Schneider Electric Annual Report 2011

Registration Document
Schneider Electric SA
Registration Document 2011
Financial and Sustainable Development Annual Report
In Bangladesh, in the village of Saharial, 40 kilometers away
from the capital city Dhaka, Schneider Electric is partnering
with Grameen Shakti to provide families with reliable,
affordable, and clean energy. It is part of our worldwide
effort to help people make the most of their energy.
Message from Jean-PascalTricoire 2
Message from HenriLachmann 4
Interview with Emmanuel Babeau 5
Leadership team 6
Key figures 2011 8
2011 in brief 11
Description oftheGroup,
anditsstrategy, markets
andbusinesses 15
1. Global specialist in energy management 16
2. Leader in an industry of the future 21
3. R&D Strategy 26
4. Organisational simplicity andefficiency 31
5. Risk factors 34
Sustainable development 43
1. Sustainable development at the heart of our strategy 44
2. Green and responsible growth driving economic
performance 52
3. Schneider Electrics Commitment
toEnvironmentalPerformance 60
4. Committed to and on behalf ofemployees 70
5. Schneider Electric, a responsible corporate citizen 81
6. Methodology andaudit ofindicators 90
7. Indicators 98
Corporate governance 107
1. Supervisory Board** 108
2. Organisational and operating procedures
oftheSupervisoryBoard** 116
3. Supervisory Board meetings** 117
4. Supervisory Board committees
(members,operatingprocedures andmeetings)** 119
5. Management Board members 121
oftheManagementBoard 123
7. Declarations concerning thesituation of
the members ofthe Supervisory Board
andManagement Board 123
8. Management interests andcompensation 124
9. Regulated Agreements 132
10. Internal control and risk management** 133
11. Application of the AFEP/MEDEF
corporategovernanceguidelines** 141
Business review 143
1. Trends in Schneider Electrics core markets 144
2. Review of the consolidated financial statements 146
3. Review of the parent company financial statements 150
4. Review of subsidiaries 150
5. Outlook 150
Consolidated financial statements 151
1. Consolidated statement of income 152
2. Consolidated statement ofcashflows 154
3. Consolidated balance sheet 156
4. Consolidated statement ofchanges in equity 158
5. Notes to the consolidated financial statements 159
6. Statutory Auditors report on theconsolidated
financialstatements 217
Company financial statements 219
1. Balance sheet 220
2. Statement of income 222
3. Notes to the financial statements 223
4. Statutory Auditors report on the financial
statements 234
5. List of securities held atDecember31, 2011 235
6. Subsidiaries and affiliates 236
7. The Companys financial results
overthelastfiveyears 238
General presentation
ofSchneiderElectricSA 239
1. General information on the Company 240
2. Shareholders rights andobligations 241
3. Capital 243
4. Ownership structure 247
5. Employee profit-sharing, stock ownership 248
6. Performance share grants andstock option plans 249
7. Disclosure of information required in
accordance with articleL.225- 100-3
oftheFrench Commercial Code** 255
8. Stock market data 255
9. Investor relations 257
Annual and Extraordinary
Shareholders Meeting 259
1. Management Board report 260
2. Supervisory Boards comments
ontheManagement Boards report,
mode in accordance with articleL . 225- 68
oftheFrenchCommercialCode 264
3. Auditors special reports 264
4. Resolutions 268
Persons responsible for the Registration Document 273
4
5
6
7
8
1
2
3
1

2011 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC
Financial and Sustainable Develo pement Annual Report
This Registration Document was led with the Autorit des Marchs Financiers on March 22 , 2012 ,
incompliance with article 212-13 of the AMFs general regulations. The issuer prepared this document and
the signatories are responsible for the information herein.
It may not be used in connection with any nancial transactions unless it is accompanied by an Offering
Circular approved by the AMF.
All of Schneider Electrics regulated information is available on the corporate website at
www. schneider-electric.com, Finance section.
The Business and Sustainable Development Report is available at
www. schneider- electric. com, Sustainable Development and Foundation section.
2011
2 2011 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC
MESSAGE FROM JEAN-PASCALTRICOIRE
PRESIDENT AND CEO
>
Message from
Jean- Pascal Tricoire
PRESIDENT AND CEO
2011 was a dening year for Schneider Electric, a year characterised
by strong growth, reactivity to many unexpected external events, an
intense deployment of our strategy and the successful closing of the
One company programme.
First of all, 2011 was an incredibly busy and meaningful year from
an operational point of view. We generated robust organic growth,
at 8.3%, reported 14% total growth and changed size. For the rst
time, our sales exceeded the EUR 22 billion mark. This translated
into record prots and strong cash generation, particularly in the
second half, achieved despite unprecedented headwind of raw
material ination, major disruptions of our supply chain following the
tsunami in Japan, the welcomed but faster than expected take-off
of solutions in our business portfolio, and the weakening of Europe.
We reacted to those events swiftly, proved once again our pricing
power, the exibility and reactivity of our supply chain, the resilience
of our cash generation, while developing our S olution business in
an aggressive but controlled manner. 2011 performance allows
us to propose to our shareholders a dividend of EUR 1.70, which
represents a payout of 50% of net income.
2011 was also characterized by an intense deployment of our
strategy.
We realized strategic investments for organic growth in new
economies and solutions. As a result, our presence in new
economies grew to about 40% of sales and our solution business
to 37% of sales. These growth engines grew three times faster than
mature countries and two times faster than products respectively.
Our solutions business has been supported by the successful
launch of our integrated hardware and software architecture of
efciency, EcoStruxure. In 2012, well leverage this key differentiator
by releasing our associated core software suite, StruxureWare.
This way, we shall provide our customers a radical innovation in
the way they design, commission and operate their business while
addressing their efciency issues. In new economies, the success
reects our continuous effort to grow our commercial presence
everywhere, to go deeper into the countries, to nurture partnerships
and develop offerings totally adapted to the needs of local markets.
We also accelerated the deployment of our strategy by making
targeted acquisitions in line with our strategic priorities: develop
solutions, grow in new economies and secure market leadership. We
completed a few strategic acquisitions in new economies, allowing
us to double our size in India, gain signicant presence in Brazil
and expand our coverage in China. By business , we boosted our
expertise in solutions and services, especially with the acquisition of
Telvent. We have put in place dedicated teams to execute integration
with discipline, building on our proven capabilities to welcome new
people & technologies in our Group.
We nalized the construction of a new world leading business in
our portfolio, Infrastructure, by integrating the Distribution branch
of Areva into Schneider Electric medium voltage division and by
acquiring Telvent. Telvent marks a major step of our development
in energy management and brings needed capabilities in the eld of
smart cities, smart grid, critical infrastructure and software. Our new
infrastructure business is already a world leader in its eld, delivering
high synergies and very promising operating results in its rst year of
integration in Schneider Electric.
We also kept progressing on the development of solutions to
save energy and carbon, and to reinforce our Corporate Social
Responsibility commitment. We continued to promote the
principles of the UN Global Compact within our company and with
our suppliers. Our Planet & Society Barometer performance has
exceeded its three- year target. Our BipBop programme towards
access to energy has enabled us to connect a million households
to electricity and train 12,000 underprivileged people in energy
management related trades. In the frame of BipBop, we have also
launched an impact-investment fund to support local entrepreneurs
around energy activities. Our commitment has been recognised by
many awards and presence in large sustainability rankings. We were
honoured to receive such prestigious awards as the Gigaton Award,
the Zayed Future Energy Prize and the Human Capital Trophy. We
were also very pleased to be part of the Dow Jones Sustainability
Index World, the Carbon Disclosure Project and the Top 100 most
sustainable companies in the world. We are very proud of these
MESSAGE FROM JEAN-PASCALTRICOIRE
PRESIDENT AND CEO
distinctions that are both an achievement and an encouragement
to keep on doing better.
2011 was also the year we ended our three-year company
programme One. One has been an unprecedented transformation
for Schneider Electric and has laid extremely solid foundations for
our future development. In three years, we changed size, we built
our identity around one brand, we organized our company around
customer segments and, we organized our Group as one integrated
team where our employees can develop on a larger scale. We
also reached our targets of efciency improvement compared to
2008. One has been the enabler of the acceleration of our strategy
execution and the catalyser of robust nancial performance through
a historical economic downturn.
Beginning 2012, we launched our new company programme,
Connect, which denes our key action plans for the next three
years. Connect builds on the fundamentals and successes of One.
This programme covers four major initiatives, which will allow the
Group to attain new levels of performance. Connect to Customers
will improve the performance of our business models to become
a leader in Products and Solutions. Connect Everywhere will push
our advantage in new economies and create new opportunities
in mature markets. Connect People will create a culture and an
environment of development and performance through training,
diversity, cross-business mobility, empowerment and increased
engagement in corporate social responsibility. Connect for Efciency
aims at extracting superior efciency from the transformation to One
Schneider Electric.
Schneider Electric is well geared to face the uncertainties
surrounding the global economy in 2012. We can rely on our
strong growth engines and strong fundamentals to develop and
go further: an undisputed leadership in our partner business, our
fast growing solution business, our well-balanced geographical
exposure, our diversied end-market coverage using the same set
of integrated technologies and systems. We shall benet from all
the work we made on our organization to integrate our teams and
focus on customer segments. We shall also benet from the new
level of operational efciency we reached. Schneider Electric is in an
exceptional position to keep exploring the new frontiers of energy
management technologies; seize new business opportunities
offered by energy efciency, smart grid and smart cities; and offer
the most advanced technologies of efciency for the sustainability
of our planet development.

MESSAGE FROM HENRILACHMANN
CHAIRMAN OF THE SUPERVISORY BOARD
>
Message from
HenriLachmann
CHAIRMAN OF THE SUPERVISORY BOARD
In 2011, we completed One, our three-year Company program.
One achieved all of its objectives and was a great success for our
Company. The Supervisory Board wants to take this opportunity
to thank the Management Board and all of Schneider Electrics
teams for this tremendous accomplishment. One has transformed
Schneider Electric and put us in a position to reap the full benets
of globalization, growth in new economies and the enormous need
for energy efciency solutions.
The energy that costs and pollutes the least is the energy we save.
Schneider Electric helps its customers use less energy. We have
the good fortune and foresight to be very well positioned in energy
efciency markets all around the world. Our products, equipment
and solutions are on the leading-edge of technology and our R&D
investments illustrate our strategy of continuing to offer to our
customers the best-in-class lineup to meet their needs. Our good
short-term business performance allows us to implement a long-
term strategy.
Your Supervisory Board will continue to advise and supervise
the Management Board. The Supervisory Board operates in a
completely transparent manner, in a friendly atmosphere where
discussion and the confrontation of ideas are welcomed.
In measuring team performance and related bonuses, business and
nancial criteria are not the only factor. Sustainable development
and corporate social responsibility are also taken into account using
a dedicated resource known as the Planet & Society Barometer.
This tool helps our people to feel responsible of this part of our
performance: measurement drives behaviour. Meeting targets in
these non-nancial areas are part of the bonus system for both
employees and senior executives.
After implementing a successful succession at the Chief Executive
level, your Supervisory Board is now working on the succession of
its Chairman and on an appropriate governance.
The Supervisory Board would like to once again express its
condence in the teams that are responsible for the implementation
of our new Company program, Connect. We fully support this
program, which should be another major milestone in Schneider
Electrics development.
INTERVIEW WITH EMMANUEL BABEAU
EXECUTIVE VICE PRESIDENT FINANCE, MEMBER OF THE MANAGEMENT BOARD
Schneider Electric reached a new record in sales in
2011. How was this performance achieved?
Indeed, we generated record high sales of EUR22.4 billion in 2011,
in comparison with less than EUR14 billion ve years ago. This is
the result of a successful long term strategy built upon balancing
organic growth and acquisitions, and on our leading position in high
growth geographies as well as in energy management solutions.
Schneider Electric has rst of all delivered solid organic growth
at +8.3%: growth in new economies reached +15%, as in 2010,
and solutions growth accelerated to +12%. These trends were
seen across the Groups businesses, with growth around +10%
for Industry and IT, and between +7% and +8% for Power and
Infrastructure.
Finally, the deployment of our strategy has been reinforced by
acquisitions such as Telvent for real-time critical infrastructure
management, but also with Luminous, Steck, or Leader & Harvest
in new economies. Acquisitions brought additional growth of 7%
this year.
Is your growth strategy comforted by the nancial
results?
Yes, because Schneider Electric also achieved record high results.
Our EBITA* before acquisition and integration costs reached
EUR3.2 billion, up 7%.
However we faced a difcult environment, notably with political
instability in Africa and the Middle East, and above all with the
natural disaster in Japan in March and its terrible consequences.
We always privileged our employees security but our local
operations were disrupted and our electronic purchases impacted.
The steep raw material ination entailed additional costs of over
EUR400 million. These difculties penalized our margin evolution.
We have nevertheless put in place strong actions to offset these
headwinds by raising the sales prices and controlling our costs. Our
free cash ow generation amounting to EUR1.7billion in the second
half was a record.
Over the full year, our Group share net income was up 6% at
EUR1,820million, the highest ever achieved by Schneider Electric.
We will therefore offer a dividend of EUR1.70 per share to our
shareholders, fully paid in cash.
Our net nancial debt amounts to EUR5.3 billion, up mainly due
to the dividend pay-out of EUR0.9 billion and to acquisitions for
EUR2.9billion. Our balance sheet is particularly strong, with a solid
net debt to adjusted EBITDA ratio at 1.4x and a free cash ow
generation capacity maintained at a very high level.
How do you consider the Groups outlook for 2012?
The uncertainty surrounding the global economy limits our visibility.
We see continued strength in new economies and opportunities
from a recovering North America, while Western Europe is expected
to weigh on growth.
In this context we foresee at to slightly positive organic growth
for sales and an adjusted EBITA margin between 14% and 15%.
But the Group enters 2012 with the strength of its well diversied
geographic and end-market exposure, leadership position across
its businesses that will continue to be very promising in the years
to come, and a clear advantage of its unique organization model
built for excellence in our commercial efciency and nancial
performance.
What are your ambitions for Connect, the new
company program?
We have just launched Connect which was successively presented
to our teams, our shareholders and investors and to our stakeholders
generally. This company program will obviously be key to accelerate
the development of SchneiderElectric by2014, on all dimensions
including customers, markets and development of our teams. We
have also expressed our ambition to drive the improvement of our
nancial results. We therefore reiterate our target of an average
organic growth at world GDP + 3 points across the economic
cycle. This growth should allow us to generate an adjusted EBITA
margin between 13% and 17%, depending on the global economic
conditions and our efciency initiatives. Additionally, the quality of
our cash generation and our discipline in terms of industrial and
nancial investments should allow us to generate a Return on
Capital Employed (ROCE) between 11% and 15%. Our ambition
is therefore to put Schneider Electric in a dynamic of continuous
protable growth, consistent with our commitment to sustainable
development.
*EBITA: EBIT before amortization and impairment of purchase accounting intangibles and impairment of goodwill
>
Interview with
Emmanuel Babeau
EXECUTIVE VICE PRESIDENT FINANCE,
MEMBER OF THE MANAGEMENT BOARD
LEADERSHIP TEAM
>
Leadership team
Executive Committee (as of February 21, 2012 )
Global
functions

1
Jean-Pascal Tricoire
President and CEO*
Businesses
1
2
5
6
7
9
10
11
12
13
14
8
4
3
2
Emmanuel Babeau
Executive Vice- President, Finance*
3
Annette Clayton
Executive Vice- President,
GlobalSupplyChain
4
Herv Coureil
Information Systems
5
Aaron Davis

Executive Vice- President, Marketing
6
Philippe Delorme
Strategy & Innovation
7
Karen Ferguson
Executive Vice-President,
Global Human Resources
* Member of the Management Board.
** President and CEO, Custom Sensors & Technologies Inc.
*** Europe, Middle East, Africa and South America.
8
Clemens Blum
Industry
9
Michel Crochon
Infrastructure
10
Chris Curtis
PowerNorth America & Buildings
11
ric Pilaud
Executive Vice- President, CST**
12
Julio Rodriguez
Executive Vice- President, Power
Global and EMEAS***
13
ric Rondolat
PowerAsia Pacic
14
Laurent Vernerey
Executive Vice- President, IT
LEADERSHIP TEAM
Supervisory Board (as of February 21,2012)
Remuneration, Appointments and
Human Resources Committee
Henri Lachmann
Chairman
Claude Bbar
Lo Apotheker*
Willy R. Kissling*
Serge Weinberg*
Henri Lachmann
Chairman of the Supervisory Board
Lo Apotheker*
Vice Chairman of the Supervisory Board
Betsy Atkins*
Corporate Director
Claude Briquet
Member of the Supervisory Board for the Schneider France-
Germany Mutual Fund
Xavier Fontanet*
Corporate Director
Nol Forgeard*
Senior partner at Arjil SAS
Jrme Gallot*
Executive Vice-President of Veolia Transdev
Jeong Kim*
President of Bell - Alcatel-Lucent Laboratories
Willy R. Kissling*
Corporate Director
Cathy Kopp*
Corporate Director
Grard de La Martinire*
Corporate Director
Dominique Snquier*
President and CEO of AXA Private Equity
G. Richard Thoman*
Managing Partner of Corporate Perspectives and University
Professor
Serge Weinberg*
Chairman of the Board of Directors for Sano
Non-voting member
Claude Bbar
Corporate Director
Secretary for the Board
Philippe Bougon
* Independent member of the Supervisory Board as dened in the AFEP/MEDEF Corporate Governance Guidelines for listed companies.
Audit Committee
Grard de La Martinire*
Chairman
Nol Forgeard*
Jrme Gallot*
Management Board
President and CEO
Emmanuel Babeau
Member of Management Board, Executive Vice-President Finance
Statutory Auditors
Principal auditors
Ernst & Young et Autres
Mazars
Alternate auditors
Socit Auditex
Mr Thierry Blanchetier
KEY FIGURES 2011
>
Key figures 2011
SCHNEIDER ELECTRIC
Solid organic growth at +8.3%
New economies and Solutions at 39% and 37% of sales respectively
Acquisition integration progressed well and synergies on track
EBITA before acquisition and integration costs up 7% and margin at 14.2%
Robust pricing and free cash flow generation in H2
Consolidated sales (in billions of euros)
07
17.3
11
22.4
08
18.3
09
15.8
10
19.6
Schneider Electric achieved record high sales despite a difcult
economic environment in 2011. Sales were up 8.3% on a like-for-
like basis and up 14% on a current structure and exchange rate
basis. All the Groups businesses contributed to growth, driven in
particular by IT and Industry. From a geographic standpoint, Asia
Pacic, North America and Rest of World experienced double digit
growth. Europe, on the other hand, was impacted by the debt
crisis in a number of countries. The Group beneted from its strong
presence in new economies and from robust Solutions growth, at
respectively 39% and 37% of 2011 sales.
Adjusted EBITA
(1)
(in millions of euros and as a % of sales)
(1) Adjusted EBITA : EBITA before restructuring costs and other operating income and expenses (one-time items such as capital gains/losses,
pension gains/losses, acquisition costs, impairment).
15.6%
2,704
15.9%
2,912
13.0%
2,048
15.4%
3,019
14.4%
3,232
07 11 08 09 10
EBITA before acquisition and integration costs reached EUR3,178
million , or 14.2% of sales. Adjusted EBITA will be the new Group
measure for operational protability. It provides better visibility
and predictability of the underlying performance of the Group
than EBITA, which includes a number of non-recurring items and
restructuring charges that have become more volatile since 2009.
Adjusted EBITA amounted to EUR3,232 million in 2011, or 14.4%
of Group sales, up 7%. Performance was driven by strong topline
growth, price increase step-up in the second half of the year and
signicant operational efciency, despite record high raw material
cost ination. Industrial productivity remains strong primarily due
to purchasing savings, lean manufacturing, continued rebalancing
to new economies and xed costs absorption. In parallel, the
Group continued investing for future growth: broader geographical
coverage in new economies, faster deployment of solutions and
increased R&D spendings.
KEY FIGURES 2011
Sales by geography
18%
Rest of the world
23%
North America
32%
Western Europe
27%
Asia-Pacific
2011 Headcount
16%
Rest of the world
31%
Asia-Pacific
32%
Western Europe
21%
North America
* Spot headcount, including employees under xed-term
and open-ended contracts, at December 31, 2011
137,535 employees*
Net income attributable to owners of the parent (in millions of euros)
07
1,583
11
1,820
08
1,682
09
824
10
1,720
Net income reached a record high of EUR1,820 million , up 6%
year-on-year. It beneted from the improvement of EBITA but
was impacted by the increase in nancial expenses, mainly due
to negative currency impact. Net income per share amounted to
3.39 euros.
Operating cash flow (in millions of euros and as a % of sales)
07 11 08 09 10
2,211
12.8%
2,500
13.7%
1,708
10.8%
2,534
12.9% 2,579
11.5 %
Operating cash ow was up 2% year-on-year and rose to
EUR2,579 million . Free cash ow in the second half was at an all-
time high, reaching EUR1,665 million , achieved by a strict working
capital control, in particular a full re-absorption of the excess safety
stock built up in the rst half due to the supply chain disruption post
the natural disaster in Japan. Full year free cash ow ended up at
EUR1,506 million .
Free cash ow included capital expenditures of EUR746 million ,
returning to a more normal level after two consecutive years of
subdued investment.

KEY FIGURES 2011
Earnings per share* (in euros)
07
3.39
11
3.39
08
3.51
09
1.66
10
3.30
Dividend per share* (in euros)
07
1.65
11
1.70**
08
1.725
09
1.025
10
1.60
* Adjusted to reect two-for-one share split (September 2, 2011).
** Subject to shareholders approval at the Annual Meeting of May 3, 2012, for payment on May 16, 2012.
Ownership structure on December 31, 2011
9.4%
Capital Research
& Management Compagny
(1)
80.6%
Public
1.7%
Treasury shares
3.7%
CDC Group
4.6%
Employees
(1) To the best knowledge of the Company.
Share price against CAC 40 index over five years
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Dec. 31, 2010 Dec. 31, 2008 Dec. 31, 2007 Dec. 31, 2006 Dec. 31, 2011
31/01/2012
Dec. 31, 2009
Share price in euros Schneider Electric share CAC 40 index
40.68
47.48
46.34 26.50
40.89
56.00
0
10
20
30
40
50
60
70 Schneider Electric
share
CAC 40 index
42.05
(Source: Thomson Reuters)
2011 IN BRIEF
>
2011 in brief
Growth and acquisitions
Acquisition of Telvent
On June 1, 2011, Schneider Electric announced the signing of a
denitive agreement related to the acquisition, through a public
offer of Telvent GIT SA (Telvent), a leading solution provider
specializing in high value-added IT software and solutions for real-
time management of mission critical infrastructure in the elds of
electricity, oil & gas, water and transportation. By acquiring Telvent,
Schneider Electric integrates a high value-added software platform
that presents a good t with its own range in eld device control
and operation management software for the smart grid and
efcient infrastructures. The Group also doubles its overall software
development competencies and enhances its IT integration and
software service capability, including weather services. Schneider
Electric made a cash tender offer for all of Telvents shares at a
price of USD40 per share, which represents a premium of 36% to
Telvents average share price over the last three months. This offer
has successfully been completed on August 30, 2011 .
Automation and Control
On June 9, 2011, Schneider Electric announced the signature
of an agreement to acquire Leader Harvest Power Technologies
Holdings Limited (Leader & Harvest), one of the leading
players in the fast-growing medium voltage drives market in
China. Headquartered in Beijing, Leader & Harvest develops,
manufactures and commercialises medium voltage (MV) variable
speed drives. The company employs over 750 people and has an
extensive inhouse nationwide sales and service support network
across 30 provinces. With an annual growth rate in excess of 20%
in the past few years, the company is expected to generate sales
of approximately USD150 million (approx. EUR100 million) for
2011. Leader & Harvests range represents an excellent addition
to Schneider Electrics industrial automation range of products and
solutions. Medium voltage drives are a key element of energy efcient
solutions to our key target segments of mining, minerals&metals
and water & waste water.
Low voltage
On July21, 2011, Schneider Electric announced it has entered into
a partnership with NVC Lighting Holding Limited (NVC Lighting) to
speed up its market penetration in smaller cities in China via NVC
Lightings well established diffused channels. The partnership will
give Schneider Electric an exclusive access to diffused channels
and bring forth strong revenue synergies. NVC Lighting has a solid
presence in China with broad diffused channels and extensive retail
management experience. It has the access to over 3,000 retail
outlets, half of which are located in smaller cities and townships.
On July 22, 2011, Schneider Electric announced the signature of
an agreement to acquire the bresilian group Steck Da Amazonia
Industria Electrica Ltd. and afliates (Steck Group), a key player
(950 employees, about BRL180 million (approx. EUR80 million)
in 2011) in the fast growing nal low voltage segment serving the
residential and commercial buildings and industries in Brazil. The
transaction will enable Schneider Electric to broaden its product
portfolio and market access and hence provide an opportunity to
expand its presence in new economies, particularly in Latin America.
Critical Power & Cooling
On January 7, 2011, Schneider Electric announced the signature
of an agreement to acquire a majority of the shares in APW
President Systems Ltd. which designs and manufactures standard
and customized racks and enclosure systems in India, serving
in particular information technology and telecom end-users.
APW President Systems Ltd. has approximately 380 employees
and generated sales of INR1.08 billion (approx. EUR17 million)
for the twelve months ending September 30, 2010. With APW
President Systems Ltd., Schneider Electric is well positioned to
capture opportunities in the fast growing Indian IT infrastructure
market as well as in international markets, particularly in Asia Pacic
and Middle East. The Group will also be able to tap the talent pool
and increase its solutions execution capabilities from server rooms
to extra large data centres.
On March31, 2011, Schneider Electric announced the signature of
an agreement to acquire from Smartlink Network Systems Ltd. the
assets of the Indian company Digilink business, one of the leading
structured cabling systems providers in India. Headquartered in
Mumbai, the Digilink business has 92 employees and generated
sales of about INR1.55billion (approx. EUR25million) in calendar year
2010. With this acquisition the Group will be able to gain access to
Digilinks well-established distribution network in the retail sector which
complements its presence in enterprise segments and will generate
signicant cross-selling opportunities for its Power and IT products.
On April 4, 2011, Schneider Electric announced the signature of
an agreement to acquire in the United States Lee Technologies, a
leading service provider for the data centres of the North American
market. Headquartered in Fairfax, Virginia, Lee Technologies has
over 300 employees and generated sales of about USD140million
(approx. EUR104 million) in 2010. Lee Technologies brings to
Schneider Electric capabilities ranging from consulting, site
assessment, design, equipment specication and selection to
integration, commissioning, facility operations stafng, maintenance
and proactive 24x7 remote monitoring. This full repertoire of
services will reinforce Schneider Electrics IT business skills in data
centre management and its ability to provide data centres, one
of the worlds fastest growing end-users of energy, with the best
standards in energy conservation and reliability.
On May30, 2011, Schneider Electric announced the signature of
an agreement to acquire 74% of Luminous Power Technologies
Pvt. Ltd., a market leader in India that provides inverters, UPS and
power storage systems to help homes and small and medium sized
businesses face frequent power cuts. Luminous is a leading player
in the around EUR800 million Indian inverter and power storage
market that is growing at more than 20% a year. Luminous has
a strong presence in India and employs approx. 3,000 people in
8 different industrial sites in India and 1 in China. It has generated
revenues of INR11.0 billion (approx. EUR170 million) for the scal
year ending March 2011.With Luminous, Schneider Electric will
become the leader in the Indian inverters and secured power
market and gain access to a complementary retail network.
2011 IN BRIEF
Energy efficiency
On March 24, 2011, Schneider Electric announced the signature
of an agreement to acquire Summit Energy Services Inc., an
American company leader in outsourced energy procurement and
sustainability services to industrial, commercial and institutional
enterprises. It is employing more than 350 individuals based
in 11 international ofces across North America and Europe
and serves client facilities in more than 90 countries. Summit
Energy is a fast-growing business, expected to generate sales of
approximately USD65 million for the current year. The acquisition
of Summit Energy allows Schneider Electric to broaden its energy
management services and solution portfolio, offering customers the
ability to manage and optimize their energy consumption from the
supply side through the demand side, while also growing Schneider
Electrics energy and environmental online reporting capabilities.
Venture capital
On February 23, 2011, Aster Capital announced Rhodias
acquisition of an interest in Aster II, the venture capital fund targeting
innovative technology start-ups. This fund, specically focused
on energy, advanced materials and environment sectors, should
eventually raise EUR120 to 150million. Joining forces in this novel
multi-corporate venture capital fund, the three sponsorsAlstom,
Rhodia and Schneider Electric will actively promote the
development of young and innovative companies. By fostering
cooperation and partnerships, it will guarantee the relevance of
technologies and markets assessed to investors. Companies in the
funds portfolio will also have access to the global network of each
of the threepartners.
Bond issues and sale of treasury stock
On June 30, 2011, Schneider Electric renanced part of its debt
and just closed a USD300 million private placement (approx.
EUR210 million). This transaction made under the Schneider
Electric EMTN programme has a oating coupon (3-month LIBOR
+0.49%) and matures in July2014.
On July 1st, 2011, Schneider Electric launched a EUR750 million
EMTN (Euro Medium Term Note) issue maturing in July 2018.
Thecoupon rate for this bond is 3.75percent.
On September 15, 2011, Schneider Electric launched a
EUR500million EMTN (Euro Medium Term Note) issue maturing in
January2019. The coupon rate for this bond is 3.50percent.
Division of the nominal values of the shares
At the Annual Shareholders Meeting held on April 21, 2011,
Schneider Electric shareholders approved the division of the
nominal value of the shares by two. The Management Board
decided that the share par value split takes effect on September2,
2011. The operation makes the shares more accessible particularly
to individual shareholders and also improves the share liquidity.
Effective on September 2, 2011, instead of every EUR8 nominal
value share held on that date, shareholders receive two shares of
EUR4 nominal value. The division of the nominal value of the share
does not have an impact on the tax situation or the rights of the
shareholders. It is carried out at no expense or formalities for them.
Innovation, partnerships and major contracts
On March 15, 2011, Schneider Electric and the City of
Rueil- Malmaison signed the rst agreement to trial an energy
efciency programme in France. The rst of its kind involving a
municipality, the energy efciency programme will initially be trialled
at the city library and the Claude Monet middle school in Rueil-
Malmaison. Over eight years, the programme is expected to reduce
energy use at the sites concerned by 20%, thereby trimming the
citys energy bill and shrinking its environmental footprint.
On April19, 2011, Schneider Electric is awarded a turnkey contract
to supply the electrical installation for the future Queensland
Curtis liqueed natural gas LNG Project being built by US-based
construction contractor Bechtel.
On April 27, 2011, Schneider Electric announced a project with
North Carolina State University (USA) to improve energy efciency
and drive sustainable, clean energy projects in 1.6 million square
feet of building space across 13 campus facilities. As part of a
USD20 million performance contracting project, the university
will implement facility improvements, equipment upgrades and
energy- efcient techniques to impact energy use, operations,
reliability and comfort.
On May17, 2011, Schneider Electric, in association with Derceto,
Echologics (a division of Mueller Water), i2O Water, TaKaDu and
Telvent, announced the creation of Smart Water Networks (SWAN),
a global industrial alliance formed to promote the development
and adoption of data-driven systems for better water network
management and operation.
On May 31, 2011, The City of Issy-les-Moulineaux, Schneider
Electric, Alstom, Bouygues Immobilier, Bouygues Telecom, ERDF,
ETDE, Microsoft, Steria and Total created IssyGrid. This rst
district smart grid in France will be built in the Seine Ouest business
district in Issy-les-Moulineaux with the goal of enabling energy
optimization at the neighborhood level.
On June15, 2011, Soitec and Schneider Electric announced that
they have signed a memorandum of understanding with Masen
(Moroccan Agency for Solar Energy) on an integrated partnership
on CPV technology. The memorandum of understanding between
Soitec, Schneider Electric and Masen is part of the Moroccan Solar
Plan. It is supported jointly by the Moroccan and French governments.
It has four key components: Research & Development; Industrial
integration; Training; Pilot projects.
On June 15, 2011, in a world rst, Schneider Electrics head
ofce (known has the Hive) has been certied as complying with
the new ISO 50001 standard for energy management systems.
Schneider Electric is pursuing its commitment to continuously
improving the energy efciency of its buildings, reducing their
environmental footprint and enhancing user comfort.
On July 13, 2011, Schneider Electric announced that it has
teamed with Cisco to provide an innovative comprehensive
energy management solution that monitors and manages energy
consumption across all building domains. With this combined
solution, building owners and managers, architects, contractors,
2011 IN BRIEF
and IT managers will now be able to optimize energy efciencies
and business operations to save energy.
On October 5, 2011, Schneider Electric became the rst
manufacturer worldwide to obtain ZE Ready certication from
Renault for its EVlink electric vehicle charging infrastructure range.
ZE Ready is a comprehensive compatibility testing protocol
designed to guarantee that internationally accepted standards will
be implemented consistently among electric vehicles and charging
infrastructure.
On November 8 , 2011, Schneider Electric presented Villasol,
a solution for village electrication. The Villasol solution is a
solar- powered micro off-grid facility for decentralised rural
electrication. This standardised solution consists in photovoltaic
panels, a battery bank and a battery charging station that enable a
communal recharge system.
Governance
On July28, 2011, the Supervisory Board recorded the resignation of
Mr Anand Mahindra from his ofce as a member of the Supervisory
Board, due to potential conicts of interest between Schneider
Electric and the MAHINDRA & MAHINDRA group liable to arise due
to the two groups developing their distribution business in India.
The Supervisory Board, which met on December 15th, 2011,
has decided to co-opt Mr Xavier Fontanet as a member of the
Supervisory Board. Xavier Fontanet, 63 years old and of French
nationality, is Chairman of the Board of Essilor International.
On July1st, 2011, Mrs Annette Clayton is appointed as Executive
Vice President of Global Supply Chain and Member of the Executive
Committee of Schneider Electric. Annette Clayton comes from Dell,
where she was Vice President of Global Operations and Supply
Chain. Annette Clayton is American, and has an impressive career
in supply chain, which she developed initially in General Motors.
Employees
On March31, 2011, Schneider Electric announced the launch of a
capital increase reserved for employees under the Group employee
savings plan (plan dpargne salariale). This offering, which is in
line with the Groups policy to develop employee shareholding,
is proposed to Group employees in fourteen countries, including
France. This plan covers around 80% of the employees of the
Group. This offering reinforces the link between the Group and its
employees by giving them the opportunity to be more involved in
the developments and future performance of the Group.
Corporate Social Responsibility
On February 11, 2011, Schneider Electric announced the launch
of Go Green in the City, a new type of creative case competition
involving students of eight countries across the world. Finals of
the challenge were held in Paris on June23-24, 2011. More than
500 teams representing 1000 candidates from eight countries
participated in this challenge.
On May6, 2011, the City of Rueil-Malmaison west of Paris decided
to take part in the 100 chances 100 emploi s campaign proposed
by Schneider Electric and Saint-Gobain. The 100 chances 100
emploi s programme created by Schneider Electric is designed
to meet a communitys economic needs while helping to restore
equal opportunity for young people age 18-30 who come from
disadvantaged neighborhoods. It offers individualized solutions to
ease the way into long-term employment for young people with few
or no credentials, as well as for young graduates who are victims
of discrimination. Targeted exclusively to young people from difcult
neighborhoods, the programme federates and engages local
stakeholders.
On July 1st, 2011, one year after the start of Haitis rebuilding
effort agreement, the Schneider Electric Foundation celebrates
the inauguration two professional training workshops dedicated to
building industry skills.
On July4, 2011, Danone, Crdit Agricole, Schneider Electric and
CDC Climat announced the creation of L ivelihoods, an innovative
carbon-offset fund serving rural communities. Livelihoods is a
unique new investment fund that gives fund partners access to
carbon credits with strong social impact. It does this by seeking
the best balance between value generated for local communities
and the value of carbon credits returned to investors.
On July26, 2011, Schneider Electric announced that it is expanding
its sponsorship of the Solar Decathlon through at least 2013,
including Solar Decathlon US in September2011, Solar Decathlon
Europe in 2012 and Solar Decathlon China in 2013. Created in
2002 by the U.S. Department of Energy (DoE), the Solar Decathlon
competition challenges students from leading universities worldwide
to design, build and operate energy-efcient solar-powered houses.
On December 7, 2011, Schneider Electric triumphed at Gigaton
Awards ceremony during UN climate change talks in Durban, South
Africa. The 2011 Gigaton Awards were powered by Carbon War
Room, The Carbon Disclosure Project and Greenstar; presented by
The Gigaton Throwdown, The World Climate Summit and Greenbiz.
The Gigaton Awards are designed to inspire and challenge
businesses to run their business in the most carbon efcient
waypossible.
DOCUMENT DE RFRENCE 2011 SCHNEIDER ELECTRIC 14
2011 IN BRIEF
Description
oftheGroup,
anditsstrategy,
markets
andbusinesses
1. Global specialist in energy management 16
2. Leader in an industry of the future 21
3. R&D Strategy 26
4. Organisational simplicity andefficiency 31
5. Risk factors 34
1
1 GLOBAL SPECIALIST IN ENERGY MANAGEMENT
DESCRIPTION OFTHEGROUP, ANDITSSTRATEGY, MARKETS ANDBUSINESSES
>
1. Global specialist in energy
management
Schneider Electric offers integrated products, systems, services, software and solutions in order to make energy safe,
reliable, efcient, productive and green.
As a global specialist in energy management, with operations in over 100 countries, the Group enjoys leadership
positions in Utilities and Infrastructure, Machine Industry and Manufacturers, Non-residential Buildings, Data Centres
and Networks, and Residential..
1.1 Effective management of energy resources, a global challenge
With economic, industrial and urban growth and the increase in the
worlds population, the need for energy is rising exponentially, along
with CO
2
emissions.
Today, out of the worlds 7billions inhabitants, only 2billions have
access to adequate energy infrastructure and 2 billions will attain
middle class status in around ten years, while 1.3billion people
300million homes still have no access to electricity. In addition,
the planet could have 2 billions additional inhabitants by 2030.
The increase in the global demand for energy seems set to carry
onrising.
At the same time, renewable energy sources are still insufcient and
the energy mix is unlikely to change much over the next 25years:
unless radical changes are made much faster than expected,
two- thirds of energy will continue to be produced from fossil fuels.
By 2050, the energy equation will therefore be: a doubling of
worldwide energy demand, and at the same time, a need to
halve CO
2
emissions at the global level in order to combat climate
change. Under these conditions, economic development requires
more effective management of our resources and especially energy.
This is the business of Schneider Electric.
1.2 Towards smart energy management
The electricity grid is becoming smarter, and users need to be
connected simply and safely.
From mobile telephones to the internet to home automation,
technology is constantly making communication easier and faster.
This trend towards connectivity is growing throughout the world.
But no matter how technical products or solutions may be, users
want them to be easy to install, use and maintain. They want to
have access to reliable and safe energy that keeps their installations,
infrastructure and equipment operating at an optimal level.
A new, more intelligent electricity grid is emerging: the smart grid.
The traditional grid, which was simple and linear, with centralised
energy output and passive consumers is now changing into a more
complex, interconnected and active model.
With renewable energies each consumer can produce his or her
own energy, but the various and irregular sources now have to be
connected to the central grid.
Demand response makes energy visible and offers everyone the
chance to affect their own consumption.
Electric vehicles are revolutionising the perception of mobility, both
in terms of access to energy, and its use and storage.
Real-time grid management allows consumption levels to be
anticipated and supply to be adapted accordingly.
To meet regulatory, environmental and protability requirements,
energy must be safe, reliable, efcient, productive and green.
Thiswill require integration: an entire system, not just the individual
components have to be taken into account. The era of intelligent
energy management has dawned, and Schneider Electric has the
vision, products and services and ambition necessary to play a
major role in this energy revolution.
1
GLOBAL SPECIALIST IN ENERGY MANAGEMENT
1.3 The emergence of sustainable cities
The energy challenge becomes clear in cities, which now contain
50% of the worlds population, responsible for 75% of global energy
consumption and 80% CO
2
emissions.
These cities are still growing: by 2050, 70% of the worlds
population will live in an urban environment. Taking into account
demographic growth, over the next 40 years urban capacity will
have to undergo a development equivalent to that experienced over
the last 4,000years.
With growth come constraints: infrastructures that lack capacity,
congestion, increased consumption, competition for jobs and skills,
economic difculties and ecological ambitions.
To withstand, survive and develop, the cities must become more
sustainable: more intelligent, more efcient, more liveable.
This will be one of the major challenges over the coming years.
1.4 A new geographical balance
The new economies now represent 50% of global GDP and may
reach 65% by 2015.
They account for 90% of the growth in energy needs over the
next 40years, combining demographic pressure, industrialisation,
urbanisation, and increase in wealth. Millions of men, woman and
children will see their living standards rise.
The driver of global growth is now the new economies and should
continue to be for years to come.
In order to guarantee its sustainable growth strategy, Schneider
Electric already has a signicant presence in these new economies,
holding strong positions in Asia (ex Japan), Africa, the Middle East,
Latin America and Mexico, Eastern Europe and Russia.
The Groups organisation reects this new economic balance, since
the Schneider Electric regional ofces are found in North America,
Europe and Asia.
1.5 A company focussed on growth
From steel to electricity and onto energy management, the Company
created 175 years ago has experienced signicant changes in its
activities in order to position itself for growth.
1836-1980: The family SME becomes a major
player
1836: Adolphe and Joseph-Eugne Schneider move their foundries
to Creusot and create Schneider& Cie two years later. The company
experiences continued development in heavy machinery and
transportation equipment, and becomes an extremely diversied
conglomerate.
1975: Merlin Gerin, one of the top manufacturers of electrical
distribution equipment in France, joins the Group, already present in
the electricity sector since the late 19
th
century.
1981-2001: The Group refocuses on the
electricity sector
1988: acquisition of Frances Telemecanique, a pioneer in remote
control systems for electric motors.
1991: a major acquisition in the US with the takeover of Square D,
leader in the North American electrical equipment sector.
1997: sale of building and public works company Spie Batignolles.
The Groups refocusing on the electricity sector is now complete.
1999: the name Schneider Electric represents the Groups new
direction and provides a clear indication of its expertise in the
electricity sector. The Group acquires Lexel, Europes second
largest supplier of installation systems and control solutions.
2000: acquisition of Crouzet Automatismes, a French leader in
electronic control, small automation devices and customised
sensors, and Positec, a European leader in motion control. Creation
of a joint venture with Toshiba called Schneider Toshiba Inverters
(STI) to develop, manufacture and market both partners industrial
speed drives. STI, of which Schneider Electric holds a 60% stake,
leads the global industrial speed drive sector. Launch of Schneider
Electric Ventures fund with capital of EUR50 million, to acquire
interests in innovative start-ups with technologies that can enhance
the Groups offering.
2001: acquisition of Legrand, a leader in installation systems and
control solutions. The European Commission vetoes the merger,
obliging Schneider Electric to sell its stake in Legrand. The Court
of First Instance of the European Communities will overrule the
Commissions decision in October2002.
2002-2011: Strategic transformation
At the turn of the 2000s, Schneider Electric radically rethinks its
growth strategy, setting itself three goals:
to ensure a more balanced exposure to its strategic end markets;
to enhance its portfolio of traditional activities (electricity
distribution, automation and industrial control); and
to anticipate the future energy requirements of companies and
individuals.
A new dimension
The Group doubles in size between 2002 and 2008, through
organic growth and by making a number of acquisitions. Revenue
jumps from EUR9 billion in 2002 to EUR18.3 billion in 2008,
reecting average annual growth of 12%. Its headcount increases
from 70,000 to 114,000 over the same period. Thanks to a loosely
integrated business model, the Group can act quickly to keep pace
with economic and environmental changes in its markets.
Following several acquisitions, notably of TAC in 2003, Schneider
Electric becomes a major player in building automation. The Group
becomes global leader in critical power and video security systems
in 2007, with the acquisition of APC and Pelco respectively. The
acquisitions in 2009 of energy efciency leader Conzerv in India
and UPS manufacturer Microsol Tecnologia in Brazil increase the
Groups exposure to new economies, as well as to the growing
energy efciency and critical power sectors. Schneider Electric
reinforces this new geographical positioning in 2010 with the
acquisition of Cimac (leader in industrial systems integration in the
Persian Gulf), Zicom Electronic Security Systems Ltds activities
(electronic security systems integration, India) and the 50% takeover
of Electroshield TM Samara (medium voltage, Russia). Schneider
Electric nalises the acquisition of Areva T&D Distribution division
in June2010, thus becoming one of the world leaders in medium
voltage and automation for electrical distribution. Schneider
Electrics medium voltage operations are therefore strengthened by
Areva T&Ds distribution activities to create a new activity: Energy.
At the same time, Schneider Electric was developing its operations
in mature countries, notably with the acquisition in December2010
of two pioneering French companies working in the area of building
management software: Vizelia, a provider of software that monitors
the energy consumption of buildings in real time, and D5X, a
specialist in solutions for optimising the use of commercial buildings.
Schneider Electric continues its policy of target acquisitions in 2011,
both small and medium sized, to accompany its growth in the area
of solutions, such as in the new economies.
Solutions
March2011: acquisition of Summit Energy, a leader in outsourced
energy services, in the area of provision and sustainable development
for industrial and commercial enterprises and institutions.
August 2011: acquisition of Telvent, a leading provider of software
and IT solutions with high added value for real-time management
of critical infrastructures in the electrical, oil and gas, and water
treatment sectors, as well as for transport. This acquisition allows
Schneider Electric to propose a high added value software platform
supplementary to its offer of equipment control and software
management via a smart grid and efcient infrastructures.
New economies
January 2011: acquisition of the majority of the share capital of
APW President Systems Limited, a company specialising in the
design and manufacture of standard or custom-built electric bays
and cabinets for use by telecom and information technology end
customers in India.
March 2011: signing of a contract to acquire the assets of the
company DIGILINK, a leader in structured cabling system supply in
India, from Smartlink Network Systems Ltd.
April 2011: acquisition of Lee Technologies, a leading service
provider for the data centres of the North American market.
June 2011: acquisition of Leader & Harvest, one of the leading
suppliers of medium voltage variable-speed drives in the rapidly
growing Chinese market.
July 2011: partnership with the Chinese company NVC Lighting
to hasten Schneider Electrics presence in small towns in China,
with the benet of NVC Lightings well established and wide spread
distribution channels. Acquisition of the Brasilian group S teck
Group, a key player in the fast growing nal low voltage segment
serving the residential and commercial buildings and industries in
Brazil.
An eco-citizen approach
Schneider Electric works actively to reduce its environmental
footprint, while making energy safer, more reliable, sustainable and
accessible by optimising its use.
2002: the Group conrms its commitment to responsible
management by creating a Sustainable Development
Department, which now forms an integral part of the Strategy &
InnovationDepartment.
2005: the quarterly Planet & Society Barometer is set up to measure
and report on the Groups sustainable development performance.
Schneider Electric is the rst manufacturer to sign French
environmentalist Nicolas Hulots pact for the environment and the
sixth global enterprise to join the Clinton Climate Initiative (CCI).
Change management
2001-2008: launch of change management programme NEW2004,
followed by new
2
in 2005, with the aim of formalising consistent and
coordinated objectives for all employees.
2009-2011: a new company programme called One introduced
to support Schneider Electrics strategic goals. One, the successor
to new
2
, continues the focus on customer satisfaction (Customer1)
and staff development (1 Team). The programme also includes
strategic initiatives to strengthen Schneider Electrics leading
position on its market:
becoming solutions provider (1 Solution Provider);
giving priority to new economies (1 Leader in New Economies);
simplifying processes in order to act as a single, unied entity
(1Company).
1
GLOBAL SPECIALIST IN ENERGY MANAGEMENT
Connect, Schneider Electrics new company programme
(2012-2014)
The new 3-year plan covering 2012 - 2014 includes four
majorinitiatives:
Connect
for Efficency
Connect
Everywhere
Connect
to Customers
Connect
People
Connect to Customers: this initiative aims at further improving the
performance of its business models in order to be a leader in products
and in solutions, and to adapt the different dimensions of the customers
and partners experience with Schneider Electric when they interact
with the Group:
Partner excellence: continue to grow in products in a win-
win relationship with partners by creating new opportunities
for Distributors and Partners, leveraging the strength of One
Schneider Electric and leading product innovation. This
initiative will further reinforce the Groups leadership position
in the Product Business.
Solution excellence: leverage the Groups unique value
proposition with its solution capabilities, improve equipment
cost competitiveness, reinforce execution while being more
selective on projects, and boost service sales. This initiative will
temporarily impact the Solution Businesss growth but will raise
signicantly its profitability and return prole.
Tailored supply chain: bring the supply chain to a new level
of excellence by aligning organis ation to customer needs and
providing differentiated manufacturing and delivery models for
each customer segment. This initiative should lead to higher
customer satisfaction and inventory efficiency.
Connect Everywhere: this initiative is designed to identify key
investment areas in new economies and create new opportunities in
mature countries to be a leader in both types of geographic areas.
Grow in new economies: expand geographical coverage by
increasing the Groups presence in the fast-growing second-
tier cities and further penetrate these markets with mid-market
segment offerings supported by strong brands with wide local
coverage. The initiative will continue to support the long term
growth potential of new economies in Schneider Electrics
portfolio.
Grow in mature countries: grow activities that develop
independently from traditional capex trends with a focus
on opex-driven opportunities and new businesses. This
includes developing installed base and energy management
services, capturing the smart grid opportunity while investing
in new businesses in areas such as electric vehicle charging
infrastructure, home automation and carbon management.
With this initiative, the Group aims to create its own growth
momentum in the mature countries.
Connect People: the target of this transformation is to create a culture
and an environment for the Groups employees development and
performance.
Engaging leaders: train leaders with Schneider Electric
University and promote Diversity
Engaged individuals: support employee development via
training, empowerment and cross-business mobility
Engaging workplace: step-up collaboration & communities,
regroup locations, ensure safety at work, develop the
Schneider Way
Connect for Efciency: this initiative includes the actions aiming
at writing a new chapter in the Groups history of protable and
responsible growth.
Industrial Productivity: raise the bar with tailored supply
chain and drive signicant industrial productivity through
purchasing, footprint optimis ation, supply chain ow re-design
and transportation rationalis ation. This will be supported by a
best-in-class planning process by customer segment and an
IT system aligned with supply chain segmentation.
Support Functions Efficiency: leverage scale to drive
savings on support functions, through non-production
purchases rationalis ation, more globalis ation of corporate
functions, simplication of business and country level set-up,
and implementation of acquisition synergies. At the same time,
the company will continue to invest in commercial presence
and research and development to support future growth. Total
R&D expenses to sales ratio is expected to move towards 5%
of sales going forward.
Planet & Society Barometer: maintain best-in-class
standard in environmental sustainability and social
responsibility. Management compensation is partly tied to
barometer performance.
Connect, Schneider Electrics company programme for the 2012-2014 period, is another major
step in the consistent deployment of the Groups strategy. With Connect, the Group will extend
the strong foundation of One to all its strategic levers: products and solutions, mature and new
economies, people, while continuing to drive efficiency at all levels.
Connect: Key financial benefits for 2012-2014
With Connect, Schneider Electric expects Group performance to reach a new level of excellence by 2014.
By 2014
Services growth Outgrow the rest of Group by more than 5 points (on organic basis)
Solutions protability At least 2 points improvement on the adjusted EBITA margin
Industrial productivity 0.9bn to 1.1bn of cumulated gross productivity
Support functions efciency
At least 1 point decrease of support functions costs/sales ratio*
(excl.scopeandcurrency,net of investments)
Inventory efciency Inventory to sales ratio reduced by ~2 points
* Assuming no severe disruption of the global economy.
Ambitious long term financial targets for
attractive shareholder returns
Over the long term, the key company priorities remain
focused on protable growth, cash conversion and capital
efciency. The management views the Connect program as
another opportunity to improve the Groups through cycle
performance on those metrics.
Across the business cycle performance targets:
sales: average organic growth of GDP +3 points.
By offer types, sales growth will be driven by Solutions with
a targeted prole at GDP +3 to 5 points. The Group intends
to maintain solid Products growth, at a rate of GDP + 1 to
3points.
By geographies, growth will continue to be driven by New
Economies with a targeted growth prole at GDP + 6 to
8points.
For each of these indicators, the reference basis is world GDP
growth on a real basis and at market foreign exchange rates.
adjusted EBITA: margin between 13% and 17% of sales;
cash conversion: ~100% of net prot converted into free cash
ow.
Across the business cycle capital efciency targets:
ROCE**: between 11% and 15%;
dividend: 50% payout of net income;
capital structure: retain a strong investment grade credit rating.
** ROCE is dened as: ajusted EBITA after tax/Average Capital Employed.
Capital Employed is defined as: shareholders equity + Net financial debt+Adjustment for associates and financial arrets.
Closing of the One company programme (2009-2011)
One, the company programme that covered the period 2009-
2011 was a big step forward in the Groups transformation. With
One, Schneider Electric was re-organis ed into 5 customer-focused
businesses and strengthened its integrated portfolio to establish itself
as the global reference in energy management. The Group became
a leading provider of high value-added solutions. During the course
of the programme , solutions have gone from 30% in 2008 to 37%
of Group sales in 2011. The companys positions in new economies
were also signicantly reinforced. New economies represented 39%
of 2011 sales (32% in 2008) and about 46% of production costs (41%
in 2008). The Group emerged from One leaner, simpler and more
agile. Under One , it simplied its supply chain, reduced the number of
its brands (10 active
(1)
brands versus 120 in 2008), generated about
1 billion of productivity and drove operational efciency by reducing
support functions costs to sales ratio by 1.5 points.
Our company programme One was a success and a big step
forward in the transformation of the Groups prole. It also laid a
very solid foundation for our future: One brand, One company for
our customers and employees, One organis ation everywhere, and
a far higher efciency than in 2008, said Jean-Pascal Tricoire,
President and CEO.
Three
transformations
customer 1
1 team
solution provider
leader in new
economies
company
1
1
1
Two
fondamentals
The One programme leant on two fundamentals as cornerstones of
Schneider Electrics strategic transformation:
Customer 1: focus on customers, develop customer delight;
1 Team: focus on people development, determination to become an
employer of choice and to increase collaboration between the different
regions and business groups.
In addition, One targeted three transformation priorities:
1 Solution Provider;
1 Leader in New Economies;
1 Company.
(1) Excluding brands from recent acquisitions and in the mid-market.
1
LEADER IN AN INDUSTRY OF THE FUTURE
>
2. Leader in an industry of the future
Schneider Electric is perfectly positioned to take advantage of growth opportunities linked to the energy challenges
facing our planet and to the development of emerging economies.
The activities in which the Group occupies a number-one or number-two position globally accounted for more
than 90% of its revenue in 2011, compared with 50% in 2000.
Today, Schneider Electric operates in ve major sectors Utilities and Infrastructures, Industries and Machine
Manufacturers, Data Centres and IT Networks, Non-residential Buildings and Residential. The Group has a presence
on every continent, with a range of products and services designed to meet the specic needs of local markets.
2.1 Helping our customers make the most of their energy
Schneider Electric is continually strengthening its portfolio of
products, services and solutions, in order to provide an integrated
energy management offering and to help its customers make
theirenergy:
safe, by protecting people and assets;
reliable, by guaranteeing ultra-secure, ultra-pure and uninterrupted
power especially for critical applications;
efficient, by delivering energy efciency solutions adapted to the
needs of each market;
productive, by expanding the use of automation and connectivity
and offering services throughout an installations life cycle;
and green, by offering solutions that are environmentally friendly.
2.2 Seizing opportunities in five growth markets
Schneider Electric serves customers in ve major growth markets:
Non-residential buildings;
Utilities and Infrastructures;
Industries and Machine manufacturers;
Data Centres and Networks;
Residential;
Meeting their energy challenges is a key growth lever for the Group.
Non-residential buildings: reducing
investment and operating costs while
offeringgreater comfort and safety
The non-residential buildings market includes all public, commercial
and industrial buildings: ofces, hotels, hospitals, shopping centres,
schools, sports and cultural centres. This sector has a high energy
consumption; energy efciency is therefore essential and is the
object of new and demanding regulations. User requirements
have to be met in terms of comfort, security and environmental
friendliness, as do the needs of owners and building managers
seeking to reduce investment costs and optimise maintenance and
operating costs.
Schneider Electrics customers in this sector include users, property
developers, design rms, systems integrators, panel builders
and installers, electrical equipment distributors and building
management companies.
The Groups products and solutions cover:
utility management (electricity, gas, district heating,.. .);
management of technical systems (HVAC, lighting, security,.. .);
voice-data-image networks;
measure and control of energy use and quality;
integrated and decentralised management and control of one
orseveral sites.
Utilities and Infrastructures: ensuring
efficiency , reliability and responsiveness
Schneider Electrics main customers in this market are energy
operators, water utilities, oil, gas and transportation infrastructures,
as well as municipalities.
The global challenges these customers face represent long-
term growth prospects for Schneider Electric, and include
booming energy demand, the need for increased efciency to
reduce environmental impact, expansion of renewable energies,
the evolution of energy market regulations and in particular the
1 LEADER IN AN INDUSTRY OF THE FUTURE
emergence of demand response, and the growing need for real-
time control of installations security and reliability.
electrical distribution;
utility management (access control, lighting, HVAC.. .);
control and supervision of industrial processes;
installation and real-time management of smart electricity grids;
systems facilitating access to electricity (our BipBop programme).
Industries and Machine manufacturers:
enhancing productivity, flexibility and
efficiency
Schneider Electric provides energy solutions for all segments of this
market: mines, cement plants, food-processing industry , material
handling and packaging machines. Its customers are end users and
companies, engineering rms, systems integrators, OEMs (original
equipment manufacturers), electro-intensive industries , panel
builders, and electrical equipment distributors.
Energy efciency is at the heart of the challenges facing industry,
which are to reduce production costs, comply with new regulations,
and reduce the environmental impact of industrial activity. In
addition, rapid industrialisation in new economies and the need to
modernise required in industrial installations in mature economies
both create signicant opportunities for growth.
automation and supervision of industrial processes;
equipment control and supervision;
utility management (access control, lighting, HVAC .. .);
integrated and decentralised supervision and control of energy
ows for one or several sites;
tools and services allowing control and optimis ation of
industrialoperations.

Data centres and Networks: guaranteed
reliability, availability and efficiency
Data centres are sites lled with servers that process and
store billions of digital data in secure, air conditioned rooms.
They constitute the central nervous systems of businesses and
public departments, and represent a high-potential market thanks
to the growing digitalisation of professional and personal activities.
The expansion of data centres implies a signicant increase in
electricity requirements for servers operation and cooling, and the
cost of energy needed to cool server rooms should shortly exceed
that for the servers .
The Group offers a complete line up to meet the energy efciency
requirements of data centres and IT networks. Its products and
solutions cover:
energy management and control;
architecture design and installation audit;
critical power systems with UPS and generators;
cooling with a unique hot air containment system;
monitoring and analysis of online data;
training;
maintenance;
monitoring and security.
Residential services: provide single solutions
for comfort and efficiency
Schneider Electrics main customers on this market include
electricians, architects and decorators, domotics, lighting or
security rms, construction rms, contractors, electrical equipment
distributors and large DIY stores, as well as end customers and
home owners.
The market for single-family homes and apartment buildings
is driven by renovation and refurbishment, especially in mature
countries, as well as construction and upgrades, especially in new
economies.
Whether for renovation or construction, the challenge is to
combine technical constraints, local standards and regulations, as
well as users preferences. Users require comfort and aesthetics,
but increasingly energy performance, connectivity, security and
surveillance too.
electrical distribution and data connection panels, and their
installation systems;
L ifeS pace control (of energy, heating, lighting, shutters);
energy performance (measuring and optimizing usage, alert
systems);
secure energy:
access control and security systems;
electric vehicles charging infrastructures.
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2.3 Unrivalled leadership in our five businesses
Schneider Electric is leveraging its broad and consistent portfolio
of innovative products, integrated and intelligent solutions and its
competitive services to meet the requirements of its customers.
Since 2011, the Groups activities have been organised into ve
businesses that meet the specic needs of their customers:
Power, which covers all low voltage equipment (electrical panels,
circuit breakers) as well as installation and control systems
(LifeSpace), renewable energies integration, residential market
offering and electric vehicles charging infrastructure;
Infrastructure (previously called Energy), which specialises
in medium voltage applications, especially for infrastructure and
electrical utilities: disconnectors , circuit breakers, transformers,
medium voltage cells and SCADA (SupervisionControl And Data
Acquisition) management systems, software for the integrated
management of mission critical infrastructure;
Industry, which provides comprehensive solutions for industrial
automation and control: advanced HMI (human-machine
interface) terminals, power supply, push buttons and indicator
lights, optimum temperature control, customised sensors;
IT, which specialises in critical power for data centres: monophase
and three-phase UPS, server cabinets, network power control,
InRow Cooling Systems;
Building , which facilitates energy efciency in industrial or
commercial buildings through automation and security systems:
programmable regulators, centralised building management
systems, camera sensors, security monitoring equipment.
All these businesses have signicant levers for growth, linked to
the growth in energy requirements, to the necessity of developing
energy efciency, to the evolution of electricity grids and of cities
throughout the world and particularly in new economies.
The Power business
Number1 worldwide in low voltage
The Power business is at the heart of the Groups activities and
helps meet the worlds energy challenges: increase of needs,
growing environmental concerns, evolution in regulations, pressure
on investment and operating costs, development of renewable
sources of energy and, in the near future, of electric vehicles,
emergence of smart grids and sustainable cities.
This business represents the backbone of all the Groups activities:
its energy management offering is found in almost all the integrated
solutions provided by the Groups other businesses to their
customers, especially in the residential and non-residential buildings
sectors.
In particular:
f or industrial and ofce buildings, the Power business offers
a very wide range of electrical equipment, circuit breakers,
transformers, meters as well as monitoring and control systems.
f or the residential market, Power offers electrical distribution
equipment and L ifeS pace control systems for energy, heating,
lighting, shutters, access control, re alarms,etc.
the Group ensures i ntegration of renewable energy sources in the
electricity grid thanks to our expertise in low- and medium-voltage
electrical di stribution, conversion and energy management.
P ower also offers a complete range of electric vehicles charging
infrastructures, that are both safe (for users, cars, buildings and
the grid) and smart thanks to energy management systems that
allow in particular to optimis e charging time, as well as supporting
information and payment services.
The Infrastructure business
Number1 worldwide in medium voltage and
automation
In June2010, the acquisition of Areva T&Ds electrical distribution
business completed Schneider Electrics medium voltage portfolio
and in particular, strengthened its position in medium voltage
network automation for electro-intensive customers and electrical
utilities.
The agreement signed in October 2010 for the acquisition of
50% of Electroshield-TM Samara further strengthened Schneider
Electrics offering and position in the medium voltage market, as
well as signicantly extending its presence in Russia.
Finally, the acquisition of Telvent in 2011, a specialist in integrated
management software for electrical, urban and industrial
infrastructures, positions the Group on the whole value chain by
completing its range of high added value integrated services and
solutions and strengthening its presence in many geographies
(USA, Brazil).
These acquisitions have brought Schneider Electric global leadership
in medium voltage, allowing the Group to fully leverage the growth
opportunities stemming from the emergence of the smart grid
as well as from the extension or modernisation of electrical and
industrial infrastructures throughout the world.
The Industry business
Number2 worldwide in automation and industrial
control
Thanks to an active policy of partnerships and acquisitions,
Schneider Electric has continually strengthened its presence in
automation and industrial control.
For its industrial customers and OEMs, Schneider Electric offers
programmable logic controllers and automation platforms,
specialised conguration, programming, operating assistance and
supervision software, as well as a wide range of industrial control
products, such as contactors, overload relays and motor circuit
breakers, speed drives, motion controllers, sensors, control units
and operator terminals.
Lastly, the customised sensors that were previously provided by the
CST business (Custom Sensors &Technologies) became part of the
Industry business at the start of 2011, bringing with it the biggest
range of sensors on the market, and global leadership positions in
1 LEADER IN AN INDUSTRY OF THE FUTURE
angular speed sensors and in position and pressure sensors for the
automobile, aeronautics and manufacturing industries.
The Industry business accompanies its customers development:
development of economic and industrial activity in the new
economies, optimisation of industrial processes, costs and
environmental impact worldwide.
The IT business
Number1 worldwide in critical power and cooling
services
A growing number of industries notably those involved in
information technology and nance require a reliable energy
supply and impeccable quality at all times.
A combination of the products of American Power Conversion
(APC) and of MGE UPS Systems has allowed Schneider Electric
to become the world leader in this market. The Group maintains it
leadership by offering a full and competitive portfolio of products,
solutions and services, worldwide geographic coverage and
distribution channels, and of course, by its permanent commitment
to innovation.
The IT business benets from the growing digitalisation of data,
its continual increase in volume and the ever-increasing speed of
dissemination.
The Buildings business
Number4 worldwide in building automation
andvideo security systems
In the last few years Schneider Electric has become one of the
worlds leading players in technical building management.
The Group offers a comprehensive, innovative range of automation
solutions backed by design and supervision software to manage
building utilities, based on open and integrated systems.
These solutions make it possible to reduce energy consumption,
optimise installations, modernise them cost effectively, and reduce
maintenance costs. They also enhance comfort and security, an
area in which the Group has continually strengthened its activities
since the acquisition in 2007 of Pelco, a worldwide leader in the
design, development and manufacture of video security systems.
Growth in this business is linked to the expansion of urban and
industrial areas, the need to renovate buildings, compliance with
new energy regulations and implementation of new building
energy standards, the development of energy efciency and the
improvement of operating cost control.
2.4 Proximity to each of our markets
Schneider Electric chose to increase its access to different markets
and a large portion of its sales is made through intermediaries
such as distributors, systems integrators, installers and purchasing
advisors, who all bring their own added value and know-how.
Excellent relationships and customer
satisfaction are key priorities
Customer satisfaction is an integral part of Schneider Electrics
growth strategy. Every contact with Schneider Electric should be a
positive experience that makes all customers, no matter who they
are or where they are located, feel , understood and satised. This
commitment is an important differentiating factor, and customer
satisfaction surveys are regularly carried out in all countries in
which the Group operates, and employees attend related training
programs.
Customers also have access to online diagnostics and support
services, an e-catalogue, downloadable software and online
information and training.
Distributors: a daily partnership
Distributors account for approximatly 50% of the Groups total
revenue s through an extensive network in 190 countries all over
the world.
Schneider Electric works with many different types of distributor:
local distributors, wholesalers and non-specialised professional
distributors, large international groups such as Rexel, Sonepar,
Graybar and Grainger, IT specialists such as Tech Data and
Ingram Micro in the United States. In the residential renovation
sector, Schneider Electric also sells products through large home
improvement chains such as Home Depot and Lowes in the US,
Kingsher in the UK and Saint 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-brand access control and security
products.
Schneider Electric assists its distributors in advising their customers
and helping them to benet from technical innovations. To maintain
a high performance network, the Group works hand in hand with
distributors on supply chain issues, technical training and marketing.
Internet tools now occupy a dominant position for sales, and above
all, up-to-date information. Through the eShop, distributors can link
Schneider Electrics product database to their e-commerce sites so
that customers have reliable 24/7 access to information. As part of a
programme to develop energy efciency solutions with distributors,
the Group has published a catalogue of energy efciency solutions
that suit the needs of different markets and customer segments.
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Specifiers: in search of efficient solutions
To meet their customers growing demands for comfort, ergonomics
and design, speciers (engineers, architects and design rms) are
constantly looking for more efcient and better integrated solutions
for energy management, as well as for access control, security, and
buildingautomation.
They are therefore essential partners for Schneider Electrics growth,
notably in the high-potential buildings and residential markets, which
include the construction and renovation of single-family homes and
apartment buildings.
Schneider Electric uses many information and training tools for
speciers, such as reserved exhibits, electrical installation guides,
installation design software and training methods.
Panel builders and systems integrators
asource of solutions
The main objective for Schneider Electric is to help these
professionals to extend their competencies by giving them the best
level of service available anywhere in the world.
Panel builders, of which there are more than 20,000 throughout
the world, make and sell electrical distribution or control/monitoring
switchboards, primarily for the buildings, energy and electricity
infrastructure markets. Their main customers are contractors.
Panel builders mostly buy low and medium voltage devices, such
as circuit breakers and contactors, and increasingly, prefabricated
systems.
Systems integrators design, develop and support automation
systems to meet their customers needs for the performance,
reliability, precision and efciency of their operations. By providing
global coverage and local contacts, they offer their clients a high
degree of exibility.
Schneider Electric has considerably expanded its automation
line up, giving systems integrators access to a powerful platform
covering all areas of automation from eld control to Manufacturing
Execution Systems (MES).
Contractors towards a revolution in
theresidential market
To devise solutions tailored to end-users specic needs, Schneider
Electric works closely with contractors, small specialist or generalist
electricians, large companies that install equipment and systems
and integrators .
These partners bring value for end customers, rst by advising them
about the choice of solutions that best suits their needs, and then by
installing efcient systems. The main objective for SchneiderElectric
is to support them in the rapid development of solutions and
technologies for the residential market: lighting, temperature and
door management systems, recharging equipment for electric
vehicles and renewable energy solutions.
In order to strengthen a relationship based on mutual trust and
added value , Schneider Electric partners actively with contractors,
providing technical training and support .
As much , the EcoXpert programme aims to secure special
partnerships with certain installers, with whom Schneider Electric
shares all its expertise on renewable energy and energy efciency
solutions. The EcoXpert network is being developed in many
countries throughout the world.
OEMs: partners in performance
Original Equipment Manufacturers (O EMs) continuously seek to
improve machine performance and optimise maintenance in areas
ranging from packaging to textiles, elevators to conveyors , and
materials handling and hoisting to HVAC.
Schneider Electric works closely with almost 30,000 OEMs.
TheGroup leverages its expertise and know-how to nurture these
special partnerships. This is mainly achieved through:
an extensive knowledge of OEMs applications;
dedicated centres of excellence that offer the most competitive
solutions for new machines, in particular, pre-tested,
pre- developed and personalised solutions;
an international customer support to deliver high-performance
after-sales service worldwide;
a dedicated programme for multi-site and/or global OEMs
that enhances their ability to offer superior solutions on an
internationallevel.
Utilit ies meeting the new challenges
of changing electrical networks
There are some 11,000 electricity companies around the world.
They use Schneider Electric products, systems and services in
power generation (electricity for renewable energy production,
power plant equipment, automation and control), transmission
(quality control and metering), distribution (medium and low voltage
networks) and management (pre-payment meters, related services,
peak management).
The Group responds effectively to their expectations with
applications support and innovative products that help them meet
important challenges linked to changes in energy market regulation
and the development of renewable energies.
Global strategic accounts our solutions
champions
Schneider Electric has established an organisation which is
dedicated to global companies, with a view to developing privileged
relationships with them. To meet these customer expectations,
the Group offers preferred supplier contracts to ensure that they
receive services of the highest quality.
1 R&D STRATEGY
This organisation is based on short lines of communication and
decision-making, rapid mobilisation of Group resources throughout
the world, and dedicated teams in which management is
directlyinvolved.
Some 87global customers benet from this organisation, including
Air Liquide, GlaxoSmithKline, IBM, Lafarge, Marriott, Nestl, Procter
& Gamble, Total, Toyota, Veolia Environnement and Walmart.
2.5 Competitors and participants with varied profiles
One can classify Schneider Electrics traditional competitors into
two categories:
large non-specialist manufacturers with diversified
businesses: ABB, Eaton, Emerson, General Electric, Johnson
Controls, Honeywell, Mitsubishi Electric, Panasonic (formerly
Matsushita), Siemens;
multinational specialist manufacturers: Cooper, Hager,
Legrand, Omron, Rockwell Automation .
Other competitors are appearing:
low-price products, manufacturers notably in low voltage
and for indirect markets: Chint, Legend, Larsen&Toubro .
>
3. R&D Strategy
Among the R&D investments of the last three years, such as the EcoStuxure programme, and the structural
acquisitions, such as Areva T&D distribution or Telvent, Schneider Electric has built an exceptional R&D capacity
portfolio, combining its acquired knowledge with new expertise, notably in terms of software and engineering systems.
Schneider Electrics R&D strategy aims to fully exploit this capacity for generating growth and protability by continuing
to give priority to innovation, both in terms of technology and solutions.
3.1 Finalisation of EcoStruxure
The EcoStruxure programme moved from the research to the
development phase in 2010 and was completed at the end of
2011 with the launch of StruxureWare, an integrated software
suite covering all the energy management, process optimisation
and environmental reporting needs of companies (shop oor to
topoor).
StruxureWare combines Schneider Electrics traditional control
solutions with complementary solutions coming from recent
acquisitions for energy optimisation and resources and new
developments management. The relevance of the main choices
for EcoStruxure, such as convergence towards IP networks and
web services integration is shown by the exibility of the whole
programme, which Schneider Electric can easily adapt to specic
needs of different target market segments.
This exibility is a strategic advantage for integrating acquisitions.
So, just nine months after acquiring Summit Energy, its Dashboard
View solution was expanded into a resource management solution
that is perfectly integrated into the StruxureWare suite. The original
Telvent components have also been integrated into StruxureWare,
six months after the acquisition was nalised.
All the StruxureWare components have likewise been designed
for many platforms to allow their use to be extended to meet new
needs. For example, the Remote Services Platform made it possible
to develop monitoring services and remote control of equipment in
a few weeks, allowing the service strategy for the installed base to
be accelerated.
With StruxureWare, Schneider Electric is in a position to fully
prot from the market maturity and from the anticipated market
consolidation in energy management to thus reinforce its leadership.
1
R&D STRATEGY
3.2 A platforms strategy
The growing digitalisation of products, which provides for more
exibility and the growing share of software within solutions, open new
perspectives on the development of shared technological platforms
for different businesses. This possibility, already demonstrated by
the new components of StruxureWare, can be extended to other
Schneider Electric product/solution portfoliodomains.
Ambitious programmes were initiated in 2011 to create shared
platforms in the embedded control domain and the SCADA (control
and monitoring systems) or in the user interface domain, with major
innovations such as augmented reality.
In addition to efciency gains, the platform strategy has major
advantages:
faster integration of acquisitions, as demonstrated by
StuxureWare;
increased ease of integrating outside products into
Schneider Electric solutions due to the denition of
interoperabilitystandards;
and therefore, faster innovation.
The Innovation and Technology Board, which was created
in 2009 and has strongly contributed to the success of the
EcoStruxure programme, is behind this strategy and responsible
for its management.
3.3 Projects with significant impact
Parallel to the cross-cutting programmes such as EcoStruxure and
long-term investments such as the platforms, Schneider Electrics
R&D still strongly contributes to the success of the Groups products
and solutions.
Large scale collaborative programmes
HOMES is Europes most important innovation programme for
the energy efciency of buildings. Led by Schneider Electric and
supported by OSEO, an agency that supports entrepreneurship
and innovation; it involves a total of 13 companies and research
laboratories.
The aim of HOMES is to nd a number of coherent solutions to
improve energy management for buildings without reducing
comfort. Covering both new and existing residential and commercial
buildings, the programs goal is to produce prototypes ready for
manufacture.
In addition, testing has been carried out under the programme at
ve pilot sites since February 2010, in conjunction with the FFIE
(French Federation of Electrical Engineers). The aim is to devise a
method for effectively measuring performance for existing buildings,
to enable ways of reducing energy consumption to be identied in
each case.
At the end of 2011 the programme was used to assess a potential
gain of around 20% to 50% on the pilot buildings by using the
building energy simulation tool of the CSTB (Building Scientic and
Technical Centre). These remarkable results are accompanied by a
description of a control functions library to be implemented in order
to achieve these gains; this library will be gradually integrated into
the Schneider Electric solutions.
The programme has also shown the ability to move directly from the
CAD drawings of a building to the simulation of the buildings energy
performance, thus providing a view of an uninterrupted chain from
conception to control.
Finally, one of the major results from the HOMES programme is
the completion of a new type of wireless comfort sensor with an
autonomous energy supply. The rst prototypes for tertiary sector
and residential buildings have been completed; they measure
temperature, humidity, luminosity and carbon dioxide. This result
allows a measurable understanding of the dynamic compromise
between energy efciency and comfort.
MIRTIC is an ENIAC European cooperative programme launched
in 2011 with the company Ulis. It responds to a need highlighted
by the results of the HOMES programme: the need for a presence
sensor (not a movement sensor) for the best possible adaptation of
the building control for work, or even for the activity in the different
zones. The aim of the programme is to supply a new type of sensor
that will use affordable, low resolution infrared technology.
SCUBA is an FP7 European cooperative programme launched in
2011 with the Universities of Cork and Dresden, Philips and the
CEA. The SCUBA project aims to dene the tools for conception,
conguration and the associated integration technologies in order
to guarantee interoperability and exibility of the building control
systems. It will use a test platform and a pilot site of the HOMES
programme.
MIND aims to improve the productivity of embedded software
developments and critical components of intelligent products.
The component assembly construction technology allows for
effective development of reliable and exible products.
Schneider Electric complements the results of this project with its
own research into combining within the same product certied
embedded software, which ensures safe operation, and open
software enabling related, evolving functions to be developed
morerapidly.
The MIND programme also passed from concept to rollout in 2011
with an initial prototype phase underway through the ADN4SE
project before a larger rollout of this technology in the embedded
control platform mentioned below.
Projects around Smart Grids
2011 saw the start of two major projects involving the smart grids
Greenlys and Millener.
GREENLYS: the rst large scale demonstrator offering a global
vision (www.greenlys.fr). The four-year project will test and rollout
innovative solutions for the whole electrical system: decentralised
electricity production, communicating meters, distribution network
management, new demand reduction programmes, in-home
energy management solutions,etc.
1 R&D STRATEGY
The project will form a showcase of technology from 2015 with the
development of two platforms in Lyon and Grenoble.
This experiment will involve nearly 1,000residential customers and
40tertiary sites in urban areas.
MILLENER: the MILLENER research project (One Thousand Energy
Management Installations on the Islands) aims to help reduce user
energy consumption and to integrate the intermittent renewable
energies more effectively into the distribution networks so as to
guarantee the real-time balance between electricity demand and
production.
It takes account of the particularities of a non-interconnected isolated
network, like that of the islands, and the need to make users aware
of how to manage their consumption. These experiments will also
include installation of photovoltaic panels, energy storage systems
and management of electrical equipment. The experiments will take
place in Corsica, Guadeloupe and Reunion.
Co-innovation around electrical vehicle
Ease of charging will be one of the key factors in public acceptance
of electric vehicles and is therefore an important line of research for
Schneider Electric and its partners.
A close partnership was established with Renault regarding
induction charging, dispensing with the need for cable connection.
The theoretical studies and the rst prototypes showed that the
system performance achieved over 90%, meaning a system rollout
can be planned and the project has entered the development
phase.
Contribution to standards
Effective energy management uses a measure and control that is
always more precise, resulting in effective and less expensive means
of communication. This is why Schneider Electric is one of the
most active members of the ZigBee consortium and is particularly
involved in the proposal for a protocol called Green Power, a radio
communication with extremely low energy consumption which can
be used in self-powered devices (e.g. by solar power).
2011 saw the acceptance of the Green Power standard by the
ZigBee consortium, opening the way to applying it industry-wide.
Energy efciency in buildings is regulated by a European Commission
framework directive: the Energy Performance of Buildings Directive
(EPBD), rewritten in 2010, denes the requirements for technical
systems, their on-site inspection and in particular for the active
control systems such as the automation, control and monitoring
systems. Within the context of this directive, a European
standardisation committee proposed a standard regarding the
impact of these systems on building performance: EN15232. This
standard proposes classifying systems into performance classes in
the same way as for electrical domestic appliances but with only
four levels A, B, C and D classA having the highest performance
(26% - 52% reduction in energy consumption according to building
type), while class D identies the lack of automation and/or inefcient
systems and requires improvement.
In the same spirit, the European association eu.bac (European
Building Automation Controls Association), with presidency held
by Schneider Electric, in 2009 launched a programme to promote
standard EN 15232 consisting of the implementation of periodic
inspections on the systems site to check certication as well as to
monitor performance over time: EEBACS, for energy efciency of
automation systems. Schneider Electric is the leader of this initiative.
Supporting Sustainable Development
In line with Schneider Electrics commitment to sustainable
development within the framework of the BipBop programme,
the Company has worked for two years on a project involving a
concentrated solar power plant adapted for communities that are
not connected to the electrical grid. Compared to photovoltaics,
the concentrated solar power process has many advantages in this
type of application:
energy storage capacity, in the form of heat, that is economic,
safe and environmentally friendly compared to batteries that can
be stolen and need to be recycled at the end of their working life;
use of residual heat for associated activities, such as crop drying
or water purication;
simple maintenance and ability to build the heaviest and bulkiest
components locally.
The project, which brings together Schneider Electric and ve smaller
companies, has obtained nancing from ADEME (Environment
and Energy Management Agency) to start on the prototype and
to conrm the business model. The project has also received
money from the MEDEF (Movement for French Companies) for
collaboration between startups (STIRAL) and large companies.
3.4 Human capital
The main force behind Schneider Electric R&D is its global network
of 11 ,000 employees who are directly involved in research and
development or technical engineering activities in 26 countries and
over more than 70sites.
In order to prot fully from this collective expertise, an ambitious
programme was launched to support the networks of expertise
in key domains formally identied according to the Companys
strategy. For each of these domains, a formal strategy is dened
an implemented by a dedicated network of experts, both internal
and external:
identication of trends and signs of weakness in the domain;
participation in structured research projects and partnerships;
structuring of critical domain expertise;
and implementation in the Groups R&D programmes.
A supplementary network of R&D centres
In addition to ensuring Schneider Electrics presence in the main
areas of expertise and innovation, the role of R&D centres is to
develop the critical expertise given above for the whole of the
Group. It is an additional area of collaboration between members
of the Innovation and Technology Board to organise R&D in the
centres of excellence located within the Groups ve R&D hubs.
1
R&D STRATEGY
Diversified partnerships
In addition to its innovation and R&D initiatives, Schneider Electric
pursues an active R&D partnership policy with universities and
prestigious institutions, notably Shanghai Jiao Tong University in
China; the MIT Media Lab and Georgia Tech in the United States;
the CEA (Alternative Energies and Atomic Energy Commission),
INRIA (National Institute for IT and Automation Research), cole
des Mines ParisTech, Institut National Polytechnique de Grenoble
and Universit Joseph Fourier in France; and Monterrey Institute of
Technology in Mexico.
The Group is also involved in numerous collaborative projects
with academic and industrial partners in France and the
rest of Europe, notably in the areas of energy efciency and
environmentalprotection.
These partnerships are also made by bilateral agreements or
support for chairs, notably the Chair in Modelling for Sustainable
Development with ParisTech, the Chair in Bioplastics with the
CEMEF Mines ParisTech.
Efficient processes
The design of complex products and solutions requires perfect
control of all the tools and methods that have become extremely
complex, from mechatronics to software. Schneider Electric
therefore relentlessly invests in these design processes, methods
and tools for greater reliability and speed within projects.
Spectacular results were obtained by systemising the simulation
at initial stages of the design and now products are mechanically,
electrically and thermally simulated before the rst prototype is
constructed. This approach is progressively being extended to
complete systems.
As far as software is concerned, iterative development is becoming
the norm. This means customers can comment on the increasing
complete versions of a product. Compared to the classic approach,
these methods reduce development delays by a factor of two or
three and produce products of a much higher quality. For example,
the latest version of the energy monitoring solution integrated in
StruxureWare was developed three times quicker and with a team
of half the size of the previous version.
Finally, the industrialisation processes are accelerated and made
more reliable by developing standards for the latest components
at a Group level. In addition to the purchasing savings of tens
ofmillions of euros, this programme allowed Schneider Electric to
weather Japans nancial crisis with a limited impact on its delivery.
3.5 A source of partnerships and innovation
By studying emerging markets and technological trends, Schneider
Electric is able to identify potential growth and innovation
opportunities at a very early stage. In 2000 Schneider Electric
created an investment structure called Schneider Electric Ventures
to invest in high-tech startups whose innovations t with the Groups
future development. Focus areas include energy, communication,
automation and the use of advanced materials and electronics. This
investment vehicle constitutes a source of particularly productive
partnerships and has forges contacts with more than a thousand
small and mid-sized businesses around the world each year.
In 2010 Schneider Electric Ventures became Aster Capital Partners
with the launch of a new capital investment fund to nance innovative
startups operating in the areas of energy and the environment. The
fund is based in Paris and has received capital subscription of
EUR85million from Schneider Electric (EUR40million) and Alstom
(EUR30million), joined in 2011 by Solvay-Rhodia (EUR15million).
Other industrial or nancial partners may be invited to join this
initiative to create the European benchmark fund specialising in
energy and environment.
Aster Capital benets from the capital investment expertise acquired
by the Schneider Electric Ventures team which has since been
strengthened by the appointed experts from Alstom and Solvay-
Rhodia. The mission of Aster Capital is to take minority interests
in innovative startups based in Europe, Israel, North America
and Asia, developing new technologies that could lead to major
breakthroughs in the elds of energy and the environment. There
were two new investments in 2011.
Ioxus Investment made in April2011
The American company Ioxus specialises in the production of
ultracapacitors which are used notably in the hybrid buses and
start-stop car engines. These high power density products have
the advantage of capturing and releasing energy in a few seconds
with a quicker recharge time than lithium-ion batteries, providing
nearly 20,000 charging cycles.
Ultracapacitors are less bulky than traditional batteries and can be
used for a wide range of applications: hybrid vehicles, wind turbines,
UPS, machine tools,etc. More generally, Ioxus products form high
added value elements within the domain of energy storage and
solution optimisation, a fast-growing market that could reach nearly
1,000million dollars in 2015.
Aster Capital invested USD3 million in Ioxus, supported by the
interest in UPS and Energy Metering divisions for products under
development.
Avantium Investment made in June2011
The expertise of the Dutch company Avantium lies in transforming
biomass into biopolymers (designed under the name Furanics) used
as base elements for generating bioplastics or bio-fuels. The YXY
technology developed by the company allowed them, for example,
to develop a PEF plastic bottle from products of 100% plant origin
in partnership with The Coca-Cola Company to replace the current
PET plastic made from petroleum with competitive performance
1 R&D STRATEGY
and price level. The available markets are vast with noteworthy
potential applications in sectors such as carpeting, car equipment
and electronics.
Production will begin shortly with the start of the Avantium pilot
plant. This equipment with a 40 tonne annual capacity was
opened in Decemberand nanced with money from a consortium
of investors, including EUR2.5million from Aster Capital, convinced
of the value of the Companys proposed advances in relation to
green plastics.
A deep commitment within the R&D
community
Schneider Electric plays an active role in the French and international
R&D community, notably in dening strategic R&D programmes
and in evaluating projects currently under way or submitted to
Frances business clusters, Frances national research agency
or European organisations such as FP7, ITEA (Information
Technology for European Advancement), KIC (Knowledge
Innovation Community), InnoEnergy and PPP E2B (Public-Private
Partnership on Energy-Efcient Buildings). The two main business
clusters include Minalogic, specialised in microtechnologies,
nanotechnologies and embedded software and Tenerrdis, which
focuses on new energy technologies and renewable energies.
Schneider Electric is involved in the main skills network, the Organic
Electronic Association, and is a promoter of green electronics in
relation to its WG-Green working group. It heads up the Intelligent
Product unit for the Plastipolis business cluster, and participates
in discussions with the French scientic community in the context
of the Organic electronics research group. Large area electronics
also provide an opportunity for innovation for Group products:
this technology is likely to bring greater exibility in design, as well
as space gains and new functions on the surface of electronic
products: printed buttons, autonomous screens,etc.
Schneider Electric is also a member of the EMMI (European
Multifunctional Materials Institute) support group, whose main
objective is to serve as a common platform for its 15 academic
members in seven European countries to dene and execute
research or educational projects in the area of multifunctional
materials. EMMI enables different communities to share views about
functional ceramics and organic-inorganic hybrid materials, etc.
Environmental issues play a key role in much of the members
resulting work: examples include projects to design new materials
or systems to reduce electrical consumption, projects to replace
toxic components and a project to develop hypersensitive gas
sensors. In this context, Schneider Electric is supporting a thesis
begun in 2009, and is backing two thesis subjects for 2011.
1
ORGANISATIONAL SIMPLICITY ANDEFFICIENCY
>
4. Organisational simplicity
andefficiency
The reorganisation of the Group has naturally led Schneider Electric to adapt its organisation so as to have a focus in
line with its strategic importance at any time, in any country and in any business.
The implementation of the new organisation was ne-tuned in early 2011, and was accompanied by a wide-ranging
corporate culture initiative.
Designed for introduction alongside the reorganisation, the One company programme has, in particular, facilitated
the rapid integration of acquisitions, notably that of Arevas distribution arm, which led to the creation of the Groups
Energy business (renamed Infrastructure end of 2011). It is also contributing to the establishment of a common
corporate culture within the Group.
4.1 An organisation focused on end markets
The year 2011 was dedicated to optimising the operation of the
organisational model rolled-out the previous year, the objective
being to pursue the advances of the three major changes from the
Companys One programme:
within the scope of the 1 Solution Provider change, the ve
business lines continued to adapt their organisation to reinforce
the closeness of their relationship with the strategic customer
segments related to the lines, whether on the level of different
countries where the Group is present or at a central level. In the
same way, they pursued the development of specic offers for
these various end customer segments with priority attention
given to the development of integrated solutions, systems and
services offer types;
within the scope of the 1 Leader in New Economies change, the
efforts for rollout of functions and resources, with a key role in the
design of specic offers for the new economies, were pursued and
emphasised. The role and the scope of responsibility for Global
Functions continued to be strengthen, conforming to the road
map dened within the framework of the Companyprogramme;
streamlining back ofce functions and standardisation of
information system platforms were pursued within the scope of
the 1 Company change.
Dual responsibility products and customers
Schneider Electric is structured into ve businesses. Each of the
businesses has a dual responsibility in terms of its product lines and
end-customer segments.
This dual responsibility for each business responds to the need
to be able to excel simultaneously in two areas: selling products,
which requires clear technological leadership, and selling solutions,
which means building close customer relationships and acquiring a
detailed understanding of end users needs.
This shift towards solutions is a major focus of the One company
program.
Each of the ve businesses manages its R&D, Marketing and Sales
teams and has responsibility for its global results.
A number of back-ofce functions such as nance, human
resources, IT systems and marketing are handled by the Global
Functions, which have a governance role and provide services
internally.
These ve activities cover the following business areas:
Power, which includes the activities of Low Voltage (electrical
distribution), LifeSpace (wiring devices and associated interface
devices) and Renewables (conversion and connection to the grid)
further to the transfer of Medium Voltage to the Energy business in
2011 (see below); the business is in charge of the end-customer
segments Residential and Marine when it relates to solutions
integrating the offers of several activities from the Group;
Infrastructure, created in 2011 and previously named Energy,
combines all Medium Voltage activities including those from
Areva Distribution, as well as Telvent; the business is in charge
of the end-customer segments Oil and Gaz and Utilities when it
relates to solutions integrating the offers of several activities from
the Group;
Industry, which includes Automation & Control and three end-
customer segments: OEMs, Water Treatment and Mining,
Minerals & Metals when it relates to solutions integrating the offers
of several activities from the Group, as well as Custom Sensors &
Technologies business (Sensors & Automatives), grouped under
Industry from 2011;
1 ORGANISATIONAL SIMPLICITY ANDEFFICIENCY
IT, which covers Critical Power & Cooling Services and two
end- customer segments: Data Centres and Financial Services
when it relates to solutions integrating the offers of several
activities from the Group;
Buildings, which includes Building Automation and Security and
four end-customer segments: Hotels, Hospitals, Ofce Buildings
and Retail Buildings.
Rationalisation and optimisation of synergies
The organisation is deployed in accordance with three key concepts:
specialisation, mutualisation and globalisation. Specialisation mainly
concerns sales and front-ofce operations. Mutualisation covers
local back-ofce operations at the country and regional level.
Globalisation concerns the six support functions, now known as
Global Functions:
Finance;
Marketing;
Supply chain;
Human resources;
Strategy & Innovation;
Information systems.
A substantial portion of the Global Functions costs is re-allocated
to the businesses using distribution keys or application bases that
are generally dened annually.
Specialisation: in each country, each business has its own sales
force and local leader as soon as it reaches critical mass. It also
has a specialised front ofce in each host country to respond
more effectively to customer demand for specic expertise.
Each business is also responsible for its overall results, both
for product sales (in its business lines) and the implementation
of solutions (especially for end-customer segments within its
scope). Over the course of 2011, the main efforts in this area
focused on strengthening, and in certain cases, implementing
teams dedicated to meeting the specic needs of strategic
customer segments with a strong focus on the collaboration
between the business lines, in order to ensure these customers
needs are met as fully as possible. In addition, the 2011 rollout
of a common Customer Relation Management (CRM) tool for all
the businesses, for use from the end of 2011 by 17,000 front
ofce equipment users, represented an important improvement
for better sharing of sales opportunities between the various
business lines.
Mutualisation: a country President is appointed in each country
to oversee the Power business (and therefore, of its income
statement), deployment of Schneider Electrics strategy in the
country (including all local cross-functional issues such as
increasing cross-selling among businesses) and pooling of local
back-ofce resources. These resources are gradually brought
together in each country or region under the country Presidents
supervision and can include multiple local support functions
ranging from administration to project execution, depending
on the situation. In addition, the country President serves as
Schneider Electrics main representative in the country, notably
in dealings with employees and local ofcials. The signicant
advances to note for 2011 in terms of this objective lie in the
alignment between the information systems development plan
in the different regions and the back ofce integration projects
resulting from the creation or acquisition of various entities in
different countries.
Globalisation: major support functions that are not specic to
a given country or business are gradually globalised to increase
experience and leverage a signicant scale effect. Manufacturing
and supply chain operations, areas of shared services or expertise
(such as nance or human resources), information systems and
certain marketing functions (e.g. web services) are now included
within the Groups Global Functions. Over the course of 2011,
these various Global Functions have followed their structuring
and rollout approach at a global level. In particular, the volume of
operations dealt with by the service centres shared by the Finance
and Human Resources functions (Finance shared services and
HR shared services) has been a signicant development.
Geographic dimension and legal structure
The Groups goal is to establish, and where possible, a single legal
structure in each country.
Schneider Electrics simplied legal organisation chart is as follows:
Schneider Electric
Industries SAS
Boissire Finance
Operational
companies
Schneider
Electric SA
The list of consolidated companies is provided in note32 to the consolidated nancial statements (see pages 205 and following ).
Boissire Finance is the Groups centralised cash-management structure; it also centralises hedging operations for all subsidiaries.
1
ORGANISATIONAL SIMPLICITY ANDEFFICIENCY
4.2 A more modular approach to information systems
In 2011 Schneider Electric continued with the redesign of its
ITstrategy, in order to gradually roll out a common model aimed at
simplifying and standardising operations. This model is developing
towards a more open architecture, capable of deploying faster and
less inter-dependent IT platforms to allow for easier upgrades at a
lower cost.
Four platforms are being rolled out for employee management,
customer relations, back-ofce functions and R&D support systems.
The gradual roll out of an SAP-based information system known
as bridge is now focused on back-ofce functions. After pilot
testing in India, Hungary, Austria, Croatia, Romania, Slovakia and
Slovenia, in 2011 the bridge core system has continued to be rolled
out various countries and entities. The roll out will continue in 2012.
This thinking at Group level was facilitated by the globalisation of
information systems within a single IT function created in 2009 that
has a governance role and provides services internally. This move
towards globalisation mainly involved:
gradually deploying a single IT Department that serves all
businesses and users within Schneider Electric in a uniform
manner. To achieve this, the most qualied and competitive
providers both internal and external will be used as needed;
gradually setting up a global IT infrastructure (networks, data
centres, distributed computing and help desk) that is independent
of the various managerial lines and that makes the most of the
Groups critical size and accumulated experience.
4.3 Worldwide redeployment of production and supply chain resources
Schneider Electric has more than 260 production sites and
110 distribution centres around the world for whom customer
satisfaction is the top priority.
While working constantly to improve occupational health and safety
and environmental protection, the Groups manufacturing policy
aims to full four key objectives (listed in order of importance):
1. deliver a level of quality and service that meets or exceeds
customer expectations;
2. achieve competitive product costs and keep increasing
productivity;
3. develop the speed and efciency of the system and limit
production sites risk exposure (currency parity, geopolitical risks
and changes in cost factors);
4. optimise capital employed in manufacturing operations.
A number of the production facilities and distribution centres 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 standardises key components as much as
possible. This global/local approach helps Schneider Electric
maximise economies of scale and optimise protability and
servicequality.
Drawing on its global scope, the Group has re-balanced and
optimised its manufacturing and supply chain resources. The Group
launched a new stage in its industrial deployment in 2010. As part
of the Groups new organisation, the Power business production
and supply chain resources have been globalised and combined
under a single organisation, with global operating responsibility.
Previously, these resources were organised by region and reported
to the various Operating Divisions.
In Western Europe, the United States, Japan and Australia,
rightsizing plans continued to be deployed with a focus on
specialising production and supply chain units and reducing the
number of sites.
Continuous improvement on a global scale
At the same time, an industrial excellence programme called
Schneider Production System (SPS) has been rolled out in all
plants to substantially and continuously improve service quality
and productivity. The programme also takes environmental criteria
into account. Based on a lean manufacturing approach, SPS is
supported by the extension of Six Sigma and Quality and Value
Analysis programmes across the Group. By deploying these
optimisation methods globally and sharing best practices, the
Group intends to lift the operational performance of all its plants to
the same high standard.
Schneider Electrics plants and products comply with increasingly
extensive and stringent European regulations and with international
standards governing environmental protection in all host countries.
In many cases, the Group anticipates future standards. In 1992,
Schneider Electric dened a formal environmental policy, which was
revised in 2004 to take account of changes both inside and outside
the Group. This policy is designed to improve production processes,
promote eco-design, integrate customer expectations into the
Groups environmental protection approach and raise awareness
among all employees and partners about environmental protection
and energy efciency. In order to limit risks related to the environment
generally, the Group has implemented an ISO 14001-compliant
process to continuously improve the environmental performance of
its plants and supply chain centres.
External environmental audits were implemented in 2011 that were
responsible for validating this process as well as for the consistency
of assessments.
The segmented response to customers needs
Since 2011, a new approach to progress was initiated in terms
of the search for responses that were better adapted to industrial
operation for each customer segment (distributers, partners, panel
builders,etc.).
1 RISK FACTORS
This change will be based on six major areas:
the functionality of the industrial and logistic process;
industrial planning;
reinforcement of skills in the target jobs;
optimisation of the industrial operation (suppliers, factories,
distribution);
alignment of the information systems strategy with this
segmentation;
adaptation of the performance measurement.
Schneider Electrics plants and products comply with increasingly
extensive and stringent European regulations and with international
standards governing environmental protection in all host countries.
In many cases, the Group anticipates future standards. In 1992,
Schneider Electric dened a formal environmental policy, which was
revised in 2004 to take account of changes both inside and outside
the Group. This policy is designed to improve production processes,
promote eco-design, integrate customer expectations into the
Groups environmental protection approach and raise awareness
among all employees and partners about environmental protection
and energy efciency. In order to limit risks related to the environment
generally, the Group has implemented an ISO 14001-compliant
process to continuously improve the environmental performance of
its plants and supply chain centres.
4.4 Global, selective purchasing
Purchases correspond to around 50% of consolidated revenue
and play a crucial role in the Groups technical and business
performance. The Group has globalised 70% of purchases from
strategic suppliers and aims to increase local sourcing in emerging
markets to more than 50% as part of its programme to re-balance
costs and revenue.
Schneider Electric primarily purchases raw materials such as silver,
copper, aluminium, steel and plastics, as well as components,
electronic products and services. The supplier list includes
international rms, as well as many small and medium-sized
companies. Suppliers are selected for their know-how, the quality
of their products and services, their competitiveness, their ability to
support the Groups globalisation approach and their compliance
with environmental and human rights requirements. As a supporter
of the United Nations Global Compact, the Group encourages
suppliers to join as well. A sustainable development agreement sets
out each partys specic commitments.
>
5. Risk factors
The Group operates worldwide, in competitive
and cyclical sectors
The worldwide markets for the Groups products are competitive
in terms of pricing, product and service quality, development and
introduction time and customer service. The Group faces strong
competitors, some of whom are larger or developing in certain
lower cost countries. It is exposed to uctuations in the economic
growth cycle and to the respective levels of investments of the
different countries in which it is present. The Groups widespread
geographic coverage and diversied end markets enable it to ride
downturns on specic markets.
As the Group records 39% of its revenue in emerging or developing
countries, it is exposed to the risks associated with those markets.
The Groups wide international presence exposes it to many
economic, legal and political risks in its host countries.
These include risks arising from social unrest (particularly, strikes
and walk- outs), political instability, unforeseen regulatory changes,
restrictions on capital transfers and other obstacles to free trade,
and local tax laws, all of which may have an adverse effect on the
Groups business, results of operations or nancial position.
Schneider Electric has implemented procedures designed to
protect it as far as possible from these risks, which are generally
beyond its control, and to manage them as effectively as possible.
As described in Chapter 3.10 Corporate Governance, Schneider
Electric regularly analyses the risks and threats it faces, which has
revealed six major risk categories as follows:
operating risks that also include the solution business, supplier
risks and competitive threats;
industrial and environmental risks that also include risks such as
natural catastrophes and political disturbances;
computer risks and internet-security threats;
market risks covering currency risks and commodity price
uctuation risks;
legal risks that also cover intellectual property;
litigation and related risks.
The Groups main risks and threats are summaris ed in a chart of
overall risks based on their impact and probability.
Risk factors related to the Companys business
1
RISK FACTORS
These procedures include quarterly business reviews in which
performance and projections are monitored, in terms of activity,
action plans, results to date and forecasts, at all organisational levels
of the Group (see the section entitled Internal Control and Risk
Management). The Group also has the necessary competencies
to manage these risks, mainly through its central functions (nance,
legal, tax and customs).
The protection provided by these measures may nevertheless
prove to be inadequate.
The growth and success of the Groups
products depend on its ability to develop new
products and services and adapt to market and
customer needs
The sectors in which the Group operates experience rapid
and signicant changes due to the introduction of innovative
technologies. Introducing new technology products and innovative
services, which Schneider Electric must do on an ongoing basis
to meet customers needs, requires a signicant commitment to
research and development, which may not result in success. The
Groups revenue and margins may suffer if it invests in technologies
that do not function as expected or are not accepted in the
marketplace or if its products, systems or service offers are not
brought to market in a timely manner, become obsolete or are not
responsive to our customers requirements.
To meet these challenges, the Group has an R&D budget which,
at 4 to 5% of revenue, is among the highest in the industry. R&D
and forward-looking engineering involves some 11 ,0 00employees
around the world, a number of them in development centres located
in over 26 countries. This ongoing commitment has allowed the
Group to accelerate time to market and leverage the technology of
strategic partners with whom it has also forged alliances to expand
its line up or geographic coverage. The Group has brought together
all of its electrotechnical, electronic, electromechanical, software
and other technical competencies by creating technology parks in
China, the US, France and Japan.
Support centres have also been established in Mexico, India and
China to provide the technology parks with additional skills and
development capacity at a very competitive cost.
The Groups business growth depends on its ability to develop,
deepen and enhance customer relationships. The Group must
constantly offer customers innovative solutions built around
high-quality products and services incorporating leading-edge
technologies that are closely tailored to customer needs and
expectations. However, the Group does not have any exposure to
a particular customer. Its ten largest customers represent less than
25% of total revenue.
Increasing customer satisfaction rates represents an important
source of competitive advantage for the Group. It closely tracks the
results of the quarterly surveys conducted in more than 80countries
among all types of customers. Improvement targets are set for each
country as part of the One company program, backed by specic
action plans and progress monitoring procedures.
Schneider Electrics strategy involves growth
through acquisitions, joint ventures and
mergers that may be difficult to execute
The Groups strategy involves strengthening its capabilities through
acquisitions, strategic alliances, joint ventures and mergers.
Changes in the scope of consolidation during 2011 are described
in note2 to the consolidated nancial statements (Chapter5).
External growth projects are examined in detail by the businesses
and corporate functions (strategy, nance, legal affairs, tax and
human resources) concerned, under a rigorous internal process
developed and led at Group level. A launch committee is
responsible for initiating the review process to identify the risks and
opportunities associated with each external growth project, while a
number of validation committees review the results on an ongoing
basis. Projects that successfully come through the review process
are submitted for approval to the Group Acquisitions Committee
made up of the main members of senior management. The largest
projects require the prior approval of the Management Board and,
in some cases, the Supervisory Board.
External growth transactions are inherently risky because of
the difculties that may arise in integrating people, operations,
technologies and products, and the related acquisition,
administrative and other costs.
This is why an integration procedure for new acquisitions has
been drawn up. The integration of newly acquired businesses is a
process that extends over a period of six to 24months depending
on the type and size of the newly acquired unit. The integration
scenario for each acquisition varies depending on whether the
business was acquired to strengthen or extend the Groups existing
line-up or enter a new segment. There are a number of different
integration scenarios, ranging from total integration to separate
organisation. An integration plan is drawn up for each acquisition
and submitted to the Acquisitions Committee for approval. The
plan is implemented by an integration manager who reports to a
Steering Committee that initially meets at monthly intervals and then
on a quarterly basis.
The unit that presents the external growth project is accountable to
the Groups senior management for meeting clearly dened business
plan targets covering the performance of the new business and
expected synergies with existing businesses. Actual performance is
measured against business plan targets during quarterly business
reviews and, for the largest acquisitions, by the Management Board
and Supervisory Board.
Value in use is determined by discounting estimated future cash
ows that will be generated by the tested assets, generally over a
period of not more than ve years. These future cash ows are based
on Group managements economic assumptions and operating
forecasts. The discount rate corresponds to Schneider Electrics
weighted average cost of capital (WACC) at the measurement
date plus a risk premium depending on the region in question
(local risk- free rate), the nature of the targets business (appropriate
beta), and the structure of the nancing (taking into account the
debt to equity ratio and risk premium on the debt). The Groups
WACC stood at 8.1% at December31, 2011, slightly down on the
2010 gure. The perpetuity growth rate was 2%, unchanged on the
previous nancial year.
Goodwill is allocated to a Cash Generating Unit (CGU) when initially
recognised. The CGU allocation is done on the same basis as used
by Group management to monitor operations and assess synergies
deriving from acquisitions. Impairment tests are performed at the
level of the cash generating unit in 2011 (CGU), i.e. the Power,
1 RISK FACTORS
Infrastructure, Industry, IT, Buildings and CST businesses. Details
on asset impairment are provided in note1.11 to the consolidated
nancial statements (Chapter5).
Where the recoverable amount of an asset or CGU is lower than
its book value, an impairment loss is recognised. Where the
tested CGU comprises goodwill, any impairment losses are rstly
deducted therefrom.
The Group is dependent upon hiring and
retaining highly qualified management and
technical personnel
Competition for highly qualied management and technical
personnel is intense in the Groups industry. Future success
depends in part on the Groups ability to hire, assimilate and retain
engineers, salespeople and other qualied personnel, especially in
the area of energy efciency solutions.
The Group put in place a Workforce strategic planning process
in 2011 in order to more effectively face this challenge. It allows
managers to anticipate their needs for certain key competences
and to implement HR solutions to recruit or improve these
competences. Group employees will also be able to benet from
this process by acquiring new knowledge, vital for the Companys
success.
The Groups success also rests on a policy of actively promoting
diversity, in terms of both gender and nationality.
The Groups human resources strategy is designed to create
a motivating working environment. Specic policies have been
developed covering international mobility, career development,
training, compensation and managing talent. The Groups
expatriates help prepare the future of its business, build local teams
and assemble the necessary skill sets in targeted regions. They are
tasked with identifying and preparing local successors. The Group
places considerable emphasis on training to expanding its skills
base and retaining employees, thanks to the Schneider Electric
University, its business academies and its leadership programs.
Industrial and environmental risks
The Group may be the subject of product
liability claims and other adverse effects due
to defective products, design faults or harm
caused to persons and property
Despite its testing and quality procedures, the Groups products
might not operate properly or might contain design faults or defects,
which could give rise to disputes in respect of its liability as seller or
manufacturer, notably in Europe, where liability related to defective
products could lead to a loss of revenue, claims under warranty and
legal proceedings. Such disputes could result in a fall-off in demand
or harm Schneider Electrics reputation for safety and quality.
To prevent or limit these risks, the Group recalls products if there
are any doubts whatsoever that a product or one of its components
is not 100% safe in respect of people and/or equipment. At the end
of 2009, the Group launched a broad recall campaign concerning a
range of low voltage capacitors produced between 2004 and 2008.
This campaign continued in 2010 and 2011 and will be concluded
in this rst quarter of 2012. Another broad recall campaign concerns
a global campaign to recall Vigi Compact NS/NSX circuit breakers
produced from 2009 to 2011, which started in 2011 and must be
continued in 2012 and 2013. Other product recall operations have
been started in 2011 and are mentioned for the record because,
due to their local nature, the type of risks caused, or the number of
products involved, they have a lesser impact on the Group.
Some of the expenses incurred by Schneider Electric in the context
of its product recall are covered by the liability insurance program
described in the Insurance section below.
The Group recorded a provision for product risk in an amount
of EUR420 million in the nancial statements for the year
ended December 31, 2011 (see note 23 to the consolidated
nancialstatements).
The Groups plants and products are subject to
environmental regulations
The Groups plants and products are subject to extensive and
increasingly stringent environmental laws and regulations in all of
its host countries.
To limit risks related to the environment in general, the Group is
involved in a process to continuously improve the environmental
performance of its plants and products. In 1992, the Group published
a formal environmental policy designed to improve manufacturing
processes, promote eco-design and integrate customer concerns
in the area of environmental protection. This policy also aims
to identify, assess and prevent environmental risks, in order to
guarantee full compliance with all environmental laws and regulations
applicable to the Groups businesses, particularly those in force in
the European Union and considered more rigorous (notably the
WEEE, RoHS directives and REACH programme). Environmental
provisions are booked when the risks can be reliably measured or
it is probable that clean-up work will be performed and the related
cost can be reasonably estimated. Provisions for environmental
risks totalled EUR57million for the year ended December31, 2011.
If no risk has been identied, Schneider Electric will not estimate
the nancial cost of environmental risks. The Group expects its
spending on environmental compliance programs to increase as
a result of changes to existing environmental regulations and the
introduction of new regulations.
There can be no guarantee that the Group will not be required to
pay signicant nes or compensation as a result of past, current
or future breaches of environmental laws and regulations by
companies that are currently or were previously members of the
Group. This exposure exists even if the Group is not responsible
for the breaches, in cases where they were committed in the past
by companies or businesses that were not part of the Group at
thetime.
1
RISK FACTORS
The Group may be exposed to the risk of claims for breaches of
environmental laws and regulations. Such claims could adversely
affect the Groups nancial position and reputation, despite
the efforts and investments made to comply at all times with all
applicable environmental laws and regulations.
If the Group fails to conduct its businesses in full compliance with
the applicable environmental laws and regulations, the judicial
or regulatory authorities could require the Group to conduct
investigations and/or implement costly clean-up measures to deal
with the current or past contamination of current or former facilities
or off-site waste disposal facilities, and to scale back or temporarily
or permanently close facilities in accordance with the applicable
environmental laws and regulations.
Information systems risk
The Group operates, either directly or through service providers,
a wide range of highly complex information systems (servers,
networks, applications, databases, etc.) that are essential to the
efciency of its sales and manufacturing processes. Failure of any of
these hardware or software systems, a fullment failure by a service
provider, human error or computer viruses could adversely affect
the quality of service offered by the Group.
The Group regularly examines alternative solutions to protect
against this type of risk and has developed contingency plans to
mitigate the effects of any information system failure. Dedicated
governance structures have been set up to manage relations with
service providers responsible for outsourced IT systems operations.
Problems may also be encountered during the deployment of new
applications or software. In particular, in the last few years, the
Group has developed an information system under SAP (bridge),
which it started to roll out in 2008. This roll-out process was
carried out fully or partially in 17 countries in 2009 and 2010, and
will continue in 2012 and over several more years, depending on
strategic, technical and economic priorities.
In view of the projects complexity, extensive functionalities and its
worldwide deployment, a dedicated governance and cost control
structure has been set up to track attainment of project milestones
and limit the related risks.
However, despite the Groups policy of establishing governance
structures and contingency plans, there can be no assurance
that information systems projects will not be subject to technical
problems or execution delays. While it is difcult to accurately
quantify the impact of any such problems or delays, they could
have an adverse effect on inventory levels, service quality and,
consequently, the Groups nancial results.
Market risks
Interest rate risk
The Group is exposed to risks associated with the effect of changing
interest rates. Interest rate risk on borrowings is managed at
Group level, based on consolidated debt and according to market
conditions. The core aim of interest rate management policies is
to optimise overall borrowing costs. Most bond debt is xed rate.
AtDecember31, 2011, 81% of the Groups gross debt was xed rate.
Maturities of nancial assets and liabilities are presented in note26.4
to the consolidated nancial statements.
A 1% change in interest rates would have an impact of around
EUR12million on the Groups net nancial expense.
The nancial instruments used to hedge the exposure of the
Group to uctuations in interest rates are described in note 26
to the consolidated nancial statements for the year ended
December31,2011.
The Groups international operations expose it
to the risk of fluctuations in foreign exchange
rates
Due to the fact that a signicant proportion of transactions of
Schneider Electric are denominated in currencies other than the
euro, the Group is exposed to currency risk. If the Group is not able
to hedge them, uctuations in exchange rates between the euro
and these currencies can have a signicant impact on its results
of operations and distort year-on-year performance comparisons.
The Group actively manages its exposure to currency risk to reduce
the sensitivity of earnings to changes in exchange rates. Hedging
programs mainly concern foreign currency receivables, payables
and operating cash ows, which are generally hedged by means of
forward purchases and sales.
Depending on market conditions, risks in the main currencies may
be hedged based on cash ow forecasting using contracts that
expire in 12months or less.
The Groups currency hedging policy is to protect subsidiaries against
risks on all transactions denominated in a currency other than their
functional currency. More than twenty currencies are involved, with
1 RISK FACTORS
the US dollar, Hong Kong dollar and UK pound representing the
most signicant sources of risk. The nancial instruments used to
hedge the exposure of the Group to uctuations in exchange rates
are described in note26 to the consolidated nancial statements for
the year ended December31, 2011 (Chapter5).
In 2011, revenue in foreign currencies amounted to EUR16.1billion,
including around USD5.7billion and 2.6billion in Chinese yuans.
The main exposure of the Group in terms of currency exchange
risks is related to the US dollar and to currencies inuenced by the
US dollar. The Group estimates that in the current structure of its
operations, a 5% increase of the euro compared to the US dollar
would have a negligible impact on operating margin (translation
effect of EUR30million on EBITA).
Equity risk
Exposure to equity risk primarily relates to treasury stock and shares
in AXA. These positions are not hedged. At December 31, 2011,
the market value of AXA shares were slightly below their acquisition
cost.
An increase in raw material prices could have
negative consequences
The Group is exposed to uctuations in energy and raw material
prices (in particular steel, copper, aluminium, silver, lead, nickel, zinc
and plastics). If the Group is not able to hedge, compensate or pass
on our increased costs to customers, this could have an adverse
impact on its nancial results.
The Group has, however, implemented certain procedures to
limit its exposure to rising non-ferrous and precious raw material
prices. The purchasing departments of the operating units report
their purchasing forecasts to the Corporate Finance and Treasury
Department. Purchase commitments are hedged using forward
contracts, swaps and, to a lesser extent, options.
The nancial instruments used to hedge the exposure of the Group
to uctuations in raw material prices are described in note26 to the
consolidated nancial statements for the year ended December31,
2011.
In 2011, purchases of raw materials totalled around
EUR1,800 million, including around EUR1,100 million for non-
ferrous and precious metals, of which roughly 55% was for copper.
The Group enters into swap and options agreements in order to
hedge all or part of its non-ferrous and precious metals purchases.
Decisions to hedge such purchases depend on Group forecasts of
changes in market prices. At December31, 2011, the Group had
hedged positions with a nominal value of EUR171million on these
transactions.
Counterparty risk
Financial transactions are entered into with carefully selected
counterparties. Banking counterparties are chosen according
to the customary criteria, including the credit rating issued by an
independent rating agency.
Group policy consists of diversifying counterparty risks and periodic
controls are performed to check compliance with the related rules.
In addition, the Group takes out substantial credit insurance and
uses other types of guarantees to limit the risk of losses on trade
accounts receivable.
Liquidity risk
Liquidity is provided by the Groups cash and cash equivalents
and commercial paper programs. These programs are backed by
undrawn conrmed lines of credit. At December31, 2011, the Group
had access to cash and cash equivalents totalling EUR2.8billion. As
of December31, 2011, the Group had EUR2.8billion in undrawn
conrmed lines of credit, of which EUR2.3 billion matures after
December2012.
The Groups credit rating enables it to raise signicant long-term
nancing and attract a diverse investor base. The Group currently
has an A- credit rating from Standard & Poors and an A3 credit
rating from Moodys. The Groups liabilities and their terms and
conditions are described in note24 of Chapter5.
In line with the Groups overall policy of conservatively managing
liquidity risk and protecting its nancial position, when negotiating
new liquidity facilities the Group resists the inclusion of clauses that
would have the effect of restricting the availability of credit lines,
such as covenants requiring compliance with certain nancial ratios
and material adverse change clauses. As of December31, 2011,
no nancing or conrmed lines of credit were subject to covenants
requiring compliance with nancial ratios.
The loan agreements or lines of credit for some of the Groups
liquidity facilities include cross default clauses. If the Group were to
default on any of its liquidity facilities, it could be required to repay
the sums due on some of these facilities.
Moreover, anticipated reimbursement provisions exist for certain
nancing and lines of credit in case of change of control. Under
these provisions, the debt holders may demand repayment if a
shareholder or shareholders acting together hold more than 50% of
the Companys shares, for the majority of contracts, and this event
triggers a downgrading of the Companys rating. At December31,
2011, the amount of nancing and lines of credit with these types of
provisions came to EUR5.5billion.
1
RISK FACTORS
Legal risks
Disputes, claims, litigation and other risks
Following public offers launched in 1993 by SPEP (the Group
holding company at the time) for its Belgian subsidiaries Cobel and
Comines, Belgium initiated proceedings against former Schneider
Electric executives in connection with the former Empain-Schneider
Groups management of its Belgian subsidiaries, notably the
Tramico sub-group. At the end of March2006, the Brussels criminal
court ruled that some of the defendants were responsible for certain
of the alleged offenses and that certain of the plaintiffs claims were
admissible. The plaintiffs claim losses of EUR5.3million stemming
from management that reduced the value of or undervalued assets
presented in the prospectus, as well as losses of EUR4.9 million
concerning transactions carried out by PB Finance, a company in
which Cobel and Comines had a minority interest. In its ruling,
the court also appointed an expert to assess the loss suffered by
those plaintiffs whose claims were ruled admissible. The experts
report was submitted in 2008. The defendants and the companies
held civilly liable contest the amounts provided by the legal expert
in their entirety on the basis of such reports drawn up by Deloitte.
Schneider Electric and its Belgian subsidiaries Cobel and Comines
were held civilly liable for the actions of their senior executives who
were found liable. Schneider Electric is paying the legal expenses
not covered by insurance of the former executives involved. Aftera
settlement agreement was signed with a group of plaintiffs, the case
is pending before the Brussels Appeals Court, as there has been
an appeal against parts of the March2006 ruling or a ruling given
in 2011 by the Court of First Instance on the admissibility of the
plaintiffs claims.
In addition, the new owners of the Tramico sub-group, to which
a Comines subsidiary had advanced funds during the sub-
groups liquidation, refused to pay back the funds and asked for
the cancellation of disposal agreements and agreements granting
advances for wilful misrepresentation, also claiming compensation
for having been implicated in the Belgian legal proceedings.
The parties took the matter to a court of arbitration but at the
end of June2011 the court gave a ruling that refused to grant the
application. Relations between the parties then improved and they
signed a settlement agreement putting an end to their dispute.
Based on this agreement, the new owners are paid a settlement
representing the main part of the advances on the principle amount
and have given up the guarantees that were awarded to them.
In connection with the divestment of Spie Batignolles, Schneider
Electric booked provisions to cover the risks associated with certain
major contracts and projects. Most of the risks were closed during
1997. Provisions were booked for the remaining risks, based on
managements best estimate of the expected nancial impact.
Nevertheless, certain new les implicating the Group for Spie
Batignolles past activities could still arise and result in costs.
Schneider Electric, in addition to other sector companies, has
been involved in legal proceedings initiated by the European
Commission with regard to an alleged agreement concerning gas
insulated switchgears (GIS), and this was because of two former
subsidiaries operating in the high voltage segment that were sold in
2001. Schneider Electric did not appeal the decision made by the
Commission with regard to this matter on January24, 2007 and was
ned EUR8.1million of which it claimed two-thirds reimbursement
from its two former subsidiaries.
In the same context, EDF Energy UK launched a claim for damages
of GBP15 million at the High Court in London on May 21, 2010.
This claim is currently being investigated.
The Groups products are subject to varying
national and international standards and
regulations
The Groups products, which are sold in national markets
worldwide, are subject to regulations in each of those markets,
as well as to various supranational regulations. Those regulations
include trade restrictions, tariffs, tax regimes and product safety
standards. Changes to any of these regulations or standards or
their applicability to the Groups business could lead to lower sales
or increased operating costs, which would result in lower protability
and earnings.
The Groups products are also subject to multiple quality and safety
controls and regulations, and are governed by both national and
supranational standards, though the majority of products comply
with world-recognised International Electrotechnical Commission
(IEC) standards. Costs of compliance with new or more stringent
standards and regulations could affect its business if the Group is
required to make capital expenditures or implement other measures.
The development and success of the Groups
products depends on its ability to protect its
intellectual property rights
The Groups future success depends to a signicant extent on the
development and maintenance of its intellectual property rights.
Third parties may infringe the Groups intellectual property rights,
and the Group may expend signicant resources monitoring,
protecting and enforcing its rights. If the Group fails to protect or
enforce its intellectual property rights, its competitive position could
suffer, which could have an adverse effect on its business.
To mitigate this risk, the patents developed or purchased by the
Group are tracked by the Industrial Property team within the Finance
& Control Legal Affairs Department. All intellectual property
queries are centralised and managed by this team for the whole
Group and in coordination with the other Finance & Control Legal
Affairs departments it ensures the Groups interests are defended
throughout the world. The same approach and organisation applies
for the Groups brand portfolio,
1 RISK FACTORS
Schneider Electric was also among 2,000 companies based all
over the world that were mentioned in the Volcker report on the
Oil for Food programme published by the UN in October 2005.
It was investigated by the French judicial system in 2010 with
regard to this report, which stated that the Group had entered into
agreements with Iraqi government between 2000 and 2004, under
which surcharge payments are alleged to have been made to the
Iraqi government of around USD450,000, violating the provisions of
the embargo in force at that time.
Various other claims, administrative notices and legal proceedings
have been led against the Group concerning such issues as
contractual demands, counterfeiting, risk of bodily harm linked 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 signicant effects on the Groups
business, assets, nancial position or protability. The Company
is not aware of any other governmental, court or arbitration
proceedings, which are pending or which threaten the Company,
that are liable to have or, during the last 12 months have had, a
material effect on the nancial position or earnings of the Company
and/or the Group.
Insurance
Schneider Electrics strategy for managing insurable risks is
designed to defend the interests of employees and customers and
to protect the Companys assets, the environment, employees,
customers and its shareholders investment.
This strategy entails:
identifying and quantifying the main areas of risk;
preventing risks and protecting industrial equipment; having
audits carried out at critical industrial sites by an independent
prevention company, self-evaluation of risks for the other
Groupsites;
organising and deploying business continuity plans and crisis
management resources, notably for health risks such as
pandemics, technical and political risks and natural disasters;
carrying out hazard and vulnerability studies and safety
management for people and equipment;
maintaining the necessary insurance cover for the main risks
facing Group companies under global programs. The Group
carefully screens insurance and reinsurance companies and
evaluates their solvency.
In addition, the Group has taken out specic cover in response to
certain local conditions, regulations or the requirements of certain
risks, projects and businesses. To extend guarantees and reduce
budgets, the Group coordinates purchasing of local cover.
Liability insurance
The integrated global liability insurance plan set up in 2007 was
continued until December 31, 2011. A new insurance plan was
put in place on January1, 2012 with a new lead insurer providing
suitable terms and limits for the current size of the Group and the
changes in its risks and agreements.
Certain specic risks, such as aeronautic or environmental risk, are
covered by specic programs.
Property damage and business interruption
insurance
The global insurance plan put in place on July1, 2010 for an initial
duration of two years has been extended until June30, 2013. This
is an all risks except contract which covers events that could
affect Schneider Electrics property (notably re, explosion, natural
disaster, machinery breakdown) as well as operating losses resulting
from the risks. Settlements under the global plan are capped at
EUR350million per claim and specic limits apply to certain risks,
such as natural disasters and machinery breakdown. These limits
were determined on the basis of scenarios of loss established by
specialists and available capacity in the insurance sector.
Assets are insured at replacement value.
Shipping and transport insurance
On January 1, 2009, Schneider Electric implemented a new
global shipping/transport insurance program that covers all goods
shipments, including between Group facilities, by all means of
transport, with a maximum insured value of EUR15.2 million
per convoy. This plan was continued in 2011 was renewed on
January1, 2012.
Erection all risk insurance
An erection all risk insurance plan was set up on April 1, 2011
in order to cover the development of our services and solutions.
Thisplan aims to provide cover for damages to work and equipment
for projects taking place at our clients premises.
Self insurance
To optimise costs, Schneider Electric self-insures certain frequent
risks through two captive insurance companies:
outside North America, a captive reinsurance company based in
Luxembourg offers damage and civil liability coverage capped at
EUR10million per year;
1
RISK FACTORS
in North America, a captive insurance company based in the US
(Vermont) is used to standardise deductibles for Civil Liability and
Road Accident primary policies. Self-insured retentions range
from USD1million to USD5million per claim, depending on the
risk. The maximum annual retention is USD15 million for Civil
Liability risk. An actuary validates the provisions recorded by the
captive reinsurance company each year.
The cost of self-insured claims is not material at the Group level.
Cost of insurance programs
The cost of the Groups main insurance plans, excluding captive
reinsurance, totalled around EUR21million in 2011.
1 RISK FACTORS
Sustainable
development
2
1. Sustainable development at the heart of our strategy 44
2. Green and responsible growth driving economic
performance 52
toEnvironmentalPerformance 60
4. Committed to and on behalf ofemployees 70
5. Schneider Electric, a responsible corporate citizen 81
6. Methodology andaudit ofindicators 90
7. Indicators 98
REGISTRATION DOCUMENT 2011 SCHNEIDER ELECTRIC 44
2SUSTAINABLE DEVELOPMENT AT THE HEART OF OUR STRATEGY
SUSTAINABLE DEVELOPMENT
>
1. Sustainable development at the
heart of our strategy
Social and environmental commitments, governance, reducing
CO
2
emissions, launching serious solutions that respect the planet,
social changes, local and regional footing, civic attitude, ethics,
business and poverty the challenges of sustainable development
have never been as signicant to Schneider Electrics customers
and stakeholders as they are today.
The Group is committed to meeting energy challenges while
acting civically and responsibly in all its locations, with measured
improvement plans, based on international corporate social
responsibility, whose results are audited and shared openly internally
and externally.
1.1 Schneider Electrics approach to sustainable development
A concrete, innovative, human commitment
Responsibility has always been a part of Schneider Electrics culture.
Since the Sustainable Development Department was founded
10years ago, this commitment has evolved in line with the Groups
continuing innovation. The Groups sustainable development policy
initially focused on internal issues, plus initiatives for the professional
integration of French youth; today, it also accounts for solutions
that help meet the energy challenges of our time (energy efciency
and access to energy) as well as worldwide environmental and
societalresponsibility.
Schneider Electrics commitment to offering sustainable and
responsible solutions for its customers aims to:
bring products and solutions to the market that waste less
energy and promote environmentally sound production
andconsumption;
bring energy to the 1.3billion
(1)
people who have no access to
electricity and provide sustainable economic development.
Besides, Schneider Electrics corporate commitment means
dynamic societal and environmental responsibility, based on the
Groups employees:
responsible, ethical governance;
sites and products which respect the environment;
fostering employee well-being;
a policy that supports and develops the communities where
Schneider Electric operates.
A commitment to action
Schneider Electric has set out four principles to put its commitment
into actions (details on following pages):
a continuous improvement process driven by the dynamic Planet
& Society Barometer;
regular and transparent communication (quarterly
Planet&SocietyBarometer newsletter);
open dialogue with stakeholders;
an approach based on international standards, codes and
globalpolicies.
Schneider Electric uses its global human resources policies (see
pages 70-80 ), external commitments (see pages 47-48 ), ethical
code of conduct and the associated professional alert program
(see pages 57-58 ) to especially strive for respect of human rights
in all its aspects: non-discrimination, abolition of forced labour,
prohibition of child labour, freedom of association and the right
to collective bargaining, health and safety, training, remuneration,
social coverage, etc.
The Company extends this commitment to civil society through its
community support and development program (see pages 81-89 ):
the right to decent living standards (access to energy program,
Foundation emergency relief programs), the right to education and
training (training program for the poorest populations, integration
program in France), local economic development (social investment
funds, entrepreneurship support).
Schneider Electric works to share this vision with its partners
(see pages 56-57 ), starting with its suppliers by encouraging
as many of them as possible to sign the United Nations Global
Compact.
(1) Source: International Energy Agency World energy poverty 2010.
2
SUSTAINABLE DEVELOPMENT AT THE HEART OF OUR STRATEGY
Open dialogue with stakeholders
Stakeholder Dialogue Department
Customers Quarterly customer satisfaction surveys
Online publication of environmental
information on products
EcoXperts Program
Quality, Customer Satisfaction, Eco-design,
Energy Efciency & Solutions
Shareholders and investors Quarterly telephone conferences to
present results, meetings and plenary
meetings
Regular meetings with individual
shareholders
Quarterly newsletters to shareholders
Investor relations
Suppliers Purchaser/supplier meetings
Suppliers day
Supplier qualication process
Awareness raising on Global Compact
challenges
Purchases
Employees Quarterly employee satisfaction surveys
Labour-management relations with
personnel representation bodies
Human resources
ESG

analysts and investors
(1)
Response to ratings questionnaires
Individual meetings
Response to questions
Sustainable development
Research centres and businesses Collaborative approach, creation and
participation in competitiveness cluster
initiatives, R&D programs, university
chairs and professional associations
R&D and Activities
Communities, NGOs Community programs
Partnerships with local NGOs
BipBop Foundation and Program
Civil society Participation in working groups and
local and international organisations on
challenges within our industry
According to subject and audience
All Quarterly Planet & Society Barometer
newsletter
Sustainable development
(1) Environment, Social and Governance
1.2 Planet & Society Barometer, a regular and objective measure
oftheGroupsactions
Planet & Society Barometer

Planet
1. 30,000 tons annual reduction of our CO
2
equivalent emissions
2. 2/3 of our products revenues achieved with Green Premium products
3. 2/3 of our employees work on ISO 14001 certified sites
Carbon
Eco-design
Certification
Green growth
Eco-services
Acess to
energy
Suppliers
Ratings
Safety
Engagement
Training
Access
to energy
Local
development
Profit
4. 7 points above the Groups organic growth gained by our
energy efficiency activities
5. 10 countries set up a recovery process for SF6 gas
6. 1,000,000 households at the Base of the Pyramid have access to
energy thanks to Schneider Electric solutions
7. 60% of our purchases from suppliers who support the Global Compact
8. 4 major ethical stock indexes select Schneider Electric
People
9. 10% annual decrease in the frequency rate of occupational accidents
10. 14 points increase in the company's employee recommendation score
11. 2,000 employees trained on energy management solutions
12. 10,000 young people at the Base of the Pyramid trained in the energy
management
13. 500 entrepreneurs at the Base of the Pyramid set up their activities
in the field of energy management
Overall Performance in the Barometer (grade out of 10)
Stakes Progress plans and targets at year-end 2011 2011 2010 2008
9.38 7.62 3.00
-161,933 -110,156 -
63.7% 26.1% 0
70.4% 69% 58.8%
14.2 8.3 NS
8 3 0
1,291,768 891,058 0
50.4% 42% 30%
3 2 3
-54% -44% -
+32 +16
239
-
1,621
4,742 0 12,318
209 0
391
0
NS =Indicator not monitored

2011 Audited Indicators
The 2008 performance serves as a starting value for the Planet & Society Barometer of the One company program between 2009 and
2011.
The arrow indicates if the indicator has increased, remained idle, or decreased in 2011 compared to 2010. The colour indicates if the
indicator is above or below the goal.
Priority objectives in response to sustainable
development challenges
Schneider Electric has used the Planet & Society Barometer as its
sustainable development dashboard since 2005. The Barometer
outlines the Groups sustainable development objectives for a
three-year period and shows progress made in achieving targets
for the 2009-2011 period on a quarterly basis.
There are no recognised standards that dene an organisations
sustainable development performance. The Planet & Society
Barometer is Schneider Electrics response to this matter. There
are also three-year progress plans for the Groups key sustainable
development challenges.
The aim of the Planet & Society Barometer is to:
mobilise the corporate community around sustainable
development objectives;
share the Groups improvement plans with stakeholders.
The Planet & Society Barometer is part of the One company program
and is administered and promoted by the Sustainable Development
Department. It comprises 13 key performance indicators
scored out of 10. The average of the scores provides the global
performance of the barometer. Departments directly concerned by
the improvement plans (Human Resources, Environment, Access
to Energy, etc.), each represented by a project leader, implement
measures to achieve the objectives of the plans. This project leader
works directly with local managers in their respective areas.
With the introduction of the new One company program in 2009,
Schneider Electric dened new ambitions for its sustainable
development approach, following up on its ten targets for 2005-2008
with 13 environmental, economic and social improvementplans.
The table above shows Schneider Electrics sustainable
development performance in 2011. When the barometer was
launched on January1, 2009 the global score was 3.00/10. At the
end of 2011, the Company had exceeded its target of 8/10 and
had attained 9.38.
2
For the rst time since the barometer was created in 2005, all
the indicators achieved their target of 8/10. Seven indicators had
even achieved 10/10 (CO
2
emissions, ISO 14001 certication,
energy efciency, access to energy, accident rate, company
recommendation, energy management training).
Communicating the results of the Planet
&Society Barometer
Since 2009, the Planet & Society Barometer has been published
through the following channels:
the website www.barometre.schneider-electric.com, expanded
in 2011 to include an interactive tool;
the quarterly Planet & Society Barometer newsletter informs
the main Schneider Electric stakeholders about the previous
quarters performance and achievements; the newsletter sent by
e-mailed to a list updated continuously;
on the Groups Intranet, the performance of the Planet & Society
Barometer, which reects value creation for stakeholders, is listed
next to the Schneider Electric share price, which reects value
creation for shareholders;
In 2012, quarterly conference calls have been set with concerned
investors to present the results of the Planet & Society Barometer.
For more information: www.schneider-electric.com/baromet er.
Sustainable development criteria in
performance incentives
Sustainable development components were added to the personal
performance incentives of all members of the Executive Committee
in 2011. These components are directly linked to the Planet
& Society Barometer targets. They are personalised according to
the areas of involvement for each (e.g. Green Premium: production
of Environmental Product Proles for the members of the Executive
Committee in charge of the activities).
Since 2010, the CO
2
reduction target has been taken into
account for the performance incentives of all Global Supply Chain
Management personnel who receive a bonus.
The reduction in the occupational accidents Severity Rate and in
the Medical Incident Rate is taken into account for the performance
incentives of all managers at industrial sites and logistics centres
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 and that performance targets are met. For the
rst time denitive attribution of a part of the shares is conditional
on meeting a sustainable development target which is dened
as the Planet & Society Barometer score at the end of 2013. We
remind that barometer is published externally and its components
are audited.
1.3 External and internal bases of preparation for a solid framework
Our external bases of preparation
The United Nations Global Compact
The Global Compact was launched in 1999 by UN Secretary-
General Ko Annan. It brings companies and non-governmental
organisations together under the aegis of the United Nations to
unite the power of markets with the authority of universal ideals.
Parties signing the Global Compact commit to 10 fundamental
principles in four areas: human rights, labour, the environment and
anti-corruption.
In signing the Global Compact in December 2002, Schneider
Electric made a public commitment to these universal values. The
Group has primarily worked to share this commitment with its
partners since 2003 (see page56 Relations with sub-contractors
and suppliers).
In line with the Global Compact requirements, Schneider Electric
publishes an annual progress report. This publication reports on the
Groups action plans and monitoring indicators for the 10principles
of the Global Compact. Last year, Schneider Electric worked on
meeting the Advanced level criteria of the Global Compact. The
reference table is available on the Global Compact website (COP
2011). With this report, the Group meets the Advanced level again
this year.
ISO26000
In 2010, the ISO (International Organisation for Standardisation)
published guidelines on organisations societal responsibility (ISO
standard 26000). ISO 26000 is a compromise that gets different
players from the public, private and non-prot sectors, from around
100 countries, involved, and a vision of how an organisation should
view societal responsibility. Schneider Electrics actions towards
sustainable development are completely in line with ISO 26000.
This standard legitimises the sustainable development actions
undertaken by the Group since the early 2000s and provides an
educational support and framework for its actions in the eld.
The Global Reporting Initiative
The Global Reporting Initiative (GRI) was established in 1997 as
a mission to develop globally applicable directives to report on
economic, environmental and social performance; initially intended
for companies and subsequently for any governmental or non-
governmental organisation.
Brought about by the Coalition for Environmentally Responsible
Economies (CERES) in association with the United Nations
Environmental Program, the GRI integrates the active participation
of companies, NGOs, accounting bodies, business associations,
and other stakeholders from across the globe.
By aligning itself with the GRI in 2010 and obtaining a score of
B, Schneider Electric reinforced its extra-nancial reporting. A
reference table with these indicators and the indicators proposed
by the GRI is provided on the website: Company > Sustainability
>Sustainable governance.
Our internal basis of preparation: the
Responsibility & Ethics Dynamics (R&ED)
program and Our Principles of Responsibility
The challenges
As a global corporation, Schneider Electric continuously interacts
with local and international partners. The Groups borders are
expanding, its environment is constantly changing, and its societal
responsibilities and activities are growing. In this international
context, reprehensible behaviour may be seen when the ethics
inspection and prevention processes are fragile. The Group is
responsible for implementing its resources to support employees in
the event of an ethical dilemma.
The aim of the program
In 2002, Schneider Electric published a set of guidelines entitled Our
Principles of Responsibility to give all team members a common
reference point. The document outlines the Groups commitments
to each of its stakeholder groups: the Companys employees, its
economic partners (mainly clients and suppliers), shareholders, the
community and the planet.
In 2009, the Group updated Our Principles of Responsibility to set
out standards on ethics. This document incorporates updated
Group and employee commitments on the following:
the respect of law, the limits established by each employee to
ensure he or she entirely respects the laws of all the countries in
which Schneider Electric works;
the deontology that all employees must follow in line with the laws
in force in countries where Schneider Electric works;
Group societal responsibility, which all employees must respect
to act responsibly towards society and the planet.
In 2010, the Responsibility & Ethics Dynamics program put these
ambitions into practice by setting up an organisation, procedures
and tools for the Group, so that its employees could:
provide team members with effective support in their daily actions
and decision-making, primarily through access to the necessary
resources (policies, procedures, tools & best practices);
help team members identify the appropriate individuals to guide
them in their responsible approach and in each of the areas
covered by the principles;
know how to notify the authorities of breaches of ethics, with
respect for current laws and regulations.
For more information: see Our Principles of Responsibility page57 .
1.4 Global policies
Reference documents are distributed throughout the Group so that
all team members can embrace Schneider Electrics responsibility
approach and apply it in line with local culture and legislation.
Ethics
The Our Principles of Responsibility document is not only Schneider
Electrics ethics charter; it also constitutes a code of conduct. All of
the Groups policies stem from it (environment, quality, purchases
and the different social policies). The document is available in 30
languages and is distributed to all employees.
Environment
The rst version of Schneider Electrics environmental policy was
published in 1992, changed in 2004 and conrmed in October2007.
It aims to improve industrial processes, reinforce product ecodesign
and incorporate Group customers concerns for environmental
protection, while providing product and service solutions. It applies
to the Group and is accompanied by global action plans.
Social
The Groups Human Resources policies cover the following:
diversity, hiring, recruiting, international mobility, training, human
capital development, talent identication, total remuneration, social
benets and health and safety. These apply to the Group and are
accompanied by global processes.
2
1.5 An organisation structured through networks
Overall operation
The Sustainable Development Department
The Sustainable Development Department, created in 2002, is part
of the Strategy & Innovation Department since 2008. It has the
following responsibilities:
dening Schneider Electrics sustainable development strategy
and rolling out action plans at Group level with the concerned
entities;
conceiving and steering Schneider Electrics innovative
community projects to ensure continuing improvements in the
Groups performance in this area.
In 2010, the Sustainable Development Department was adapted
to better meet the Companys present and future challenges, as
well as the requirements of stakeholders. It is organised around four
areas:
ethics, steering the Responsibility & Ethics Dynamics program
(see page57 );
societal responsibility, with the Schneider Electric Foundation as
well as insertion and expansion programs (see pages85 to 89 );
access to energy, responsible for the BipBop program
(seepages81 to 85 );
supporting and developing the Groups performance, in particular
by steering the Planet & Society Barometer and the strategy and
sustainable development report (see pages46 to 47 ).
Supervisory Board
Following James Ross, Cathy Kopp has been responsible for
ofcially presenting the sustainable development issues to the
Supervisory Board since 2010. She also plays the part of internal
advisor for sustainable development: Cathy Kopp analysed the
Groups sustainable development policies and programs in 2011,
interviewing various managers. A restitution to the Supervisory
Board is expected in 2012.
SEREorganisation Safety, Environment &Real Estate
(see page61 ).
Human Resources organisation
(see page70 ).
Energy Efficiency and Solutions Experts
(fortheoffer)
Within the Strategy and Innovation Department, the Energy
Efciency and Solutions team rolls out and supports the Companys
and its employeestransition from a product-based approach to a
solution-based approach.
To achieve this, Schneider Electric works with a network of 15,000
employees, comprised of certied solution sales and marketing
teams and supported by technical experts and over 60 Solution
Centres aligned to supporting customers in local geographies and
key global end user segments, where our solution architects are
developing the solutions its customers want today and designing
the solutions of tomorrow
Cross-functional committees
There are three bodies made up of members from the Groups
entities who work on sustainable development directly or remotely.
These specic committees guide and monitor the action plans for
their area of expertise.
The Executive Sustainability Committee
Since 2010, the three members of the Executive Committee
in charge of global Human Resources, Global Supply Chain
Management and Strategy and Innovation, meet every quarter with
the Sustainable Development Director to monitor and steer the
Groups action plans in this area.
The Strategic Sustainability Committee
It was created in 2008 and is chaired by the Sustainable
Development Director. Its representatives are from the following
programs and functions: health and safety, diversity, societal
innovation, environmental management, sustainable RoHS and
REACH programs, purchasing, supply chain, ethics, access to
energy program, communication and relations with stakeholders.
The Ethics Committees
(See page58 ).
1.6 Global and local external commitments to move forward collectively
Highlights of 2011
Livelihoods: Carbon offset fund for rural
communities
Livelihoods is an investment fund to provide investment partners
with carbon credits that have a high societal value, seeking the best
balance between the value of these credits and the value created in
local communities. In Senegal, for example, 450 villages are already
replanting 7,000 hectares of mangroves, thereby rebuilding their
food-producing ecosystem (sh breeding and crop protection).
This project allows 900,000 tonnes of carbon to be stored in
20years. With a provision of EUR30 to 50million, Livelihoods will
invest mainly in 3 program types: restoration and preservation of
natural ecosystems, agroforestry and soil restoration for sustainable
agricultural practises and rural energy access projects that avoid
deforestation. Schneider Electric, CDC Climat and Le Crdit
Agricole are the main investors joining Danone to create this fund.
Business solutions for energy access: White paper
for the WBCSD
At the end of 2011 Jean-Pascal Tricoire, with the Chairmen of ERM
and GDF SUEZ, co-signed a white paper for the WBCSD (World
Business Council for Sustainable Development) on the business
solutions to enable energy access for all. This white paper is the
rst signicant publication from the WBCSD and coincides with
the launch of the International Year of Sustainable Energy for all in
January2012 by the United Nations.
Participation in the 17th Conference of the Parties
(COP17)
During the COP17, at the end of 2011 in Durban, South Africa,
Schneider Electric took part in many conferences, notably on
access to energy, energy efciency of buildings and on Smart Cities,
in collaboration with the United Nations Environmental Program
and the WBCSD.
List of the Groups primary sustainable development commitments
Schneider Electric works with different local and international organisations on economic, social and environmental issues to foster sustainable
development in cooperation with various actors from society. In 2011, Schneider Electric conrmed its commitment and its participation in
discussions on issues related to climate change.
Theme Commitment
Sustainable governance International: World Business Council for Sustainable Development (WBCSD), United Nations Global
Compact.
France: member of the Board of Directors of ORSE (French study centre for corporate social responsibility)
and of the French Global Compact network.
Energy/Energy
efciency
International: Alliance to Save Energy (Energy efciency), Clinton Climate Initiative (Buildings), Green Grid
(Information Technology), The 2C Challenge Communiqu (Corporate Leaders Network for Climate Action, CLN).
France: EpE (Entreprises pour lEnvironnement), IFPEB (Institut Franais pour la Performance Energtique du
Btiment), Pacte cologique de Nicolas Hulot, Grenelle de lEnvironnement.
Diversity France: see page76 .
Social policy Observatoire Social International
Standardisation With more than 20experts actively participating in international standardisation bodies, Schneider Electric is
making a decisive contribution to the elaboration of standards that ensure the reliability and transparency of
the work on environmental issues of its offers (UTE, Union technique de llectricit et de la communication;
CENELEC, European Committee for Electrotechnical Standardisation; IEC, International Electrotechnical
Commission; ISO, International Organisation for Standardisation) .
Schneider Electric plays an active role within AFNOR (French Standards Organisation). It participates in the
working group on sustainable development.
Since February2007, Schneider Electric has represented France on the IECs Advisory Committee for
Environmental Aspects (ACEA). The ACEA works to advise and coordinate the IECs efforts to tackle
environmental issues.
Miscellaneous For many years, the Group has also actively supported Association pour le dveloppement du mcnat
industriel et commercial (ADMICAL), a French not-for-prot organisation involved in corporate sponsorship
issues, and IMS-Entreprendre pour la cit, an association that 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.
2
1.7 Ratings and awards
The evaluations by the leading specialist ratings agencies
and by a number of ethical fund managers indicate the
Companys performance in its sector. The evaluations and
awards underline external recognition of the Groups sustainable
developmentprograms.
Ethical stock market indices
A key performance indicator was set in the Planet & Society
Barometer for the duration of the 2009-2011 One program: to
ensure Schneider Electrics presence in the four major SRI (Socially
Responsible Investing) indices the DJSI World, the DJSI Europe,
the ASPI Eurozone and the FTSE4Good.
At year-end 2011, Schneider Electric was included in three of the
leading ethical investment indices, compared with two in 2010. In
fact, the Group was conrmed in the DJSI Europe index and the ASPI
Eurozone index, rejoined the DJSI World index, and was excluded
from the FTSE4Good index because part of its activity is within the
military sector (1%, mainly in electrical distribution). Thislast index is
therefore not a priority target for the 2012-2014period.
Dow Jones Sustainability (DJSI) indices
Schneider Electric is part of the 2011 DJSI World and DJSI Europe
Evaluation for this family of indices is provided by Sustainable Asset
Management (SAM), an independent asset manager headquartered
in Switzerland.
Carbon Disclosure Leadership Index (CDLI)
Schneider Electric was among the 52 companies of the CDLI in
2011; companies chosen for their understanding of climate change
challenges in business.
Carbon Performance Leadership Index (CPLI)
Schneider Electric was selected in the CPLI in 2011 as one of
29 companies chosen for their commitment and action plans to
ght climate change.
ASPI Eurozone Index
The ASPI Eurozone (Advanced Sustainable Performance Indices)
listing tracks the nancial performance of 120 leading euro zone
sustainability performers from the DJ Euro Stoxx benchmark
nancial universe. Vigeo ratings are used to select the listed stocks,
in keeping with ASPI Eurozone guidelines.
Ethibel Sustainability Indices
In 2011, Schneider Electric was included in the Ethibel Sustainability
Index (ESI) Excellence Europe and Ethibel Sustainability Index (ESI)
Excellence Global indices.
FTSE4Good Indices
The evaluation allowing inclusion into the FTSE4Good was carried
out by the British agency EIRIS. Schneider Electric does not
full the inclusion criteria because part of its activity is within the
militarysector.
Awards 2011
Among the recognitions for sustainable development received in
2011, the Group highlights the following:
Gigaton Award: the Carbon War Room awarded Schneider
Electric the Gigaton Prize for its leadership in energy efciency
and the development of the smart grid to effectively ght global
warming.
Global 100 most sustainable corporations: Schneider Electric
reached 26th place in the ranking by Corporate Knights Inc.
Ethisphere: Schneider Electric was one of the 100most ethical
companies following ranking by Ethisphere.
Zayed Future Energy prize: Schneider Electric received the
Zayed Future Energy prize in the Large Businesses category
in recognition of its contribution to renewable energies and
sustainable development.
Green Cross for Safety: the United States National Safety
Council awarded the Green Cross for Safety medal to Schneider
Electric North America.
Human Capital Trophy: Michael Page International and Le
Monde awarded Schneider Electric this trophy in the category
of Management Internationalisation from among CAC 40
companies.
Best workplace in Brazil and China: Schneider Electric was
recognised in the 150 Best companies to work for in Brazil
(byVoce S/A) and the 50 Best workplaces in China (by Staffers
magazine and the China Business newspaper).
Annual General Meeting Award: Schneider Electric was
recognised by Capitalcom from among the CAC 40 companies
on more than 80 criteria of readability, transparency and provision
of relevant information announced at the Annual General Meeting.
2GREEN AND RESPONSIBLE GROWTH DRIVING ECONOMIC PERFORMANCE
>
2. Green and responsible growth
driving economic performance
This chapter covers two subjects:
Products and solutions for fighting climate change: energy
efciency, renewable energies, electric vehicles, smart grid,
product end-of-life recovery services , etc.
Business ethics: Group responsibility principles, ght against
corruption, relations with suppliers and subcontractors.
Corporate governance is discussed in chapter 3 Corporate
Governance page 107 : working of the Supervisory Board,
Management Board, Internal Control & Audit, shareholders rights,
remuneration of members of the Supervisory Board, Management
Board and Executive Committee.
Context and aims
Climate change is one of the main challenges of the 21stcentury.
Schneider Electric works for sectors that account for the majority
of global energy consumption. Energy consumption is not always
optimised, which makes it one of the largest sources of CO
2

emissions.
As a global specialist in energy management, Schneider Electrics
products and solutions help reduce energy use and CO
2
emissions.
The Group is therefore developing energy efciency solutions to
reduce energy bills by up to 30% for every type of building. The
Groups solutions also target other areas related to intelligent
electricity networks (Smart Grids): generation and connection to the
renewable energies grid; electric vehicles; and demand-response.
Moreover, the Groups products and solutions are sold worldwide,
either directly to end customers or through networks of partners,
therefore without any control over their nal destination and end-
of-life processing. To limit the impact of its end-of-life products,
Schneider Electric has established a system to recover equipment
containing SF
6
, a powerful greenhouse gas.
The Group works in more than 100 countries, with uniform practices,
standards and values. Schneider Electric is also committed to act
responsibly towards all of its stakeholders. Therefore, the Company
has dened its Principles of Responsibility that apply to the whole
Group and are based on dedicated organisation and processes.
Schneider Electric has also been involved in the United Nations
Global Compact since 2002, which it wishes to encourage a larger
number of its suppliers to sign.
2.1 Overview
Four key performance indicators were set in Schneider Electrics Planet & Society Barometer over the duration of the One program
(2009- 2011):
Objectives for Year-End-2011 2011 2010 2009 2008
1. Exceeding the Groups growth by 7points per year
with our energy efciency activities 14.2 8.3 5.3 NM
2. Implement a recovery process for SF
6
gas
in10countries 8 3 3 0
3. Make 60% of our purchases from suppliers who
support the Global Compact 50.4% 42% 33% 30%
4. Ensure that 4 major ethical stock indices select
Schneider Electric 3 2 3 3
NM = Indicator not monitored
The 2008 performance serves as a starting value for the Planet & Society Barometer of the One program between 2009 and 2011.
Please refer to pages 90 to 92 for the methodological presentation of indicators and the following pages for the analysis of the results
(pages 53-54 for indicator 1, 55-56 for indicator 2, 56-57 for indicator 3, 51 for indicator 4 ).
2
GREEN AND RESPONSIBLE GROWTH DRIVING ECONOMIC PERFORMANCE
Highlights of 2011
Indexation of the performance incentives for the Executive
Committee members to one of more components of the Planet &
Society Barometer, chosen according to their eld.
Above-target performance in energy efciency activities, reecting
the Groups commitment to this area in its different markets.
Reaching the target for the SF
6
gas recovery system as a result of
restructuring the offer in place in various countries.
Return of Schneider Electric to the DJSI World (Dow Jones
Sustainability Index).
Revenue breakdown
Every year for the last 6 years, Schneider Electric has published a
diagram showing its revenue distribution for its various stakeholders.
This exercise allows the importance of each stakeholder to be
highlighted from the point of view of nancial ows and shows their
share in this ow.

Employees
& wages
5,493
million
Non-governmental
Organisations
& Donations
12.4
million
Purchases
& others
13,440
million
Dividends Paid to
Shareholders
Operatin
CashFlowAfter
DividendPayment
Debt Repayment Net Financial
Investments
Banl, Loans &Cash
925
1,654
500 2,873
1,216
million
million
million million
million
ShareIssues &Saleof
TreasuryStock
Investments
& Development
215
*
million
2011
Total Revenue
22,387
million
Government
& Taxes
562
million
Net interest
Expenses to Bank
301
million
* 178 million comes from the employee shareholding plan and 37 million from
long-term incentives exercised? No sales of treasury stock were made in 2011.
732
million
Cash ows from external sources
Operating costs
Cash ow after operating expenses
2.2 Smart energy management products and solutions to help
thefightagainst climate change
Our planet is facing an unprecedented energy challenge. By 2035,
energy needs could have increased by 30% to accompany global
demographic, economic, industrial and urban development. At
the same time, carbon gas emissions could increase by 20% -
although experts agree that to prevent dramatic consequences due
to climate change emissions should be halved.
Contributing to resolving this challenge lies at the heart of Schneider
Electrics development strategy.
The expectations of the Groups customers are also moving in
that direction. They want to reduce energy costs and reduce their
environmental impact by constantly improving reliability, safety and
performance of sites and equipment.
Schneider Electric presents an innovative and competitive portfolio
of products, systems, services and software in order to assist
customers further in optimising their energy management.
Energy efficiency
Context
Energy efciency means using less energy for equivalent
performance or service.
Energy efciency is the fastest, most economical and most effective
way for governments, businesses and individuals to reduce CO
2

emissions. According to the International Energy Agency (World
Energy Outlook 2011), energy efciency represents nearly 50% of
the reduction in CO
2
emissions required to save the planet.
Schneider Electric is one of the rst companies to have taken a
strong position in support of energy efciency by developing
efcient and competitive offers for all the large market segments.
Thus, the growth rate for energy efciency activities in 2011
exceeded the Groups revenue growth by over 14points.
Offers
Schneider Electric promotes active energy efciency, which
consists in optimising the entire energy cycle through several steps:
initiate an energy audit that will result in a series of quick win
actions to quickly make substantial savings, as well as an action
plan;
then, automating the systems to maintain these savings;
and nally, monitoring, controlling and adjusting to make
sustainable savings on energy.
To do this, the Group offers a range of products, systems, services
and software:
Products: dimmer switches, timers, heating and air-conditioning
control, variable speed drives, etc;
Systems: building management systems, lighting control,
process supervision;
Services: energy audits, optimisation of energy purchases,
participation in demand reduction programs, etc;
Software: data analysis, remote monitoring, integrated
management of energy ows over several sites, etc.
These solutions respond to the standards and regulations in force in
each country where they are marketed.
Schneider Electric is continually developing new offers to better
respond to the needs of its customers, notably in the area of
services and integrated management, as well as developing new
distribution channels.
Schneider Electrics energy services activity is experiencing strong
growth.
The Groups large customers want to manage their energy better
and therefore must better understand their energy ows. This
involves energy efciency audits, metering, monitoring and analysis
services.
They then want to optimise these ows, done using the best
purchasing policies, in order to participate in demand reduction
programs, implement energy performance contracts, and obtain
certications (e.g. the new ISO 50001 international standard).
These are energy management services.
Finally, this energy management allows customers to reduce the
environmental impact of their activities and to improve their carbon
audit. This involves evaluation and carbon footprint management
services, closely linked to energy management services.
The Companys integrated energy management solution is also
experiencing strong growth.
It involves achieving a consolidated view of energy ows over
various activity zones of a single site, several sites, or the whole
of a company. Understanding the ows means they can be
monitored and then optimised, thus improving the long-term energy
performance of the site or company.
Schneider Electric has developed an integrated offer called
EcoStruxure, combining products, systems, services and software
within a single energy management architecture.
Schneider Electric has competitive offers for energy efciency, as
well as for energy ow management of industrial processes, security
systems, data centres, and of course buildings. EcoStruxure
combines these various offers to provide the customer with a single
vision complete supervision of their sites or their company.
Finally, Schneider Electric is rolling out an EcoXperts Network in
many countries to provide its smaller customers with simple and
competitive solutions for energy efciency and energy source
integration. These are specialised external partnerships trained and
supported by the Group to develop closer working relationships
with their customers at a local level.
This network is already in place in the United States, France, Spain
and Italy and currently is being developed in about ten countries,
mainly in Europe and Latin America.
Renewable Energy
Context
Renewable energy is one of the key principles of Schneider Electrics
development, societal responsibility and environmental goals.
According to the International Energy Agencys forecast (World
Energy Outlook 2010), renewable energy sources, in particular
solar, wind and hydraulic, should account for more than half of
new energy capacity installed globally by 2035, making it strongest
growing energy mix.
Renewable energies allow for growing energy needs to be met
while limiting environmental impact. Ever more efcient integration in
electrical transmission and distribution networks means that these
renewable energies are also contributing to the advent of smart
grids.
Offers
Schneider Electric offers a full range of products, systems and
services for solar, wind and hydroelectric energy.
Group teams ensure that these are well-integrated into the
electricity grid thanks to our expertise in electrical distribution (low
and medium voltage), conversion and energy management.
Schneider Electric serves and connects power plants and large
buildings to the electricity grid, provides equipment to turbine
manufacturers and supplies the residential market through its
network of partners and distributors.
2
> PARTNERSHIPS WITH START-UPS
Aster Capital, the joint Schneider Electric, Alstom
and Rhodia risk-capital fund, endowed with
EUR 100 million, focuses on identifying new
opportunities for growth and innovation in the areas
of energy and the environment. It detects emerging
market and technology trends ahead of the curve
and develops partnerships with promising start-up
Electric vehicle
Context
Fully electric or hybrid vehicles are likely to undergo rapid
development over the next few years and could represent 10% of
vehicles sold worldwide by 2020.
They are quieter and cause less pollution than petrol vehicles
and are part of the solution to the energy challenge, as well as
to urban policies that aim to reduce congestion and pollution in
cities. Development of the electric vehicle mainly depends on the
re-charging infrastructure, which must combine safety (for users,
the vehicles, buildings, and the electricity grid), facility (availability
of charging terminals at all times, in every location, and for all
requirements), and the effective integration of the electricity grid
(rstmobile charge in history).
Schneider Electric contributes to electric vehicle development
through recharging infrastructures.
Offers
Schneider Electrics offers include safe recharging infrastructures,
efcient energy management systems and high added value
accompanying services.
The recharging infrastructure must be completely safe, rstly for the
user but also for the vehicle, building and electricity grid. Schneider
Electric has developed a full range of solutions for residential or co-
owned garages, public and private car parks or roadside parking
and for rapid recharging during a journey.
However, for an electric vehicle to be green, the electricity used
for charging must also be green. Priority for charging must therefore
be given to the periods in which energy sources with low CO
2

emissions are available. Peak periods must also be avoided as
the electricity grid is already experiencing 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 businesses and car service providers.
Smart grid - Intelligent networks
Context
The electricity grid faces several constraints. Demand for
energy continues to increase, electric infrastructures are old
or lacking sufcient capacity, installations need to be more
environment- friendly, and renewable energy sources are increasing
but remain intermittent and dispersed.
The grid must therefore be developed into an effective electric
infrastructure combined with an intelligent IT infrastructure: the
smart grid, ensuring continued balance between energy production
and consumption.
Citizens and companies are increasingly energy efcient in terms
of energy use; in terms of production, grid operators (transmission
and distribution) are developing automation and control systems;
and between the two, new mechanisms are being implemented:
load shedding, optimal management of renewable energy sources,
reduction of carbon peak, nancial valuation of changes in use
behaviour, etc.
Offers
Schneider Electric offers products and solutions in all the main elds
relating to the smart grid:
buildings, industrial sites, and residential buildings: energy
efciency products and solutions, complex solutions for
integrated energy management, operational and nancial project
management, electric vehicle charging systems;
production of renewable energy: installation and equipping
of solar, wind or hydroelectric plants, automation and control
systems, SCADA (Supervisory Control And Data Acquisition),
engineering and maintenance;
distribution: control and automation of sub-stations (between
high and medium voltage and medium and low voltage networks),
SCADA, protection and metering systems, outage devices;
demand-response: consultancy and implementation of software
platforms to share data and for load shedding aimed at energy
operators.
Recovery service for equipment containing SF
6
In the framework of its Planet & Society Barometer, Schneider
Electric looks to create SF
6
gas recovery processes, for end-of- life
products in 10 countries, in Europe and in China. SF
6
is a gas
used as an insulator in medium voltage devices. It has an elevated
heat capacity and therefore requires special treatment to prevent it
leaking into the atmosphere.
The rst devices containing SF
6
gas sold by Schneider Electric
reached their end-of-life at the start of 2000. The objective is to
develop commercial offers that allow customers to dispose of their
end-of-life, SF
6
containing devices, in order to completely extract
the gas and recycle it.
At the end of 2011, 8 countries had implemented a recovery
process with a local service manager, a recovery solution
(Schneider Electric or partner), customer communication and
effective recovery: Australia and France (since 2009), Sweden
(since 2010), Germany, Austria, Belgium, Spain and the United
Kingdom (since 2011). A considerable effort was made during the
second half of 2011 to restructure the recovery offer already in place
within the countries and to report the information and evidence to
the Companyexecutives.
In several other countries, specic recovery actions have been
implemented: Hungary, Israel, Switzerland, Italy, Japan, Colombia,
Costa Rica, Estonia, Ukraine, Ireland, South Africa, Turkey, Vietnam,
Saudi Arabia, etc. However, these countries do not have a dedicated
local system.
In Norway, a recovery process was implemented by the country. SF
6

recycling is a legal obligation and Schneider Electrics customers
work with the organisations in charge of electrical and electronic
waste recycling . This country is not included in the indicator.
2.3 Relations with subcontractors and suppliers
Approach
As a Global Compact signatory, Schneider Electric has been
involved in an ambitious approach to include sustainable
development challenges in the supplier selection and working
processes. This approach is all the more important as Schneider
Electrics purchases volume exceeds EUR11 billion.
Schneider Electric has published a charter for its suppliers,
called the Supplier Guide Book, which includes a large section
on expectations with regard to sustainable development in the
following four areas: health and safety, human rights, ethics and
the environment.
Since 2004, the Group has been supporting its suppliers so that they
can publically commit and directly adhere to the Global Compact.
This initiative is part of the foundation of Schneider Electrics
approach. A key performance indicator was dened in the Planet
& Society Barometer regarding the duration of the 2009-2011 One
program: at the end of 2011, more than 50% of Schneider Electric
purchases were from suppliers who had signed the 10 Principles
of the Global Compact or the EICC. This represents an increase of
8 points in 2011.
Action plans
Schneider Electrics approach to its suppliers in the area of
sustainable development centres around three main action plans.
1. Integration of the sustainable purchases approach into the
selection of new suppliers
Schneider Electric uses a qualication process called Schneider
Supplier Quality Management to select new suppliers. It is based
on an evaluation questionnaire combined with on-site audits by
Schneider Electric quality specialists.
This process includes a specic section on the environment and
sustainable development and aims to assess supplier suitability
with regard to the Groups aims in 3 areas:
social responsibility linked to the Global Compact principles;
environment: ISO 14001, ISO 14062 on eco-design, REACH and
RoHS;
safety: health, safety standards, accidents and severity rate.
Sustainable development criteria account for nearly 15% of supplier
evaluation. In addition, all these criteria have a minimum level, below
which a supplier will not be retained to work with Schneider Electric.
Schneider Electric carried out more than 260 audits of this type
in2011.
This qualication process applies to all new suppliers and to
existing suppliers in certain cases. It is strengthened by the General
Purchasing Conditions to which all suppliers must conform: OECD
directives on sustainable development, ten principles of the United
Nations Global Compact and regulations dened in the ISO 14001
standard. Suppliers also commit to respect all national legislation
and regulations, the REACH regulation and the RoHS directives,
and, more generally, the laws and regulations relating to prohibition
or restriction of use of certain products or substances.
2. Support for suppliers adhering to the Global Compact
A statement on the importance of joining the Global Compact
is made by the Group purchasing pilot to each major supplier
of Schneider Electric after the supplier has been trained in
the approach. The purchasing pilot also helps the supplier by
supporting them in this approach and giving them the benet of
Schneider Electrics experience.
The sustainable development goals have become one of the
7 pillars used to measure supplier performance since 2011; this
has the particular advantage of allowing the highest-performing
suppliers to become a Preferred Group supplier. Adhesion to the
Global Compact is a key point in this evaluation.
3. Rollout of eco-responsible initiatives
Schneider Electric is rolling out several eco-responsible initiatives
with its suppliers.
For example, Schneider Electric has chosen to go further than the
European REACH and RoHS regulations. The approach is therefore
rolled out in the Group over the whole product portfolio and all
suppliers, regardless of their geographic origin.
Furthermore, Schneider Electric launched an update in 2011 to
the carbon impact analysis of company purchases in terms of its
carbon footprint. Schneider Electric has used this approach to raise
awareness of the importance of this subject among purchasers and
certain suppliers in the most relevant purchasing sectors.
2
Finally, by the very nature of its activity, the Group continually
encourages its ecosystem (including customers and suppliers) to
implement energy efcient solutions.
Outlook for 2012-2014
Within the framework of its business program 2012-2014,
Schneider Electric wants to go even further in its work with suppliers
in the areas of sustainable development and social responsibility.
One line of action will be to motivate Group suppliers to roll out and
monitor progress plans conforming to the ISO 26000 standard. The
action will be supported by placing the sustainable development
dimension at the heart of the activity and on an external evaluation
process for suppliers performance.
The Group will also now work on another plan to develop its capacity
for innovation with its suppliers and especially in eco-design areas.
Examples
A global workshop organised in 2011 for Preferred suppliers
emphasised the importance that Schneider Electric places on
aspects linked to sustainable development. During this workshop,
Schneider Electric wanted to reward the highest-performing
suppliers, particularly in the Planet and Societal Responsibility
category for which a trophy was awarded.
Another example is Schneider Electrics commitment to support
the small and medium enterprises network. This support is given
through an approach to work adapted with certain suppliers. In
France, Schneider Electric is a major player of the International SME
Pact.
Schneider Electric is also a committed to employing people with
disabilities. The Company was presented an award by the French
Paralysis Association in 2010 and went on to sponsor their 2011
award ceremony. Schneider Electric continues to place great
emphasis on its commitment in this area through its purchasing and
subcontracting with sheltered-employment workshops or Centres
for Adaptation to Work (CAT).
2.4 Our Principles of Responsibility
The Company is constantly interacting with all the stakeholders
throughout the world: its borders are expanding, its environment is
changing ever faster, its activities are becoming globalised and its
social responsibilities are growing.
Schneider Electric wants to reafrm its desire to respect the laws
and regulations in all the countries in which it works.
The challenge is to gain and maintain the highest condence of
its customers and in a wider sense of its stakeholders. To
support each employee in this approach, the Group emphasises
the importance of placing responsibility at the heart of its corporate
governance.
The Group currently has around 140,000 employees worldwide.
Following the Groups various acquisitions, it has been able to
integrate this exceptional professional and cultural diversity to its
advantage. Driven by Group values, the Responsibility & Ethics
Dynamics program forms the basis of common references.
Schneider Electrics mission therefore takes its meaning from
engaging with individuals and organisations in order to help them
get the most from their energy.
A common frame of reference: our Principles
of Responsibility
Our Principles of Responsibility is a 15-page document that is as
pragmatic and realistic as possible, a synthesis of the Groups
common commitments to employees, partners, shareholders,
the planet & society. Our Principles of Responsibility does not
claim to cover all ethical dilemmas, but rather serves as a general
guideline. They are adapted locally to meet local practices or legal
requirements.
Our Principles of Responsibility were prepared in compliance with
the 10 principles of the Global Compact, the corporate governance
principles, the Universal Declaration of Human Rights and the
International Labour Standards. As a result, these principles comply
with international standards such as the anti-corruption principles.
Today, Our Principles of Responsibility document has been
translated into 30languages and sent to all Group employees.
A clause was added to all employment contracts, specifying that
new arrivals had read Our Principles of Responsibility when they
joined Schneider Electric.
Adapted processes
The Responsibility & Ethics Dynamics program provides each
employee with a method for asking the right questions and seeking
out the right people according to two approaches:
a detailed questioning process to take the right steps in delicate
situations. This may be broken down into three stages:
1. consulting the programs Intranet site,
2. contacting ones manager and/or a member of the concerned
department (legal, nancial, human resources (HR),
environment, etc.),
3. contacting the entitys Principles of Responsibility advisor.
an alert process to guide employees step-by-step towards the
right bodies:
1. contact their N +1 N +X managers,
2. use existing in-house outlets (legal, nancial, HR, environment,
etc.),
3. contact the Group Compliance Committee.
Three tools accessible to all employees
an Intranet site accessible to all employees from the global
Intranet home page, providing all information on the program and
Our Principles of Responsibility, as well as news and progress in
the eld;
frequently Asked Questions FAQs. This tool which is continually
powered was introduced following a collection of reports written
by the managers after the program and Our Principles of
Responsibility were presented to their teams;
an online e-learning module. The aim is that, at the end of the
session, the trainee is familiar with Our Principles of Responsibility
and more comfortable using them in his or her job. At the end of
2011, more than 21,000employees participated in the module:
94% rated the module as good or excellent.
A professional alert system
To allow each employee to exercise their right to report a problem,
aprofessional alert system is currently being deployed.
In compliance with local legislations, this market solution is provided
by an independent company and proposes alert categories, a
questionnaire, and information exchange protocol between the
person issuing the alert and the person responsible for investigating
it. The main players in this process are the Compliance Ofcers (see
Dedicated teams and organisation).
The system is currently in place on the American continent and
implementation is planned for the whole Group, accompanied by an
internal communication plan that identies the persons responsible
for investigating alerts received.
Dedicated teams and organisation
The program requires implementation of an organisation including
the following:
a Governance Committee and a network of Principles of
Responsibility Advisors.
They are responsible for the implementation and roll out the
Responsibility & Ethics Dynamics program.
a Compliance Committee and a network of Compliance Ofcers.
They are responsible for detecting and managing cases of non-
compliance with the processes dened, in line with local laws and
regulations and Our Principles of Responsibility.
Stakeholders and committees exercise their authority within
activities of inuence and control.
In particular, the Governance Committee must ensure coherence
with the Groups strategic plans. It provides Executive Committee
members with information on trends that, for example, implement
the company change program.
Governance
Committee
Compliance
Committee
Executive
Committee
One a year Twice a year Upon Request
Defne, Explain
& Spread the Rules
Detect & Manage
Non Compliance
PoR Advisers
(1 per Entity)
Compliance
Ofcers
(1 per geograph. area)
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
actions that they must drive forward, dependent on the risks to
which they are exposed in their countries of operation.
Two particular actions were undertaken in 2011:
one for the Country Presidents during the year to reemphasize
the importance of their role as sponsor for their countries, the
expectations at the end of 2011 and to respond to their questions;
and another addressed to the 500 main Group managers to
inform them of the developments brought by the program
and to raise their awareness once more on the importance of
communication within their teams.
In addition and since the program was launched in 2010, it has
been the subject of an assessment conducted by Internal Audit.
Our Principles of Responsibility were rolled out in all the Groups
entities in 2010. The results of the Internal Audit, including the
ndings of a survey of 10,000employees and an audit that includes
Argentina, China, the United Arab Emirates, the United States,
France, India, Indonesia, Italy, and Russia were:
73% of employees questioned said they were familiar with Our
Principles of Responsibility;
84% of survey participants stated that the information given was
useful and comprehensive.
In 2011, the assessment of the Responsibility & Ethics Dynamics
program as a whole, with a particular focus on the 19 most exposed
countries in which the Group works, according to the corruption
perception index of Transparency International.
The audit shows the level of knowledge of Our Principles of
Responsibility stands at 75% (83% if a recently acquired entity is
excluded). Beyond the gures, the audit makes two very important
points clear to us:
on the one hand, regarding the means of communication judged
the most effective;
and on the other, on the level of perception of Our Principles of
Responsibility by position within the company.
For 2012, these lessons are driving us to integrate communication
into the Schneider Electric University programs and to use
supplementary action for the job posts where the result is weakest.
2
2.5 Fight against corruption
Approach and action plans
Schneider Electric must complete surveys, controlled by rating
agencies and investors on sustainable development practices,
which often include questions on very specic subjects such as our
anti-corruption policies. The Group makes an effort to respond to all
questions with full transparency.
The Governance Committee, presided over by the Executive Vice
President for Strategy & Innovation, applies a seven-point progress
plan based on the Responsibility &Ethics Dynamicsprogram:
1. identify high level employees to monitor the rollout of the
Responsibility & Ethics Dynamics program;
2. dene best practices to prevent illegal actions, strengthen
managements major role and promote use of the professional
alert system;
3. ensure that all policies comply with Our Principles of Responsibility;
4. inform employees of standards and procedures;
5. implement monitoring, audit, and reporting systems;
6. establish a discipline for the practical implementation of standards
and procedures;
7. in the event of a breach of the ethics principles, take the corrective
measures necessary, including the consolidation of procedures.
Examples
In full coordination with the Responsibility & Ethics Dynamics
program, the awareness-raising actions, linking the Sustainable
Development, Legal, Security and Internal Audit functions have
been led by the line managers in 2011.
Various other anti-corruption initiatives have been implemented, at
the national or regional level:
in France, Schneider Electric is involved in dening ethical
standards as part of the Business Ethics Commission of the
GIMELEC, a grouping of electrical equipment manufacturers;
in Russia, Schneider Electric signed an ethics charter with the
Association of European Businesses;
Schneider Electric Egypt obtained specic anti-corruption
certication for its work with the National Electricity Corporation
in Sudan.
Award for excellence 2011
The Group is also proud of having been included once again in The
Ethisphere Institutes Worlds Most Ethical Companies indicator.
Schneider Electric is among 100 international companies
recognised for their ethical commitment and behaviour. The
performance measures looks at the existence and consistency
of governance, the reputation and inuence of the company, the
quality of actions promoting citizenship and social responsibility,
and the culture and actions promoting ethics. This recognition
is reassuring for the Group as it implements the Responsibility
&Ethics Dynamicsprogram.
Outlook for 2012
Program rollout will continue in 2012 along various axes:
implementation of the recommendations given during the internal
audit in late 2011, primarily continuing communication actions
and training for employees in countries most susceptible to
breaches of ethics;
continuation of implementing simple measures to enable
employees to understand ethical dilemmas in an operational
context and to help them place themselves above the risk level
to which they may be exposed;
working with the Principles of Responsibility Advisors to
forge closer ties between the principles and the operational
procedures and directives that should be readily available to all
Groupemployees.
2SCHNEIDER ELECTRICS COMMITMENT TOENVIRONMENTALPERFORMANCE
>
toEnvironmentalPerformance
This chapter deals with the environmental impact of the Groups industrial activities. The products and solutions offered by Schneider Electric
which help reduce the environmental impacts of our customers activities are described in part 2, (page52 ).
3.1 Overview
Context and aims
Schneider Electric does not produce or distribute energy. It
conceives and builds electrical products and proposes integral
solutions for a number of market segments. The great majority of
these products are installation components for energy management.
They consume little energy compared with the devices they control,
and the losses through dissipation are negligible compared with
the energy in transit. Production activities, for their part, mainly call
on assembly and control techniques and only minimally integrate
procedures with a signicant environmental impact, such as the
transformation and treatment of metals.
With a company presence in more than 100 countries resulting
from a continual rhythm of acquisitions, Schneider Electric applies
a common environmental policy to all its entities and rolls out
the same programs for certication, reporting and performance
objective throughout all its geographical locations.
Schneider Electric commits to protecting the environment and health
through the following objectives contained in the One company
program:
to roll out ISO14001 certication and the Groups environmental
reporting to 100% of the industrial sites and logistics centres
(more than 50 people ) within two years after their creation or
acquisition, and to the large tertiary sites (more than 300 people );
to roll out energy efciency monitoring solutions to 100 sites
covering 75% of the Groups total consumption (Energy Efciency
Monitoring program);
to reduce energy consumption of sites by 4% per year, to limit
SF
6
emissions to 1% of consumption (1.2% target revised to
1%) and to reduce the air freight portion to 20% of long distance
freight;
to monitor water consumption for all ISO 14001 sites and control
deviations (+/- 10%);
to monitor VOC emissions (Volatile Organic Compounds) for all
ISO 14001 sites holding emissions permits or emitting more than
one tonne per year;
to achieve 2/3 of product revenue with products that have a life
cycle analysis and chemical substance usage that is controlled
and limited (Green Premium).
Three performance indicators were set in the Planet and Society Barometer for the duration of the One program (2009-2011):
1. 30,000 tonnes annual reduction of CO
2
emissions - 161,933 -110,156 -44,089 -
2. 2/3 of products revenues gained with Green
Premium products 63.7% 26.1% 2.6% 0
3. 2/3 of employees work in ISO14001 certied sites 70.4% 69.0% 63.7% 58.8%
NM =indicator not monitored.
The 2008 performance serves as a starting value for the Planet & Society Barometer of the One program between 2009 and 2011.
(pages61-64 for indicator 1, 64-67 for indicator 2 and 67 for indicator 3).
2
SCHNEIDER ELECTRICS COMMITMENT TOENVIRONMENTALPERFORMANCE
Organisation
At the corporate level, the Sustainable Development Department
establishes the Groups environmental strategy and leads the
corporate environmental actors, jointly with the Global Supply Chain
Management. The Director of Sustainable Development is ranked
below the Executive Vice President of Strategy and Innovation
(member of the Groups Executive Committee).
The Environment Director, ranked below the Senior Vice President
of the Global Supply Chain Management (member of the Groups
Executive Committee), denes and rolls out the environmental
policies and programs; he reports the results and leads the
environmental manager network comprising:
for product management: environmental managers in each
business who are responsible for integrating environmental
concerns in line-up management, environmental representatives
who are responsible for assessing the impact on marketing,
and environmental specialists with expertise in integrating
environmental aspects into product design;
for site management: environmental managers in each major
region, environmental managers in each large region with
signicant business volume, and environmental managers in
each plant or supply chain centre.
In 2010, the organisation within Global Supply Chain Management
changed from a corporate only leadership to a regional organisation
(North America, Asia-Pacic, Europe-Middle East, Africa and South
America). Three SERE (Safety, Environment, Real Estate) directors
were appointed: each one is responsible for implementing the
Groups policies in these elds for all sites within their geographical
area and for reporting on progress plans. There is a meeting of the
three directors every quarter to ensure coherence in the Security,
Environment and Real-Estate policies for the entire Group. To
implement this policy, the SERE directors lead a network of more
than 200 managers responsible for the environmental management
of industrial, logistic, and administrative sites.
These networks have access to a wide range of management
and experience sharing resources including directives, application
guides, an intranet site, and databases.
The Transport Director, within Global Supply Chain Management,
is in charge of measuring and reducing freight CO
2
emissions at
Group level.
Highlights of 2011
indexation of the performance incentives for the Executive
Committee members to one of more components of the Planet
& Society Barometer, chosen according to their eld: particularly
Green Premium for Global Supply Chain Management and
Activities, CO
2
reductions, ISO 14001 and Energy Efciency
Monitoring for the Global Supply Chain Management;
a very steep rise in the Green Premium indicator, particularly
as a result of the Environment Director rejoining the Executive
Committee Management in charge of Global Supply Chain as
well as because of the indexation of a portion of the performance
incentives of the Activity directors of progress plans linked to
Green Premium;
sustained reduction in CO
2
emissions due to the efforts to reduce
the SF
6
leakage rate in industrial processes (0.94% leakage at
the end of 2011).
3.2 Reduction of CO
2
Emissions
Approach
Schneider Electric is not subject to European quotas on carbon
emissions since it is an industrial business that globally produces
few emissions in comparison to energy intensive industries.
Schneider Electric is therefore classied in the low emissions sector
by the Carbon Disclosure Project
(1)
. However, the Group has dened
measures to reduce its carbon emissions.
With the support of the Carbon 4 consultancy rm, Schneider
Electric in 2011 updated the carbon footprint performed in 2007
(from 2006 data), from its upstream suppliers to its downstream
distribution chain. The main sources of emissions remain the same:
purchase of raw materials (steel, plastic, metal) and equipments
represents around 70% of the total. The logistics involving
upstream and downstream supply from and to suppliers and rst
tier customers represents 15%, of which the main part comes from
road freight. Schneider Electric is aiming to reduce these emissions
by 10% over the next three years. Direct emissions (scope 1 and
2) in Group buildings represent around 9%. More modest sources,
employees travels and waste represent 5% and 1% respectively.
This emissions split is representative of a second transformation
activity.
Compared to emissions evaluated in 2006, carbon intensity of the
Group fell and certain sources were the subject of specic work in
which the results are very visible: SF
6
emissions for example were
signicantly reduced.
Finally, the structure of emissions has changed: freight emissions as
a percentage have decreased following a correction of the method
used for 2006 gures.
9%
Site energy consumption
(and SF
6
)
15%
Logistics transportation
(from upstream
to customer delivery)
1%
Others
(including waste)
5%
Employee travel
(daily commute
and business trips)
70%
Purchases of raw
material and equipment
(1) Source: Carbon Disclosure Project 2008, Survey of the SBF120 French companies.
In the Planet & Society Barometer, Schneider Electric has set the
following objectives for 2009-2011:
to reduce the CO
2
equivalent emissions by 30,000 tonnes per
year over the total of scope 1 and 2 for the GHG Protocol
(1)
(SF
6
gas emissions in the industrial sites concerned, and energy
consumption of industrial and supply chain sites and of some
tertiary sites) as well as for a part of scope 3 for the GHG
Protocol
(1)
(air freight in the long distance freight transport mix
(2)
).
The objective is to reduce CO
2
emissions by approximately 15%
over three years on a constant basis compared to 2008. These
reductions are avoided emissions due to optimisation efforts,
see calculation methodology on page90 ;
implement a recovery process for SF
6
gas in 10 countries.
The rst devices containing SF
6
gas sold by Schneider Electric
reached their end-of-life at the start of 2000. The objective is to
develop commercial offers that allow customers to dispose of
their end-of-life, SF
6
containing devices, in order to completely
extract the gas and recycle it (see pages55-56 ).
During the period of the One program (2009 -2011), Schneider
Electric saved nearly 162,000 tonnes of CO
2
equivalent. the Group
exceeded the reduction target of 30,000 tonnes per year (i.e.
90,000 tonnes over the three-year period of the program).
The following actions were undertaken to achieve the target:
the carbon footprint of scopes1 and2, as dened in the GHG
Protocol, is calculated monthly, as is the performance of each
site concerned;
since 2010, the carbon performance has been presented
monthly to the Management Committee of the Global Supply
Chain Management by the Groups Environmental Director and
the three SERE Directors (SERE Safety, Environment, Real
Estate);
since 2010, the CO
2
reduction target has been taken into
account for the performance incentives of all Global Supply Chain
Management personnel who receive a bonus;
in 2011, the reduction of the carbon footprint and the rollout of
Energy Efciency Monitoring (see page63 ) were included in the
performance incentives of the Executive Committee member in
charge of Global Supply Chain .
In 2011, Schneider Electric worked on dening its new carbon
emission reduction targets for the 2012-2014 period within the
scope of the next Company Program. The Groups approach is
based on measuring, controlling and reducing CO
2
emissions,
starting with the most direct ones upon which the Group has most
impact and greater reliability in terms of metering (these correspond
to scopes 1 and 2 dened in the GHG Protocol) followed by more
indirect emissions (corresponding to scope 3 of the GHG Protocol).
Thus, Schneider Electric maintained the target cap of 0.95% of SF
6

leakage for the 2012-2014 period and included the new targets in
the Planet & Society Barometer:
10% savings in energy consumption;
10% CO
2
savings in transport.
Action plans
Actions to reduce SF
6
emissions
The performance of the Planet & Society Barometer in CO
2
savings
is mainly due to the reduction of SF
6
leaks in the production
processes, resulting from:
mandatory monthly reporting since 2010 rather than twice yearly
in 2009;
a Failure Modes, Effects and Criticality Analysis (FMECA) deployed
for manufacturing processes that involve SF
6
gas since2010;
improvements in processes and measurement on certain high
emission sites, particularly the SCFME Libourne site (France), the
largest European site, and the SBLMV Peking site (China), the
Asian site with the highest SF
6
consumption.
Note that the emissions reductions for SF
6
, and therefore of CO
2

equivalent, are normalised, i.e. they are calculated at a production
level equivalent to the period from one year to the next.
To obtain the target for the Planet and Society Barometer, industrial
leakage of SF
6
gas had to be reduced from a rate of 4% at the end
of 2008 to a rate of 1.2% by the end of 2011 for gas consumed
during production.
The target for 2011 went even further, aiming for 1%. This target
was exceeded with an effective leakage rate of 0.94%.
Energy Savings
In general, Schneider Electric sites are low consumers of energy,
compared with more energy intensive industries. However,
Schneider Electric wishes to set an example in the reduction of
energy consumption by applying its own solutions.
Energy Action program
Approach
Energy Action is a program for the continual reduction in energy
consumption in all of the Groups sites. The objectives are:
cutting out waste of electricity, natural gas and oil, and thereby
reducing costs;
deploying Schneider Electrics energy efciency solutions at its
own sites;
raising employees awareness about new energy efciency
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).
Energy efciency in the sites, with an objective of a 4% decrease in
2010 compared to 2009 and a 4% decrease in 2011 compared to
2010, helps full the objective for the reduction of CO
2
emissions for
the Planet & Society Barometer.
Since 2005, Schneider Electric has xed annual objectives for
reduction and publishes (internally) the energy consumption of each
of its production and logistics sites each year, as part of the Energy
(1) The Greenhouse Gas Protocol (GHG Protocol) is the most widely-used international accounting tool for CO
2
-equivalent emissions. Scope 1
corresponds to greenhouse gas emissions from sources held or controlled by the company. Scope 2 corresponds to emissions for the genera-
tion of electricity consumed 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.).
(2) Long-distance freight includes air freight and maritime freight.
2
Action program. The Group met and in some cases exceeded
its objective of reducing energy consumption per production site
employee by 10% between 2005 and 2008.
The Planet & Society Barometer for the One program (2009-2011)
extended the monitoring of consumption to tertiary sites with
more than 300 employees, including these into the objectives for
ISO14001 certication of sites. The Groups head ofce in France
was therefore certied according to the ISO14001 environmental
management standard, the EN 16001 energy management
standard in 2010 and the new ISO 50001 certication in 2011. The
sites energy consumption is monitored on a monthly basis by the
Management Board of Global Supply Chain Management since
2010. Global Supply Chain Management is responsible for all of
the Groups sites.
Action plans
The Energy Action program uses Schneider Electric energy
service activities to identify opportunities in key areas as HVAC,
certain equipment (such as air compressors), lighting and specic
industrialprocesses.
Many initiatives and awareness campaigns are implemented
internally to improve understanding of the short and long term
benets of energy efciency. There is also a dedicated Intranet site
that provides information on progress and the results obtained as
part of Energy Action. Events and symposiums have been organised
in France, the UK, Korea, Turkey, South Africa, Singapore, and the
US for Group customers and, more widely, partners.
The program resulted in the following achievements in 2011:
155 sites conducted formal internal audits of their energy
consumption over the last 3 years;
around EUR3million were invested in energy efciency projects,
generally with a return on investment of less than three years;
100,000 lights were replaced, 500 speed drives were used,
1,900 meters were placed in 160 sites, hundreds of sensors,
regulators, and building management systems were installed.
The business program 2012-2014 with its target of achieving an
extra 10% energy efciency over three years compared to 2011,
includes the following targets:
installation of remote control tools for energy consumption and
of the Summit dashboardDView by Summit Energy for all sites
above 5,000m
2
;
implementation of ISO 50001 standard for energy management
in 20 sites;
identication of opportunities to reduce energy consumption over
all sites as a result of the Energy Action audits.
Examples
Equipping buildings:
the Hyderabad site in India has implemented an extended range
of Schneider Electric energy management solutions, installing
movement and light sensors, variable speed drives in the
hydropneumatic system, and a building management system
to control the plant temperature. All these efforts have led to
a saving of 39% on the total energy consumption of the site,
resulting in an award of rst prize in the General Category of the
National Energy Conservation Awards in 2011 (from the Indian
Ofce of Energy Efciency);
in Germany, 12,500 m solar panels were installed in 2011 on the
roof of the Ratisbonne factory, representing the largest installation
of this type in the Ratisbonne region.
In Carros (France), energy efciency was considered during the
architectural design of the new building:
the architect was able to commit to an annual energy consumption
limited to 40kW/m
2
;
the photovoltaic panels were installed on the roof to cover almost
all the energy needs and a green roof was placed over the
connection area;
the twin skin metal cladding was placed on the west face of the
building to reduce thermal ows and avoid their absorption by
the building;
the coloured metal plates were incorporated within the walls of
the building to allow natural cooling at certain times of the night;
water is pumped and used by the natural cooling system.
Processes: the LifeSpace Department succeeded in increasing
from 20 to 30% the reduction in its energy consumption by installing
several variable speed drives in its injection casting machines and a
cooling tower on 5 production sites in the Asia-Pacic zone (China,
Malaysia, Vietnam, India and UAE). The Malaysian site (CMK) alone
made total savings of EUR 17,000between April and August2011.
Energy Action in North America: the Smyrna site (Tennessee), which
manufactures medium voltage switchgears and is the technical
design centre for electrical distribution equipment, installed a
1 MW solar photovoltaic energy generating system. This dual
voltage photovoltaic installation, among the rst in the world, will
be used as a source of green energy and as a test laboratory for
Schneider Electric technologies. The electricity produced by the
system powers more than half the site by using sunlight as the only
energysource.
The Energy Efciency Monitoring (EEM) program
Energy Efciency Monitoring is a centralised energy performance
monitoring program (excluding changes in temperature and
production). The objective is to provide the various levels of
management with a single scorecard that displays the energy
performance of all sites in the scope of environmental reporting to:
accurately manage energy costs;
compare site performance to identify inefciency;
help full the Groups environmental objectives.
At the end of 2010, close to 60 of the most energy intensive
factories in North America and Europe deployed EEM to accurately
measure their energy consumption.
Schneider Electric continued to roll out the EEM program during
2011 in its most energy intensive sites to ensure accurate
measurement of the actual reduction in energy consumption,
eliminating the effects of changes in climate and activity level from
one year to the next.
The objective for 2011 was to roll out EEM in 100 factories covering
at least 75% of the Groups total energy consumption. At the end
of 2011, the target had been exceeded as 160 sites had energy
consumption remote control tools, representing around 90% of
total consumptions.
The Green IT program
Green IT is a program to reduce the energy consumption of
Schneider Electrics IT infrastructure (data centres, servers, and IT
devices). It also aims to use IT technologies to reduce business
travel using telepresence/HD videoconferencing systems.
The main objectives are:
optimise the number of data centres and their energy efciency
using Schneider Electric products and solutions;
train all IT employees on best efciency and carbon practices;
ensure that more than 80% of the equipment bought is Energy
Star qualied.
The following measures were implemented in 2011:
consolidation of three of the main data centres operating the
Groups SAP platform on a single site with optimised energy
efciency (PUE <1.2), thus saving 240MWh;
roll out of a Green IT electronic training module to all IT personnel;
continuation of a global server virtualization plan, resulting in an
average cut of 40% in electrical consumption.
Actions to reduce emissions linked to freight
Long distance freight
In 2011, the mobilisation of major players in the supply chain and
logistics allow efforts to reduce air freight to be continued in favour
of sea transport for long distance freight. The CO
2
savings made
by these actions are included in the carbon indicator of the Planet
& Society Barometer 2009-2011. In 2011, air freight tonnage
represented 17% of joint air and sea tonnage, as against 20% in
2010.
Working on the structure of international ows by making use
of the growing importance of European and Singaporean hubs
has meant that the number of network point-to-point ows has
been halved. This has resulted in a mass use of ows on maritime
routes that link Europe to Asia and a reduction in greenhouse
gasemissions.
Short distance freight
Continual streamlining of the supply chain has allowed important
ows in Europe from France to Russia to be transferred from a road
route to a short sea route that is more reliable in terms of delays,
less expensive and more environmentally friendly.
Schneider Electric has taken an active role in the Smartway Europe
initiative concerning road transport, which produces the most
signicant portion of the Groups emissions. Around thirty supply
chain and some shipping multinationals are involved in this initiative
that aims to promote a European framework to address the issue of
CO
2
transport emissions. Schneider Electric is particularly involved
in the thought process surrounding the development of a tool for
reporting carbon dioxide emissions on a simple shared basis.
The Company is also a stakeholder in the extension of Smartway
Europe launched in Asia under the name Green Freight Asia.
Smartway Europe and Green Freight Asia also allow for promoting
good practise in terms of sustainable development in transport and
for advocating the implementation of supranational rules regarding
standardisation of emission measurement methods.
Emission reduction target
A new carbon audit was launched in 2011 at Group level that aimed
to recover on 70% of our transport costs at a global level the
greenhouse gas emissions generated by transport. This summary
is based on the information provided by approximately 60 of the
largest transport providers of the Group. The exercise has resulted in
specic collaborative meetings with the transporters to understand
better their calculation hypotheses and to start to plan the actions
required to reduce their carbon footprint.
More generally, a working framework was dened to detail the
attributes of Preferred Suppliers with whom Schneider Electric
wants to develop the volume of activity. In order to become a
Preferred Supplier, the transporter must be able to measure and
provide information their carbon footprint.
In 2011, training dedicated to greenhouse gas emissions in
transport was implemented in order to emphasise the importance
of this subject in the Groups strategy, to explain to the teams how
to measure and consolidate the quarterly CO
2
emissions level to
the network at a global level and nally, how to indicate the ways of
reducing CO
2
emissions that are available to the supply chainteams.
A result of this work, 2011 ended with the decision to include a
freight-linked CO
2
emissions reduction target of 10% within the new
Company Program for the period 2012-2014.
3.3 Eco-Design
Approach
If there is no general legal obligation on eco-design, the pressure
on the use of natural resources, climate change and respect for
biodiversity must encourage the public and private actors to
mobilise around these questions.
It is unusual for customers to explicitly specify environmental
criteria for a product but having a green supplier is becoming a
prerequisite.
Global customers, particularly in the green construction or transport
sectors or the authorities, need support to implement their
environmental policies, especially to:
calculate and reduce their carbon footprint;
2
anticipate and ensure conformity with statutory provisions,
especially with regard to chemical products;
facilitate eco-design of their products and services by supplying
all the appropriate information;
reduce end of working-life installation costs for the customer by
optimisation of recycling.
In order to be the rst to supply its customers with all the
environmental information that they need, Schneider Electric
developed Green Premium - a unique eco-brand based on clearly
dened criteria - including ad hoc environmental information on
itsproducts.
A solution falls under the Green Premium branding if it satises the
four following criteria:
complies with the RoHS European directive, i.e. it does not
include one of the six substances stated in this directive;
contains information relating to the presence of Substances of Very
High Concern (SVHC) within the scope of the REACHEuropean
regulation;
has a Product Environmental Prole (PEP) providing a list
of materials, a recycling rate and a calculation of eleven
environmental impacts such as raw material and energy
consumption, carbon footprint and damage to the ozone layer.
This environmental prole is established over the whole product
life cycle, from manufacture to end of working life;
contains a guide identifying and locating the subsets or
components required for a particular recycling process, called
the End-of-Life Instruction guide (EoLI).
With an end-of-year target for 2011 of two thirds of global product
sales made up of Green Premium offers (based on 2008 sales),
Schneider Electric is clearly positioning itself as a sector leader and
occupies a unique role based on:
its green solutions;
its evaluation of environmental impacts, especially in terms of
substances contained and of end-of-life;
its transparency through information available on its web portal;
the reliability of its information with systematic reference to
international standards available.
Green Premium is an integral part of the creation and development
process for Schneider Electrics offers as a critical deliverable for
marketing product offers.
All the information is made available to Schneider Electric
customers on the Groups web portal. The conformity information
for RoHS and SVHC is available on the Check a Product website
dedicated to environmental information. The Product Environmental
Prole information and End-of-Life Instruction are available on the
Products and Services website.
Action plans
Substance Management
Schneider Electric is subject to European environmental regulation,
with particular emphasis on the use of toxic substances.
The REACH regulation requires traceability of dangerous substances
and the RoHS directive requires elimination of six substances
(lead, mercury, cadmium, hexavalent chromium, polybrominated
biphenyls (PBBs) and polybrominated diphenyl ethers (PBDE).
Schneider Electric has implemented the RoHS and REACH
programs by applying these European regulations.
The RoHS program, started in 2006, aims to eliminate the six
substances from all products. By deciding to eliminate these
substances from all its products, whether or not affected by the
directive or sold on the European market or worldwide, Schneider
Electric has gone far beyond the directives requirements.
Efforts to bring products into compliance continued in 2011,
particularly for the new entities to have recently joined Schneider
Electric. However, for certain offers that have little to do with
the scope of the RoHS directive, such as the medium voltage
equipment of AREVA Distribution activities, the RoHS compliance
decision has been deferred.
A new RoHS directive 2011/65/EU came into force on July, 21,
2011. The earlier directive, RoHS 2002/95/EC, will be repealed
on January3, 2003, the date by which Member States must have
transposed this directive into national regulations.
This new directive has two important developments: the extension
of the scope to all electrical and electronic equipment until 2019
and the CE mark, but no new substance is added to the existing list
of six substances stated in the rst directive.
As a result of the implemented RoHS program, Schneider Electric
is a very good position to ensure conformity with this new directive
because most of the work regarding product conformity has already
been undertaken.
Directives similar to the RoHS European directive are now in force or
being discussed in several countries. Schneider Electrics decision
to generalise the application of the RoHS to all its products has
helped anticipate developments in regulations all over the world and
Schneider Electric is able to offer products which comply with the
RoHS directives on all its markets (China, South Korea, Japan, etc.).
The REACH program, started in 2008, aims to:
ensure that substances used by Schneider Electric and its
subsidiaries are registered and authorised for the applications in
question, in accordance with REACH requirements;
formalise the information to be provided to customers about
the presence and level of hazardous substances in Schneider
Electric products;
anticipate the substitutes that will certainly be needed for certain
chemical substances, avoiding any impact on Schneider Electric
product performance.
In 2011, the REACH program was mainly strengthened in the
following areas:
consideration of the updates to the substance list published by
the European Chemicals Agency (ECHA);
the replacement project for SVHC phthalate substances in
cables;
preparation of notication for the European Chemicals Agency
(ECHA) about SVHC substances used in our products;
the launch of the project aims to integrate substance management
within our information systems in order to anticipate the impact of
obsolescence on our offers and to automate the REACH reports
for our products, as well as to circulate information more quickly
to our customers.
Environmental information
The Green Premium eco-brand guarantees customers the
availability of environmental information relating to Schneider
Electric product offers such as the Product Environmental Prole
(PEP) or the End-of-Life Instruction (EoLI).
As an integral part of the eco-design approach, the PEP program
provides customers with the environmental impact of products
during their life cycle according to the ISO14040 standard. This
program applies to all offers developed by Schneider Electric.
The analysis of each products environmental characteristics
looksat:
the materials used;
the presence of hazardous substances as dened by the RoHS
directive;
the environmental certication statute of the production site;
the products recycling potential;
11 environmental impacts of the product, such as the
consumption of raw materials and energy, the carbon footprint,
the damage to the ozone layer, the production of photochemical
ozone, the acidication of the air, the production of dangerous
waste, the eutrophication of the water, and the toxicity of the air.
The majority of the Product Environmental Prole (PEP) documents
in 2011 were established or made to conform to the requirements
of the PEPecopassport program, with reference to the ISO
14025 standard. Schneider Electric has actively participated in
the launch of this independent program that brings together the
professional unions of manufacturers in the electrical, electronic and
environmental engineering sectors. The PEPecopassport program
is a measure of rigour, reliability and transparency.
Schneider Electric also integrates product recycling into the design
of its products in order to promote recovery of end-of-life materials.
Schneider Electric has developed a design rules guide in order
to optimise end-of-life costs and the potential recycling rate of
itsproducts.
These practices led to the publication of a product recycling rate
and to recommendations to ensure end-of-life treatment that is
environmentally friendly. This information is available to clients in the
Product Environmental Prole (PEP) documents.
These practices are equally applicable to the publication of
information and recommendations to facilitate recycling of subsets
or components stated in the WEEE (Waste Electrical and Electronic
Equipment) European directive. In effect, even though the vast
majority of Schneider Electric product offers do not fall under this
directive, Schneider Electric makes the End-Of-Life Instructions
information sheets available to its customers. This allows
customers to identify and locate the subsets or components so
that they are able to recycle them using suitable processes that are
environmentally friendly.
Compliance with WEEE and equivalent legislation
A number of political commitments and regulations address
the issue of waste from electrical products. One example is the
European Waste Electrical and Electronic Equipment directive
(WEEE), which has been transposed in each Member State. Similar
regulations have been adopted or initiated in Japan, China, India,
and the United States.
The WEEE directives main objective is to increase the recovery
rate for the largest types of electrical waste, such as televisions,
refrigerators and lighting systems, as well as for short-lived IT and
telecommunication equipment. Industrial electrical and electronic
devices and electrical distribution equipment is only very marginally
concerned. Under the directive, the equipment manufacturer
is responsible for setting up and nancing dedicated solutions
to collect and process discarded equipment. The directive sets
minimum rates for recovery and recycling.
Schneider Electric is actively involved in a responsible approach even
though virtually none of its products are covered by thedirective.
As a responsible company, Schneider Electric must be able to
prove the existence of established end-of-life solutions. These must
be nanced and certied for collecting, processing, and recycling
end-of-life products in a way that respects both human health and
the environment.
Carried out in close cooperation with all Group partners, the
approach is deployed at the national level in each host country.
This involves identifying, certifying, and in some cases organising
solutions for processing waste from electrical equipment, with the
application of the appropriate indicators.
Green Premium Eco-brand
More than 400 Product Environmental Prole (PEP) documents
and more than 200 End-Of-Life Instructions (EoLI) were generated
in2011.
Linked to more than 75% of revenue taken for the RoHS compliant
offers and with the REACH information available, Schneider
Electrics target was to consolidate this in 2011 with almost 64% of
global product sales made through Green Premium offers, based
on 2008 sales.
The Check a Product website was checked worldwide on
average 3,500 times per month and more than 6,000 reference
products were checked monthly for their RoHS and REACH
environmentalstatus.
The Schneider Electric Environment Marketing campaign will be
rolled out during 2012, promoting the Green Premium eco-brand
through the Schneider Electric electronic catalogue and through a
unique web portal Check a Product Green Premium for RoHS,
REACH, PEP, EoLI, and Battery Directive environmental information.
The reference year for the Green Premium indicator calculation will
be updated.
Green Plastic Program
This technologically innovative program aims to make plastic parts
healthier and more environmentally friendly throughout the product
life-cycle. In effect, plastic is present in almost all Schneider Electric
products and the amount of CO
2
equivalents needed to produce
the plastic is estimated at 550,000 tonnes per year.
2
The Green Plastic program is carried out in collaboration with the
activities, the teams in charge of material purchasing and design
and is included in the Group actions for sustainable development.
The program follows a unique strategy for each type of plastic
focusing around three successive progress plans. A green plastic
must therefore:
1. be exempt from potentially toxic substances and have an end-of-
life evaluation scenario (material or energy);
2. come from a production sector that has low CO
2
use (recycled
plastic or plastic from renewable sources);
3. come from a resource that does not compete with the food
sector either directly or indirectly, in the case that the Green
Plastic solution makes good use of a raw material from a
renewablesource.
The added value that customers expect from green plastics lies
in two major areas:
residential applications exempt from substances of very high
concern, particularly including non-PVC and non-halogen ame
retardant product ranges;
new energy efcient offers, such as Efcient Home, which use
plastics with a very low CO
2
impact.
Schneider Electric uses a partnership approach in order to make
progress in research in this area. The Group therefore participates
in collaborative platforms such as the Paristech Mines Bioplastics
Chair or the Axelera competitive clusters initiative (in sustainable
chemistry) and Plastipolis (in plastics engineering).
Approach
Schneider Electric has extended its environmental system rollout
program beyond only the industrial sites to tertiary sites throughout
the 2009-2011 period. All these sites contribute to reporting, and
therefore to the Group targets. Priority objectives for 2009-2011 to
increase the number of employees working in ISO14001 certied
sites and to reduce its energy consumption were set within the
framework of the Planet & Society Barometer for the entire Group.
The certication objective helps focus continuous efforts to reduce
the main environmental impacts of the sites, shown in the table on
pages 98-99 :
energy consumption;
CO
2
emissions;
amount of waste produced;
percentage of waste recovered;
consumption of water;
VOC emissions (Volatile Organic Compounds).
Action plans
ISO14001 certification of Group sites
As soon as the ISO 14001 environmental management standard
was published in 1996, Schneider Electric decided to certify its
sites. For several years the Group has demanded that all industrial
and logistic sites with more than 50 people be ISO14001 certied
within two years of their acquisition or creation.
The extension of this internal directive to all tertiary sites with more
than 300 people was enacted in the One program from 2009
and actually launched in 2010. The headquarters of the Group in
France, in Rueil-Malmaison, was thus certied in 2010.
The Groups priority objective, as set out in the Planet & Society
Barometer, is to enable two thirds of employees to work in
ISO14001 certied sites. When the One program came to an end
in December2011, the target had been exceeded with more than
70% of employees working on ISO 14001 sites.
The challenge for the coming years is to maintain this performance
level by certifying all the new industrial sites within two years of their
acquisition or creation and to continue the new certications of
large tertiary sites.
NB: This has already been achieved, ahead of the two year deadline,
for 26 industrial sites from the Areva D acquisition.
Management of industrial consumption
Water consumption
The Group provides a detailed breakdown of water consumption
that takes into account groundwater and water from the public
network. Water used solely for cooling and then immediately
released without any change is also included in the statistics.
Schneider Electric reports on the quantities of water consumed
by its sites on a six-monthly basis and monitors the per capita
consumption of water on a like-for-like basis in order to evaluate its
performance from one year to the next.
During the period of the One company program, the overall eco-
production approach allowed the Group to reduce its per capita
consumption of water by 6.8% by the end of 2011 in relation to
2010 on a like-for-like basis.
Water is not generally a critical resource in Schneider Electrics
industrial processes.
Water is essentially used for sanitary purposes, sometimes for
cooling and in certain sites for surface treatment. In the latter case,
industrial water discharge is subject to treatment that is suitable
in terms of its pollutant potential and discharge into the natural
environment or in a plant subject to a monitoring plan.
As Schneider Electric industrial production is mainly based on
manual assembly processes or automatic processes for electrical
components and subsets, it has low water consumption and a
negligible impact on water quality.
Nevertheless, in 2011 the group initiated an analysis of industrial
site positions relative to water stress in different regions throughout
the world using the WBCSD tool (World Business Council for
Sustainable Development).
3.4 Eco-Production
In the future, sites with the highest water consumption and the most
exposed sites will be the focus of particular attention and of specic
action plans, after the implementation of pilot sites in the major
world regions (America, Europe & Africa, Asia & Pacic).
Energy consumption
See the Groups energy consumption action plans pages62-64 .
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 thermal and electrical
constraints so that it can optimise the amount of materials required
in production. Each devices Product Environmental Prole
(PEP) lists the materials used. To facilitate end-of-life processing,
Schneider Electric chooses materials that are easy to recycle and
clip-together components that are easy to disassemble. Life cycle
analyses and recyclability assessments also help the Group identify
areas for improvement.
For more information on the Schneider Electric global action plan
relating to PEP and to end-of-life instructions, see the Green
Premium chapter on page64 . Also see the Green Plastic program
on page64 .
Schneider Electrics desire to reduce its environmental impact
has driven its focus towards the use of recycled raw materials.
Forexample, 85% of cardboard used in Europe and 100% in Asia
comes from recycled material. North America is less advanced with
about 50%. With regard to metals that Schneider Electric purchases
on global markets, these include recycled material from recovered
waste. The UNEP (United Nations Environment Program) report
was published in 2011 addressing the situation with regard to metal
recycling rate. On a global level, 18 metals have a recycling rate of
over 50%, among which are lead, gold, silver, aluminium, tin, nickel,
zinc, copper and iron and 34 elements have a recovery rate below
1%, including rare earth elements. The UNEP recommends that
priority be given to product design in order to facilitate disassembly
and recovery of metals at end of life and to emphasise recycling
electrical and electronic equipment (WEEE). Schneider Electric
participates in the recycling systems via the recovery of its own
waste, with a target of 85%, and the End-of-Life Instructions for
its products.
Management of waste, emissions and industrial
pollution
Waste
Because waste is a major source of pollution but also a potential
source of raw materials, waste management is a priority in
environmental protection.
Most of the Groups waste is solid waste. Continuous improvement
plans have been deployed to manage this waste. This approach
ts in fully with the ISO14001 approach that all Schneider Electric
production and logistics sites worldwide are required to follow.
The target of the One program 2009-2011 was to recover 85% of
hazardous and non-hazardous waste.
Because classication systems vary widely from country to country,
the Group does not consolidate global data by category (hazardous
and non-hazardous). Data is processed to ensure local traceability.
In France, for example, hazardous industrial waste accounts for
around 14% of total waste. All waste is channelled to the appropriate
treatment facility.
Schneider Electric notes the quantities of waste produced and
recycled on a six monthly basis and monitors this production per
capita, on a like-for-like basis in order to evaluate its performance
from one year to the next.
The overall eco-production approach helped reduce our production
of waste by 7.1% per capita in 2011 compared with 2010 on a
comparable basis and to increase the proportion of waste recycled
from 82% at the end of 2010 to 84% at the end of 2011 on a
comparable basis.
Conditions of use and contamination of soils
Virtually all Schneider Electric sites are located in urban or industrial
areas and do not affect any notable biotopes. None of the Groups
businesses involve extraction or land farming.
No substances are purposely released into the soil in the course of
site operation. Workshop ooring at risk is given a waterproof seal
using a suitable treatment (resin retention). Hazardous substances
are systematically stored and handled in areas equipped with
retention tanks in compliance with regulations. As a result of
developments in legislation, retention systems are being designed
more and more to compensate in the event of malfunctions or
emergencies, such as res.
In 2011 Schneider Electric conducted its annual review of pollution
risks at all manufacturing sites as part of ISO14001 tracking. No
major incidents were reported in 2011.
Discharge into the water and air
Because Schneider Electric is mainly an assembler, its discharge
into the air and water is very limited. Mechanical component
production workshops are carefully monitored, in keeping with
their ISO 14001 certication. Their releases are tracked locally as
required by current legislation. No major spills or discharges were
reported in 2011.
Emissions of NOx and SOx and particles into the air are monitored
site by site according to their heating activity; monitoring of these
emissions is veried via ISO 14001 audits. Emissions are then
monitored by the site managers with respect to the thresholds
dened in local legislation and monitored by the heads of the
geographical areas (see SERE organisation page 61 ). These
emissions are not subject to consolidation at Group level.
The COV emissions have been identied as representative of Group
levels and are therefore included in Group reporting.
Finally, the CFC and HCFC emissions are monitored through our air
conditioners in accordance with legislation. They are not linked to
our industrial activities.
2
Noise and odours
All Schneider Electric sites comply with noise and odour limits.
Environmental risk management and prevention
The ISO 14001 environmental management system covers
management of environmental risks. No Schneider Electric sites are
Seveso classied. Aside from the voluntary prevention measures
discussed above for sites with a soil contamination history, no
signicant amounts have been paid out in connection with a legal
ruling.
In 2011, a particular effort was dedicated to an independent
ground analysis of our oldest industrialised sites; the analysis was
completed at the end of 2012.
All of the Groups industrial sites, which are ISO 14001 certied,
have procedures in place to prevent emergencies and respond
effectively if necessary. Preventive and corrective action plans are
based on an analysis of non-standard situations and their potential
impact. This analysis draws in part on hazard reviews for classied
installations.
In France, for example, certain sites that handle large amounts of
chemical compounds, such as Le Vaudreuil, MGA and 38TEC,
are equipped with balloon-type containment systems to avoid any
pollution through the water systems. Others, located next to a river,
have oating beams.
Drills are held regularly throughout the year to ensure that supporting
procedures are ready and effective.
A national organisation has been set up to track sensitive sites.
Their managers systematically receive training in environmental
crisis management. Directives, procedures and national guidelines
concerning environmental crisis management, historical and
current operations management, pollution risk prevention and other
topics are available on the intranet. Internal audits verify that these
procedures are applied correctly.
2COMMITTED TO AND ON BEHALF OFEMPLOYEES
>
4. Committed to and on behalf
ofemployees
4.1 Overview
Context and aims
Schneider Electrics people are critical to its success. The Group
motivates its employees and promotes involvement by making
the most of diversity, supporting professional development, and
ensuring safe, healthy working conditions.
Human Resources play a key role to support the development of
Schneider Electric in the changing context of its activity. This growth
is characterised by a sustained internationalisation, numerous
acquisitions, the increase of headcounts dedicated to selling
solutions and services, while maintaining a share of blue collars
close to 45%.
Schneider Electrics HR policy is founded on a strong sense of
commitment and shared services:
all of the Group entities participate in the drawing up of HR policies
and in their application. This guarantees coherence and facilitates
consideration for local economic, legislative and cultural realities;
all employees are treated equally on the basis of their skills,
notably with regard to employment, recruitment, talent
identication, mobility, training, remuneration, health and safety
(common processes and policies);
particular emphasis is placed on communicating the Groups
broad strategic plans to the employees in order to enhance
individual participation;
training is also a priority so that employees have the opportunity
to adapt to developments within the Company.
Schneider Electric encourages each employee to actively manage
their own career in collaboration with their line manager, their HR
manager and using the tools provided, particularly on the Groups
intranet. This allows each employee to play a key role in their own
performance and in their advancement.
Three key performance indicators were set in the Planet and Society Barometer for the duration of the One program (2009-2011):
1. 10% annual decrease in the frequency rate of
occupational accidents - 54% - 44% - 32% -
2. 14points increase in the Companys employee
recommendation score + 32 +16 0 -
3. 2,000employees trained on energy management
solutions 1,621 239 40* 0
The 2008 performance serves as a starting value for the Planet & Society Barometer One program between 2009 and 2011.
Audited 2011 indicators.
* In the 2009 Annual Report, the indicator measured the people having attended energy management solution courses (2,655 at the
end of 2009). Since the beginning of 2010, only the people having completed the entire educational course ofcially recognised by a
certication are accounted for by the indicator.
(pages71-72 for indicator 1, 73 for indicator 2 and 74 for indicator 3).
Organisation
Since 2009, the Human Resources department has been structured
around three principal roles to better respond to their missions:
HR Business Partner assists managers on a day-to-day basis in
setting out their business strategies and in assessing the human
resource requirements needed to meet their business targets.
HR Business Partner also plays a pivotal role in anticipating
skill requirements and employee development, and in the
management of employee relations;
HR Solutions creates and develops comprehensive solutions
to the organisations strategic challenges in key areas, such as
compensation, benets, human capital development, training
and performance management. Regional teams are leveraged to
effectively shadow the Groups globalised operations;
HR Operations handles the logistics and administrative
responsibilities relating to payroll, sourcing, mobility and training
programs, mainly through shared service centres designed to
optimise efciency and costs.
2
COMMITTED TO AND ON BEHALF OFEMPLOYEES
Highlights of 2011
indexation of the performance incentives for Executive Committee
members to sustainable development targets, chosen according
to their eld of work, particularly the implementation of social
policies by Human Resources;
continued reduction in the frequency of accidents at work, mainly
due to more training and protection measures;
a strong improvement in the recommendation rate for Schneider
Electric as an employer, due to the continual dialogue between
managers and their teams and to the action plan from the One
Voice quarterly surveys;
a sharp increase in number of employees trained in energy
management solutions due to training duration (from 12 to 18
months) resulting in the pass rate of many certied employees at
the end of the year.
4.2 Employee health and safety
Approach
Schneider Electric values the health and safety of all employees.
The company-wide policy on health and safety states All our
employees and contractors must benet from the highest possible
standards of Health & Safety in our work activities and sets the
same standards in all its locations. Schneider Electric goals in this
area include the following:
promote good physical and mental health throughout the
professional career of each employee;
improve the quality of life in the workplace;
anticipate events that could have an impact on the health and
safety of the employees;
and apply controls to minimize the potential for harm from
hazards.
This policy takes into account the Health & Safety risks identied
in the Group: slips and falls, material handling, machine hazards,
electrical hazards, ergonomics, chemical hazards, driving (for
trucks and automobiles), as well as psychosocial risks. Fire and
explosions prevention is operated by the Emergency Plan and
Business Continuity Plan of the Group, in which it has been
included also a Health section in order to ensure the highest degree
of responsiveness (for example during the H1N1 crisis).
One way that Schneider Electric ensures the best physical and
mental health of its employees is through the prevention of illnesses
that could hamper their efciency, creativity and well being.
Increasingly ergonomic work stations within its production system,
for example, are an ongoing measure to prevent muscular and
bone problems.
Action plans
Schneider Electric promotes health and safety to its employees
through the implementation of a comprehensive set of actions.
These actions include:
the implementation of Schneider Production Systemguidelines
(1)
,
continuously evaluated and improved.
the implementation of occupational health and safety
management systems and certications (see below).
the sharing and standardisation of best practices for hazard
identication and risk assessment, management and employee
involvement within the program, and program assessment.
New organisation
In 2010, Schneider Electric set up three regional organisations
which report to the Global Supply Chain central function. Each
regional organisation supports the Groups plans across of the
BUs in three areas: Safety, Environment and Real Estate (SERE).
One SERE leader is appointed for each region: North America,
Asia-Pacic and EMEAS. In 2010, the Group focused on building
the new organisation. In 2011, the scope has increased to include
global standardisation of best practices.
Objectives
With this view to share best practices worlwide, the rst action
of the new SERE organisation has been to implement a new
key performance indicator focused on measuring work-related
incidents requiring medical treatment. This new KPI, the MIR
(Medical Incident Rate) sets the foundation for deeper incident
investigation into workplace hazards and the prevention of injury.
It measures the number of medical cases per million of hours
worked, in order to have a clear and comprehensive vision of the
impact of the employees work activity on their health, taking into
account the events or exposures in the work environment which
had consequences on the health, or signicantly deteriorated
a pre- existing condition. The MIR started to be tracked in North
America before 2000 and worldwide in 2010 with the target to
reduce it by 10% every year.
Schneider Electric also commits to reduce the Severity Rate of
accidents (SR). The MIR and SR reductions are taken into account
in all plant managers performance incentives (combined goal of
-10% annually, up to -20% for specic BUs).
As part of the Planet & Society Barometer, Schneider Electric set a
goal for 2009-2011 to reduce the annual rate of lost-time accidents,
calculated as the Frequency Rate (FR), in the workplace by 10%
each year (consequently 27% over 3 years). In 2011, this KPI
was part of the performance incentives of Executive Committee
members in charge of the Businesses. As of the end of 2011, the
FR fell by 18% as compared to the end of 2010 and by 54% as
compared to the end of 2008 (see page103 ).
This performance is due to efforts made to reduce workplace
hazards, improve training, enforce the use of personal protective
equipment, increase employee awareness on safety and, in
particular, implement health and safety management systems
(1) The Schneider Production System (SPS) is the companys primary strategy for improving quality and productivity in manufacturing and in the
extended value stream. SPS is based on 40 principles organised into three domains that assure quality and customer service. These three
domains are People commitment, Product-process engineering, and Management of industrial and logistic processes. Within these 40 prin-
ciples, is a strong commitment to adhere to ergonomic, safety and environmental rules and standards. The SPS process is managed through
an extensive audit process used to assess conformance with best practices in many areas, including ergonomics, safety and environmental.
which imply safety assessments, prevention campaigns, specic
trainings and e-learning on safety aspects.
Certifications
In 2009, Schneider Electric started to implement occupational
health and safety management systems that meet or exceed the
requirements of ILSO/OHSAS 18001 standards. The deployment
of these management systems is over 83% complete.
In 2011, the Group started to run a global program to certify OHSAS
18001 (or equivalent) 100% of its manufacturing and logistics sites
by end of 2012 (sites with more than 50 people and within two
years of creation or acquisition). The deployment of this program is
tracked at regional level through the SERE organisation and is 50%
complete at end of 2011.
Training
Training and communication are key in Schneider Electric Health &
Safety program. This includes a strong commitment to employee
training on both the awareness level and on task specic training,
ensuring that its employees and contractors have the knowledge
base to work safely. Schneider Electric also communicates
workplace hazards, practices to protect employees from hazards,
best practices found in various locations globally, progress on health
and safety goals and objectives, and management commitment to
employee safety.
The process of standardising safety training on a global basis was
initiated in 2011. The regional organisations began the development
and implementation of global safety training program, with the rst
offering focused on general safety awareness and the expectations
for improving occupational health and safety within the organisation.
Several additional courses have been added in 2011 and the
process will continue into 2012.
Additional actions for 2011 included: the development of the
Annual Safety and Environmental Assessment (ASEA) shared
across each region; the standardisation and improvement of global
safety KPI reporting; and a strong focus on the communication of
serious work-related injuries, along with action plans to prevent
reoccurrence, to the Executive Management team.
Focus on stress management
Stress at work is managed by the Human Resources organisation
within the Group. Effective measures are in place locally to address
stress reduction in the workplace. In North America for example,
Human Resources promote stress reduction via incentives and
communications on the healthy lifestyle program in place (exercise,
proper diet, smoking cessation, stress management, preventative
medicine, etc.) which is encouraged both on and off the job. In
Asia Pacic, Human Resources promote stress reduction via health
lecture, yoga class, sport club, stretching program and annual
health welfare.
In France, a special program is in place regarding psychosocial
risks induced by stress at work, with the identication and the
address of risk factors. Schneider Electric has developed and
deployed a management tool to prevent psychosocial risks. It
includes a training module, a collection of indicator and a reading
guide to identify factors contributing to psychosocial risks in a work
organisation. So far, 22 sites have received training, six are under
diagnoses, and 10 are implementing corrective action plans. A
second management tool is deployed to maintain employment for
people with occupational health problems and prevent the sources
of work stress that may impact physical and mental health.
Examples
Schneider Electric has received several recognitions for its safety
program in 2011, including:
the Green Cross Award, presented by the National Safety Council
to the North America region;
208 safety awards from the National Safety Council for several
Schneider Electric sites in the North America and Asia-Pacic
regions. They reward the practices of the Group in such elds
as health management, weak occupational accidents frequency
rate, prevention of risks related to trucks driving, etc.
Teams across the globe celebrated their safety successes by
submitting entries for consideration to the 2011 Schneider Electric
One Trophy Award campaign. The One Trophy Award is an internal
award program designed to recognise team actions for activities
that contribute to the One company program priorities. In 2011,
there were 40 entries for safety related projects, with heavy
emphasis in the EMEAS region. To recognise the good efforts of the
employees who participated actively in these safety projects, the
EMEAS region created a special Safety Award category in addition
to the EMEAS regional Trophy Awards.
2
Approach
Schneider Electric is working to become the best company to
work for, as rated by its employees, and conducts a survey of
employee satisfaction every quarter.
The Group also is looking to establish a strong name as an employer
and is communicating around its Employer Value Proposition, which
are closely aligned with the values of the Schneider Electric brand.
Action plans
Employee satisfaction
Set up in 2009, the One Voice internal satisfaction survey is carried
out on a quarterly basis to take the organisations pulse worldwide.
The survey methodology used is similar to that used to measure the
Groups customer satisfaction.
Specically, all employees are asked to ll out a short questionnaire
evaluating their engagement and their willingness to recommend
Schneider Electric as a model employer. This process helps
the Group identify key avenues for improving major employee
engagement factors.
Analysed by country and by unit, the survey results help to steadily
improve employees commitment to processes and projects, whose
proper execution is crucial to both successfully implementing the
Groups strategy and satisfying its customers.
A key performance indicator for the Group, registered in the Planet
& Society Barometer, was to increase by 14 points the Companys
employee recommendation score between 2009 and 2011. At the
end of 2011, the goal was exceeded with 32 points of increase.
In 2011, 146,049 cumulated employees answered to the One
Voice survey by email and 35,959 employees in plants worldwide
answered by paper or kiosk in 51 different languages (53% global
participation). This reects a very high level of engagement (87%
indicated they were willing to give extra effort to help the Company
meet its targets).
In 2011, the Group introduced further improvements to the
reporting of One Voice. Since Q1 2011, managers with a minimum
of 20 employees in their reporting organisation receive a One
Voice result specically for their team through a dedicated on-line
results dashboard. Two questions of the survey focus on team
communication regarding One Voice results and ensuing action
plans. This encourages and helps drive detailed action planning at
all levels of the organisation.
In 2012, new questions will be added to the survey that will give
the Group a detailed Employee Engagement Index. This will allow
Schneider Electric to benchmark its employee engagement level
against other companies in its Industry.
Employer Value Proposition
After launch in 2008 as part of the One program, the drive to deploy
a strong employer brand was stepped up in 2009, 2010 and 2011.
Schneider Electric becomes a distinctive employer of choice. It is
recognised as a highly attractive global company offering a friendly,
exible, creative and dynamic work environment, ensuring the
development of its people and the sustainable development of the
Planet and Society. Schneider Electrics Employer Value Proposition
creates the emotional link with Schneider brand value which enables
to attract diverse young potentials and professionals.
Universum rankings
Universum is a research company that helps global corporations
understand their employer branding positioning in each country
they are operating. Universum annually surveys over 300,000
students regarding their career preferences, career goals and
image perception of their ideal employers. The study is conducted
in 27 countries and involves more than 1,500 universities. In 2011,
Schneider Electric participated for the rst time in Universum
ranking survey in business and engineering schools.
Universum Country Ranking at targeted schools has been a major
achievement: France, China, Russia and Turkey are targeting to be
positioned in Top 25; USA, Brazil, India, Germany, Mexico, Poland
and Golf countries are targeting in Top 50 in engineering rankings
by 2014. Universum Business rankings show a positive trend. In the
meantime, Brazil has won the best employer of choice.
Partnerships with universities
Multiple partnerships have been set up with the worlds largest
universities, including Moscow Power Engineering University,
Cairo University, INSEAD, HEC, ParisTech, Supelec, BMS College
of Engineering (Bangalore), Shanghai JiaoTong University, Peking
TsingHua University, University of Toronto, University of California
Berkeley and Northwestern University Kellogg. In 2011, global
target universities were identied by business units and HR leaders
to better reect the Groups geographical locations and the new
skills that it needs to develop in the area of energy management.
Partnerships with prestigious laboratories such as MIT were signed.
Go Green in the City
Launched in 2011 by Schneider Electric, Go Green in the City is an
international case challenge for university business and engineering
students around the world to nd clever solutions for energy
management. It is well-recognised as a global employer branding
initiative to attract female graduates for internship or recruitment
in 8 strategic countries: Brazil, Russia, India, China, France, USA,
Germany, and Turkey; and in more than 80 targeted schools.
Thesecond edition was launched in January2012 and is open to
more than 90 selected universities in 9 countries (with Poland).
As in its rst year, candidates are asked to present a case study
on the subject of energy solutions in the city. In pairs, with at
least one woman, students must propose viable solutions of
energy management in ve key areas of a city: residential areas,
universities, trade, water and hospitals. The best proposals will
reconcile increased demand for energy, social progress and
environmentalprotection.
4.3 Employee engagement and talent attraction
Schneider Electric Career Portal
As part of the project to centralise the Groups existing websites,
Schneider Electric Career Portal has been created to more
effectively attract all categories of potential candidates. Video
employee testimonies have been associated. Particular emphasis
is placed on the Groups specialisation in energy management.
Promoting a strong employer brand in this way has helped to
position Schneider Electric as a globally recognised benchmark
employer, capable of both attracting the best talent and mobilising
all employees around a set of shared values that are aligned with the
Groups strategicdevelopment.
4.4 Fostering talent and competence
One company program initiatives such as the evolution from
products to solutions, growing internationalisation or employee
engagement demand ongoing adaptation and skill enhancement.
Training, therefore, is at the heart of Schneider Electrics Human
Resources policy.
Approach
Schneider Electric global Talent Acceleration program is designed
to increase the Groups talent pool and develop diversity, in
accordance with the One company program.
In 2011, this program continued to focus primarily on new
economies but also on enhancing managerial ability to identify and
mentor employees that show exceptional potential.
To this end, performance management tools were deployed at
all levels of the Groups organisation. These include individual
skill reviews, annual performance appraisals, mid-year reviews
to assess progress and adjust targets, and people reviews.
All of these resources help the Group continuously monitor and
accurately evaluate individual as well as collective performance, and
identify high potentials. The use of these tools has made for more
objective and individualised decision-making in the area of career
management, remuneration and recognition.
Action plans
3E Program
In 2009, Schneider Electric implemented the 3E program to foster
optimal skills development. It involves relevant work experience
(Experience), managerial coaching and feedback structures
(Exposure) and appropriate training investment (Education).
The Groups aim is to give all employees the opportunity to draw up
a personalised skills and career development plan in collaboration
with their managers with career and competencies reviews.
Schneider Electric University
Schneider Electric University offers courses that build knowledge
and skills across the organisation in technical, solutions, supply
chain, and leadership competencies. All of this training is offered
through a blended learning of class room and e-learning facilities. All
training modules are assessed by the participants on the quality of
the content, the teachers, the format and related logistics.
In 2011, eight Group campuses worldwide are dedicated
to employee training: the US (Chicago and Boston), France
(Rueil- Malmaison and Grenoble), China (Beijing), India (Bangalore),
Brazil (Sao Paulo), and the eighth campus was created in
November2011 in Russia (Moscow).
One Champion e-learning portal
The One Champion e-learning portal was launched in 2009 to
ensure that all Schneider Electric employees have access to the
same training programs.
In 2011, 68,275 employees have developed their knowledge thanks
to the 52 customised modules available on this on-line learning
platform, a 25% increase compared to 2010 (55,000).
The most selected modules are: Our Values, Energy Efciency, Our
Principles of Responsibility, E-mail efciency and Safety awareness.
New modules such as Why Solutions, Discovering EcoStruxure,
Energy Technical Institute, Global Supply Chain and Marketing
Academy have been added during the year. A specic chapter,
Welcome to Schneider Electric, is also available and dedicated
to newcomers in the company. A Gender Diversity module is
alsoavailable.
Energy & Solutions University
As part of the Planet & Society Barometer, Schneider Electric
set a target for 2009-2011 to train 2,000 employees in energy
management solutions. The HR organisation in charge of Learning
& Development partnered with the Solutions & Energy Efciency
Department (within Strategy & Innovation) and the business
leaders to develop the Energy & Solution University, in order to
accelerate the development of strategic skills in solutions and
services. Certifying career paths are offered to employees (account
managers, sales representatives, solutions architects, projects and
services teams, etc.). At end of 2011, 1,621 people in 55 countries
have received certication and more than 8,500 people are enrolled
in the certication path.
Leadership Development
One leadership, a suite of programs addressing the learning
needs of managers and regional talent, was deployed on a global
level by the Leadership Academy. By the end of 2011, about 3,800
managers from all countries had participated in the different offers
for manager and senior managers.
LEAP, the entity and regional high potential program of One
Leadership, has received great feedback from participants and
2
business leaders, in particular on the 3E approach (Experience,
Exposure and Education) and on the real business problem solving.
About 300 participants joined these regional cross-entity programs.
Leadership Roundtable, an innovative learning approach of
leaders developing leaders, has been led by many countries with
the involvement of leaders at every level of the Group (country,
regional, corporate) and in all functions including our CEO, and
other members of the Executive Committee. Using a book-sharing
approach, these leaders have addressed a wide range of topics
from Trust to Entrepreneurship, to an audience of sometimes as
large as 500 managers, through a combination of face-to-face
sessions and video links. Asia Pacic alone delivered a total of 48
such sessions with over 2,000 managers participation.
Other functional skills development
In addition to Solutions & Leadership skills development, Schneider
Electric has initiatives in key functional areas such as:
Global Supply Chain: The Global Supply Chain Academy was
set up to provide every supply chain professional the opportunity
to learn and develop their functional knowledge, capability and
competencies in the six domains of Customer Satisfaction
& Quality, Manufacturing, Purchasing, Logistics, Safety,
Environment, and Industrialisation. In 2011, more than 2,500
people have been trained on 60 learning modules of the Global
Supply Chain Academy.
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. Our range of learning offers cover the entire OCP
lifecycle, addressing skills such as project management, design
& testing, R&D processes, software tools, etc. The Group is also
increasingly focusing on building learning offers around software
development competencies. More than 3,000 R&D employees
have been trained in 2011 on the 130 training offers structured
around 5 pillars of this Academy.
Transactional Sales: The Sales Excellence Academy focuses
on the sales competencies needed to support transactional
business, which is also undergoing transformational changes
driven for example by EcoStruxure. In addition, the Group
developed and piloted in 2011 an offer targeting more than 2,000
sales managers addressing their roles as Strategist, Coach, and
Communicator. This offer is ready for deployment in 2012.
Access to learning
Schneider Electric made available to all employees its Leadership
& Desktop Library, which comprises a collection of 400 different
e-learning courses. In 2011, around 14,000 employees consulted
these courses. More than 80 learning paths have been created from
these courses to develop soft skills in different elds.
In 2011, Schneider Electric also completed the specications,
call for proposal, and subsequent evaluation and selection of a
Global Learning Management System. This is targeted for phased
deployment globally beginning 2012, taking the Group another step
closer towards its ambition of making learning readily available to
every employee: in the 2012-2014 Planet & Society Barometer,
Schneider Electric set the target to achieve at least one day of
training for every employee each year.
Innovation in training
Collaborative Learning: A number of pilots were launched in 2011
utilising web social media tools to build collaborative learning
groups as part of a Learning program. These groups were
centred on communities such as New Hires, Action Learning
Project Teams, etc. The learning the Group has derived will be
used to build upon further iterations in 2012.
Technology: Pilot projects, for example Schneider Electric
Kindle e-book learning application, aims to make learning more
accessible. The Group also used media such as e-mail or SMS to
deliver Bite-sized learning to employees. Webinars are another
fast growing method that has been used in 2011 to deliver
training in topics ranging from leadership to technical skills.
4.5 Anticipating workforce needs
The business growth of Schneider Electric, its ever expending
locations, and the shortage of critical skills available on the market
inspired the Group to create a small team dedicated to Strategic
Workforce Planning in 2011. This teams mission is to create a
practical framework which ows from the organisational strategy
and links operational HR execution to the medium and long term
business needs.
The aim is to enhance management practices so that leaders have
a practice of anticipating their workforce needs and develop their
employees to address the future business challenges.
The solution transformation and geographic expansion created a
sense of urgency around creating an HR practice comfortable with
anticipating the future competency and headcount gaps needed
to capture the market of tomorrow. With that in mind, the Strategic
Workforce Planning team has a responsibility to build skills and
condence in this methodology with strategic planners, business
leaders, nancial controllers and HR staff.
Approach
The changing economic conditions around the world have caused
Schneider Electric to develop a workforce planning methodology
which is agile enough to adjust based on todays results while
maintaining alignment with the organisations long-term strategic
direction.
Strategic Workforce Planning provides a framework to help the
Businesses manage change and risk through simulating factors out
of their control and developing strategies and responses to mitigate
that risk. It helps the leaders deal with the unknown and rehearse
how they might adapt to future events through decisions they make
today.
The availability of talent globally is vital to the execution of the Groups
medium and long term strategy. As the business of Schneider
Electric evolves, the talent needs become increasingly complex.
With workforce planning, Schneider Electric is able to segment
talents and focus on the building of new, critical competencies
which will be the core competencies of tomorrow. Schneider
Electric is also able to focus on critical roles for the medium and
long term and ensure that it has a process to develop, hire and
retain talent in those key areas.
The stakes for new and mature economies are different, but the
approach to strategic workforce planning is dynamic enough to
handle both situations.
In mature economies, the strategic workforce planning challenges
come in different forms: ageing workforce, need for new
competencies in renewable energy, energy management services
These challenges give Schneider Electric the opportunity to deliver
on strategic moves by building the key competencies to anticipate
the workforce of tomorrow.
In new economies, rapid ination means Schneider Electric has to
be deliberate about how much space it makes available for hiring
and it has to be agile enough to develop new talents.
The Group also zooms on key competencies and new regions
which are requiring fast development.
Action plans
The Strategic Workforce Planning approach is based on the
principle that Schneider Electric must translate various nancial,
strategic and human capital factors into a coherent and sustainable
workforce plan. To accomplish this goal, business leader, nancial
and HR partners have to work together.
The starting point for workforce planning is the business strategic
plan. Strategic Workforce Planning identies the key elements of the
business plan which impact the workforce in the medium and long
term. It analyses planned strategic initiatives and makes scenarios
based on the expected revenue changes. Finally, it looks at nancial
constraints.
In 2011, Strategic Workforce Planning has developed a robust
method and tools that have been well received from business units
managers, nance as well as HR. It also launched pilots around
the world.
4.6 Diversity
Approach
Since 2002, diversity and equal employment opportunity have been
an integral part of Our Principles of Responsibility, and have been
inspired by the companys vision:
talented and diverse workforce is a key competitive advantage;
the wide array of perspectives that results from such diversity
promotes innovation and business success;
in treating all people with respect and dignity, we strive to create
and foster a supportive and understanding environment in which
all individuals realise their maximum potential within the company,
regardless of their differences.
By promoting the integration of new talents and a wide range of
skills, diversity represents a source of innovation, performance
and competitiveness: over and above this observation, Schneider
Electric intends to move beyond its simple promotion to take a
pragmatic approach to the management of diversity day by day.
Diversity and equal employment opportunity are enshrined in the
One company program, with two primary objectives:
strengthen the role of managers in rolling out the Groups diversity
strategy;
consolidate the place of equal employment opportunity in HR
management practices.
Agreements in France
In 2004, Schneider Electric France formalised its commitments
to equal employment opportunity in a rst company agreement
and signed the Diversity Charter. In 2007, Schneider Electric was
awarded Frances Equality Label and signed the Parenthood
Charter the following year.
Gender diversity:
Equal Employment Opportunity Agreement (since 2004);
Equality Label (since 2007 and renewed in 2010);
Parenthood Charter (launched in 2008).
Disability:
Disability Agreement (eighth agreement signed in 2010 for the
2010-2012 period).
Age diversity:
Senior Agreement (since 2010);
Apprenticeship Agreement;
Training Agreement.
Diversity of origin (social, cultural, nationality, backgrounds,
etc.):
Espoir banlieue plan (promotion of employment opportunities for
young people from underprivileged areas);
partnership with the Nos Quartiers ont du Talent association
(Our neighbourhoods have talent);
100 chances 100 emplois program for professionnal integration
of youth suffering from discrimination (see page89 ).
Action plans
Several global processes have been developed to support
Schneider Electrics diversity policy:
People Review process to detect talent and promote equality and
diversity at all levels of the company, ensuring that professional
development is based on equality. In 2011, the people review
process was extended to all Schneider Electric entities, including
latest acquisitions, enabling the company to use a single process
and ensuring, by this way, that all employees have the same
means to manage their development and career;
2
talent Pool to foster talent development throughout the world and
the access of women to key positions;
recruitment policies, succession planning, access to training,
talent and promotion management, which pay particular attention
to gender balance and new economies representation;
trainings leading to diplomas and qualications for OATAM
employee categories (Manual Workers, Administrative
Employees, Technicians and Foremen), which impact is major
on promotion and remuneration of women, particularly manual
workers and assistants;
working session trainings on diversity for members of the
Executive Committee and their management teams;
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 economic and
societal challenges of the 21st Century. Schneider Electric shares
the conviction that gender differences in the workplace (leadership
style and personality among others) complement each other, foster
innovation and provide a wealth of benets to its customers.
From an operational point of view, the strategy consists of:
promoting women in the talent pool and in positions of key
responsibility;
ensuring equal access to training and developing the conditions
for genuine diversity in the workplace;
curtailing average wage differentials by allocating a specic
annual budget (in France see below);
creating favourable working conditions for both men and women
by adopting measures designed to enhance work-life balance.
For example, succession planning for key positions in the company
must include at least one woman. Along the same line, the promotion
of women is monitored, as is their participation in leadership
development programs. Go Green in the City international case
challenge for students (see page73 ) is a Schneider Electric initiative
that helps attract female graduates for internship or recruitment.
Gender balance Executive Workshops (half day seminars focusing
on gender balance) were deployed in the leadership teams of main
entities. At end of 2011, 120 top managers have been involved.
In 2011, within the 2,500 talented employees identied across the
Group, 25% are women ( up 4 points compared to 2010).
In the new company program, through 2012-2014, the percentages
of women in key positions and in the talent pool are key performance
indicators. The Planet & Society Barometer sets to have 30% of
women in the talent pool by the end of 2014.
Equal pay for women (France)
Salary equality is fundamental to the equality of treatment
that Schneider Electric is committed to guaranteeing for all its
employees, both male and female.
In France, this commitment has been put into action each year since
2006 by allocating a budget (0.1% of the salary total) dedicated to
reducing male/female salary inequality. In 2011, Schneider Electric
decided to strengthen this and launched a large campaign with two
objectives:
to give meaning to the idea of salary equity even though salary
individualisation leads to differences in remuneration;
to analyse all remuneration by looking at competencies,
responsibilities and the professional pathway of each male and
female employee.
Nationalities
Schneider Electric has always promoted change, adhering to an
international, innovative and responsible strategy. With 137,000
employees in more than 100 countries, Schneider Electric
transforms the diversity of its employees into a means to understand
its customers and the world in which we live.
In 2011:
ve nationalities are represented within the Executive Committee
(French, American, German, British, Spanish);
17% of Country Presidents are French, against 50% in 2003;
20% of Country Presidents based in Asia are French, against
60% in 2003;
the number of French expatriates is not currently more than 25%,
in 2003 it was 55%;
the number of nationalities has increased considerably, from 48
in 2003 to 70 in 2011.
These developments are a result of the Groups careful and
committed policy. In addition, Schneider Electric received the
Human Capital Award in 2011 within the Internationalisation of
Management category, from among the CAC 40 companies.
Emphasis is also placed on representation of new economies
with it in the Groups talent pool: among the 2,500 high potential
employees identied at the end of 2011, 36% are located within
the new economies (up 6 points compared to 2010). The share
of talent coming from the new economies is a key performance
indicator established in the new Business Program for the 2012-
2014 period.
Disability
Schneider Electric focuses on training and adapting workstations to
foster the independence of employees with a disability and to ensure
that all are accorded the same opportunities to succeed. Schneider
Electric is committed to ensuring maximum independence for
employees by adapting the organisation and workstations and
providing access to the best technologies available to compensate
for their disabilities. Schneider Electric also works on preventing
disabling situations.
All its teams cooperate to change behaviour, improve practices,
and involve all personnel in actively providing equal opportunities
for the disabled:
the Recruitment and Mobility unit utilises partner rms and
monitors compliance with equal treatment at all stages of the
recruitment process;
the Occupational Health Department is responsible for
preventing individual and group disabling situations (ergonomics,
desktop adaptation, musculoskeletal risks), retaining disabled
employees and disability compensation;
the Purchasing Department species its requirements to
temporary employment agencies and ensures compliance
with commitments in terms of subcontracting to the protected
employment sector.
Schneider Electric subcontracts to the tablissements et Services
dAide par le Travail (ESAT Assistance through Employment
Entities and Services) for industrial work, landscaping services,
catering and seminars. In Europe, the amount subcontracted to
the protected employment sector represents EUR 43 million in
2011, including: EUR18million in France, EUR12million in Spain,
EUR4million in other Western Europe countries and EUR9million
in Eastern Europe (Czech Republic and Hungary).
Schneider Electric signed its eighth Disability Agreement in
France in January 2010. The three-year Agreement (2010, 2011
and 2012) is directed and promoted globally and throughout
the country through a network of internal and external members
(Purchasing Department, Employment Management Department,
Occupational Health Department, Communication Department,
corporate partners and specialist agencies) with local rollout by
DisabilityOfcers.
In France, Schneider Electric recruits through work-study
programs for positions that are predominantly technical, and also
for service sector positions ranging from the Certicat dAptitude
Professionnelle (skills training certicate) to engineering degree level.
The company is committed to recruiting 20 persons with disabilities
each year: 15 on work-study contracts (learning and/or professional
development) and 5persons on a xed-term contract.
In 2011, 8 people with disabilities were recruited on work-study
contracts and 6 on permanent contracts. In all, employees
with disabilities accounted for 6.19% of employment at
Schneider Electric in France in 2011, 3% of these in indirect
employment (subcontracting to the protected sector) and 3.19%
in direct employment. The mobilisation of internal actors and the
creation of a network of responsible persons for disability in 2010
led to an improvement of practices; thus, the objective of 6% set by
the law was reached for the second year in a raw.
Schneider Electric in 2011 committed to a voluntary approach within
the scope of the disability agreement to improve all of its industrial
and tertiary establishments in France and make them accessible. In
compliance with the French law of 2005 promoting the principal of
equal access to all and for all, the program anticipates:
carrying out an assessment of the situation on existing sites;
ensuring compliance with legislation and going beyond;
anticipating future construction and renovation projects;
making expert occupations more professional in terms of
disability access;
constantly working for improvement using a measurement
indicator: the accessibility index.
This project covers 30 establishments in 2011 and around 40 in
2012.
Generational diversity (France)
Within the scope of the agreement on seniors, SchneiderElectric
has implemented an interview for the second half of a career called:
The Outlook Meeting.
This is a voluntary meeting for employees on their 45th birthday.
The Outlook Meeting takes place in two stages:
an outlook stage with an Apec consultant (Management
Employment Agency) that aims to help the employee to plan for
the second half of their career;
a consolidation stage with their manager to validate the
professional development pathways they have taken and to
implement an individual action plan.
More than 300 employees have had an Outlook Meeting, 74%
would recommend the meeting to their colleagues.
4.7 Employee share ownership
Schneider Electric is convinced that employee share ownership is
instrumental in strengthening companies capital (both nancial and
human), and that employee shareholders are long-term partners.
Approach
The Group has been building an international employee shareholder
base since 1995 that is representative of the Groups diversity.
Employees should hold around 5% of the capital in 2015.
Action plans
Employee share ownership plan 2011
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 nancial results.
T he 2011 Plan was very well received, with 24,400 employees in
14 countries subscribing shares for a total of EUR178million.
The employee shareholding at December31, 2011 represented:
4.55% of Schneider Electric SAs capital and 7.06% of the voting
rights;
Over 30% of the employees worldwide.
In 2012, the Group is already expected to launch a new global Plan.
This 2012 Plan will cover 103,000employees in 26 countries.
Socially responsible investment fund
In November2009, Schneider Electric created the Fund Schneider
nergie Solidaire (a dedicated mutual fund). A number of information
sessions were held on this special purpose fund providing the
opportunity for employees in France to share in the ideas and
actions of Schneider Electric outlined in its access to energy
program called BipBop (see pages81-85 ).
Investment in this fund totalled in excess of EUR3.3million as of
December31, 2011, thus enabling 2,137 of the employees to take
part in social welfare projects in France and abroad developed
as part of the BipBop program (EUR2million in 2010 and 1,500
employees).
2
Approach
Schneider Electric considers that freedom of association and
collective bargaining are fundamental rights and must be respected
everywhere. For many years, social dialogue has been taken into
consideration by our social reporting system: each year, local HR
report the presence of trade unions, works councils and health
& safety committees (see page 103 ). In 2011, 85% of Schneider
Electric entities have at least one representative organization (gure
based on more than 80% of the overall headcount).
Social dialogue is managed at European level through the European
Works Council and at Country level by the HR leaders. Schneider
Electric applies in all countries the same HR policies and processes
regarding career management, training, diversity, health & safety
as well as the Responsibility and Ethics Dynamics program and the
R&ED line (under deployment, see pages57-58 ).
Action plans in major localisations
European Works Council (EWC)
Schneider Electric senior management and the employee
representatives of the European countries decided to set up the
Schneider Electric European Committee (renamed European
Works Council) under the terms of a collective agreement signed
on January28, 1998.
This European channel for dialogue has enabled the management
to make more efcient decisions by giving employee representatives
the opportunity to be informed of such decisions and to understand
their reasons, as well as to put forward proposals to supplement or
improve them.
It has also fostered the emergence of a strong identity, combining
different cultures and having the common aim of working towards
social and economic progress within the companies in the Group
at European level.
Buoyed by this encouraging result, the signatory parties agreed
in 2011 to revise the existing agreement by pursuing the following
objectives:
take into account recent acquisitions in Europe;
incorporate the provisions of the European Directive 2009/38/EC
of 6May 2009, which supplements the Directive of 22September
1994 by specifying dialogue and consultation methods between
Management and employee representatives at European level.
This amendment claries the role of the EWC and its Bureau in the
consultation process and re-denes the geographical scope of the
Committee offering one seat to Switzerland and Turkey.
The amendment number 3 of the collective agreement has been
signed by all members of the EWC at end of 2011.
In 2011, the European Works Council met six times in three different
locations in Europe: ve restricted committees (including negotiation
meetings for the amendment) and one plenary session.
In March 2011, the members of the EWC received a two-day
training conducted by both external trainers and internal specialists.
The restricted committee, during its last session of the year,
reviewed two European agreements signed with the European
Metal Workers Federation:
the European Agreement on the anticipation of changes signed
in 2007,
the European Agreement on the integration of Areva D company
signed in 2010.
Also, the so-called Temporary Instance, to follow the integration
of the Areva D employees into Schneider Electric and gathering
representatives from both Alstom and Schneider Electric, held its
last meeting in May2011. Indeed, the participants considered that
this original body, created during the acquisition phase, reached the
objectives that the different parties agreed on in 2010.
Group Works Council, France
The Schneider Electric Group Works Council France is a forum
for economic, nancial and social dialogue between senior
management and the representatives of the employees from all
French subsidiaries. This body currently gathers 30 members.
In 2011, two sessions of training gathering all members have
beenorganised.
In order to better understand the evolution of the business of
Schneider Electric for the future, the Group Works Council France
visited a solar farm.
To discuss in depth important topics like the integration of Areva D
activities in Infrastructure Business unit, some additional meetings
have been organised during 2011. In total, the Committee had
three meetings of one or two days in 2011.
Social dialogue in the United States
In the United States, regular communication takes place with both
union and non-union employees on key business topics and trends
affecting their jobs. Company ofcials meet on a semi-annual basis
with key international union leaders to inform them of competitive
issues impacting the companys business, and to ensure alignment
with the companys business strategies and challenges, on a local,
regional and global basis.
In 2011, Schneider Electric successfully negotiated new collective
bargaining agreements with the three international unions in the
United States - the International Association of Machinists (IAM),
the International Brotherhood of Electrical Workers (IBEW) and the
International Brotherhood of Teamsters (IBT). A new three- year
labour agreement was ratied at six manufacturing facilities
represented by the three unions. Also, a new three-year agreement
was ratied by the employees represented by the Chicago and
4.8 Social Dialogue and relations
Midwest Regional Joint Board, Workers United which manufactures
the Juno Lighting brand.
Social dialogue in Mexico
In Mexico, Schneider Electric leaders have regular communication
with the employees on topics related to their jobs: this communication
takes place in different ways, including large communication
meetings and small group conversations. There is also continuous
communication with the Union leaders and delegates of three
national Unions which represent unionized employees. Schneider
Electric keeps them informed of internal and external issues
impacting the companys results, listen to their concerns and look
for alignment with the company strategy and challenges.
Schneider Electric and the Unions have negotiations regarding
salaries and every two years the contracts are reviewed. In
2011, Schneider Electric negotiated salary agreements in all the
manufacturing and distribution facilities as well as benets in ve
manufacturing plants.
Social dialogue in China
In China, new labour laws, which refer to several important work-
related issues, came into force in 2008. Schneider Electric fully
complies with the new Chinese law:
Schneider Electric union is established and is functioning in
China, it is engaged with city trade union;
the Group is under discussion with city trade union on how to
deal with collective contract, which is new in China.
Social dialogue in India
In India, social dialogue is traditionally restricted primarily to blue
collars working in factories. Schneider Electric has 31 factories
across India. Only 3 factories have Registered Trade Union, namely
Infrastructure Business at Naini, Global Suply Chain factories
at Chennai and Nasik. In these factories, social dialogue is done
through involving Unions. In all other factories, social dialogue is
organised either through Works Councils/Committees or through
direct dialogue with employees.
Schneider Electric India has a strong social dialogue culture with
both unionized and non-unionized employees (Work Committees/
Councils). These representatives periodically meet and discuss
the issues on grievances, productivity and growth. Apart from the
regular meetings, management representatives also meet with
Union or Works Council representatives based on the need. The
Unions are afliated to the external bodies and registered under the
Trade Union Act, 1926.
The majority of Schneider Electric employees are non-unionized
(28 factories out of 31). These employees are represented
through various employee committees and councils (such as
Welfare Committee, Womens Committee, Transport Committee,
Canteen Committee, Sports & Recreation Committee, Safety &
Health Committee, Prevention of Sexual Harassment Complaints
Committee, etc.). These committees provide a platform for
employees to represent their concerns, collective grievances
and workplace-related issues to the management. All employee
engagement programs are run through these committees with the
active participation of every employee. To maintain cordial employee
relations in the organisation and create an atmosphere of trust and
motivation, we sign every year a single or bipartite agreement on
salary and benets as per the provisions of local laws for a year.
In 2011, Schneider Electric Global Supply Chain India successfully
negotiated an agreement through collective bargaining with two
Unions (Nashik and Chennai). Thereby, Schneider Electric agreed
to x all the terms on wages and benets for next four years.
2
SCHNEIDER ELECTRIC, A RESPONSIBLE CORPORATE CITIZEN
>
5. Schneider Electric, a responsible
corporate citizen
Schneider Electric has consistently been committed to playing an
active role in the economic development of the communities in which
it has a presence. This is reected in the substantial involvement of
the Group and its employees in supporting communities, particularly
by helping people to enter the workforce, and through its access to
energy program.
5.1 The BipBop energy access program
P
I B
BOP
P
BO
P
I
OP BOP
I B
BOP
The "BipBop"program
Business
Create an
investment fund
for business
development in
the electricity
sector.
People
Help provide electrical training for young
people looking to enter the workforce.
Innovation
Conceive and
provide electrical
distribution solutions
for disadvantaged
populations.
Context and aims
In todays world, 1.3 billion
(1)
people, approximately 300 million
households, do not have access to electricity; 585 million of
these live in Sub-Saharan Africa, 404million in India, 100million in
Indonesia and in Bangladesh.
In general, these disadvantaged groups live on less than US$ 2
per day.
While their families energy costs may run to more than US$15
a month. Improved access to energy not only improves quality
of life, but also facilitates access to healthcare, education and
development for those who need it most.
Through its energy access BipBop program, Schneider Electric
wants to play a major role in helping people at the base of the
Pyramid to gain access to electricity.
Schneider Electric is involved in three specic areas:
Business (Investment) manage an investment fund for
business development in the electricity sector;
Innovation (Economic and Offers and Models) build and
deliver electricity distribution solutions for disadvantaged groups;
People (Training) help provide electrical training for young
adults looking to enter the workforce. The Schneider Electric
Foundation and Schneider Electrics team members support this
focus through their collective and individual commitment.
Created in 2008 and launched in 2009, the BipBop (Business,
Innovation, People at the Base of the Pyramid) internal energy access
program illustrates Schneider Electrics desire to create a virtuous
circle combining business, innovation and socialresponsibility.
(1) Source: International Energy Agency World energy poverty 2010.
2SCHNEIDER ELECTRIC, A RESPONSIBLE CORPORATE CITIZEN
> WHO IS A PERSON AT THE BASE
OFTHEPYRAMID?
Base of the pyramid is a term widely used today
to refer to those with the lowest income either in
the world or in a given country. Whether seen in
absolute terms (income of less than US$1.25 per
day in purchasing power parity terms according to
the World Bank) or in relative terms (income of less
than 60% of the average income for the European
Union), poverty affects people in marginalised
situations (infrastructure, isolation, poor access to
banking structures, etc.). Specic approaches are
required to meet these challenges and to contribute
to reducing poverty.
Organisation
Management
The program is managed by the Sustainable Development Ofce.
The BipBop program management team has been strengthened
in 2010 in line with the ambitious objectives set for it in the One
program. The team is now spread equally between France and
India:
a BipBop 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, Nigeria,
South Africa, Brazil, etc.).
Rollout
BipBop operates through its local presence in the countries
concerned by the energy access problem to achieve its goals. With
a few rare exceptions, all projects initiated benet from monitoring
by employees of Schneider Electric entities operating in the country.
These employees constitute a network of key contact people for
the design, management and monitoring of projects.
Their involvement may be part or full time. They contribute their
knowledge of the local context (organisation of civil society, local
authorities, the private sector) and guarantee that the project is
aligned with local needs. Their presence is of crucial importance
for the long-term oversight of projects in which Schneider Electric
is involved.
The main areas targeted by BipBop are India, Bangladesh, China,
South Asia, Sub-Saharan Africa and South America.
Three key performance indicators were set in the Planet & Society Barometer for the duration of the One program (2009-2011):
1. 1,000,000 households at the Base of the Pyramid
have access to energy thanks to Schneider Electric
solutions 1,291,768 891,058 260,000 0
2. 10,000 young adults at the Base of the Pyramid
trained in the energy management professions 12,318 4,742 2,150 0
3. 500 entrepreneurs at the Base of the Pyramid set up
their activities in the energy management eld 391 209 125 0
NM =indicator not monitored.
The 2008 performance serves as a starting value for the Planet & Society Barometer One program between 2009 and 2011.
Please refer to pages 90 to 92 for the methodological presentation of indicators, and the following pages for the analysis of the results
(pages 84 for indicator 1, 84-85 for indicator 2 and 88 for indication 3).
Highlights of 2011
indexation of the performance incentives for the Executive
Committee members to one of more components of the Planet &
Society Barometer, chosen according to their eld, for example,
Access to Energy for the Population at the Base of the Pyramid,
for managers in the Asia-Pacic and EMEAS zones;
two out of three BipBop targets were exceeded as a result of
the energy access solutions implemented in the new countries
(Kenya, Burkina Faso and Sierra Leone in particular) and as a
result of the launch of new training programs.
Social welfare investment (Business)
In July2009, Schneider Electric announced the creation of a global
social welfare investment fund called Schneider Electric Energy
Access (SEEA), with an initial capital of EUR3million.
At December31, 2011, the following amounts were managed by
the fund:
EUR 3,000,000 in capital invested by Schneider Electric;
EUR 1,000,000 in capital invested by Schneider Energie Sicav
Solidaire;
EUR 2,000,000 in capital invested by Phitrust Partenaires;
2
Approach
Created with the support of the Crdit Coopratif, the funds
mission is to support the development of entrepreneurial initiatives
worldwide that will help the poorest populations obtain access to
energy. It will invest in specic projects:
help jobless individuals create businesses in electricity;
promote the development of businesses that provide access to
energy in rural or suburban areas in developing countries;
support the deployment of innovative energy access solutions
that use renewable energies for people at the Base of the
Pyramid.
The SEEA fund brings together different stakeholders by
encouraging Schneider Electrics employees and business partners
around the world to play an active role in this commitment. This
socially welfare investment structure, designed by Schneider Electric
to promote responsible development, constitutes a response to the
new French legislation on employee savings plans. In 2011, 2,137
Group employees in France showed their interest in the BipBop
program by investing a little over EUR3.3million (seepage78 ).
The aim of the SEEA fund is to promote development while
protecting the assets under management. Accordingly, it has
adopted strict management rules, such as:
always invest in partnerships with recognised players;
never take a majority shareholding;
always ensure sustained company support (help develop a
business plan, technical advice, etc.) to deliver the optimum
social efcacy while minimising risk.
> SEEA FUND INVESTMENT POLICY
France
projects projects
International
Access to energy sector
Sector of micro finance
institutions funding the
abovementioned sector
Social impact of businesses
funded
Job creation through
electrical profession
Sectorial
specialization
Asia and Africa priority
Always through joint investment
Minority participation only
Always provide technical
and management support
Always through joint investment
Minority participation only
Always provide technical
and management support
Own funds
Tickets size: 100 to
400 thousand euros
nvestment period: 5 to 7 years
Own funds
Tickets size: 200 to
1,000 thousand euros
nvestment period: 3 to 5 years
Geographical
targets
Methodological
rules
Investment type
Action plans
Investments in France
La Foncire Chenelt is a Chenelt Group employment opportunity
company formed to counter energy precariousness by creating
energy-efcient social housing. Moreover, construction sites bring
together employment opportunity companies and conventional
rms to promote rehiring of the unemployed.
The SIDI (International Solidarity for Development and Investment)
is an investment fund that assigns priority to the impact on
development relative to return. The fund is an important partner of
SEEA and is particularly active in the micronance sector.
Solasyst is a company of La Varappe employment opportunity
group based in Aubagne, France. The company specialises in
renewable energy solutions and has developed specic skills in
integrated solar panel installation. Backed by SEEAs investment,
Solasyst will open two new branches in the south of France.
Partnership with the ADIE
Schneider Electric set up a project two years ago in partnership
with the Association pour le Droit lInitiative conomique (ADIE)
to help entrepreneurs start electricity-related businesses. The goal
is three-fold:
help individuals who have in some cases been out of the workforce
for several years create their own jobs in a promisingindustry;
contribute to the local economy;
promote the electrical profession.
The project targets entrepreneurs who do not have access to
bank loans, notably the unemployed and low-income individuals.
Schneider Electric and Schneider Initiatives Emploi, an association
that nurtures spin-offs, nance part of the microloans granted to
electrical businesses through ADIE. Schneider Electrics French
sales division has also created a pact with dedicated technical
training resources combined with support from a local sales
representative to help these entrepreneurs.
129businesses received support in 2011.
Investments internationally
Two transactions were concluded as part of the SEEA international
portfolio in 2011:
Kayer SARL a Senegalese company involved in the distribution
of photovoltaic solar panels in rural areas. Its offering includes
individual systems (SHS) as well as collective systems for
supplying irrigation pumps or agricultural 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 will allow the
company to expand in Tanzania.
Finally, discussions are under way for other partnerships in India
and Africa.
Offers and economic models for the base of
the pyramid (Innovation)
Innovation is reected in the design and implementation of rural
electricity offers, products and solutions for disadvantaged groups.
Approach
Innovation for Schneider Electric starts with the local needs and the
socio-economic context of those with little or no access to clean,
healthy and reliable electricity. With this in mind, the chief aims of its
offers and economic models are to:
respond to the energy needs of villages to support sustainable
economic and social activity;
include and involve local populations in projects to guarantee
their sustainability in the long term.
Schneider Electric sets out to provide comprehensive energy access
solutions that support revenue-generating entrepreneurial activities,
foster community services or meet domestic needs. Products and
solutions are developed to meet a range of both individual and
community needs across the energy chain, from lighting systems
and battery charging stations to decentralised small power plants
and water pumping systems.
Action plans
Electrication of villages in Nigeria and Senegal and a
partnership with Grameen Shakti in Bangladesh
In 2011, Schneider Electric established a partnership with the
Grameen Shakti organisation based in Bangladesh. Through the
partnership, Schneider Electric aims to supply lighting products and
power control systems customised to demand for Grameen Shakti.
Schneider Electric is currently strengthening this partnership
through the rollout of training programs that are fully integrated into
the BipBop plan.
After Vietnam in 2010, four rural electrication projects were
successfully implemented in 2011.
The rst three projects in Senegal concerned the electrication of
three eco-villages situated around Dakar. They were implemented
in partnership with the ANEV (National Eco-Villages Agency) and
the company KAYER, a local installer with whom Schneider Electric
signed a partnership agreement in 2010.
Another village electrication was carried out in Nigeria in the Ogun
province. Schneider Electric implemented an off-grid solar power
station that powered community buildings and a battery charging
station. This station is managed by a local entrepreneur who rents
the batteries to individual homes on a daily basis.
In India, Schneider Electric rolled out the same entrepreneurial
battery charging business through selected volunteer entrepreneurs
at the start of a basic electrician training program.
Launch of a collaborative project
The MiCST project consists of designing and manufacturing
an innovative solar plant using sunlight to heat a thermal energy
supply powering a thermodynamic machine coupled with a 10-kW
alternator.
The associated offer, named Microsol, will be designed to supply
off-grid areas. MiCST is aimed in particular at developing countries
with strong sunlight. Simple to install and maintain, it can be easily
adopted by local populations. A major technical and technological
challenge, it will take high-strength, low-cost and eco-design criteria
into consideration.
The project extends over 42months and coordinates the expertise
of 12 industrial and research partners. It is supported by the French
Environment and Energy Management Agency (ADEME).
Low-consumption lighting system
In a program to extend access to energy, lighting is one of the
rst vital needs expressed by population groups denied access or
reliable access to electricity. Lighting makes it possible to study after
the sun has gone down and to extend entrepreneurial activities into
the evening. Schneider Electric developed In-Diya, an innovative
and very low-cost domestic lighting system. With two types of lamp
made up of 90 or 45 low-consumption LEDs (4.5W for 90 LED)
that can be connected to a battery, which is in turn connected to a
photovoltaic panel for charging.
This new system is available practically everywhere in the
world. Partnerships have been set up with local institutions and
organisations to optimise deployment of the product and to target
the poorest communities.
The lamps are sold through our distribution networks, subsidiaries,
a number of NGOs and businesses in the sector developing access
to electricity.
Training (People)
Approach
The key challenge of training in the electrical sector is to provide
those at the base of the pyramid with the knowledge and skills to
be able to carry out the task given to them in a safe and responsible
way, as well as providing their families with the means for suitable
subsistence.
2
It will also give them the ability, should they wish, to sell and maintain
energy access offers and to create their own small business in time.
Furthermore they are a vital and indispensable element for all
responsible and sustainable rural electrication policies.
Schneider Electrics strategy for the training of disadvantaged
groups at the base of the pyramid includes three key priorities:
basic training that is relatively short, free and accessible to a large
number of people; full-time or evening and weekend courses to
be able to better adapt to the local situation;
training leading to qualications in partnership with local Ministries
of Education, included within the bilateral guidelines;
training for trainers to support effective and quality roll-out of
training down the line, accompanied by nancing for investments
in materials.
These actions are funded by the Schneider Electric Foundation
and are systematically implemented in partnership with local actors
and/or national or international organisations (NGOs, governments,
etc.).
Action plans
In 2011, Schneider Electric set as a priority the optimisation and
rationalisation of existing projects to prepare to extend them on a
larger scale during the period 2012 to 2014. This was particularly
the case for its three major projects in India, Brazil and Lebanon.
Furthermore, this ambition was maintained on its other projects and
at the end of 2011 there were 19 projects that contributed to the
development of knowledge in electricity in 16 countries and opened
the way to employment for billions of people.
The new targets had also been explored in 2011 to reinforce the
effectiveness of projects implemented in our partner centres:
direct donation of materials (in Haiti and in Tanzania);
development of low-cost didactics materials adapted to the
technical and economic reality of countries at the base of the
pyramid (rst prototype in November2011);
support of micro-enterprise creation by young adults coming
from partnership training centres (50 in India in 2011).
2012 will be the year of supporting the growth of existing projects
whilst proving their effectiveness. The target will be to train more
than 10,000 new people during the year.
This year will also see the rst experimentation in transnational
duplication (Lebanon to Morocco/Nigeria, India to sub-Saharan
Africa, Tanzania to the East African Community).
Projects started in 2010 will be fully underway in 2012:
launch of a BipBop Education didactic materials range;
implementation of a materials donation process to extend this
action;
support of at least 150 new self-starting entrepreneurs in
India and experimentation with the model in new countries
(Haiti,Cambodia).
Due to the fact that the complimentary factor could be an even
more effective factor in helping populations at the base of the
pyramid, research on a more voluntary basis by partnerships with
the companies sharing Schneider Electrics values will be started
in 2012. This may lead to opening our existing projects to new
partners or to co-construction of new projects with them.
5.2 The Schneider Electric Foundation
Approach
Created in 1998 under the aegis of Fondation de France, the
Schneider Electric Foundation is involved in three main programs:
training and employment opportunities for young adults from the
base of the pyramid trained primarily in the electrical profession;
support for emergency and post-emergency relief efforts after
natural disasters;
raising sustainable development awareness through innovative
projects.
The Foundation carries out its work through a network of 120
employee volunteers, known as delegates. These volunteers, who
are located in more than 70 countries, are responsible for identifying
local partnerships, presenting them to employees in their units, and
to the Foundation and tracking projects once they are launched.
Each project is subject to a review process based on administrative
and nancial data by the Schneider Electric Foundation and by
Fondation de France before funds are released.
With an annual budget of EUR4million, the Foundation works to
support its partnerships through Schneider Electric entities in which
employees are also involved. A total of EUR12.4million have been
invested in this way to benet local communities (see page105 ).
Organisation
The Foundations network structure is an original and very suitable
means for engaging local, humane, and lasting sponsorship. It
also reinforces the energy of the people involved. In each site, the
choice of delegates is made based on recognised and formalised
participation via a letter of engagement signed by the head of the
site and that of the Foundation for a duration of two years. In 2011,
the Foundation had 120 delegates in 70 countries for a mission,
which includes:
selecting an association dedicated to employing young adults
and supporting this partnership;
organising local events adapted to the countrys culture, to better
boost employee morale;
informing employees of Foundation activities at their site.
The delegates also coordinate the organisation of the annual
campaign for international mobilisation called Luli. This week takes
place in June and is an important time in the life of the Foundation
and the company with local partnerships taking centre stage at an
international level.
Governance
The Schneider Electric Foundation Board of Directors meets two
times per year. It denes and encourages signicant strategic
directions for the Foundation. It is composed of Schneider Electric
managers, employee representatives, and important people from
outside of the company.
Requests received, responding to the foundations criteria, are
systematically sent to the delegate of the country concerned for
the proposed project. If the project is selected and supported
locally, it can then be studied on the corporate level by the selection
committee if a supplementary budget is necessary.
This committee is composed of three members: the Foundation
Managing Director, the Foundation Program Director, and the Access
to Energy Program Training Director. They meet everymonth.
Action plans
Training and opportunities for young adults
To facilitate the integration and professional training of the most
under-privileged young adults, the Schneider Electric Foundation
continually encourages and supports national and international
integration associations or electrical profession educational
organisations.
To full this mission the Foundation also participates in the Groups
commitment to sustainable development. In particular, it also
contributes to the BipBop energy access program (for Business,
Innovation and People at the Base of the Pyramid) started in 2008.
The Foundation supports the People aspect of the program,
dedicated to training with priority given to the target developing
countries.
All of these actions are monitored and measured on a quarterly
basis within the scope of the Planet & Society Barometer through a
key performance indicator: 10,000 young adults at the base of the
pyramid trained in the energy management professions.
The target was achieved and exceeded at the end of 2011 with
12,318 young adults trained .
The new Connect Business Program includes this training target
once again with an increase: to train 30,000 people at the base
of the pyramid in energy management occupations by the end of
2014.
Emergency relief and reconstruction aid
Acting as intermediary in rallying its employees, the Schneider
Electric Foundation regularly brings its support during natural
disasters. The Foundation above all wishes to maintain long term
involvement. The aid takes place at two times: during the emergency
the teams mobilise immediately to support the specialised NGOs
and to meet the initial needs of the populations. The second stage
is then implemented, which can take time. This stage aims to
contribute to the reconstruction in the medium term. The actions
supported and developed by local partners focus on construction
projects, reconstruction and rehabilitation of the technical training
centres for energy management professions. This is the part of the
program which mobilises the essential available resources. The
Schneider Electric Foundation considers it fundamental to share its
skills in electrical professions in order to actively contribute to aid in
catastrophe-hit zones so that reconstruction can be sustainable.
Two campaigns were launched in 2011 following the earthquakes in
Japan and the oods in Thailand.
Raising Awareness about Sustainable Development
Energy and climate change are the heart of the issues facing
our planet. It is now possible to do more with less resources. By
supporting innovative projects, the Schneider Electric Foundation
voluntarily helps raise awareness to different parties participating
in the challenges of climate change. The company invests in
emblematic and international programs by making its knowledge,
notably in energy systems management, available through
donations in resources and/or knowledge. Through its projects
and the commitment of its employees, the Schneider Electric
Foundation wants to emphasise:
the desire to contribute and to provide solutions;
Safe, reliable, efcient, productive and green energy management
solutions are now available and operational, even in the most
extreme conditions. Through its Foundation and alongside the
International Polar Foundation and other partners, Schneider
Electric contributes to implementing innovative and exemplary
smart networks within the environmental domain;
the ability to build together, to break down barriers;
By forging links with NGO partners, Schneider Electric aims
to develop solutions that will serve the project by extending its
scope, adapting to needs and to different ways of collaborating
that are new and sometimes unexpected.
setting an example for employees but also for the wider
community;
Faced with the issues of our planet and particularly the challenges
posed by energy resources, Schneider Electric always wants to
aim higher through its ambitious initiatives that may sometimes
seem idealistic, these adventurous solutions show that it is
possible to meet the challenges.
2
Examples
Highlights of 2011 for the Schneider Electric Foundation
March May June July September November
Emergency
campaign
Japan
Admical Oscar
France
Opening of the
first centres
Haiti
International
Luli celebrates its
10
th
anniversary
South Africa
Signing of a BipBop
training agreement
India
2,500 young people
trained
The Schneider Electric Foundation brings home the
Admical Oscar
The Oscar awarded by the company Admical was presented
to the Schneider Electric Foundation in 2011. For more than 30
years Admical has organised this initiative that recognises French
companies or companies based in France for their exemplary
and original sponsorship policy in all areas of general interest:
social, education, health, culture, sport, environment, research,
international solidarity, etc. The jury, independent of Admical, is
made up of qualied persons from the world of business, general
interest, media and communication.
This award honours the actions that we are undertaking. It also
gives us the opportunity to afrm our particular vision of sponsorship
and its prominent role within the company, through the involvement
of foundation delegates and Schneider Electric employees, but also
its direct and original contribution to the BipBop energy access
program said Gilles Vermot Desroches, Sustainable Development
Director, General Delegate of the Foundation.
In 2003, the Schneider Electric foundation received the Admical
Oscar for company sponsorship.
Luli celebrates its 10th anniversary in 2011
Schneider Electric employees, donors and partner organisations
met in 2011 to celebrate the 10th anniversary of Luli, the
international mobilisation campaign co-ordinated by the Schneider
Electric Foundation. As in every year, the Luli campaign is always
a joyful moment when local initiatives to support partnerships and
involvement with local organisations undertaken by Schneider
Electric employees and the 120 Foundation delegates throughout
the world can take centre stage.
Luli in 2011 will involve: 28,000 mobilised employees, 150 initiatives,
80 supported organisations and 50 participating countries.
Creation of the Schneider Electric Teachers NGO
Since the Schneider Electric Foundation was created in 1998, it
has placed Group employee involvement at the heart of its work.
Whether Foundation delegates or employee volunteers, they are
the link between the company, the Foundation and the supported
organisations in more than 70 countries.
The creation the Schneider Electric Teachers organisation at the
start of 2012 resulted from the desire of Schneider Electric and
the Foundation to do more to support voluntary work of Schneider
Electric current and retired employees in the teaching and
professional training programs. The main objective was to provide a
new contribution to the BipBop training programs and to undertake
300 missions in three years. This indicator is included in the Planet
&Society Barometer 2012-2014.
For more information: www.fondation.schneider-electric.com
Initiatives in North America
American culture gives a lot of importance to community
involvement. Schneider Electric North America has the following
commitments:
one of the agship programs of the Schneider Electric Foundation
North America is the matching gift program, through which the
company matches employee donations to the organisations of
their choice. In 2011, the Company matched 2,791 donations
in North America (compared with 2,578 in 2010 and 2,674 in
2009);
Pelco by Schneider Electric, the Group entity specialised in
building security and video surveillance, is developing a program
called Pelco Community Partnership Program which encourages
employees to get involved and volunteer in selected associations
for up to 40 hours per employee per year;
every year, APC by Schneider Electric implements a program
called Community Impact which gathers employees from
the head ofce and others to support local associations with
community service (donating or recycling computer equipment,
assisting handicapped people, etc.).
These initiatives are consolidated at the level of the Schneider
Electric Foundation and are taken into account in the different
reports and indicators.
Wherever it operates, Schneider Electric makes a strong
commitment to community partners and civil society through
positioning itself in a way that is indispensable for a global enterprise
that wants to keep in touch with the labour markets local to its
industrial facilities. Numerous projects under way and on the
drawing board demonstrate Schneider Electrics desire to be
engaged, notably in the area of employment, and to contribute fully
to local economic development.
Business creation in France Support for
business creation with Schneider Initiatives
Emploi (SIE)
Approach and action plans
For more than 15years, Schneider Electric has supported employee
projects in France to create businesses or buy going concerns
through Schneider Initiatives Emploi (SIE), a dedicated structure
demonstrating the Groups commitment to its mobility, employment
and regional economic development responsibilities.
SIE also illustrates Schneider Electrics efforts to encourage the
development of entrepreneurial values within its units.
The association provides condential support for Schneider Electric
employees during all stages of business creation, as well as
afterwards, with a follow-up period of three years.
SIEs dedicated team of seasoned managers is responsible for
reviewing the nancial, legal, technical and commercial aspects of
business creation projects to ensure they are viable and sustainable.
Specic support is offered for energy-related projects, which can
benet in particular from the support of the Sales and Marketing
Department. These accounted for more than 20% of all supported
projects in 2011. The support of the Sales Department is also
provided to electrical designers from EDF.
The SIE structure is represented directly or indirectly in local business
networks. To enhance the quality of services offered, it has teamed
up with various local associations involved in job and business
creation such as the EGEE, ECTI, Management Boutiques, ALIZE,
local Undertake networks and other local associations.
More than 1,000 project sponsors were supported, including
electrician, baker, consultant, graphic designer, asset manager,
orist, etc.
Examples
On 16 November 2011 at the fourth Schneider Electric Vivez
laventure ! (Live the Adventure) competition, four young heads
of companies received an award to recognise and highlight their
initiative. An award of the 1,000th project was celebrated during
this competition.
Didier Doucet, the 1,000th project designer, said: My business
plan, produced with helpful advice from SIE, was judged to be
very relevant by other bodies including banks and Management
Boutiques.
85%: the success rate after three years for the projects SIE
supports;
2,200 jobs created: each business created or taken over
generates two jobs on average.
Economic development of territories
Many actions are undertaken to contribute to local economic
development, for example:
specic missions within the fabric of the local SMEs (small and
medium enterprises) carried out by Schneider Electric senior
experts;
support for organisations that open the way to creation of
activities and companies;
nancial aid for learning within the energy sector.
Other organisations such as ADIE (Association for the Right to
Economic Initiative) are also nancially supported through guarantee
funds, loans, or particular subsidies for electrical project creators.
The electrical project creators can also access support for expansion
from the Schneider Electric Sales Department.
Revitalisation of local labour markets in France
The pilot SIE structure was used to implement the revitalisation
actions put into place during restructuring of certain industrial areas.
The involvement of the teams in local economic networks optimises
the allocation of resources where they are needed most under these
agreements dened in the GPEC, the employment safeguarding
plans (PSE) or the future industrial restructuring plans.
Nine local labour markets were involved in 2011. These actions
result in support for employment, implementation of the Groups
involvement policy, SME development aid, support for the energy
sector, learning and other actions desired by the local economic
and political authorities.
5.3 Territorial positioning and impact on economic and social development
2
Job creation for disadvantaged young adults in
France
Schneider Electric has implemented a raft of initiatives such
as training, professional involvement for young adults from
disadvantaged backgrounds, partnerships with schools and
associations, nancial support for young students, and participation
in technical or general training courses, etc. These actions are
undertaken by partnerships founded within the scope of the
Schneider Electric Foundation.
In France, the annual 100 chances - 100 emplois campaign
targets young adults aged 18 to 30 with a low level of education
or qualications that are susceptible to discrimination, come from
sensitive urban areas (ZUS) and who are motivated to take part in
a job opportunity program.
The objective: to open the door to lasting employment by offering
personalised qualication pathways with the help of many companies
brought together and led by the pilot companies (SchneiderElectric
in Grenoble, Chambry, Rouen, Rueil-Malmaison, Dijon and
Nord- Isre).
The aim: attaining positive outcome target of 60%, meaning that
participants obtain a xed-term contract of more than six months, a
permanent contract or a skills-qualication training contract.
The French government launched the rst 100 chances -
100emplois campaign in January2005 in ChalonsurSane.
At the end of 2011 more than 600 young adults had obtained a
permanent contract, a xed-term contract of more than six months
or a skills-qualication training contract, equal to over 70% of
participants. More than 1,100 other young adults were supported
by the program.
The 100 chances - 100 emplois campaign targeted the cities of
Aubervilliers, Saint-Denis, Chalon-sur-Sane, Grenoble, Chambry,
Dieppe, Lyon, Nice, Rouen, Rueil-Malmaison, Dijon and Nord-Isre.
2METHODOLOGY ANDAUDIT OFINDICATORS
>
6. Methodology andaudit
ofindicators
6.1 Methodology elements on the published indicators
In the absence of any recognised and meaningful benchmark for
companies involved in manufacturing and assembling electronic
components, Schneider Electric has drawn up a frame of reference
with reporting methods for the Planet & Society Barometers
indicators and for Human Resources, safety and environment data.
This referential includes the boundaries, the collection and
consolidation procedures and the denitions of this information.
As it is engaged in a process of constant improvement, Schneider
Electric is gradually supplementing this work to adapt its referential
of sustainable development indicators to changes in the Group.
This document is regularly updated and additional information can
be consulted on www.barometer.schneider-electric.com.
In keeping with its commitment to continuous improvement,
Schneider Electric asked Ernst & Young to conduct a review in
order to obtain a moderate level of assurance for certain human
resources, safety and environment indicators. The audit work is
entered along with that conducted since 2006 and was broadened
to a larger number of key performance indicators from the Planet &
Society Barometer (See Auditors report page96 ).
Human Resources, safety and environment
indicators
The Human Resources and safety data comes from several
dedicated reporting tools, available on the Groups Intranet,
including the One reporting tool for the Human Resources and
safety data. Its consolidation is placed respectively under the Global
Human Resources Division and the Groups Global Supply Chain
Management. Data reliability checks are conducted at the time of
consolidation (review of variations, inter-sites comparison).
Breakdown of workforce data (by gender, category, age, and
seniority), sites declaring employee representation, the number of
collective agreements and training programs cover 80% of the total
workforce. Performance or career interviews have taken place with
more than 84% of the workforce.
This data is consolidated over all fully integrated companies within
the scope of nancial consolidation, when the Group has more than
a 50% stake in the subsidiary.
Units that belong to Group companies which are fully consolidated
are included on a 100% basis in reporting. Units belonging to
proportionally consolidated companies are also fully integrated.
Companies accounted for by the equity method are not included
in the reporting.
All the ISO14001 certied entities must report their environmental
data. All production and supply chain sites with 50 or more
employees must obtain ISO 14001 certication before the end
of the third full calendar year of operation or membership in the
Group. Administrative, R&D and sales sites with 300employees or
more had to progressively obtain ISO14001 certication between
2009 and the end of 2011. Other sites may seek certication and/
or report on a voluntary basis.
Indicators from the Planet & Society
barometer
The following Human Resources, safety and environment data is
used by indicators from the Planet & Society Barometer and veried
by Ernst & Young: total workforce, workforce present on the ISO
14001 certied sites, ISO 14001 certied sites, and the accident
frequency rate.
Other data is used and consolidated under 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 Groups Sustainable Development Department.
The indicators from the Planet & Society Barometer have a Group
scope with specic levels of coverage per indicator.
30,000T annual reduction of our C0
2
equivalent
emissions
This indicator includes:
direct greenhouse gas emissions, i.e. emissions of SF
6
in the
industrial sites concerned;
direct and indirect emissions associated with energy use of
industrial and logistics sites and largest tertiary sites (electricity,
gas, fuel, diesel, urban heating);
indirect emissions, related to long distance freight.
The emissions associated with these activities are converted into
CO
2
:
23,900kg of CO
2
per 1kg of SF
6
(source: International Energy
Agency - IEA);
Energy/CO
2
ratios of the IEA. Figures are taken for the One
business program period from 2009 to 2011. These conversion
factors can be global (gas, fuel, diesel) or national (electricity,
urban heating).
2
METHODOLOGY ANDAUDIT OFINDICATORS
In 2011, this scope was extended: the number of sites reporting
their energy use increased from 255 sites in 2010 to 281 in 2011.
The indicator compares the equivalent CO
2
volume released in
year n with the equivalent CO
2
volume that the Group would have
released on a comparable basis without making any effort to cut
its emissions. For instance, the effort made to make the industrial
processes safe that use SF
6
enabled the leakage rates of SF
6
to
be cut in year n compared with year n-1; without this effort, it is
considered that the leakage rates would have been equivalent in
year n and in year n-1.
The two rst indicator components above were audited by Ernst &
Young. The indicator was not audited because the comparison of
energy use over two years, to calculate a cut in emissions, requires
temperature variations to be neutralised on a comparable basis,
which we are not yet in a position to calculate precisely. A program
to connect Schneider Electrics largest sites to the advanced energy
monitoring solutions is anticipated within the scope of the Company
Program 2012-2014 as a result of the recent acquisitions of Summit
Energy and Vizelia.
2/3 of our products revenues achieved with Green
Premium products
A Green Premium product is dened by the following four criteria:
an Environmental Product Prole available online;
an end-of-life instruction manual available online;
the list of substances of concern according to the European
Directive REACH available online;
the observance of the thresholds imposed by the RoHS EU
Directive on hazardous substances.
In 2009-2011, the indicator measured the share of sales made
with a Green Premium offer from sales gures for 2008 for Industry,
LifeSpace EMEAS and Power offers. Coverage was around 50% of
product sales (EUR5.3billion). Global and adapted references were
taken into account. From 2012, the indicator will include sales from
Buildings, IT and Life Space APAC and the reference year will be
updated (approximately EUR9billion).
This indicator was audited by Ernst & Young.
2/3 of our employees work on ISO14001
certifiedsites
ISO14001 is an international standard certifying the environmental
management systems of sites.
The sites purchased in 2010 after the purchase of the Areva
Distribution business were not included in 2010. However, Areva
D was able to be included in the indicator calculation for 2011.
The sites purchased in 2011 after the takeovers of Telvent and
Luminous were not included in 2011.
The indicators denominator recognises those under contract
with Schneider Electric (xed-term and permanent contracts) and
temporary staff (all of the Group employees) and its numerator
those under contract with Schneider Electric (xed-term and
permanent contracts), the temporary staff and subcontractors from
the ISO14001 certied sites. The indicator is thus increased.
Exceeding the Groups growth by 7points per year
with our energy efficiency activities
The energy efciency activities are products, services and solutions
sold by the Group contributing to at least one of the four stages
of active energy efciency (measure, optimise, monitor, improve).
Theirchoice in the Groups offer is validated in Executive Committee.
The 2011 exchange rate is applied to sales achieved in 2010 to
calculate the growth in sales of the Group and energy efciency
activities untouched by exchange rate effect. This method is
also used by Schneider Electric to publish its growth gures.
This restatement is achieved each year identically over the entire
period of the Companys One program (2009-2011).
The turnover achieved by the Areva Distribution business,
purchased by the Group in 2010, was not included in the 2010
result. However, it is included in 2011.
Quarterly sales are calculated year to date over the year: the sales
from the rst quarter of the year are compared with sales from
the rst quarter of the previous year, then the sales of the rst two
quarters of the year are compared with the sales of the rst two
quarters of the previous year, and so on. The sales gures are reset
to 0 on January1.
Implement a recovery process for SF
6
gas
in10countries
SF
6
is one of the six greenhouse gases targeted by the Kyoto
Protocol.
A SF
6
recovery process is characterised by:
the existence of a technical recovery solution and disposal or
recycling of SF
6
;
the existence of a commercial recovery offer for equipment
containing SF
6
which are at their end-of-life;
the recovery and processing of equipment.
1,000,000 households at the Base of the Pyramid
have access to energy thanks to Schneider Electric
solutions
Households at the base of the pyramid taken into account by this
indicator are those that have incomes under USD3,000 per annum
in purchasing power parity.
The indicator measures the sales of prepayment meters sold by
Conlog, a subsidiary of Schneider Electric, to electrical distribution
companies in Africa, enabling households to connect to the grid
who were not able to do so previously. A drop of 20% to this gure
is applied to remove the new connections due to new housing
constructions for households not belonging to the base of the
pyramid.
Make 60% of our purchases from suppliers who
support the Global Compact
The Global Compact is a United Nations initiative aimed at involving
businesses in observing the ten universal principles, in the areas of
human rights, labour, environment and anti-corruption.
Businesses which support the Global Compact publicly undertake
with the United Nations to constantly improve their actions in favour
of the ten Principles and to annually communicate the efforts made
during the year.
This indicator measures the share of the volume of purchases from
suppliers listed by Schneider Electric, along with those who support
the Global Compact or equivalent. For electronic businesses, the
Electronic Industry Code of Conduct (EICC) is considered as
equivalent to the Global Compact and is incorporated as such
into the indicator. Taiwan is not recognised by the United Nations,
Taiwanese businesses must send Schneider Electric a letter of
commitment signed by their PDG in order to be included in the
indicator. This is the same for companies with less than 10 people
who cannot commit to the Global Compact. The indicator is
calculated on a comparable basis.
Four major ethical stock indexes select Schneider
Electric
The indicator measures the presence of Schneider Electric in the
following four ethical stock market indices:
the Dow Jones Sustainability Index (DJSI) World;
the Dow Jones Sustainability Index (DJSI) Europe;
the Advanced Sustainable Performance Index (ASPI) Eurozone;
the FTSE4Good.
Decrease by 10% annually the frequency of accidents
at work
The lost time injury frequency rate corresponds to the number of
accidents resulting in more than one day of lost work over a period
of twelve months per millions hours worked. All accidents reported
on Schneider Electric sites are counted (including therefore accident
affecting subcontractors on site and temporary workers).
14points increase in the Companys employee
recommendation score
This indicator measures the results of quarterly surveys from all of
the Groups employees (those on xed-term contracts including
work-study participants and on permanent contracts). The
Employee Net Promoter Score is measured with the question:
To what extent would you recommend Schneider Electric to your
friends as being a business where it is pleasant to work?. Polls are
considered as in favour of, undecided or against, depending
on the rating they select on a scale from0to10 (against from 0 to
6, undecided from 7 to 8, in favour of from 9 to 10). The indicator
measures the difference between those who are for and those who
are against. This methodology is also used for the Customer Net
Promoter Score.
2,000employees trained on energy management
solutions
The indicator counts the employees haven taken one of the internal
or external training courses aimed at training specialists in energy
management:
a generalist training on energy efciency (in-class and e-learning).
The CEM certication program (Certied Energy Manager) issued
by an external certication body is accepted as equivalent and
included in the indicator;
a training path including a general phase on energy efciency,
then a specialisation phase (marketing, sales, customer projects
management, etc.) requiring functional skills, a knowledge of
solution segments and experience with customers.
In 2009, the indicator counted solely employees taking part in the
courses offered.
10,000 young adults at the base of the pyramid
trained in the energy management professions
Young adults from the base of the pyramid taken into account by
this indicator are those that come from a household with an income
under USD 3,000 per annum in purchasing power parity.
The indicator counts students undergoing training by Schneider
Electric (supplying equipment or equipment with added technical
and teaching expertise).
A student is only counted once in the indicator.
This indicator was subject to a dry-run audit by Ernst & Young.
500 entrepreneurs from the Base of the Pyramid
start their own business in the area of energy
management
Entrepreneurs from the base of the pyramid are people with no
access to the banking system and traditional credit organisations to
nance the creation of their business.
The indicator counts people creating their business in the area
of energy management (electricians, small tters, etc.) who avail
themselves of microcredit and support in business creation and
management by a specialised association nanced by Schneider
Electric. Schneider Electric also offers support to its vendors
including in particular equipment and technical and marketing
support.
An entrepreneur is only counted once in the indicator.
2
6.2 Concordance of our indicators with the NRE Act (New Economic
Regulations, France) and article225 of the Grenelle2Act
Concordance Table with the NRE Act
The new economic regulations act (Article 116) requires French listed companies to give an account of the social and environmental
management of their business in their annual report. The table below indicates the numbers of the pages in this report in which the various
indicators are mentioned.
Article148-2 of the
implementing order Social information Pages
1.1.a
Total staff, xed-term/permanent contracts, recruitment, layoffs and grounds, overtime, labour
from outside the Company 100
1.1.b
Cutting staff and job saving, regarding reorientation efforts, re-employment and supporting
measures 88-89
1.2 Work schedule, total hours for full-time and part-time employees, absenteeism and grounds
1999 ARTT
Agreement
1.3
Remuneration and development, social charges, application of the provisions of Title IV of Book
IV of the French Labour Code, gender equality 76-78, 124-132
1.4 Professional relations and statement of collective agreements 79-80, 103
1.5 Health and safety conditions 71-72, 103
1.6 Training 74-75, 104
1.7 Employment and integration of disabled persons 77-78
1.8 Social works 79-80, 103
1.9 Size of subcontracting 56-57, 100
Article148-3 of the
implementing order Environmental information Pages
2.1
Water, raw materials and energy use. Steps taken to improve energy efciency, use of
renewable energy, conditions of land use, airborne, water borne and soil borne releases, noise,
odour and waste pollution 60-69 , 98-99
2.2
Steps taken to restrict harm to biological balance, to natural environments, to protected animal
and plant species 68-69
2.3 Evaluation approaches or company environment certication 67, 98
2.4 Steps taken to ensure the Company business conforms to the applicable laws and regulations 36-37, 65-66
2.5 Expenses incurred to prevent the consequences of the Company business on the environment 63
2.6
Internal department for environment management, training and informing employees about
them, the resources devoted to environment risk reduction, organisation and set up to contend
with accidental pollution with an impact beyond the sites 60-69
2.7
Amount of provisions and cover for environmental risks except if this is likely to cause serious
harm to the Company in a pending litigation 37
2.8
Amount of compensation paid out during the nancial year implementing an environmental court
decision and cases brought for damages caused to the environment 39-40
2.9
All the items on the objectives that the Company assigns to its subsidiaries abroad on points
16 above 60-69, 98-99
Concordance Table Article225 of the Grenelle2Act
This article extends the requirement of listed and non-listed French companies to give an account of the social and environmental
management of their business in their annual report. Although its implementing order was not published when this current report was being
drafted, Schneider Electric had prepared a response. The table below indicates the numbers of the pages of the report in which the various
indicators are mentioned.
1 Social information Pages
a) Employment
Total workforce and breakdown of employees by sex, age and region 100 -103
Hiring and layoffs 100-102
Remuneration and its development 124-132
b) Organisation of work
Organisation of working time 100
Absenteeism 103
c) Social relations
Organisation of social dialogue particularly information and personnel consultation procedures and personnel
negotiation procedures 79-80
List of collective agreements 103
d) Health and safety
Health and safety conditions in the workplace 71-72
List of agreements signed with unions or staff representatives regarding health and safety in the workplace 103
Work accidents, particularly their frequency and their seriousness 103
as well as occupational illnesses 103
e) Training
Training policies implemented 74-75
Total number of training hours 104
f) Equality of treatment
Measures taken towards gender equality 76-78, 101
Measures taken towards employment and involvement of persons with disabilities 77-78
Anti-discrimination policy 76-78
g) Promotion and respect of the provisions of the International Work Organisations fundamental
agreements relating to:
Respect of the freedom of association and the right to collective bargaining,
Eradication of discrimination in employment and profession,
Eradication of forced or obligatory labour,
Effective abolition of child labour. 44, 47
2
2 Environmental information
a) General environmental policy
Organisation of the company to take into account environmental questions and, when necessary, environmental
evaluation or certication approaches 61-67
Employee training and information actions regarding environmental protection
104, 58, Intranet
Environment
Environmental risk and pollution prevention means 69
Amount of provisions and cover for environmental risks except if this is likely to cause serious harm to the Company
in a pending litigation 37
b) Pollution and waste management
Measures for prevention, reduction or repair of emissions in the air, water and ground with serious environmental
effects 68, 98
Measures for prevention, recycling and removal of waste 68, 98
Consideration of noise pollution and any other form of pollution specic to an activity 69
c) Sustainable use of resources
Water consumption and supply according to local constraints 67, 98
Raw material consumption and measures taken to improve the efciency of their use 68
Energy consumption and the measures taken to improve energy efciency and the use of renewable energies 62-64, 98
Land use 68
d) Climate change
Greenhouse gas emissions 61-62, 99
Adaptation to the consequences of climate change 60-64, 67-69, CDP
e) Biodiversity protection
Measures taken to preserve or develop biodiversity 68-69, 65, 50
3 Information relating to societal commitments in sustainable development
a) Territorial, economic and social impact of the companys activity
Regarding employment and regional development 82-84, 88-89
On bordering or local populations 81-85, 89
b) Relations with the persons or organisations involved in the companys activity, particularly involvement
organisations, teaching establishments, environmental defence organisations, consumer associations and
bordering populations
Conditions of dialogue with these persons or organisations 45
Partnership or sponsorship actions 85-88
c) Subcontracting and suppliers
Consideration within the companys purchasing policy of social and environmental issues 56-57
The importance of subcontracting and the consideration within relations with subcontractors and suppliers of their
social and environmental responsibility 56-57
d) Loyalty of practices
Anti-corruption actions taken 59
Measures taken towards consumer health and safety 21, 64-67
e) Other actions taken towards human rights, within the scope of this third indicator 44
6.3 Statutory Auditors Report
Year ended December31, 2011
Statutory auditors report on a selection of environmental, safety, Human Resources and Planet &
Society Barometer indicators
To the Shareholders,
Further to your request and as statutory auditors of Schneider Electric, we have performed a review allowing us to express limited assurance
that the 29 indicators regarding environment, safety, human resources and Planet & Society Barometer for the 2011 scal year, identied
with the symbol in the tables presented on pages 46, 52, 60, 70 et 98 to 105 of the annual report ("the Indicators" ), have been prepared,
in all material respects, in accordance with Schneider Electric 2011 reporting guidelines ("the Guidelines"), summarized on pages 90 to 92.
It is the responsibility of Schneider Electrics management team to prepare the Indicators, draw up the Guidelines and ensure that the
Guidelines are available for consultation at the group s head ofce.
Our responsibility is to express a conclusion on the Indicators, based on our review. Our review was carried out in accordance with the
international standard ISAE 3000 (International Standard on Assurance Engagement, December 2003). Our independence is dened by the
legislative and statutory texts as well as the ethics code of the profession.
The conclusion formulated below concerns only the specied Indicators and not the entire sustainability report included in the annual report.
A higher level of assurance would have required more extensive work.
Nature and scope of our review
In order to be able to express our conclusion on the Indicators, we performed the following review:
We conducted interviews with the persons responsible for the reporting on these Indicators as well as a risk and materiality analysis at
Group level. For EMEAS and North America regions, extended works were performed on safety Indicators.
We also assessed compliance with the Guidelines and performed analytical procedures and consistency checks, as well as veried, based
on sample surveys, data processing for the calculation of the Indicators and their aggregation.
We selected a sample of ve operational sites
(1)
according to their activities, their geographic locations, their contribution to the group s
Indicators and the results of prior risk analyses.
The selected sites represent on average 6% of the total value of the Indicators (from 2% to 35% depending on the Indicators
(2)
). At the
selected sites level, we veried the understanding and application of the Guidelines, and veried, on a test basis, compliance with the
calculation formula and reconciliation with supporting documents.
We reviewed the presentation of the Indicators in the annual report on pages 46 to 80 and 98 to 105.
In view of the work carried out over the last seven years, we consider that our verication work concerning the Indicators provide a sufcient
basis on which to formulate our conclusion, presented hereafter.
(1) Spain (MESA site, Mungia) ; China (sites of SAS, Suzhou and SBMLV, Beijing) ; Mexico (site of Monterrey 3) ; USA (site of Pelco, Clovis,
California).
(2) 4% of energy consumption, 6% of water consumption, 5% of VOC emissions, 3% of waste production, 2% of recovered waste, 35% of SF
6

leaks ; 7% of frequency rate and severity rate, 3% of salaried headcount, 4% of environmental headcount, 5% of average temporary workers,
3% of training hours.
2
Information and comments
Regarding the reporting Guidelines dened by Schneider Electric for the selected data, we wish to make the following comments:
Specic attention has been provided to the traceability of changes in the reporting perimeter of operational units.
Verication procedures implemented by the Group have been precised. At Group, sites and operational units levels, the implementation
of controls to be performed could be reinforced on all security data as well as on the SF
6
leaks and VOC emissions indicators.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the Indicators were not established, in all material
respects, in accordance with the Guidelines.
Paris La Dfense, March 20, 2012
French original signed by
The Statutory Auditors
Ernst&Young et Autres
Ernst&Young
Environment and Sustainable Development
Yvon SALAN ric DUVAUD
2INDICATORS
>
7. Indicators
7.1 Environmental indicators
The indicators hereafter have a Group scope. They illustrate our
industrial and logistics sites environmental consumption, emission,
and waste in addition to certain major tertiary sites.
Schneider Electric provides readers two pieces of information so
that environmental performance can be compared from one year
to another :
one part publishing constant scope indicators;
and another part publishing indicators per employee to correct the
changes in the companys activities. The sites workforce includes
Schneider Electric employees (Fixed-term, Permanent, Work-
study participants), temporary staff, and on-site subcontractors.
The table below indicates how the indicators correspond with the
Global Reporting Initiative.
Comments on the indicators are included in the corresponding
chapters .
ISO 14001 certification of sites
2011 2010 2009
Number of ISO 14001 Certied Sites 273 251 244
Industrial and Logistics sites 253 236 233
Tertiary Sites 20 15 11
New Sites Certied this Year 36 22 25
Certied Sites that have Closed or Consolidated this Year 14 15 8
2011 Audited Indicator.
Group sites consumption, emissions, and waste
GRI Indicators
Current Scope Constant Scope
2011 2010 2009 2011 2010
Number of Participating Sites 281 255 240 244 244
Number of Employees 102,991 87,371 78,078 90,257 86,045
EN22 Amount of Waste Produced (in metric tonnes) 135,392 113,684 101,535 118,427 118,001
EN22
Waste Produced per Employee (in metric
tonnes/p) 1.3 1.3 1.3 1.3 1.4
EN22 Recovered Waste (in metric tonnes) 112,611 95,092 80,255 99,561 96,836
EN22 Percentage of Waste Recovered 83% 84% 79% 84% 82%
EN8 Water Consumption (m
3
) 2,863,934 2,664,824 2,493,351 2,603,318 2,659,468
EN8 Water Consumption/employee (m
3
/p) 27.8 30.5 31.9 28.8 30.9
EN19-20 VOC Emissions (in kg) (estimates) 451,154 461,499 409,219 441,467 530,170
EN19-20
VOC Emissions per Employee (kg/p)
(estimates) 4.4 5.3 5.2 4.6 6.2
EN3 Energy Consumption (MWh equivalent) 1,204,580 1,186,864 1,066,173 1,116,270 1,178,478
EN4 Electricity (indirect consumption) 839,991 790,829 711,815 UP UP
EN4 Heating (indirect consumption) 31,074 32,231 27,899 UP UP
EN3 Fuel Oil (direct consumption) 21,366 28,128 28,926 UP UP
EN3 Gas (direct consumption) 307,705 331,010 292,917 UP UP
2
INDICATORS
GRI Indicators
Current Scope Constant Scope
2011 2010 2009 2011 2010
EN3 Coal (direct consumption) 4,432 4,641 4,594 UP UP
EN3 Renewable Energy (direct consumption) 11 25 22 UP UP
EN5 Energy consumption per employee (MWh) 11.7 13.6 13.7 12.4 13.7
EN16
CO
2
emissions linked to energy consumption
(in metric tonnes) (estimates)* 430,191 411,177 357,513 400,280 407,224
EN17 Electricity (indirect emission) 348,316 323,429 278,809 UP UP
EN17 Heating (indirect emission) 11,728 10,995 9,570 UP UP
EN16 Fuel Oil (direct emission) 5,555 7,313 7,520 UP UP
EN16 Gas (direct emission) 63,080 67,857 60,048 UP UP
EN16 Coal (direct emission) 1,511 1,583 1,566 UP UP
EN16 Renewable Energy 0 0 0 UP UP
EN16 CO
2
/Employee (in metric tonnes/person) 4.2 4.7 4.6 4.4 4.7
EN16
SF
6
Emissions (in CO
2
equivalent
metrictonnes)** 52,542 60,491 135,895 49,661 93,761
EN16
Direct and Indirect CO
2
Emissions (SF
6
energy
consumption and emissions inmetric tonnes) 482,733 471,668 493,408 449,941 500,985
UP =Unpublished
* T he CO
2
emissions linked to energy consumption are considered estimates, because the indirect emissions are calculated on the
conversion factors per country.
** 9 sites used in 2009 and 2010, 17 sites in 2011 with the acquisition of Areva D, 15 sites for the constant scope calculations.
Constantscope emissions are not corrected from activity level.
Intensity indicators
The intensity ratios by workforce above only cover the scope of reporting sites. According to the 2012 carbon footprint, on the whole scopes
1 and 2 as per the GHG Protocol, the ratio of CO
2
emissions/workforce at the Group level is estimated at 4.6.
The ratio of CO
2
emissions/million of euros of turnover is: 29.1.
2INDICATORS
7.2 Social indicators
The indicators below have a Group scope. They cover 100% of
the workforce from integrated companies (see rules page 90 ).
Certain indicators cover 80% of workforce; they are indicated by the
footnotes at the bottom of the page. To respond to the French NRE,
some indicators are given for France only. The precisions on the
variations of scope are contributed at the end of the tables below
and indicated by footer notes.
The social indicators count the people with xed-term contracts, on
work-experience and on permanent contracts. The indicators that
also include temporary workers and/or subcontractors on site are
indicated by footer notes.
The comments on the indicators are given in the matching chapters
and indicated in the tables below.
The table below indicates the matching of indicators with the Global
Reporting Initiative.
Workforce
GRI Indicators 2011 2010 2009
Workforce
LA1 Average workforce
(4)
140,489 123,482 116,065
Of which production
(4)
70,609 61,913 55,125
Of which structure
(4)
69,580 61,569 60,940
LA1 Average supplementary workforce 13,924 12,049 8,463
LA1 Fixed-term contract and permanent contract personnel
(5)
137,535 118,819 104,853
Of which permanent contract 87.4% 88.4% UA
Of which xed-term contract 12.7% 11.6% UA
LA1
Share of temporary personnel (supplementary and xed-term
contracts)
(5)
20.5% 20.8% 18.9%
LA1 Organisation of working time
(3)

Full-time 97.9% NP NP
Part-time 2.1% NP NP
LA1 Hiring
(6)
19,792 17,590 8,977
LA1 Departures
(6)
16,362 14,968 17,663
Of which layoffs 3,887 3,976 6,331
Of which resignations 7,558 NP NP
Others (retirement, end of contract, etc.) 4,917 NP NP
LA1 Voluntary turnover 6% 7% 5%
LA1 Breakdown of workforce by region
(5)

Asia-Pacic 31% 27% 25%
Europe 39% 42% 43%
North America 21% 22% 24%
Rest of the world 9% 9% 8%
LA1
Breakdown of workforce by country
(themostsignicantcountries)
(5)

France 13% 17% 18%
United States of America 12% 15% 17%
China 10% 10% 10%
India 8% 6% 5%
Mexico 5% 6% 6%
Spain 4% 3% 3%
Germany 3% 4% 3%
Brazil 3% 3% 2%
Australia 3% 3% 3%
2
INDICATORS
Indonesia 2% NP NP
United Kingdom 2% 3% 3%
Russia 2% 3% 3%
LA1
Annual change in workforce by country (the most signicant
countries)
(5)

France - 2% +9% -6%
United States of America + 9% - 1% -10%
China + 29% +24% -9%
India + 88% + 38% + 2%
Mexico + 5% +14% - 16%
Spain + 74% +6% -20%
Germany + 2% +57% -8%
Brazil + 38% +40% + 16%
Australia + 22% +2% -13%
United Kingdom + 8% +11% -11%
Russia - 1% +6% - 20%
LA13 Breakdown of workforce by gender
(2)

Men 68% 66% 66%
Women 32% 34% 34%
LA13 Breakdown of workforce by gender and by category
(2)

White collar 54.5% 53.6% 54.6%
Men 72% 71% 72%
Women 28% 29% 28%
Blue collar 45.5% 46.4% 45.4%
Men** 64% 60% 60%
Women 36% 40% 40%
LA13 Breakdown of workforce by age
(2)

14/24years 9.7% 8.7% 7.9%
25/34years 32.7% 31.4% 30.7%
35/44years 36.4% 27.5% 27.9%
45/54years 21.2% 22.3% 23.3%
55/64years 9.6% 9.7% 9.8%
> 64years 0.4% 0.4% 0.5%
LA1 Breakdown of workforce by seniority
(2)

< 5years 44.2% 43.9% 44.7%
5/14years 29.9% 30.4% 29.2%
15/24years 13.8% 13.7% 13.9%
25/34years 8.8% 8.6% 9%
> 34years 3.3% 3.4% 3.2%
LA1 Breakdown of workforce by function
Marketing 3.8% 3.8% 3.9%
Sales 12% 14.9% 17.2%
Services and projects** 15% 12.9% 9.5%
Support 19.2% 16.8% 16.3%
Technical 8.4% 7.6% 7.2%
Industrial 6.4% 6.6% 7.6%
LA1
Direct variable costs* (cost of employees under production or
business costs) 45.4% 46.4% 45.4%
2INDICATORS
Workforce (France)
LA1 Spot workforce 19,947 20,311 18,698
LA1 Number of hires 1,228 793 379
LA1 Number of departures 1,531 1,228 1,330
LA1 Breakdown by type of contract
Permanent contract 94.7% 95.6% 96.6%
Fixed-term contract 5.3% 4.4% 3.4%
LA1 Breakdown by occupational category
Manual workers 28.6% 30.2% 31.1%
Foremen 1.2% 1.3% 1.3%
Administrators and technicians 30.7% 31.9% 32.0%
Engineers and executives 35.1% 32.7% 32.7%
Work experience 4.4% 3.9% 2.9%
LA13 Breakdown by gender
(7)

Men 68.4% 66.8% 66.2%
Women 31.6% 33.2% 33.8%
Hiring
(6)

Permanent contract 61.2% 58.5% 56.6%
Fixed-term contract 38.8% 41.5% 43.4%
LA2 Breakdown by category
White collar 51.3% 41.1% 40%
Blue collar 48.7% 58.9% 60%
LA2 Breakdown by Region
Europe 23% 20% 20%
Layoffs
(6)

Permanent contract 81% 75% 91%
Fixed-term contract 19% 25% 9%
White collar 45% 39% 44%
Blue collar 55% 61% 56%
Europe 33% 31% 37%
Resignations
(6)

LA2 Breakdown by seniority
(2)

< 1 year 35.8% 33.8% UA
1/4years 41.5% 45% UA
5/14years 18.7% 18.1% UA
15/24years 2.7% 2.2% UA
25/34years 0.9% 0.7% UA
> 34years 0.4% 0.2% UA
2
INDICATORS
Average temporary workforce
White collar 12.7% 12.5% 19.5%
Blue collar 87.3% 87.5% 80.5%
Asia-Pacic 56.9% 59.4% 61%
Europe 32% 29.5% 24.2%
North America 3.8% 7% 6%
Rest of the world 7.3% 4.1% 8.8%
Average temporary workforce (France)
LA1 Total 2,779 2,202 1,190
Breakdown by category
White collar 11% 10% 13%
Blue collar 89% 90% 87%
Dialogue and social relations
Dialogue and social relations
LA4-6 Sites stating they benet from employee representation
(2)

Unions 52.4% 60.6% 55.1%
Works Council 56.5% 63.1% 63.5%
Health and Safety Committee 81% 85.9% 83.1%
LA7 Number of collective agreements
(2)
316 261 UA
Health and safety of employees
Health and safety of employees
LA7 Number of accidents
(1)
531 612 609
of which Schneider Electric employees 434 507 544
of which subcontractors 96 104 65
LA7 Number of fatal accidents 0 1 2
of which Schneider Electric employees 0 1 UA
of which subcontractors 0 0 UA
LA7 Frequency rate
(8)
2.06 2.51 3.06
of which Schneider Electric employees 1.95 2.37 2.99
of which subcontractors 2.62 3.50 3.11
LA7 Severity rate
(8)
0.06 0.06 0.08
of which Schneider Electric employees 0.06 0.06 0.08
of which subcontractors 0.04 0.05 0.08
LA7 Number of lost days 14,284 14,624 15,678
of which Schneider Electric employees 12,815 13,007 14,574
of which subcontractors 1,491 1,617 1,104
LA7 Number of hours worked 257,313,965 243,999,107 199,050,694
of which Schneider Electric employees 222,211,425 214,588,490 182,034,089
of which subcontractors 35,158,598 29,410,617 17,016,605
LA7 Medical Incident Rate
(8)
4.77 7.54 UA
of which Schneider Electric employees 4.41 UA UA
of which subcontractors 7.01 UA UA
2INDICATORS
Talent development and training
Talent development and training
LA10 Number of training hours
(2)
2,205,713 2,088,144 UA
LA10 Average hours of training per person
(2)
21.1 22.6 24.3
White collar 27.2 30.8 28.9
Blue collar 15 14.3 19.4
LA10 Breakdown of hours by category
(2)

White collar 64.3% 68.6% 61.8%
Blue collar* 35.7% 31.4% 38.2%
LA10 Breakdown of hours by training type
(2)

Health. safety. environment 14.3% 11.9% 12.5%
Technical 36.8% 32.7% 35.6%
Languages, IT 16.6% 18.2% 17.7%
Management and Leadership 12.4% 16.7% 15.1%
Other 20% 20.6% 19.1%
LA10 Breakdown of costs by training type
(2)

Health. safety. environment 10.4% 11.8% 9.9%
Technical 29.4% 43.2% 33.5%
Languages, IT 15.8% 10.5% 14.9%
Other 25.6% 16.1% 15.5%
LA10 Breakdown of costs by category
(2)

White collar 75.5% 68.0% 75.5%
Blue collar 24.5% 32.0% 24.5%
Talent development and training (France)
LA10 Breakdown of costs by training type
Health. safety. environment 13% 11.8% 11.5%
Technical 42.8% 16.7% 18.1%
Languages, IT 17.3% 17.8% 7.1%
Other 13.2% 9.9% 13.1%
LA10 Breakdown of costs by gender
Women 25.2% 27.2% 25.0%
Men 74.8% 72.8% 75.0%
LA10 Breakdown of costs by category
Engineers and executives 48.9% 37.7% 45.6%
Administrators, Technicians and Foremen 39.1% 39.1% 38.4%
Manual workers 11.9% 23.2% 16.0%
LA12 Employees having had a performance interview
(3)
52% 46.7% UA
Employees having had a career interview
(3)
31.3% 32.0% UA
(1) Includes business travel, excludes home/workplace travel. (2) The data covers more than 80% of the Group workforce at the end of
October2011 (annual survey); it does not include acquisitions integrated after this date. (3) The data relates to over 84% of the Groups
workforce at December31, 2011. (4) Temporary workforce included. (5) Based on spot workforce year end.
(6) Acquisitions/disposals and temporary staff are not taken into account in the calculation.
(7) The data relates to over 94% of the Groups workforce on French territory.
(8) FR =Number of accidents with lost days x 1,000,000/Number of hours worked.
SR =Number of lost days x 1,000/Number of hours worked.
MIR =Number of accidents requiring medical treatment x 1,000,000/Number of hours worked.
* Data includes service VDC headcount, or 23% of all VDC in 2011, 19% in 2010, 16% in 2009.
** Part of the VDC services on total workforce: 10.4% in 2011; 8.9%in 2010; 7.1% in 2009.
UA =Unavailable/UP =Unpublished
Blue collars are Schneider Electric employees whose costs impact directly on the completion of business. The VDC are variable direct
costs. Audited 2011 indicators.
2
INDICATORS
7.3 Societal indicators
The data below was consolidated for the rst time in 2010.
It is distributed based on declarative information submitted by
Foundation delegates.
This information covers 80% of Schneider Electric employees.
It highlights the importance of company and employee participation
in the Foundations approach to involvement, as close to the local
communities as possible.
Breakdown of the Foundations financial commitments
2011
FOUNDATIONS INTERVENTION BUDGET 4,000,000
Breakdown by program (in%)
Training and opportunities for young adults 49%
Emergency and post-emergency
31%
(of which 30% post-emergency training/education)
Raising awareness about sustainable development 1%
Other (mainly involving employee/sponsorship expertise) 19%
Breakdown by region (in %)
Africa & Caribbean 30%
America 10%
Asia 42%
Europe 18%
Breakdown of contributions from employees and Schneider Electric entities
totheFoundationactions
2011
Total nancial contribution (in euros)
From employees 1,181,714
Of the Schneider Electric entity 4,037,158
From partners 447,495
TOTAL 5,666,367
Financial contribution per region (in%)
Africa & Caribbean 2 %
America 65%*
Asia 30%
Europe 3 %
DONATIONS IN PRODUCTS OR SERVICES FOR A PARTNER/PROJECT OF THE FOUNDATION (IN EUROS) 2,736,243
Number of employees involved in the Foundations actions 28,129
* Of which S quare D/SchneiderElectric North America
Total budget for 2011 for the Foundations actions
FOUNDATION BUDGET, FINANCIAL CONTRIBUTIONS AND DONATIONS IN KIND (IN EUROS) 12,402,610
For more information
www.schneider-electric.com (> sustainability )
www.barometer .schneider-electric.com
www.environ ment.schneider-electric.com
www.foun dation.schneider-electric.com
To contact us
Email: fr-developpement-durable@schneider-electric.com
Mail: Schneider Electric
Sustainable Development address 35, rue Joseph Monier,
CS3032392506 Rueil-Malmaison Cedex, France
2
Corporate
governance
3
1. Supervisory Board** 108
oftheSupervisoryBoard** 116
3. Supervisory Board meetings** 117
(members,operatingprocedures andmeetings)** 119
5. Management Board members 121
oftheManagementBoard 123
7. Declarations concerning thesituation of the members
ofthe Supervisory Board andManagement Board 123
8. Management interests andcompensation 124
9. Regulated Agreements 132
10. Internal control and risk management** 133
corporategovernanceguidelines** 141
3SUPERVISORY BOARD
CORPORATE GOVERNANCE
This report includes the Chairmans report on the application of the principle of equal representation of women and
men on the Board, and the conditions applicable for the preparation and organisation of the work carried out by the
Supervisory Board, and the internal control and risk management procedures implemented by the Company.
The sections below - Management Board/Supervisory Board system, 1, 2, 3, 4, 8 (Remuneration Policy for corporate
ofcers and members of the Management Board and Pension Plans), 10 and 11, and Section 2 (Shareholders
Meeting and Voting Rights) and7 of Chapter7 - constitute the Chairman of the Supervisory Boards report provided
for in articleL.225-68 of the French Commercial Code. They are indicated with**.
A Management Board/Supervisory Board system**
The company applies the AFEP/MEDEF corporate governance guidelines. There are a few exceptions, which are
described below (see Section11).
The guidelines are available online at www.medef.fr.
At the Annual Shareholders Meeting of May3, 2006, shareholders approved a recommendation to adopt a two-tier
management structure, with a Management Board and a Supervisory Board.
>
1. Supervisory Board**
The Supervisory Board must have at least three and up to
18members, all of whom must be natural persons.
Throughout their term, Supervisory Board members must hold at
least 250 Schneider ElectricSA shares.
Supervisory Board members are elected for a four-year term and
are eligible for re-election. However, the Annual Shareholders
Meeting of April 21, 2011 removed the age limit of 74 years for
membership and it was decided that members who are 70years
old may be re-elected or appointed for a period of two years. No
more than one third of the members of the Supervisory Board may
be over 70years old.
The Supervisory Board has 14members and one
non- votingmember.
There are 12 independent members according to the denition
contained in the AFEP/MEDEF corporate governance guidelines
for listed companies: Mr Lo Apotheker, Mrs Betsy Atkins,
MrGrard de La Martinire, MrXavier Fontanet, MrNolForgeard,
MrJrmeGallot, MrJeong Kim, MrWilly R. Kissling, MrsCathy
Kopp, Mrs Dominique Snquier, Mr G. Richard Thoman
andMrSergeWeinberg. Each year, the Supervisory Board includes
an item on the agenda to review the status of its members, based
on a report from the Remunerations, Appointments and Human
Resources Committee. Members directorships and functions in
other companies that have business relations with Schneider Electric
do not, by their nature, affect the said members independence in
light of the types of transactions involved. These transactions are
carried out on arms-length terms and are not material for either
party. Moreover, as regards Mrde La Martinire, who has been a
Director or member of the Schneider Electric SA Board for more
than 12years, his seniority is not considered as a hindrance to his
independence due notably to his personality and involvement in the
work and discussions on the operation of the Audit Committees.
Five members do not have French nationality: (American MrsAtkins,
Messrs Kim and Richard Thoman; German: Mr Apotheker, and
Swiss: MrKissling).
One member, Mr Claude Briquet, represents the employee
shareholders in accordance with article L.225-71 of the French
Commercial Code. He was nominated by the Shareholders
Meeting, on the recommendation of the Supervisory Boards of the
FCPEs.
The average age of the Supervisory Board members is 61.
The appointments of seven members of the Board are due to
expire. These are the appointments of Messrs Lo Apotheker,
Xavier Fontanet, Jrme Gallot, Willy Kissling, Henri Lachmann
and G. Richard Thoman as well as the appointment of MrClaude
Briquet who was elected by the Annual Shareholders Meeting in
accordance with article11-c of the articles of association from a list
of candidates nominated by the employee shareholders.
In view of the major changes made in composition of the Board
in 2011 with the addition of Mrs Betsy Atkins, Mr Jeong Kim,
Mrs Dominique Snquier and Mr Xavier Fontanet who was co-
opted to replace MrAnand Mahindra, the Shareholders Meeting is
asked to renew the appointments of:
MessrsKissling, Lachmann, and Richard Thoman for a two year
period, in view of the new provisions in the articles of association;
Messrs Apotheker, Gallot and Fontanet for a four year period.
The Annual Shareholders Meeting will also have to ratify the co-
opting of MrFontanet.
With regard to the Board member representing employee
shareholders, the Supervisory Board recommends that
shareholders vote for Mrs Magali Herbault whose prole and
professional career t the objectives of female quotas, rejuvenation
and internationalisation, as set by the Supervisory Board regarding
its composition.
3
SUPERVISORY BOARD
Supervisory Board (as of December31, 2011)
MrHenri Lachmann
Age: 73
Business address:
Schneider Electric
35, rue Joseph Monier 92500 Rueil-Malmaison - France
60,143
(1)
Schneider ElectricSA shares
First appointed: 1996/Term ends: 2012
Directorships and other functions
Currently:
Chairman of the Supervisory Board of Schneider ElectricSA;
Vice-Chairman of the Supervisory Board of Vivendi; member
of the Supervisory Board of Groupe Norbert Dentressangle;
Director of Carmat; Non-voting Director of Fimalac;
Chairman of the Board of Directors of Centre Chirurgical Marie
Lannelongue; Chairman of Fondation pour le Droit Continental;
member of the Steering Committee of Institut de lEntreprise;
Director of Association Nationale des Socits par Actions;
Chairman of Institut Telmaque; Vice-Chairman and Treasurer
of Institut Montaigne; Director of Planet Finance and Fondation
Entreprendre, Chairman of the Advisory Council of Campus
dExcellence au Commissariat Gnral lInvestissement (Grand
Emprunt).
Previous directorships and functions held in the past veyears:
Member of the Supervisory Board of AXA and AXA Assurances
IARD Mutuelle; Director of Finaxa; Non-voting member of Tajan;
member of CODICE; Director of Solidarits Actives.
Experience and qualications
A graduate of Hautes tudes Commerciales (HEC), Henri
Lachmann began his career in 1963 with Arthur Andersen. In
1970, he joined Compagnie Industrielle et Financire de Pompey.
In 1971 he became Executive Vice-President of Financire Strafor
(later Strafor Facom), where from 1981 to 1997 he served as CEO.
He was elected to the Schneider Electric SA Board of Directors
in 1996 and was appointed Chairman on February 25, 1999. On
May 3, 2006, he became Chairman of the Supervisory Board of
SchneiderElectricSA.
Vice-Chairman of the Supervisory Board
MrLo Apotheker*
Age: 58
Business address:
72, Ralston Road; Atherton, CA 94027, USA
500 Schneider ElectricSA shares
Currently:
Vice-Chairman of the Supervisory Board of Schneider
ElectricSA;
Director of New E.A (USA); member of the Board and Strategy
Committee of PlanetFinance.
CEO and President of Hewlett-Packard; member of the Board
of Directors of Hewlett-Packard; CEO of SAP AG; Non-voting
member of Schneider Electric SA; Director of Ginger SA,
GTNexus (USA), SAP AmericaInc. (USA), SAP Global Marketing
Inc. (USA), SAP Asia Pte. Ltd (Singapore), SAP Japan Co.,
Ltd (Japan), SAP France SA, SAP Italia Sistemi, Applicazioni,
Prodotti in Data Processing SpA (Italy), SAP Hellas Systems
Application and Data Processing SA (Greece), SAP (Beijing)
Software System Co., Ltd, (China), SAP Manage Ltd (Israel),
SAPFinland Oy (Finland) and SAP Danemark A/S (Denmark).
Lo Apotheker began his career in 1978 in management control
after graduating with a degree in international relations and
economics from the Hebrew University in Jerusalem. He then
held management and executive responsibilities in several IT rms
including SAP France and SAP Belgium, where he was CEO
between 1988 and 1991. Mr Apotheker was founding President
and Chief Operating Ofcer of ECsoft. In 1995, he returned to SAP
as Chairman of SAP France. After various appointments within SAP
as Regional Director, he was appointed in 2002 as a member of
the Executive Committee and President of Customer Solutions &
Operations, then in 2007 as President CSO and Deputy CEO of
SAP AG and in 2008 CEO of SAP AG. In 2010, he became CEO
and President of Hewlett-Packard and served until Autumn 2011.
Nota: in bold type, those companies are listed on a regulated market.
(1) Held directly or through the FCPE.
* An independent member of the Supervisory Board within the meaning of the AFEP/MEDEF code of corporate governance for listed companies.
3SUPERVISORY BOARD
Members of the Supervisory Board
MrsBetsy Atkins*
Age: 58
Business address:
BAJACORP 10 Edgewater Drive, Ste 10A Coral
Gables, FL 33133
Currently:
Member of the Supervisory Board of Schneider ElectricSA;
Member of the Board of Directors of Chicos FAS Inc. (USA),
Polycom Inc. (USA), and SunPowerCorp (USA); President of
Vantrix (Canada); member of the Advisory Committee de SAP
(Germany).
Director of Towers Watson (USA), Reynolds American (USA),
Vonage (USA); President and CEO of Clear Standards, Inc. (USA).
After graduating of the University of Massachusetts and Trinity
College Oxford, Betsy Atkins began her career co-founding several
successful high-tech and consumer companies including Ascend
Communications. In addition, she served as CEO and Chairman of
NCI from 1991 to 1993 and as CEO of Key Supercomputer from
1987 to 1989.
MrClaude Briquet
Age: 51
Business address:
Schneider Electric Industries SAS
Boulevard Salvador Allende Zone Industrielle BP
660 16340 LIsle dEspagnac - France
4,302
(1)
Currently:
Director of European Trading at Schneider Electric; member of
the Supervisory Board of the Schneider France-Germany FCP;
Director of the Sicav Schneider nergie and Sicav solidaire.
Previous directorships and functions held in the past ve years:
Executive Vice-President of Alombard.
An engineering graduate of cole Nationale dIngnieurs in Tarbes
and ENSEEIHT in Toulouse, Claude Briquet joined Schneider
Electric in 1985. He began his career in the areas of development,
quality and production. MrBriquet managed the Pacy I plant from
1992 to 1996 and the Vaudreuil plant from 1996 to 1999. He was
appointed Executive Vice-President of Mafelec in 1999 and of
Alombard in 2001. Mr Briquet is currently responsible for trading
in Europe within the Industry Department of Schneider Electrics
European Operating Division.
* An independent member of the Supervisory Board within the meaning of the AFEP/MEDEF code of corporate governance for listed companies.
3
SUPERVISORY BOARD
MrGrard de La Martinire*
Age: 68
Business address:
18, alle du Clotre 78170 La Celle-Saint-Cloud - France
6,856 Schneider ElectricSA shares
Currently:
Director of Air Liquide; member of the Supervisory Board
of European Financial Reporting Advisory Group EFRAG
(aBelgian law association); Director of Standard & Poors Credit
Market Services France SAS; Director of Allo Finance; Chairman
of the Managing Committee of Charte du Don en Conance (a
charity within the meaning of the 1901 French law); member of
the Haut Conseil de la Vie Associative.
Chairman of Fdration Franaise des Socits dAssurances
(FFSA) and Chairman of Comit europen des Assurances
(CEA); Vice-Chairman of Comit europen des Assurances
(CEA); member of the Supervisory Board of Air Liquide; Director
of BanquedOrsay.
A graduate of cole Polytechnique and cole Nationale
dAdministration, Grard de La Martinire held several positions in
the French Finance Ministry before serving as Secretary General of
Commission des Oprations de Bourse and General Manager of
Socit des Bourses Franaises. In 1989, he joined AXA, where
he was appointed Executive Vice-President for Holding Companies
and Corporate Functions in 1993, member of the Management
Board in 1997 and Executive Vice-President of Finance, Budget
Control and Strategy in 2000. He left the AXA Group in 2003 to
become Chairman of the Fdration Franaise des Socits
dAssurances (FFSA), a post he held until September2008.
MrXavier Fontanet*
Age: 63
Business address:
3, rue Charles Lamoureux 75016 Paris - France
Currently**:
Director of Essilor, LOral and Crdit Agricole SA.
CEO of Essilor International; Chairman of the Board of Directors
of Essilor International Director of the Fonds S tratgique
dInvestissement (F S I); President of EOA Holding Co. Inc. (USA),
Nikon and Essilor Joint Research Center Co Ltd (Japan); Director
of Nikon-Essilor Co. Ltd (Japan), Nikon and Essilor Joint Research
Center Co Ltd (Japan), Essilor of America Inc. (USA), Transitions
Optical Inc. (USA), EOA Holding Co, Inc. (USA), Shanghai Essilor
Optical Company Ltd (China), Transitions Optical Holdings B.V.
(Netherlands), Essilor Manufacturing India Private Ltd (India),
Essilor India PVT Ltd (India), Essilor Amico L.L.C. (United Arab
Emirates); Permanent representative of Essilor International on
the Board of Directors of the Association Nationale des Socits
par Actions (Ansa)
A graduate of the cole Nationale des Ponts et Chausses and
Massachusetts Institute of Technology, Xavier Fontanet began his
career as a Vice-President at the Boston Consulting Group. Hewas
General Manager forBnteau beginning in 1981. Between 1986
and 1991, he was in charge of central management of catering
for the Wagons-Lits group. In 1991, he joined Essilor as Executive
Vice-President and then served as CEO from 1996 to 2009 and
Chairman of the Board of Directors until the beginning of 2012.
* An independent member of the Supervisory Board within the meaning of the AFEP/MEDEF corporate governance code for listed companies.
** Situation as of January2, 2012.
3SUPERVISORY BOARD
MrNol Forgeard*
Age: 65
Business address:
84, avenue dIena 75016 Paris - France
Currently:
Senior Partner at Arjil SAS; member of the Committee of France
Galop; Director of the PMU Economic Interest Group.
A graduate of cole Polytechnique and cole des Mines, MrNol
Forgeard began his career in the French civil service before joining
Usinors subsidiary Compagnie Franaise des Aciers Spciaux.
In 1986, he served as an advisor on industrial issues in Prime
Minister Jacques Chiracs ofce. In 1987, he joined the Lagardre
Group, where he headed the Defense and Space divisions of Matra.
Five years later, he became CEO of Matra Haute Technologie and
joint Vice-President of the Lagardre Group. In 1998, he was
appointed Director and general manager of GIE Airbus-Industrie,
and in 2000, CEO of Airbus SAS (an Airbus consolidated company).
From July1,2005 to July1, 2006 he was co-Executive Chairman of
EADS. In 2011 he joined Arjil SAS as a Senior Partner.
MrJerome Gallot*
Age: 52
Business address:
Veolia Transdev
17 bis, rue la Prouse 75016 Paris - France
Currently:
Executive Vice-President of Veolia Transdev; member of the
Management Committee of the CDC Group; Director of Nexans
SA, Caixa Seguros SA (Brazilian subsidiary of CNP), Plastic
Omnium; Non-voting member of NRJ Group SA.
Chairman of CDC Entreprises SAS, CDC Entreprises Elan PME,
FSI PME Porfefeuille, Consolidation et Dveloppement Gestion;
Manager of Caisse des Dpts et Consignations; Director of
Crdit Foncier de France, Galaxy Fund, Galaxy Management
Services, Caisse Nationale de Prvoyance (CNP Assurances SA);
President of the Austral mutual fund; member of the Supervisory
Board of Compagnie Nationale du Rhne (CNR); Non-voting
director of OSEO (EPIC); member of the Executive Committee of
Fonds Stratgique dInvestissement; Director of Icade SA.
Jrme Gallot is a graduate of Institut dtudes Politiques in Paris
and cole Nationale dAdministration. After three years with the
Cour des Comptes, he served as an advisor to the Secretary
General of the interministerial committee for European economic
cooperation, from 1989 to 1992, and then moved to the Budget
Department. He was then Chief of Staff in a number of French
ministries, from 1993 to 1997. In 1997, he was appointed Director
of the Competition, Consumer Affairs and Anti-Fraud Division of
the Ministry of Economy and Finance. He left this position in 2003
to become Senior Executive and member of the Management
Board at Caisse des Dpts et Consignations. He was appointed
Chairman of CDC Entreprises and member of the Management
Board of Caisse des Dpts in September2006. In January2009,
he was appointed member of the Executive Committee of Fonds
Stratgique dInvestissement. In March2011 he became Executive
Vice-President of Veolia Transdev.
MrJeong H. Kim*
Age: 51
Business address:
Alcatel-Lucent: 600 Mountain Avenue, Room 6A-509 -
Murray Hill, NJ 07974 United States
First appointed: 2011 /Term ends: 2015
Currently:
President of Bell Labs Alcatel-Lucent; Professor at the University
of Maryland; member of the Board of Trustees at Johns Hopkins
University; member of the Board of Directors of Georgetown;
member of the Board of Visitors of the Stanford Freeman Spogli
Institute; CEO of Jurie Holdings LLC; member of the Board of
Managers of Applied Physics Lab; and Director of GIV Global
Private Equity.
Member of the Board of Trustees at the University of Maryland,
College Park Foundation and Bankinter Foundation of Innovation;
Director of In-Q-Tel; member of the Nasdaq Listing and Review
Council; member of the External Advisory Board of the CIA;
member of the Advisory Board of Royal Oak Capital and Director
of CINTT.
Jeong H. Kim holds a doctorate in reliability engineering from the
University of Maryland and holds degrees from Johns Hopkins
University in Technical Management, electrical engineering, and
computer sciences.
A businessman, professor, and member of the National Academy
of Engineering, Jeong H. Kim joined Lucent Technologies in 1998
when Lucent purchased Yurie Systems, the company he founded in
1992. He supervised the Lucents Optical Network Group. He then
went to work at the University of Maryland, where he taught in both
the Electrical Engineering and Computer Sciences Department and
the Mechanical Engineering Department. Before that, Jeong H.Kim
held technical and managerial positions in computers, satellite
3
SUPERVISORY BOARD
systems, and data communications, and he spent seven years as
an ofcer aboard a US Navy nuclear submarine.
In 2005, Jeong H. Kim was appointed Chairman of Bell Laboratories
(Alcatel-Lucent). He is the eleventh Chairman.
MrWilly R. Kissling*
Age: 67
Business address:
Poststrasse n 4 BP 8808 Pfaefkon - Switzerland
Currently:
Member of Board of Directors of Cleantech Invest AG.
Director of Khne +Nagel International AG (logistics); Director
of Holcim Ltd; Chairman of the Board of Directors of Grand
Resort Bad Ragaz AG; member of the European Advisory Board
of Booz & Co.
Willy Kissling, a Swiss citizen, holds diplomas from the University
of Bern and Harvard University. He began his career at Amiantus
Corporation and then joined Rigips, a plasterboard manufacturer,
in 1978. He was appointed to the Rigips Executive Committee in
1981 and subsequently became Chairman. From 1987 to 1996,
Mr Kissling served as Chairman and Executive Vice-President of
Landis & Gyr Corporation, a provider of services, systems and
equipment for building management, electrical contracting and
pay phones. From 1998 to 2005, he was Chairman of the Board
of Directors of Oertikon Bhrle Holding AG (since renamed OC
Oerlikon Corp.).
MrsCathy Kopp*
Age: 62
Business address:
22, square de lAlboni 75016 Paris France
Currently:
Director of Dexia; member of the Appointments and
Remuneration Committee of Dexia; member of the Board of the
Fondation SNCF; member of the Haut Conseil lIntgration.
Member of the Board of cole Normale Suprieure de la rue
dUlm in Paris; General Manager of Human Resources and
member of the Executive Committee of Accor; member of the
Collge de la Haute Autorit de Lutte contre les Discriminations
(Halde).
After earning a degree in mathematics, Cathy Kopp joined IBM
France in 1973. In 1992, she became Human Resources Director
at IBM France before being appointed Vice-President of Human
Resources in the Storage Systems Division of IBM Corp. In 2000,
Cathy Kopp became Chairman and Executive Vice-President of
IBM France. In 2002 she joined the Accor Group as HR Director
and served until 2009. Cathy Kopp was Chairman of the Social
Committee of the Service Providers Group at MEDEF until 2009.
She headed up the cross sector negotiations on diversity at MEDEF
in 2006, and the negotiations on modernising the labour market
in2007.
3SUPERVISORY BOARD
MrsDominique Snquier*
Age: 58
Business address:
AXA Private Equity
20, place Vendme 75001 Paris - France
Currently:
Chairman of the Management Board of AXA Investment Managers
Private Equity SA France, Private Equity Europe SA; Chairman
of the Supervisory Committee of AXA Private Equity US LLC
(USA); Chairman of the Supervisory Board of AXA Private Equity
Germany GmbH (Germany); Director of AXA Private Equity Asia
PteLtd (Singapore), of Italy S.r.l. (Italy), Chairman of the Board of
Directors of AXA Private Equity UKLtd (UK), and Switzerland AG
(Switzerland), and Switzerland Finance AG (Suisse); Chairman of
the Supervisory Board of AXA Private Equity Eastern Europe GmbH
(Austria); Chairman, member of the Management Committee and
the Investment Committee of Matignon Dveloppement 1 SAS,
Dveloppement 2 SAS, Dveloppement 3 SAS,
Dveloppement 4 SAS; Chairman, member of the Management
Committee and Coordination Committee of AXA Infrastructure
InvestissementSAS; Director of the Thtre des Champs lyses
SA; Non-voting member of the Board of Directors of Groupe
Bourbon SA; member of the Board of Directors and the Audit
Committee of Hewlett-Packard Company (USA); member of the
Board of Directors of Compagnie Industriali Riunite S.p.A. (Italy);
Manager of SCI 30 rue Jacob; Director of SENEQ SA (Belgium);
President of Escouf Properties Corp. (USA).
Non-voting Director of Schneider Electric SA; Vice-Chairman
of the Supervisory Board of Linedata Services SA; Chairman of
Pikanter 4 SAS; Chairman of AXA Chile Private Equity I; Director
of AXA Private Equity Funds of Funds II Manager Ltd; Director of
AXA Private Equity Primary Ltd; Director of AXA Private Equity
Secondaries Ltd; Director of AXA IM Secondaries Associates
Management Ltd; Director of AXA Private Equity SL Management
Ltd; Director of AXA PE Asia Manager Ltd; Director of AXA IM
LBO Management Ltd; Director of AXA IM LBO Management
Ltd III; Director of AXA IM LBO Management Ltd IV; Director of
AXA Alternative Participations SICAV I; Director of AXA Alternative
Participations SICAV II; Director of Groupe Bourbon SA; Non-
voting member of the Board of Directors of Nakama SA; Chairman
of Pikanter9SAS; Chairman of Pikanter 10 SASU;
Mrs Dominique Snquier is a graduate of cole Polytechnique
with a postgraduate diploma in banking and nance. She joined the
insurance industry supervisory team in 1975. In 1980 she joined GAN
as head of group acquisitions and then in 1987 she founded GAN
Participations and which led up until 1995. In 1996 she joined AXA
group and set up AXA Private Equity for which she is Chairman of the
Management Board.
MrG. Richard Thoman*
Age: 67
Business address:
Corporate Perspectives, LLC
126 East 56th Street, 9
th
Floor New York NY 10022 -
United States
Currently:
Managing Partner of Corporate Perspectives (an American
strategy consulting rm); member of the Board of Advisors
of INSEAD, the French American Foundation, the Americas
Society, the Council of the Americas, Committee for Economic
Development, McGill University School of Management, the
Fletcher School and the heritage committee of the Institut
des Hautes tudes Internationales, IHEID (Geneva); Adjunct
Professor at Columbia University and the Fletcher School;
member of the Trilateral Commission, the Council on Foreign
Relations; Business Executives for National Security, New York
Economics Club.
Member of the Board of Directors of Union Bancaire Prive
(Geneva).
Mr G. Richard Thoman has a unique background. He was one
of the top ve CEOs for four of the top Fortune 75companies, in
three different industries: nancial services, food and beverage, and
technology.
MrThoman began his career at Citibank after receiving his BA from
McGill University in Montreal and MA, MALD and PhD from Fletcher
School of Law and Diplomacy which resulted from a partnership
between Tufts University and Harvard. He also graduated from
Hautes tudes Internationales in Geneva. After working with Exxon
Finance and McKinsey, he became Chairman and co-Executive
Vice-President of American Express Travel Related Services. In
1992, he was appointed Chairman and Executive Vice-President
of Nabisco International. In 1993, he joined IBM as Senior
Vice- President, Personal Systems Group, later becoming Financial
Director. In 1997, he joined Xerox. He served as Chairman and
Executive Vice- President of Xerox from April 1999 to May 2000.
MrThoman is currently Managing Partner of Corporate Perspectives
and is on the faculty of several US universities.
3
SUPERVISORY BOARD
Serge Weinberg*
Age: 60
Business address:
Weinberg Capital Partners
20, rue Quentin Bauchart 75008 Paris France
Currently:
Chairman of the Board of Directors of Sanofi ; Chairman of
Weinberg Capital Partners, Financire Piasa and Piasa Holding,
Piasa and VL Holding, Alret and Maremma; member of the
Supervisory Committee of Financire BFSA; Vice-Chairman and
Director of Financire Poinstia and Financire Sasa; member
of the Supervisory Board of Alna; Permanent representative
of Weinberg Capital Partners; Director on the Board of Alliance
Industrie and Sasa Industrie; Chairman of Corum (Switzerland).
Vice-Chairman of the Supervisory Board of Schneider
ElectricSA (from May2006 to May2010); Chairman of the Board
of Directors of Accor (January2006 to February2009); Director
of Alliance Industrie (from October2006 to November2008), of
Road Holding (from March2007 to May2008) and Rasec (from
February 2006 to January 2010); member of the Management
Board of Pharma Omnium International (from June 2006 to
January2010); Director of FNAC (from July1995 to May2010), of
Rothschild Concordia SAS (from March2008 to October2010),
of Rothschild & Cie (from June 2005 to October 2010), of the
Gucci Group (from March1999 to April2010).
After graduating from Frances cole Nationale dAdministration,
Serge Weinberg held several positions in the French civil service
and ministerial ofces. He then served as Deputy Vice-President
of FR3, Executive Vice-President and then Chairman of the
Management Board of Havas Tourisme, Director of Pallas Finance.
And then in 1990 joined what is now the Pinault-Printemps-
Redoute Group (PPR) as Executive Vice-Chairman of Compagnie
franaise de lAfrique occidentale (CFAO). Within this group,
he served as Chairman of Rexel (formerly CDME), an electrical
equipment distributor. In 1995, he was appointed Chairman of the
PPR Management Board, a position he held until early 2005. In
March2005 he founded Weinberg Capital Partners, a company that
manages an investment fund specialised in leveraged buyouts and
real estate. From 2006 to 2009, he was Chairman of the Board of
Directors of Accor. He has been Chairman of the Board of Directors
of Sano since May2010.
Non-voting member
MrClaude Bbar
Age: 76
Business address:
GIE AXA
25, avenue Matignon 75008 Paris France
Currently:
Non-voting member of Schneider ElectricSA;
Director of AXA Assurances Vie Mutuelle, AXA Assurances IARD
Mutuelle and BNP-Paribas; member of the Supervisory Board
of Vivendi.
Chairman of the Supervisory Board of AXA, Chairman and
Director of various AXA subsidiaries, including AXA Financial;
Chairman and Executive Vice-President of Finaxa.
A graduate of cole Polytechnique, Claude Bbar joined Groupe
Ancienne Mutuelle in 1958, the mutual insurance company
that would become Mutuelles Unies, then AXA in 1985. He was
appointed Chairman and Executive Vice-President of the Company
in 1975.
From late 1996, when AXA merged with UAP, until 2000,
Claude Bbar served as Chairman of AXAs Management
Board and Chairman of its Executive Committee. In 2000 he was
appointed Chairman of the AXA Supervisory Board. Mr Bbar
resigned as Chairman of the Supervisory Board in April 2008 to
become Honorary Chairman of AXA.
3ORGANISATIONAL AND OPERATING PROCEDURES OFTHESUPERVISORYBOARD
>
2. Organisational and operating
procedures oftheSupervisoryBoard**
The Supervisory Board exercises ongoing control over the
Management Boards management of the Company, in accordance
with French law. To this end, it performs all the checks and controls
that it considers appropriate and obtains copies of any and all
documents that it considers necessary in order to full its duties.
Specic powers are vested in the Supervisory Board under French
law and the Companys articles of association. These include the
power to:
appoint the Management Board, designating the number of
members that compose it as well as its Chairman. Establish the
compensation of the members of the Management Board;
if necessary, remove Management Board members from ofce;
authorise nancing transactions that may have a substantial
effect on the Companys nancial structure (loans, increase in
share capitaletc.);
authorise material business acquisitions and disposals, meaning
strategic transactions amounting to more than EUR250million, as
well as strategic partnerships;
authorise the creation of stock option plans or stock grant plans,
with or without performance criteria;
authorise the signature of regulated related party agreements;
authorise the issuance of bonds and other guarantees, subject to
compliance with French law.
The Supervisory Board also authorises recommendations made at
the Annual Shareholders Meeting concerning the dividend, Board
membership and changes statutory changes.
The Supervisory Board may appoint between one and three
non- voting members and decide to create Board committees. It
draws up internal rules. It determines the allocation of attendance
fees; the total amount is determined by the Annual Shareholders
Meeting .
Internal rules and procedures of the Supervisory Board
Missions and powers of the Supervisory Board
The Supervisory Boards internal rules and procedures, adopted
on May 3, 2006, include the internal rules and procedures of the
Board committees (the Remunerations and Appointments and
HumanResources Committee and the Audit Committee) as well as
the Directors charter recommended by the AFEP/MEDEF corporate
governance guidelines. It has been amended on several occasions.
The internal rules and procedures of the Supervisory Board are
made up of 13articles:
Article 1 denes the role and powers of the Supervisory Board
(see above). It species the Management Board decisions that
require the prior approval or consultation of the Supervisory Board.
In particular, acquisitions amounting to more than EUR250million
require the prior approval of the Supervisory Board.
Article 2 denes the principles applied by the Supervisory Board
concerning the renewal of its membership. These include assuring
international representation by maintaining a signicant number
of non-French members, maintaining independence through a
majority of independent members as dened in the AFEP/MEDEF
corporate governance guidelines, ensuring continuity through
the re-election of a certain proportion of the members at regular
intervals and enabling representation of employee shareholders.
Article 3 denes the procedures for organising and conducting
Supervisory Board meetings (notice of meeting, methods of
participation, minutes,etc.).
Article 4 denes the role and powers of the Chairman of the
Supervisory Board. The Chairman leads the work of the Board.
He is regularly informed by the Management Boards Chairman of
material events and developments in the life of the Group.
Article5 concerns information received by the Supervisory Board.
It stipulates that Supervisory Board members shall receive any
information required to enable them to full their duties and that
they may request any necessary or relevant documents prior to any
meeting of the Board. The article also describes the content of the
Management Boards quarterly reports to the Supervisory Board,
to be drawn up in accordance with Article L.225-68 of the French
Commercial Code. It stipulates that the Management Board should
present the Supervisory Board with annual targets, strategic and
operational plans.
Article6 denes the status of members of the Supervisory Board.
This is in compliance with the Directors charter contained in the
AFEP/MEDEF corporate governance guidelines.
It states that Supervisory Board members must:
represent all shareholders and act in the corporate interest;
resign from the Board when they have not participated in more
than half the Board meetings;
comply with an overall obligation of condentiality;
report any and all conicts of interest;
hold at least 250shares of Company stock;
abide by strict rules regarding transactions involving Schneider
Electric SA stock (no trading allowed in the 31 days preceding
3
SUPERVISORY BOARD MEETINGS
the day following the publication of the annual or interim nancial
statements and in the sixteen days preceding the day following
publication of quarterly reports,etc.);
attend General Meetings.
Article7 states that non-voting members, who attend Supervisory
Board meetings in a consultative capacity, are subject to the same
ethical rules as voting members.
Articles 8 to 10 apply to Board committees. The content of these
Articles is provided in the corresponding section below.
Articles 11 and 13 dene the scope of the internal rules and
procedures of the Supervisory Board.
Article 12 states that the Management Board may allocate
management tasks among its members, with the Supervisory
Boards approval.
Information required by the Supervisory Board and its members
Schneider Electric lays down the following rules so as to ensure
the Supervisory Board is properly informed: in principle, members
of the Supervisory Board have available to them a secure website
on which they receive or can peruse, 10days before each Board
meeting, the meeting agenda and the draft minutes of the previous
meeting and, four or ve days before, documentation for the Board
meeting. The le includes the Management Boards report, notes
or the text of presentations scheduled on the agenda and, for the
meeting held to approve the annual or interim nancial statements,
the nancial statements approved by the Management Board.
Asupplementary le may also be provided at the meeting.
Supervisory Board meetings are attended by the members of the
Management Board. Executive Committee members are invited for
the presentation of major issues within their area of responsibility.
The Statutory Auditors attend the Supervisory Board meetings at
which the annual and interim nancial statements are reviewed.
Between each meeting of the Supervisory Board, aside from
interviews that Supervisory Board members may have with the
Chairman of the Management Board, Supervisory Board members
receive a monthly letter, a weekly press review, all of the Companys
press releases, nancial analysts reports and other documents.
Members also have the opportunity to meet informally with key
Members of Senior Management prior to Supervisory Board
meetings. New members of the Supervisory Board attend training
and information sessions dealing with the Companys strategy
andbusinesses.
Schneider Electric has adopted a code of ethics for Supervisory
Board Members and employees of the Group designed to prevent
insider trading. Under the terms of these provisions, both Supervisory
Board Members and employees are barred from trading Company
shares and shares in companies for which they have information
that has not yet been made public. In addition, they may not trade
Schneider ElectricSA shares during the 31 days preceding the day
following publication of the annual and interim nancial statements,
nor during the 16 days preceding the day following publication of
a quarterly update, nor may they engage in any type of speculative
trading involving Schneider Electric SA shares (including margin
trading, purchasing and re-selling shares in a period of less than
four months,etc.).
>
3. Supervisory Board meetings**
Eight meetings were held in 2011. The meetings lasted around
four hours and the average participation rate of Members of
Supervisory Board was 90 %. They were primarily devoted to
discussing the Companys corporate governance and strategy,
reviewing operations and the nancial statements and preparing
the Annual Shareholders Meeting.
Corporate Governance
Based on advice from the Remunerations, Appointments and
Human Resources Committee, the Supervisory Board:
discussed the composition of its Membership and that of its
committees and achieving gender balance on the Board. The
Board, having also set a target of internationalisation, a better
gender and age balance within its composition, made a proposal
to the Annual Shareholders Meeting 2011 to ratify the co-opting
of Anand Mahindra and the appointment to the Board of Betsy
Atkins and Dominique Snquier and Jeong Kim. In Decemberit
co-opted Xavier Fontanet to replace Mr Mahindra who had
3SUPERVISORY BOARD MEETINGS
resigned for reasons of a possible conict of interest between
Schneider Electric and Mahindra & Mahindra that could have
arisen out of the development of these two groups distribution
businesses in India;
discussed succession of its Chairman. In fact, after the successful
succession of its CEO, the Board is working on the succession of
its chairman and a suitable governance model.
reviewed the Management Boards operations and evaluated the
members of the Management Board;
examined the Management Boards Members succession plan;
approved the remuneration of members of the Management
Board (appraisal of attainment of their personal targets for 2010
and determination of the rules relating to their remuneration for
2011: xed element, variable element) as well as the number of
stock grants. The principles and rules applied by the Supervisory
Board in determining remuneration and benets for corporate
ofcers are presented below (pages 124 and 125 );
authorised the Management Board to set up plans for
performance/bonus shares (plans10bis, 11bis, 12, 13 and14,
see page 249 and following) and to carry out an employee share
issue in 2012;
made a proposal to the Annual Shareholders Meeting to increase
attendancefees;
decided to review these every three years. This was carried out in
the Autumn of 2011 with the assistance of the Supervisory Board
secretary. This review included the opinions and comments of
Members of the Board based on a questionnaire drawn up
by the Remunerations, Appointments and Human Resources
Committee. This questionnaire covered the membership of the
Board, its missions, the conduct of its meetings and information
as well as the Boards relations with the Management Board and
the organisation and conduct of its Committees. On February21,
2012 the Supervisory Board examined the conclusions of the
report submitted by the Remunerations, Appointments and
Human Resources Committee. This examination concluded
that the Board is exemplary. This appraisal was shared by all
its Members. They feel that the Schneider Electric SA Board is
amongst the best, if not the best Board on which they sit or have
had occasion to sit. They put this down to the quality and depth
of discussions at Board meetings and the level of condence that
reigns between Members themselves and between Members
and management. Areas for improvement were identied
however. These mainly relate to the development of discussions
of the Board, the situation of Schneider Electric compared to
the competition, R&D and more especially R&D productivity
and the conclusions arising out of the work undertaken by the
Audit Committee on risk. The Board also wishes to receive more
detailed information on Schneider Electrics competitors and
the Groups situation regarding those competitors as well as
information on the work of the Executive Committee. In order
to improve the conduct of its work, the Board intends to extend
the duration of its meetings. It furthermore considers that the
participation of its membres by audio or video conference should
only be a last resort. Furthermore, the Board has accepted to
raise the minimum number of Schneider ElectricSA shares that
Members have to hold from 250 to 1,000.
Strategy
The Supervisory Board conducted an in-depth review of the
Groups strategy at a one-and-a-half-day meeting devoted entirely
to this topic, as it does each year.
In particular, as part of this strategy, the Board authorised acquisition
of Telvent, Leader &Harvest and Luminous.
The Board examined the new Company programme Connect
covering the period 2012-2014.
Agenda
The Supervisory Board was given the Management Boards
quarterly reports. At each meeting, the Board also tracked business
performance. It also examined the Companys nancial position.
The Supervisory Board was informed of the Groups 2011 targets.
On February16, 2011, the Supervisory Board reviewed the 2010
nancial statements based on the Audit Committees report
and the Statutory Auditors, who were present at the meeting. It
approved the Management Boards proposal to set the dividend
at EUR3.20 per share. At its meeting on July28, 2011, the Board
reviewed the nancial statements for the rst half of 2011 based on
the Audit Committees report and after seeking the opinion of the
StatutoryAuditors.
The Audit Committee reported to the Board on the work carried out
by the Groups internal auditors, the deployment of an internal audit
team and the results of the entities internal control self-evaluations.
The Audit Committee also reported on other steps taken with
regard to monitoring risk management, prevention of fraud, the
management process for R&D solutions and projects, nancial
communication such as investor days, reviewing acquisitions and
the independence of the Statutory Auditors.
It ensured consistent compliance with market disclosure
requirements, notably through an analysis of market consensus and
the issuance of press releases.
The Supervisory Board carried out the procedures required by law,
which include reviewing budgets and business plans.
3
SUPERVISORY BOARD COMMITTEES (MEMBERS,OPERATINGPROCEDURES ANDMEETINGS)
Shareholders Meeting 2011
The Supervisory Board reviewed the agenda and draft resolutions to
be tabled at the 2011 Annual Shareholders Meeting , and prepared
its report to shareholders. It approved the Chairmans report on the
operations of the Supervisory Board and internal control. Almost all
of the Members of the Board (13/14) were present at the Annual
Shareholders Meeting. The Meeting adopted all the resolutions
tabled.
>
(members,operatingprocedures
andmeetings)**
In its internal rules and procedure, the Supervisory Board has set out
the role, responsibilities and competences of its two committees:
the Audit Committee and the Remuneration, Appointments
& Human Resources Committee. Their Members are appointed
by the Supervisory Board, based on recommendations from the
Remuneration, Appointments & Human Resources Committee.
The Committees may commission studies from outside consultants
after having referred to the Chairman of the Supervisory Board.
They may invite anybody they wish to meetings, as necessary.
Audit Committee
Members
The Supervisory Boards internal rules and procedures stipulate that
the Audit Committee must have at least three members. Twothirds
of the Members must be independent and at least one must have
in-depth knowledge of accounting standards combined with
hands-on experience in applying current accounting standards and
producing nancial statements.
The Audit Commitee has three members: Grard de La Martinire,
Chairman, Nol Forgeard and Jrme Gallot. Theyare independent
and have the necessary nancial or accounting competence. In
addition, Nol Forgeard offers particular expertise on industrial
matters.
Operating procedures
Meetings are called by the Committee Chairman or at the request of
the Chairman of the Supervisory Board or the President and CEO.
At least ve meetings are held during the year.
It may invite whomever it chooses to its meetings. The Statutory
Auditors attend meetings at which nancial statements are reviewed
and, depending on the agenda, all or some of the other meetings.
It can ask the Management Board to provide it with any
documentation it feels necessary. It may also commission studies
from external consultants.
Responsibilities
A cornerstone of the Groups internal control system, the Audit
Committee is responsible for preparing the work of the Supervisory
Board, making recommendations to the Board and issuing opinions
on nancial, accounting and risk management issues. Accordinglyit:
prepares the Supervisory Boards review of the annual and interim
nancial statements, and notably in this respect:
ensures that accounting policies used to prepare the
consolidated and company nancial statements are appropriate
and applied consistently, that all signicant transactions are
properly reected in the consolidated nancial statements
and that the rules governing the scope of consolidation are
correctly applied,
analyses the scope of consolidation, risks, commitments given
including off-balance sheet commitments , as well as the
nancial position and the cash position;
reviews the draft Registration Document and takes on Board any
comments by the AMF in this regard, as well as the reports on the
interim nancial statements;
makes recommendations concerning the appointment or
re- appointment of the Statutory Auditors;
monitors the auditing of the annual and consolidated nancial
statements, notably by examining the scope of the external
audit schedule and the results of the reviews carried out by the
Statutory Auditors;
veries the auditors independence, in particular by reviewing
fees paid by the Group to their rm and network and by giving
3SUPERVISORY BOARD COMMITTEES (MEMBERS,OPERATINGPROCEDURES ANDMEETINGS)
prior approval for assignments that, strictly speaking, fall outside
the scope of the auditing of the nancial statements;
monitors the effectiveness of internal control and risk management
systems. In particular, the Committee:
reviews Internal Audit organisation and resources, as well as
its annual audit schedule. Receives a quarterly summary report
on the ndings of the audits carried out,
reviews risk mapping and its year on year evolution,
reviews risk mitigation on the basis of presentations by the
relevant managers or reports by Internal Audit,
reviews the rollout of the Companys internal audit system
and the management report on internal control, as well as
the draft report of the Chairman of the Supervisory Board on
procedures for internal audits and risk management,
reviews codes of conduct, notably concerning fair trading and
ethics and examines the measures taken to ensure they are
circulated and applied.
The Audit Committee examines proposed dividend payouts and
the amount of nancial authorisations submitted to the Annual
Shareholders Meeting.
The Audit Committee examines all nancial, accounting and risk
management issues referred to it by the Management Board, the
Supervisory Board or its Chairman.
The Audit Committee presents its ndings and recommendations
to the Board. The Chairman of the Audit Committee immediately
informs the Chairman of the Supervisory Board of any difculties
encountered.
Meetings in 2011
In 2011, the Audit Committee met six times. The average duration
of the meetings was three hours and the average attendance rate
was 94%.
Each meeting was attended by the Chief Financial Ofcer, members
of the Finance Department, head of Internal Audit and also the
external auditors. Operational management also reported to the
Committee. In line with the provisions of the AFEP/MEDEF Code,
representatives of the Finance Department and Internal Audit were
not present during the Statutory Auditors presentation at meetings
devoted to the nancial statements. The President and CEO did not
attend any of the Audit Committees meetings.
The Committee looked at the following topics:
1) Financial statements and nancial disclosures:
review of the annual and interim nancial statements and of the
reports of the Management Board on the nancial statements,
review of goodwill, reserving and pension obligations or
assimilated obligations,
review of investor relations documents concerning the annual
and interim nancial statements,
review of AMF recommendations concerning the 2011
Registration Document,
review of nancial communication such as Investor days;
2) Internal audit, internal control and risk management:
review of the 2012/Q1 2013 Internal Audit schedule drawn up
on the basis of risk mapping,
review of the main audits carried out by Internal Audit and an
update of the methodology for internal audit,
review of the current situation regarding organisation and
deployment of Internal Audits and review of the results of
self- evaluation,
review fraud prevention: methodology and executive summary,
review of action plans regarding the security of IT systems,
review of the possible impacts of the nancial crisis on
management of debt and the Groups conditions for obtaining
nance,
review of procedures for the approval of projects,
review of tax risks,
review of controls on customer risks,
review of management process for R&D,
review of business acquisition plans,
review of Group policy on managing Benets and the Pension
Fund,
review of risk mitigation by means of insurance,
review of the Chairmans draft report on procedures for internal
audit and risk management;
3) Statutory Auditors:
review of the 2010/2012 external audit schedule,
review of the fees paid to the Statutory Auditors and their
networks;
4) corporate governance:
update the 2010-2013 schedule covering the work of the
Audit Committee and more specically its risk review,
review of the nancial authorisations presented to the 2011
Annual Shareholders Meeting,
recommended dividend for 2011.
The Audit Committee reported to the Supervisory Board on its work
in 2011 at the February16, June21 and 22, July28, October19
and December15, 2011 meetings.
Remunerations, Appointments and Human Resources Committee
Members
The Supervisory Boards internal rules and procedures stipulate that
the Remuneration, Appointments & Human Resources Committee
must have at least three members. It is chaired by the Chairman of
the Supervisory Board.
The Committee members are: Messrs Henri Lachmann
Chairman, Claude Bbar, Lo Apotheker, Willy R.Kissling and
Serge Weinberg.
Operating procedures
Meetings are called by the Committee Chairman. The agenda is
drawn up by the Chairman, after consulting the President and CEO.
It meets at least three times a year.
The Committee may seek advice from any person it feels will help
it with its work.
3
MANAGEMENT BOARD MEMBERS
Responsibilities
The Committee makes recommendations to the Supervisory
Board concerning candidates for appointment to the Management
Board, the Supervisory Board and the Committees. It also makes
recommendations concerning the remuneration of members
of the Management Board and the Chairman of the Supervisory
Board, as well as concerning stock options and stock grants for
members of the Management Board, and all other aspects of their
remunerationpackage.
Based on the proposals made by the Management Board, the
Committee makes recommendations concerning the remuneration
of Executive Committee Members, the principles and methods for
determining executive compensation, as well as the creation 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:
the Human Resource strategy and major action plans, including
those relating to the talent policy and key skills (high potential,
experts, occupations,etc.);
the policy of giving employees a share in the Groups prots;
the overall remuneration policy for managers and the remuneration
packages of Executive Committee Members.
It recommends the amount for attendance fees, which is
established by the Annual Shareholders Meeting , and the basis for
their allocation.
The Committee recommends processes and procedures to
reassure shareholders and the market that the Supervisory Board
carries out its responsibilities objectively and independently.
It thus makes recommendations to the Supervisory Board regarding:
the terms of reference of Supervisory Board Committees;
the determination and review of independence criteria applicable
to Supervisory Board Members;
the assessments of the Supervisory Boards organisation and
procedures;
application by the Company of national or international corporate
governance practices.
The Remunerations, Appointments and Human Resources
Committee presents the Board with the results of its work and
actions it proposes. The minutes of these meetings are circulated
to members of the Supervisory Board.
Meetings in 2011
In 2011, the Supervisory Boards Remuneration, Appointments and
Human Resources Committee met four times. The attendance rate
by its Members was 95 %. It reported on its work to the Supervisory
Board at the February 16, June 21 and 22, October 19 and
December15, 2011 meetings.
The Remuneration, Appointments & Human Resources Committee
made recommendations to the Supervisory Board concerning:
the Membership of the Supervisory Board and of its committees
and the classication of Members on the basis of the
independence criteria;
the succession of the Chairman of the Supervisory Board;
the remuneration of members of the Management Board
(amount, structure of 2012 remuneration, 2011 targets, and level
of achievement of 2010 targets);
the changes to the top-up pension plan for senior executives;
the implementation of the annual performance share plans and
the allocation of stock grants to members of the Management
Board, in accordance with the AFEP/MEDEF guidelines of
October6, 2008;
the launch in 2012 of a new employee share issue;
changes to the articles of association regarding the upper age
limit (abolition of the statutory age limit) and regarding non-voting
members whose maximum number is now set at four;
the amount of attendance fees;
organisation of the three-year appraisal of the Board;
organisation and operation of the Board in the light of the results
of the three-year appraisal.
The Committee also reported to the Board on:
the review of the work of the Management Board and the
assessment of the performance of its Members;
the review of the performance of Members of the Executive
Committee;
the review of succession plans for members of the Management
Board and Members the Executive Committee;
the review of the remuneration of Executive Committee Members;
the review of the draft report from the Chairman on
corporategovernance.
>
5. Management Board members
The bylaws stipulate that the Management Board may have
between two and seven members.
The Management Board and its Chairman are appointed by the
Supervisory Board. Membership on the Management Board is for
three years and renewable.
The age limit for holding ofce as a member of the Management
Board is 65. When a member reaches the age of 65, the Supervisory
Board may extend his or her term several times provided that the
total extension does not exceed three years.
The Management Board consists of two members: Jean-Pascal
Tricoire, Chairman, and Emmanuel Babeau. He was appointed
by the Supervisory Board for a three year term that will expire on
May2, 2012. At its meeting of February21, 2012 the Supervisory
Board decided to renew his appointment at term for a further three
years expiring on May2, 2015.
3MANAGEMENT BOARD MEMBERS
Pre sident and CEO
MrJean-Pascal Tricoire
Age: 48
Business address:
Schneider Electric
99,885
(1)
Currently:
Chairman of the Management Board of Schneider ElectricSA,
Chairman and Chief Executive Ofcer of Schneider Electric
Industries SAS, Director of Schneider Electric USA, Inc. (USA).
(United States).
Director of Clipsal Asia Holding Limited, Digital Electronics
Corporation, Schneider Electric (Australia) Pty. Limited, Schneider
Electric New Zealand Holding Limited, PT Schneider Indonesia,
Schneider Electric Japan Ltd, Schneider Electric Japan Holding
Ltd, Schneider Electric Venezuela SA, Schneider Toshiba Inverter
SAS and PDL Holding Ltd.
After graduating from ESEO Angers and obtaining an MBA from
EM Lyon, Jean-Pascal Tricoire spent his early career with Alcatel,
Schlumberger and Saint-Gobain. He joined the Schneider Electric
Group (Merlin Gerin) in 1986. From 1988 to 1999 he occupied
occupational functions within Schneider Electric abroad, in Italy
(ve years), China (ve years) and South Africa (one year). Heheld
corporate positions from 1999 to 2001: Director in charge of
Strategic Global Accounts and the Schneider 2000+ strategic
plan. From January 2002 to the end of 2003, he was Executive
Vice-President of Schneider Electrics International Division.
InOctober2003, he was appointed Chief Operating Ofcer, before
becoming Chairman of the Schneider Electric SA Management
Board on May3, 2006.
Member of the Management Board
MrEmmanuel Babeau
Age: 44
Business address:
Schneider Electric
1,187
(1)
Currently:
Chairman of the Board of Directors of Schneider Electric Services
International, Director of Schneider Electric Industries S.A.S.,
Schneider Electric France and Schneider Electric USA.
Group Deputy Managing Director in charge of Finance at
PernodRicard.
Emmanuel Babeau graduated from ESCP and began his career
at Arthur Andersen in 1990. In 1993, he joined the Pernod
Ricard group as an internal auditor. He was appointed head of
Internal Audit, the Corporate Treasury centre and consolidation in
1996. Mr Babeau subsequently held several executive positions
at Pernod Ricard, notably outside France, before becoming
Vice- President, Development in 2001, CFO in June 2003 and
Group Deputy Managing Director in charge of Finance in 2006. He
joined Schneider Electric in the rst half of 2009.
3
DECLARATIONS CONCERNING THESITUATION OF THE MEMBERS OFTHE SUPERVISORY BOARD ANDMANAGEMENT BOARD
>
6. Organisational and operating
procedures oftheManagementBoard
The Management Board has the broadest powers in relation to third
parties to act in all circumstances in the Companys name within the
limits of the corporate purpose, except for those powers that are
specically vested in the Supervisory Board and the Shareholders
Meeting under French law, and except for those matters that require
the prior authorisation of the Supervisory Board.
Under French law and pending, when necessary, the Supervisory
Boards authorisation, the Management Board:
approves the annual and interim nancial statements and related
management reports;
calls Shareholders Meetings;
decides share issues and capital reductions, pursuant to an
authorisation given by shareholders in Extraordinary Meeting;
grants stock options and makes stock grants, pursuant to an
authorisation given by shareholders in Extraordinary Meeting;
decides to carry out bond issues.
The Management Board has adopted internal rules and procedures
that organise its activities and its relations with the Supervisory
Board. These internal rules and procedures are invalid against
claims from third parties.
The Management Board met 16times in 2011.
>
7. Declarations concerning
thesituation of the members
ofthe Supervisory Board
andManagement Board
The members of the Supervisory Board and Management Board
together hold 0.03% of the Companys capital and 0.03% of the
voting rights.
Emmanuel Babeau has a service contract with Schneider Electric
Industries SAS and is Chairman of the Board of Directors of
Schneider Electric Services International. He receives compensation
for these duties.
Claude Briquet has a service contract with Schneider Electric
Industries SAS.
Service contracts
None of the members of the Supervisory Board or Management Board has a service contract with the Company or any of its subsidiaries
providing for benets upon termination of employment.
Conviction or incrimination
To the best of the Companys knowledge, in the last ve years, none
of the members of the Supervisory Board or Management Board
has been:
the subject of any convictions in relation to fraudulent offences or
of any ofcial public incrimination and/or sanctions by statutory
regulatory authorities;
disqualied by a court from acting as a member of the
administrative, management or supervisory bodies of an issuer
or from acting in the management or conduct of the affairs of
an issuer;
involved, as a member of an administrative, management or
supervisory body or a partner, in a bankruptcy, receivership or
liquidation.
3MANAGEMENT INTERESTS ANDCOMPENSATION
Family ties
To the best of the Companys knowledge, none of the members of the Supervisory Board or Management Board are related to each other.
Conflicts of interest
To the best of the Companys knowledge, there are no arrangements
or understandings with major shareholders, customers, suppliers
or others pursuant to which a member of the Supervisory Board
or Management Board has been selected as a member of an
administrative, management or supervisory body or a member of
Senior Management.
To the best of the Companys knowledge, there are no conicts
of interest between any duties of the members of the Supervisory
Board or Management Board to the Company and their private
interests or other duties.
To the best of the Companys knowledge, the members of the
Supervisory Board and Management Board have no restrictions
on selling their Company shares aside from those stipulated in
stock option and stock grant plans (see page 249 and following)
for Members of the Management Board and a 250 share-holding
requirement for members of the Supervisory Board.
>
8. Management interests
andcompensation
Corporate officers and Executive Committee compensation policy**
The general principles underlying the Senior Management
compensation policy and the situation of each executive are
reviewed by the Remunerations and Appointments and Human
Resources Committee and presented to the Supervisory Board.
The policys aims are to:
retain and motivate the best talents;
reward individual and collective performance;
align overall compensation with the Groups results.
The variable remuneration, expressed in terms of a percentage
of the xed element, is linked to the attainment of objectives set
out at the beginning of the nancial year. There can be quite a
considerable variation in amounts depending on the degree of
attainment of objectives. This uctuation can vary from 0% to 160%
of the xed remuneration for Members of the Executive Committee
and 200% for the Chairman of the Management Board. The variable
remuneration is therefore of a distinctly random nature.
The variable remuneration of Executive Committee Members are
determined as follows:
30% is determined by Groups overall performance, as measured
in terms of operating margin, organic growth, cash generation
ratio and customer satisfaction rates;
70% is based on the performance of the executives unit
(economic targets), as measured on the basis of collective
targets (solutions, the Companys social responsibility, people
development etc.) and on the attainment of measurable personal
goal set for them.
The remuneration of the Management Board Members is set
by the Supervisory Board based on the recommendations of
the Remunerations and Appointments and Human Resources
Committee.
The variable remuneration of the Management Board Members are
determined as follows:
70% is determined by Groups overall performance, as measured
in terms of operating margin, organic growth, cash generation
ratio, customer satisfaction rates, corporate social responsibility
and people development);
30% on the attainment of measurable personal performance
targets set by the Supervisory Board.
Directors benet from an annual long-term participation scheme
that gives them a performance-based allocation of shares, linked in
part, for Executors or those who are residents in the USA, to stock
appreciation rights (SARs) that are akin to stock options. Stock
options are no longer been allocated since December2010.
As part of this long term participation scheme, 100% of the shares
and/or SARs allocated to Members of the Management Board
since January2009 and to Members of the Executive Committee
since December 2011 are subject to a performance criterion.
The level of performance attainment recorded is controlled by the
external auditors.
Details of these stock grants are set out on pages 249, 253 (History
of share plans).
3
MANAGEMENT INTERESTS ANDCOMPENSATION
Pension benefits**
(1) The maximum amount is dened as follows: 50% if the number of years of service is less than or equal to ve years, plus 1% per year from the
sixth year of service for Senior Manager status.
French members of the Management Board are covered by the
Groups top-hat dened-benet pension plan (article39) and, with the
exception of Jean-Pascal Tricoire, supplementary dened- contribution
pension plans (article 83) for employees and/or Group Managers.
The benets from dened-contribution plans are deducted from the
pension supplement from the dened-benet plan.
The dened-benet plan provides for a pension supplement of a
maximum amount equal to 60%
(1)
of the difference between the
average reference salary (i.e. the average of the base salary and of
the remuneration during three calendar years prior to retirement)
plus the total benet amounts granted under external plans
(compulsory and other plans, where applicable). The pension plus
the additional pensions from dened-contribution plans, may not
exceed 25% of the average reference salary. The dened-benet
plan includes, subject to conditions, a right to 60% for the surviving
spouse. Under the contingency section, an annuity for the spouse
is paid if the executive dies before the retirement age. In the event
of disability occurring in the course of business, the executive has a
right to a pension supplement as of his/her sixtieth birthday.
This dened-benet plan (see pages 260, 261 and 265 ) will be
modied as of July1, 2012 in particular to provide for a progressive
acquisition of the rights of these beneciaries according to how long
they have been in the Group and on the Executive Committee.
Non-French Members of the Board of Directors are covered by
pension plans in line with local practices in their respective countries.
Compensation of the Supervisory Board Members
Based on the recommendation of the Remunerations, Appointments
and Human Resources Committee, at its meeting on April22, 2010,
the Supervisory Board decided to set the annual compensation of
its Chairman at EUR500,000 not including the attendance fees paid
to Supervisory Board Members.
The Chairman of the Supervisory Board does not receive any stock
options or stock grants and will not be entitled to any payment on
leaving the Board.
In 2011, MrHenri Lachmann was paid:
in his capacity as Chairman of the Supervisory Board:
EUR500,000;
in attendance fees for 2010: EUR60,000;
under the Companys pension plan for senior executives:
EUR558,276.
Mr Lachmann has a Company car and may also use the
chauffeur- driven Company cars made available to Group Senior
Management. This benet in kind can be estimated for the entire
nancial year at EUR2,279 .
Members of the Supervisory Board
The Annual Shareholders Meeting set total attendance fees at
EUR1million. TheSupervisory Board has decided to allocate these
fees as follows:
Board members and non-voting Members resident in France
receive a basic fee of EUR15,000 and members resident outside
France receive double this amount;
Board members receive a fee of EUR5,000 for each meeting they
attend;
members who sit on the committees of the Board receive a xed
fee of EUR15,000, with the Audit Committee Chairman receiving
double this amount.
On this basis, attendance fees paid in respect of 2010 and 2011 were as follows:
Supervisory Board members
Amounts paid for the nancial
year 2011
(1)
Amounts paid for the nancial
year 2010
(1)
MrLACHMANN
Attendance fees EUR70,000 EUR60,000
Other EUR500,000 EUR500,000
MrAPOTHEKER
Other
MrsATKINS
(2 )

Attendance fees EUR61,000 -
Other
MrBBAR
(3 )

Other
MrBRIQUET
(4)

Attendance fees - -
Other
MrFORGEARD
Other
MrGALLOT
Other
MrKIM
(5 )

Attendance fees EUR61,000 -
Other
MrKISSLING
Other
MrsKOPP
Other
Mrde La MARTINIRE
Other
MrMAHINDRA
(6 )

Other
MrsSNQUIER
(7 )

Other
MrTHOMAN
Other
MrWEINBERG
Other
(1) Attendance fees for the year are paid at the beginning of the following year.
(2 ) This sum includes a non-recurring fee of EUR15,000 awarded by the Board for Ms ATKINS.
(3 ) Non-voting member.
(4) MrBriquet, who has a employment contract with Schneider Electric Industries SAS, waived payment of his attendance fees. Thesumof
the attendance fees will be donated by Schneider Electric SA to the Schneider Electric Foundation.
(5 ) This sum includes a non-recurring fee of EUR10,000 awarded by the Board to MrKIM.
(6 ) MrMahindra resigned on June27, 2011.
(7 ) Non-voting member before being appointed as a member of the Supervisory Board at the Annual Shareholders Meeting on April21,
2011.
3
Based on the recommendation of the Remunerations,
Appointments and Human Resources Committee, at its meetings
on December15, 2010, February16, 2011, December15, 2011
and February 21, 2012 the Supervisory Board set the annual
compensation for the members of the Management Board.
President and CEOJean-Pascal Tricoire
At its meetings of December15, 2010 and February16, 2011, the
Supervisory Board:
decided to set the annual 2011 salary ofJean-Pascal Tricoire at
EUR900,000 and his target variable remuneration at 100% of this
amount, with a maximum of 200%. 70% of MrTricoires target
variable remuneration is based on Group performance targets
and 30% is based on measurable personal targets;
authorised, as part of the long-term incentive plan for 2011, an
allocation of 50,000
(1)
performance shares under plan 10. The
allocation of these shares is entirely dependent on attaining
Group performance criteria, in compliance with the AFEP/
MEDEF recommendations. These shares are also subject to
lock-up arrangements (see page 250 ).
At its meeting of February16, 2011 the Supervisory Board set the
following targets for MrTricoires variable remuneration.
Group performance: organic revenue growth, growth in operating
prot, cash generation ratio and customer satisfaction rates;
Individual performance: complete the One programme develop
the new company programme, balance between Solutions/
Products...
Based on these elements, at its meeting of February 21, 2012,
the Supervisory Board set the variable remuneration for 2011 at
133.10 % of his base salary, or EUR1,197,900 .
Emmanuel Babeau
At its meetings of December15, 2010 and February16, 2011, the
Supervisory Board decided:
to set Mr Babeaus total xed annual salary for 2011 at
EUR500,000 and his target variable remuneration at 80% of this
amount, with a maximum of 160%. 70% of MrBabeaus target
variable remuneration is based on Group performance targets
and 30% is based on measurable personal targets;
authorised, as part of the long-term incentive plan for 2011, an
allocation of 20,000
(2 )
shares for performance under plan 10.
The allocation of these shares is entirely dependent on attaining
Group performance criteria, in compliance with the AFEP/MEDEF
recommendations. These options are also subject to lock-up
arrangements (see page250 ).
70% of the variable remuneration is based on the Groups overall
performance (rate of operating margin, organic growth, cash
generation ratio, customer satisfaction rate, companys social
responsibility and people development ) and 30% is based on
attaining personal objectives laid down by the Board.
Based on these elements, at its meeting of February 21, 2012,
the Supervisory Board set the variable remuneration for 2011 at
103.23 % of base salary, or EUR516,150
(1) The data below has been adjusted to reect two-for-one share split that took place on September2, 2011.
(2) See note 1 .
(3) The valuation of stock options and stock grants correspond to a measurement carried out in application of IFRS 2 and not remuneration
actually received during the nancial year. Income from these stock options and stock grants is subject to the attainment of
performancecriteria
Compensation and stock options for Management Board Members
Overview of Management Board compensation
Summary of remunerations, stock options and shares granted to each corporate officer director for the
financial year
Jean-Pascal TRICOIRE, President and CEO Financial year 2011 Financial year 2010
Remuneration for the nancial year 2,101,097 2,323,946
Valuation of options granted during the nancial year
(3 )
0 958,000
Value of stock grants granted during the nancial year 2,565,000 867,500
TOTAL 4,666,097 4,149,446
Emmanuel BABEAU, Member of the Management Board Financial year 2011 Financial year 2010
Remuneration for the nancial year 1,021,667 1,215,167
Valuation of options granted during the nancial year
(3 )
0 287,400
Value of stock grants granted during the nancial year 1,026,000 260,250
TOTAL 2,047,667 1,762,817
Summary table of the remuneration of each corporate officer
Jean-Pascal TRICOIRE Financial year 2011 Financial year 2010
President and CEO
Amounts due for the
nancial year
Amounts paid during
the nancial year
Amounts due for the
nancial year
Amounts paid during
the nancial year
Fixed remuneration 900,000 900,000 850,000 850,000
Variable remuneration 1,197,900 1,468,800 1,468,800 1,147,500
Exceptional remuneration 0 0 0 0
Attendance fees 0 0 0 0
Benets in kind (company car) 3,197 3,197 5,146 5,146
TOTAL 2,101,097 2,371,997 2,323,946 2,002,646
Emmanuel BABEAU Financial year 2011 Financial year 2010
Amounts due for the
nancial year
Amounts paid during
the nancial year
Amounts due for the
nancial year
Amounts paid during
the nancial year
Fixed remuneration 500,000 500,000 500,000 500,000
Variable remuneration 516,150 709,650 709,650 316,000
Exceptional remuneration 0 0 0 0
Attendance fees 0 0 0 0
Benets in kind (company car) 5,517 5,517 5,517 5,517
TOTAL 1,021,66 7 1,215,167 1,215,167 821,517
Subscription or purchase options attributed during the financial year to each corporate officer by the issuer
and by any company in the Group
The data below has been adjusted to reect two-for-one share split that took place on September2, 2011.
No options to subscribe new shares or purchase existing shares were granted during the 2011 nancial year.
For a complete understanding of the information reported in the summary of the compensation, stock options and stock grants received by
each corporate ofcer (see page 127 ), the allocations made for 2010 are given below.
Plan no.
(1)
Plan date
Unit
valuation
IFRS2
Number
of options
granted Exercise price Exercise period
Type of
options
(2)
Jean-Pascal TRICOIRE 33 Dec. 21, 2009 9. 58 100,000 37. 92 Dec. 21, 2013/ Dec. 20, 2019 P/S
Emmanuel BABEAU 33 Dec. 21, 2009 9. 58 30,000 37. 92 Dec. 21, 2013/ Dec. 20, 2019 P/S
(1) Plan 33 granted for the nancial year 2010.
(2) Their type, purchase options (P) or subscriptions options (S) will be determined before the start of the nancial year.
Plan 33
Performance criteria 100% of options 2010 and2011 operating margin and share of revenue generated in new economies
3
Stock grants allocated during the financial year to each corporate officer
The data below has been adjusted to reect two-for-one share split that took place on September2, 2011.
For a complete understanding of the information reported in the summary of the compensation, stock options and stock grants received
by each corporate ofcer (see page127 ), the allocations made in 2011 (for 2012) and the allocations made in2009 and 2010 for2010
and2011 are disclosed hereinafter.
Plan no.
(1)
Plan date
Number of
sharesgranted
Unit valuation
IFRS2 Acquisition date Date of availability
Jean-Pascal TRICOIRE 8 Dec. 21, 2009 25,000 34. 70 December 22, 2012 February23, 2013
10 Dec. 17, 2010 50,000 51. 30 March18, 2013 March19, 2015
13 Dec. 16, 2011 50,000 33. 89 March17, 2014 March18, 2016
Emmanuel BABEAU 8 Dec. 21, 2009 7,500 34. 70 December 22, 2012 February23, 2013
10 Dec. 17, 2010 20,000 51. 30 March18, 2013 March19, 2015
13 Dec. 16, 2011 22,000 33. 89 March17, 2014 March18, 2016
(1) Plan 8 for 2010, plan 10 for 2011, plan 13 for 2012.
Plan 8 Plan 10 Plan 13
Performance criteria 100% of the shares 2010 and
2011 operating margin and
share of revenue generated in
neweconomies
100% of the shares 2011 and
average revenue growth in 2011
and 2012 compared to changes in
world GDP over the same period
100% of the shares - 2012
and 2013 operating margin
and change in the Planet
&SocietyBarometer
Performance shares made available for each corporate officer
Name Plan no. Plan date
Number of shares made
available during the
nancial year Date of availability Conditions of acquisition
Jean-Pascal TRICOIRE 1 Dec. 21, 2006 10,588 Dec. 21, 2011 50% of shares - 2007 and 2008
operating margin and revenue
Benefits received by members of the Management Board
Management Board
corporate ofcers
Employment contract Top-hat pension plan
Payments or benets
may be due in the event
of termination or change
offunction
Payments in relation to a
non-compete agreement
Yes No Yes No Yes No Yes No
Jean-Pascal TRICOIRE

See
hereafter
President
and CEO
See above
Pension
benets
See hereafter
President
and CEO
See hereafter
President
and CEO
President and CEO
May3, 2009
May2, 2012
Emmanuel BABEAU
See hereafter
Member
of the
Management
Board
See above
Pension
benets
(1)

See hereafter
Member
of the
Management
Board
See hereafter
Member
of the
Management
Board
Member of the
Management Board
May3, 2009
May2, 2012
(1) The contribution paid in 2011 to the dened contribution retirement plan was EUR22,901.
President and CEO - Jean-Pascal Tricoire
In accordance with AFEP/MEDEF guidelines, Mr Jean-Pascal
Tricoire resigned from his service contract when he was
reappointed Chairman of the Management Board on May3, 2009.
The Supervisory Board has dened the benets granted to him as
Chairman of the Management Board. Under the terms of his new
status, approved by the Annual Shareholders Meeting of April23,
2009, MrJean-Pascal Tricoire:
1) will continue to benet from:
the Schneider Electric SA and Schneider Electric Industries
SAS employee benet plan, which offers health, disability and
death coverage,
the supplementary health, disability and death coverage
available to the Groups senior French executives,
the Top-hat Pension Plan for the Groups Senior Management
described in the Supervisory Board Chairmans report in
accordance with article L.225-68 of the French Commercial
Code (see page125 );
2) MrTricoire will be due compensation in the event of termination,
capped at two years of his target remuneration (xed salary
and target bonus, maximum described below) taking into
account compensation provided for in the non-compete
agreement described below. The amount due will be subject to
performance criteria.
Compensation will be due in the event that:
(i) Mr Tricoire resigns, is dismissed or is not reappointed as
a member or Chairman of the Management Board in the
12months following a material change in Schneider Electrics
shareholder structure that could change the membership of the
Supervisory Board,
(ii) Mr Tricoire resigns, is dismissed or is not reappointed as a
member or Chairman of the Management Board following a
reorientation of the strategy pursued and promoted by him
until that time, whether or not in connection with a change in
Schneider Electrics shareholder structure as described above,
(iii) MrTricoire is asked to resign, is dismissed or is not reappointed
as a member or Chairman of the Management Board when
the mathematical average of the rate of achievement of
performance objectives used to calculate his variable bonus
was 50% or higher in the four full nancial years preceding his
departure (or, if he has been a member and Chairman of the
Management Board for less than four years, in the number of
full nancial years since his appointment).
Payment of compensation will depend on the mathematical
average of the rate of achievement of performance objectives
used to determine the variable portion of Mr Tricoires
remuneration for the three full years preceding the date of the
Board meeting at which the decision is made.
If the mathematical average is:
less than 50% of the target: no compensation will be paid,
equal to 50% of the target: he will receive 75% of the maximum
amount,
equal to 100% of target: he will receive 100% of the maximum
amount,
between 50% and 100%, he will receive between 75% and
100% of the maximum amount calculated on a straight-line
basis depending on the rate of attainment.
To date, the achievement rate of Group performance objectives
for the previous three nancial years is, on average, 138.6 %.
Theseobjectives were based on the Groups overall performance
(operating margin, organic growth, cash generation ratio and
customer satisfaction rate);
3) is bound by his non-compete agreement should he leave the
Company, unless a mutually agreeable arrangement is found;
the agreement is for a period of one year and is remunerated
(60% of target remuneration: xed and variable);
4) will retain all of the stock options, stock grants and performance
stock grants allocated or to be allocated to him should he
leave the Company. The performance condition is dened as
follows; the average rate of attainment of the Group targets
that determine Jean-Pascal Tricoires variable remuneration
calculated for the last three nancial years at the time of his
departure, which gure should be at least 50% of target.
Travel and business expenses for Jean-Pascal Tricoire are assumed
by the Group, as well as the costs of his new professional and
personal organization and any related extra expenses. He may use
the chauffeur-driven Company cars made available to Group Senior
Management and also has the use of a Company car. This benet
in kind is estimated at EUR3,197.
The Supervisory Board on February21, 2012 decided to renew the
appointment to the Management Board that terminates on May2,
2012 for a further period of three years. On this occasion, it adapted
the benets granted to Jean-Pascal Tricoire as part of his functions
as a corporate ofcer. The Anual Shareholders Meeting of May3,
2012 is called upon to approve these (see pages 261-262, 265
and 266 ).
Emmanuel Babeau
Under his service contract with Schneider Electric Industries SAS,
Emmanuel Babeau is covered by the top-hat pension plan for senior
executives in France (see above) and is also entitled to a termination
benet should the employer terminate the contract or if, following
a signicant change in equity ownership, he decides to terminate.
This termination benet, including the benet provided for in the
industry collective bargaining agreement (Convention Nationale des
Ingnieurs et Cadres de la Mtallurgie), is capped at two years of
his target annual compensation (salary plus target variable bonus).
Should MrBabeau leave the Company for any reason, the Company
may evoke the non-compete agreement in his service contract
and the provisions of the industry collective bargaining agreement
(Convention Nationale des Ingnieurs et Cadres de la Mtallurgie),
which call for monthly payment of an amount equivalent to 50%
to 60% of the average monthly compensation for the last twelve
months of presence (salary plus paid bonus). This payment is due
for one year, renewable once.
Mr Babeaus travel and entertainment expenses are reimbursed
by the Company. He may use the chauffeur-driven company cars
made available to Group Senior Management and also has the use
of a Company car. This benet in kind is estimated at EUR5,517.
3
Senior Management
The Senior Management team consists of the Management Board,
assisted by the Executive Committee. The 14 member Executive
Committee is chaired by the Chairman of the Management Board.
In addition to the members of the Management Board, it comprises:
the Executive Vice-Presidents of the Global Functions:
Information Systems, Marketing, Strategy & Innovation, Global
Human Resources and Industrial Operations;
the Executive Vice-Presidents of the businesses: Power Global &
EMEAS*, Power North America & Buildings, Power Asia Pacic,
Industry, Energy, IT and Custom Sensors & Technologies.
Senior Management compensation in 2011
In 2011, gross compensation, including benets in kind, paid by
group companies to members of Senior Management other than
the Management Board members amounted to EUR12,069,456,
including EUR4,984,231 in variable remuneration for the
2010 nancial year. Group objectives for the nancial year in
questionwere:
organic growth;
operating margin;
cash ow;
customer satisfaction and dissatisfaction.
Performance shares and SARs
The data below has been adjusted to reect two-for-one share
split that took place on September2, 2011. As part of the annual
long-term participation schemes:
Allocation of December2010 for the 2011 nancial year
On December 17, 2010, members of Senior Management other
than Management Board members were allocated (for the 2011
nancial year) a total of:
Performance shares (French residents): 29,000shares under
plan10;
Stock grants (non-residents): 88,000shares under plan11;
SARs (US citizens or residents): 190,000SARs.
All of the options and stock grants are subject partially (50%) to
performance criteria.
Allocation of December2011 for 2012
On December 16, 2011, members of Senior Management other
than Management Board members were allocated (for the 2012
nancial year) a total of:
12,500 stock grants under plan13 for residents of France;
120,250 stock grants under plan 14 for non-residents of
France;
210,000 SARs for US residents or citizens.
100% of these allocations are subject to performance criteria.
As of December31, 2011, Members of Senior Management other
than Management Board members thus held:
676,854 stock options including 124,400 subject to the
attainment of Group performance criteria;
744,440 SARs including 431,360 that are conditional;
338,682 performance shares including 235,716 that are
conditional.
* EMEAS =Europe, Middle-East, Africa and South America.
Compensation paid to members of Senior Management other than Management
Board members
3REGULATED AGREEMENTS
Transactions in Schneider ElectricSA shares by senior management and
corporate officers in 2011
Transactions disclosed in application of article62118-2 of the French Monetary andFinancialCode
Date Name Transaction type Unit price
(1)
Total transaction
amount
June28, 2011 Henri Lachmann Exercise of stock options 27.77 1,666,500
July12, 2011 Henri Lachmann Subscription via FCPE 47.69 75,000
July12, 2011 Claude Briquet Subscription via FCPE 47.69 2,400
July12, 2011 Claude Briquet Subscription via FCPE 47.69 4,786
July12, 2011 Emmanuel Babeau Subscription via FCPE 47.69 6,465
July12, 2011 Jean-Pascal Tricoire Subscription via FCPE 47.69 3,000
July12, 2011 Jean-Pascal Tricoire Subscription via FCPE 47.69 210,395
August29, 2011 Dominique S n quier Share purchase 45.24 22,870
August29, 2011 Betsy Atkins Share purchase $ 65.62 $ 32,808
September1, 2011 Jeong Kim Share purchase 46.77 23,415
November15, 2011
Natural person connected to
Serge Weinberg Share purchase 39.90 9,974
November15,2011
Natural person connected to
Serge Weinberg Share purchase 39.90 9,974
December12, 2011 Willy Kissling Share transfer 40.38 1,615
(1) Data adjusted to reect two-for-one share split that took place on September2, 2011.
>
9. Regulated Agreements
At its meeting of January6, 2006, the Board of Directors authorised
the signature of a shareholders agreement between AXA and
Schneider ElectricSA. The agreement calls for the continuation of
stable cross-shareholdings between the two groups. In particular,
Schneider Electric SA undertakes to hold no less than 8.8 million
AXA shares, or 0.4% of AXAs capital, while AXA undertakes
to hold no less than 2.6 million Schneider Electric SA shares or
1% of Schneider Electric SAs capital. Each group also holds a
call option that may be exercised in the event of hostile takeover.
This agreement, which was entered into for a period of one year
and renewable tacitly each year for one year was approved by the
Anual Shareholders Meeting of April26, 2007. On December22,
2011 AXA and Schneider Electric informed the AMF that they had
decided not to renew this agreement. It will therefore cease in its
effects on the date dictated by the contract, i.e. May15, 2012. This
cancellation has been made public by the AMF on December27,
2011.
As Jean-Pascal Tricoire agreed to resign from his employment
contract with the Schneider Electric Group (where he has 22years
seniority) when his term as Chairman of the Board expired on
May 2, 2009, the Supervisory Board dened his new status with
his agreement. His new status took effect on May3, 2009 and was
3
INTERNAL CONTROL AND RISK MANAGEMENT
approved by the Shareholders Meeting. Under this agreement, set
out on pages130 Jean-Pascal Tricoire:
benets from the Top-hat Pension Plan for Schneider Electric
senior executives, the Schneider Electric SA employee benet
plan and the supplementary health, disability and death coverage
available to the Groups senior executives;
is bound by a non-compete agreement;
is entitled to compensation in the event of termination,
capped at 24 months of his target remuneration taking into
account compensation provided for in the non-compete
agreement described above and provided that he resigns, is
dismissed or is not re-appointed following a material change in
Schneider Electrics shareholder structure or a re-orientation of
the strategy pursued and promoted by him until that time;
retains, subject to performance criteria, all unvested stock
options, stock grants and performance stock grants should he
leave the Company.
At its meetings of April23 and December17, 2009, the Supervisory
Board agreed that Emmanuel Babeau would continue to benet
from the top-hat pension plan for senior executives provided under
his employment contract with Schneider Electric Industries SAS.
The Shareholders Meeting of April22, 2010 approved this benet.
On February21, 2012 the Supervisory Board gave the Management
Board authorisation to change the Top-hat Pension Plan for the
Schneider Groups directors to comply with the AFEP/MEDEF
recommendations that provide for progressive acquisition of rights
according to length of service. It has also given authorisation for
Management Board members to benet from the modied plan
(see pages 260, 261 and 265 ).
The Supervisory Board decided to renew the Management Board
on expiry of its appointment on May 2, 2012 for a further period
of three years. As a result, and pursuant to the TEPA act, the
Supervisory Board decided to renew the sections of the articles
of association relating to Mr Jean-Pascal Tricoire. These remain
unchanged under the following conditions:
the benet of supplementary sickness, incapacity, disability
and death coverage available to the Schneider Electrics senior
executives is subject to performance criteria;
compensation in the event of termination is not capped at twice
the target remuneration (xed and variable target), but at twice
the mathematical average of the effective annual remuneration
(xed and variable) for the last three years (see pages 261-262,
265-266 ).
>
10. Internal control and risk
management**
10.1 Definition and objectives of internal control and risk management
Definition and objectives
The Groups internal control procedures are designed to ensure:
compliance with laws and regulations;
application of instructions and guidelines issued by Senior
Management;
the proper functioning of the Companys internal processes,
notably as concerns asset preservation;
the reliability of nancial reporting;
more generally, internal control helps the Group manage its
businesses, run efcient operations and use its resources efciently.
Internal control aims to prevent and manage risks related to the
Groups business. These include accounting and nancial risks,
the risk of fraud, as well as operating, nancial and compliance
risks. However, no system of internal control is capable of providing
absolute assurance that these risks will be managed completely.
Scope of this report
The system is designed to cover the Group, dened as the
Schneider Electric SA parent company and the subsidiaries over
which it exercises exclusive control.
Jointly controlled entities are subject to all of the controls described
below, with the exception of self-assessments of the implementation
of Key Internal Controls (see Operating Units below).
Internal control reference documents
The Groups internal control system complies with the legal
obligations applicable to companies listed on the Paris stock
exchange. It is consistent with the reference framework laid down
by Frances Autorit des Marchs Financiers (AMF).
The internal control process is a work in progress; procedures are
adapted to reect changes in the AMF recommendations and the
business and regulatory environment, as well as in the Groups
organisation and operations.
Information used to prepare this report
This report was prepared using contributions from the
Groups Internal Audit and Internal Control Departments, the
Management Control and Accounting Departments, as well as
the various participants in internal control. It was reviewed by the
AuditCommittee.
3INTERNAL CONTROL AND RISK MANAGEMENT
In 2011, the Groups organisational chart rests on Senior
Management, of Global Functions, of Operating Divisions;
dened in terms of businesses, geographical location, logistical or
industrialresponsibility.
The Groups corporate governance bodies supervise the
development of the internal control and risk management systems.
The Audit Committee has particular responsibility for monitoring the
systems effectiveness (see Committees of the Supervisory Board,
Chapter3 4).
Each manager is responsible for monitoring internal control in
his or her area, at the different levels of the organisation, as are
all key internal control participants, in accordance with the tasks
describedbelow.
Senior Management
Senior Management is responsible for designing and leading the
overall internal control system, with support from all key participants
and notably the Internal Audit and Groups Internal Control
Departments.
It also monitors the Groups performance, during quarterly reviews
with the 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 Managements quarterly review.
Internal Audit Department
The Internal Audit Department reports to Senior Management. It
had an average staff of 13 people in 2011. The internal auditors are
responsible for ensuring that, at the level of each unit:
risks are appropriately identied and managed;
signicant nancial, management and operating information is
accurate, reliable and timely;
employees actions are in compliance with the Groups policies,
standards, procedures and the applicable laws and regulations;
instructions issued by Senior Management are effectively applied;
resources are acquired economically, used efciently and
protected adequately.
Annual internal audit plans are drawn up based on risk and control
concerns identied by Senior Management, taking into account the
results of past audits, the work performed by the external auditors
and the results of internal control self-assessments returned by the
units. When necessary, the audit plan is adjusted during the year to
include special requests from Senior Management. These missions,
which are not included in the initial audit plan, help the Group detect
potential cases of fraud.
The internal audit process is described in Section5 below.
After each internal audit, a report is issued setting out the auditors
ndings and recommendations. Measures are taken to monitor
implementation of recommendations and specic audits are
conducted if necessary.
The audit reports and the implementation of its recommendations
are distributed to Senior Management and to the Audit Committee.
The external auditors also have access to the reports.
Internal Control Department
The Internal Control Department, which reports to the Internal Audit
Department, is responsible particularly for:
dening and updating the list of Key Internal Controls in close
cooperation with the Global Functions and in line with the
recommendation of the AMF reference framework;
maintaining and leading a network:
a network of internal business controllers in the Operating
Divisions, with responsibility for dening Key Internal Controls
and ensuring their use in the operating units within their
scope notably through training sessions and annual self-
assessments,
internal regional controllers to carry out training in the entities
and on-site control of the accuracy of self-evaluations and the
efciency of the remediation plans implemented as a result
of the previous years self-evaluations, by the entities coming
within their geographic scope. After each internal audit, a
report is issued setting out ndings and recommendations for
the attention of the persons in charge of the entity audited,
the internal controllers in the Operating and Regional Divisions,
in their respective assignments, act in close cooperation using
standardised methods;
analysing and critically reviewing the results of these
self- assessments to identify areas that require an action plan at
the Group, Operating Division or Global Function level;
leading the Internal Control Committee, comprising internal
controllers from the Operating and Regional Divisions, as well
as internal control correspondents from the Global Functions.
The Committee members work to improve internal control and
adapt procedures in light of the results of self-assessments and
changes in the business environment or organisation.
Finance and Control Legal Affairs
Department
The Finance and Control Legal Affairs Department is actively
involved in organising control and ensuring compliance
withprocedures.
Within the department, the Management Control and Accounting
unit plays a key role in the internal control system by:
drafting and updating instructions designed to ensure that
statutory and management accounting practices are consistent
throughout the Group and compliant with applicable regulations;
organising period-end closing procedures;
10.2 Internal control organisation and management: key participants
3
analysing performance and tracking the achievement of targets
assigned to the operating units.
The Management Control and Accounting unit is responsible for:
the proper application of Group accounting principles
andpolicies;
the integrity of the consolidation system database;
the quality of accounting processes and data;
training for nance staff in the form of specic seminars;
drafting, updating and distributing the necessary documents for
producing quality information.
The unit drafts and updates:
a glossary of accounting terms used in the reporting package,
including a denition of each term;
the chart of accounts for reporting;
a Group statutory and management accounting standards
manual, which includes details of debit/credit pairings in the
consolidation system;
a Group reporting procedures manual and a system users guide;
a manual describing the procedures to be followed to integrate
newly acquired businesses in the Group reporting process;
an intercompany reconciliation procedure manual;
account closing schedules and instructions.
The Management Control and Accounting unit monitors the reliability
of data from the subsidiaries and conducts monthly reviews of the
various units primary operations and performance.
The Finance and Control Legal Affairs Department oversees
tax and legal affairs and insurance, to provide comprehensive
management of these risks.
The Treasury Department centralises nearly all of the Treasury and
Financing management of the Group, and centralises or audits the
Treasury of the Group. In addition it distributes rules for nancial risk
management and payments security.
The Corporate Treasury Center also reviews balance-sheet changes
and nancial risks facing the Groups companies on an annual basis
during formal nancial review meetings.
Procedures for managing nancial risk are described in
RiskFactors .
Operating Divisions and operating units
The Operating Division management teams play a critical role in
effective internal control.
All Group units report to one of the Operating Divisions, which
are headed by an Executive Vice-President, supported by a
nancialcontroller.
The Executive Vice-Presidents of the Operating Divisions sit on
the Executive Committee, which is chaired by the Chairman of the
Management Board. The nancial controllers report to the Internal
Audit and Internal Control Departments.
Within each division, the management team organises control of
operations, ensures that appropriate strategies are deployed to
achieve objectives, and tracks unit performance.
A Management Committee led by the corporate Management
Control and Accounting unit reviews the transactions of the
Divisions and businesses on a monthly basis.
The Operating Divisions have teams of internal controllers who
organise training on Key Internal Controls for the units within
their scope and analyse the quality of the internal control
self- assessments (including ratings and action plans) returned by
the units.
They detect internal control issues that require action plans in some
or all of the units under their responsibility. They also identify units
that need specic assistance and either implement or oversee the
implementation of the appropriate support.
They carry out monitoring of the remediation plans drawn up at the
time of the self-evaluations and control assignments on site.
Lastly, the internal control teams offer suggestions for enhancing
and updating the Key Internal Controls.
Global Functions (Human Resources,
Purchasing, Manufacturing, Supply Chain,
Information Systems,etc.)
Schneider Electric centralises decision-making and risk management
at the corporate level through specic bodies such as the Group
Acquisitions Committee (see Risk Factors), by combining certain
functions within the Finance and Control Legal Affairs Department
(see above) and through dedicated Global Functions.
An Innovation and Technology Council 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.
The Purchasing Department is responsible for establishing guidelines
concerning purchasing organisation and procedures; relationships
between buyers and vendors; and procedures governing product
quality, service levels, and compliance with environmental standards
and Group codes of conduct.
The Global Functions also issue, adapt and distribute policies,
target procedures and instructions to units and individuals assigned
to handle specic duties.
The Global Functions have internal control correspondents who
work with the Internal Control Department to establish and update
the Key Internal Controls deployed across the Group.
They analyse the results of self-assessments concerning the Key
Internal Controls that fall within their Functions scope, identify
internal control issues that require action plans and either implement
or oversee the implementation of these plans.
The main internal control benchmarks are available to all employees,
notably on the Group intranet. The Global Functions send updates
of these Registration Documents to the appropriate units and
individuals through their networks of correspondents.
In some cases, dedicated e-mails are sent out or messages are
posted on the intranet portal to inform users about publications
orupdates.
Whenever possible, the distribution network leverages the
managerial/functional organisation to distribute standards
andguidelines.
Principles of Responsibility
The Principles of Responsibility, initially published in 2002, were
updated in 2009.
Translated into all the languages used within the Group, given
to all new employees and available on the Groups intranet, they
are designed to guide employees in their decisions and actions.
They dene the Groups essential values and set out individual
responsibility in respect of these values. They also set out the
interrogation and alert procedures.
A Committee on Ethics and Responsibility has been set up, and
correspondents appointed to steer action in this area, to make
updates and to validate changes. The Committee also answers
employee questions that are not addressed in the companion
guide to the Principles of Responsibility, or that employees own
managers are unable to answer. (see Sustainable development
framework, Chapter2 Section2). In 2011, Internal Audit carried out
an assignment aimed at assessing the deployment of the Principals
of Responsibility as well as the adequacy of the information and
training resources with managers and employees.
Insider code
This code sets out the rules to be followed by management and
employees to prevent insider trading. It imposes an obligation of
condentiality on all employees who have access to condential
information and sets permanent restrictions on purchases and
sales of Schneider Electric SA shares by persons who have
access to price-sensitive information in the course of their work
(see Organisational and operating procedures of the Supervisory
Board, Chapter3 2).
International internal auditing standards
The Schneider Electric internal auditors are committed to complying
with the international standards published by the Institute of Internal
Auditors (IIA) and other bodies.
International Financial Reporting Standards
(IFRS)
The consolidated nancial statements for all scal years
commencing on and after January1, 2005 have been prepared in
accordance with International Financial Reporting Standards (IFRS),
in compliance with European Union regulation 1606/2002.
The Group applies IFRS as adopted by the European Union as of
December31, 2011.
The Groups accounting principles reect the underlying
assumptions and qualitative characteristics identied in the IFRS
accounting framework. accrual accounting, business continuity,
true and fair view, ruleofsubstance over form, neutrality, prudence,
completeness, comparability, relevance andintelligibility.
The application of Group accounting principles and methods is
mandatory for all Group entities, for management reporting and
statutory consolidation.
IFRS guidelines are available on the intranet, along with training
modules covering the more technical aspects.
Commitment limits and authorisations
Commitment limits have been set for executives from Group level
down to the individual units.
Thus, product purchase and sale contracts may only be signed
by, or with the authorisation of, operations correspondents who
benet from ad-hoc authorisations which, in turn, are granted by
their managers. Within this organisational framework, Business
executives have the power to authorise the signature of product or
service, purchase or sale contracts covering up to EUR10million.
Moreover, they enable their collaborators to authorise smaller
amounts which they consider appropriate for the signature of such
contracts.
Moreover, all transactions that may affect the Groups fundamental
interests, due to their size or nature, must be authorised in advance
by the Management Board or, in some cases, by the Supervisory
Board. This rule applies in particular to all transactions affecting the
scope of consolidation, purchases and sales of strategic assets,
trademarks and patents, and off-balance sheet commitments.
Statutory and management
reportingprinciples
An integrated reporting and consolidation system applicable to all
Group companies and their management units has been in place
since January 1, 2006. Statutory and management reporting
principles and support tools are available on the Group intranet.
The subsidiaries record their transactions in accordance with Group
standards. Data are then adjusted, where necessary, to produce
the local statutory and tax accounts.
The reporting system includes consistency controls, a comparison
of the opening and closing balance sheets and items required to
analyse management results.
Key Internal Controls
A list of Key Internal Controls was drawn up in 2008 and is expanded
annually. Its 114items cover:
the control environment (Principles of Responsibility, Delegation
of Powers, Separation of Functions, Business Continuity Plans
and Retention of Records);
10.3 Distributing information: benchmarks and guidelines
3
10.4 Risk identification and management
operating processes (purchases, sales, inventories,etc.);
accounting and nancial cycles;
Human Resources, IT, Legal and Tax cycles.
The Key Internal Controls are available to all units on the Group
intranet, along with appendices with more detailed information,
links to full policy descriptions on the Functions intranets, an
explanation of the risks covered by each Key Internal Control and a
self-assessment guide.
For each cycle, the Key Internal Controls cover compliance, reliability,
risk prevention and management and process performance. The
operating units ll out self-assessment questionnaires concerning
the Key Internal Controls.
General risks at the Group level
The Internal Audit Department interviews the Groups 55 top
managers to update the list of general risks at the Group level
each year. The risks identied through these interviews are ranked
by impact and probability of occurrence. The threat/opportunity
aspect of each risk is also taken into account.
Risk factors related to the Companys business, as well as
procedures for managing and reducing those risks, are described in
Risk Factors. These procedures are an integral part of the internal
control system.
The risk matrix and the analysis of changes from one year to the
next contribute to the development of an internal audit plan for the
following year.
Half of the major and general risks identied at end-2010 were
addressed in audits carried in 2011 to assess action plans for
managing and reducing risks.
Operating risks at the unit level
Operating risks are managed rst and foremost by the units in
liaison with the Operating Divisions, based on Group guidelines
(notably the Key Internal Controls). Each subsidiary is responsible
for implementing procedures providing an adequate level of internal
control.
The Operating Divisions implement cross-functional action plans for
operating risks identied 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 Groups insurance programs cover the remaining portion of
transferable risks.
Risk Solutions
The Risk Solutions Management Department , denes and
implements principles and tools designed to manage these risks;
In 2011, a network of Solution Risk managers was set up to assess
the risks inherent in all major projects. The rules for entering into
agreements and adopting solutions in projects were updated.
Risk management by the Risk and Insurance
Department
The Risk and Insurance Department contributes to internal audits
by dening and deploying a Group-wide insurance strategy, as
dened in Risk Factors and Insurance Strategy. The insurance
strategy includes the identication and assessment of the main
insurable risks and denes and recommends measures to prevent
these risks and protect assets.
Risk management by the Safety Department
The Groups Security Department denes corporate governance
with regard to loss prevention in the area wilful acts against property
and people.
In this respect and in close cooperation with the Risk and Insurance
Department, it is directly involved in assessing the nature of such risk
as well as dening adequate prevention and protection measures.
The Security Department publishes internally a table of Country
Risks for use in security procedures that are mandatory for people
travelling, expatriates and local employees. On request it provides
support to local teams for any security issues (site audit, expatriates
or local employee security, security whilst on assignments,etc.).
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 Department is integrated in the Fraud Committee
alongside the Internal Audit Department and the Legal Department
and gets involved in combatting internal fraud (managing and
carrying out internal investigations).
Management of information system risks
An IT Security unit within the Information, Process and Organisation
Department denes and implements specic security policies for
information systems.
This department has specic skills in auditing the security of
IT systems. After each site audit, a report is issued setting out
ndings and recommendations for the attention of the persons in
charge of the entity audited.
10.5 Control procedures
This section describes specic measures taken in 2011 to improve
the Groups control system.
Operating units
For internal control to be effective, everyone involved must
understand and continuously implement the Groups general
guidelines and the Key Internal Controls.
Training in Key Internal Controls continued in 2011 for those
involved for the rst time in the annual self-evaluation process: newly
promoted managers and entities recently integrated. Operational
units, trained by their line management undertook self-evaluation
of compliance with the Key Internal Controls governing their scope
of operations.
The self-assessments conducted during the 2011 campaign
covered 90% of consolidated revenue and made it possible to
dene improvement plans in the operating units, when necessary.
The ultimate goal is that these evaluations should cover at least
90% of consolidated revenue each year.
The self-assessments are conducted in the units by each process
manager. Practices corresponding to the Key Internal Controls are
described and performance is rated on a scale of1 (non- compliance)
to4 (very good).
For all responses below3 (compliance) on the scale, an action plan
is dened and implemented to achieve compliance. These action
plans are listed in the self-assessment report.
The units nancial manager conducts a critical review of the
self- assessments by process, and certies the quality of the overall
results. The self-evaluation is then also certied by the person in
charge of the unit.
Operating Divisions and business
To control the reliability of the nancial statements and the
alignment of performance with set targets, the Group relies on
Senior Managements quarterly review process and procedures
carried out by the Management Control and Accounting Unit to
control the quality of accounting data provided by consolidated
units (see Internal Control organisation and Management Senior
Management and Internal control procedures governing the
production and processing of accounting and nancial information).
In 2011, the Operating Divisions continued to provide training for
the operating units on internal control issues and examined and
challenged the self-assessments of internal audits of these units.
After analysing the results, improvement plans were developed
either for certain units or for certain Key Internal Controls at the
Division level.
The regional internal controllers carried out audits on site as to the
reliability of self-assessments of Internal Control and the efciency of
the remediation plans put in place as a result of the previous years
self-assessments.
Global Functions
In 2011, the Global Functions continued to set guidelines, issue
instructions and provide support.
During the year:
the Companys processes were mapped and each one assigned
a process guarantor sponsored by a member of the Executive
Committee. The key processes for carrying out strategy of
Schneider Electric are the subject of particular attention so as to
ensure coherence with operational results, IT and organisational
resources employed including coherence with internal
controldemands;
for the two-year period 2010 and 2011, the IT Security Department
carried out 13 audits in units, which gave rise to reports giving
conclusions and recommendations for the managers of the units
audited. The implementation of recommendations by the units
is subject to monitoring. In 2011 particular attention was paid to
R&D centres;
in addition to on-site audits, the security function in 2011
acquired a new skill known as penetration testing. This skill
set allows the vulnerability of websites to be identied and for
remedial measures taken to limit the effects on any future attacks.
Five sites were audited;
the Management of Solution Risks Department assists project
leaders in risk assessment, the conclusion of contracts for
major projects and organisation of validation meetings before
submitting proposals;
in 2011, the Security Department headed up the organisation
of a new Group-level crisis room. In addition, by identifying at a
global level certain internal competences specic to the area of
investigation, it initiated the creation of a new organisation directly
reporting to the Fraud Committee that will signicantly increase
investigation capabilities as regards combatting internal fraud;
the Corporate Treasury Department continued to roll out its
central payment system developed in 2009 and which today
covers 60 subsidiaries. Roll out will continue in the years to
come. A system of monitoring bank guarantees so as to track
commitments is also under development.
Internal Control Department
Internal Control continued to deploy the Key Internal Controls
training and requests for self-assessments throughout the
Operating Divisions, with the scope extended to cover new units:
50% of the deciencies identied during the 2010 campaign were
deemed settled in 2011.
New deciencies were identied owing to additional Key Internal
Controls, which gave rise to further action plans.
Internal Control self-assessments were received and analysed,
which identied areas needing work in 2012 as part of the process
of continuous improvement.
In addition to the analysis and action plans initiated by the Entities
and Operating Divisions, similar work is being carried out in the
Global Functions. On the basis of the results obtained in their eld,
the various functions dene and implement improvement actions
as needed.
3
The list of Key Internal Controls continues to grow. In 2011, the
Global Functional Department dened Key Internal Controls covering
the Bid Creation and Administration process; these controls were
self-evaluated by the major Research and Development units.
A software package for the management of Internal Audit and
Internal Control self-assessment questionnaires and follow-up
action plans will be introduced to replace the in-house application
used to date.
A regional internal control organisation was introduced in 2011 that
consists of 28regional in-house controllers in three regions, who:
perform the duties dened under Section2.3 for the units in their
regional scope, covering all Operational Departments;
establish standardised procedures (e.g. for internal control
assignments such as control cycles, documentation,
scope denition, work programs etc.), in line with Internal
Auditprocedures.
Internal Audit Department
In addition to ne-tuning the general risk matrix and performing
audits to ensure these risks are managed properly, the Internal
AuditDepartment:
monitors and reviews the way that Key Internal Controls
areapplied;
critically reviews the audited units internal control self-assessment
and related action plans.
The Departments audit assignments go beyond the Key Internal
Controls, and include an in-depth review of processes and their
effectiveness, focusing on compliance and/or performance,
depending on the size of the audited unit and the identied risks
and challenges.
The internal auditors also review newly acquired units to assess
their level of integration and ensure that Group rules and guidelines
are properly applied.
A summary overview of the departments audits makes it possible
to identify any emerging or recurring risks that require new
risk management tools and methodologies or adjustments to
existingresources.
In 2011, Senior Management ordered unscheduled audits on
emerging risks that led to the revision of certain internal procedures.
In 2011, the internal auditors performed 22audits, including:
full audits of medium-sized units;
audits of a number of risks or operating processes;
post-acquisition audits for newly acquired companies;
analyses of control self-assessments by the units;
follow-up audits to ensure recommendations are applied;
assistance assignments .
Committee on Ethics and Responsibility
The Committee on Ethics and Responsibility steers action in relation
to the Principles of Responsibility, updates them and validates
changes. It also answers employee questions that are not addressed
in the companion guide to the Principles of Responsibility, or that
employees own managers are unable to answer.
(see Sustainable development framework, Chapter2 Section2.)
Fraud Committee
In 2010, the Fraud Committee formalised the policy against fraud
and the process of reporting and treating fraud and suspected fraud,
including changes in procedures or practices to avoid recurrence.
Declared incidents are monitored by the Fraud Committee,
which meets on a monthly basis. The Fraud Committee decide
on investigations that are managed either by the local units or
centrally by the Fraud Committee depending on the nature and
the seriousness of the incident. A report is written and updated
monthly for this purpose. The Fraud Committee presents an annual
summary report to the Audit Committee.
2011: stronger internal control system
In 2011, further efforts were made to improve the identication and
control of general risks, to step up periodic reviews of results and
performance, and to enhance auditing practices. The year was
marked, for the internal control system, by the items set out above,
in particular:
the Fraud Committees procedures were dened and implemented
for investigation and analysis of the identied incidents of fraud;
regional internal control units were set up in an internal control
system covering three levels: management, regional internal
control and internal audit;
a dedicated software package for the management of
self- assessment questionnaires and follow-up action plans will
be ushered in to replace the in-house application used to date;
internal control self-assessment questionnaires were sent out
to cover 90% of the Groups consolidated revenue (training
managers in internal control practices, dening and implementing
remedial action plans if needed) including units from the
acquisition of Areva Distribution;
administrative measures were pursued regarding segregation of
duties in the informationsystems.
10.6 Internal control procedures governing the production and processing
ofconsolidated and individual company accounting and financial
information
In addition to:
its regulatory tasks;
its responsibility for overseeing the close of accounts across the
Group;
its audits of the Groups results with respect to set targets (see
Internal Control Organisation and Management: Finance and
Control Legal Affairs).
The Management Control and Accounting unit is tasked with
overseeing:
the quality of reporting packages submitted monthly by
thesubsidiaries;
the results of programmed procedures;
the integrity of the consolidation system database.
The Management Control and Accounting unit ensures that:
given that the Group consolidated nancial statements are
nalized a few weeks after the annual and half-year balance
sheet date, subsidiaries perform a hard close at May 31,
and November 30, of each year so that most consolidation
adjustments for the period can be calculated in advance;
the scope of consolidation is determined and, in cooperation
with the Legal Affairs Department, the Groups interest and
the type of control (exclusive control, joint control, signicant
inuence) of each subsidiary, determined on the basis of the
consolidationmethod;
instructions are issued for the closing process, including reporting
deadlines, required data and any necessary adjustments;
the Groups consolidated nancial statements are analysed
in detail, to understand and check the main contributions by
subsidiaries, as well as the substance of transactions reected
in the accounts;
accounting classications are veried, in particular the preparation
and approval of the statement of changes in equity and the cash
ow statement being the key control points.
Internal control procedures conrm the existence and value of
assets and liabilities. To this end:
each subsidiary is responsible for implementing procedures
providing an adequate level of internal control;
internal control procedures generally consist of dening levels
of responsibility for authorising and checking transactions, and
segregating tasks to help ensure that all transactions are justied.
In addition, integrated statutory and management reporting
systems have been developed to guarantee the completeness of
transaction data recorded in the accounts;
all of the subsidiaries apply International Financial Reporting
Standards (IFRS) with regard to recognition principles,
measurement and accounting methods, impairment and
verication;
the Management Control and Accounting unit performs checks
and analyses.
10.7 Report of the Statutory Auditors on the internal control procedure
Statutory Auditors Report, prepared in
accordance with article L. 225-235 of French
Commercial Code (Code de commerce), on
the report prepared by the Chairman of the
Supervisory Board of the Company Schneider
Electric S.A.
This is a free translation into English of a report issued in French language and is
provided solely for the convenience of English-speaking users. This report should be
read in conjunction with and construed in accordance with French law and professional
auditing standards applicable in France.
In our capacity as statutory auditors of Schneider Electric S.A. and
in accordance with article L. 225 235 of French Commercial Code
(Code de Commerce), we hereby report on the report prepared by
the Chairman of your Company in accordance with article L. 225-
68 of French Commercial Code (Code de Commerce) for the year
ended December 31, 2011.
It is the chairman s responsibility to prepare and submit for the
supervisory board s approval a report on the internal control and
risk management procedures implemented by the company and
to provide other information required by article L. 225-68 of French
commercial code (Code de commerce) relating to matters such as
corporate governance.
Our role is to:
report on the information contained in the chairman s report in
respect of the internal control and risk management procedures
relating to the preparation and processing of accounting and
nancial information;
conrm that the report also includes other information required
by article L. 225-68 of French commercial code (Code de
commerce). It should be noted that our role is not to verify the
fairness of this other information.
We conducted our work in accordance with French professional
standards.
Information on the internal control and risk
management procedures relating to the preparation
and processing of accounting and financial
information
These standards require that we perform the necessary procedures
to assess the fairness of the information provided in the chairman s
report in respect of the internal control and risk management
procedures relating to the preparation and processing of the
accounting and nancial information. These procedures consist
mainly in:
obtaining an understanding of the internal control and risk
management procedures relating to the preparation and
processing of the accounting and nancial information on which
the information presented in the Chairman s report is based, and
existing documentation;
obtaining an understanding of the work involved in the preparation
of this information and of the existing documentation;
determining if any material weaknesses in the internal control
procedures relating to the preparation and processing of
accounting and nancial information that we would have noted in
3
APPLICATION OF THE AFEP/MEDEF CORPORATEGOVERNANCEGUIDELINES
Schneider Electric applies the AFEP/MEDEF corporate governance guidelines with the following exceptions:
Recommendation Schneider Electric practice
Deadline for Audit Committee review of the nancial
statements
The Audit Committee should review the nancial statements at
least two days before they are reviewed by the Board.
At Schneider Electric, the Audit Committee which reviews the Financial
Statements meets after the Management Board meeting that approves
the Financial Statements and the day before the Board Directors
meeting.
However, the Committee members receive a meeting le with the draft
Financial Statements four to ve days before the meeting.
Compensation and benets paid to corporate ofcers
Fixed salary should be revised only after a relatively long period,
such as three years.
The Management Board members xed salary is revised each
year. When Jean-Pascal Tricoire became President and CEO, his
compensation was not (and still is not) aligned with that of CEOs
of comparable companies. The Board decided to reduce the gap
gradually through annual salary revisions after reviewing MrTricoires
performance.
Top-hat pension plan
The increase in potential rights should correspond to a limited
percentage of the beneciarys compensation.
Under the Top-hat Pension Plan for the Groups Senior Management
(see page 125 ), most rights are acquired at the outset. However, the
plan complies with the recommendations intention, given that:
the rights are capped at 25% of average compensation;
current members still have many years of service to perform before
they can benet from the plan.
The Supervisory Board authorised the Management Board to change
this plan to conform with the AFEP/MEDEF recommendations
(seepages 260-261 and 265 )
>
corporategovernanceguidelines**
the course of our work are properly disclosed in the Chairman s
report.
On the basis of our work, we have nothing to report on the information
in respect of the company s internal control and risk management
procedures relating to the preparation and processing of accounting
and nancial information contained in the report prepared by the
chairman of the Supervisory Board in accordance with article L.
225-68 of French Commercial Code (Code de Commerce).
Other information
We conrm that the report prepared by the chairman of the
supervisory board also contains other information required by article
L. 225-68 of French Commercial Code (Code de Commerce).
Courbevoie and Paris-La Dfense, March 21, 2012
Mazars Ernst & Young et Autres
David CHAUDAT Yvon SALAN
Business review
4
1. Trends in Schneider Electrics core markets 144
2. Review of the consolidated financial statements 146
3. Review of the parent company financial statements 150
4. Review of subsidiaries 150
5. Outlook 150
4TRENDS IN SCHNEIDER ELECTRICS CORE MARKETS
BUSINESS REVIEW
>
1. Trends in Schneider Electrics core
markets
Industries and machine manufacturers
The industry and machine manufacturers markets continued to
grow signicantly in 2011, in the continuity of the sharp rebound
experienced since the economic cycle trough in May2009.
The dynamics during the year changed though, from a buoyant
start of year, somewhat amplied by the Fukushima earthquake
(customers anticipating orders for fear of electronic components
shortages), towards a weaker second semester, when the OEMs
(original equipment manufacturers) sector in North East Asia (China,
Korea, Taiwan, Japan) was affected by the tight credit policy led by
China government to curb ination. However, China infrastructure
and mining sectors continued to grow.
Investments in Western Europe were as well impacted in the second
part of the year, due to the uncertainty generated by the sovereign
crisis, while the US markets enjoyed a relative resilience, notably in
the last fourmonths of the year.
Beyond these regions, very positive evolution of emerging markets,
such as South and Central Americas, Russia, South East Asia,
driven by water and mining investments.
The political events in the Mediterranean countries affected the
investments and projects, notably those linked to Water (Egypt,
Lybia). In the rest of the world, the standardization of the water
treatment plants and a more comprehensive management of
the whole water cycle in large urban environments sustained the
investments.
The mining , minerals and metals sectors grew substantially this year,
with signicant investments in countries such as Brazil, Canada,
Russia, and, in the later part of the year, also in Australia, driven
both by the increased consumption of raw materials and a concern
to control and reduce energy consumption.
Non residential buildings
In the US, non-residential construction declined on an annual basis,
but experienced signs of sequential improvement starting during the
second semester. Front runners were healthcare, private education,
retail and manufacturing buildings. European countries suffered
from the sovereign debt crisis and austerity measures. In new
e conomies, the non-residential construction market experienced a
dynamic activity generated by the powerful process of urbanisation.
Schneider Electric solutions and services are designed to monitor
and control system for buildings efciency. Our solutions integrate
access control, video surveillance, HVAC, and lighting control on
an open standard systems to maximize buildings efciency by
improving the energy consumption and safety of a building.
In 2011, Schneider Electric has reinforced its Building Energy
and Occupancy Management offer with the integration of Vizelia
and D5X. Schneider Electric has also acquired Summit Energy, a
Strategic Energy Sourcing leader and Viconics, offering an exciting
suite of wireless thermostats.
Residential
In the US, residential construction market sector was negatively
impacted notably by low consumer condence and tight lending
conditions. However, starts of multi-family housing has improved
throughout the year, from a very weak level.
In the Eurozone, after a harsh fall of output between 2008 and
2010, the residential market has slightly improved in 2011. Note
that this trend is characterized by large disparities across countries.
On one hand, Iberian countries are still undergoing strong decline
in investment and facing high levels of outstanding inventories.
Meanwhile, countries such as France are in an intermediate pace
essentially thanks to the support of new housing construction. On
the other hand, Germany and Scandinavian countries have been
far less affected by the debt crisis with a housing market which is
even growing. In Asia Pacic, residential construction was relatively
fast growing. In Japan and New Zealand, the end of the year
was marked by large ows of reconstruction due to earthquakes
destructions. Finally, in new economies, positive demographic and
urbanisation trends drove the housing constructions.
BUSINESS REVIEW
4
TRENDS IN SCHNEIDER ELECTRICS CORE MARKETS
Utilities and Infrastructures
Electric power
While emerging economies keep on investing heavily in their grid
infrastructures to meet their growth objectives with strong rising
demand, mature economies have adjusted their investment plans
to deal with aging grid assets and the need to connect more
renewable sources, still maitaining or improving their performance
in terms of reliability of power supply. As a result, the global e lectric
p ower market keeps enjoying a steady 4 to 6% growth rate.
Themomentum towards smart grids is materialized by a growing
activity in demonstration pilot projects to test new technologies
and associated business models, as well as sustained investment
in distribution automation and advanced distribution management
systems which offer attractive return on investments for grid
operators. Market accelerators such as the increased activity in
grid-connected renewables, the roll-out of electric vehicles and the
implementation of demand response programs will strenghten the
need for new investments world-wide.
Oil and gas
In 2011 Oil & Gas markets have conrmed the recovery engaged
in 2010. With more that USD500 billion invested in Exploration &
Production, investment surged by 15% in 2010, and exceeded the
level reached pre-crisis in 2008.
Uncertainties caused by the geopolitical tensions in Middle East and
North African (Arabic spring) together combined with the sovereign
debt turmoil have not altered the condence of Oil Companies in
2011 who pursued their investment. Those short term uncertainties
do not hamper the long term vision where more than 75% of energy
demand is supplied by fossil energy.
The Middle East continued to invest to maintain its production
capacities (Saudi Arabia) while Iraq elds are promised to large
developments to tap its large O&G reserves. In North America
investment is sustained by the shale gas and tar sand development.
Schneider Electric has been present in all key O&G geographies
and large Oil & Gas companies, as well as major EPC companies,
have been Schneiders customer for years. Schneider supplies
energy management and control solutions that allow them to
improve Energy Management and brings them innovative solution
to tap reserves in harsh environment. By complementing its O&G
expertise and IT capabilities, the acquisition of Telvent in June2011
will foster the development of new integrated business solution that
will deliver more efciency to the Oil & Gas infrastructures.
Data centres and Networks
The IT global markets grew at a moderate pace in 2011, impacted
in the second half by a slowdown in Europe with an expected
spillover into a more cloudy 2012. After strong growth in 2010, x86
server growth was more modest in 2011, primarily supported by
Asia and Latin America.
At the same time, the drivers for long term growth remained
unchanged with the migration to the Cloud and larger Data Centres
where fast growing collocation companies will battle it out with
T elcos and IT Outsourcers. Strong ITB customers in the Collocation
segment, with access to capital markets or with the backing of large
Private Equity groups, as well as Telcos will continue to operate their
Data Centres at very high utilization and will expand their number of
sites on a global basis to meet demand.
Our Data Centre Solutions and Services offerings experienced a
strong growth conrming ITBs leadership in those key segments,
reinforced further with the integration of Uniair, Lee Technologies
and Viridity. In the fast growing Data Centre Infrastructure
Management software segment, Schneider Electric was named a
Market Leader by IDC. In the Emerging markets, Schneider Electric
strengthened its position in India with the acquisitions of Luminous
and APW President.
BUSINESS REVIEW
4REVIEW OF THE CONSOLIDATED FINANCIAL STATEMENTS
>
2. Review of the consolidated
financial statements
Review of business and consolidated statement of income
Changes in the scope of consolidation
Acquisitions
On January 7 , 2011, Schneider Electric announced the
signature of an agreement to acquire a majority of the shares in
APW President Systems Ltd. which designs and manufactures
standard and customized racks and enclosure systems in India,
serving in particular information technology and telecom end-users.
APW President Systems Ltd. has approximately 380 employees
and generated sales of INR1.08 billion (approx. EUR17 million)
for the twelve months ending September 30, 2010. With
APWPresidentSystems Ltd., Schneider Electric is well positioned
to capture opportunities in the fast growing Indian IT infrastructure
market as well as in international markets, particularly in Asia Pacic
and Middle East. The Group will also be able to tap the talent pool
and increase its solutions execution capabilities from server rooms
to extra large data centres.
an agreement to acquire Summit Energy Services Inc., an American
company leader in outsourced energy procurement and sustainability
services to industrial, commercial and institutional enterprises. It is
employing more than 350 individuals and serves client facilities in
more than 90countries. Summit Energy is a fast-growing business,
expected to generate sales of approximately USD65million for the
current year. The acquisition of Summit Energy allows Schneider
Electric to broaden its energy management services and solution
portfolio, offering customers the ability to manage and optimize their
energy consumption from the supply side through the demand side,
while also growing Schneider Electrics energy and environmental
online reporting capabilities.
an agreement to acquire from Smartlink Network Systems Ltd. the
assets of the Indian company DIGILINK business, one of the leading
structured cabling systems providers in India. Headquartered in
Mumbai, the DIGILINK business has 92employees and generated
sales of about INR1.55billion (approx. EUR25million) in calendar
year 2010. With this acquisition the Group will be able to gain
access to DIGILINKs well-established distribution network in
the retail sector which complements its presence in enterprise
segments and will generate signicant cross-selling opportunities
for its Power and IT products.
On April 4, 2011, Schneider Electric announced the signature of
an agreement to acquire in the United States Lee Technologies, a
leading service provider for the data centres of the North American
market. Headquartered in Fairfax, Virginia, Lee Technologies has
over 300employees and generated sales of about USD140million
(approx. EUR104 million) in 2010. Lee Technologies brings to
Schneider Electric capabilities ranging from consulting, site
assessment, design, equipment specication and selection to
integration, commissioning, facility operations stafng, maintenance
and proactive 24x7 remote monitoring. This full repertoire of
services will reinforce Schneider Electrics IT business skills in data
centre management and its ability to provide data centres, one
of the worlds fastest growing end-users of energy, with the best
standards in energy conservation and reliability.
On May30, 2011, Schneider Electric announced the signature of
an agreement to acquire 74% of Luminous Power Technologies
Pvt. Ltd., a market leader in India that provides inverters, UPS and
power storage systems to help homes and small and medium sized
businesses face frequent power cuts. Luminous is a leading player
in the around EUR800 million Indian inverter and power storage
market that is growing at more than 20% a year. Luminous has
a strong presence in India and employs approx. 3,000 people
in eight different industrial sites in India and one in China. It has
generated revenues of INR11.0 billion (approx. EUR170 million)
for the scal year ending March 2011.With Luminous, Schneider
Electric will become the leader in the Indian inverters and secured
power market and gain access to a complementary retail network.
On June 9, 2011, Schneider Electric announced the signature
of an agreement to acquire Leader Harvest Power Technologies
Holdings Limited (Leader & Harvest), one of the leading
players in the fast-growing medium voltage drives market in
China. Headquartered in Beijing, Leader & Harvest develops,
manufactures and commercialises medium voltage (MV) variable
speed drives. The company employs over 750people and has an
extensive inhouse nationwide sales and service support network
across 30provinces. With an annual growth rate in excess of 20%
in the past few years, the company is expected to generate sales
of approximately USD150 million (approx. EUR100 million) for
2011. Leader & Harvests range represents an excellent addition
to Schneider Electrics industrial automation range of products
and solutions. Medium voltage drives are a key element of energy
efcient solutions to our key target segments of mining, minerals &
metals and water & waste water.
On July21, 2011, Schneider Electric announced it has entered into
a partnership with NVC Lighting Holding Limited (NVC Lighting) to
speed up its market penetration in smaller cities in China via NVC
Lightings well established diffused channels. The partnership will
give Schneider Electric an exclusive access to diffused channels
and bring forth strong revenue synergies. NVC Lighting has a solid
presence in China with broad diffused channels and extensive retail
management experience. It has the access to over 3,000 retail
outlets, half of which are located in smaller cities and townships.
BUSINESS REVIEW
4
REVIEW OF THE CONSOLIDATED FINANCIAL STATEMENTS
On July 22, 2011, Schneider Electric announced the signature of
an agreement to acquire the bresilian group Steck Da Amazonia
Industria Electrica Ltda. and afliates (Steck Group), a key player
(950 employees, about BRL180 million (approx. EUR80 million)
in 2011) in the fast growing nal low voltage segment serving the
residential and commercial buildings and industries in Brazil. The
transaction will enable Schneider Electric to broaden its product
portfolio and market access and hence provide an opportunity to
expand its presence in new economies, particularly in Latin America.
On June 1, 2011, Schneider Electric announced the signing of a
denitive agreement related to the acquisition, through a public
offer of Telvent GIT SA (Telvent), a leading solution provider
specializing in high value-added IT software and solutions for real-
time management of mission critical infrastructure in the elds of
electricity, oil & gas, water and transportation. By acquiring Telvent,
Schneider Electric integrates a high value-added software platform
that presents a good t with its own range in eld device control
and operation management software for the smart grid and
efcient infrastructures. The Group also doubles its overall software
development competencies and enhances its IT integration and
software service capability, including weather services. Schneider
Electric made a cash tender offer for all of Telvents shares at a
price of USD40 per share, which represents a premium of 36% to
Telvents average share price over the last three months. This offer
has successfully been completed on August30, 2011.
Acquisitions and disposals that took place in2010
and that had an impact on the 2011 financial
statements
The following entities were acquired during nancial year 2010 and
their consolidation on a full-year basis for nancial year 2011 had a
scope effect compared to nancial year 2010:
Cimac, consolidated as of January21, 2010,
Zicom Electronic Security Systems Limited, consolidated as of
March5, 2010,
SCADA group, consolidated as of April13, 2010,
Distribution business of Areva T&D, consolidated as of
June7,2010,
Uniair, consolidated as of November23, 2010,
Vizelia and D5X, consolidated as of December9, 2010.
Changes in foreign exchange rates
Changes in foreign exchange rates relative to the euro had a
material impact over the year. This negative effect amounts to
EUR229 million on consolidated revenue and EUR32 million on
EBITA
(1)
(effect of conversions only).
Revenue
On December 31, 2011, the consolidated revenue of Schneider
Electric totaled EUR22,387million, an increase of 14.3% at current
scope and exchange rates compared to December31, 2010.
This growth breaks down into 8.3% organic, a contribution of
acquisitions net of disposals of 7.3% and a negative exchange rate
effect of 1.3%.
(1) EBITA (Earnings Before Interests, Taxes and Amortisation of purchase accounting intangibles) corresponds to operating prot before amortisa-
tion and impairment of purchase accounting intangible assets from acquisitions, and before goodwill impairment.
Changes in revenue by operating segment
Power revenue (37% of Group revenue), totaled EUR8,297million
on December31, 2011, an increase of 7.0% on an actual basis and
of 7.6% at constant scope and exchange rates. This performance
is driven primarily by product business which continued to be
supported by global manufacturing and infrastructure markets,
launching of new offers and better coverage especially in new
economies. Solutions business shows about at revenue compared
to 2010 despites renewable energy revenue was negative, due to
the change by some countries in their incentive policies.
Infrastructure revenue (22% of Group revenue), totaled
EUR4,897million on December31, 2011, an increase of 12.8% on
an actual basis (2010 comparative data including EUR1,878million
of Areva D revenues from January1) and of 7.5% at constant scope
and exchange rates. Despite the product business globally at, the
growth in Infrastructure sales is driven by improving demand in
solutions business from electro-intensive customers (oil and gas,
mining and metals), infrastructure projects in the new economies.
Industry revenue (20% of Group revenue), totaled EUR4,404million
on December31, 2011, an increase of 10.5% on an actual basis
and of 10.4% at constant scope and exchange rates. The product
business recorded solid growth, beneting from the globally
well- oriented industrial demand, especially from machine builders
segment in new economies and some export-oriented mature
markets, as well as new product launches. The performance of
Industry is also boosted by the solutions business, particularly in
the areas of OEM solutions, drives systems for mining, oil and gas,
and cement sectors, energy efciency solutions as well as industrial
services.
IT revenue (14% of Group revenue), totaled EUR3,237million on
December31, 2011, an increase of 17.9% on an actual basis and
of 10.3% at constant scope and exchange rates. The solutions
business grew double-digit, reecting the strong demand for
complete data center projects and services. Products beneted
from the good momentum particularly in the region Rest of the
World.
Buildings revenue (7% of Group revenue), totaled EUR1,552million
on December31, 2011, an increase of 10.7% on an actual basis and
4.8% at constant scope and exchange rates. Solution business is
supported by strong advanced and installed base services and also
security systems and energy efciency projects in mature countries
and in new economies. The low growth in product business is
hampered by challenging new constructions market conditions in
mature markets.
BUSINESS REVIEW
4REVIEW OF THE CONSOLIDATED FINANCIAL STATEMENTS
Adjusted EBITA by operating segment
Adjusted EBITA is dened as EBITA before Restructuring costs and
before Other operating income and expense (of which Acquisition,
integration and separation costs).
Power achieved an Adjusted EBITA margin of 21%, this rate is
down 0.6point compared to December31, 2010.
Infrastructure achieved an Adjusted EBITA margin of 10.4%,
stable compared to December31, 2010 (10.3%).
Industry achieved an Adjusted EBITA margin of 17.7%, down
1point compared to December31, 2010.
IT achieved an Adjusted EBITA margin of 16.2%, down 0.4point
compared to December31, 2010.
Buildings achieved an Adjusted EBITA margin of 9.3%, down
1.3point compared to December31, 2010.
Net financial income/loss
Net nancial income/loss is a net loss of EUR415 million at
December31, 2011, compared to EUR347million at December31,
2010.
Net nance costs totaled EUR301 million, up EUR19 million
compared to 2010. This increase is mainly due to a higher net
nancial debt.
Exchange gains and losses, including the impact of the Groups
foreign currency hedges, was a negative effect of EUR40million in
2011, compared to an income of EUR25million in 2010.
The nancial component of pension plan and other post-employment
benet costs represents a net expense of EUR45million compared
to EUR49million in 2010.
Finally, other net nancial expense, in the amount of EUR37million,
can mainly be explained by bank fees linked to issuance or
settlement of credit lines.
Tax
The effective tax rate at December31, 2011 was 23.1% compared
to 24.0% at December31, 2010.
Share of profit/(losses) of associates
The share of prot/losses of associates represents income of
EUR28million at December31, 2011. It principally comprises the
share in net income of Electroshield-Samara in Russia (EUR14million)
and the Fuji Electric joint venture in Japan (EUR12million).
Non-controlling interests
Minority interests in net income for nancial year 2011 totaled
EUR84million, compared to EUR76million in 2010. This represents
the share in net income attributable mainly to the minority interests
of certain Chinese companies.
Profit for the period
Net income for the period attributable to the equity holders of the
parent company amounted to EUR1,820million, a EUR100million
increase over 2010 (EUR1,720million).
Earnings per share
Earnings per share (taking into account the division of the nominal
value of the shares by two, effective on September 2, 2011)
amounted to EUR3.39 in 2011 compared with EUR3.30 in 2010.
Review of balance sheet and cash flow statement items
Total consolidated balance sheet amounted to EUR35,886million
as at December31, 2011, up 15.6% compared with December31,
2010. Non-current assets amounted to EUR22,540million or 63%
of total assets.
Goodwill
Goodwill amounted to EUR12,773million or 36% of total assets, up
by EUR2,560million compared with December31, 2010.
The Groups acquisitions mainly comprising Areva Distribution
in 2011 accounted for EUR2,356million of the increase. Changes
in foreign exchange rates accounted for EUR142 million of the
increase.
The Groups impairment tests did not lead to the recognition of any
additional impairment losses during the period.
Property, plant and equipment and intangible
assets
Property, plant and equipment and intangible assets amounted to
EUR7,277million or 20% of total assets, up 10% compared with
December31, 2010.
Intangible assets
Trademarks amounted to EUR2,529million at December31, 2011,
an increase of EUR103million compared with December31, 2010
mainly as a result of acquired entities Telvent, Steck and Luminous
and foreign exchange differences.
Gross capitalised development costs totaled EUR1,292 million
(EUR809million net), including the capitalisation of costs for current
projects in an amount of EUR217million.
Other intangible assets, net, consisting primarily of customer
relationships recognised on acquisition, software and patents,
increased by EUR252 million over the year primarily due to the
EUR436million of intangible assets recognised in the balance sheet
following the acquisition of Telvent, Leader & Harvest and Summit
Energy.
Property, plant and equipment
Net property, plant and equipment came to EUR2,573million, an
increase of EUR236million compared with December31, 2010.
BUSINESS REVIEW
4
REVIEW OF THE CONSOLIDATED FINANCIAL STATEMENTS
Investments in associates
Investments in associates amounted to EUR489 million, a steep
rise compared to the balance of EUR42million as at December31,
2010.
Non-current financial assets
Non-current nancial assets totaled EUR557 million. They mainly
comprised listed equity investments (mainly AXA and NVC Lighting
shares) for EUR191million and potential assets linked to acquisitions.
Cash and net debt
Net cash provided by operating activities before changes in
operating assets and liabilities came to EUR2,579 million versus
EUR2,534 million in 2010, and represented 11.5% of revenue
compared with 12.9% the year before.
Change in working capital requirement consumed EUR327million
in cash, reecting the increase in inventories generated by the
corresponding rise in revenue.
In all, net cash provided by operating activities totalled
EUR2,252million in 2011 compared with EUR2,262million in 2010.
Net capital expenditure, which includes capitalised development
projects, represented an outlay of EUR746 million, or 3.3% of
revenue, compared with EUR528million, or 2.7% in 2010.
The years acquisitions represented a cash outow of
EUR2,873million in 2011 compared to 1,754million in 2010, net
of cash acquired. Numerous acquisitions took place in 2011, such
as Telvent, Leader & Harvest, Luminous, Summit Energy, Steck
and Digilink; the main acquisition of 2010 was Areva Distribution for
EUR1,208million.
There was no sale of treasury stock in 2011 when the sale of treasury
stock in 2010 generated a net cash inow of EUR249 million.
Dividends paid totaled EUR925million, of which EUR69million to
minority interests. This is an increase compared to EUR241million
paid in 2010 (out of which EUR46million to minority interests), as a
result of an increase in the dividend per share that was entirely paid
in cash (when part of it was paid in shares in 2010).
Net debt at December31, 2011 totaled EUR5,266million or 32.7%
of equity attributable to equity holders of the parent. This represents
an increase of EUR2,530 million from the year before with the
purpose of nancing 2011 acquisitions.
The Group ended the year with cash and cash equivalents
of EUR2,771 million, of which EUR1,515 million in cash,
EUR634 million in marketable securities and EUR622 million in
short-term negotiable instruments such as commercial paper,
money market mutual funds and equivalents.
Total current and non-current nancial liabilities amounted to
EUR8,037million. Of this, bonds represented EUR5,540million and
non-current bank loans EUR1,464million. Five new bond issues, in
an aggregate amount of EUR1,692million, were launched in 2011,
while EUR500million worth of bonds were redeemed at maturity.
Equity
As at December31, 2011 equity attributable to equity holders of the
parent company came to EUR15,898million, or 44% of the balance
sheet total. The EUR1,113million increase over the period was the
net result of the following:
prot for the year of EUR1,820million,
payment of the 2010 dividend in an amount of EUR856million,
actuarial losses on dened benet plans of EUR275million,
foreign exchange differences in an amount of EUR159million,
share issues for EUR178million,
the exercise of stock options for EUR51million,
disposal of own shares for EUR38million.
Minority interests amounted to EUR192 million, down
EUR12million compared with December31, 2010 as a net effect
of the EUR84 million prot for the year, the dividend payments of
EUR69million and various negative items for EUR27million.
Provisions
Current and non-current provisions totaled EUR3,363million, or 9%
of the balance sheet total, of which EUR960million covered items
that are expected to be paid out in less than one year. This item
primarily comprises provisions for pensions and healthcare costs in
an amount of EUR1,723million. The EUR219million increase over
the year corresponds mainly to actuarial variances, linked to the
decrease of discount rates.
Other provisions excluding employee benets totaled
EUR1,640 million at December 31, 2011. These provisions cover
economic risks (tax risks, nancial risks generally corresponding to
sellers warranties) for EUR739 million, product risks (warranties,
disputes over identied defective products) for EUR420 million,
restructuring for EUR137 million, customer risks (customer
disputes and losses on long-term contracts) for EUR87million and
environmental risks for EUR57million. The EUR176million increase
over the year principally corresponds to the acquisitions of the
period (EUR167million).
Deferred taxes
Deferred tax assets came to EUR1,444million as at December31,
2011, reecting unused tax losses of an amount of EUR294million,
future tax savings on provisions for pensions of an amount of
EUR553million, and non-deductible provisions and accruals of an
amount of EUR247million.
Deferred tax liabilities totaled EUR944 million and primarily
comprised deferred taxes recognised on trademarks, customer
relationships and patents acquired in connection with business
combinations.
BUSINESS REVIEW
4REVIEW OF THE PARENT COMPANY FINANCIAL STATEMENTS
>
3. Review of the parent company
>
4. Review of subsidiaries
Schneider Electric SA posted total portfolio revenues of
EUR1,436 million in 2011 compared with EUR691 million the
previous year. Schneider Electric Industries SAS, the main
subsidiary, paid dividends of EUR1,300million in 2011 compared
with EUR672 million in 2010. Interest expense net of interest
income amounted to EUR80 million versus EUR177 million the
year before. Non-recurring income amounted to EUR1,336million
versus EUR497million in 2010.
On December30, 2011, Schneider ElectricSA invoiced Schneider
Electric IndustriesSAS a nancial compensation for the use of the
trademark Schneider Electric for EUR1.2billion.
Net prot stood at EUR2,604million compared with EUR703million
in 2010.
Equity before appropriation of net prot amounted to
EUR11,701million at December31, 2011 versus EUR9,738million
at the previous year-end, after taking into account 2011 prot,
dividend payments of EUR856 million and share issues in an
amount of EUR215million.
All trade payables are due before end-January.
Schneider Electric SA proceed to several bond issuances during
the year for a total nominal amount of EUR1.7 billion euros and
repaid the 2006 bond of EUR500 million at the maturity date
(July18, 2011).
Schneider Electric IndustriesSAS
Revenue totaled EUR3.6billion versus EUR3.4billion in 2010.
The subsidiary posted an operating loss of EUR88million compared
with an operating prot of EUR22million in 2010.
Net prot came to EUR992million compared with EUR1,502million
in 2010.
Cofibel
Cobel posted a net prot of EUR2 million, compared with
EUR154million in 2010 (out of which EUR152million of capital gain
on sale of Schneider ElectricSA shares).
Cofimines
Comines posted a net prot of EUR16 million, compared with
EUR34million in 2010 (out of which EUR29million of capital gain
on sale of Schneider ElectricSA shares).
Remuneration and benefits of corporate officers
The remuneration and other benets paid to corporate ofcers are disclosed in Chapter 3, Corporate Governance, paragraph 8,
Management interests and compensation (page124 and following).
>
5. Outlook
For 2012, the uncertainty surrounding the global economy limits
visibility. While the Group sees continued strength in new economies
and opportunities from a recovering North America, Western
Europe is expected to weigh on growth.
In this context and assuming no major change in economic
conditions, the Group expects at to slightly positive organic growth
for sales and an adjusted EBITA margin between 14% and 15%.
Consolidated financial
statements
5
1. Consolidated statement of income 152
2. Consolidated statement ofcashflows 154
3. Consolidated balance sheet 156
4. Consolidated statement ofchanges in equity 158
5. Notes to the consolidated financial statements 159
6. Statutory Auditors report on theconsolidated
financialstatements 217
5CONSOLIDATED STATEMENT OF INCOME
CONSOLIDATED FINANCIAL STATEMENTS
>
1. Consolidated statement of income
(in millions of euros except for earnings per share) Note Full year 2011 Full year 2010
Revenue 3 22,387 19,580
Cost of sales (13,958) (11,842)
Gross prot 8,429 7,738
Research and development 4 (539) (450)
Selling, general and administrative expenses (4,658) (4,269)
EBITA adjusted* 3,232 3,019
Other operating income and expenses 6 (8) 8
Restructuring costs 7 (145) (96)
EBITA** 3,079 2,931
Amortization and impairment of purchase accounting intangibles 8 (226) (228)
Operating income 2,853 2,703
Interest income 30 24
Interest expense (331) (306)
Finance costs, net (301) (282)
Other nancial income and expense 9 (114) (65)
Net nancial income/loss (415) (347)
Prot before tax 2,438 2,356
Income tax expense 10 (562) (566)
Share of prot/(losses) of associates 28 6
PROFIT FOR THE PERIOD 1,904 1,796
attributable to owners of the parent 1,820 1,720
attributable to non-controlling interests 84 76
Basic earnings per share (in euros) 21.3 3.39 3.30
Diluted earnings per share (in euros) 3.35 3.28
* EBITA adjusted (Earnings Before Interests, Taxes, Amortization of purchase accounting intangibles and Restructuring costs) EBITA
adjusted corresponds to operating prot before amortization and impairment of purchase accounting intangible assets, before goodwill
impairment, before other operating income and expenses and before restructuring costs.
** EBITA (Earnings Before Interests, Taxes and Amortization of purchase accounting intangibles) EBITA corresponds to operating prot
before amortization and impairment of purchase accounting intangible assets and before goodwill impairment.
The accompanying notes are an integral part of the consolidated nancial statements.
5
CONSOLIDATED STATEMENT OF INCOME
Other comprehensive income
(inmillions of euros) Full year 2011 Full year 2010
Prot for the period 1,904 1,796
Other comprehensive income:
Translation adjustment 159 944
Cash-ow hedges (87) 31
Available-for-sale nancial assets (60) (32)
Actuarial gains (losses) on dened benets (275) (6)
Income tax relating to components of other comprehensive income 129 3
Other comprehensive income for the period, net of tax (134) 940
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 1,770 2,736
Attributable:
to owners of the parent 1,694 2,649
to non-controlling interests 76 87
5CONSOLIDATED STATEMENT OFCASHFLOWS
>
2. Consolidated statement
ofcashflows
(inmillions of euros) Note Full year 2011 Full year 2010
I - Cash ows from operating activities:
Prot for the period 1,904 1,796
Share of (prot)/losses of associates, net of dividends received (28) (6)
Adjustments to reconcile net prot to net cash provided by operating
activities:
Depreciation of property, plant and equipment 386 358
Amortization of intangible assets other than goodwill 380 387
Impairment losses on non-current assets 31 29
Increase/(decrease) in provisions (89) (49)
Losses/(gains) on disposals of assets 12 (21)
Difference between tax paid and tax expense (65) 14
Other 48 26
Net cash provided by operating activities before changes in operating
assets and liabilities, before tax 2,579 2,534
Decrease/(increase) in accounts receivable (280) (291)
Decrease/(increase) in inventories and work in process (38) (515)
(Decrease)/increase in accounts payable (41) 373
Change in other current assets and liabilities 32 161
Change in working capital requirement (327) (272)
Total I 2,252 2,262
II - Cash ows from investing activities:
Purchases of property, plant and equipment (515) (376)
Proceeds from disposals of property, plant and equipment 52 84
Purchases of intangible assets (297) (239)
Proceeds from disposals of intangible assets 14 3
Net cash used by investment in operating assets (746) (528)
Net nancial investments 2 (2,873) (1,754)
Purchases of other long-term investments (54) 5
Increase in long-term pension assets (64) -
Sub-total (2,991) (1,749)
Total II (3,737) (2,277)
III - Cash ows from nancing activities:
Issuance of long-term debt 24 1,692 1,000
Repayment of long-term debt (500) (1,160)
Sale/(purchase) of own shares - 249
Increase/(reduction) in other nancial debt 432 (273)
Issuance of shares 210 305
Dividends paid: Schneider ElectricSA * (856) (195)
Non-controlling interests (69) (46)
Total III 909 (120)
5
CONSOLIDATED STATEMENT OFCASHFLOWS
(inmillions of euros) Note Full year 2011 Full year 2010
IV - Net effect of exchange rate: (166) 6
Increase/(decrease) in cash and cash equivalents: I +II +III +IV (742) (129)
Cash and cash equivalents at beginning of period 3,296 3,425
Increase/(decrease) in cash and cash equivalents (742) (129)
CASH AND CASH EQUIVALENTS AT END OF PERIOD 20 2,554 3,296
* Dividends paid in 2010 totalled EUR525million, of which EUR330million were returned by shareholders who decided to reinvest their dividend.
5CONSOLIDATED BALANCE SHEET
>
3. Consolidated balance sheet
Assets
(inmillions of euros) Note Dec.31, 2011 Dec.31, 2010
Non-current assets
Goodwill, net 11 12,773 10,213
Intangible assets, net 12 4,704 4,258
Property, plant and equipment, net 13 2,573 2,337
Total tangible and intangible assets 7,277 6,595
Investments in associates 14 489 447
Available-for-sale nancial assets 15.1 296 410
Other non-current nancial assets 15.2 261 144
Non-current nancial assets 557 554
Deferred tax assets 16 1,444 1,023
Total non-current assets 22,540 18,832
Current assets
Inventories and work in progress 17 3,349 3,139
Trade accounts receivable 18 5,484 4,441
Other receivables and prepaid expenses 19 1,638 1,212
Current nancial assets 15.3 104 38
Cash and cash equivalents 20 2,771 3,389
Total current assets 13,346 12,219
TOTAL ASSETS 35,886 31,051
5
CONSOLIDATED BALANCE SHEET
Liabilities
(inmillions of euros) Note Dec.31, 2011 Dec.31, 2010
Equity 21
Share capital 2,196 2,176
Additional paid-in capital 6,690 6,495
Retained earnings 6,864 6,133
Translation reserve 148 (19)
Equity attributable to owners of the parent 15,898 14,785
Non-controlling interests 192 204
Total equity 16,090 14,989
Total long-term provisions
Pensions and other post-employment benet obligations 22 1,723 1,504
Other long-term provisions 23 680 588
Total long-term provisions 2,403 2,092
Non-current nancial liabilities
Bonds 24 5,540 3,845
Other long-term debt 24 1,387 1,165
Non-current nancial liabilities 6,927 5,010
Deferred tax liabilities 16 944 957
Other non-current liabilities 25 235 128
Total non-current liabilities 10,509 8,187
Current liabilities
Trade accounts payable 4,094 3,432
Accrued taxes and payroll costs 2,320 1,760
Short-term provisions 23 960 876
Other current liabilities 803 692
Short-term debt 24 1,110 1,115
Total current liabilities 9,287 7,875
TOTAL EQUITY AND LIABILITIES 35,886 31,051
5CONSOLIDATED STATEMENT OFCHANGES IN EQUITY
>
4. Consolidated statement
ofchanges in equity
(inmillions of euros except
fornumber of shares)
Number
of shares
(thousands) Capital
Additional
paid-in
capital
Treasury
shares
Retained
earnings
Translation
reserve
Equity
attributable
to owners
ofthe parent
Non-
controlling
interests TOTAL
Dec.31, 2009
(1)
262,752 2,102 5,934 (324) 4,969 (952) 11,729 131 11,860
Prot for the period 1,720 1,720 76 1,796
Other comprehensive
income (4) 933 929 11 940
Comprehensive
income for the period 1,716 933 2,649 87 2,736
Capital increase 6,497 52 422 474 474
Exercise of stock
options 2,710 22 139 161 161
Dividends (525) (525) (46) (571)
Change in treasury
shares 249 249 249
Stock options 30 30 30
Other 1 17 18 32 50
Dec.31, 2010 271,959 2,176 6,495 (74) 6,207 (19) 14,785 204 14,989
Prot for the period 1,820 1,820 84 1,904
Other comprehensive
income (293) 167 (126) (8) (134)
Comprehensive
income for the period 1,527 167 1,694 76 1,770
Division of the nominal
value by two 271,959
Capital increase 3,856 15 162 178 178
Exercise of stock
options 1,169 5 33 37 37
Dividends (856) (856) (69) (925)
Stock options 51 51 51
Other
(2)
9 9 (19) (10)
Dec.31, 2011 548,943 2,196 6,690 (74) 6,938 148 15,898 192 16,090
(1) Dec.31, 2009 gures restated for acquisition fees and French CVAE.
(2) Of which EUR9million in connection with the employee share purchase plan and a negative EUR19million for the ArevaD PPA
adjustment.
5
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
TABLE OF CONTENTS
Note1 Accounting Policies 160
Note2 Changes in the scope of consolidation 166
Note3 Segment information 168
Note4 Research and development 170
Note5 Depreciation and amortisation expenses 171
Note6 Other operating income and expenses 171
Note7 Restructuring costs 171
Note8 Amortisation and impairment of
purchase accounting intangibles 172
Note9 Other financial income and expense 172
Note10 Income tax expense 173
Note11 Goodwill 174
Note12 Intangible assets 175
Note13 Property, plant and equipment 177
Note14 Investments in associates 179
Note15 Financial assets 179
Note16 Deferred taxes by type 180
Note17 Inventories and work in progress 180
Note18 Trade accounts receivable 181
Note19 Other receivables and prepaid expenses 181
Note20 Cash and cash equivalents 182
Note21 Equity 182
Note22 Pensions and other post-employment
benefit obligations 190
Note23 Provisions 196
Note24 Total (current and non-current)
financial liabilities 197
Note25 Other non-current liabilities 199
Note26 Financial instruments 200
Note27 Employees 204
Note28 Related party transactions 204
Note29 Commitments and contingent liabilities 205
Note30 Subsequent events 205
Note31 Statutory Auditors fees 206
Note32 Consolidated companies 207
All amounts inmillions of euros unless otherwise indicated.
The following notes are an integral part of the consolidated nancial statements.
The Schneider Electric Groups consolidated nancial statements for the nancial year ended December31, 2011 were
drawn up by the Management Board on February17, 2012 and reviewed by the Supervisory Board on February21,
2012. They will be submitted to shareholders for approval at the Annual General Meeting of May3, 2012.
The Groups main business activities are described chapter 1 of the Registration Document.
>
5. Notes to the consolidated financial
statements
5NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note1 Accounting Policies
1.1 Accounting standards
The consolidated nancial statements have been prepared in
compliance with the international accounting standards (IFRS)
as adopted by the European Union as of December 31, 2011.
Thesame accounting methods were used as for the consolidated
nancial statements for the year ended December31, 2010.
The following standards and interpretations that were applicable
during the period did not have a material impact on the consolidated
nancial statements as of December31, 2011:
amendment to IAS32 Classication of Rights Issues;
amendment to revised IAS24 Information on Related parties;
2010 improvements to IFRS (May2010);
amendment to IFRIC 14 Prepayment of a Minimum Funding
Requirement;
IFRIC 19 Extinguishing Financial liabilities with Equity
instruments.
There are no differences in practice between the standards applied
by Schneider Electric as of December31, 2011 and the IFRS issued
by the International Accounting Standards Board (IASB), since the
application of standards and interpretations that are mandatory for
reporting periods beginning on or after January1, 2011 but not yet
adopted by the European Union would not have a material impact.
Lastly, the Group did not apply the following standards and
interpretations that had not yet been adopted by the European
Union as of December 31, 2011 or that are mandatory at some
point subsequent to December31, 2011:
Standards adopted
IFRS 7 Disclosures Transfert of Financial assets
Standards not yet adapted
amendment to IAS 1 Presentation of Items of Other
Comprehensive Income;
IAS12 Recovery of Underlying Assets;
IAS19 revised Employee benets;
IAS27 revised Separate Financial Statements;
IAS28 revised Investments in associates and joint-ventures;
amendments to IAS 32 Offsetting Financial assets and
Financial liabilities;
amendments to IFRS 7 Disclosures Transfer of Financial
assets;
IFRS9 Financial instruments;
IFRS10 Consolidated Financial Statements;
IFRS11 Joint Arrangements;
IFRS12 Disclosure of Interests in Other entities;
IFRS13 Fair value Measurement;
amendment to IFRS1 Severe Hyperination and Removal of
Fixed dates for First-Time Adopters;
IFRIC 20 Stripping Costs in the Production Phase of a
Surface Mine.
Schneider Electric is currently assessing their potential impact on
the Groups consolidated nancial statements. At this stage of
analysis, the Group does not expect the impact on its consolidated
nancial statements to be material, except for IFRS10 and
IFRS11 for which impacts are being assessed on entities currently
consolidated with proportional consolidation, and except for IFRS9
due to uncertainties surrounding the adoption process in Europe.
The nancial statements provide data prepared in accordance with
IFRS for the years ended December31, 2011 and December31,
2010. The nancial statements for the year ended December 31,
2009, presented in the Registration Document registered with
Autorit des Marchs Financiers (AMF) under number D10-0125
on March19, 2010, are incorporated by reference.
1.2 Basis of presentation
The nancial statements have been prepared on a historical cost
basis, with the exception of derivative instruments and available- for-
sale nancial assets, which are measured at fair value. Financial
liabilities are measured using the amortised cost model. The book
value of hedged assets and liabilities and the related hedging
instruments corresponds to their fair value.
1.3 Use of estimates and assumptions
The preparation of nancial statements requires Group and
subsidiary management to make estimates and assumptions
that are reected in the amounts of assets and liabilities reported
in the consolidated balance sheet, the revenues and expenses in
the statement of income and the obligations created during the
reporting period. Actual results may differ.
These assumptions mainly concern:
the measurement of the recoverable amount of goodwill,
property, plant and equipment and intangible assets (note1.10);
the realisable value of inventories and work in process (note1.12);
the recoverable amount of accounts receivable (note1.13);
the valuation of share-based payments (note1.19);
the calculation of provisions for contingencies, in particular for
warranties (note1.20);
the measurement of pension and other post-employment benet
obligations (note22).
1.4 Consolidation principles
Subsidiaries over which the Group exercises exclusive control,
either directly or indirectly, are fully consolidated. Exclusive
control is control by all means, including ownership of a majority
voting interest, signicant minority ownership, and contracts or
agreements with other shareholders.
Group investments in entities controlled jointly with a limited number
of partners, such as joint ventures and alliances, are proportionally
consolidated in accordance with the recommended treatment
under IAS31 - Interests in Joint Ventures.
5
Companies over which the Group has signicant inuence
(associates) are accounted for by the equity consolidation
method. Signicant inuence is presumed to exist when more than
20% of voting rights are held by the Group.
Companies acquired or sold during the year are included in or
removed from the consolidated nancial 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 note32.
The reporting date for all companies included in the scope of
consolidation is December 31, with the exception of certain
associates accounted for by the equity method. For the latter
however, nancial statements up to September30 of the nancial
year have been used (maximum difference of three months in line
with the standards).
1.5 Business combinations
Business combinations are accounted for using the acquisition
method, in accordance with IFRS 3 - Business Combinations.
In accordance with the option provided by IFRS 1 First-Time
Adoption of IFRS business combinations recorded before
January1, 2004 have not been restated. Material acquisition costs
are presented under Other operating income and expenses in the
statement of income.
All acquired assets, liabilities and contingent liabilities of the acquiree
are recognised at their fair value, following a measurement period
that can last for up to 12months from the date of acquisition.
The excess of the cost of acquisition over the Groups share in
the fair value of assets and liabilities at the date of acquisition is
recognised in goodwill. Where the cost of acquisition is lower than
the fair value of the identied assets and liabilities acquired, the
negative goodwill is immediately recognised in the statement of
income.
Goodwill is not amortised, but tested for impairment at least
annually and whenever there is an indication that it may be impaired
(see note1.10 below). Any impairment losses are recognised under
Amortisation and impairment of purchase accounting intangibles.
1.6 Translation of the financial statements
offoreign subsidiaries
The consolidated nancial statements are prepared ineuros.
The nancial statements of subsidiaries that use another functional
currency are translated into euros as follows:
assets and liabilities are translated at the ofcial closing rates;
income statement and cash ow items are translated at
weighted- average annual exchange rates.
Gains or losses on translation are recorded in consolidated equity
under Cumulative translation adjustments. In accordance with
IFRS 1 First Time Adoption of IFRS cumulative translation
adjustments were reset to zero at January 1, 2004 by adjusting
opening retained earnings, without any impact on total equity.
1.7 Foreign currency transactions
Foreign currency transactions are recorded using the ofcial
exchange rate in effect at the date the transaction is recorded or the
hedging rate. At the balance sheet date, foreign currency payables
and receivables are translated into the functional currency at the
closing rates or the hedging rate. Gains or losses on translation
of foreign currency transactions are recorded under Net nancial
income/(loss). Foreign currency hedging is described below, in
note1.22.
1.8 Intangible assets
Intangible assets acquired separately or as part of a
business combination
Intangible assets acquired separately are initially recognised in the
balance sheet at historical cost. They are subsequently measured
using the cost model, in accordance with IAS38 Intangible Assets.
Intangible assets (mainly trademarks and customer lists) acquired
as part of business combinations are recognised in the balance
sheet at fair value, appraised externally for the most signicant
assets and internally for the rest. The valuations are performed
using generally accepted methods, based on future inows. The
assets are regularly tested for impairment.
Intangible assets are amortised on a straight-line basis over their
useful life or, alternatively, over the period of legal protection.
Amortised intangible assets are tested for impairment when there is
any indication that their recoverable amount may be less than their
carrying amount.
Amortisation and impairment losses on such intangible assets
are presented on a separate statement of income line item,
Amortisation and impairment of purchase accounting intangibles.
Trademarks
Trademarks acquired as part of a business combination are not
amortised when they are considered to have an indenite life.
The criteria used to determine whether or not such trademarks
have indenite lives and, as the case may be, their lifespan, are as
follows:
brand awareness;
outlook for the brand in light of the Groups strategy for integrating
the trademark into its existing portfolio.
Non-amortised trademarks are tested for impairment at least
annually and whenever there is an indication they may be impaired.
When necessary, an impairment loss is recorded.
Internally-generated intangible assets
Research and development costs
Research costs are expensed in the statement of income when
incurred.
Systems were set up to track and capitalise development costs
in 2004. As a result, only development costs for new products
launched since 2004 are capitalised in the IFRS accounts.
Development costs for new projects are capitalised if, and only if:
the project is clearly identied and the related costs are separately
identied and reliably tracked;
the projects technical feasibility has been demonstrated and the
Group has the intention and nancial resources to complete the
project and to use or sell the resulting products;
the Group has allocated the necessary technical, nancial and
other resources to complete the development;
it is probable that the future economic benets attributable to the
project will ow to the Group.
Development costs that do not meet these criteria are expensed in
the nancial year in which they are incurred.
Capitalised development projects are amortised over the lifespan
of the underlying technology, which generally ranges from three to
tenyears. The amortisation of such capitalised projects is included
in the cost of the related products and classied into Cost of sales
when the products are sold.
Software implementation
External and internal costs relating to the implementation of
enterprise resource planning (ERP) applications are capitalised when
they relate to the programming, coding and testing phase. They are
amortised over the applications useful lives. In accordance with
paragraph98 of IAS38, the SAP bridge application currently being
rolled out within the Group is amortised using the unit method to
reect the pattern in which the assets future economic benets are
expected to be consumed. Said units of production correspond to
the number of users of the rolled-out solution divided by the number
of target users at the end of the roll-out.
1.9 Property, plant and equipment
Property, plant and equipment is primarily comprised of land,
buildings and production equipment and is carried at cost, less
accumulated depreciation and any accumulated impairment
losses, in accordance with the recommended treatment in
IAS16Property, plant and equipment.
Each component of an item of property, plant and equipment with a
useful life that differs from that of the item as a whole is depreciated
separately on a straight-line basis. The main useful lives are as
follows:
Buildings: 20 to 40years
Machinery and equipment: 3 to 10years
Other: 3 to 12years
The useful life of property, plant and equipment used in operating
activities, such as production lines, reects the related products
estimated life cycles.
Useful lives of items of property, plant and equipment are reviewed
periodically and may be adjusted prospectively if appropriate.
The depreciable amount of an asset is determined after deducting
its residual value, when the residual value is material.
Depreciation is expensed in the period or included in the production
cost of inventory or the cost of internally-generated intangible
assets. It is recognised in the statement of income under Cost of
sales, Research and development costs or Selling, general and
administrative expenses, as the case may be.
Items of property, plant and equipment are tested for impairment
whenever there is an indication they may have been impaired.
Impairment losses are charged to the statement of income under
Other operating income and expenses.
Leases
The assets used under leases are recognised in the balance sheet,
offset by a nancial debt, where the leases transfer substantially all
the risks and rewards of ownership to the Group.
Leases that do not transfer substantially all the risks and rewards of
ownership are classied as operating leases. The related payments
are recognised as an expense on a straight-line basis over the lease
term.
Borrowing costs
In accordance with IAS 23 R Borrowing costs (applied as of
January 1, 2009), borrowing costs that are directly attributable to
the acquisition, construction or production of a qualifying asset are
capitalised as part of the cost of the asset when it is probable that
they will result in future economic benets to the entity and the costs
can be measured reliably. Other borrowing costs are recognised
as an expense for the period. Prior to January1, 2009, borrowing
costs were systematically expensed when incurred.
1.10 Impairment of assets
In accordance with IAS 36 Impairment of Assets the Group
assesses the recoverable amount of its long-lived assets as follows:
for all property, plant and equipment subject to depreciation and
intangible assets subject to amortisation, the Group carries out a
review at each balance sheet date to assess whether there is any
indication that they may be impaired. Indications of impairment
are identied 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;
non-amortisable intangible assets and goodwill are tested for
impairment at least annually and whenever there is an indication
that the asset may be impaired.
Value in use is determined by discounting future cash ows that
will be generated by the tested assets, generally over a period of
not more than ve years. These future cash ows are based on
Group managements economic assumptions and operating
forecasts. The discount rate corresponds to the Groups weighted
average cost of capital (WACC) at the measurement date plus a
risk premium depending on the region in question. The WACC
stood at 8.1% at December 31, 2011, a slight decrease on the
8.4% at December31, 2010. This rate is based on (i)a long-term
interest rate of 3.7%, corresponding to the average interest rate for
10year OAT treasury bonds over the past few years, (ii)the average
premium applied to nancing obtained by the Group in the fourth
quarter of 2011, and (iii)the weighted country risk premium for the
Groups businesses in the countries in question.
5
The perpetuity growth rate was 2%, unchanged on the previous
nancial year.
Impairment tests are performed at the level of the cash-generating
unit (CGU) to which the asset belongs. A cash-generating unit is
the smallest group of assets that generates cash inows that are
largely independent of the cash ows from other assets or groups of
assets. The cash-generating units in 2011 are Power, Infrastructure,
Industry, IT, Buildings and CST businesses. Power, Industry, IT
and Buildings businesses have operated as divisions since the
reorganisation on January 1, 2010. CST business was included
in 2011 within Industry business, of which it shared the same
characteristics, for presentation purpose. Infrastructure business
(previously named Energy), was created in 2011 in order to combine
all Medium Voltage activities including those from Areva Distribution,
as well as Telvent activities. Net assets were reallocated to the CGUs
at the lowest possible level on the basis of the business activities
to which they belong; the assets belonging to several activities
were allocated to each business (Power, infrastructure and Industry
mainly) pro-rata to their revenue in that business.
The WACC used to determine the value in use of each CGU was
8.1% for CST, 8.8 % for Industry, Power and IT 8.3% for Buildings
and 9.1 % for Infrastructure.
Goodwill is allocated when initially recognised. The CGU allocation
is done on the same basis as used by Group management to
monitor operations and assess synergies deriving from acquisitions.
Where the recoverable amount of an asset or CGU is lower than
its book value, an impairment loss is recognised. Where the
tested CGU comprises goodwill, any impairment losses are rstly
deducted therefrom.
1.11 Non-current financial assets
Investments in non-consolidated companies are classied as
available-for-sale nancial assets. They are initially recorded at their
cost of acquisition and subsequently measured at fair value, when
fair value can be reliably determined.
The fair value of equity instruments quoted in an active market
may be determined reliably and corresponds to the quoted price
at balance sheet date (Level 1 from the fair value hierarchy as per
IFRS7).
In cases where fair value cannot be reliably determined (Level 3
inputs), the equity instruments are measured at net cost of any
accumulated impairment losses. The recoverable amount is
determined with reference to the Groups share in the entitys net
assets along with its expected future protability and outlook. This
rule is applied in particular to unlisted equity instruments.
Changes in fair value are accumulated in equity under Other
reserves up to the date of sale, at which time they are recognised
in the income statement. Unrealised losses on assets that are
considered to be permanently impaired are recorded under
Finance costs and other nancial income and expense, net.
Loans, recorded under Other non-current nancial assets, are
carried at amortised cost and tested for impairment where there
is an indication that they may have been impaired. Long-term
nancial receivables are discounted when the impact of discounting
is considered signicant.
1.12 Inventories and work in process
Inventories and work in process are stated at the lower of their
entry cost (acquisition cost or production cost generally determined
by the weighted average price method) or of their estimated net
realisable value.
Net realisable value corresponds to the estimated selling price net
of remaining expenses to complete and/or sell the products.
Inventory impairment losses are recognised in Cost of sales.
The cost of work in process, semi-nished and nished products,
includes the cost of materials and direct labor, subcontracting costs,
all production overheads based on normal capacity utilisation rates
and the portion of research and development costs related to the
production process (corresponding to the amortisation of capitalised
projects in production and product and range maintenance costs).
1.13 Trade accounts receivable
Depreciations for doubtful accounts are recorded when it is
probable that receivables will not be collected and the amount of the
loss can be reasonably estimated. Doubtful accounts are identied
and the related depreciations determined based on historical loss
experience, the age of the receivables and a detailed assessment of
the individual receivables along with the related credit risks. Once it
is known with certainty that a doubtful account will not be collected,
the doubtful account and the related depreciation are written off via
the statement of income.
Accounts receivable are discounted in cases where they due in over
one year and the impact of adjustment is signicant.
1.14 Assets held for sale
Assets held for sale are no longer amortised or depreciated and
are recorded separately in the balance sheet under Assets held for
sale at the lower of amortised cost and net realisable value.
1.15 Deferred taxes
Deferred taxes, corresponding to temporary differences between
the tax basis and reporting basis of consolidated assets and
liabilities, are recorded using the liability method. Deferred tax assets
are recognised when it is probable that they will be recovered at a
reasonably determinable date.
Future tax benets arising from the utilisation of tax loss carryforwards
(including amounts available for carryforward without time limit)
are recognised only when they can reasonably be expected to
berealised.
Deferred tax assets and liabilities are not discounted. Deferred tax
assets and liabilities that concern the same unit and are expected
to reverse in the same period are netted off.
1.16 Cash and cash equivalents
Cash and cash equivalents presented in the balance sheet consist
of cash, bank accounts, term deposits of three months or less and
marketable securities traded on organized markets. Marketable
securities are short-term, highly-liquid investments that are readily
convertible to known amounts of cash at maturity. They notably
consist of commercial paper, mutual funds and equivalents. In light of
their nature and maturities, these instruments represent insignicant
risk of changes in value and are treated as cash equivalents.
1.17 Schneider ElectricSA shares
Schneider Electric SA shares held by the parent company or by
fully consolidated companies are measured at acquisition cost
and deducted from equity. They are held at their acquisition cost
untilsold.
Gains (losses) on the sale of own shares are added (deducted) from
consolidated reserves, net of tax.
1.18 Pensions and other employee benefit
obligations
Depending on local practices and laws, the Groups subsidiaries
participate in pension, termination benet and other long-term
benet plans. Benets paid under these plans depend on such
factors as seniority, compensation levels and payments into
mandatory retirement programs.
Defined contribution plans
Payments made under dened contribution plans are recorded
in the income statement, in the year of payment, and are in full
settlement of the Groups liability.
In most countries, the Group participates in mandatory general
plans, which are accounted for as dened contribution plans.
Defined benefit plans
Dened benet plans are measured using the projected unit
creditmethod.
Expenses recognised in the statement of income are split between
operating income (for current service costs) and net nancial income/
(loss) (for nancial costs and expected return on planassets).
The amount recognised in the balance sheet corresponds to the
present value of the obligation, adjusted for unrecognised past
service cost and net of plan assets.
Where this is an asset, the recognised asset is limited to the present
value of any economic benet due in the form of plan refunds or
reductions in future plan contributions.
Changes resulting from periodic adjustments to actuarial
assumptions regarding general nancial and business conditions
or demographics (i.e., changes in the discount rate, annual salary
increases, return on plan assets, years of service,etc.) as well as
experience adjustments are immediately recognised in the balance
sheet and as a separate component of equity in Other reserves.
Other commitments
Provisions are funded and expenses recognised to cover the
cost of providing health-care benets for certain Group retirees in
Europe and the United States. The accounting policies applied to
these plans are similar to those used to account for dened benet
pension plans.
The Group also funds provisions for all its subsidiaries to cover
seniority-related benets (primarily long service awards in its French
subsidiaries). Actuarial gains and losses on these benet obligations
are fully recognised in prot or loss.
1.19 Share-based payments
The Group grants different types of share-based payments to senior
executives and certain employees. These include:
Schneider ElectricSA stock options;
stock grants;
stock appreciation rights, based on the Schneider Electric SA
stock price.
Only plans set up after November7, 2002 that did not vest prior to
January1, 2005 are affected by the application of IFRS2 Share-
based payments.
Pursuant to this standard, these plans are measured on the date
of grant and an employee benets expense is recognised on a
straight-line basis over the vesting period, in general three or four
years depending on the country in which it is granted.
The Group uses the Cox, Ross, Rubinstein binomial model to
measure these plans.
For stock grants and stock options, this expense is offset in the
own share reserve. In the case of stock appreciation rights, a liability
is recorded corresponding to the amount of the benet granted,
re- measured 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 (note21.5).
1.20 Provisions for contingencies and pension
accruals
A provision is recorded when the Group has an obligation to a third
party prior to the balance sheet date, and where the loss or liability is
likely and can be reliably measured. If the loss or liability is not likely
and cannot be reliably estimated, but remains possible, the Group
discloses it as a contingent liability. Provisions are calculated on a
case-by-case or statistical basis and discounted when due in over a
year. The discount rate used for long-term provisions was 3.42% at
December31, 2011 versus 2.75% at December31, 2010.
5
Provisions are primarily set aside to cover:
economic risks:
These provisions cover tax risks arising from tax audits performed
by local tax authorities and nancial risks arising primarily on
guarantees given to third parties in relation to certain assets and
liabilities;
customer risks:
These provisions are primarily established to covers risks arising
from products sold to third parties. This risk mainly consists of
claims based on alleged product defects and product liability;
product risks:
These provisions comprise:
statistical provisions for warranties: the Group funds provisions
on a statistical basis for the residual cost of Schneider Electric
product warranties not covered by insurance.
provisions to cover disputes concerning defective products
and recalls of clearly identied products;
environmental risks:
These provisions are primarily funded to cover cleanup costs;
restructuring costs, when the Group has prepared a detailed
plan for the restructuring and has either announced or started to
implement the plan before the end of the year.
1.21 Financial liabilities
Financial liabilities primarily comprise bonds and short and
long- term bank borrowings. These liabilities are initially recorded at
fair value, from which are deducted any direct transaction costs.
Subsequently, they are measured at amortised cost based on their
effective interest rate.
1.22 Financial instruments and derivatives
Risk hedging management is centralised. The Groups policy is
to use derivative nancial instruments exclusively to manage and
hedge changes in exchange rates, interest rates or prices of certain
raw materials. The Group accordingly uses instruments such
as swaps, options and futures, depending on the nature of the
exposure to be hedged.
Foreign currency hedges
The Group periodically buys foreign currency derivatives to hedge the
currency risk associated with foreign currency transactions. Some
of these instruments hedge operating receivables and payables
carried in the balance sheets of Group companies. The Group does
not apply hedge accounting to these instruments because gains
and losses on this hedging is immediately recognised. At year- end,
the hedging derivatives are marked to market and gains or losses
are recognised in Net nancial income/(loss), offsetting the gains
or losses resulting from the translation at end-of-year rates of foreign
currency payables and receivables, in accordance with IAS 21
The Effects of Changes in Foreign Exchange Rates.
The Group also hedges future cash ows, including recurring
future transactions, intra-group foreign currency loans or planned
acquisitions or disposals of investments. In accordance with IAS39,
these are treated as cash ow hedges. These hedging instruments
are recognised in the balance sheet and are measured at fair
value at the end of the year. The portion of the gain or loss on the
hedging instrument that is determined to be an effective hedge is
accumulated in equity, under Other reserves, and then recognised
in the statement of income when the hedged item affects prot
or loss. The ineffective portion of the gain or loss on the hedging
instrument is recognised in Net nancial income/(loss).
In addition, certain long-term receivables and loans to subsidiaries
are considered to be part of the net investment, as dened by
IAS 21 The Effects of Changes in Foreign Exchange Rates. In
accordance with the rules governing hedges of net investments,
the impact of exchange rate uctuations is recorded in equity and
recognised in the statement of income when the investment is sold.
Interest rate swaps
Interest rate swaps allow the Group to manage its exposure to
interest rate risk. The derivative instruments used are nancially
adjusted to the schedules, rates and currencies of the borrowings
they cover. They involve the exchange of xed and oating-rate
interest payments. The differential to be paid (or received) is accrued
(or deferred) as an adjustment to interest income or expense over
the life of the agreement. The Group applies hedge accounting as
described in IAS 39 for interest rate swaps. Gains and losses on
re-measurement of interest rate swaps at fair value are recognised
in equity (for cash ow hedges) or in prot or loss (for fair value
hedges).
Commodity contracts
The Group also purchases commodity derivatives including forward
purchase contracts, swaps and options to hedge price risks on all
or part of its forecast future purchases. Under IAS39, these qualify
as cash ow hedges. These instruments are recognised in the
balance sheet and are measured at fair value at the period- end.
The effective portion of the hedge is recognised separately in equity
(under Other reserves) and then recognised in income (gross
margin) when the hedged item affects consolidated income. The
effect of this hedging is then incorporated in the cost price of the
products sold. The ineffective portion of the gain or loss on the
hedging instrument is recognised in Net nancial income/(loss).
Cash ows from nancial instruments are recognised in the
consolidated statement of cash ows in a manner consistent with
the underlying transactions.
Put options granted to minority shareholders
In line with the AMFs recommendation of November2010 and in
the absence of a specic IFRS rule, the Group elected to retain
the accounting treatment for minority put options applied up to
December31, 2009 (involving puts granted to minority shareholders
prior to this date). In this case, the Group elected to recognise the
difference between the purchase price of the minority interests
and the share of the net assets acquired as goodwill, without
re- measuring the assets and liabilities acquired. Subsequent
changes in the fair value of the liability are recognised by adjusting
goodwill.
The Group elected to recognise the subsequent changes in the fair
value of the liability against equity.
1.23 Revenue recognition
The Groups revenues primarily include merchandise sales and
revenues from services and contracts.
Merchandise sales
Revenue from sales is recognised when the product is shipped
and risks and benets are transferred (standard shipping terms
areFOB).
Provisions for the discounts offered to distributors are set aside
when the products are sold to the distributor and recognised as a
deduction from revenue.
Certain Group subsidiaries also offer cash discounts to distributors.
These discounts and rebates are deducted from sales.
Consolidated revenue is presented net of these discounts
andrebates.
Service contracts
Revenue from service contracts is recorded over the contractual
period of service. It is recognised when the result of the
transaction can be reliably determined, by the percentage of
completionmethod.
Long-term contracts
Income from long-term contracts is recognised using the
percentage-of-completion method, based either on the percentage
of costs incurred in relation to total estimated costs of the entire
contract, or on the contracts technical milestones, notably proof
of installation or delivery of equipment. When a contract includes
performance clauses in the Groups favor, the related revenue is
recognised at each project milestone and a provision is set aside if
targets are not met.
Losses at completion for a given contract are provided for in full
as soon as they become probable. The cost of work-in-process
includes direct and indirect costs relating to the contracts.
1.24 Earnings per share
Earnings per share are calculated in accordance with IAS 33
Earnings Per Share.
Diluted earnings per share are calculated by adjusting prot
attributable to equity holders of the parent and the weighted
average number of shares outstanding for the dilutive effect 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 the proceeds from the exercise of the
rights attached to the options.
1.25 Statement ofcashflows
The consolidated statement of cash ows has been prepared
using the indirect method, which consists of reconciling net prot
to net cash provided by operations. The opening and closing
cash positions include cash and cash equivalents, comprised
of marketable securities, (note 1.16) net of bank overdrafts
andfacilities.
Note2 Changes in the scope of consolidation
The Groups consolidated nancial statements for the year ended December31, 2011 can be summarised as follows:
Number of companies Dec.31, 2011 Dec.31, 2010
Parent company and fully consolidated subsidiaries 590 549
Proportionally consolidated companies 1 1
Companies accounted for by the equity method 5 6
TOTAL 596 556
5
2.1 Acquisition of Areva T&Ds Distribution business in 2010
In accordance with standard IFRS3R, Schneider Electric valued the assets acquired and liabilities assumed at their fair value on the date of
acquisition. The nal allocation of the acquisition price breaks down as follows:
Areva Distribution
Before allocation of
acquisition price
Allocation of
acquisition price
After allocation of
acquisition price
Acquisition price 1,208
Cash and cash equivalents 33 - 33
Current assets 992 (23) 969
Non current assets 437 139 576
Total assets 1,462 116 1,578
Financial liabilities 45 - 45
Non-current liabilities excluding debt 167 156 323
Current liabilities excluding debt 799 67 866
Non-controlling interests 34 (18) 16
Total liabilities 1,045 205 1,250
GOODWILL 880
The valuation of the assets acquired at their fair value led
principally to the recognition of intangible assets in the amount of
EUR159 million (technology, backlog, inventories and customer
relationships) and to revaluations of property, plant and equipment
in the amount of EUR26 million; these assets were valued by
independent experts. Contingent liabilities were recognised for a
total amount of EUR199million. The goodwill is not tax-deductible.
On December 31, 2010, the main elements of the provisional
computation were:
contingent liabilities, for the identication of risks, particularly
tax, was not completed at the close of business on
December31,2010;
tangible assets, because the estimated fair value of these assets
was in progress;
intangible assets, because the assumptions used to value the
technology has been rened in 2011.
On December 31, 2010, the Distribution business of Areva
T&Ds, had been included to the scope of consolidation from the
acquisition date, i.e. June7, 2010. If Distribution business of Areva
T&Ds had been acquired from January1, 2010, then the effect on
the consolidated income statement i n 2010 would have been as
follows:

Group
excluding Areva
Distribution
Contribution of
ArevaD since
acquisition
Group
published
ArevaD from

January1, to
Jun.7
Group including
ArevaD since
January1
Revenue 18,350 1,230 19,580 648 20,228
EBITA 2,846 85 2,931 9 2,940
% 15.5% 6.9% 15.0% 1.4% 14.5%
Restructuring costs (96) (96) (5) (101)
Other operating income and expenses 8 8 8
Adjusted EBITA* 2,934 85 3,019 14 3,033
% 16.0% 6.9% 15.4% 2.2% 15.0%
* Adjusted EBITA: EBITA before Restructuring costs and Other income and expenses (of which Costs of acquisition, integration
andseparation).
Comparative data in 2010 did not require a change in 2011 because the impacts related to changes in fair value recognized as part of the
acquisition were not signicant across the Schneider Group balance sheet and income statement also.
2.2 Other acquisitions during the year
The total amount of acquisitions during the year came to EUR2,873million, net of cash and cash equivalents acquired.
2011 2010
Acquisitions (2,873) (1,762)
Cash and cash equivalents paid (2,953) (1,800)
Cash and cash equivalents paid acquired 80 38
Disposals 6 8
Other operations (6) -
NET FINANCIAL INVESTMENT (2,873) (1,754)
It is mainly related to the acquisition of Telvent (August30, 2011),
Leader & Harvest (June 9, 2011), Luminous (May 30, 2011),
Summit Energy (March24, 2011), Steck (July22, 2011) and Digilink
(March31, 2011).
The temporary valuation of assets acquired at their fair value
principally led to the recognition of intangible assets in the amount
of EUR432 million (technology, backlog, customer relationships)
and to revaluation of property, plant and equipment in the amount
of EUR4million; these assets were valued by independent experts.
Contingent liabilities and indemnication assets were recognized
respectively for a total amount of EUR93million and EUR47million.
These amounts are before deferred tax impacts.
On December 31, 2011, the main elements of the provisional
computation are:
contingent liabilities, for the identication of risks is not completed;
tangible assets, because the estimated fair value of these assets
is in progress;
intangible assets, because the assumptions used to value these
assets will be rened in 2012.
Note3 Segment information
The new divisions are organised by business (Power, Infrastructure,
Industry, IT, Buildings).
The ve Businesses are:
Power, which includes the activities of Low Voltage (electrical
distribution), LifeSpace (wiring devices and associated interface
devices) and Renewables (conversion and connection to the grid)
further to the transfer of Medium Voltage to the Energy business in
2011 (see below); the business is in charge of the end-customer
segments Residential and Marine when it relates to solutions
integrating the offers of several activities from the Group;
Infrastructure, created in 2011 and previously named Energy,
combines all Medium Voltage activities including those from
Areva Distribution, as well as Telvent; the business is in charge
of the end-customer segments Oil and Gaz and Utilities when it
relates to solutions integrating the offers of several activities from
the Group;
Industry, which includes Automation & Control and three end-
customer segments: OEMs, Water Treatment and Mining,
Minerals & Metals when it relates to solutions integrating the offers
of several activities from the Group, as well as Custom Sensors &
Technologies business (Sensors & Automatives), grouped under
Industry from 2011;
IT, which covers Critical Power & Cooling Services and two
end- customer segments: Data Centers and Financial Services
when it relates to solutions integrating the offers of several
activities from the Group;
Buildings, which includes Building Automation and Security and
four end-customer segments: Hotels, Hospitals, Ofce Buildings
and Retail Buildings.
Data concerning General Management that cannot be allocated to
a particular segment are presented under Corporate costs.
Operating segment data is identical to that presented to the
Management Board, which has been identied as the main decision-
making body for allocating resources and evaluating segment
performance. Performance assessments used by the Management
Board are notably based on Adjusted EBITA. 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
nancial statements apply to segment data.
Details are provided in Chapter 4 of the Registration Document
(Business Review).
5
3.1 Information by operating segment
Dec.31, 2011
Power Infrastructure Industry IT Buildings
Corporate
costs Total
Revenue 8,297 4,897 4,404 3,237 1,552 - 22,387
EBITA 1,714 465 761 497 126 (484) 3,079
% 20.7% 9.5% 17.3% 15.3% 8.1% - 13.8%
Restructuring costs (75) (19) (24) (9) (11) (7) (145)
Other operating income and expense 49 (27) 4 (17) (8) (9) (8)
of which acquisition and
integration costs (2) (50) (5) (10) (8) (24) (99)
Adjusted EBITA * 1,740 511 781 523 145 (468) 3,232
% 21.0% 10.4% 17.7% 16.2% 9.3% - 14.4%
* Adjusted EBITA: EBITA before Restructuring costs and before Other operating income and expenses (of which Costs of acquisition,
integration and separation)
Dec.31, 2010 (included ArevaD since January1, 2010)
Power Infrastructure Industry IT Buildings
Corporate
costs Total
Revenue 7,755 4,341 3,984 2,746 1,402 - 20,228
EBITA 1,660 456 698 453 135 (462) 2,940
% 21.4% 10.5% 17.5% 16.5% 9.6% - 14.5%
Restructuring costs (37) (10) (41) (5) (9) 1 (101)
Other operating income and expense 24 21 (5) 2 (4) (30) 8
of which acquisition and
integration costs - - (3) - (3) (25) (31)
Adjusted EBITA* 1,673 445 744 456 148 (433) 3,033
% 21.6% 10.3% 18.7% 16.6% 10.6% - 15.0%
* Adjusted EBITA: EBITA before Restructuring costs and before Other operating income and expenses (of which Costs of acquisition,
integration and separation).
As a consequence of the creation of Infrastructure business,
revenue and prots related to Medium voltage business, reported
in 2010 in Power Business are now reported in Energy division.
Additionally, revenue and prots related to Distribution business of
Areva from January1 to June7, 2010, that were not consolidated in
nancial statements released on December31, 2010 and described
in note2.1 are now also reported in Infrastructure business, in order
to ease the comparability from previous semester.
Due to a change of responsibility, 2011 rst quarter revenue of the
Power and Building businesses have been modied compared to
the data set provided in rst quarter 2011 Group revenues release.
3.2 Information by region
The geographic regions covered by the Group are:
Western Europe;
North America: United States, Canada and Mexico;
Asia-Pacic;
Rest of the World (Eastern Europe, Middle East, Africa, South America).
Non-current assets include net goodwill, net intangible assets and net property, plant and equipment.
Dec.31, 2011

Western
Europe
of which
France
North
America
of which
USA
Asia-
Pacic
of which
China
Rest of the
world Total
Revenue by country market 7,184 1,958 5,208 4,360 5,933 2,798 4,062 22,387
Non-current assets 7,361 1,710 7,466 7,310 4,413 1,095 811 20,051
Dec.31, 2010

Western
Europe
of which
France
North
America
of which
USA
Asia-
Pacic
of which
China
Rest of the
world Total
Revenue by country market 6,568 1,777 4,704 3,952 4,792 2,269 3,516 19,580
Non-current assets 6,022 1,869 6,391 6,141 3,590 703 805 16,808
3.3 Degree of dependence in relation to main customers
No single customer accounts for more than 10% of consolidated revenue.
Note4 Research and development
Research and development costs break down as follows:
2011 2010
Research and development costs in cost of sales 206 171
Research and development costs in commercial expenses - -
Research and development costs in R&D costs
(1)
539 450
Capitalized development costs 234 197
TOTAL RESEARCH AND DEVELOPMENT COSTS OF THE YEAR 979 818
(1) Of which EUR29million research and development tax credit in December2011 and EUR21million in December2010.
Amortisation of capitalised development costs amounted to EUR112 million for the 2011 nancial year, compared with EUR107 million
in2010.
5
Note5 Depreciation and amortisation expenses
Depreciation and amortisation expenses recognised in operating expenses were as follows:
2011 2010
Included in cost of sales:
Depreciation and amortisation (398) (373)
Included in selling, general and administrative expenses:
Depreciation and amortisation (133) (131)
DEPRECIATION AND AMORTISATION EXPENSES (531) (504)
In 2011, provisions in an amount of EUR90million were recorded in
other operating income and expenses.
The net amount of impairment losses on non-current assets totaled
EUR25 million, of which EUR7 million in goodwill impairment
(note8), and EUR17million in other operating income and expenses
(note6).
Note6 Other operating income and expenses
Other operating income and expenses break down as follows:
2011 2010
Impairment losses on assets - (34)
Gains on asset disposals 8 25
Losses on asset disposals (9) (5)
Costs of acquisitions (99) (31)
Pension plan curtailments 42 8
Others 50 45
OTHER OPERATING INCOME AND EXPENSES (8) 8
The costs of acquisitions are the costs of acquisition, integration
and separation related to major acquisitions in 2010 and 2011.
The line Pension plan curtailments includes mainly a provision
release for medical care in the US of EUR45million.
The line Others includes mainly a reversal of provision for litigation
or claims expired on December. In 2010, this line included mainly
a reversal of provision for EUR22 million due to changes in paid
vacation modalities in the US and a proceed from insurance claim
for EUR17million.
Note7 Restructuring costs
Restructuring costs totaled EUR145million over the period. They mainly relate to industrial and support function reorganisations in Europe
(approximately EUR99million) and in North America (approximately EUR14million).
Note8 Amortisation and impairment of purchase accounting intangibles
Note9 Other financial income and expense
2011 2010
Exchange gains and losses, net (40) 25
Financial component of dened benet plan costs (45) (49)
Dividends received 9 9
Net gains/(losses) on disposal of long-term investments (1) 3
Other nancial expense, net (37) (53)
OTHER FINANCIAL INCOME AND EXPENSE (114) (65)
Dividends are mainly received on AXA shares.
2011 2010
Amortization of purchase accounting intangibles (208) (213)
Impairment of purchase accounting intangibles (3) -
Goodwill impairment (15) (15)
AMORTIZATION AND IMPAIRMENT OF PURCHASE ACCOUNTING INTANGIBLES (226) (228)
The migration of the Groups brands towards the Schneider
Electric brand (One Brand project) has led to the amortisation
from January1, 2010 of the Xantrex, TAC and MGE brands over
a six-year period. The corresponding amortisation expense totaled
EUR57million over the year.
Impairment losses totaling EUR15 million are recognised on
goodwill relating to two small businesses in Europe sold on second
semester.
Impairment tests performed on all the Groups CGUs have not
led to impairment losses being recognised. Analysis of the tests
sentitivity shows that no impairment losses would be recognized in
the following scenarios:
a 0.5point increase of the discount rate;
a 1.0point decrease of the growth rate;
a 0.5point decrease of margin rate.
5
Note10 Income tax expense
Whenever possible, Group entities le consolidated tax returns. Schneider ElectricSA has chosen this option for the French subsidiaries it
controls directly or indirectly through Schneider Electric IndustriesSAS.
10.1 Analysis of income tax expense
2011 2010
Current taxes
France (190) (23)
International (718) (598)
Total (908) (621)
Deferred taxes
France (100) 6
International 446 49
Total 346 55
INCOME TAX (EXPENSE)/BENEFIT (562) (566)
10.2 Tax proof
2011 2010
Prot attributable to owners of the parent 1,820 1,720
Income tax (expense)/benet (562) (566)
Non-controlling interests (84) (76)
Share of prot of associates 28 6
Prot before tax 2,438 2,356
Statutory tax rate 34.43% 34.43%
Income tax expense calculated at the statutory rate (839) (811)
Reconciling items:
Difference between French and foreign tax rates 220 196
Tax credits and other tax reductions 87 62
Impact of tax losses (28) 1
Other permanent differences (2) (14)
Income tax (expense)/benet (562) (566)
EFFECTIVE TAX RATE 23.1% 24.0%
Note11 Goodwill
11.1 Main items of goodwill
Group goodwill is broken down by business as follows:
Dec.31, 2011 Net Dec.31, 2010 Net
Power 3,906 3,789
Industry 2,176 1,732
Buildings 1,642 1,345
ITB 3,061 2,620
Infrastructure 1,987 727
TOTAL 12,773 10,213
The 2010 goodwill is presented in order to take into account the business reorganisation that occurred in 2011.
Square D goodwill was allocated to each business in proportion to operating income:
Power Industry
Square D Company 82% 18%
11.2 Movements during the year
The main movements during the year are summarised as follows :
2011 2010
Net goodwill at opening 10,213 8,611
Acquisitions* 2,356 938
Disposals (21) (1)
Impairment - (15)
Translation adjustment 142 675
Reclassications 83 5
Net goodwill at year end 12,773 10,213
Cumulative impairment (178) (172)
* On the basis of the exchange rate at acquisition date.
Acquisitions
There is a 12 month period after the date of acquisition for the
Group to nalise the allocation of goodwill to these entities.
Thecorresponding goodwill is therefore provisional.
Goodwill generated by acquisitions made during the year
totaled EUR2,356 million and correspond principally to Telvent
(EUR1,001 million), the Chinese group L eader & Harvest
(EUR347million) and the Indian group Luminous (EUR260million).
Goodwill generated by 2010 acquisitions totaled EUR938 million,
consisting mainly of Areva Distribution for EUR727 million,
SCADAgroup in Australia for EUR110 million and Cimac in the
United Arab Emirates for EUR33million.
Impairment
Impairment tests performed on all the Groups CGUs have not led
to impairment losses being recognised.
Other changes
Translation adjustments concern principally goodwill onUSdollars.
5
Note12 Intangible assets
12.1 Change in intangible assets
Trademarks Software
Development
projects (R&D) Other Total
GROSS VALUE
Dec.31, 2009 2,420 724 842 1,213 5,199
Acquisitions - 15 197 27 239
Disposals (4) (8) (10) (5) (27)
Translation adjustments 205 20 39 95 359
Reclassication - 20 8 (33) (5)
Changes in scope of consolidation and other - 29 9 213 251
Dec.31, 2010 2,621 800 1,085 1,510 6,016
Acquisitions 0 25 217 54 296
Disposals - (30) (19) (8) (57)
Reclassication 1 4 (16) (25) (36)
Changes in scope of consolidation and other 84 24 4 338 450
Dec.31, 2011 2,786 827 1,292 1,915 6,820
ACCUMULATED AMORTIZATION AND
IMPAIRMENT
Dec.31, 2009 (132) (489) (243) (416) (1,280)
Depreciation and impairment (60) (73) (115) (160) (408)
Recapture 4 7 6 3 20
Translation adjustments (7) (14) (20) (35) (76)
Reclassication - (1) 2 5 6
Changes in scope of consolidation and other - (23) 3 - (20)
Dec.31, 2010 (195) (593) (367) (603) (1,758)
Recapture - 29 9 1 39
Reclassication - 13 3 (3) 13
Changes in scope of consolidation and other - 1 (5) 18 14
Dec.31, 2011 (257) (616) (483) (760) (2,116)
NET VALUE
Dec.31, 2009 2,288 235 599 797 3,919
Dec.31, 2010 2,426 207 718 907 4,258
Dec.31, 2011 2,529 211 809 1,155 4,704
In 2011, changes in scope of consolidation of other intangible assets mainly include recognized intangibles relating to Telvent (EUR182million)
and to Leader & Harvest (EUR125million), acquired in 2011.
12.2 Trademarks
At December31, 2011, the main trademarks recognised were as follows:
Dec.31, 2011 Dec.31, 2010
APC 1,406 1,382
Pelco 388 370
Clipsal 200 194
MGE 167 167
TAC 82 101
Juno 88 86
Digital 54 50
Other 144 76
NET 2,529 2,426
Brands recognised on acquisition realized in 2011 (Telvent, Luminous, Steck) amount to EUR78million. They are recorded in line O ther.
The migration of the Groups brands towards the Schneider Electric brand (One Brand project) has led to the amortisation from January1,
2010 of the Xantrex, TAC and MGE brands over a six-year period. The corresponding amortisation expense totaled EUR57million over
theyear.
5
Note13 Property, plant and equipment
13.1 Change in tangible assets
Land Buildings
Machinery and
equipment Other Total
GROSS VALUE
Dec.31, 2009 156 1,234 3,208 735 5,333
Acquisitions 1 54 171 145 371
Disposals (8) (53) (132) (65) (258)
Reclassication 2 35 91 (121) 7
Changes in scope of consolidation and other 69 149 196 91 505
Dec.31, 2010 231 1,480 3,678 832 6,221
Acquisitions 11 104 168 233 516
Disposals (1) (18) (105) (46) (170)
Reclassication 3 33 42 (141) (63)
Changes in scope of consolidation and other (24) 122 18 33 149
Dec.31, 2011 222 1,732 3,822 912 6,688
ACCUMULATED AMORTIZATION AND
IMPAIRMENT
Dec.31, 2009 (12) (597) (2,372) (387) (3,368)
Recapture 1 41 140 36 218
Reclassication - 3 (9) 5 (1)
Changes in scope of consolidation and other (1) (61) (123) (42) (227)
Dec.31, 2010 (14) (702) (2,697) (471) (3,884)
Recapture 0 11 121 27 159
Translation adjustments 0 (6) (20) (2) (28)
Reclassication 3 4 38 11 56
Changes in scope of consolidation and other (3) (23) 6 (13) (33)
Dec.31, 2011 (15) (792) (2,802) (506) (4,115)
NET VALUE
Dec.31, 2009 144 637 836 348 1,965
Dec.31, 2010 217 778 981 361 2,337
Dec.31, 2011 207 940 1,020 406 2,573
Reclassications primarily correspond to assets put into use.
13.2 Finance leases
Tangible assets primarily comprise the following nance leases:
Dec.31, 2011 Dec.31, 2010
Land 1 3
Buildings 44 74
Machinery and equipment 31 32
Other tangible assets 2 3
Accumulated depreciation (67) (83)
ASSETS UNDER FINANCE LEASE, NET 11 29
Future minimal rental commitments on nance lease properties at December31, 2011 break down as follows:

Minimum
payments
Discounted
minimum
payments
Less than one year 1 1
Between one and ve years 4 4
Five years and more 1 1
TOTAL COMMITMENTS 6 6
Discounting effect -
Discounted minimum payments 6
13.3 Operating leases
Rental expense breaks down as follows:
Dec.31, 2011 Dec.31, 2010
Minimum rentals 110 118
Conditional rentals 1 1
Sub-lease rentals (7) (4)
TOTAL RENTAL EXPENSE 104 115
Operating lease commitments break down as follows at December31, 2011:

Minimum
payments
Discounted
minimum
payments
Less than one year 96 93
Between one and ve years 250 226
Five years and more 108 85
TOTAL COMMITMENTS 454 404
Discounting effect (50)
Discounted minimum payments 404
5
Note14 Investments in associates
Investments in associates can be analysed as follows:
% interest at Dec.31 Share net assets at Dec.31 Share in net prot at Dec.31
2011 2010 2011 2010 2011 2010
Delta Dore Finance 20.0% 20.0% 15 13 2 1
Electroshield TM Samara 50.0% 50.0% 276 266 14 -
Sunten Electric Equipment 50.0% 50.0% 96 85 - (1)
Fuji Electric FA Components & Systems 36.8% 36.8% 96 76 12 5
Other N/A N/A 6 7 - 1
TOTAL - - 489 447 28 6
Note15 Financial assets
15.1 Available-for-sale financial assets
Available-for-sale nancial assets, primarily comprising investments, are detailed below:

Dec.31, 2011 Dec.31, 2010
% interest Gross value
Revaluation/
impairment Fair value Fair value
I Listed available-for-sale nancial assets
AXA 0.5% 111 (4) 107 132
NVC Ligthing 9.2% 115 (33) 82 -
Gold Peak Industries Holding Ltd 4.4% 6 (4) 2 3
Total listed AFS 232 (41) 191 135
II Unlisted available-for-sale nancial assets
Citec, SEAT
(1)
100.0% 6 - 6 -
FCPR SEV1 100.0% 34 21 55 58
FCPR SESS 54.5% 10 - 10 10
Simak
(2)
99.4% 5 - 5 5
SE Venture 100.0% 7 (7) - -
Others
(3)
36 (7) 29 202
Total unlisted AFS 98 7 105 275
TOTAL AVAILABLE-FOR-SALE FINANCIAL
ASSETS 330 (34) 296 410
(1) Companies purchased in 2011.
(2) Removed from the scope of consolidation in liquidation.
(3) Gross unit value of less than EUR5million.
The fair value of investments quoted in an active market corresponds
to the price on the balance sheet date. The revaluation of listed
investments over the year has had a negative impact on other
equity reserves of EUR60million.
15.2 Other non-current financial assets
Non Current nancial assets total EUR261million at December31,
2011 and include potential assets linked to acquisitions.
15.3 Current financial assets
Current nancial assets total EUR104million at December31, 2011
and comprise short-term investments.
Note16 Deferred taxes by type
Deferred taxes by type can be analysed as follows:
Dec.31, 2011 Dec.31, 2010
Deferred tax assets
Tax credits and tax loss carryforwards 294 387
Provisions for pensions and other post-retirement benet obligations 553 423
Impairment of receivables and inventory 163 183
Non-deductible provisions for contingencies and accruals 84 134
Other 350 (104)
TOTAL DEFERRED TAX ASSETS 1,444 1,023
Deferred tax liabilities
Differences between tax and accounting depreciation (113) (107)
Trademarks and other intangible assets (430) (897)
Capitalized development costs (R&D) (55) (56)
Other (346) 103
TOTAL DEFERRED TAX LIABILITIES (944) (957)
Note17 Inventories and work in progress
Inventories and work in process changed as follows:
Dec.31, 2011 Dec.31, 2010
Cost:
Raw materials 1,604 1,461
Production work in process 362 559
Semi-nished and nished products 1,564 1,384
Goods 75 84
Solution work in process 132 -
INVENTORIES AND WORK IN PROCESS AT COST 3,605 3,488
Impairment:
Raw materials (191) (169)
Production work in process (10) (20)
Semi-nished and nished products (167) (147)
Goods (12) (13)
Solution work in process (8) -
IMPAIRMENT LOSS (387) (349)
Net:
Raw materials 1,413 1,292
Production work in process 353 539
Semi-nished and nished products 1,397 1,237
Goods 63 71
Solution work in process 124 -
INVENTORIES AND WORK IN PROCESS, NET 3,349 3,139
Deferred tax assets recorded in respect of tax loss carryforwards at December31, 2011 essentially concern France (EUR102million) and
Belgium (EUR77million).
5
Dec.31, 2011 Dec.31, 2010
Accounts receivable 5,442 4,276
Notes receivable 185 265
Advances to suppliers 116 98
Accounts receivable at cost 5,744 4,639
Impairment (259) (198)
Accounts receivable, net 5,484 4,441
Of which:
On time 4,446 3,658
Less than one month past due 400 326
One to two months past due 168 126
Two to three months past due 112 100
Three to four months past due 93 79
More than four months past due 265 152
ACCOUNTS RECEIVABLE, NET 5,484 4,441
Note18 Trade accounts receivable
Accounts receivable result from sales to end-customers, who are
widely spread both geographically and economically. Consequently,
the Group believes that there is no signicant concentration of
creditrisk.
In addition, the Group takes out substantial credit insurance and
uses other types of guarantees to limit the risk of losses on trade
accounts receivable.
Changes in provisions for impairment of short and long-term trade accounts receivable were as follows:
Dec.31, 2011 Dec.31, 2010
Provisions for impairment on January1 (198) (140)
Additions (34) (47)
Utilizations 31 23
Reversals of surplus provisions 3 3
Translation adjustments 3 (10)
Other (64) (27)
PROVISIONS FOR IMPAIRMENT ON DECEMBER31 (259) (198)
Note19 Other receivables and prepaid expenses
Dec.31, 2011 Dec.31, 2010
Other receivables 337 236
Other tax credits 1,039 698
Derivative instruments 82 118
Prepaid expenses 180 160
TOTAL 1,638 1,212
5NOTES TO THE CONSOLIDATED FINANCIAL
Note20 Cash and cash equivalents
Dec.31, 2011 Dec.31, 2010
Marketable securities 634 1,825
Negotiable debt securities and short-term deposits 622 115
Cash and cash equivalents 1,515 1,449
Total cash and cash equivalents 2,771 3,389
Bank overdrafts (217) (93)
NET CASH AND CASH EQUIVALENTS 2,554 3,296
Note21 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 September2, 2011
and resulted in the issuance of 271,959,091new shares.
The Companys share capital at December31, 2011 amounted to
EUR2,195,772,096, represented by 548,943,024shares with a par
value of EUR4, all fully paid up.
At December31, 2011, a total of 548,722,100 voting rights were
attached to the 548,943,024shares outstanding.
Schneider Electrics capital management strategy is designed to:
ensure Group liquidity;
optimise its nancial structure;
optimise the weighted average cost of capital.
The strategy must also ensure the Group has access to different
capital markets under the best possible conditions. Factors taken
into account for decision-making purposes include objectives
expressed in terms of earnings per share, ratings or balance sheet
stability. Finally, decisions may be implemented depending on
specic market conditions.
Changes in share capital
Changes in share capital since December31, 2010 were as follows:
Cumulative number of shares Total (in euros)
Capital at Dec.31, 2010 271,959,091 2,175,672,728
Division of the par value by two 271,959,091 -
Exercise of stock options 1,169,210 4,676,840
Employee share issue 3,855,632 15,422,528
CAPITAL AT DEC.31, 2011 548,943,024 2,195,772,096
The share premium account increased by EUR194,755,657following the exercise of options and the increases in capital.
5
NOTES TO THE CONSOLIDATED FINANCIAL
21.2 Ownership structure

Dec.31, 2011 Dec.31, 2010
Capital
Number of
shares Voting rights
Number of
votingrights Capital Voting rights
% % % %
Capital Research andManagement
Company
(1)
9.4 51,780,765 8.9 51,780,765 8.2 7.7
CDC 3.7 20,349,002 4.6 26,699,002 4.2 5.1
Employees 4.6 25,001,870 7.1 41,268,373 4.1 6.1
Own shares 0.0 1,058 - - - -
Treasury shares 1.7 9,164,952 - - 1.7 -
Public 80.6 442,645,377 78.0 455,807,950 81.8 79.4
TOTAL 100.0 548,943,024 100.0 584,722,100
(2)
100.0 100.0
(1) To the best of the Companys knowledge.
(2) Number of voting rights as dened in article223-11 of the AMF general regulations, which includes shares stripped of voting rights.
No shareholders pact was in effect as of December31, 2011.
21.3 Earnings per share
These calculations are adjusted to reect the division of the par value by two, from 8 euros to 4 euros, effective September2, 2011.
Determination of the share base used in calculation
(in thousands of shares)
Dec.31, 2011 Dec.31, 2010
Basic Diluted Basic Diluted
Common shares* 537,422 537,422 521,786 521,786
Stock grants 2,890 1,184
Stock options 2,623 2,180
Average weighted number of shares 537,422 542,935 521,786 525,150
* Net of treasury shares and own shares.
Earnings per share
(In euros)
Dec.31, 2011 Dec.31, 2010
Basic Diluted Basic Diluted
Prot before tax 4.54 4.49 4.51 4.48
EARNINGS PER SHARE 3.39 3.35 3.30 3.28
21.4 Dividends paid and proposed
In 2011, the Group paid out the 2010 dividend of EUR3.20 per
share, for a total of EUR856million.
In 2010, the Group paid out the 2009 dividend of EUR2.05 per
share, for a total of EUR525million.
At the Shareholders Meeting of May 3, 2012, shareholders will
be asked to approve a dividend of EUR1.70 per share for 2011.
At December 31, 2011 Schneider Electric SA had distributable
reserves in an amount of EUR96million (versus EUR257million at
the previous year-end), not including prot for the year.
21.5 Share-based payments
Current stock option and stock grant plans
The Board of Directors of Schneider ElectricSA and later the Management Board have set up stock option and stock grant plans for senior
executives and certain employees of the Group. The main features of these plans were as follows at December31, 2011:
Stock option plans
Plan no.
Date of Board
meeting
Type of
plan
(1)
Starting date
of exercise period Expiration date Price (ineuros)
Number of
options initially
granted
Options cancelled
because targets not
met
18 Mar.24, 2000 P Mar.24, 2003 Mar.23, 2008 32.62 2,842,400 1,373,200
19 April4, 2001 S April4, 2005 April3, 2009 34.06 3,115,700 N/A
(2)
20 Dec.12, 2001 S Dec.12, 2005 Dec.11, 2009 25.63 3,200,000 333,600
21 Feb.5, 2003 S Feb.5, 2007 Feb.4, 2011 22.60 4,000,000 283,800
22 Feb.5, 2003 S June5, 2003 Feb.4, 2011 22.60 222,000 N/A
(2)
23 May6, 2004 S Oct.1, 2004 May5, 2012 27.77 214,000 N/A
(2)
24 May6, 2004 S May6, 2008 May5, 2012 27.77 4,121,400 188,600
25 May12, 2005 S Oct.1, 2005 May11, 2013 28.23 277,000 N/A
(2)
26 June28, 2005 S June28, 2009 June27, 2013 30.09 4,007,600 -
27 Dec.1, 2005 S Dec.1, 2009 Nov.30, 2013 35.70 3,229,800 -
28 Dec.21, 2006 S or P Dec.21, 2010 Dec.20, 2016 40.67 2,514,240 -
29 April23, 2007 S or P April23, 2011 April22, 2017 48.52 166,300 -
30 Dec.19, 2007 S or P Dec.19, 2011 Dec.18, 2017 46.00 1,889,852 980,926
31 Jan.5, 2009 S or P Jan.5, 2013 Jan.4, 2019 26.06 1,358,000 -
32 Aug.21, 2009 S or P Aug.21, 2013 Aug.20, 2019 31.30 10,000 -
33 Dec.21, 2009 S or P Dec.21, 2013 Dec.20, 2019 37.92 1,652,686 -
TOTAL 32,820,978 3,160,126
(1) S =Options to subscribe new shares. P =Options to purchase existing shares.
(2) Not applicable because no vesting conditions were set.
Rules governing the stock option plans are as follows:
to exercise the option, the grantee must be an employee or
corporate ofcer of the Group. Vesting is also conditional on the
achievement of performance criteria;
the options expire after eight to ten years;
the vesting period is three or four years in the United States and
four years in the rest of the world.
5
Stock grants
Plan no.
Date of Board
meeting Vesting Date Expiration Date
Number of shares
grantedoriginally
Grantscancelled because
targets not met
1 Dec.21, 2006 Dec.21, 2009 Dec.21, 2011 104,012 -
2 April23, 2007 April23, 2010 April23, 2012 4,428 -
3 Dec.19, 2007 Dec.19, 2010 Dec.19, 2012 132,788 69,434
4 Dec.19, 2007 Dec.19, 2011 Dec.19, 2011 114,500 58,176
5 Jan.5, 2009 Jan.5, 2012 Jan.5, 2014 287,430 -
6 Jan.5, 2009 Jan.5, 2013 Jan.5, 2013 424,702 -
7 Aug.21, 2009 Aug.21, 2012 Aug.21, 2014 2,500 -
8 Dec.21, 2009 Dec.21, 2011 Dec.21, 2013 319,506 -
9 Dec.21, 2009 Dec.21, 2013 Dec.21, 2013 780,190 -
10 Dec.17, 2010 Mar.17, 2013 Mar.17, 2015 665,524 -
11 Dec.17, 2010 Dec.17, 2014 Dec.17, 2014 1,161,696 -
10 bis July26, 2011 July26, 2013 July26, 2015 3,000 -
11 bis July26, 2011 July26, 2015 July26, 2015 5,882 -
12 July26, 2011 July26, 2015 July26, 2015 19,850 -
13 Dec.16, 2011 Dec.16, 2013 Dec.16, 2015 645,443 -
14 Dec.16, 2011 Dec.16, 2015 Dec.16, 2015 1,387,800 -
TOTAL 6,059,851 127,610
Rules governing the stock grant plans are as follows:
to receive the stock, the grantee must be an employee or
corporate ofcer of the Group. Vesting is also conditional on the
achievement of performance criteria;
the vesting period is two to four years;
the lock-up period is zero to two years.
Outstanding options and grants
Change in the number of options
Plan no.
Number of options
outstanding
Dec.31, 2010
Number of options
exercised and/ or
createdin2011
Number of options
cancelled in 2011
(1)
Number of options
outstanding
Dec.31, 2011
21 88,452 (29,674) (58,778) -
22 12,940 (820) (12,120) -
23 30,332 (8,040) - 22,292
24 845,644 (274,254) - 571,390
25 58,940 (14,872) - 44,068
26 1,890,198 (234,952) (7,676) 1,647,570
27 2,168,392 (265,750) (3,232) 1,899,410
28 2,105,646 (291,794) (13,130) 1,800,722
29 152,300 - (8,000) 144,300
30 882,440 - (40,480) 841,960
31 1,286,900 - (33,600) 1,253,300
32 10,000 - - 10,000
33 1,646,086 - (21,450) 1,624,636
TOTAL 11,178,270 (1,120,156) (198,466) 9,859,648
(1) Including potential cancellations due to targets not being met or options being granted to employes without being exercised.
To exercise the options granted under plans 26 to 33, and the SARs,
the grantee must be an employee or corporate ofcer of the Group.
In addition, exercise of some options is generally conditional on the
achievement of annual objectives based on nancial indicators.
In respect of subscription vesting conditions for current stock option
plans, Schneider ElectricSA has created 1,169,210shares in 2011.
Change in the number of stock grants
Plan no.
Number of stock grants
atDec.31, 2010
Number of existing or new
shares grants in 2011
Number of shares
cancelledin 2011
Number of shares
outstanding Dec.31, 2011
4 54,086 (49,054) (5,032) -
5 274,680 - (1,850) 272,830
6 411,026 - (17,278) 393,748
7 2,500 - - 2,500
8 319,506 - (1,544) 317,962
9 772,190 - (21,780) 750,410
10 665,524 - (3,544) 661,980
11 1,161,696 - (25,620) 1,136,076
10 bis - 3,000 - 3,000
11 bis - 5,882 - 5,882
12 - 19,850 - 19,850
13 - 645,443 - 645,443
14 - 1,387,800 - 1,387,800
TOTAL 3,661,208 2,012,921 (76,648) 5,597,481
For stock grants to vest, the grantee must be an employee or corporate ofcer of the Group. In addition, vesting of some stock grants is
conditional on the achievement of annual objectives based on nancial indicators.
21.5.1 Valuation of share-based payments
Stock option valuation
In accordance with the accounting policies described in note1.20,
the stock option plans have been valued on the basis of an
average estimated life of between seven and ten years using the
followingassumptions:
expected volatility of between 20% and 28%, corresponding to
capped historical volatility;
a payout rate of between 3.0% and 4.5%;
a discount rate of between 2.9% and 4.5%, corresponding to a
risk-free rate over the life of the plans (source: Bloomberg).
Based on these assumptions, the amount recorded under Selling,
general and administrative expenses for stock grant plans set up
after November7, 2002 breaks down as follows:
2011 2010
Plan 28 - 5
Plan 29 - 1
Plan 30 1 2
Plan 31 2 2
Plan 32 - -
Plan 33 4 4
TOTAL 7 14
5
Valuation of stock grants
In accordance with the accounting policies described in note1.20,
the stock grant plans have been valued on the basis of an average
estimated life of between four and ve years using the following
assumptions:
a payout rate of between 3.0% and 4.5%;
a discount rate of between 1.6% and 4.5%, corresponding to a
risk-free rate over the life of the plans (source: Bloomberg).
Based on these assumptions, the amount recorded under Selling, general and administrative expenses for stock grant plans set up after
November7, 2002 breaks down as follows:
2011 2010
Plan 5 2 2
Plan 6 2 2
Plan 7 - -
Plan 8 5 5
Plan 9 6 6
Plan 10 16 1
Plan 11 13 -
Plan 10 bis - -
Plan 11 bis - -
Plan 12 - -
Plan 13 - -
Plan 14 - -
TOTAL 44 16
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 scal requirements have the choice
between a classic and a leveraged plan.
Under the classic plan, employees may purchase
Schneider Electric shares at a 15% to 20% discount to the price
quoted for the shares on the stock market. Employees must then
hold their shares for ve years, except in certain cases provided for
by law. The share-based payment expense recorded in accordance
with IFRS 2 is measured by reference to the fair value of the
discount on the locked-up shares. The lock-up cost is determined
on the basis of a two-step strategy that involves rst selling the
locked- up shares on the forward market and then purchasing the
same number of shares on the spot market (i.e., shares that may be
sold at any time) using a bullet loan.
This strategy is designed to reect the cost the employee would
incur during the lock-up period to avoid the risk of carrying the
shares subscribed under the classic plan. The borrowing cost
corresponds to the cost of borrowing for the employees concerned,
as they are the sole potential buyers in this market. It is based
on the average interest rate charged by banks for an ordinary,
non- revolving personal loan with a maximum maturity of ve years
granted to an individual with an average credit rating.
Under the leveraged plan, employees may also purchase
Schneider Electric shares at a 15% to 20% discount from the price
quoted on the stock market. However, the leveraged plan offers a
different yield prole as a third-party bank tops up the employees
initial investment, essentially multiplying the amount paid by the
employee. The total is invested in Schneider Electric shares at a
preferential price. The bank converts the discount transferred by
the employee into funds with a view to securing the yield for the
employee and increasing the indexation on a leveraged number
(factor of 4.4 in 2010) of directly subscribed shares.
As with the classic plan, the share-based payment expense is
determined by reference to the fair value of the discount on the
locked-up shares (see above). In addition, it includes the value of the
benet corresponding to the issuers involvement in the plan, which
means that employees have access to share prices with a volatility
prole adapted to institutional investors rather than to the prices and
volatility prole they would have been offered if they had purchased
the shares through their retail banks. The volatility differential is
treated as a discount equivalent that reects the opportunity gain
offered to employees under the leveraged plan.
As regards the rst semester 2011, Schneider Electric gave
its employees the opportunity to purchase shares at a price of
EUR95.38 or EUR89.77 per share, depending on the country, as
part of its commitment to employee share ownership, on June6,
2011. This represented a 15% to 20% discount to the reference
price of EUR112.21 calculated as the average opening price
quoted for the share during the 20 days preceding the Management
Boards decision to launch the employee share issue.
Altogether, 1.9 million shares were subscribed, increasing the
Companys capital by EUR178million as of July12, 2011. The issue
represented a total cost of EUR9 million, taking into account the
ve-year lock-up period.
The tables below summarize the main characteristics of the plans, the amounts subscribed, the valuation assumptions and the plans cost
for 2011 and 2010.
Nonleveraged plans
2011 2010
% Value % Value
Plan characteristics
Maturity (years) 5 5
Reference price (euros) 112.21 79.34
Subscription price (euros):
between 95.38 67.44
and 89.77 65.86
Discount:
between 15.0% 15.0%
and 20.0% 17.0%
Amount subscribed by employees 72.0 37.8
Total amount subscribed 72.0 37.8
Total number of shares subscribed (millions of shares) 0.8 0.6
Valuation assumptions
Interest rate available to market participant (bullet loan)
(1)
4.8% 4.1%
Five year risk-free interest rate (euro zone) 2.8% 2.1%
Annual interest rate (repo) 1.0% 1.0%
(a) Value of discount:
between 15.0% 7.9 15.0% 6.2
and 20.0% 6.7 17.0% 0.6
(b) Value of the lock-up period for market
participant 14.9% 12.9 15.0% 6.7
Total expense for the Group (a-b) 0.12% to 5.12% 1.8 0.01% to 2.01% 0.1
Sensitivity
decrease in interest rate for market participant
(2)
-0.5% 2.0 -0.5% 1.2
Amounts inmillions of euros, unless otherwisestated.
(1) Average interest rate charged on an ordinary, non-revolving personal loan, with a ve-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.
5
Leveraged plans
2011 2010
% Value % Value
Plan characteristics
Maturity (years) 5 5
Reference price (euros) 112.21 79.34
Subscription price (euros):
between 95.38 67.44
and 89.77 65.86
Discount
(5)
:
between 15.0% 15.0%
and 20.0% 17.0%
Amount subscribed by employees 10.6 9.9
Total amount subscribed 105.7 105.4
Total number of shares subscribed (millions of shares) 1.2 1.6
Valuation assumptions
Interest rate available to market participant (bullet loan)
(1)
4.8% 4.1%
Five year risk-free interest rate (euro zone) 2.8% 2.1%
Annual dividend rate 3.0% 3.0%
Annual interest rate (repo) 1.0% 1.0%
Retail/institutional volatility spread 5.0% 5.0%
(a) Value of discount:
between 15.0% 5.9 15.0% 11.7
and 20.0% 18.1 17.0% 8.0
(b) Value of the lock-up period for market
participant 14.9% 19.3 15.0% 18.8
(c) Value of the opportunity gain
(2)
2.0% 2.6 1.9% 2.4
Total expense for the Group (a-b+c) 2.10% to 7.10% 7.3 1.89% to 3.89% 3.3
Sensitivity
decrease in interest rate for market participant
(3)
-0.5% 3.1 -0.5% 3.3
increase in retail/institutional volatility spread
(4)
0.5% 0.3 0.5% 0.2
Amounts inmillions of euros, unless otherwisestated.
(1) Average interest rate charged on an ordinary, non-revolving personal loan, with a ve-year maturity to an individual with an average
credit rating.
(2) Calculated using a binomial model.
(3) A decline in the interest rate for market participants reduces the lock-up cost and increases the expense booked by the issuer.
(4) An increase in the retail/institutional volatility spread increases the opportunity gain for the employee and increases the expense booked
by the issuer.
(5) In some countries, due to local law, employees subscribe for undiscounted sums while the bank subscribes at a discount
toprovidetheleverage.
21.6 Schneider ElectricSA shares
At December31, 2011, the Group held 9,164,952 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 Equity amounts to EUR329million as of December31, 2011 and can be analysed as follows:
Dec.31, 2011 Dec.31, 2010 Change in tax
Cash-ow hedges 100 69 31
Available-for-sale nancial assets (3) (14) 11
Actuarial gains (losses) on dened benets 233 146 87
Other (1) (1) -
TOTAL 329 200 129
The Group has set up various post-employment benet plans for
employees covering pensions, termination benets, healthcare, life
insurance and other benets, as well as long-term benet plans
for active employees, primarily long service awards and similar
benets, mainly in France.
Note22 Pensions and other post-employment benefit obligations
Actuarial valuations are generally performed each year. Theassumptions used vary according to the economic conditions prevailing in the
country concerned, as follows:

Weighted average rate Of which US plans
2011 2010 2011 2010
Discount rate 4.3% 5.0% 4.6% 5.5%
Rate of compensation increases 2.5% 2.0% N/A N/A
Expected return on plan assets
(1)
6.9% 7.0% 8.0% 8.3%
(1) Corresponding to the 2010 and 2011 rates.
The discount rate is determined on the basis of the interest rate
for investment-grade (AA) corporate bonds or, in the event a
liquid market does not exist, government bonds with a maturity
that matches the duration of the benet obligation (reference:
Bloomberg). In the United States, the average discount rate is
determined on the basis of a yield curve for investment-grade (AA
and AAA) corporate bonds.
These benchmarks, which are the same as those used in previous
years, comply with IAS19.
The expected return on plan assets is determined on the basis of
the weighted average expected return of the total asset value.
The discount rate currently stands at 4.00% in the euro zone,
4.59% in the United States and 4.90% in the United Kingdom.
A 0.5 point increase in the discount rate would reduce pension and
termination benet obligations by around EUR155 million and the
service cost by EUR2million. A 0.5 point decrease would increase
pension and termination benet obligations by EUR165million and
the service cost by EUR2million.
The post-employment healthcare obligation mainly concerns the
United States. A one point increase in the healthcare costs rate
would increase the post-employment healthcare obligation by
EUR38 million and the sum of the service cost and interest cost
by EUR3 million. A one point decrease in healthcare costs rate
would decrease the post-employment healthcare obligation by
EUR33million and the sum of the service cost and interest cost by
EUR2million.
In 2011, the rate of healthcare cost increases in the United States
is based on a decreasing trend from 8% in 2012 to 4.5% in 2023.
Thiscompares with the previous years forecast of 9% in 2011 to
5% in 2015. In 2009, the forecast was based on a decreasing trend
from 9% in 2010 to 5% in 2014. The rate in France was estimated
at 4% in 2011, as in 2010 and in 2009.
5
Pensions and termination benefits
Pension obligations primarily concern the Groups North American
and European subsidiaries. These plans feature either a lump-sum
payment on the employees retirement or regular pension payments
after retirement. The amount is based on years of service, grade
and end-of-career salary. They also include top-hat payments
granted to certain senior executives guaranteeing supplementary
retirement income beyond that provided by general, mandatory
pension schemes.
The majority of benet obligations under these plans, which represent
76% of the Groups total commitment or EUR2,027 million at
December31, 2011, are partially or fully funded through payments
to external funds. These funds are not invested in Group assets.
External funds are invested in equities (around 36%), bonds
(around54%) and real estate or cash (around 9%).
Contributions amounted to EUR83million in 2011 and are estimated
at EUR56million for 2012.
At December 31, 2011, provisions for pensions and termination
benets totaled EUR1,263million, compared with EUR1,032million
in 2010. These provisions have been included in non-current
liabilities, as the current portion was not considered material in
relation to the total liability.
Payments made under dened contribution plans are recorded in the
income statement in the year of payment and are in full settlement
of the Groups liability. Dened contribution plan payments totalled
EUR61million in 2011 and EUR59million in 2010.
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 insurance benets to retired employees who fulll
certain criteria in terms of age and years of service. These post-
employment benet obligations are unfunded.
Healthcare coverage for North American employees represents
84% of this obligation.
The assumptions used to determine post-employment benet
obligations related to healthcare and life insurance are the same
as those used to estimate pension benet obligations in the
countryconcerned.
Other long-term benet obligations include healthcare coverage
plans in Europe, for EUR62million, and long-service awards due by
subsidiaries in France, for EUR13million.
At December 31, 2011, provisions for these benet obligations
totaled EUR460 million, compared with EUR472 million at
December31, 2010. These provisions have been included in non-
current liabilities, as the current portion was not considered material
in relation to the total liability.
22.1 Changes in provisions for pensions and other post-employment benefit obligations
Changes in provisions for pensions and other post-employment benet obligations (net of plan assets) were as follows:

Pensions and
termination
benets
Of which SE
USA
Other post-
employment
and long-term
benets
Of which SE
USA
Provisions
for pensions
& other post-
employment
benets
Dec.31, 2009 944 293 435 358 1,379
Net cost recognized in the statement of income 63 2 25 18 88
Benets paid (58) (1) (26) (21) (84)
Plan participants contributions (21) (1) 2 2 (19)
Actuarial items recognized in equity 4 (18) - 4 4
Translation adjustment 40 23 29 26 69
Changes in the scope of consolidation 58 - 5 - 63
Other changes 2 1 2 - 4
Dec.31, 2010 1,032 299 472 387 1,504
Net cost recognized in the statement of income 70 3 (22) (29) 48
Benets paid (28) - (21) (20) (49)
Plan participants contributions (83) (66) 2 2 (81)
Actuarial items recognized in equity 247 143 20 - 267
Translation adjustment 20 17 9 9 29
Changes in the scope of consolidation (10) - (1) - (11)
Other changes 15 (1) 1 - 16
Dec.31, 2011 1,263 395 460 349 1,723
Changes in gross items recognised in equity were as follows:

Pensions and
termination
benets
Other post-
employment and
long-term benets
Provisions for
pensions & other
post-employment
benets.
Dec.31, 2009 458 (53) 405
Actuarial (gains)/losses on projected benet obligation 42 - 42
Actuarial (gains)/losses on plan assets (38) - (38)
Effect of the asset ceiling - - -
Dec.31, 2010 462 (53) 409
Actuarial (gains)/losses on projected benet obligation 222 18 240
Actuarial (gains)/losses on plan assets 25 - 25
Effect of the asset ceiling - - -
Dec.31, 2011 709 (35 ) 674
22.2 Provisions for pensions and termination benefit obligations
Annual changes in obligations, the market value of plan assets and the corresponding assets and provisions recognised in the consolidated
nancial statements can be analysed as follows:

Dec.31, 2011 Dec.31, 2010
Of which SE USA Of which SE USA
1. Reconciliation of balance sheet items
Pension assets - - - -
Provisions for pensions and other post-employment
benet (1,263) (395) (1,032) (299)
NET ASSET/(LIABILITY) RECOGNIZED
INTHEBALANCE SHEET (1,263) (395) (1,032) (299)

Dec.31, 2011 Dec.31, 2010
2. Components of net cost recognized in the
statement of income
Service cost 41 2 43 2
Interest cost (effect of discounting) 110 53 109 56
Expected return on plan assets (86) (56) (82) (56)
Past service cost 1 - - -
Curtailments and settlements 4 4 (7) -
NET COST RECOGNIZED IN THE STATEMENT
OFINCOME 70 3 63 2
5

Dec.31, 2011 Dec.31, 2010
3. Change in projected benet obligation
Projected benet obligation at beginning of year 2,340 1,034 2,055 937
Service cost 41 2 43 2
Interest cost (effect of discounting) 110 53 109 56
Plan participants contributions 4 - 4 -
Benets paid (100) (47) (134) (48)
Actuarial (gains)/losses recognized in equity 222 120 42 14
Past service cost 1 4 5 -
Changes in the scope of consolidation (18) - 87 -
Translation adjustments 62 44 130 73
Curtailments and settlements 4 - (7) -
Other 19 - 6 -
PROJECTED BENEFIT OBLIGATION
ATENDOFYEAR 2,685 1,210 2,340 1,034
Actuarial gains and losses have been fully recognised in
Otherreserves.
They stem mainly from changes in actuarial assumptions (primarily
discount rates) used to measure obligations in the United States,
the United Kingdom and the euro zone.
At December 31, 2011, actuarial gains relative to the effects of
experience on pension and termination benet obligations totaled
EUR20million for the Group.
At December 31, 2010, actuarial gains relative to the effects of
experience totaled EUR49million for the Group. At December31,
2009, actuarial losses relative to the effects of experience totaled
EUR64million. At December31, 2008, actuarial losses relative to
the effects of experience totaled EUR445million. At December31,
2007, actuarial losses relative to the effects of experience totaled
EUR2million.

Dec.31, 2011 Dec.31, 2010
4. Change in fair value of plan assets
Fair value of plan assets at beginning of year 1,304 735 1,112 643
Expected return on plan assets 86 56 82 56
Plan participants contribution 4 - 4 -
Employer contributions 83 66 21 1
Benets paid (72) (47) (76) (47)
Actuarial gains/(losses) recognized in equity (25) (23) 38 32
Changes in plan s - - - -
Changes in the scope of consolidation (8) - 29 -
Translation adjustments 42 27 90 50
Curtailments and settlements - - - -
Other 7 - 4 -
FAIR VALUE OF PLAN ASSETS AT END OF YEAR 1,421 814 1,304 735
The actual return on plan assets was EUR61million.
Actuarial gains and losses have been fully recognised in Other
reserves.
They stem mainly from the differential between the effective and
expected return on plan assets in the US and Canada.

Dec.31, 2011 Dec.31, 2010
5. Funded status
Projected benet obligation (2,685) (1,210) (2,340) (1,034)
Fair value on plan assets 1,421 814 1,304 735
Surplus/ (Decit) (1,264) (396) (1,036) (299)
Effect of the asset ceiling - - - -
Deferred items:
Unrecognized past service cost 1 1 4 -
(LIABILITIES)/NET ASSET RECOGNIZED IN THE
BALANCE SHEET (1,263) (395) (1,032) (299)
22.3 Provisions for healthcare costs, life insurance benefits and other post-employment
benefits
Changes in provisions for other post-employment and long-term benets were as follows:
Dec.31, 2011 Dec.31, 2010
1. Components of net cost recognized in the statement of income
Service cost 7 7
Interest cost (effect of discounting) 20 22
Expected return on plan assets - -
Past service cost (7) (4)
Curtailments and settlements (42) -
Amortization of actuarial gains & losses - -
NET COST RECOGNIZED IN THE STATEMENT OF INCOME (22) 25
Amounts related to pensions and termination benet obligations as of 2011 and the four previous periods are as follows:
Dec.31, 2011 Dec.31, 2010 Dec.31, 2009 Dec.31, 2008 Dec.31, 2007
6. Historical data
Projected benet obligation (2,685) (2,340) (2,055) (2,036) (1,958)
Fair value on plan assets 1,421 1,304 1,112 1,010 1,402
Surplus/ (Decit) (1,264) (1,036) (943) (1,026) (556)
Effect of the asset ceiling - - (1) (2) (10)
Deferred items:
Unrecognized past service cost 1 4 0 1 1
(LIABILITIES)/NET ASSET RECOGNIZED
INTHEBALANCE SHEET (1,263) (1,032) (944) (1,027) (565)
Amortisation of actuarial gains and losses concerns long-term
benets for active employees, notably long service awards in
France.
In 2011, healthcare plan curtailment in the US decreased the benet
obligation.
5
Dec.31, 2011 Dec.31, 2010
2. Change in projected benet obligation
Projected benet obligation at beginning of year 445 406
Service cost 7 7
Interest cost (effect of discounting) 20 22
Plan participants contribution 2 2
Benets paid (21) (26)
Actuarial (gains)/losses recognized in equity 20 -
Past service cost (41) -
Changes in the scope of consolidation (1) 5
Translation adjustments 9 29
Other (including curtailments and settlements) - -
PROJECTED BENEFIT OBLIGATION AT END OF YEAR 440 445
Actuarial gains and losses have been fully recognised in Other
reserves except for long-term benets for active employees,
notably long service awards in France, for which all actuarial gains
and losses are recognised in the income statement. Actuarial
gains and losses stem from changes in actuarial assumptions
(primarilydiscount rates).
At December 31, 2011, actuarial losses relative to the effects
of experience on healthcare costs, life insurance and other
post- employment benets totaled EUR21 million for the Group.
Actuarial gains totaled EUR26million at December31, 2010.
At December 31, 2009, actuarial losses relative to the effects of
experience totaled EUR18 million for the Group. They totaled
EUR10million at December31, 2008. And at December31,2007,
actuarial gains relative to the effects of experience totaled
EUR59million.
Dec.31, 2011 Dec.31, 2010
3. Funded status
Projected benet obligation (440) (445)
Deferred items:
Unrecognized past service cost (20) (27)
PROVISION RECOGNIZED IN BALANCE SHEET (460) (472)
Amounts related to healthcare costs and other post-employment obligations as of 2011 and the four previous periods are as follows:
Dec.31, 2011 Dec.31, 2010 Dec.31, 2009 Dec.31, 2008 Dec.31, 2007
4. Historical data
Projected benet obligation (440) (445) (406) (401) (366)
Deferred items:
Unrecognized past service cost (20) (27) (29) (35) (33)
PROVISION RECOGNIZED IN BALANCE SHEET (460) (472) (435) (436) (399)
Note23 Provisions

Economic
risks
Customer
risks
Products
risks
Environmental
risks Restructuring Other risks Provisions
Dec 31, 2009 418 80 264 44 210 132 1,148
Long-term portion 131 31 79 27 28 80 375
Additions 117 18 150 3 39 75 402
Discounting effect - - 1 - - (4) (3)
Utilizations (36) (9) (95) (2) (124) (34) (300)
Reversals of surplus
provisions (75) (9) (17) - (19) (8) (128)
Translation adjustments 16 4 16 2 5 3 46
Changes in the scope
ofconsolidation and other 174 2 90 8 13 12 299
Dec 31, 2010 614 86 409 55 124 176 1,464
Additions 159 5 143 8 87 69 471
Discounting effect 1 - - - - - 1
Utilizations (82) (8) (109) (5) (77) (60) (341)
Reversals of surplus
provisions (53) (6) (29) (1) (9) (38) (136)
Translation adjustments 8 1 3 - - 2 14
Changes in the scope
ofconsolidation and other 92 9 3 - 12 51 167
Dec 31, 2011 739 87 420 57 137 200 1,640
(a) Economic risks
These provisions cover, in particular, tax risks arising from audits
performed by local tax authorities and nancial risks arising primarily
on guarantees given to third parties in relation to certain assets
andliabilities.
Variations in scope of consolidation and others amount to
EUR92million and are principally related to Leader &Harvest, Steck
and Luminous acquisitions .
(b) Customer risks
These provisions are primarily established to covers risks arising
from products sold to third parties. This risk mainly consists of
claims based on alleged product defects and product liability.
Provisions for customer risks also integrate the provisions for
losses at completion for a number of long term contracts, for
EUR18million.
(c) Product risks
These provisions comprise:
statistical provisions for warranties: the Group funds provisions
on a statistical basis for the residual cost of Schneider Electric
product warranties not covered by insurance;
provisions for disputes over defective products;
provisions to cover disputes related to recalls of clearly
identiedproducts.
(d) Environmental risks
These provisions are primarily funded to cover cleanup costs.
5
Note24 Total (current and non-current) financial liabilities
Non-current nancial liabilities break down as follows:
Dec.31, 2011 Dec.31, 2010
Bonds 5,540 4,348
Bank and other borrowings 1,464 1,379
Lease liabilities 7 15
Employees prot sharing 12 10
Short-term portion of convertible and non-convertible bonds - (503)
Short-term portion of long-term debt (96) (239)
NON-CURRENT FINANCIAL LIABILITIES 6,927 5,010
Current nancial liabilities break down as follows:
Dec.31, 2011 Dec.31, 2010
Commercial paper 190 -
Accrued interest 132 110
Other short-term borrowings 475 170
Drawdown of funds from lines of credit - -
Bank overdrafts 217 93
Short-term portion of convertible and non-convertible bonds - 503
Short-term portion of long-term debt 96 239
Short-term debt 1,110 1,115
TOTAL CURRENT AND NON-CURRENT FINANCIAL LIABILITIES 8,037 6,125
24.1 Breakdown by maturity

Dec.31, 2011 Dec.31, 2010
Nominal Interests Swaps Nominal
2011 1,115
2012 1,110 285 46 104
2013 1,181 256 27 1,085
2014 1,158 187 5 767
2015 998 133 7 980
2016 792 120 - 546
2017 and beyond 2,798 171 - 1,528
TOTAL 8,037 1,152 85 6,125
24.2 Breakdown by currency
Dec.31, 2011 Dec.31, 2010
Euro 6,272 5,182
US Dollar 728 521
Indian rupee 233 22
Japanese yen 384 153
Brazilian real 147 75
Russian rouble 32 34
Colombian peso 29 23
Other 212 115
TOTAL 8,037 6,125
24.3 Bonds
Dec.31, 2011 Dec.31, 2010 Effective interest rate Maturity
Schneider ElectricSA 2011 500 Euribor +0.200% variable July 2011
Schneider ElectricSA 2013 605 608 CMS 10+1.000% variable and 6.750% xed July 2013
Schneider ElectricSA 2014 730 498 Libor USD +0.490% variable and 4.500% xed January 2014
Schneider ElectricSA 2015 749 748 5.375% xed January 2015
Schneider ElectricSA 2016 736 519 Euribor +0.600% variable and 0.849%, 0.846%,
2.875% xed
July, November,
December 2016
Schneider ElectricSA 2017 987 981 4.000% xed August 2017
Schneider ElectricSA 2018 743 - 3.750% xed July 2018
Schneider ElectricSA 2019 495 - 3.500% xed January 2019
Schneider ElectricSA 2020 495 494 3.625% xed July 2020
TOTAL 5,540 4,348
Schneider ElectricSA has made several bond issues as part of its
Euro Medium Term Notes (EMTN) programme over the past few
years. Issues that were not yet due as of December31, 2011 were
as follows:
JPY22.5billion worth of bonds issued in 2011, comprising a rst
JPY12.5billion tranche at a rate of 0.849% issued in Novemberand
due in November2016 and a second JPY10billion tranche at a
rate of 0.84625% issued in Decemberdue in December2016;
EUR500million worth of bonds issued in September2011, at a
rate of 3.5%, due in January2019;
EUR750million worth of bonds issued in July2011, at a rate of
3.75%, due in July2018;
USD300 million worth of bonds issued in July 2011, at a rate
variable rate indexed on the three-month USD Libor, due in
July2014;
EUR300 and EUR200million worth of bonds issued successively
in July and October 2010, at a rate of 2.875%, due on
July20,2016;
EUR500million worth of bonds issued in July2010, at a rate of
3.625%, due on July20, 2020;
EUR150million worth of bonds issued in May2009 to top up the
EUR600million twelve-year tranche, due January8, 2015, at a
rate of 5.375% issued on October2007, raising the total issue
to EUR750million;
EUR250million worth of bonds issued in March2009 to top up
the EUR780million twelve-year tranche, at a rate of 4%, issued in
August2005, raising the total issue to EUR1.03billion;
EUR750million worth of bonds issued in January2009 at a rate
of 6.75%, due on July, 16 2013; in July2010, this borrowing was
partially repayed with EUR263million;
EUR100million worth of bonds issued in July2008 indexed to the
10-year Constant Maturity Swap (CMS) rate, due July31,2013;
EUR12million corresponding to the discounted present value of
future interest payments on a EUR177 million eight year bond
issue (July25, 2008 to July25, 2016) indexed to the threemonth
Euribor. The nominal value of the bonds is not recognised in debt
because the bond holder has waived its right to repayment of the
principal in exchange for the transfer, on a no-recourse basis, of
the future cash ows corresponding to the requested refund of
a tax receivable;
EUR180million worth of bonds issued in April2008 to top up the
EUR600 million twelve-year tranche, at a rate of 4%, issued in
August2005, raising the total issue to EUR780million;
5
EUR600million worth of bonds issued in October2007, at a rate
of 5.375%, due on January8, 2015;
EUR1 billion worth of bonds issued in July 2006, comprising a
EUR500 million ve-year variable rate tranche indexed to the
threemonth Euribor and a EUR500million 7 1/2-year tranche at
4.5%. On July17, 2011 the rst tranche was reimbursed;
EUR600million worth of bonds issued in August2005, at a rate
of 4%, due on August2017.
These bonds are traded on the Luxembourg stock exchange. The
issue premium and issue costs are amortised according to the
effective interest method.
24.4 Other information
At December 31, 2011 Schneider Electric had conrmed credit
lines of EUR2.8billion, all unused.
Loan agreements and committed credit lines do not include any
nancial covenants nor credit rating triggers.
Dec.31, 2011 Dec.31, 2010
Debt related to 2010 acquisitions* 25 53
Electroshield TM Samara acquisition debt 50 50
Debt on Luminous valu ation 76 -
Other 84 25
OTHER NON-CURRENT LIABILITIES 235 128
* Acquisition of D5X, Vizelia and HDev.
The debt on Luminous valu ation corresponds to the Group commitments on the minority interest (26%) in Luminous.
Note25 Other non-current liabilities
Note26 Financial instruments
The Group uses nancial instruments to manage its exposure to uctuations in interest rates, exchange rates and metal prices. Exposure to
these risks is described in the chapter on risk factors in the Registration Document.
26.1 Carrying amount and nominal amount of derivative financial instruments

IFRS
designation
Dec 31, 2010 Dec 31, 2011 Dec 31, 2011
Carrying
amount
Change over the period
Carrying
amount
Nominal amount
Statement of
income
(1)
Equity
(2)
Other
(3)
Sale Purchase
Foreign exchange
Futures - cash ow hedges CFH* (95) 27 16 (7) (59) 194 (1,404)
Futures - net investment hedges NIH* 9 - (59) - (50) 1,633
Futures - hedges of balance sheet
items
Trading/
FVH* (24) (60) - - (84) 2,632 (1,637)
Metal prices
Futures and options CFH* 14 - (26) - (12) (171)
Share-based payment
Call options CFH* 53 (2) (17) - 34 (136)
(4)
Interest rates
Swaps on credit lines CFH*/FVH* (24) (3) 13 - (14) (1,131)
DERIVATIVES FINANCIAL
INSTRUMENTS (67) (38) (73) (7) (185)
* Cash ow hedge/Fair value hedge/Net investment hedge.
(1) Gains and losses on hedging instruments for the period are offset by changes in the fair value of the underlying, which are also
recognised in net result.
(2) Reported in equity under Retained earnings or Translation adjustment.
(3) Telvents acquisition impact.
(4) 3,300,894 Schneider Electric stocks are hedged in relation to Stock Appreciation Rights granted to US employees.
The carrying amount reects the fair value of nancial instruments.
5
26.2 Currency risk
Positions of futures hedges of balance sheet items and net investment by currency

Dec.31, 2011
Sales Purchases Net
AED 115 (12) 103
AUD 219 (49) 170
CHF 18 (10) 8
DKK 6 (68) (62)
GBP 181 (84) 97
HKD 263 - 263
HUF 30 (50) (20)
JPY - (42) (42)
RUB 46 - 46
SAR 36 (3) 33
SEK 4 (131) (127)
SGD 970 (133) 837
USD 2,307 (1,014) 1,293
ZAR 22 - 22
Others 48 (41) 7
TOTAL 4,265 (1,637) 2,628
26.3 Impact of financial instruments
Dec.31, 2011
Impact on nancial
income and
expense
Impact on Equity
Fair value
Translation
adjustment Other
Available-for-sale nancial assets 6 (60) 9 -
Loans and accounts receivable 30 - 78 -
Financial liabilities measured at amortized cost (331) - (158) -
Derivative instruments (38) (73) (2) -
TOTAL (333) (133) (73) -
Dec.31, 2010
Impact on nancial
income and
expense
Impact on Equity
Fair value
Translation
adjustment Other
Available-for-sale nancial assets 12 (32) 6 -
Loans and accounts receivable 24 - 372 -
Financial liabilities measured at amortized cost (306) - (561) -
Derivative instruments (64) 31 2 -
TOTAL (334) (1) (181) -
Theses forward currency hedging positions include EUR1,977million in hedges of loans and borrowings of a nancial nature (net sales) and
EUR651million in hedges of operating cash ows (net sales).
Other cash-ow hedge contracts are mainly related to the following currencies: USD, DKK, BRL, JPY and CAD.
The impact of nancial instruments, by category, on prot and
equity was as follows:
the main impact on prot concerned interest income andexpense;
the impact on equity primarily stemmed from the measurement
of available-for-sale nancial assets and derivative instruments at
fair value and from translation adjustments to foreign currency
loans, receivables and liabilities.
26.4 Maturities of financial assets and liabilities
Up to 1year 1 to 5years > 5years
Financial liabilities (1,110) (4,129) (2,798)
Financial assets 2,771 191 -
NET POSITION BEFORE HEDGING 1,661 (3,938) (2,798)
26.5 Balance sheet amounts for financial instruments by category
(In millions of euros)
Dec.31, 2011 Breakdown by category
Carrying
amount Fair value
Fair value
through P&L
Available-for-
sale nancial
assets
Loans,
receivables
and nancial
liabilities at
amortized cost
Derivative
instruments
ASSETS
Available-for-sale nancial assets 296 296 - 296 - -
Other non-current nancial assets 261 261 - - 261 -
TOTAL NON-CURRENT ASSETS 557 557 - 296 261 -
Current assets:
Trade accounts receivable 5,484 5,484 - - 5,484 -
Other receivables 82 82 - - - 82
Current nancial assets 104 104 104 - - -
Marketable securities 634 634 634 - - -
TOTAL CURRENT ASSETS 6,304 6,304 738 - 5,484 82
LIABILITIES
Non-current liabilities:
Other long-term debt 6,927 7,248 - - 7,248 -
TOTAL NON-CURRENT LIABILITIES 6,927 7,248 - - 7,248 -
Current liabilities
Trade accounts payable 4,094 4,094 - - 4,094 -
Other 292 292 - - 25 267
Short-term debt 1,110 1,110 - - 1,110 -
TOTAL CURRENT LIABILITIES 5,496 5,496 - - 5,229 267
5
(In millions of euros)
Dec.31, 2010 Breakdown by category
Carrying
amount Fair value
Fair value
through P&L
Available-for-
sale nancial
assets
Loans,
receivables
and nancial
liabilities at
amortized cost
Derivative
instruments
ASSETS
Available-for-sale nancial assets 410 410 - 410 - -
Other non-current nancial assets 144 144 - - 144 -
TOTAL NON-CURRENT ASSETS 554 554 - 410 144 -
Current assets:
Trade accounts receivable 4,441 4,441 - - 4,441 -
Other receivables 118 118 - - - 118
Current nancial assets 38 38 38 - - -
Marketable securities 1,825 1,825 1,825 - - -
TOTAL CURRENT ASSETS 6,422 6,422 1,863 - 4,441 118
LIABILITIES
Other long-term debt 5,010 5,276 - - 5,276 -
TOTAL NON-CURRENT LIABILITIES 5,010 5,276 - - 5,276 -
Current liabilities
Trade accounts payable 3,432 3,432 - - 3,432 -
Other 204 204 - - 19 185
Short-term debt 1,115 1,115 - - 1,115 -
TOTAL CURRENT LIABILITIES 4,751 4,751 - - 4,566 185
26.6 Fair value hierarchy
The split of nancial instruments by fair value level is as follows:

Dec.31, 2011
Level 1 Level 2 Level 3 Total
Available-for-sale nancial assets 191 - 105 296
Net derivative instruments - (185) - (185)
Marketable securities 634 - - 634
NET ASSETS AT FAIR VALUE 825 (185) 105 745

Dec.31, 2010
Level 1 Level 2 Level 3 Total
Available-for-sale nancial assets 135 - 275 410
Net derivative instruments - (67) - (67)
Marketable securities 1,825 - - 1,825
NET ASSETS AT FAIR VALUE 1,960 (67) 275 2,168
Note27 Employees
27.1 Employees
The average number of permanent and temporary employees was as follows in 2010 and 2011:
(number of employees) 2011 2010
Production 70,610 61,911
Administration 69,881 61,571
TOTAL AVERAGE NUMBER OF EMPLOYEES 140,491 123,482
By region:
EMEAS* 68,392 60,937
North America 27,245 26,324
Asia-Pacic 44,854 36,221
* Europe, Middle-East, Africa, SouthAmerica.
Note28 Related party transactions
27.2 Employee benefits expense
2011 2010
Payroll costs (5,362) (4,649)
Prot-sharing and incentive bonuses (70) (65)
Stock options (51) (31)
WESOP (9) (3)
EMPLOYEE BENEFITS EXPENSE (5,492 ) (4,748)
27.3 Benefits granted to senior executives
In 2011, the Group paid EUR0.57 million in attendance fees to
the members of its Supervisory Board. The total amount of gross
remuneration, including benets in kind, paid in 2011 by the Group
to the members of Senior Management excluding members of the
Management Board totaled EUR12million, of which EUR4.9million
corresponded to the variable portion.
During the last three periods, 559,000 stock options and
528,482 stock grants have been allocated to members of Senior
Management.
Since December 16, 2011, 100% of stock grants and/or stock
options are conditional on the achievement of performance criteria
for members of the Executive Committee. Amounts here above
have been restated to reect the division by half of the nominal
amount of the stock that occurred on September2, 2011.
Pension obligations with respect to members of Senior
Management amounted to EUR76 million at December 31, 2011
versus EUR73million at December31, 2010.
Please refer to Chapter3 Section8 of the Registration Document for
more information regarding the members of Senior Management.
28.1 Associates
Companies over which the Group has signicant inuence,
accounted for by the equity consolidation method. Transactions
with these related parties are carried out on arms length terms.
Related party transactions were not material in 2011.
28.2 Related parties with significant
influence
No transactions were carried out during the year with members of
the Supervisory Board or Management Board.
Compensation and benets paid to the Groups top senior
executives are described in note27.3.
The increase in the average number of employees is primarily linked to the 2011 acquisitions.
5
29.1 Guarantees and similar undertakings
Dec.31, 2011 Dec.31, 2010
Market counter guarantees
(1)
934 880
Pledges, mortages and sureties
(2)
15 17
Endorsements and guarantees - 6
Other commitments given
(3)
318 175
GUARANTEES GIVEN 1,267 1,078
Endorsements and guarantees received 71 80
GUARANTEES RECEIVED 71 80
(1) On certain contracts, customers require a guarantee from a bank that the contract will be fully executed by the Group. For these
contracts the Group gives a counterguarantee to the bank. If a claim occurs, the risk linked to the commitment is assessed and a
provision for contingencies is recorded when the risk is considered probable and can be reasonably estimated.
(2) Certain loans are secured by property, plant and equipment and securities lodged as collateral.
(3) Other guarantees given comprise guarantees given in rental payments.
Note29 Commitments and contingent liabilities
29.2 Purchase commitments
Shares in subsidiaries and affiliates
Commitments to purchase equity investments correspond to put
options given to minority shareholders in consolidated companies
or relate to earn-out payments. The amount of these commitments
was not material at December31, 2011.
Information technology services
The Group is party to an agreement with Capgemini providing for
outsourcing (facilities management) of certain of its information
technology functions in Europe and deployment of a system of
shared SAP management applications. The rst pilot version of
the global system was implemented in India in April2007 and the
second version was deployed in mid-2008 in several European pilot
countries. At the end of 2011, Schneider Electric had capitalised
total costs (net of impairment) of EUR142 million. The costs are
progressively amortised with effect from 2009, over a seven-year
rolling calendar and based on the number of users connected
worldwide as the system is deployed.
For 2011 , the contractual facilities management costs amount to
EUR100million including the volume and indexing factors provided
for by the contract (EUR103million for 2010).
29.3 Contingent liabilities
Senior Management believes that the provisions recognised in the
balance sheet, in respect of the known claims and litigation to which
the Group is a party, should be adequate to ensure that such claims
and litigation will not have any substantial impact on the Groups
nancial position or results. This is notably the case for the potential
consequences of a current dispute in Belgium involving former
senior executives and managers of the Group.
The Group has entered into a company-wide agreement in
respect of individual training entitlement. It has applied the French
accounting treatment recommended by opinion 2004-F issued
by the CNCs urgent issues committee. Expenditure on individual
training is written off as an expense during the period and therefore
no provision is made for it. As of December 31, 2011, rights
accrued but not used by employees of French entities of the Group
corresponded to around 1,643,000hours.
Note30 Subsequent events
On February13, 2012, we received notice that a tax litigation in Spain was settled in favor of Schneider Electric for an amount of EUR20million
excluding late payment interests. This potential tax income was not recorded in 2011 consolidated nancial statements.
Fees paid by the Group to the Statutory Auditors and their networks:
(in thousands of euros)
2011
Ernst & Young % Mazars % TOTAL
Audit
Statutory auditing 9,922 91% 7,057 93% 16,979
o/w Schneider ElectricSA 100 100
o/w subsidiaries 9,822 6,957
Related services 788 7% 506 7% 1,294
o/w Schneider ElectricSA - -
o/w subsidiaries 788 506
Audit sub-total 10,710 98% 7,563 100% 18,273
Other services
Legal, tax 212 2% 0 0% 212
TOTAL FEES 10,922 100% 7,563 100% 18,485
Note31 Statutory Auditors fees
2010
Ernst & Young % Mazars % TOTAL
Audit
Statutory auditing 8,463 87% 6,578 99% 15,041
o/w Schneider ElectricSA 100 100
o/w subsidiaries 8,363 6,478
Related services 1,046 11% 80 1% 1,126
o/w Schneider ElectricSA - -
o/w subsidiaries 1,046 80
Audit sub-total 9,509 98% 6,658 100% 16,167
Other services
Legal, tax 211 2% 3 0% 214
TOTAL FEES 9,720 100% 6,661 100% 16,381
5
Note32 Consolidated companies
The main companies included in the Schneider Electric Group scope of consolidation are listed below.

% interest
Dec.31, 2011
% interest
Dec.31, 2010
Europe
Fully consolidated
Schneider Electric Energy Austria AG Austria 100.0 100.0
MGE UPS Systems Vertriebs GmbH Austria 100.0 100.0
Schneider Electric Austria GmbH Austria 100.0 100.0
Schneider Electric Power Drives GmbH Austria 100.0 100.0
Cobel SA Belgium 100.0 100.0
Compagnie Financire, Minire et Industrielle SA - Comines Belgium 100.0 100.0
tablissements Crouzet NV Belgium 100.0 100.0
Schneider Electric Energy Belgium SA Belgium 100.0 100.0
Schneider ElectricSA Belgium 100.0 100.0
Schneider Electric Services International SPRL Belgium 100.0 100.0
Summit Energy International BVBA Belgium 100.0 -
Delixi Electric SEE EOOD Bulgaria 100.0 100.0
Schneider Electric Bulgaria EOOD Bulgaria 100.0 100.0
Schneider Electric d.o.o. Croatia 100.0 100.0
Merten Czech s.r.o. Czech Republic 100.0 100.0
Schneider Electric AS Czech Republic 98.3 98.3
Schneider Electric CZ s.r.o. Czech Republic 100.0 100.0
7-Technologie A/S Denmark 100.0 -
JO-EL Electric A/S Denmark 100.0 100.0
rbaekvej 280 A/S Denmark 100.0 100.0
Schneider Electric Buildings Denmark A/S Denmark 100.0 100.0
Schneider Electric Danmark A/S Denmark 100.0 100.0
Schneider Electric IT Denmark ApS Denmark 100.0 100.0
Schneider Nordic Baltic A/S Denmark 100.0 100.0
Telvent Denmark ApS Denmark 100.0 -
Schneider Electric EESTI AS Estonia 100.0 100.0
Elko Suomi Oy Finland 100.0 100.0
I-Valo Oy Finland 100.0 100.0
JO-EL Electric Oy Finland 100.0 100.0
Oy Lexel Finland Ab Finland 100.0 100.0
Pelco Finland Oy Finland 100.0 100.0
Schneider Electric Buildings Finland OY Finland 100.0 100.0
Schneider Electric Finland Oy Finland 100.0 100.0
Strmfors Electric Oy Finland 100.0 100.0
Vamp OY Finland 100.0 100.0
Alombard SAS France 100.0 100.0
Schneider Electric Protection et Contrle SAS France 100.0 100.0
BCV Technologies SAS France 100.0 100.0
BEI Ideacod SAS France 100.0 100.0
Boissire Finance SNC France 100.0 100.0
Construction lectrique du Vivarais SAS France 100.0 100.0
Crouzet Automatismes SAS France 100.0 100.0
D5X France 100.0 -
Dinel SAS France 100.0 100.0
Distrelec SA France 100.0 100.0
Elau SARL France 100.0 100.0
Electro Porcelaine SAS France 100.0 100.0
Energy Pool Developpement France 100.0 -

% interest
Dec.31, 2011
% interest
Dec.31, 2010
Energy Pool International France 100.0 -
Epsys SAS France 100.0 100.0
France Transfo SAS France 100.0 100.0
Infraplus SAS France 100.0 100.0
Machines Assemblage Automatique SAS France 100.0 100.0
Merlin Gerin Als SAS France 100.0 100.0
Merlin Gerin Alpes SAS France 100.0 100.0
Merlin Gerin Loire SAS France 100.0 100.0
Schneider Electric IT France France 100.0 100.0
Muller & Cie SA France 100.0 100.0
Newlog SAS France 100.0 100.0
Normabarre SAS France 100.0 100.0
Prodipact SAS France 100.0 100.0
Rectiphase SAS France 100.0 100.0
Sarel - Appareillage lectriqueSAS France 99.0 99.0
SCI Auxibati France 100.0 100.0
Scanelec SAS France 100.0 100.0
Schneider Automation SAS France 100.0 100.0
Schneider Electric Consulting SAS France 100.0 100.0
Schneider Electric Energy France SAS France 100.0 100.0
Schneider Electric Foncire SAS - S.E.L.F. France 100.0 100.0
Schneider Electric France SAS France 100.0 100.0
Schneider Electric Holding Amrique du Nord SAS France 100.0 100.0
Schneider Electric Holding Europe SAS France 100.0 100.0
Schneider Electric IndustriesSAS France 100.0 100.0
Schneider Electric International SAS France 100.0 100.0
Schneider Electric Manufacturing Bourguebus SAS France 100.0 100.0
Schneider ElectricSA (Holding company) France 100.0 100.0
Schneider Electric Telecontrol SAS France 100.0 100.0
Schneider Toshiba Inverter Europe SAS France 60.0 60.0
Schneider Toshiba Inverter SAS France 60.0 60.0
Socit dAppareillage lectrique Gardy SAS France 100.0 100.0
Socit dApplication et dIngnierie Industrielle et Informatique SAS - SA3I France 100.0 100.0
Socit lectrique dAubenas SAS France 100.0 100.0
Socit Franaise de Construction Mcanique et lectriqueSA France 100.0 100.0
Socit Franaise Gardy SA France 100.0 100.0
Socit pour lquipement des industries chimiques SA France 100.0 100.0
Socit Rhodanienne dtudes et de Participations SAS France 100.0 100.0
Spie Capag SA France 100.0 100.0
Systmes quipements Tableaux Basse Tension SAS France 100.0 100.0
Transfo Services SAS France 100.0 100.0
Vizelia France 100.0 -
APC Deutschland GmbH Germany 100.0 100.0
Berger Lahr Positec GmbH Germany 100.0 100.0
Crouzet GmbH Germany 100.0 100.0
Elso GmbH Germany 100.0 100.0
Kavlico GmbH Germany 100.0 100.0
Merten GmbH Germany 100.0 100.0
Merten Holding GmbH Germany 100.0 100.0
MGE USV-Systeme GmbH Germany 100.0 100.0
Schneider Electric Automation Deutschland GmbH Germany 100.0 100.0
Schneider Electric Automation GmbH Germany 100.0 100.0
Schneider Electric Buildings Germany GmbH Germany 100.0 100.0
Schneider Electric Deutschland Energy GmbH Germany 100.0 100.0
Schneider Electric Deutschland GmbH Germany 100.0 100.0
5

% interest
Dec.31, 2011
% interest
Dec.31, 2010
Schneider Electric Energy GmbH Germany 100.0 100.0
Schneider Electric GmbH Germany 100.0 100.0
Schneider Electric Motion Deutschland GmbH Germany 100.0 100.0
Schneider Electric Motion Real Estate GmbH Germany 100.0 100.0
Schneider Electric Sachsenwerk GmbH Germany 100.0 100.0
Telvent Deutschland GmbH Germany 100.0 -
Uniair GmbH Germany 100.0 -
Verwaltung SVEA Building Control Systems GmbH Germany 100.0 100.0
Schneider Electric AE Greece 100.0 100.0
Schneider Electric IT Greece ABEE Greece 100.0 100.0
BEI Automative Hungary Manufacturing Inc. Hungary 100.0 100.0
CEE Schneider Electric Kzep-Kelet Europai Korlatolt Felelssg Tarsasag Hungary 100.0 100.0
Schneider Electric Energy Hungary LTD Hungary 100.0 100.0
Schneider Electric IT Hungary Kft Hungary 100.0 100.0
Schneider Electric Hungaria Villamassagi ZRT Hungary 100.0 100.0
Uniair Magyarorszag Kft Hungary 100.0 -
APC (EMEA) Ltd Ireland 100.0 100.0
Schneider Electric Buildings Ireland Ltd Ireland 100.0 100.0
Schneider Electric Ireland Ireland 100.0 100.0
Schneider Electric IT Logistics Europe Ltd Ireland 100.0 100.0
Square D Company Ireland Ltd Ireland 100.0 100.0
Thorsman Sales Ireland Ltd Ireland 100.0 100.0
Crouzet Componenti Srl Italy 100.0 100.0
SAIP & Schyller Spa Italy 100.0 100.0
Schneider Electric Energy Manufacturing Italia Srl Italy 100.0 100.0
Schneider Electric Industrie Italia Spa Italy 100.0 100.0
Schneider Electric IT Italia Srl Italy 100.0 100.0
Schneider Electric Spa Italy 100.0 100.0
Uniair Spa Italy 100.0 -
Lexel Fabrika SIA Latvia 100.0 100.0
Schneider Electric Baltic Distribution Center Latvia 100.0 100.0
Schneider Electric Latvija SIA Latvia 100.0 100.0
UAB Schneider Electric Lietuva Lithuania 100.0 100.0
COC Luxembourg S. r.l. Luxembourg 100.0 100.0
Comodot S. r.l. Luxembourg 100.0 100.0
Industrielle de Rassurance SA Luxembourg 100.0 100.0
Maha Investment Luxembourg 100.0 -
SGBT European Major Investments SA Luxembourg 100.0 100.0
SHL Luxembourg S. r.l. Luxembourg 100.0 100.0
American Power Conversion Corp (A.P.C.) BV Netherlands 100.0 100.0
APC Holdings BV Netherlands 100.0 100.0
APC International Corporation BV Netherlands 100.0 100.0
APC International Holdings BV Netherlands 100.0 100.0
Control Microsystems BV Netherlands 100.0 100.0
Crouzet BV Netherlands 100.0 100.0
Elau BV Netherlands 100.0 100.0
Pelco Europe BV Netherlands 100.0 100.0
Pro-Face HMI BV (sub-group) Netherlands 99.9 99.9
Sandas Montage BV Netherlands 100.0 100.0
Schneider Electric BV Netherlands 100.0 100.0
Schneider Electric Energy Netherlands BV Netherlands 100.0 100.0
Schneider Electric Logistic Centre BV Netherlands 100.0 100.0
Schneider Electric Manufacturing The Netherlands BV Netherlands 100.0 100.0
Summit Energy Services BV Netherlands 100.0 -
Telvent Netherlands BV Netherlands 100.0 -
U.P.S. Systems MGE BV Netherlands 100.0 100.0

% interest
Dec.31, 2011
% interest
Dec.31, 2010
ELKO AS Norway 100.0 100.0
JO-EL Electric AS Norway 100.0 100.0
Lexel Holding Norgue AS Norway 100.0 100.0
Schneider Electric IT Norway AS Norway 100.0 100.0
Schneider Electric Norge AS Norway 100.0 100.0
Schneider Electric Buildings Norway AS Norway 100.0 100.0
Elda Eltra S.A. (ex Eltra SA) Poland 100.0 100.0
Schneider Electric Buildings Polska Sp. z.o.o. Poland 100.0 100.0
Schneider Electric Energy Poland Sp. z.o.o. Poland 100.0 100.0
Schneider Electric Industries Polska SP Poland 100.0 100.0
Schneider Electric IT Poland Sp. z.o.o. Poland 100.0 100.0
Schneider Electric Polska SP Poland 100.0 100.0
Schneider Electric II IT Portugal LDA Portugal 100.0 100.0
Schneider Electric Portugal LDA Portugal 100.0 100.0
Telvent Portugal SA Portugal 100.0 -
Schneider Electric Romania SRL Romania 100.0 100.0
DIN Elektro Kraft OOO Russia 100.0 100.0
LLC Schneider Electric Zavod ElectroMonoblock Russia 100.0 100.0
OOO Schneider Electric Buildings (Russia) Russia 100.0 100.0
OOO Lexel Elektromaterialy (SPB) Russia 100.0 100.0
OOO RusEI Russia 100.0 100.0
OOO Schneider Electric Kaliningrad Russia 100.0 100.0
Relay Protection Vamp CJSC Russia 100.0 100.0
Schneider Electric Equipment Kazan Ltd Russia 100.0 100.0
ZAO Potential Russia 100.0 100.0
ZAO Schneider Electric Russia 100.0 100.0
Schneider Electric Srbija d.o.o. Beograd Serbia 100.0 100.0
Telvent DMS LLC for Power Enginering Nove Sad Serbia 57.0 -
Schneider Electric Slovakia Spol SRO Slovakia 100.0 100.0
Schneider Electric d.o.o. Slovakia 100.0 100.0
EFI Electronics Europe SL Spain 100.0 100.0
Keyland Sistemas de Gestion SL Spain 50.0 -
Manufacturas Electricas SA Spain 100.0 100.0
Schneider Electric IT, Spain SL Spain 100.0 100.0
Schneider Electric Energy Spain SL Spain 100.0 100.0
Schneider Electric Espana SA Spain 100.0 100.0
Telemantenimiento de Alta Tension, SL Spain 100.0 100.0
Telvent Arce Sistemas, SA Spain 100.0 -
Telvent Energia SA Spain 100.0 -
Telvent Environment SA Spain 100.0 -
Telvent Export SL Spain 100.0 -
Telvent GIT SA Spain 100.0 -
Telvent Global Services, SA Spain 100.0 -
Telvent Servicios Compartidos SA Spain 100.0 -
Telvent Traco y Transporte SA Spain 100.0 -
Traco Ingenieria SA Spain 100.0 -
Uniair Iberica SA Spain 100.0 -
AB Crahftere 1 Sweden 100.0 100.0
AB Wibe Sweden 100.0 100.0
AB Wibe Telescopic Masts Sweden - 100.0
Elau AB Sweden 100.0 100.0
Elektriska AB Delta Sweden 100.0 100.0
Elko AB Sweden 100.0 100.0
JO-EL Electric AB Sweden 100.0 100.0
Lexel AB Sweden 100.0 100.0
Pelco Sweden AB Sweden 100.0 100.0
5

% interest
Dec.31, 2011
% interest
Dec.31, 2010
Pele Security AB Sweden 100.0 -
Pisara AB Sweden 100.0 100.0
Schneider Electric Buildings AB Sweden 100.0 100.0
Schneider Electric Buildings Sweden AB Sweden 100.0 100.0
Schneider Electric Distribution Centre AB Sweden 100.0 100.0
Schneider Electric IT Sweden AB Sweden 100.0 100.0
Schneider Electric Sverige AB Sweden 100.0 100.0
Telvent Sweden AB Sweden 100.0 -
Thorsman & Co AB Sweden 100.0 100.0
Crouzet AG Switzerland 100.0 100.0
Feller AG Switzerland 83.7 83.7
Gutor Electronic GmbH Switzerland 100.0 100.0
Schneider Electric IT Switzerland AG Switzerland 100.0 100.0
Schneider Electric Finances SA Switzerland 100.0 100.0
Schneider Electric (Schweitz) AG Switzerland 100.0 100.0
Schneider Electric Ukraine Ukraine 100.0 100.0
Ajax Electrical Ltd United Kingdom 100.0 100.0
Andromeda Telematics Ltd United Kingdom 100.0 -
Andromeda Telematics Holdings Ltd United Kingdom 100.0 -
APC Power and Cooling, UK Ltd United Kingdom 100.0 100.0
APC UK Ltd United Kingdom 100.0 100.0
C-Matic Systems Ltd United Kingdom 100.0 -
CBS Group Ltd United Kingdom 100.0 100.0
Crouzet Ltd United Kingdom 100.0 100.0
Crydom SSR Ltd United Kingdom 100.0 100.0
Elau Ltd United Kingdom 100.0 100.0
Kell Systems Ltd United Kingdom 100.0 -
Lexel Holdings (UK) Ltd United Kingdom 100.0 100.0
Newall Measurement Systems Ltd United Kingdom 100.0 100.0
Pelco UK Ltd United Kingdom 100.0 100.0
Power Measurement Ltd United Kingdom 100.0 -
Powerman Ltd (ex Grawater of Wakeeld Ltd) United Kingdom 100.0 100.0
Sarel Ltd United Kingdom 100.0 100.0
Schneider Electric (UK) Ltd United Kingdom 100.0 100.0
Schneider Electric Buildings UK Ltd United Kingdom 100.0 100.0
Schneider Electric Energy Holdings UK Ltd United Kingdom 100.0 100.0
Schneider Electric Energy UK Ltd United Kingdom 100.0 100.0
Schneider Electric IT UK Ltd United Kingdom 100.0 100.0
Schneider Electric Ltd United Kingdom 100.0 100.0
Serck Control and Safety Ltd United Kingdom 100.0 100.0
Serck Controls Ltd United Kingdom 100.0 100.0
Telvent UK Ltd United Kingdom 100.0 -
Accounted for by equity method
Delta Dore Finance SA (sub-group) France 20.0 20.0
Mre Electric Group A/S Norway 34.0 34.0
Electroshield TM Samara (sub-group) Russia 50.0 50.0
North America
Fully consolidated
Control Microsystems Inc. Canada 100.0 100.0
Juno Lighting Ltd Canada 100.0 100.0
Novasena 1 ULC Canada 100.0 100.0
Novasena 2 ULC Canada 100.0 100.0
Power Measurement Ltd Canada 100.0 100.0
Schneider Electric Canada Inc. Canada 100.0 100.0
Telvent Canada Ltd Canada 100.0 -
Trio Datacom Inc. Canada 100.0 100.0

% interest
Dec.31, 2011
% interest
Dec.31, 2010
Viconics Technologies Inc. Canada 100.0 -
APC Mexico, S.A. de C.V. Mexico 100.0 100.0
Automatismo Crouzet De Mexico, S.A. de C.V. Mexico 100.0 100.0
Custom Sensors & Technologies Mexico, S.A. de C.V. Mexico 100.0 100.0
Custom Sensors & Technologies Transportation de Mxico, S.A. de C.V. Mexico 100.0 100.0
Gestion Integral de Proyectos y Ingenieria, S.A. de C.V. Mexico 99.8 -
Industrias Electronicas Pacico, S.A. de C.V. Mexico 100.0 100.0
MGE Systems Mexico, S.A. de C.V. Mexico 100.0 100.0
Ram Tech Manufacturing de Mexico S de R.L. de C.V. Mexico 100.0 100.0
Ram Tech Services de Mexico S de R.L. de C.V. Mexico 100.0 100.0
Schneider Electric Administracion, S.A. de C.V. Mexico 100.0 100.0
Schneider Electric Mexico, S.A. de C.V. Mexico 100.0 100.0
Schneider Industrial Tlaxcala, S.A. de C.V. Mexico 100.0 100.0
Schneider Mexico, S.A. de C.V. Mexico 100.0 100.0
Schneider R&D, S.A. de C.V. Mexico 100.0 100.0
Schneider Recursos Humanos, S.A. de C.V. Mexico 100.0 100.0
Steck de Mexico S.A. de C.V. Mexico 100.0 -
Square D Company Mexico, S.A. de C.V. Mexico 100.0 100.0
Telvent Mexico S.A. de C.V. Mexico 99.8 -
Adaptive Instruments Corp. USA 100.0 100.0
American Power Conversion Federal Systems, Inc. USA 100.0 100.0
APC America Inc. USA 100.0 100.0
APC Corp. USA 100.0 100.0
APC Holdings Inc. USA 100.0 100.0
APC Sales & Service Corp. USA 100.0 100.0
BEI Precisions Systems & Space Co. Inc. USA 100.0 100.0
BEI Sensors & Systems Company, Inc. USA 100.0 100.0
Control Microsystems U.S. Inc. USA 100.0 100.0
Crydom, Inc. USA 100.0 100.0
Custom Sensors & Technologies, Inc. USA 100.0 100.0
Delsena 1, LLC USA 100.0 100.0
Delsena 2, LLC USA 100.0 100.0
Juno Lighting LLC USA 100.0 100.0
Juno Manufacturing Inc. USA 100.0 100.0
Kavlico Corp. USA 100.0 100.0
Lee Technologies, LLC USA 100.0 -
Lee Technologies Group, LLC USA 100.0 -
Lee Technologies Puerto Rico, LLC USA 100.0 -
Lee Technologies Services, LLC USA 100.0 -
Neovasys Inc. USA 100.0 100.0
Netbotz Inc. USA 100.0 100.0
Newall Electronics Inc. USA 100.0 100.0
P.H.L. Four, Inc. USA 80.0 80.0
P.H.L. One, Inc. USA 80.0 80.0
Pacsena LP USA 100.0 100.0
Palatine Hills Leasing Inc. USA 80.0 80.0
Pelco, Inc. USA 100.0 100.0
Power Measurement Inc. USA 100.0 100.0
Pro-face America, LLC USA 100.0 100.0
Schneider Electric Buildings Americas, Inc. USA 100.0 100.0
Schneider Electric Buildings Critical Systems, Inc. USA 100.0 100.0
Schneider Electric Buildings, LLC USA 100.0 100.0
Schneider Electric Engineering Services, LLC USA 100.0 100.0
Schneider Electric Holdings Inc. USA 100.0 100.0
Schneider Electric Investments 2, Inc. USA 100.0 100.0
Schneider Electric Motion USA, Inc. USA 100.0 100.0
5

% interest
Dec.31, 2011
% interest
Dec.31, 2010
Schneider Electric Summit Holdings, Inc. USA 100.0 -
Schneider Electric USA, Inc. USA 100.0 100.0
Schneider Electric Vermont Ltd USA 100.0 100.0
SNA Holdings Inc. USA 100.0 100.0
Square D Investment Company USA 100.0 100.0
Summit Belgium I, Inc. USA 100.0 -
Summit Belgium II, Inc. USA 100.0 -
Summit Energy Services, Inc. USA 100.0 -
Telvent Farradyne Enginnering, PC USA 100.0 -
Telvent Services Inc. USA 100.0 -
Telvent USA Corp. USA 100.0 -
Veris Industries LLC USA 100.0 100.0
Xantrex Technology Inc. USA 100.0 100.0
Asia-Pacic
Fully consolidated
APC Australia Pty. Limited Australia 100.0 100.0
Clipsal Australia Pty. Limited Australia 100.0 100.0
Clipsal Integrated Systems Pty. Limited Australia 100.0 100.0
Clipsal Technologies Australia Pty. Limited Australia 100.0 100.0
Control Microsystems Asia Pacic Pty. Ltd Australia 100.0 100.0
Pelco Australia Pty. Limited Australia 100.0 100.0
Scadagroup Pty. Ltd Australia 100.0 100.0
Schneider Electric (Australia) Pty. Limited Australia 100.0 100.0
Schneider Electric Australia Holdings Pty. Limited Australia 100.0 100.0
Schneider Electric Buildings Australia Pty. Limited Australia 100.0 100.0
Serck Controls Pty. Ltd Australia 100.0 100.0
Telvent Australia Pty. Limited Australia 100.0 -
APC (Suzhou) Uninterrupted Power Supply Co., Ltd. China 100.0 100.0
APC (Xiamen) Power Infrastructure Co., Ltd. China 100.0 100.0
Schneider Electric (Xiamen) Switchgear Co. Ltd China 100.0 100.0
Schneider Electric Huadian Switchgear (Xiamen) Co., Ltd China 55.0 55.0
Shanghai Schneider Electric Power Automation Co. Ltd China 59.0 59.0
Schneider Switchgear (Suzhou) Co, Ltd China 58.0 58.0
Beijing Leader & Harvest Electric Technologies Co. Ltd China 100.0 -
Beijing Leader & Harvest Energy Efciency Investments Co. Ltd China 100.0 -
Beijing Merlin Great Wall Computer Room Equipment & Engineering Co. Ltd China 75.0 75.0
Citect Controls Systems (Shanghai) Ltd China 100.0 100.0
ClipsalManufacturing(Huizhou)Ltd China 100.0 100.0
Custom Sensors & Technologies Asia (Shangai) Ltd China 100.0 100.0
Foshan Gaoming TAC Electronic & Electrical Products Company Ltd China 100.0 100.0
Foshan Wilco Electrical Trading Co Ltd China 100.0 100.0
MERTEN Shanghai Electric Technology Co. Ltd China 100.0 100.0
MGE Manufacturing Shanghai Co. Ltd China 100.0 100.0
Proface China International Trading (Shangha) Co. Ltd China 99.9 99.9
RAM Electronic Technology and Control (Wuxi) Co., Ltd China 100.0 100.0
Schneider (Beijing) Medium & Low Voltage Co., Ltd China 95.0 95.0
Schneider (Beijing) Medium Voltage Co. Ltd China 95.0 95.0
Schneider (Shaanxi) Baoguang Electrical Apparatus Co. Ltd China 70.0 70.0
Schneider (Shangha) Supply Co. Ltd China 100.0 100.0
Schneider (Suzhou) Drives Company Ltd China 90.0 90.0
Schneider (Suzhou) Enclosure Systems Co Ltd China 100.0 100.0
Schneider (Suzhou) Transformers Co. Ltd China 100.0 100.0
Schneider Automation Solutions (Shanghai) Co., Ltd. China 100.0 100.0
Schneider Busway (Guangzhou) Ltd China 95.0 95.0
Schneider Electric (China) Investment Co. Ltd China 100.0 100.0
Schneider Electric International Trading (Shanghai) Co., Ltd. China 100.0 100.0

% interest
Dec.31, 2011
% interest
Dec.31, 2010
Schneider Electric IT (China) Co., Ltd China 100.0 100.0
Schneider Electric Low Voltage (Tianjin) Co. Ltd China 75.0 75.0
Schneider Shangha Apparatus Parts Manufacturing Co. Ltd China 100.0 100.0
Schneider Shangha Industrial Control Co. Ltd China 80.0 80.0
Schneider Shangha Low Voltage Term. Apparatus Co. Ltd China 75.0 75.0
Schneider Shangha Power Distribution Electric Apparatus Co. Ltd China 80.0 80.0
Schneider Wingoal (Tianjin) Electric Equipment Co. Ltd China 100.0 100.0
Telvent - BBS High & New Tech (Beijing) Co. Ltd China 80.0 -
Telvent Control System (China) Co. Ltd China 100.0 -
Tianjin Merlin Gerin Co. Ltd China 75.0 75.0
Wuxi Proface Electronic Co.Ltd China 99.9 99.9
Clipsal Asia Holdings Limited Hong Kong 100.0 100.0
Clipsal Asia Limited Hong Kong 100.0 100.0
Clipsal Industries Hong Kong Limited Hong Kong 100.0 100.0
Custom Sensors & Technologies Asia (Hong Kong) Limited Hong Kong 100.0 100.0
Luminous Power Technologies (HK) Ltd Hong Kong 100.0 -
Schneider Electric IT Hong Kong Limited Hong Kong 100.0 100.0
Schneider Electric (Hong Kong) Limited Hong Kong 100.0 100.0
Schneider Electric Asia Pacic Limited Hong Kong 100.0 100.0
APC India Private Ltd India 100.0 100.0
APW President Systems Ltd India 75.0 -
Cimac Automation Private Ltd India 85.0 85.0
Cimac Software Systems Private Ltd India 85.0 85.0
CST Sensors India Private Limited India 100.0 100.0
Luminous Power Technologies Private Ltd India 100.0 -
Luminous Renewable Energy Solutions Private Ltd India 100.0 -
Luminous Teleinfra Ltd India 100.0 -
Schneider Electric India Private Ltd India 100.0 100.0
Uniair India Private Ltd India 100.0 -
PT Clipsal Manufacturing Jakarta Indonesia 100.0 100.0
PT Schneider Electric IT Indonesia Indonesia 100.0 100.0
PT Merten Intec Indonesia Indonesia 100.0 100.0
PT Schneider Electric Indonesia Indonesia 100.0 100.0
PT Schneider Electric Manufacturing Batam Indonesia 100.0 100.0
APC Japan, Inc. Japan 100.0 100.0
Digital Electronics Corporation Japan 99.9 99.9
Schneider Electric Japan Holdings Ltd Japan 100.0 100.0
Toshiba Schneider Inverter Corp. Japan 60.0 60.0
Clipsal Integrated Systems (M) Sdn Bhd Malaysia 100.0 100.0
Clipsal Manufacturing (M) Sdn Bhd Malaysia 100.0 100.0
DESEA Sdn Bhd Malaysia 100.0 100.0
Gutor Electronic Asia Pacic Sdn Bhd Malaysia 100.0 100.0
Huge Eastern Sdn Bhd Malaysia 100.0 100.0
KSLA Energy & Power Solutions (M) Sdn Bhd Malaysia 100.0 100.0
PDL Electric (M) Sdn Bhd Malaysia 100.0 100.0
Schneider Electric (Malaysia) Sdn Bhd Malaysia 30.0 30.0
Schneider Electric Energy Malaysia Sdn Bhd Malaysia 100.0 100.0
Schneider Electric Industries (M) Sdn Bhd Malaysia 100.0 100.0
Schneider Electric IT Malaysia Sdn Bhd Malaysia 100.0 100.0
Schneider Electric Manufacturing (M) Sdn Bhd Malaysia 100.0 100.0
Schneider Electric (NZ) Ltd New Zealand 100.0 100.0
American Power Conversion Land Holdings Inc. Philippines 100.0 100.0
Clipsal Philippines Philippines 100.0 100.0
MGE UPS Systems Philippines Inc. Philippines 100.0 100.0
Schneider Electric (Philippines) Inc. Philippines 100.0 100.0
Clipsal International Pte. Ltd Singapore 100.0 100.0
5

% interest
Dec.31, 2011
% interest
Dec.31, 2010
KSLA Energy & Power Solution Pte. Ltd Singapore 100.0 100.0
Merten Asia Pte. Ltd Singapore 100.0 100.0
Pelco Asia Pacic Pte. Ltd Singapore 100.0 100.0
Schneider Electric Buildings Singapore Pte. Ltd Singapore 100.0 100.0
Schneider Electric Export Services Pte. Ltd Singapore 100.0 100.0
Schneider Electric IT Logistics Asia Pacic Pte. Ltd Singapore 100.0 100.0
Schneider Electric IT Singapore Pte. Ltd Singapore 100.0 100.0
Schneider Electric Logistics Asia Pte. Ltd Singapore 100.0 100.0
Schneider Electric Overseas Asia Pte. Ltd Singapore 100.0 100.0
Schneider Electric Singapore Pte. Ltd Singapore 100.0 100.0
Schneider Electric South East Asia (HQ) Pte. Ltd Singapore 100.0 100.0
Pro Face Korea Co. Ltd South Korea 99.9 99.9
Schneider Electric Korea Ltd (ex Samwha EOCR Co. Ltd) South Korea 100.0 100.0
Schneider Electric Lanka (Private) Limited Sri Lanka 100.0 100.0
Pro Face Taiwan Co. Ltd Taiwan 99.9 99.9
Schneider Electric Taiwan Co Ltd Taiwan 100.0 100.0
Clipsal (Thailand) Co. Ltd Thailand 95.1 95.1
MGE UPS Systems SA (Thailand) Co. Ltd Thailand 100.0 100.0
Pro Face South East Asia Pacic Co. Ltd Thailand 100.0 100.0
Schneider (Thaland) Ltd Thailand 100.0 100.0
Schneider Electric CPCS (Thailand) Co. Ltd. Thailand 100.0 100.0
Square D Company (Thaland) Ltd Thailand 100.0 100.0
Telvent Thailandia Ltd Thailand 100.0 -
Clipsal Vietnam Co. Ltd Vietnam 100.0 100.0
MGE UPS Systems Viet Nam Limited Vietnam 100.0 100.0
Schneider Electric Vietnam Co. Ltd Vietnam 100.0 100.0
Accounted for by proportionate method
Delixi Electric Ltd (sub-group) China 50.0 50.0
Accounted for by equity method
Sunten Electric Equipment China 50.0 50.0
Fuji Electric FA Components & Systems Co., Ltd (sub-group) Japan 37.0 37.0
Rest of the world
Fully consolidated
Delixi Electric Algerie Algeria 100.0 100.0
SARL Schneider Electric Algerie Algeria 100.0 100.0
MGE UPS Systems Argentina S.A Argentina 100.0 100.0
Schneider Electric Argentina SA Argentina 100.0 100.0
Steck Electric SA Argentina 100.0 -
Telvent Argentina SA Argentina 100.0 -
Clipsal Middle East Bahrain 80.0 80.0
APC Brasil Ltda Brasil 100.0 100.0
CST Latino America Comercio E Representacao de Produtos Electricos E
Elestronicos Ltda Brasil 99.8 99.8
Matchmind Software Ltda Brasil 100.0 -
Microsol Tecnologia SA Brasil 100.0 100.0
Ram Do Brasil, Ltda Brasil 100.0 100.0
Schneider Electric Brasil Ltda Brasil 100.0 100.0
MGE UPS Systems Do Brasil Ltda Brasil 100.0 100.0
Schneider Electric Participacoes Do Brasil Ltda Brasil 100.0 -
Telve nt Brazil SA Brasil 100.0 -
Softbrasil Automao Ltda Brasil 100.0 100.0
Steck da Amazonia Industria Electrica Ltda Brasil 100.0 -
Steck Industria Electrica Ltda Brasil 100.0 -
Inversiones Schneider Electric Uno Limitada Chile 100.0 100.0
Marisio SA Chile 100.0 100.0
Schneider Electric Chile SA Chile 100.0 100.0
Telvent Chile SA Chile 100.0 -

% interest
Dec.31, 2011
% interest
Dec.31, 2010
Dexson Electric SA Colombia 100.0 100.0
Schneider de Colombia SA Colombia 85.0 85.0
Schneider Centroamerica SA Costa Rica 100.0 100.0
Delixi Electric Egypt s.a.e Egypt 98.0 98.0
Schneider Electric Distribution Company Egypt 87.4 87.4
Schneider Electric Egypt SA Egypt 91.0 91.0
Schneider Electric Industries Iran Iran 89.0 89.0
Telemecanique Iran Iran 100.0 100.0
Schneider Electric LLP Kazakhstan 100.0 100.0
Schneider Electric East Mediterranean SAL Lebanon 96.0 96.0
Crouzet SA Morocco 100.0 100.0
Delixi Electric Maroc SARL AU Morocco 100.0 100.0
Schneider Electric IT Morocco, SA Morocco 100.0 100.0
Schneider Electric Maroc Morocco 100.0 100.0
Delixi Electric West Africa Ltd Nigeria 100.0 100.0
Schneider Electric Nigeria Ltd Nigeria 100.0 100.0
Schneider Electric Oman LLC Oman 100.0 100.0
Schneider Electric Pakistan (Private) Limited Pakistan 80.0 80.0
Schneider Electric Peru SA Peru 100.0 100.0
Cimac Electrical and Automation W.L.L Qatar 75.0 75.0
EPS Electrical Power Distribution Board & Switchgear Ltd Saudi Arabia 51.0 51.0
Telvent Saudi Arabia Co. Ltd Saudi Arabia 100.0 -
Delixi Electric South Africa (Pty) Ltd South Africa 100.0 100.0
Merlin Gerin SA (Pty) Ltd South Africa 80.0 80.0
Schneider Electric IT South Africa (Pty) Ltd South Africa 100.0 100.0
Schneider Electric South Africa (Pty) Ltd South Africa 74.9 74.9
Uniair South Africa (Pty) Ltd South Africa 100.0 -
Schneider Enerji Endustrisi Sanayi Ve Ticaret Turkey 100.0 100.0
DMR Demirbag Elektrik Malzemeleri Ticaret Anonim Sirketi Turkey 100.0 100.0
Metesan Elektric Malzemeleri Ticaret Ve Pazarlama A.S Turkey 100.0 100.0
Schneider Electric Bilgi Teknolojileri Ticaret Ve Pazarlama A.S Turkey 100.0 100.0
Schneider Elektrik Sanayi Ve Ticaret A.S. Turkey 100.0 100.0
Cimac Electrical and Control Systems LLC United Arab Emirates 80.0 80.0
Cimac FZCO United Arab Emirates 100.0 100.0
Cimac LLC United Arab Emirates 49.0 49.0
Clipsal Middle East FZC United Arab Emirates 100.0 100.0
Clipsal Middle East FZCO United Arab Emirates 60.0 60.0
CLS Systems FZCO United Arab Emirates 100.0 100.0
Delixi Electric FZE United Arab Emirates 100.0 100.0
Hunter Watertech Middle East FZE United Arab Emirates 100.0 100.0
Schneider Electric DC MEA FZCO United Arab Emirates 100.0 100.0
Schneider Electric FZE United Arab Emirates 100.0 100.0
Schneider Electric RAK FZE United Arab Emirates 100.0 100.0
APC Uruguay SA Uruguay 100.0 100.0
Schneider Electric Venezuela SA Venezuela 91.9 91.9
Telvent Venezuela SA Venezuela 50.0 -
5
STATUTORY AUDITORS REPORT ON THECONSOLIDATED FINANCIALSTATEMENTS
>
6. Statutory Auditors report on
theconsolidated financialstatements
This is a free translation into English of the Statutory Auditors report on the consolidated nancial statements issued in French and it is provided solely
for the convenience of English speaking users. The Statutory Auditors report includes information specically required by French law in such reports,
whether modied or not. This information is presented below the audit opinion on the consolidated nancial statements and includes an explanatory
paragraph discussing the auditors assessments of certain signicant accounting and auditing matters. These assessments were considered for the purpose
of issuing an audit opinion on the consolidated nancial statements taken as a whole and not to provide separate assurance on individual account balances,
transactions, or disclosures. This report also includes information relating to the specic verication of information given in the management report and in
the documents addressed to shareholders. This report should be read in conjunction with, and construed in accordance with, French law and professional
auditing standards applicable in France.
In compliance with the assignment entrusted to us by your Annual
Shareholders Meeting, we hereby report to you, for the year ended
December31, 2011, on:
the audit of the accompanying consolidated nancial statements
of Schneider ElectricSA;
the justication of our assessments;
the specic verication required by French law.
These consolidated nancial statements have been approved by
the Management Board. Our role is to express an opinion on these
consolidated nancial statements based on our audit.
I Opinion on the consolidated
We conducted our audit in accordance with professional standards
applicable in France; those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
consolidated nancial statements are free of material misstatement.
An audit involves performing procedures, using sampling techniques
or other methods of selection, to obtain audit evidence about the
amounts and disclosures in the nancial statements. An audit also
includes evaluating the appropriateness of accounting policies used
and the reasonableness of accounting estimates made, as well as
the overall presentation of the nancial statements. We believe that
the audit evidence we have obtained is sufcient and appropriate to
provide a basis for our audit opinion.
In our opinion, the consolidated nancial statements give a true and
fair view of the assets and liabilities and of the nancial position of
the Company as at December 31, 2011 and of the results of its
operations for the year then ended in accordance with IFRS, as
adopted by the European Union.
II Justification of assessments
In accordance with the requirements of articleL. 823-9 of French
Commercial Code (Code de commerce) relating to the justication
of our assessments, we bring to your attention the following matters:
Note 1.8 to the consolidated nancial statements explains the
method for recognizing research and development costs and
describes the criteria under which development costs may
be capitalized. We reviewed the data and assumptions used
to identify projects that qualify for capitalization, as well as the
Groups calculations, and veried that adequate disclosure is
made in the notes to the consolidated nancial statements.
As explained in notes 1.10 and 8 to the consolidated nancial
statements, intangible assets and goodwill are tested for
impairment at least once a year and when factors exist indicating
that the related assets may have suffered a loss of value. We
analysed, on a test basis, the indicators of a loss of value and the
other information evidencing the absence of any loss of value. We
reviewed the data, assumptions used, and calculations made,
and veried that adequate disclosure is made in the notes to the
consolidated nancial statements.
As indicated in notes1.15 and 16 to the consolidated nancial
statements, future tax benets arising from the utilization of tax
loss carry forwards are recognized only when they can reasonably
be expected to be realized. We veried the reasonableness of the
assumptions used to produce estimate of future taxable income
used to support assessments of the recoverability of these
deferred tax assets.
Notes 1.18 and 22 describe the method for valuing pensions
and other post-employment obligations. Actuarial valuations
were performed for these commitments. We reviewed the data,
assumptions used, and calculations made, and veried that
adequate disclosure is made in the notes to the consolidated
nancial statements.
Note7 Restructuring costs states the amount of restructuring
costs recorded in 2011. We veried that, based on currently
available information, these costs concern restructuring measures
initiated or announced before December 31, 2011, for which
provisions have been recorded based on an estimate of the costs
to be incurred. We also reviewed the data and assumptions used
by the Group to make these estimates.
These assessments were made as part of our audit of the
consolidated nancial statements taken as a whole and therefore
contributed to the opinion we formed which is expressed in the rst
part of this report.
III Specific verification
As required by law we have also veried in accordance with
professional standards applicable in France the information
presented in the Groups management report.
We have no matter to report as to its fair presentation and its
consistency with the consolidated nancial statements.
Courbevoie and Paris-La Dfense, February21, 2012
5STATUTORY AUDITORS REPORT ON THECONSOLIDATED FINANCIALSTATEMENTS
Company financial
statements
6
1. Balance sheet 220
2. Statement of income 222
3. Notes to the financial statements 223
4. Statutory Auditors report on the financial statements 234
5. List of securities held atDecember31, 2011 235
6. Subsidiaries and affiliates 236
7. The Companys financial results overthelastfiveyears 238
2011 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 220
6BALANCE SHEET
COMPANY FINANCIAL STATEMENTS
>
1. Balance sheet
Assets
(in thousands of euros) Notes Gross A. & D. or Prov.
Dec.31, 2011
Net
Dec.31, 2010
Net
Dec.31, 2009
Net
Non-current assets:
Intangible assets 1.1
Intangible rights 27,474 (27,474) - - -
Property, plant and equipment 1.2
Land 2,954 - 2,954 2,964 2,965
Buildings 48 (48) - - -
Other 1,469 (243) 1,226 1,226 1,226
31,945 (27,765) 4,180 4,190 4,191
Investments
Shares in subsidiaries and afliates 2.1 4,607,2124 (17,896) 4,589,316 4,590,207 4,590,203
Other investment securities 2.2 160,081 (77) 160,004 160,004 160,004
Advances to subsidiaries and afliates 2.3 3,606,707 (61) 3,606,646 3,139,977 3,139,107
Other - - - - -
8,373,999 (18,034) 8,355,966 7,890,188 7,889,315
Total non-current assets 8,405,945 (45,799) 8,360,146 7,894,378 7,893,505
Current assets:
Accounts receivable
Accounts receivable - trade 101 - 101 58 136
Other 3 180,085 (45,256) 134,829 185,047 2,394
180,186 (45,256) 134,930 185,105 2,529
Cash and cash equivalents
Marketable securities 4 217,284 (17,604) 199,680 217,284 219,240
Advances to the Group cash pool 5 9,845,777 - 9,845,777 6,481,885 6,065,867
Other 5 - 5 981 15
10,063,066 (17,604) 10,045,461 6,700,150 6,285,122
Total current assets 10,243,253 (62,860) 10,180,391 6,885,255 6,287,651
Accruals and other assets:
Prepaid expenses 6.1 1,621 - 1,621 1,696 1,616
Deferred charges 6.2 11,815 - 11,815 8,943 8,952
Call premiums 6.3 52,287 - 52,287 49,995 53,593
Translation losses - - - - -
TOTAL ASSETS 18,747,717 (108,659) 18,639,056 14,840,268 14,245,318
The notes form an integral part of these company nancial statements.
6
BALANCE SHEET
Equity and liabilities
(in thousands of euros) Note Dec.31, 2011 Dec.31, 2010 Dec.31, 2009
Equity:
Share capital 7.1 2,195,772 2,175,673 2,102,016
Additional paid-in capital 7.2 6,587,655 6,392,899 5,831,637
Reserves and retained earnings
Legal reserve 217,567 210,202 197,941
Retained earnings 7.3 96,496 256,681 322,373
Net income for the nancial year 2,603,738 702,982 475,753
Untaxed provisions 2 2 425
Total equity 11,701,230 9,738,439 8,930,145
Provisions for contingencies and pension accruals: 8
Provisions for contingencies 45 45 959
Provisions for pension accruals 31,721 31,704 31,779
Total provisions for contingencies and pension
accruals 31,766 31,749 32,738
Bonds 9 5,750,973 4,544,565 4,707,565
Other borrowings 10 527,889 510,369 514,487
Amounts payable to subsidiaries and afliates 13 13 13
Borrowings and nancial liabilities 11 190,064 3 46,678
6,468,939 5,054,951 5,268,743
Current liabilities:
Accounts payable trade 276 288 251
Accrued taxes and payroll costs 394,073 5,148 3,363
Other 9,834 9,694 10,013
404,183 15,130 13,626
Total non-current and current liabilities 6,873,122 5,070,081 5,282,369
Deferred income 12 141 - 66
Translation gains 32,797 - -
TOTAL EQUITY AND LIABILITIES 18,639,056 14,840,268 14,245,318
6STATEMENT OF INCOME
>
2. Statement of income
(in thousands of euros) Note 2011 2010 2009
Sales of services and other 261 2,379 2,455
Reversals of provisions, depreciation and amortisation
and expense transfers 1,987 1,992 2,424
Operating revenues 2,249 4,371 4,879
Purchases and external expenses 9,094 5,549 8,533
Taxes other than on income 4,455 1,726 2,063
Payroll expenses 2,719 8,198 5,862
Depreciation, amortisation and provision expense 500 200 1,973
Other operating expenses and joint-venture losses 1,392 1,005 1,257
Operating expenses 18,159 16,678 19,689
Operating prot/loss (15,910) (12,307) (14,810)
Dividend income 1,436,419 691,233 540,925
Interest income 216,004 142,631 182,775
Reversals of impairment provisions for long-term
receivables and other 0 0 103
Financial income 1,652,422 833,864 723,803
Interest expense 296,408 319,904 321,229
Provision expense 3,789 4,484 1,926
Financial expenses 300,197 324,388 323,155
Net nancial income/(loss) 14 1,352,225 509,476 400,649
Proceeds from xed asset disposals 1,191,653 192 294
Provision reversals and expense transfers 915 1,499 32,433
Other 109 1,230 8,861
Non-recurring income 1,192,677 2,921 41,588
Carrying amount of xed asset disposals 1,240 2,273 2,962
Provisions, depreciation and amortisation 17,604 0 0
Other 968 56 410
Non-recurring expenses 19,812 2,329 3,372
Net non-recurring income/(expense) 15 1,172,864 592 38,216
Net income tax benet 16 94,558 205,221 51,700
NET INCOME 2,603,738 702,982 475,753
6
NOTES TO THE FINANCIAL STATEMENTS
>
3. Notes to the financial statements
(All amounts in thousands of euros unless otherwise indicated)
During the nancial year, Schneider Electric SA carried out
EUR215million in share capital increases, as follows:
the employee share issue carried out on July 12, 2011 as
part of the worldwide Employee Stock Purchase Plan, for
EUR177million;
the exercise of stock options, for EUR38million.
The Company carried out several bond issues during the nancial
year for a nominal aggregate of EUR1.7 billion, for nancing of
acquisitions on September1, 2011 and redeemed EUR500million
worth of bonds issued in 2006 upon maturity on July18, 2011.
Furthermore, on July21, 2010 the Company carried out a partial
redemption of the EUR750million bond issue maturing on July16,
2013 for a nominal amount of EUR263 million on the basis of a
purchase price of EUR299 million. This deal gave rise to the
recognition of EUR36million in nancial expenses.
Following the merge of Digital Holding and Schneider Electric Japan
Holding of December 2010 signed on March 2011 with effective
date on January 1, 2011, the company know owns shares of
Schneider Electric Japan Holding for EUR21million.
Moreover, the Company sold, on December 29, 2011, its shares
in Socit Industrielle de Rassurance that she owned since
September 11, 2009 for EUR3 million verus a net book value of
EUR1million.
On December 30, 2011, the company invoiced to
SchneiderElectricIndustriesSAS a nancial compensation for the
use of Schneider Electric trademark, according to an agreement
signed on December15, 2011 for EUR1.2billion.
Lastly, the Company issued commercial paper in 2011, and the
outstanding balance of EUR190million at December31, 2011 were
redeemed in January2012.
Accounting principles
As in the prior nancial year, the nancial statements for the nancial
year ended December31, 2011 have been prepared in accordance
with French generally accepted accounting principles.
Non-current assets
Non-current assets of all types are stated at cost.
Intangible assets
Intangible rights are amortised over a maximum of ve years.
Property, plant and equipment
Items of property, plant and equipment are depreciated on a
straight-line basis over their estimated useful lives, ranging from
three to tenyears.
Shares in subsidiaries and affiliates
Shares in subsidiaries and afliates are stated at acquisition cost.
Provisions for impairment may be funded where the carrying amount
is higher than the estimated value in use at the end of the nancial
year. This estimate is primarily determined on the basis of the
underlying net assets, earnings outlook and economic forecasts.
For the more recently-acquired investments, the analysis also takes
account of the acquired business goodwill.
For listed securities, the average stock price over the previous
month is used. Unrealised gains resulting from such estimates are
not recognised.
Own shares
Treasury stock is stated at weighted average cost.
In the case of treasury stock held for allocation on the exercise
of stock options, a provision is recorded if the exercise price is
lower than the carrying value of the related treasury shares or if the
average stock price for the month previous to the closing is lower
than the weighted average cost.
Pension obligations
The present value of termination benets is determined using the
projected unit credit method.
Provisions are funded for the supplementary pension benets
provided by the Company on the basis of the contractual terms of
top-hat agreements.
The Company applies the corridor method to actuarial gains and
losses arising from changes in estimates. Under this method, the
portion of net cumulative actuarial gains and losses exceeding 10%
of the projected benet obligation is amortised over 10years.
Significant events of the financial year
6NOTES TO THE FINANCIAL STATEMENTS
Note1 Non-current assets
1.1 Intangible assets
This item primarily consists of share issue and merger expenses, which are fully amortised.
Note2 Investments
2.1 Shares in subsidiaries and affiliates
Shares in subsidiaries and afliates Dec.31, 2010 Additions Disposals Dec.31, 2011
Cost 4,608,104 21,556 (22,448) 4,607,212
Provisions (17,896) - - (17,896)
NET 4,590,208 21,556 (22,448) 4,589,316
The main changes over the nancial year are mainly related to the transfer of Digital Holding shares towards Schneider Electric Japan Holding
for EUR21million and to acquisition of Cobel shares and Comines shares.
On December29, 2011, the Company carried out the disposal of investments Industrielle de Rassurance for EUR1million.
The main investments at December31 , 2011 were as follows:
Currency risk
Where necessary, a contingency provision is in place for unrealised
exchange losses. However, where there are unrealised exchange
gains and losses on back-to-back transactions in the same
currency and with the same maturity, the amount of the provision is
then limited to the net loss.
Bonds
Redemption premiums and issue costs are amortised over the life
of the bonds.
1.2 Tangible assets
Tangible assets Dec.31, 2010 Additions Disposals Dec.31, 2011
Cost 4,480 - (10) 4,470
Depreciation (290) - - (290)
NET 4,190 - (10) 4,180
Shares in subsidiaries and afliates Carrying value
Schneider Electric IndustriesSAS 4,344,481
Cobel 137,210
Comines 82,655
Schneider Electric Japan Holding 21,249
Other (less than EUR20million) 3,721
TOTAL 4,589,316
6
2.2 Other investment securities
Other investment securities Dec.31, 2010 Increases Decreases Dec.31, 2011
Schneider ElectricSA shares 48,778 - - 48,778
Other 111,303 - - 111,303
Provisions for other shares (77) - - (77)
NET 160,004 - - 160,004
2.3 Advances to subsidiaries and affiliates
Advances to subsidiaries and afliates Dec.31, 2010 Increases Decreases Dec.31, 2011
Cost 3,140,038 548,584 (81,915) 3,606,707
Provisions (61) - - (61)
NET 3,139,977 548,584 (81,915) 3,606,646
Other investment securities primarily include Schneider ElectricSA
shares acquired for allocation on the exercise of certain stock
options. Schneider Electric SA has not reclassied own shares
allocated to this line item as of December31, 2004. However, since
then, all purchases made for allocation to stock option plans have
been classied as marketable securities.
On September2, 2011, the nominal value of the shares was divided
by two. As a consequence, the number of own shares recognised
under Other investment securities is 1,994,154 versus 997,077
shares at December 31,2010, representing a gross value of
EUR49million.
Other shares primarily consist of EUR111million of AXA shares.
The other investments included in this item have been fully
writtendown.
At December31, 2011, this item mainly consisted of two loans totaling EUR3billion granted to Schneider Electric IndustriesSAS, repayable
in 2011 and 2015, of three loans granted to Boissire Finance for a total amount of EUR456million with maturity date 2016 and of accrued
interest of EUR50million.
Note3 Other receivables
Other receivables Dec.31, 2011 Dec.31, 2010
Cost 180,085 230,307
Provisions (45,256) (45,260)
NET 134,829 185,047
Other receivables primarily consist of the EUR280million in group tax relief, net of EUR210million in advances to subsidiaries, representing
a net amount of EUR70million.
As of December31, 2011, line item still included EUR45million in disputed receivables, all fully written down.
Note4 Marketable securities

Dec.31, 2010 Aquisitions Disposals Dec.31, 2010
Number of
shares* Value Value Value Value
Number of
shares
Stock options plan 26 1,460,906 43,300 - (17,604) 25,696 866,970
Stock options plan 27 1,892,054 54,128 - - 54,128 1,892,054
Stock options plan 29 62,666 1,797 - - 1,797 62,666
Stock grants plan 5 - - 8,141 - 8,141 274,680
Stock grants plan 8 - - 9,463 - 9,463 319,256
Total Gross 7,170,798 217,284 17,604 (17,604) 217,284 7,170,798
Provisions - (17,604) - (17,604)
TOTAL NET 217,284 - (17,604) 199,680
* Taking into account the two-for-one share split effective on September2, 2011.
Marketable securities primarily represent own shares held by the
Company for allocation to stock option plans. The shares oh stock
grants plans n5 and 8 are registered as direct shareholders and
blocked during two years.
At December31, 2011, a EUR17million provision was registered
over the 593,936 own shares allocated to plans n5 and 8 by
Management Board decision on December6, 2011; these shares
were allocated to plan n26 in 2010.
Note5 Advances to the Group cash pool
Note6 Accruals and other assets
6.1 Prepaid expenses
This EUR1million line item consists of the expenses incurred in arranging a rate swap in connection with the EUR600million bond issue
ofOctober8, 2007.
This item consists of interest-bearing advances by Schneider ElectricSA to the Group cash pool (Boissire Finance) that are recoverable
on demand.
6
6.2 Bond issue expenses
Bond issue expenses Dec.31, 2010 Increases Decreases Dec.31, 2011
Aug.11, 2005 due 2017 (600million) 878 - (118) 760
July17, 2006 due 2011 (500million) 22 - (22) -
July17, 2006 due Jan. 2014 (500million) 78 - (23) 55
Oct. 8, 2007 due 2015 (600million) 860 - (214) 646
Feb. 16, 2007 due 2014 (4,500million) (bridge loan) 2,116 - (526) 1,590
May21, 2008 due 2013 (18million) 31 - (13) 18
May21, 2008 due 2013 (183million) 318 - (131) 187
May21, 2008 due 2015 (55million) 126 - (28) 98
May21, 2008 due 2015 (129million) 295 - (64) 231
June11, 2008 due 2013 (12million) 21 - (7) 14
July25, 2008 due 2016 (177million) 115 - (20) 95
Mar.20, 2009 due 2018 (250million) 93 - (12) 81
Apr.30, 2009 due 2014 (150million) 164 - (38) 126
Jan.16, 2009 due 2013 (750million) 1,163 - (469) 694
July20, 2010 due 2016 (300million) 753 - (126) 627
July20, 2010 due 2016 (200million) 485 10 (84) 411
July20, 2010 due 2020 (500million) 1,426 - (112) 1,314
July1, 2011 due 2014 ($300million) - 276 (46) 230
July12, 2011 due 2018 (750million) - 2,702 (181) 2,521
Sep.22, 2011 due 2019 (500million) - 1,665 (89) 1,576
Nov.18, 2011 due 2016 (JPY12billion) - 302 (7) 295
Dec.8, 2011 due 2016 (JPY10billion) - 250 (3) 247
8,943 5,205 (2,334) 11,815
6.3 Redemption premiums
Redemption premiums Dec.31, 2010 Increases Decreases Dec.31, 2011
Aug. 11, 2005 due 2017 (600million) 2,841 - (382) 2,459
July17, 2006 due 2011 (500million) 109 - (109) -
July17, 2006 due Jan. 2014 (500million) 1,443 - (431) 1,012
Oct. 8, 2007 due 2015 (600million) 283 - (70) 213
Apr.11, 2008 due 2018 (55million) 5,584 - (713) 4,871
Apr. 11, 2008 due 2018 (125million) 13,039 - (1,661) 11,378
Mar.20, 2009 due 2018 (250million) 27,041 - (3,434) 23,607
Apr.30, 2009 due 2014 (150million) (3,060) - 708 (2,352)
Jan. 16, 2009 due 2013 (750million) 131 - (53) 78
July20, 2010 due 2016 (300million) 1,892 - (317) 1,575
July20, 2010 due 2016 (200million) (3,560) - 602 (2,958)
July20, 2010 due 2020 (500million) 4,254 - (335) 3,919
July1, 2011 due 2014 ($300million) - 372 (63) 309
July12, 2011 due 2018 (750million) - 4,845 (325) 4,520
Sep.22, 2011 due 2019 (500million) - 3,865 (207) 6,658
49,995 9,082 (6,790) 52,287
The increases in this line item were due to the 2011 bond issues (see note9).
Note7 Shareholders equity and retained earnings
(inmillions of euros) Share capital
Additional
paid-in capital
Reserves
and retained
earnings
Net income for
the year
Untaxed
provisions Total
December31, 2009 before
allocation of net income for the year 2,102 5,831 521 476 1 8,931
Change in share capital 39 265 304
Allocation of 2009 net income 12 (12) 0
2009 dividend 35 296 (66) (464) (199)
Other changes during the period (1) (1)
2010 net income 703 703
December31, 2010 before
allocation of net income for the year 2,175 6,393 467 703 - 9,738
Change in share capital 20 195 215
Allocation of 2010 net income 7 (7) 0
2010 dividend (160) (696) (856)
Other changes during the period -
2011 net income 2,604 2,604
DECEMBER31, 2011 BEFORE
ALLOCATION OF NET INCOME
FOR THE YEAR 2,195 6,588 314 2,604 - 11,701
7.1 Capital
Share capital
The Companys share capital at December31, 2011 amounted to
EUR2,195,772,096, consisting of 548,943,024 shares with a par
value of EUR4, all fully paid up.
Changes in share capital
During the nancial year, 3,855,632 shares were issued as part of
the worldwide Employee Stock Purchase Plan amounting to the
EUR15 million in share capital while 1,169,210 new shares were
issued on the exercise of stock options, increasing the share capital
by EUR5million.
Own shares
The total number of own shares held at the reporting date stood at
9,164,952, representing a net amount of EUR248million.
7.2 Additional paid-in capital
Additional paid-in capital rose by EUR195million over the nancial
year, including EUR162 million from the worldwide Employee
Stock Purchase Plan and EUR33 million from the exercise of
stockoptions.
7.3 Retained earnings
Pursuant to the third resolution of the Annual and Extraordinary
Shareholders Meeting of April 21, 2011, EUR7 million of the
EUR703million in 2010 distributable earnings was allocated to the
legal reserve. EUR856million was paid out in dividends (including
EUR160million deducted from retained earnings).
6
Note8 Provisions for contingencies and pension accruals
Dec.31, 2010 Increases Decreases Dec.31, 2011
Provisions for contingencies
Disputes 15 - - 15
Other 30 - - 30
45 - - 45
Provisions for pension accruals
Pension accruals 31,704 2,000 (1,983) 31,721
31,749 2,000 (1,983) 31,766
8.1 Contingencies
Management is condent that overall the balance sheet provisions
for disputes of which it is currently aware and in which the Company
is involved should be sufcient to ensure that these disputes do not
have a material impact on its nancial position or income. This is
particularly true of the provisions set aside to cover the potential
consequences of a pending dispute in Belgium involving former
senior executives and managers of the Company.
8.2 Pension accruals
The Company has various obligations towards its current and
retired senior executives and managers. Following an actuarial
valuation carried out in 2011, the provision for these obligations was
estimated to EUR32million.
The Company applied the corridor method to the actuarial gains
and losses arising from this valuation (see accounting principles).
At December 31, 2011, cumulative actuarial gains and losses
totalled EUR7 million. From 2012, a total of EUR2.5 million,
exceeding 10% of the obligation, is being amortised over 10years.
Note9 Bonds

Share capital
Interest rate Maturity Dec.31, 2011 Dec.31, 2010
Schneider ElectricSA 2017 600,000 600,000 4.00% Fixed Aug.11, 2017
Schneider ElectricSA 2011 - 500,000 Euribor +0.20% Floating July18, 2011
Schneider ElectricSA 2014 500,000 500,000 4.50% Fixed Jan.17, 2014
Schneider ElectricSA 2016 177,565 177,565 Euribor +0.60% Floating July25, 2016
Schneider ElectricSA 2013 100,000 100,000 CMS +1% Floating July31, 2013
Schneider ElectricSA 2013 487,000 487,000 6.75% Fixed July16, 2013
Schneider ElectricSA 2014 231,857 Libor +0.49% Floating July1, 2014
Schneider ElectricSA 2018 750,000 3.75% Fixed July12, 2018
Schneider ElectricSA 2019 500,000 3.50% Fixed Jan.22, 2019
Schneider ElectricSA 2016 124,750 0.849% F ixed Nov.18, 2016
Schneider ElectricSA 2016 99,800 0.84625% Fixed Dec.8, 2016
5.750,973 4,544,565
Fixed: xed rate.
Floating: oating rate.
Schneider ElectricSA has made a series of bond issues as part of
its Euro Medium Term Notes (EMTN) program over the past few
years. The issues that had not matured as of December31, 2011
were as follows:
JPY12 and JPY10 billion for a total amount of EUR225 million
worth of respectively 0.849% and 0.84625% bonds issued in
Novemberand December2011 and maturing on November18,
2016 and December8, 2016;
EUR500million worth of 3.50% bonds issued in September2011
and maturing on January22, 2019;
EUR750million worth of 3.75% bonds issued in July2011 and
maturing on July12, 2018;
USD300 million for a total amount of EUR232 million worth of
bonds issued in July 2011 at a oating rate and maturing on
July1, 2014;
EUR300 and EUR200million worth of 2.875% bonds successively
issued in Julyand October2010 and maturing on July20, 2016;
EUR500million worth of 3.625% bonds issued in July2010 and
EUR150 million worth of bonds issued in May 2009 to top up
the EUR600 million tranche at 5.375% maturing on January 8,
2015 and issued in October2007, thereby raising the total issue
to EUR750million;
EUR250million worth of bonds issued in March2009 to top up
the EUR780million 12year tranche at 4% issued in August2005,
thereby raising the total issue to EUR1.03billion;
EUR750million worth of 6.75% bonds issued in January2009
and maturing on July16, 2013. In July2010, this bond was partly
redeemed to the amount of EUR263million, reducing the bond
to EUR487million;
EUR100million worth of bonds issued in July2008 at a oating
rate indexed to the 10y ear CMS (Constant Maturity Swap) and
EUR177million worth of oating-rate bonds issued in July2008
and maturing on July25, 2016;
EUR180million worth of bonds issued in April2008 to top up the
EUR600 million 12 year tranche at 4% issued in August 2005,
thereby raising the total tranche to EUR780million;
EUR600million worth of 5.375% bonds issued in October2007
and maturing on January8, 2015;
EUR1 billion worth of bonds issued in July 2006, comprising
a EUR500 million ve-year oating rate tranche and a
EUR500million 71/2-year4.5% tranche;
EUR600million worth of 4% bonds issued in August2005 and
maturing in August2017;
These bonds are traded on the Luxembourg stock market. The
issue premiums and issue costs are amortised in line with the
effective interest method.
Lastly, the Group redeemed EUR500 million worth of July 2006
bonds at maturity date on July18, 2011.
Note10 Other borrowings
Other borrowings at December31, 2011 included accrued interest
on bonds and other debt issued by the Company. Following the
issue of EUR1.7 billion worth of bonds in 2011, accrued interest
amounted to EUR131million, compared to EUR113million at end
of 2010.
Finally, this line item includes a EUR397 million Schuldschein
loan granted by international banks in rst-half 2008, comprising
four tranches: a EUR129 million sevan-year oating-rate tranche,
a EUR55 million seven-year xed-rate tranche, a EUR195 million
ve- year oating-rate tranche and a EUR18 million ve-year
xed- rate tranche.
Note11 Interest-bearing liabilities
Interest-bearing liabilities Dec.31, 2010 Increase Decrease Dec.31, 2011
Commercial paper - 3,101,000 (2,911,000) 190,000
Overdrafts 1 61 - 62
Other 2 - - 2
NET 3 3,101,061 (2,911,000) 190,064
At December 31, 2011, Interest-bearing liabilities are mainly composed of a EUR190 million of commercial paper to be redeemed in
January2012.
6
Note12 Maturities of receivables and payables
Total Due within 1 year Due in 1 to 5 years Due beyond 5 years
Non-current assets
Advances to subsidiaries and afliates 3,606,707 50,236 3,556,471
Other investment
Current assets
Accounts receivable - trade 101 101
Other receivables 180,085 112,385 67,700
Marketable securities 217,284 154,777 62,507
Prepaid expenses 1,621 764 857
Debt
Bonds 5,750,973 2,068,857 3,682,116
Bank loans 397,000 397,000
Other borrowings 130,889 130,889
Amounts payable to subsidiaries and afliates 13 13
Interest-bearing liabilities 190,064 190,061 3
Accounts payable - trade 276 276
Accrued taxes and payroll costs 394,073 394,073
Other 9,834 9,834
Deferred income 141 141
Note13 Related-party transactions (minimum 10% interest)
Gross Net
Shares in subsidiaries and afliates 4,604,529 4,586,633
Advances to subsidiaries and afliates 3,606,579 3,606,518
Accounts receivable 969 742
Cash and cash equivalents 9,845,777 9,845,777
Interest-bearing liabilities - -
Accounts payable - -
Revenues:
dividends 1,428,936
interests 93,832
Note14 Net financial income
Dec.31, 2011 Dec.31, 2010
Dividends 1,436,419 691,233
Net interest income (expense) (80,404) (177,272)
Other (3,789) (4,484)
NET FINANCIAL INCOME 1,352,225 509,477
Note15 Net non-recurring income/(expense)
Dec.31, 2011 Dec.31, 2010
Net gains/(losses) on xed asset disposals 1,190,413 (2,081)
Provisions net of reversals (16,889) 1,499
Other non-recurring income/(expense) (859) 1,173
NET NON-RECURRING INCOME/(EXPENSE) 1,172,864 592
The EUR1.2 billion net gain on xed assets disposals is mainly related to the sale of Schneider Electric trademark to Schneider Electric
IndustriesSAS.
In December2011, the Company registered a EUR17million provision related to the allocation of own shares to stock grants plan n5 and 8.
Note16 Net income tax benefit
The income tax expense line item in the statement of income
mainly consists of the Group tax relief recorded by the tax group
headed by Schneider ElectricSA, net of 2011 income tax due by
EUR159million. Group relief totalled EUR280million in 2011, up on
the EUR73million the prior nancial year.
Schneider Electric SA is the parent company of the tax group
comprising all French subsidiaries that are over 95%-owned. Tax
loss carryforwards available to the Company in this capacity totaled
EUR704million at December31, 2011.
The main 2011 dividends received by Schneider ElectricSA were paid by its subsidiaries Schneider Electric IndustriesSAS (EUR1,300million),
Cobel (EUR79million) and Comines (EUR50million).
The Schneider Electric IndustriesSAS subsidiary paid a dividend of EUR672million in 2010.
6
Underlying
Hedging instrument
Type Face value Maturity
Impact
onnetnancialincome Market value
Bond issue USD300,000,000 July1, 2014 (745) (1,466)
Schuldschein EUR195,000,000 May21, 2013 (6,552) (9,765)
Schuldschein EUR129,000,000 May21, 2015 (4,277) (14,646)
Private placement (CMS) EUR100,000,000 July31, 2013 (3,584) (6,143)
Private placement (CMS) EUR100,000,000 July31, 2013 2,728 4,770
Bond issue 2013 EUR475,000,000 July16, 2013 7,466 14,320
TOTAL (4,964) (12,930)
Note17 Off-balance sheet commitments
17.1 Partnership obligations
The share of liabilities of SC non-trading companies attributable to
Schneider ElectricSA as partner is not material.
The share of liabilities of SNC ow-through entities attributable to
Schneider ElectricSA as partner is not material.
17.2 Guarantees given and received
Commitments given:
Counter-guarantees of bank guarantees: None
Other guarantees given: EUR504million
Commitments received:
Bank counter-guarantees: None
Note18 Other information
18.1 Workforce
At December31, 2011, the Company had two employees.
18.2 Consolidated financial statements
Schneider ElectricSA is the parent company of the Group and accordingly publishes the consolidated nancial statements of the Schneider
Electric Group.
17.3 Financial instruments
Schneider Electric Group hedging transactions, exchange guarantees and the establishment of nancial instruments are carried out by
the manager of the Group cash pool, Boissire Finance, a wholly-owned subsidiary of Schneider Electric IndustriesSAS, which in turn is
wholly- owned by Schneider ElectricSA. Nevertheless, Schneider ElectricSA has arranged xed-rate/oating-rate interest rate swaps to
hedge certain bond issues, the market value of which is as follows:
6STATUTORY AUDITORS REPORT ON THE FINANCIAL STATEMENTS
>
4. Statutory Auditors report on the
This is a free translation into English of the Statutory Auditors report on the Financial Statements issued in French and it is provided solely for the convenience
of English speaking users.
The Statutory Auditors report includes information specically required by French law in such reports, whether modied or not. This information is presented
below the audit opinion on the nancial statements and includes an explanatory paragraph discussing the auditors assessments of certain signicant
accounting and auditing matters. These assessments were considered for the purpose of issuing an audit opinion on the nancial statements taken as a
whole and not to provide separate assurance on individual account balances, transactions, or disclosures.
This report also includes information relating to the specic verication of information given in the management report and in the documents addressed to
shareholders.
This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France
We conducted our audit in accordance with professional standards
applicable in France; those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the nancial statements are free of material misstatement. An
audit involves performing procedures, using sampling techniques
or other methods of selection, to obtain audit evidence about the
amounts and disclosures in the nancial statements. An audit also
includes evaluating the appropriateness of accounting policies used
and the reasonableness of accounting estimates made, as well as
the overall presentation of the nancial statements. We believe that
the audit evidence we have obtained is sufcient and appropriate to
provide a basis for our audit opinion.
In our opinion, the nancial statements give a true and fair view of
the assets and liabilities and of the nancial position of the Company
as at December 31, 2011 and of the results of its operations for
the year then ended in accordance with French generally accepted
accounting principles.
In compliance with the assignment entrusted to us by your Annual
Shareholders Meeting, we hereby report to you, for the year ended
December31, 2011 on:
the audit of the accompanying nancial statements of Schneider
ElectricSA;
the justication of our assessments;
the specic verications and information required by law.
These nancial statements have been approved by the
Management Board. Our role is to express an opinion on these
nancial statements based on our audit.
I Opinion on the Financial Statements
II Justification of assessments
In accordance with the requirements of articleL.823-9 of the French
Commercial Code (Code de commerce) relating to the justication
of our assessments, we bring to your attention the following matters:
As part of our assessment of the accounting principles and
methods used by your company, we veried the appropriateness
of the principles and methods used to value shares in subsidiaries
and afliates, described in the section on accounting principles and
in note2 to the nancial statements, and obtained assurance that
they were correctly applied.
Our assessments were made in the context of the performance
of our audit of the nancial statements, taken as a whole, and
therefore contributed to the opinion we formed which is expressed
in the rst part of this report.
6
LIST OF SECURITIES HELD ATDECEMBER31, 2011
III Specific verifications and information
We have also performed the specic verications required by law, in
accordance with professional standards applied in France.
We have no matters to report regarding the fair presentation and
conformity with the nancial statements of the information given in
the Management Boards report and in the documents addressed
to the shareholders with respect to the nancial position and the
nancial statements.
Regarding the information provided in accordance with the
requirements of article L.225-102-1 of French Commercial Code
relating to the compensation and benets paid to the Corporate
ofcers concerned and the engagement granted to them, we
veried the conformity with the nancial statements, or with the
data used for the preparation of the nancial statements; and, when
applicable, with the information collected by the Company from the
companies which control your Company or are controlled by your
Company. On the basis of the audit we performed, we attest that
this information is true and fair.
In accordance with French Law, we have ensured that the required
information concerning the purchase of investments and controlling
interests and the names of the principal shareholders has been
properly disclosed in the Management Boards report.
Paris-La Dfense and Courbevoie, February21, 2012,
Ernst & Young et Autres Mazars
Yvon SALAN David CHAUDAT
>
5. List of securities held
atDecember31, 2011
Number amount
(in thousands of euros) Company Carrying of securities
A. Major investments
(Carrying amounts over EUR15 thousand)
56,019,611 Schneider Electric IndustriesSAS 4,344,481
10,612,659 AXA 111,172
44,271 SELF 2,683
1,300 Vigo SAS 53
1,994,154 Schneider ElectricSA own shares 48,778
4,507,167
B. Other investments
(Carrying amounts under EUR15 thousand) 1,038
C. Investments in real estate companies -
D. Investments in foreign companies 241,114
TOTAL 4,749,319
Marketable securities
7,170,798 Schneider ElectricSA own shares 199,681
(stock option plans 26, 27, 28, 29 and 30 and Stocks grants plan n5 and 8)
TOTAL 199,681
6SUBSIDIARIES AND AFFILIATES
>
6. Subsidiaries and affiliates
Company
(in thousands of euros) Capital
Reserves and
retained earnings &
retained earnings
prior to appropriation
ofearnings*
Share interest
held (%)
I.
Detailed information on subsidiaries and afliates with a carrying amount
of over 1% of the share capital of Schneider ElectricSA
A. Subsidiaries (at least 50% owned)

Schneider Electric IndustriesSAS
35, rue Joseph Monier 92500 Rueil-Malmaison, France 896,313 4,745,624 100.00

Cobel
18/20, avenue Winston Churchill - 1180 Brussels, Belgium 55,362 7,642 99.79

Comines
18/20, avenue Winston Churchill - 1180 Brussels, Belgium 41,522 32,793 99.84
B. Afliates (10 to 50%-owned)

Schneider Electric Japan Holdings Ltd
8-2-52 Nanko-Higashi - 559 0031 Suminoe Osaka, Japan 26,038 37,560 4.81
II. Other subsidiaries and afliates
A. Subsidiaries not included in SectionI: (+50%)
a) French subsidiaries (aggregate)
b) Foreign subsidiaries (aggregate)
B. Afliates not included in SectionI: (0-50%)
a) French companies (aggregate)
b) Foreign companies (aggregate)
* Including income or loss in prior nancial year.
6
SUBSIDIARIES AND AFFILIATES
Book value of securities
held
Loans and
advances
provided by the
Company and still
outstanding
Amount of
guarantees
given by the
Company
Sales (ex. VAT)
in the past
nancialyear
Prot or loss (-) in
the past nancial
year
Dividends received
by the Company
during the
nancial year Comments Gross Net

4,344,481 4,344,481 3,148,324 - 3,631,827 992,332 1,299,655
137,210 137,210 - -
Holding
company 2,081 78,681
82,655 82,655 - -
Holding
company 16,170 50,001

21,249 21,249 - - - (6,186) -

18,934 1,038 - - - - 600
- - - - - - -

113,985 113,909 - - - - 7,483
- - - - - - -
6THE COMPANYS FINANCIAL RESULTS OVERTHELASTFIVEYEARS
>
7. The Companys financial results
over the last five years
Description 2011 2010 2009 2008 2007
Financial position at December31
Share capital (in thousands of euros) 2,195,772 2,175,672 2,102,016 1,979,405 1,962,395
Number of shares in issue 548,943,024 271,959,091 262,752,025 247,425,629 245,299,366
Number of convertible bonds in issue (in thousands) - - -
Maximum number of shares to be created
(in thousands):
through conversion of bonds - - -
through exercise of rights 15,556 7,478 9,860 9,183 9,382
Results of operations
Sales (ex. VAT) 215 2,225 2,419 1,906 946
Investment revenue, interest income and other revenue 1,652,422 833,865 723,928 1,623,715 747,914
Earnings before tax, depreciation, amortization and
provisions 1,345,453 506,204 393,238 1,087,409 136,259
Income tax 168,347 9,922 13,244 10,883 11,099
Earnings after tax, depreciation, amortization and
provisions 2,603,738 702,982 475,753 1,147,592 226,643
Dividends paid
(1)
excluding tax credit and withholdings 933,203
(2)
870,269 538,642 853,618 809,488
Results of operations per share
(in euros)
Earnings before depreciation, amortisation
andprovisions 4.79 2.62 1.71 4.72 0.51
Earnings after tax, depreciation, amortization
andprovisions 4.74 2.58 1.81 4.64 0.92
Net dividend per share 1.70
(2)
3.20 2.05 3.45 3.30
Employees
Average number of employees during the nancial year 2 2 2 1 2
Total payroll for the nancial year
(in thousands of euros) 4,549 4,262 3,859 4,376 4,291
Total of employee benets paid over the nancial year
(Social security, other benets, etc.)
(in thousands of euros) 1,170 3,936 2,004 1,374 2,606
(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 May3, 2012.
General
presentation of
SchneiderElectricSA
7
1. General information on the Company 240
2. Shareholders rights andobligations 241
3. Capital 243
4. Ownership structure 247
5. Employee profit-sharing, stock ownership 248
6. Performance share grants andstock option plans 249
7. Disclosure of information required in accordance with
articleL.225- 100-3 oftheFrench Commercial Code** 255
8. Stock market data 255
9. Investor relations 257
7GENERAL INFORMATION ON THE COMPANY
GENERAL PRESENTATION OF SCHNEIDERELECTRICSA
This report includes the Chairmans report on the conditions applicable for the preparation and organisation of the
work carried out by the Supervisory Board and the internal control and risk management procedures implemented
within the Company.
Sections2 (General Meetings and Voting rights) and 7 below, as well as the paragraph entitled A Management Board/
Supervisory Board system, Sections 1, 2, 3, 4, 8 (Management Board and Executive Committee compensation
policy and Pension benets), 10 and 11 of Chapter3 constitute the Supervisory Board Chairmans report prepared in
accordance with articleL.225 -68 of the French Commercial Code. They are indicated with**.
>
1. General information on the Company
Schneider Electric SA is a French corporation (Socit Anonyme)
with a Management and Supervisory Board (since May 3, 2006)
governed by the French Commercial Code, with a share capital
of EUR2,195,772,096, whose registered head ofce is located at
35, rue Joseph Monier 92500 Rueil-Malmaison, France (phone
number: +33 (0)141297000).
The Company is registered in Nanterre under No. 542 048 574,
business identier code (APE) 7010Z.
Schneider Electric SA was founded in 1871 and its term is up to
July1, 2031. It was rst called Spie Batignolles, then changed its
name to SchneiderSA when it merged with SchneiderSA in 1995,
and then to Schneider ElectricSA in May1999.
As stated in article2 of its articles of association, the Company has
the following objectives, directly or indirectly, engaged in any form,
in France and elsewhere:
(i) the design, development and sale of products, equipment
and solutions related to the metering, management and use
of energy in all its forms and delivering reliability, efciency and
productivity, in particular through the pursuance, whether by
creating, acquiring or otherwise, of all activities related to:
electrical equipment manufacturing, electrical distribution and
secure power supply;
building control, automation and safety;
industrial control and automation, including software;
management of all types of data centres, networks, equipment
and other infrastructure;
(ii) the acquisition, purchase, sale and use of any intellectual or
industrial property rights relative to these industries;
(iii) involvement in any way in any enterprise, company or
consortium, whatever the type, undertaking activities related to
the Companys business or such as to encourage its industry
and commerce, and, more generally, all industrial, commercial
and nancial, real estate and other operations related directly or
indirectly in any way to the above objective.
The Company may perform any operations that fall within the
scope of its objectives either alone for its own benet or on behalf
of third parties, either by having an interest in, or by the purchase,
subscription, contribution or exchange of company shares,
partnership shares and the purchase of any company, irrespective
of type, in pursuance of a similar or related objective, or such as to
encourage its extension or development.
The articles of association, minutes of General Meetings, Auditors
reports and other legal documents concerning the Company
are available for consultation at the Companys head ofce
(Management Board secretariat) located at 35rue Joseph Monier -
92500 Rueil-Malmaison, France.
The articles of association, regulated information, Registration
Documents, sustainable development reports, calls to meeting
and other documents are also available on the corporate website
(http:// www.schneider-electric.com).
7
SHAREHOLDERS RIGHTS ANDOBLIGATIONS
>
2. Shareholders rights
andobligations
The procedures for calling and holding General Meetings are
governed by French law.
The meetings are held at the head ofce or any other address
provided in the call to meeting. When the decision is made to call
a General Meeting, the Management Board may decide to make
all or part of the meeting available for public viewing via video
conferencing or remote transmission.
All shareholders may attend personally or be represented at General
Meetings after providing proof of their identity and share ownership
in accordance with the applicable law and regulations.
When the decision is made to call a General Meeting, the
Management Board may also decide to allow shareholders to
participate or vote using videoconferencing facilities and/or any
other telecommunication medium allowed under the applicable
legislation.
Remote voting procedures are governed by the applicable laws
and regulations. In particular, shareholders may send proxy and
postal voting forms before General Meetings either on paper or,
if approved by the Management Board and stated in the Meeting
announcement and/or notice, electronically.
When the decision is made to call a General Meeting, the
Management Board may authorise shareholders to ll out and
sign these forms electronically through a secure site set up by
the General Meeting organiser using a process that complies with
article 1316-4, paragraph 2, line 1 of the French Civil Code, for
example by entering an ID and a password.
Proxies or votes submitted electronically before the General
Meeting, as well as the related acknowledgements of receipt,
will be considered irrevocable and binding documents. However,
in the event that shares are sold before the applicable record
date (i.e. midnight CET three days before the Meeting date), the
Company will cancel or amend, as appropriate, any related proxies
or votes submitted electronically before the General Meeting.
The Chairman of the Supervisory Board chairs the General Meetings.
In his absence, he is replaced by the Vice Chairman or by another
member of the Supervisory Board specically designated for this
purpose by the Supervisory Board. In the event that no Chairman
has been selected, the General Meeting elects its Chairman.
The two shareholders with the largest number of voting rights
present at the meeting or accepting the mission serve as scrutineers.
The meeting committee selects the secretary, who may or may not
be a shareholder.
An attendance sheet is lled out in accordance with French law.
Copies or extracts of the Meetings minutes are certied either by
the Chairman or Vice Chairman of the Supervisory Board, a member
of the Management Board or the General Meeting secretary.
Voting rights**
1 Double voting rights (article24 of the
articles of association)
Voting rights attached to shares are proportionate to the equity in
the capital they represent, assuming that they all have the same
par value. Each share carries one voting right, unless there are
any unavoidable legal restrictions on the number of voting rights
that may be held by any single shareholder. Notwithstanding the
foregoing, double voting rights are attributed to fully paid-up shares
registered in the name of the same holder for at least two years
prior to the end of the calendar year preceding the one in which
the General Meeting takes place, subject to compliance with the
provisions of the law. In the case of a bonus share issue paid up
by capitalising reserves, earnings or additional paid-in capital, each
bonus share allotted in respect of shares carrying double voting
rights will also have double voting rights.
The shares are stripped of their double voting rights if they are
converted into bearer shares or transferred to another person,
except in the case of an inheritance or family gift, with the transfer
from one registered holder to another.
Double voting rights may also be stripped by a decision of the
Extraordinary Shareholders Meeting, ratied by a special meeting
of shareholders beneting 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 June27, 1995.
Annual Shareholders Meetings (article23 of the articles of association)**
7SHAREHOLDERS RIGHTS ANDOBLIGATIONS
2 Ceiling on voting rights (article24 of the
articles of association)
At the Annual Meeting, no shareholder may exercise more than
10% of the total voting rights attached to the Companys shares.
The 10% ceiling is calculated on the basis of the single voting rights
held directly and proxies held by the shareholder concerned. If
the shareholder holds or represents shares carrying double voting
rights, the limit may be raised to 15%, provided that the 10% ceiling
is exceeded solely by virtue of the double voting rights.
To apply these provisions:
the total number of voting rights is calculated on the date of the
Meeting and announced to shareholders when the Meeting is
called to order;
the number of voting rights held directly and indirectly include
those attached to shares owned by a shareholder personally,
those attached to shares held by a legal entity over which the
shareholder exercises control, as dened in article L.233-3 of
the French Commercial Code, and those attached to shares
assimilated to shares owned, as dened by article L.233-7 et
seq. of the French Commercial Code;
proxies returned to the Company that do not appoint a
representative are subject to the above ceilings. However, these
ceilings do not apply to the Meeting Chairman voting on behalf
of such proxies.
The above ceilings will no longer apply, without it being necessary
to put the matter to the vote at a further Annual and Extraordinary
Meeting, if any individual or legal entity, acting alone or jointly with
one or other individuals or legal entities, acquires or increases its
stake to at least two-thirds of the Companys capital through a
public tender offer for all the Companys shares. In this case, the
Management Board will place on record the lifting of the above
ceilings and will amend the articles of association accordingly. The
ceiling on voting rights was approved by the combined Annual and
Extraordinary Shareholders Meeting of June27, 1995.
In accordance with article L.225-96, paragraph 1 of the French
Commercial Code, any amendment to the articles of association
must be approved by shareholders in Extraordinary Meeting, by a
majority of at least two-thirds of the voting rights represented by
shareholders in attendance or participating by proxy.
Shareholders may elect to hold their shares in registered or bearer form. To establish proof of ownership, the shares must be recorded in the
shareholders account in accordance with the procedures and conditions dened by current legislation and regulations.
Income appropriation (article26 of the articles of association)
Net income for the year less any losses brought forward from prior
years is appropriated in the following order:
5% to the legal reserve (this appropriation is no longer required
once the legal reserve represents one tenth of the capital,
provided that further appropriations are made in the case of a
capital increase);
to discretionary reserves, if appropriate, and to retained earnings;
to the payment of a dividend.
The Annual Meeting may decide to offer shareholders the
opportunity to receive the dividend in cash or in the form of new
shares of common stock.
Dividends not claimed within ve years from the date of payment
become time-barred and are paid over to the State in accordance
with the law.
Types of shares (article7 paragraph1 of the articles of association)
Disclosure thresholds (article7 paragraph2 of the articles of association)
The articles of association stipulate that any individual or legal entity
that owns or controls (as these terms are dened in articleL.233-
9 of the French Commercial Code) directly or indirectly, shares or
voting rights representing at least 1% of the total number of shares
or voting rights outstanding, or a multiple thereof, is required
to disclose the total number of shares, voting rights and share
equivalents held directly, indirectly or in concert to the Company
by registered letter with return receipt requested, within ve trading
days of the disclosure threshold being crossed. In addition, effective
November 1, 2009 the shareholder must notify the Company, in
the disclosure letter, of the number of existing shares it is entitled
to acquire by virtue of agreements or nancial instruments referred
to in pointb) of the third paragraph of articleL.233-7 of the French
Commercial Code and of the number of existing shares covered by
any agreement or nancial instrument referred to in pointc) of said
paragraph. Shareholders are also required to notify the Company
7
CAPITAL
>
3. Capital
Share capital and voting rights
if the number of shares or voting rights held falls below one of the
thresholds dened above. In the case of failure to comply with
these disclosure obligations, the shares in excess of the disclosure
threshold will be stripped of voting rights at the request of one or
several shareholders owning at least 2.5% of the Companys capital,
subject to compliance with the relevant provisions of the law. These
disclosure thresholds were approved by the combined Annual and
Extraordinary Shareholders Meetings of June 27, 1995, May 5,
2000 and April23, 2009.
Identifiable holders of bearer shares (article7 paragraph3 of the articles ofassociation)
As approved by the combined Annual and Extraordinary Shareholders Meetings of June30, 1988 and May5, 2000, the Company may at
any time request that Euroclear identify holders of bearer shares carrying voting rights either immediately or in the future.
The Companys share capital at December31, 2011 amounted to EUR2,195,772,096, represented by 548,943,024shares with a par value
of EUR4, all fully paid up. At December31, 2011, 584,722,100voting rights were attached to the 548,943,024outstanding shares.
Potential capital
Sale of shares (article8 of the articles of association)
The Companys shares are transferable and negotiable.
At December31, 2011, stock options granted under:
stock option plans23 to 29 represented 6,129,752shares;
3,729,896 shares for share subscription or purchase plans,
plans 30 to 33; the type of options (share subscription or
purchase options) will be determined at a later date by the
Management Board;
5,006,689 shares under the performance shares or stock
grant plans relating to existing shares or shares to be issued,
plans 6 and 7 and 9 to 14; the origin of these shares (existing
shares or shares to be issued) will be determined later by the
ManagementBoard;
in addition, as part of employee share issues, the Company has
issued 99,148share subscription warrants;
Together, these plans represent a total of 14,965,485shares.
The potential maximum dilution in case of issue of all the shares
as a result of the exercise of options to subscribe, stock grants,
performance shares and warrants would be 2.73% of share capital
at December31, 2011.
7CAPITAL
The following authorisations were given to the Management Board
at the combined Annual and Extraordinary Shareholders Meetings
of April21, 2011:
1) to increase the Companys capital by capitalising reserves,
earnings or additional paid-in-capital;
2) to increase the share capital by a maximum of EUR800million
(200million shares) by issuing shares or share equivalents:
in the case of an issue with pre-emptive subscription rights, the
ceiling stands at EUR800million (200million shares);
in the case of an issue without pre-emptive subscription rights,
the ceiling stands at EUR217 million (54.25 million shares) with
the possibility of:
(i) proceeding to issue by private placements of shares subject to
a ceiling of EUR108million (27million shares),
(ii) by issuing securities tendered to the Company within the
framework of a public exchange offer initiated by the Company
or, in the limit of 10% of capital, in payment for shares or share
equivalents of unlisted companies.
The Management Board is also authorised to increase the
number of shares or share equivalents to be issued in case of
oversubscription (subject to the overall limits dened above);
3) to grant existing or new Schneider Electric SA shares to
employees and corporate ofcers of the Company and its
afliates under the provisions of article L.225-197-1 et seq.
of the French Commercial Code, within a limit of 1.3% of the
Companys issued capital as of April21, 2011;
4) to grant options to purchase new or existing shares to employees
and corporate ofcers of the Company and its afliates under the
provisions of articles L.225-177 and L.225-180 of the French
Commercial Code, within a limit of 1% of the issued capital as of
April21, 2011;
5) to issue new shares to members of the Employee Stock
Purchase Plan (ESPP), within a limit of 2% of the issued capital
on the date of the implementation of the authorisation;
6) to issue new shares under programs to promote stock
ownership among employees in non-French companies of the
Group, within a limit of 1% of the Companys share capital as of
April21, 2011 to be applied to the ceiling for the authorisation
given in5 above.
At its meeting on December 15, 2011, the Supervisory Board
authorised the Management Board to issue new shares to
employees during 2012, within a limit of 0.9% of the Companys
issued capital. The Management Board intends to use this
authorisation in June2012 to issue new shares to employees under
a non-leveraged and leveraged stock ownership plan.
Authorisations to issue shares
7
CAPITAL
At the Annual Shareholders Meeting to be held in May2012 (see pages270 - 271 ), the Management Board will ask shareholders to renew
the authorisation for the issuance of new shares under programs to promote stock ownership among employees in non-French companies
of the Group, that will expire on October2012.

Maximum
aggregate
par value of
authorised share
issues
Number of shares
(inmillions)
Authorisation
date/ authorisation
expires
Amount used at
Dec. 31, 2011
I Issues with pre-emptive subscription rights:
shares, warrants and other securities, giving access
immediately or in the future to the capital EUR800million
(1)
200 Apr.21, 2011
(3)
Jun.20, 2013
II Issues without pre-emptive subscription rights:
a) for the issue, in cash or listed securities, of shares,
warrants and other securities giving access immediately
or in the future to the capital EUR217million
(1)
54.25 Apr.21, 2011
(3)
Jun .20, 2013
b) to make private placements of shares 108million
(1)

(2)
27 Apr.21, 2011
Jun .20, 2013
c) to issue new shares as consideration for the shares
of unlisted companies
10% of the
Companys capital
(1)

(2)
54.4 Apr.21, 2011

Jun .20, 2013
III Employee share issues
Share issues restricted to employees (ESPP)
2% of the
Companys
capital
(6)
10.8 Apr.21, 2011
(3)
Jun.20, 2013
Share issues to promote stock ownership among
employees in foreign companies of the Group
1% of the
Companys
capital
(4)

(6)
5.4 Apr.21, 2011
(3)
Oct.20, 2012
Stock options
1% of the
Companys
capital
(6)
5.4 Apr.21, 2011 -
Jun.20, 2014
Stock grants or performance-based grants
1.3% of the
Companys
capital
(6)
7 Apr.21, 2011 0.38%
(5)
Jun.20, 2014
(1) The ceilings for issues with and without pre-emptive subscription rights are not cumulative and are capped at EUR800million in
aggregate.
(2) With a EUR217million ceiling of a).
(3) At its meeting on December15, 2011, the Supervisory Board authorised the Management Board to issue new shares to employees
during 2012, within a limit of 0.9% of the Companys issued capital. The Management Board intends to use this authorisation in
June2012 to issue new shares to employees, part of the ESPP or not, under a non-leveraged and leveraged stock ownership plan. The
share capital increase that will be restricted to emplyees part of the ESPP will be deducted from the ceilings authorised in I and II a).
(4) Issues of shares restricted to employees in non-French subsidiaries will be deducted from the ceiling for employee share issues (ESPP).
(5) The nature of stock grant or performance plans 10bis, 11bis, 12 to 14 (subscription or purchase) will be determined on the effective
date of grant at the latest.
(6) On the date of the Annual Shareholders Meeting the capital is EUR2,177million.
7CAPITAL
Three-year summary of changes in capital
The Annual Shareholders Meeting of April22, 2010 authorised the
Company to buy back shares. This authorisation was renewed at
the Annual Shareholders Meeting of April21, 2011.
Pursuant to these authorisations, the Company did not buy back
any share during the year.
Details of the share buyback programme submitted for approval at
the Annual Shareholders Meeting of May3, 2012 are as follows:
number of shares and percentage of share capital held directly
and indirectly by Schneider ElectricSA (as of March 13 , 2012 ):
treasury stock: 8,574,460 shares, or 1.56 % of the share
capital,
own shares: 1,058shares,
total: 8,575,518 shares, or 1.56 % of the share capital;
overview of purposes for which shares have been held:
the 8,574,460 shares held in treasury stock are held for
allocation on the exercise of stock options and performance
shares;
buyback plan objectives:
reduce the capital by cancelling shares,
hold shares for allocation on the exercise of stock option plans
or performance shares plans or to permit the conversion of
convertible debt securities,
nance a future acquisition (rather than issue new shares at the
time of the acquisition),
market making under a liquidity agreement;
maximum number of shares that may be acquired:
10% of the issued share capital as of the date of the
Annual Shareholders Meeting, representing, on the basis
of the issued share capital at February 28, 2012, a total of
54,920,425 Schneider ElectricSA shares with a par value of
EUR4,
taking into account treasury stock and own shares at
March 13 , 2012 (8,574,460 shares), the number of shares
that could be bought back under the authorisation comes to
46 ,345,965 shares, or 8.44 % of the issued capital;
maximum purchase price and maximum aggregate amount of
share purchases:
the maximum purchase price is set at EUR75 per share,
share purchases may not exceed an aggregate maximum
amount of EUR4,117,072,650.
duration of the buyback programme:
18months maximum, expiring on November2, 2013;
transactions carried out pursuant to the program authorised by
the Annual Shareholders Meeting 2010 and renewed by the
Annual Shareholders Meeting 2011 between January 1, 2011
and March 13 , 2012 :
transactions carried out by the Company:
number of shares acquired: 0,
number of shares transferred since the beginning of the
programme: 590,492 .
The following table shows changes in Schneider ElectricSAs share capital and additional paid-in-capital since December31, 2008 through
share issues and the exercise of stock options:

Number of shares issued
or cancelled
Cumulative number of
shares Share capital
Employee share issue 1,999,846*
Exercise of stock options 126,417*
Capital at December31, 2008
(1)
247,425,629* EUR1,979,405,032
Payment of dividend in shares 11,967,608*
Exercise of stock options 870,491*
(2)
262,752,025* EUR2,102,016,200
Payment of dividend in shares 4,345,794*
Exercise of stock options 2,709,882*
(3)
271,959,091* EUR2,175,672,728
Employee share issue 3,855,632
Exercise of stock option and performance shares issued 1,169,210
CAPITAL AT DECEMBER31, 2011
(4)
548,943,024 EUR2,195,772,096
* Not adjusted for the two-for-one share split on September2, 2011.
(1) Increase in share capital (EUR17.01million), increase in additional paid-in-capital (EUR123.9million).
Share buybacks
7
OWNERSHIP STRUCTURE
>
4. Ownership structure
Three-years summary of changes in capital
Dec. 31, 2011 Dec. 31, 2010 Dec. 31, 2009

Capital
Number of
shares Voting rights
Number of
voting rights Capital
Voting
rights Capital
Voting
rights
% % % % % %
Capital Research and
Management Company
(1)
9.43 51,780,765 8.86 51,780,765 8.17 7.72 5.07 4.75
CDC 3.71 20,349,002 4.57 26,699,002 4.23 5.10 4.32 5.18
Employees 4.55 25,001,870 7.06 41,268,373 4.11 6.14 4.26 6.33
Own shares
(2)
0.00 1,058 - - 0.00 - 0.92 -
Treasury shares 1.67 9,164,952 - - 1.68 - 1.76 -
Public 80.64 442,645,377 77.95 455,807,950 81.80 79.45 83.67 81.23
TOTAL 100.00 548,943,024 100.00 584,722,100 100.00 100.00 100.00 100.00
(1) To the best of the Companys knowledge.
(2) Number of voting rights as dened in article223-11 of the AMF general regulations, which includes shares stripped of voting rights.
Disclosure thresholds
To the best of the Companys knowledge, no shareholders other than Capital Research & Management Company, listed above, hold, either
directly or indirectly, more than 5% of Schneider Electrics capital or voting rights.
Changes in holdings (for stakes of more than 5%)
Date Company Capital (%) Voting rights (%)
Apr.27, 2011 BlackRock Inc. 5.00 4.73
Apr.27, 2011 Commerzbank AG 5.63 5.33
Apr.28, 2011 Commerzbank AG 3.72 3.51
Aug.2, 2011 BlackRock Inc. 4.99 4.73
Nov.4, 2011 CDC 4.12 4.99
Pledges on Schneider Electric shares
6,356shares are pledged.
Pledges on subsidiaries shares
Schneider Electric SA has not pledged any shares in signicant
subsidiaries.
7EMPLOYEE PROFIT-SHARING, STOCK OWNERSHIP
>
5. Employee profit-sharing, stock
ownership
Profit-sharing plans
Schneider Electric employees are the drivers of company growth.
They are the main force behind the Group with their knowledge of
the business and their involvement in the roll-out of Group strategy.
By linking employees to its capital, Schneider Electric allows
them to prot from value creation other than by their salary, thus
bringing together the interests of the employees and the Company.
In countries where regulations permit, Schneider Electric offers
its employees the opportunity to invest to restricted share capital
increases.
The Groups last employee share issue took place in July 2011.
Thisresulted in a subscription of 1.9million shares.
At December 31, 2011, employees held a total of 25,001,870
Schneider ElectricSA shares through the corporate mutual funds or
directly, representing 4.55% of the capital and 7.06% of the voting
rights, taking into account double voting rights.
Voting rights attached to shares held by corporate mutual funds are
exercised by the Supervisory Boards of the funds.
The Groups employee shareholders are broken down as follows:
47% in France, 13% in the United States and 40% internationally,
including China, India, Brazil and Russia. More than 30% of
our employees are Group shareholders and are spread over
60countries.
Profit sharing bonus
In 2011, employees of French entities received a EUR200 payment
as a prot sharing bonus. This bonus benetted from a 50%
matching contribution when allocated to the Shareholder fund.
Most of the Groups French companies have prot-sharing and other prot-based incentive plans.
The amounts paid by the Groups French entities over the last ve years were:
(inmillions of euros) 2011 2010 2009 2008 2007
Prot-based incentive plans and prot-sharing plans 59.9 56.5 48.5 69.7 64.8
Almost 55% of the total from incentives and prot-sharing was invested in the Schneider Electric shareholder funds and nearly 24% was
cashed in by employees.
The Schneider Electric employee shareholding
7
PERFORMANCE SHARE GRANTS ANDSTOCK OPTION PLANS
>
6. Performance share grants
and stock option plans
Performance share grant plans with
performance criteria and stock option plans
The gures below have been calculated where necessary
to take account of the two-for-one share split, effective from
September2,2011.
Grant policy
As part of its overall staff pay policy, each year Schneider Electric
sets up a long-term incentive plan based on an annual allocation of
stock grants, and, for employees who are US citizens or residents,
Stock Appreciation Rights (SARs) that are akin to stock options,
and stock options until December 2009. Since December 2010,
stock options have no longer been granted. Phantom shares which
track performance share grants have also been granted to certain
beneciaries in emerging market countries.
These plans are established by the Management Board, as
authorized by the Supervisory Board, which takes decisions based
on the report from the Remuneration, Appointments and Human
Resources Committee.
Beneciaries include members of Senior Management, top
managers of the Group in all countries, high-potential managers
and employees whose performance and potential were
judgedexceptional.
Each year Schneider Electric increases the number of beneciaries
of the annual plan. There were 1,579beneciaries in 2009, 2,360 in
2010 and 2,637 in 2011.
Allocations to Senior Management, including corporate ofcers,
dropped from 17% of the total in 2006 to 11.1% in 2011.
The annual plans are set up in December for the following scal
year so that beneciaries can be informed of their stock option and
performances shares grants at the same time as their targets for
the year ahead.
The annual plan for 2012 was set up in December2011. It comprises
the following plans, all of them subject to performance criteria:
performance share plan13 and 13bis, concerning 647,943shares
and 608beneciaries (French residents);
performance share plan 14 and 14bis, concerning 1,386,800shares
and 2,029beneciaries (residents of countries other than France);
SAR plan, concerning 816,636 SARs and 145 beneciaries
(American citizens or residents);
Phantom shares plan concerning 70,272 phantom shares and
274 beneciaries.
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 three years and
two years respectively. The vesting and lock-up periods for stock
allocations made under plans8, 10, 10bis, 13 and 13bis are at least
twoyearseach.
The vesting period for performance shares allocations made to
residents of countries other than France under plans 6, 9 and 11,
11bis, 12, 14 and 14bis is fouryears, with no lock-up period.
Similarly the beneciaries of phantom shares have a vesting period
of three years.
performance shares grants and phantom shares vest only if the
beneciary is a Group employee as of the vesting date and if certain
performance targets, detailed below, are met (see page 253 ).
Since January 2009, for members of the Management Board, and
since December 2011 for members of the Executive Committee,
allocations of stock grants are fully subject to the achievement of
performance conditions.
Description of the stock option plans
The option exercise price is equal to the average closing price
of the twenty trading days prior to the date of allocation by the
Management Board. No discount is applied.
Since 2006, the options have a ten year life. They may not be
exercised until after the fourth year. However, they can be exercised
before maturity in the case of a takeover bid for the Companys
shares. Exceptionally, options granted under plans 22, 23 and
25may be exercised as from the rst year. Similarly, US citizens and
residents may exercise their rights following the third year under
certain plans.
Options may only be exercised by Group employees. In addition,
exercise of 50% of the options allocated is dependent on specic
targets being met, detailed below (see page 251 ). Effective from
January 2009, all of the options granted to members of the
Management Board are subject to performance criteria.
Description of Stock Appreciation Rights
(SARs)
SARs have the same vesting period and expiration date as the
corresponding options or grants and are subject to the same
performance criteria. The beneciary receives the proceeds in cash.
7PERFORMANCE SHARE GRANTS ANDSTOCK OPTION PLANS
Description of phantom shares
Phantom shares are akin to performance shares and are subject to
specic performance criteria. The beneciary receives the proceeds
in cash.
Lock-up arrangements applicable to members
of the Management Board
The Supervisory Board has set:
a retention target of shares representing three years of base
salary for Jean-Pascal Tricoire, and two years of base salary for
Emmanuel Babeau. Calculation of the number of shares held is
based on Schneider Electric SA shares equivalent to the FCP
(Company Mutual Fund) units invested in Schneider Electric
shares held by the beneciaries.
In accordance with the provisions of articles L.225-185 and
L.225- 197-1 of the French Commercial Code and the AFEP/MEDEF
guidelines, the Supervisory Board has approved the following:
retention of a proportion of shares arising from the exercise of
options granted under plans30 and following must be held in a
registered account. This number corresponds to a percentage
of the capital gains realised through exercise of the options, net
of taxes and obligatory contributions and the sums necessary
to fund the purchase of such shares. The percentage is xed at
25% for Jean-Pascal Tricoire and 15% for Emmanuel Babeau;
mand atory retention beyond the lock-up period of a percentage
of the shares acquired under plans 3 and following. The
percentage is xed at 25% for Jean-Pascal Tricoire and 15% for
Emmanuel Babeau;
obligatory investment in Schneider ElectricSA shares of 10% of
the selling price (net of taxes and contributions) of performance
shares grants acquired through plans set up in 2009.
These obligations are suspended once the shareholding targets
described above are met.
Stock options and stock grants held by
members of the Management Board
Mr Jean-Pascal Tricoire
As of December31, 2011, Jean-Pascal Tricoire held 859,336options
ofwhich 190,000 based on Group performance criteria, 147,500stock
grants also subject to performance criteria, 6,750 shares acquired
under share plan3 which will become available as of December19,
2012, and 10,588shares under plan1 which became available as of
December21, 2011.
The vesting period for plan 8 expired on December 21, 2011.
However, determination of the level of achievement of the
performance criteria required the closure and publication of the
2011 nancial statements, which occurred on February22, 2012.
As a result, delivery of the securities was deferred to that date.
Mr Emmanuel Babeau
As of December31, 2011, Emmanuel Babeau held 40,000options,
including 30,000 based on performance criteria, and 52,000stock
grants, of which 49,500 were subject to performance criteria.
The vesting period for plan 8 expired on December 21, 2011.
However, determination of the level of achievement of the
performance criteria required the closure and publication of the
2011 nancial statements, which occurred on February22, 2012.
As a result, delivery of the securities was deferred to that date.
7
Plan Plan date
Number of
beneciaries
at inception
Number of
options at
inception
of which
corporate
ofcers
Exercise
price
(ineuros) Performance criteria
% of
targets
reached
Options
cancelled by
performance
criteria
(1)
Options
outstanding
at Dec.31,
2011
(2)
21 Feb.5, 2003 433 4,000,000 300,000 22.60 50% of options - 2005 net
operating prot and return
on capital employed
84.0 283,800 -
(5)
22 Feb.5, 2003 111 222,000 - 22.60 Without - plan reserved to
winners of the trophy
NA NA -
(5)
23 May6, 2004 107 214,000 - 27.77 Without - plan reserved to
NA NA 22,292
24 May6, 2004 402 4,121,400 300,000 27.77 50% of options - operating
margin on revenue - 1/3
per year on 2004, 2005
and 2006
88.9 188,600 571,390
25 May12, 2005 157 277,000 - 28.23 Without - plan reserved to
NA NA 44,068
26 Jun.28, 2005 458 4,007,600 400,000 30.09 50% of options - 2005 and
revenue
100 - 1,647,570
27 Dec.1, 2005 419 3,229,800 300,000 35.70 50% of options - 2006 and
revenue
100 - 1,899,410
revenue
100 - 1,800,722
29 Apr.23, 2007 43 166,300 - 48.52 50% of options - 2007 and
revenue
100 - 144,300
revenue
- 887,952 841,960
31 Jan.5, 2009 328 1,358,000 137,000 26.06 50% of options/100% for
the Management Board
- 2011 operating margin
(4)

and 2009 to 2011 EPS
compared to a benchmark
selection
(3)
80
(6)
- 1,253,300
32 Aug.21, 2009 1 10,000 10,000 31.30 without - - 10,000
33 Dec.21, 2009 391 1,652,686 130,000 37.92 50% of options/100% for
the Management Board -
2010 and 2011 operating
margin
(4)
and 2011 share
of revenue generated in
the new economies
100 - 1,624,636
23,662,878 1,977,400 - 1,360,352 9,859,648
(1) Number of shares cancelled for non-achievement of targets (plans23 to 30).
(2) Number of options outstanding after deduction of all cancellations and exercises since the plan was initiated.
(3) On the basis of a pre-dened and xed list of 11competitor companies.
(4) Excluding restructuring costs.
(5) 58,778options for plan21 and 12,120options for plan 22 were cancelled following the end of the annual period (February4, 2011).
(6) Application of these performance criteria has resulted in the cancellation of 133,760 options granted under plan 31 in 2012.
Past stock option plans
The data below are adjusted for the two-for-one share split , effective September2, 2011.
Details on outstanding options (2011)
Plan Plan date
Type of
plan
(1)
Expiration date
Exercise
price
ineuros(2)
Plans as at 1
Janua
ry
2011
of which
corporate
ofcers
(3)
Number
of options
exercised
during the
nancial year
Number
of options
cancelled
during the
nancial year
Options
outstanding at
December 31,
2011
21 Feb.5, 2003 S Feb.4, 2011 22.60 88,452 - 29,674 58,778 -
22 Feb.5, 2003 S Feb.4, 2011 22.60 12,940 - 820 12,120 -
23 May6, 2004 S May.5, 2011 27.77 30,332 - 8,040 - 22,292
24 May6, 2004 S May5, 2011 27.77 845,644 6 6,156 274,254 - 571,390
25
May12,
2005 S May11, 2013 28.23 58,940 - 14,872 - 44,068
26
Jun.28,
2005 S Jun.27, 2013 30.09 1,890,198 403,922 234,952 7,676 1,647,570
27 Dec.1, 2005 S Nov.30, 2013 35.70 2,168,392 302,942 265,750 3,232 1,899,410
28
Dec.21,
2006 S/P Dec.20, 2016 40.67 2,105,646 161,574 291,794 13,130 1,800,722
29
Apr.23,
2007 S/P Apr.22, 2017 48.52 152,300 - - 8,000 144,300
30
Dec.19,
2007 S/P Dec.18, 2017 46.00 882,440 63,000 - 40,480 841,960
31 Jan.5, 2009 S/P Jan.4, 2019 26.06 1,286,900 90,000 - 33,600 1,253,300
(3)
32
Aug .21,
2009 S/P Aug.20, 2019 31.30 10,000 10,000 - - 10,000
33
Dec.21,
2009 S/P Dec.20, 2019 37.92 1,646,086 130,000 - 21,450 1,624,636
)
11,178,270 1,22 7,594 1,120,156 198,466 9,859,648
(1) S= subscription option plan / P = purchase option plan.
(2) Average of the 20 rates preceding the grant, with no discount or premium.
(3) Application of these performance criteria has resulted in the cancellation of 133,760 options granted under plan31 in 2012.
24 Henri Lachmann 66,156
28 Jean-Pascal Tricoire 161,574
32 Emmanuel Babeau 10,000
(2 )
33 Jean-pascal Tricoire 100,000
Emmanuel Babeau 30,000
(1) Options attributed at the time of his recruitment as Chief Financial Ofcer.
(2) In his role as corporate ofcer at the date of attribution.
Situation of corporate officers, broken down by plan (at December31, 2011)
(1 )
(in italics, options still subject to performance conditions)
7
Past share plans (at December31, 2011)
Plan Plan date
Number
of bene-
ciaries at
inception
Number of
shares at
inception
Vesting
period
Holding
period Performance criteria
% of
targets
reached
Rights
cancel-
led
(1)
(3)
Corpo-
rate of-
cers
(2)
Total
rights
cancelled
since the
grant
Rights
outstanding
at
December31,
2011
4 Dec.19,
2007
274 114,500 4 years 0 50% of shares - 2008
and 2009 operating
margin and revenue
- 55,394 0 10,052 0
(5)
5 Jan.5,
2009
342 287,430 3 years 2 years 50% of shares/100% for
2011 operating margin
(4)

and share of revenue
generated in the new
economies 2011
100 - 22,500 14,600 272,830
6 Jan.5,
2009
721 424,702 4 years 0 As plan5 100 - 0 30,954 393,748
7 Aug.21,
2009
1 2,500 3 years 2 years without - - 2,500 0 2,500
8 Dec.21,
2009
395 319,506 2years 2 years 50% of shares/100% for
margin
(4)
and share of
revenues generated in the
new economies in 2011
100 - 32,500 1,544 317,962
9 Dec.21,
2009
1,184 780,190 4 years 0 As plan9 100 - 0 29,780 750,410
10 Dec.17,
2010
658 665,524 2years
and
3months
2 years 50% of shares/100% for
margin
(4)
and 2011 and
2012 average revenue
growth compared to
changes in world GDP
over the same period
- - 70,000 3,544 661,980
10
bis
June26,
2011
1 3,000 2 years 2 years As plan10 - - 0 0 3,000
11 Dec.17,
2010
1,702 1,161,696 4 years 0 As plan10 - - 0 0 1,136,076
11
bis
July26,
2011
1 5,882 4 years 0 As plan10 - - 0 0 5,882
12 July26,
2011
1 19,850 4 years 0 with no performance
conditions
- - 0 0 19,850
13
and
13
bis
(6 )

Dec.16,
2011
608 647,943 2years
and
3months
2 years 50% of the shares/100%
for the Management
Board and Executive
Committee - 2012 and
2013
(4)
operating margin
and change in the Planet
&Society barometer to
the end of 2013
- - 72,000 0 647,943
14
and
14
bis
(6 )
Dec.16,
2011
2,029 1,386,800 4 years 0 As plan13 - - 0 0 1,386,800
5,819,523 55,394 199,500 90,474 5,598,981
(1) Rights cancelled for non-achievement of targets.
(2) Rights after cancellations for non-achievement of targets.
(3) Application of the performance conditions led to the cancellation of 55,394shares in 2010 (plan4).
(4) Excluding restructuring costs.
(5) 53,064 shares were delivered on December19, 2011 .
(6 ) Plans 13 bis and 14 bis each include a beneciary. The vesting conditions are identical to those of plans 13 and 14.
Situation of corporate officers, broken down by plan (at December31, 2011)
(1 )
The data below are adjusted for the two-for-one share split , effective September 2, 2011.
(in italics, shares still subject to performance conditions)
(2 )
7 Emmanuel Babeau 2,500
(3 )
(1 ) In his role as corporate ofcer at the date of attribution.
(2 ) The holding period ended on December 20, 2011.
(3 ) Shares attributed at the time of his recruitment as Chief Financial Ofcer.

Options granted and exercised and stock grants made to top10 employee
grantees during the year
Subscription or purchase options awarded to the ten most highly paid non-corporate officer
employees and options exercised by them
Number
Exercise price/Average
weighted price Plans
Options exercised in 2011 of which the number of
options bought or subscribed is the highest 247,400 34.10 24-26-27-28
Shares awarded to the ten most highly paid non-corporate officer employees
Number Plans
Shares awarded for 2012 (Decembergrant) 122,500 13-14
7
STOCK MARKET DATA
>
7. Disclosure of information required in
accordance with articleL.225- 100-3
oftheFrench Commercial Code**
Items that could have an impact in the event of a public tender
offerinclude:
agreements calling for payments to the members of the
Management Board or to employees if they resign or are
terminated without real cause or if their employment ends due to
a public tender offer (see page130 );
agreements entered into by the Company with change of
control clauses: information on the exercise of stock options
and performance shares grants (see page2 49 ); information on
certain loans and credit facilities (see page38 );
restrictions in the articles of association on the exercise of voting
rights (see page2 49 ) relating to the non-application of the ceiling
on voting rights when a public tender offer is in process.
>
8. Stock market data
In France, Schneider Electric is listed on the Eurolist of the Euronext Paris market (compartment A), where it is traded in lots of one under
ISIN code FR0000121972. It is part of the markets benchmark CAC40 index of Frances largest stocks.
18-month trading data in Paris
Year Month
Trading volume
(1)
(inthousands)
Capital traded
(inmillions of euros)
Highs and lows
(1)(2)
(in euros)
Number of trading
sessions High Low
2010 August 45,370 1,989 46.73 40.70 22
September 51,863 2,338 47.48 40.80 22
October 51,429 2,535 51.93 45.71 21
November 35,675 1,899 56.88 50.43 22
December 33,968 1,911 60.00 54.65 23
2011 January 35,086 2,008 59.68 54.18 21
February 35,259 2,019 60.25 54.48 20
March 51,517 2,976 61.65 52.90 23
April 44,356 2,566 61.83 54.00 19
May 65,613 3,790 60.28 54.10 22
June 39,550 2,201 58.00 53.73 22
July 43,348 2,319 58.85 47.00 21
August 78,375 3,554 52.13 40.59 23
September 63,191 2,626 47.40 35.94 22
October 50,244 2,160 47.60 37.48 21
November 50,276 1,982 43.19 35.00 22
December 38,399 1,553 43.12 37.01 21
TOTAL 2011 595,214 29,755 257
2012 January 44,997 2,066 49.77 40.31 22
The data correspond to trading volumes on NYSE Euronext.
(1) Period from August2010 to August2011 restated for the two-for-one share split , effective September2, 2011.
(2) During the trading session.
7STOCK MARKET DATA
Five-year trading summary
2011 2010 2009 2008 2007
Average daily trading volume Euronext Paris:
number of shares (in thousands)
(1)
2,316.01 2,642.57 2,647.16 3,382.38 3,175.58
inmillions of euros 115.78 108.23 77.12 115.18 152
High and low share prices (ineuros):
high
(1)
61.83 60.00 40.93 47.15 55.13
low
(1)
35.00 36.00 20.65 19.42 41.76
Year-end closing price (ineuros)
(1)
40.68 56.00 40.89 26.50 46.34
Yield including tax credit(%) 4.18 2.86 2.51 6.50 3.56
The data correspond to trading volumes on NYSE Euronext.
(1) Historical data restated for the two-for-one share split, effective September2, 2011.
The Schneider ElectricSA share versus the CAC40 index over five years
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Dec. 31, 2010 Dec. 31, 2008 Dec. 31, 2007 Dec. 31, 2006 Dec. 31, 2011
31/01/2012
Dec. 31, 2009
Share price in euros Schneider Electric share CAC 40 index
40.68
47.48
46.34 26.50
40.89
56.00
0
10
20
30
40
50
60
70 Schneider Electric
share
CAC 40 index
42.05
(Source: Thomson Reuters )
Monep
Options on Schneider Electric SA shares have been traded on the MONEP market since December20, 1996.
Ordinary bonds
The information is disclosed in note 9 of the Company Financial Statements (pages229-230).
7
INVESTOR RELATIONS
>
9. Investor relations
Person responsible for financial information
Emmanuel Babeau
Executive Vice-President, Finance, member of the Management Board
35, rue Joseph Monier CS30323
92506 Rueil-Malmaison Cedex - France
Tel: +33 (0)141297119
Contacts
Institutional investors, nancial analysts and private shareholders may request information and documents from:
Carina Ho, Vice-President Financial Communication and Investor Relations
For institutional investors and nancial analysts: Tel: +33 (0)141396084
Toll-free number for individual investors in France: 0800205514
The Committee consists of eight individual shareholders appointed
by Schneider Electric for a three-year term. Members may serve a
maximum of two terms. The Committee is designed to reect the
geographical and professional diversity of the Groups shareholders
and to relay their concerns to the Company. To fulll this mission,
the Committee is available at all times to pass on comments from
shareholders to the Company. It gives an opinion and makes
suggestions on investor relations actions and resources. In 2011,
the Committee met to discuss various topics and to participate in
events dedicated to individual shareholders, including:
ways to strengthen the Companys strategy for individual
Shareholders;
the Committees participation in the Q&A session with the
Chairman at the Annual Shareholders Meeting.
In 2011, Committee members also took part in the following events:
visit of Schneider Electric s Research and Development center at
Grenoble-Eybens ;
guided tour of our showroom at our headquarters in Rueil
Malmaison.
Shareholder documents
The Company makes available to its shareholders:
the annual report and a short form;
a letter to shareholders;
general, economic and nancial information (presentations-press
releases);
a corporate website http://www.schneider-electric.com.
Shareholders Relations Committee
7STOCK MARKET DATA
8
1. Management Board report 260
2. Supervisory Boards comments ontheManagement
Boards report, mode in accordance with articleL . 225- 68
oftheFrenchCommercialCode 264
3. Auditors special reports 264
4. Resolutions 268
Annual and
Extraordinary
Shareholders Meeting
8MANAGEMENT BOARD REPORT
ANNUAL AND EXTRAORDINARY SHAREHOLDERS MEETING
>
1. Management Board report
Ordinary Meeting
Approval of the parent company financial
statements
- first resolution -
We ask you to approve the transactions and nancial statements
for the year 2011, as presented, which show a net prot of
EUR2,603.7million.
Approval of the consolidated financial
statements
- second resolution -
We ask you to approve the transactions and consolidated nancial
statements for the year 2011, as presented, which show a net prot
for the Group of EUR1,820million.
Distribution: payment of a dividend of EUR1.70
per share
- third resolution -
We recommend a dividend of EUR1.70 per EUR4 pe r value share.
This represents a distribution rate of almost 50% of net prot for the
Group. The dividend will be paid on May16, 2012 on 548,943,024
shares holding dividend rights on January1, 2011 that made up the
capital on December31, 2011. No dividend will be paid on treasury
shares on the payment date; the corresponding amounts will be
allocated to retained earnings.
The dividend will be paid out of prot available for distribution,
consisting of:
retained earnings of EUR96,496,292.01;
net income for the year of EUR2,603,738,064.30;
less the statutory allocation to the legal reserve of
EUR2,009,936.80;
and amounting to EUR2,698,224,419.51.
The dividend payment will total EUR933,203,140.80; the remaining
prot available for distribution in euros will be allocated to retained
earnings.
For individual shareholders who pay income tax in France, a social
security tax of 13.5% will be charged on the gross dividend.
After applying a 40% (uncapped) allowance, only 60% of the
dividend amount net of social security tax will be included in taxable
income, less:
any deductible charges and expenses; and
an annual allowance of EUR1,525 for single, widowed or
divorced persons or couples ling separately or EUR3,050 for
couples who le a joint tax return.
The full dividend will be eligible for the 40% allowance. No amounts
eligible or not eligible for the 40% deduction provided for in
article 158-3-2 of the French Tax Code will be distributed, other
than the dividend described above.
Shareholders may also choose to pay a withholding tax (at 21%)
on the full dividend amount with no allowances. In this case, the
allowances and tax credits described above will not apply.
Dividend payments for the last three years were as follows:
2008 2009 2010
Dividend paid per share of
EUR8 par value
(1)
3.45 2.05 3.20
Dividend paid per share
adjusted for a two-for-one
share split

(2)
1.725 1.025 1.60
(1) The full dividend is eligible for a 40% deduction for individuals
resident in France. N on-eligible dividends have been
distributed.
(2) The two-for-one share split effective on September2, 2011.
Agreements and obligations governed by
articlesL.225-86 and L.225-90-1 of the French
Commercial Code
- fourth and fifth resolutions -
We request you to approve the agreements and regulated
obligations presented in the Statutory Auditors report drawn up
pursuant to article L.225-88 of the French Commercial Code,
regarding:
the adaptation of the top-hat dened benet pension plan for the
French Groups senior executives allowed to the Management
Board members;
the agreements and obligations to Mr Jean-Pascal Tricoire,
approved by the General Shareholders Meeting on April 23,
2009, which must be approved once more by the Assembly
under the TEPA Act.
The adaptation of the top-hat defined benefit
pension planfor the French Groups senior
executives (4
th
resolution)
The Groups senior executives afliated to the French Social
Security systems are the Management Board members that benet
from a top-hat dened benet pension plan article39 . This plan
presented on page 125 set up a pension of a maximum amount
equal to 60% of the difference between the average remuneration
of the last three years (reference salary) and the total of external
8
MANAGEMENT BOARD REPORT
pensions. The amount of this pension is capped to 25% of the
reference salary considering, if applicable, the amount paid for
the dened contribution plan(s) (article 83). This plan does not
conform to the recommendations of the AFEP/MEDEF corporate
governance guidelines which anticipate that the basic rights are
acquired without length of service conditions in the Group. In order
to conform to these recommendations, the reform anticipates:
closure of the current article39 plan to all new entrants;
implementation of a new article 39 plan open to Executive
Committee and Board members with progressive vesting of
rights according to time of service in the Group and on the
Executive Committee. Full rights are granted after 15 years
of service for a new entrant to the plan, except for the Group
service condition. The new plan is contingent upon completing
a career in the Company with the same exibility introduced by
Social Security in 2004. Therefore, conditional assurance of an
income is maintained in case of dismissal, producing the same
effects as employee redundancy, after 55 years of age without
restarting work or for 2
nd
or 3
rd
category disability as dened by
Social Security without restarting work.
For the rest, the new planincludes the provisions of the current
plan, notably:
limiting the top-hat pension to 25% of the reference salary
considering the pension paid for the article 83 plans
implemented by the Group (unchanged from current plan);
the right to a widow/widowers pension for the surviving
partner;
a spouses pension if a senior executive dies before retirement
age, although limited to rights acquired by the date of death;
pension supplement paid to a senior executive from the
retirement date after disability occurring during work activities.
the progressive replacement of the conditional rights of the new
plan for those of the current plan. In effect, the conditional rights of
the twoplans are not added together but are gradually replaced.
As a result, the current plan, which has been continued because
of a wider scope of beneciaries, will disappear in the future.
outsourcing of the new article 39 plan. This outsourcing is
mandatory. To this end, a contract was signed with the company
AXA France Vie following an invitation to tender issued by an
independent rm. This contract only involves outsourcing of the
new plan that will come into force on July1, 2012, the outsourcing
of the old article39 plan still being under review.
Renewal of MrJean-Pascal Tricoires status
(5
th
resolution)
In conformity with the AFEP/MEDEF recommendations of
October6, 2008, MrTricoire agreed to resign from his employment
contract at the time of renewing his appointment as Chairman of
Management Board in May2009. Also, in agreement with MrJean-
Pascal Tricoire, the Supervisory Board of February18, 2009 dened
a status that was approved by the Annual Shareholers Meeting of
April23, 2009. This status stipulates that MrTricoire:
1) will continue to benet from:
the Schneider ElectricSA and Schneider Electric IndustriesSAS
employee benet plan, which offers health, incapacity, disability
and death cover,
the supplementary health, incapacity, disability and death
cover available to the Groups French senior executives,
the top-hat pension plan for the Schneider Groups French
senior executives above described;
2) receives compensation in the event of termination capped at
two years of his target remuneration (xed salary and target
bonus, maximum described below) taking into account
compensation provided for in the non-compete agreement
described below and subject to performance criteria;
the agreement lasts for one year and is remunerated (60% of
target remuneration: xed and bonus);
4) retains forthwith, subject to performance criteria, the benet
of his stock options, stock grants and performance shares
granted to him or that will be granted to him, should he leave
the Company.
The appointment to the Management Board comes to an end on
May 2, 2012; the Supervisory Board of February 21, 2012 has
decided to renew the roles of Board members for three years and
therefore, to renew Mr Tricoires status under the two adjustment
conditions presented hereafter. It is therefore stipulated that
MrTricoire:
1) benets from:
the Schneider ElectricSA and Schneider Electric IndustriesSAS
employee benet plan, which offers health, incapacity, disability
and death cover,
the supplementary cover available to the Groups French
senior executives for health, incapacity, disability and death.
The contingency and supplementary cover compensation are
now subject to performance criteria. The right to compensation
is subject to one of the two following criteria being present:
the average net prot for the last ve nancial years is positive
or the average free cash ow amount for the last ve years
ispositive;
2) benets from a compensation due in the event of dismissal
capped taking into account the compensation provided for in
the non-compete agreement described below, not twice the
last target remuneration (xed salary and target bonus), but
twice the average actual annual remuneration (xed salary and
variable) for the last three years (hereafter Maximum Amount).
The amount due will be subject to performance criteria;
(i) Mr Tricoire resigns, is dismissed or is not reappointed as
a member or Chairman of the Management Board in the
12months following a material change in Schneider Electrics
shareholder structure that could change the membership of the
Supervisory Board;
(ii) Mr Tricoire resigns, is dismissed or is not reappointed as a
member or Chairman of the Management Board following a
reorientation of the strategy pursued and promoted by him
until that time, whether or not in connection with a change in
Schneider Electrics shareholder structure as described above;
(iii) MrTricoire is asked to resign, is dismissed or is not reappointed
as a member or as Chairman of the Management Board when
the mathematical average of the rate of achievement of Group
objectives used to calculate his bonus was 50% or higher in the
four completed nancial years preceding his departure.
Compensation will depend on the mathematical average of the
rate of achievement of Group performance objectives used to
determine MrTricoires bonus for the three completed nancial
8MANAGEMENT BOARD REPORT
years preceding the date of the Board meeting at which the
decision is taken.
If the mathematical average of Group performance objectives
rate is:
less than 50% of the target: no compensation will be paid,
equal to 50% of the target: he will receive 75% of the Maximum
Amount,
equal to 100% of the target: he will receive 100% of the
Maximum Amount,
between 50% and 100%: he will receive between 75% and
100% of the Maximum Amount calculated on a straight-line
basis according to the rate of achievement;
The mathematical average of the Group target achievement
rate for the last threeyears (2009 to 2011) was 138.6%
(60% of target remuneration: xed +variable);
4) retains forthwith, subject to performance criteria, the benet
of his stock options, stock grants and performance shares
granted to him or that will be granted to him, should he leave
the Company. The performance criterion depends on the
mathematical average of the rate of achievement of Group
performance objectives, used to determine Mr Jean-Pascal
Tricoires bonus for the three completed nancial years
preceding his departure, will be equal to at least 50% of
thetarget.
Mr Tricoire also benets from the top-hat pension plan for the
Groups senior executives as presented below and which approval
of the change is contained in the 4
th
resolution.
Nomination of the Supervisory Board members
- sixth to fifteenth resolutions -
The appointments of Mrs Lo Apotheker, Claude Briquet,
Jrme Gallot, Willy Kissling, Henri Lachmann and Richard
Thoman come to an end at the close of the Annual Shareholders
Meeting. In addition, the Supervisory Board on December15, 2011
co- opted MrXavier Fontanet to replace MrAnand Mahindra whose
appointment will also come to an end at the close of the Annual
Shareholders Meeting.
The Board considers the importance of the changes that occurred
in 2011 in its composition, with the addition of Mrs Betsy Atkins
and Mrs Jeong Kim, Dominique Snquier and Xavier Fontanet
who was co-opted to replace Mr Anand Mahindra, pausing in its
policy of female quotas, internationalisation and rejuvenation of its
members. In addition, the Management Board, in agreement with
the recommendation from the Supervisory Board, proposes:
to renew the appointment of Messrs Kissling, Lachmann and
Thoman for a two year period due to the new statutory provisions
relating to the age of Board members, and of Messrs Apotheker
and Gallot for a period of four years;
to ratify the co-opting of MrXavier Fontanet and elect him as a
member of the Supervisory Board for a period of four years.
Mr Briquet having been nominated to represent the employee
shareholders in virtue of the provisions of article11-c of the articles
of association, his successor must be nominated according to the
procedure for this article. The procedure stipulates that when the
employee shareholders hold more than 3% of the capital at the end
of a nancial year, the representative for the employee shareholders
must be elected by the Annual Shareholders Meeting from among
the candidates designated by the FCPE (collective employee
shareholding plan investing in the Company shares) Supervisory
Boards or designated by the employee shareholders when their
shares are held directly and not via the FCPEs.
The candidates who have been designated are Mr Manfred Brill,
MrClaude Briquet, MrsMagali Herbaut and MrThierry Jacquet.
Following the Supervisory Boards recommendation, the
Management Board has agreed to the 14
th
resolution nominating
MrsMagali Herbaut as a Supervisory Board member representing
employee shareholders. Indeed, MrsMagali Herbauts prole ts the
objectives of female quotas, rejuvenation and, taking into account
her professional pathway within the Group, of internationalisation,
as set by the Supervisory Board regarding its composition.
The Management Board therefore invites you to vote solely in favour
of the 14
th
resolution and to abstain from the 12
th
, 13
th
, and 15
th

resolutions.
Biographical notes for Messrs Apotheker, Fontanet, Gallot, Kissling,
Lachmann and Thoman, as well as their roles are provided in the
Company governance report (see pages109-115 ). The candidates
for the Supervisory Board member duties to represent the employee
shareholders are given below.
MrManfred Brill (age: 57)
Manfred Brill holds German nationality and after studying applied
science at university began his career in 1975 in the company BBC
AG as a project and software engineer. In 1982, he joined AEG
AG as a programmer, then taking on the role of systems engineer.
He later became R&D manager for communication systems and
then joined Schneider Electric Group at the time of the JV AEG
Schneider Automation. From 1999 to 2004 he worked as head of
the Communication and Conguration Department and since then
has held the position of SW Governance Manager. He was Vice-
Chairman of the Supervisory Board of Schneider Electric GmbH
from 2004 to 2008 and is Chairman of the Workers Council of
Schneider Electric Automation GmbH.
MrClaude Briquet (age: 50)
Claude Briquet is an engineering graduate from National School of
Engineers in Tarbes and from ENSEEIHT in Toulouse. He joined the
Schneider Electric Group in 1985 and began his career in the areas
of development, quality and production. He managed the Pacy I
plant from 1992 to 1996 and the Vaudreuil plant from 1996 to 1999.
He was appointed Executive Vice-President of Mafelec in 1999 and
of Alombard in 2001. MrBriquet is currently responsible for trading
in Europe within the Industry Department of Schneider Electrics
European Operating Division. He is a member of the Supervisory
Board of Schneider ElectricSA and is Chairman of the Supervisory
Board of FCPE Schneider France Germany.
MrsMagali Herbaut (age: 40)
Magali Herbaut graduated from the cole Suprieure de Commerce
in Grenoble and earned an MBA from Laval University (Canada).
She began her career as an auditor for the rm Deloitte, then
joined Schneider Electric in 1996 as a management controller for
Schneider Electric Automation GmbH. Ms Herbaut spent two years
as a management controller for Schneider Electric Automation Inc.
in the US, before becoming Chief Financial Ofcer for Normabarre
(2000-2003) then for the Medium Voltage/Low Voltage Regional
Facilities Unit (2003-2007), later taking charge of the Alombard
plant (2007-2008). Since 2009, she has managed the Electrical
Wiring activity in the Business Unit LifeSpace for the EMEAS region.
Ms Herbaut is a member of the Supervisory Board of the FCPE
Schneider Actionnariat.
8
MANAGEMENT BOARD REPORT
MrThierry Jacquet (age: 47)
Thierry Jacquet holds a masters degree in Management from
the cole Suprieure de Commerce in Grenoble and a degree
from the Grenoble Technology Institute. He studied Electrical
Engineering at the Paul Louis Merlin School and began his
career in 1982 with the Schneider Electric Group as a cable tter
for very high voltage work. After a period as a draughtsman, in
1987 he was appointed to the medium voltage technical sales
business where he remained until 1999. After 1995, he was
elected (CFDT - the French Democratic Confederation of Labour)
to the Workers Council of Schneider Electric Grenoble and to
the Central Company Committee for Schneider Electric where
he was Chairman of the economic commission from 2003-2006.
Since 2007, he has been a member of the European Company
Committee of Schneider Electric and secretary of this committee
since 2009. Thierry Jacquet is Chairman of the Supervisory Board
of FCPE Schneider Actionnariat and a member of the Supervisory
Board of FCPE Schneider FranceGermany.
Share buybacks - sixteenth resolution -
We request that you renew the authorisation given to the Company
by the General Meeting of April21, 2011 to buy back its shares by
any appropriate method, including through the use of derivatives,
pursuant to the provisions of article L.225-209 of the French
Commercial Code.
The Company buyback programs may have various objectives: to
reduce the issued capital; or to cover plans for stock options or
plans for stock grants; or to permit the conversion of convertible
debt securities; or to carry out external growth transactions and to
ensure an active market for the Companys shares.
Shares bought back may be cancelled in accordance with the
authorisation given to the Management Board by the twenty-fth
resolution adopted by the General Meeting of April21, 2011.
Further information on your Companys share buyback programmes
is provided on page246 .
You are asked to authorise the Company to buy back shares
representing at most 10% of the issued capital as of the date of
the Meeting (e.g. 54,894,302 shares based on issued capital as at
December31, 2011). The maximum purchase price is set at EUR75.
This authorisation will not be available for use during offer periods.
Extraordinary Meeting
Capital increases restricted to employees
- seventeenth resolution
The General Meeting of April21, 2011 authorised the Management
Board to proceed within the 2% capital limit to issue shares to
employees who are members of the PEE company savings plan
(hereafter: twenty-third resolution) as well as to issue shares to
employees from non-French Group companies or to entities created
to represent these employees (hereafter: twenty-fourth resolution).
This last resolution aims to allow employee shareholder operations
in certain countries where the PEE plan rules do not easily comply
with the legislation.
Within the scope of these authorisations, the Supervisory Board of
December15, 2011 authorised the Management Board to renew
the annual employee shareholder operation in 2012 within a limit
of 4.9 million shares (almost 0.9% of the capital). This program
will include a non-leveraged and a leveraged plan (x10) restricted
to employees of Group will be offered in 27 countries, excluding
France and the United States, representing 80% ofemployees.
The twenty-third resolution is valid until June 2013, whereas the
twenty-fourth resolution expires in November 2012. Therefore, to
allow a new global employee shareholder program in 2013, we
propose a renewal of this authorisation with the same conditions.
The authorisation will not exceed 1% of the capital. They will be
deducted from the ceiling of 2% of the capital set for the issuance
of shares to employees who are members of the PEE plan. Atthe
discretion of the Management Board, the issue price will be based
on either (i) the opening or closing price of the Companys share
quoted on the trading day the decision of the Management Board
setting the issue price is made, or (ii) the average of the opening
or closing prices quoted for the Companys shares over the
twenty trading days preceding the decision of the Management
Board setting the issue price under this resolution or under the
twenty- third resolution. The Management Board may apply a
maximum discount of 20% to the reference price. The discount will
be determined by the Management Board taking into consideration
any foreign legal, regulatory or tax provisions that may apply to any
beneciary governed by foreign law.
This authorisation cancels and replaces the existing authorisation
from August 1, 2012 given in the twenty-fourth resolution for the
amounts remaining unused by July 31, 2012. This authorisation
is valid for a period of 18 months and can only be used from
August1,2012.
Finally, the eighteenth resolution requests the powers necessary to
carry out formalities.
8SUPERVISORY BOARDS COMMENTS ONTHEMANAGEMENT BOARDS REPORT, MODE IN ACCORDANCE WITH ARTICLEL
>
2. Supervisory Boards comments
on the Management Boards
report, mode in accordance
with articleL . 225- 68
oftheFrench Commercial Code
In our capacity as Statutory Auditors of Schneider Electric SA, we
present below our report on regulated agreements.
Our responsibility is to report to you, based on the information
provided, on the main terms and conditions of agreements that have
been disclosed to us or that we would have discovered at the time
of our work, without commenting on their relevance or substance or
researching the existence of other agreements. Under the provisions
of articles R.225-31 and R.225-58 of the French Commercial Code,
it is the responsibility of shareholders to determine whether the
agreements are appropriate and should be approved.
Furthermore, it is our responsibility, as appropriate, to inform you
of the information set forth in the provisions of articles R. 225-31
and R.225-58 of the French Commercial Code pertaining to the
signing during the past year of agreements already approved by the
Shareholders at the Shareholders Meeting.
We carried out our work in accordance with French professional
standards. Those standards require that we perform procedures
to verify that the information given to us agrees with the underlying
documents.
The Supervisory Board wishes to congratulate the staff and the
Management Board on the successful conclusion of the One
company programme. But over and above the simple achievement
of their objectives, the Supervisory Board wishes to emphasize
the transformations that Schneider Electric achieved with One that
constitute solid foundations for the future of the Group.
The results for the year ending 31 December 2011 in a particularly
volatile and difcult environment clearly show:
excellent 14% growth driven largely by 8.3% organic growth,
revenues of over EUR22.3billion;
EBITA before acquisition and integration costs up 7% with a prot
margin of 14.2%;
Group share of net income, of EUR1,820million;
earnings per share of EUR3.39, up 3%, which based on a
50% payout rate, allows a dividend of EUR1.70 per share for
submission to the General Meeting.
These results reect the commitment and dedication of all Group
employees, to whom the Supervisory Board offer their thanks.
The Supervisory Board also wishes to express its support for the new
company programme Connect, which as President and CEO Jean-
Pascal Tricoire states, is designed to add to Ones achievements
and to broaden them to include all our strategic plans, products and
solutions in developed and developing countries, while improving
efciency at all levels.
In conclusion, the Supervisory Board recommends that shareholders
approve the resolutions tabled by the Management Board.
>
3. Auditors special reports
This is a free translation into English of the Statutory Auditors special report on regulated agreements issued in French and it is provided
solely for the convenience of English speaking users.
The Statutory Auditors report includes information speci cally required by French law in such reports, whether modi ed or not.
This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards
applicable in France.
Statutory Auditors special report on regulated agreements
8
AUDITORS SPECIAL REPORTS
Agreements submitted totheshareholders for
approval atthe shareholders meeting
Agreements and obligations authorised since year-end
We have been advised of the following commitments and obligations,
authorised since the end of the previous nancial year, which were
subject to advance authorisation by your Supervisory Board.
The adaptation of the top-hat pension plan with dened
contributions for the French Group Senior Executives.
Persons involved: Jean-P ascal Tricoire (President and CEO) and
Emmanuel Babeau (Board Member).
Your Supervisory Board, in its meeting of 21 February 2012,
authorised the change to the top-hat pension plan with dened
contributions for the Group managers that are subject to French
social security plans (article 39), the benets of the modied
plan for Board members and the signing by your company of an
outsourcing agreement for the new plan under the terms of the
regulated agreements and obligations. The Board members have
a direct or indirect interest.
The modication aims to make this plan compliant with the AFEP/
MEDEF Business Governance Code by making provision for linking
acquisition of rights to length of service in the company. In order to
conform to these recommendations, the reform anticipates:
closure of the current article 39 plan to all new entrants;
the implementation of a new article 39 plan applicable to
members of the Executive Committee and the Management
Board, which provides for the progressive vesting of rights
according to seniority in the Group and the Executive Committee.
Full rights are gained after 15 years of service for a new entrant
to the plan, except for the Group service condition. Conditional
rights under the new plan are deducted from the current article
39 plan maintained for its current beneciaries.
This new plan is contingent upon completing a career in the
company with the exibility introduced by Social Security in
2004. A conditional assurance income is thus maintained in
the event of dismissal or redundancy after 55 years of age
without restarting work or for 2nd or 3rd category disability as
dened by Social Security without restarting work.
In other cases, the new plan includes the provisions of the
current plan, notably:
limiting the top-hat pension to 25% of the Reference Salary
(60% of the difference between the average remuneration
for the last 3 years and the total annuities paid from external
pension plans) considering the pension paid for the article 83
plans implemented by the Group (unchanged from current
plan);
the right to a widow/widowers pension for the surviving
partner;
a spouses pension if a director dies before retirement age is
limited to rights acquired by the date of death;
pension supplement paid to a director from the retirement date
after disability occurring during work activities.
outsourcing of the new article 39 plan: this outsourcing is
mandatory. To this effect, an insurance contract for company
pensions with dened contributions (Article L. 137-1 of the Social
Security code) was signed on 23 February 2012 by Schneider
Electric SA and Schneider Electric Industries SAS with AXA
France Vie.
The nature of the contract guarantees and the implementation and
operation methods were dened in accordance with legislative
and regulatory provisions. The contract was agreed with normal
insurance contract conditions, under which implementation
depends on duration of human life.
It aims to guarantee payment of annuity arrears due under the
rules of the new plan for contracting companies. It takes effect
on 1 July 2012 and can be terminated each year by the parties
provided notice is given before 31 October that will take effect on
31 December of the same year.
The insurance premium amounts will be established according
to the periodic results from actuary experts for the respective
commitments of the contracting companies.
The guarantees agreed by the insurer were agreed under normal
conditions.
On the date that the contract comes into effect, the insurer will open
a collective pension fund for the contracting companies. This fund
will cover commitments resulting from the plan. The net premiums
collected by the insurer will be allocated to technical provisions for
this collective fund. Contracting companies will have recourse to
arbitrage as support for the investment.
Provisions relating to the payment of employee and former
employee rights and to the annuity service are standard provisions.
The particular provisions relate to:
elements of the foundation agreement and rules of the top-hat
pension plan for senior executive members of the Executive
Committee for the Schneider Electric Group, provided it shall
be adopted through the unilateral decision by the contracting
companies; and
commitments made to benet the corporate ofcers for which
the procedures established by the French Commercial Code
are applicable.
A special revaluation fund for the annuities currently being paid
will be formed. The contracting companies will be able to decide
their allocation freely when their balance exceeds 10% of the policy
liabilities for the annuities being paid (i.e. to all the stockholders or
to the collective funds).
Agreements and obligations to Jean-Pascal Tricoire.
Person involved: Jean-P ascal Tricoire (President and CEO).
Within the scope of renewing the appointment of Jean-Pascal
Tricoire, on 21 February 2012 your Supervisory Board decided to
renew, under the conditions of the adjustments presented below
for the supplementary cover of health, incapacity, disability and
death risks, the top-hat pension plan and the benets of forced
dismissal compensation, the rewritten article of association
concerning Jean-Pascal Tricoire that was produced in agreement
with Mr Tricoire following his decision to resign from his employment
contract on 2 May 2009 and approved by the Shareholders
Meeting of 23 April 2009.
This commitment is subject to approval by the Shareholders
Meeting for approval of year-end nancial statements on 31
December 2011.
8AUDITORS SPECIAL REPORTS
This article of association, which has been rewritten, allows that
Jean-Pascal Tricoire:
1) to continue to benet from:
the supplementary health, incapacity, disability and death cover
available to the Groups French directors. These contingency
and supplementary cover compensations are however now
subject to performance criteria. Compensation is subject to
one of the following two criteria being present: positive average
net prot of the ve years preceding the event, or positive
average free cash ow for the ve years preceding the event;
the Schneider Electric SA and Schneider Electric Industries
SAS employee benet plan, which offers health, incapacity,
disability and death cover;
the modied top hat pension plan for Schneider Group senior
executives as authorised by the Supervisory Board of 21
February 2012 and submitted for approval to the Shareholders
Meeting for approval of year-end nancial statements on 31
December 2011.
2) compensation in the event of leaving his corporate
appointment, capped at twice the average of the effective
annual remuneration for the last three years (hereafter
Maximum Amount) taking into account compensation
provided for in the non-compete agreement described below
and subject to performance criteria. This compensation was
previously capped at two years target remuneration (xed
salary and target bonus) in accordance with the commitment
approved by the Shareholders Meeting of 23 April 2009.
Mr Tricoire resigns, is dismissed or is not reappointed as a
member or President and CEO in the 12 months following a
material change in Schneider Electrics shareholder structure
that could change the membership of the Supervisory Board;
Mr Tricoire resigns, is dismissed or is not reappointed as a
member or President and CEO following a reorientation of the
strategy pursued and promoted by him until that time, whether
or not in connection with a change in Schneider Electrics
shareholder structure as described above;
Mr Tricoire is asked to resign, is terminated or is not reappointed
as a member or Chairman of the Management Board when
the mathematical average of the rate of achievement of
performance objectives used to calculate his variable bonus
was 50% or higher in the four full nancial years preceding his
departure (or, if he has been a member and Chairman of the
Management Board for less than four years, in the number of
full nancial years since his appointment).
Compensation will depend on the mathematical average of the rate of
achievement of performance objectives used to determine the variable
portion of Mr Tricoires compensation for the three full years preceding
the date of the Board Meeting at which the decision is made.
If the mathematical average is:
less than 50%: no compensation will be paid;
equal to 50%: 75% of the maximum compensation will be
paid;
equal to 100%: 100% of the maximum compensation will be
paid;
between 50% and 100%, compensation will be calculated on
a straight-line basis at a rate of 75% to 100% of the maximum.
(60% of target remuneration);
4) will retain all of the stock options, stock grants and performance
stock grants allocated or to be allocated to him should he leave
the Company. Compensation will only be due if the mathematical
average of the rate of achievement of performance objectives
used to determine the variable portion of Jean-Pascal
TRICOIREs compensation for the three full years preceding
prior to his departure is 50% or higher.
Agreements already submitted tothe
shareholders for approval attheShareholders
meeting
We were informed of the status of the following agreements already
approved by the shareholders at the Shareholders Meeting in prior
years that were or were not entered into during the past year:
Benet from the top-hat pension plan for French Group senior
executives granted to Emmanuel Babeau
The Supervisory Board, at its meetings held on 23 April 2009 and 17
December 2009, has authorised Emmanuel Babeau to benet from
the top-hat pension plan for Schneider Electric senior executives,
as he is entitled under his service contract with Schneider Electric
Industries S.A.S. In the event that Mr Babeau is still in ofce at the
date of his retirement, these plans (dened contribution plan, article
83, and dened benet plan, article 39) will ensure him a pension
equal to 25% of his average salaries over the last three years.
Nevertheless, in the event that Mr Babeau leaves the Group before
his retirement, the contributions related to article 83 would be his.
These contributions represent a capital constituting a guaranteed
income, capital which increases by EUR 22 thousand euros per
year.
Agreement with AXA (Board of Directors Meeting on 6 January
2006)
The shareholders agreement between AXA and Schneider Electric
SA, approved by the Board of Directors on 6 January 2006, calls
for the continuation of stable cross-shareholdings between the two
groups. Each group also holds a call option that may be exercised
in the event of a hostile takeover.
This agreement was announced by the two parties on 22 December
2011. It will end on 15 May 2012.
Agreed at Courbevoie and Paris-La Dfense , 21March 2012
8
AUDITORS SPECIAL REPORTS
Report from the Statutory Auditors on a share or securities issue with cancellation
ofpre-emptive subscription rights, reserved for a category of named beneficiaries
Extraordinary Shareholders Meeting of May3, 2012
In our capacity as statutory auditors of your Company, and pursuant
to articles L.225-135 and seq., L.228-92 and L.225-135 and seq.
of the French Commercial Code, we present below our report on
the project to issue common shares or securities providing access
to the Companys share capital reserved for (i) the employees and
corporate ofcers of Schneider Electric Group companies, linked to
the Company under the conditions of article L.225-180 of the French
Commercial Code and of article L.3344-1 of the French Labour
Code and with their head ofce outside France; (ii) and/or mutual
funds or other entities, whether or not they have legal personality,
employee shareholdings invested in securities of a company whose
holders of units or shareholders are the persons mentioned in (i)
of this paragraph; (iii) and/or any banking institution or subsidiary
of such an institution acting at the request of the Company for the
purposes of implementation of an employee shareholding or savings
plan for the benet of the persons mentioned in (i) of this paragraph
with cancellation of pre-emptive subscription rights. The maximum
nominal amount by which the capital may be increased may not
exceed 1% of the issued capital as of the date of the present
Shareholders Meeting and which you are asked to approve. The
1% capital limit will be imposed on the planned 2% limit in the
twenty-second resolution adopted by the Shareholders Meeting of
the April21, 2011; however it is autonomous and separate from the
aggregate amount by which the capital may be increased under
the Fourteenth and Sixteenth Resolutions of the General Meeting
of April21, 2011.
You are asked to authorise the Management Board, on the basis
described in its report and with the powers of delegation, the power
to set the methods for this transaction and to exclude your pre-
emptive subscriptions rights for the stocks and the securities to be
issued, for a period of 18 months from this Shareholders Meeting.
This authorisation may only be used as and from August1, 2012.
The Management Board is responsible for reporting to shareholders
on the proposed share issue in accordance with articles R.225-113
et seq. of the French Commercial Code. Our responsibility is to
express an opinion on the fairness of gures taken from the nancial
statements, on the proposal to cancel shareholders pre-emptive
subscription right, and on certain other information concerning the
issue, included in this report.
We performed the procedures we deemed necessary to conduct the
mission in accordance with the professional guidelines of the French
Institute of Statutory Auditors (CNCC). Those standards require that
we perform procedures to check the content of the report drawn up
by the competent management authority concerning this transaction
and the methods used to determine the share price.
We have no matters to report concerning the method for determining
the issue price as described in the Management Report, contingent
upon our nal review of the terms of the proposed issue.
Since the nal conditions for the issue have not yet been xed, we
cannot formulate an opinion on these conditions and consequently
have no opinion on the proposal made to you to cancel your pre-
emptive subscription right.
In compliance with article R.225-116 of the French Commercial
Code, we will prepare an additional report when this authorisation is
used by your Management Board.
Courbevoie and Paris-La Dfense, March21, 2012,
8RESOLUTIONS
FIRST RESOLUTION
(Approval of the 2011 parent company
financial statements)
The Shareholders Meeting, acting with the quorum and majority
requirements for Ordinary Meetings, having heard the report of the
Management Board and of the Statutory Auditors, and noting the
Supervisory Boards comments on the Management Boards report
and on the Company nancial statements, approves the nancial
statements for 2011 as presented, as well as the transactions
contained in these statements or summarised in the reports
showing a net income of EUR2,603.7million.
SECOND RESOLUTION
(Approval of 2011 consolidated financial
statements)
requirements for Ordinary Shareholders Meetings, having heard
the report of the Management Board and of the Statutory Auditors,
and noting the Supervisory Boards comments on the Management
Boards report and on the Company consolidated nancial
statements, approves the consolidated nancial statements for
2011 as presented, as well as the transactions contained in these
statements or summarised in the reports.
THIRD RESOLUTION
(Apropriation of profit for the financial year
and dividend proposal)
The Shareholders Meeting, acting with the quorum and
majority requirements for Ordinary Meetings, and on the
recommendation of the Management Board, based on the
number of 548,943,024shares with a nominal value of EUR4 as of
December31, 2011, decides to appropriate the prot available for
distribution for the year 2011, consisting of:
(i) retained earnings from the previous nancial year of
EUR96,496,292.01;
(ii) net income for the year of EUR2,603,738,064.30;
(iii) less the statutory allocation to the legal reserve of
EUR2,009,936.80;
representing a total amount of EUR2,698,224,419.51, as follows:
Share dividend EUR933,203,140.80
Retained earnings EUR1,765,021,278.71
TOTAL EUR2,698,224,419.51
The Shareholders Meeting therefore decides a dividend payment
of EUR1.70 for each of the EUR4 par value shares carrying dividend
rights on January1, 2011.
The full dividend proposed is eligible for the 40% allowance for
individuals resident in France provided for in article158-3-2 of the
French Tax Code. This allowance will not apply if the shareholder
has chosen to pay the withholding tax on his or her dividends
provided for in article117 quarter of the French Tax Code.
Unpaid dividends on treasury shares held at the ex-dividend date
will be allocated to retained earnings.
Apart from the dividend described above, no other amounts eligible
or not eligible for the 40% allowance provided for in article158-3-2
of the French Tax Code will be distributed.
Dividend payouts for Schneider ElectricSA for the last three years
were as follows:
2008 2009 2010
Dividend paid per share of
EUR8 par value
(1)
3.45 2.05 3.20
Dividend paid per share
adjusted for the division by
two of the par value
(2)
1.725 1.025 1.60
(1) The full dividend is eligible for a 40% allowance for individuals
resident in France for tax purposes. No non-eligible dividends
have been distributed.
(2) The two-for-one share split occured on effective on
September2, 2011.
FOURTH RESOLUTION
(Approval of the arguments and regulated
obligations made in 2012 relating to the
top-hat defined benefit pension plan for
Management Board members)
requirements for Ordinary Meetings, having heard the report of
the Management Board and Statutory Auditors special report
presented pursuant to the provisions of article L.225-88 of the
French Commercial Code on agreements and obligations as per
L.225-86, L.225-90-1 and L.225-79-1 of the Code, approves the
obligations and the agreement presented in these reports relating to
the top-hat pension plan with dened contributions for Management
Board members.
FIFTH RESOLUTION
(Approval of the agreements and regulated
obligations relating to the status of
Jean- Pascal Tricoire)
requirements for Ordinary Meetings, having heard the report of
the Management Board and Statutory Auditors special report
presented pursuant to the provisions of article L.225-88 of the
French Commercial Code on agreements and obligations as per
L.225-86 and L.225-90-1 of the Code, approves the obligations
and the agreement presented in these reports relating to the benet
plan for MrJean-Pascal Tricoire, as well as the compensation and
benets due in case of cessation of duties.
>
4. Resolutions
Ordinary Meeting
8
RESOLUTIONS
SIXTH RESOLUTION
(Renewal of the appointment of MrLo Apotheker
as a member of the Supervisory Board)
requirements for Ordinary Meetings, renews the appointment
of Mr Lo Apotheker as a member of the Supervisory Board for
a period of four years, expiring at the close of the Shareholders
Meeting in 2016 to approve the 2015 nancial statements.
SEVENTH RESOLUTION
(Ratification of the co-opting of MrXavier
Fontanet and his appointment as a member of
the Supervisory Board)
requirements for Ordinary Meetings, raties the co-opting of
Mr Xavier Fontanet as a member of the Supervisory Board with
effect from December 15, 2011 and appoints him as a member
of the Supervisory Board for a period of four years, expiring at the
close of the Shareholders Meeting in 2016 to approve the 2015
nancial statements.
EIGHTH RESOLUTION
(Renewal of the appointment of MrJrme
Gallot as a member of the Supervisory Board)
requirements for Ordinary Meetings, renews the appointment
of Mr Jrme Gallot as a member of the Supervisory Board for
a period of four years, expiring at the close of the Shareholders
NINTH RESOLUTION
(Renewal of the appointment of MrWillyKissling
requirements for Ordinary Meetings, renews the appointment of
MrWilly Kissling as a member of the Supervisory Board for a period
of two years due to the new statutory provisions relating to the
age of Board members, expiring at the close of the Shareholders
TENTH RESOLUTION
(Renewal of the appointment of MrHenriLachmann
Mr Henri Lachmann as a member of the Supervisory Board for
a period of two years due to the new statutory provisions with
regard to the age of Board members, expiring at the close of
the Shareholders Meeting in 2014 to approve the 2013 nancial
statements.
ELEVENTH RESOLUTION
(Renewal of the appointment of MrRick Thoman
MrRick Thoman as a member of the Supervisory Board for a period
of two years due to the new statutory provisions relating to the
age of Board members, expiring at the close of the Shareholders
TWELFTH RESOLUTION*
(Nomination of a Supervisory Board member to
represent the employee shareholders pursuant
to article11- c of the articles of association).
requirements for Ordinary Meetings, nominates Mr Manfred Brill
to replace Mr Claude Briquet, whose appointment has expired,
as a member of the Supervisory Board representing the employee
shareholders for a period of four years, pursuant to article11- c of
the articles of association, expiring at the close of the Shareholders
Meeting in 2016 to approve the 2015 nancial statement.
THIRTEENTH RESOLUTION*
(Renewal of the appointment of a Supervisory
Board member to represent the employee
shareholders pursuant to article11- c of the
articles of association).
MrClaude Briquet, member of the Supervisory Board representing
the employee shareholders, whose appointment has expired, as
a member of the Supervisory Board representing the employee
FOURTEENTH RESOLUTION*
(Nomination of a Supervisory Board member
to represent the employee shareholders
pursuant to article11- c of the articles of
association).
requirements for Ordinary Meetings, nominates MrsMagali Herbaut
to replace MrClaude Briquet, whose appointment has expired, as
8RESOLUTIONS
Extraordinary Meeting
SEVENTEENTH RESOLUTION
(Capital increase reserved for a class of
beneficiaries: for employees of non-French
Group companies, either directly or through
entities acting on their behalf)
requirements for Extraordinary Meetings, having considered the
report of the Management Board and the special report of the
Statutory Auditors, pursuant to articlesL.225-129-2 and L.225-138
of the French Commercial Code:
1. delegates to the Management Board, with authority to delegate
the powers necessary to effect the increase in one or more
stages, at the times it shall set and in the proportions it shall
determine, the share capital, within the limits of a maximum
of 1% of capital at the date of this Shareholders Meeting,
by issuing shares or securities granting access to Company
capital that confer the same rights as existing shares, and such
issue will be reserved for persons who meet the requirements
of the category dened below, with the understanding that
(i)the ceiling of 1% of capital set above will be applied to the
2% ceiling set in the twenty-second resolution adopted by
the Shareholders Meeting of April 21, 2011, but is instead
autonomous and separate from the ceilings in the fourteenth
and sixteenth resolutions adopted by Shareholders Meeting
of April 21, 2011, (ii) that this resolution cannot be used until
August1, 2012;
2. decides to waive the pre-emptive subscription rights of
shareholders to the shares or other securities granting access to
capital issued pursuant to this resolution and to reserve the right
to subscribe to one and/or the other class of beneciaries who
meet the following characteristics: (i)employees and corporate
ofcers of Schneider Electric Group companies related to the
Company under the conditions of article L.225- 180 of the
French Commercial Code and article L.3344-1 of the French
Labour Code that have their headquarters outside France,
(ii) and/or mutual funds or other entities, whether or not they
have legal personality, employee shareholdings invested in
securities of a company whose unitholders or shareholders are
the persons mentioned in (i) of this paragraph; (iii) and/or any
banking institution or subsidiary of such an institution acting at
the request of the Company for the purposes of implementation
FIFTEENTH RESOLUTION*
(Nomination of a Supervisory Board member
to represent the employee shareholders
pursuant to article11- c of the articles of
association).
requirements for Ordinary Meetings, nominates MrThierry Jacquet
to replace MrClaude Briquet, whose appointment has expired, as
* Resolutions twelve to fifteen: pursuant to article11 - c of the
articles of association of the Company, for a single seat of a
member of the Supervisory Board to represent the employee
shareholders to be filled, only the candidate who has obtained the
largest number of votes from present and represented share-
holders will be appointed. Following the recommendation of the
Supervisory Board, the Management Board has approved the
14th resolution, and therefore invites you to vote in favour of this
resolution and to abstain from voting on the 12th, 13th and 15th
resolutions.
SIXTEENTH RESOLUTION
(Authorisation for the Company to buy back
company shares: maximum purchase price
EUR75)
requirements for Ordinary Meeting, having heard the report of
the Management Board authorises the Management Board, in
accordance with article L.225-209 of the French Commercial
Code, to buy back Company shares in order to reduce the capital,
cover plans for stock options or plans for stock grants, or for
securities convertible into shares; to carry out external growth
transactions or to stimulate the market for Company shares under
a liquidityagreement.
The maximum number of shares that may be acquired pursuant
to this authorisation shall not exceed 10% of the issued share
capital as of the date of this Shareholders Meeting (e.g.
54,894,302shares as of December31, 2011).
The maximum purchase price is set at EUR75. However, if all or
some of the shares acquired pursuant to these conditions are
intended to grant stock options, pursuant to articlesL.225-177
et seq. of the French Commercial Code, the selling price of the
shares in question will be determined in accordance with the legal
provisions governing stock options.
As a result of the limits above, share buybacks may not exceed a
maximum amount of EUR4,117,072,650.
The shares may be acquired, disposed, exchanged or transferred
at any time, except when there is a public offering on Schneider
ElectricSA securities, in compliance with current legislation. This
may be done by any appropriate method on the market, over the
counter, or by any means including through block acquisitions
or disposals, the use of put or call options or the use of any
derivative nancial instrument.
Shares acquired may also be cancelled, subject to compliance
with the provisions of articles L.225-204 and L.225-205 of
the French Commercial Code and in accordance with the
twenty- fourth resolution adopted by the General Meeting of
April21, 2011.
The Management Board may adjust the price(s) set above to take
into account the effect of any of the following: (i)an issue of bonus
shares or increase in the par value of existing shares paid up
by capitalising reserves or earnings, (ii) a stock-split or reverse
stock-split, or (iii)more generally, any transaction affecting equity,
to account for the impact of such transactions on the share price.
Said adjustment will be determined by multiplying the price by the
ratio between the number of shares outstanding before and after
the transaction.
The Management Board shall have full authorisation to implement
this resolution, directly or through a representative.
This authorisation will expire at the end of a period of 18months
from the date of this Meeting.
RESOLUTIONS
of an employee shareholding or savings plan for the benet of
the persons mentioned in (i)of this subsection insofar as the use
of subscription of the person authorised under this resolution
would allow employees of subsidiaries located abroad to
benet from share ownership or equivalent employee savings
plans in terms of economic benet to those enjoyed by other
employees of the Group;
3. decides that the unit price of the shares to be issued pursuant
to this resolution shall be xed by the Management Board
on the basis of the share price of the Company on the
NYSEEuronextregulated market in Paris; the issue price will be
determined at the discretion of the Management Board on the
basis of either (i)the rst or last trading price of the shares of the
Company during the trading session the day of the decision of
the Management Board xing the issue price or (ii)the average
opening or closing prices of the shares of the Company during
the 20trading days preceding the date of the decision of the
Management Board xing the issue price under this resolution
or xing the issue price under the twenty-second resolution
adopted by the Shareholders Meeting on April 21, 2011;
the Management Board may x the issue price by applying a
maximum discount of 20% to the share price of the Company
shares determined by either of the methods described in (i)and
(ii) of this paragraph, the percentage of this discount applied
to the share price of the Company will be determined by the
relevant Management Board, including legal, regulatory and tax
provisions of foreign law applicable, as the case may be, to any
persons who are beneciaries of the issue;
4. decides that the Management Board shall have all powers,
under the conditions provided by law and within the limits set
above, to implement this delegation and determine the list of
beneciaries within the categories established by this resolution
and the number of securities to be offered to each of them,
provided that the Management Board may decide that the
capital increase will be realised for the amounts subscribed,
provided that at least 75% of the shares or other securities
granting access to capital offered have been subscribed, and in
particular:
dene the characteristics of the securities to be issued,
setting the issue price, dates, times, terms and conditions of
subscription, payment, delivery and possession of shares and
securities, within legal or regulatory limits,
note the capital increase, issue shares and other securities
granting access to capital, amend the corresponding bylaws,
and, more generally, enter into any agreement, in particular for
achieving the successful completion of the proposed issues,
take any measures and carry out all formalities for the issue,
trading and servicing of the securities issued by virtue of this
delegation and the exercise of the rights attached thereto, and
generally do whatever is necessary;
5. decides that this delegation shall nullify as of July31, 2012 the
authorisation given by the Shareholders Meeting of April 21,
2011 in its twenty-third resolution for its amounts not used by
the Management Board.
The delegation conferred by this resolution shall be valid for a period
of 18months from this Shareholders Meeting.
EIGHTEENTH RESOLUTION
(Powers for formalities)
The Shareholders Meeting gives full powers to the bearer of a copy
or excerpts of the minutes stating these resolutions to accomplish
all legal and administrative formalities.
8RESOLUTIONS
PERSONS RESPONSIBLE FOR THEREGISTRATIONDOCUMENT
PERSONS RESPONSIBLE FOR THE REGISTRATION DOCUMENT
Persons responsible for
theRegistrationDocument
>
Persons responsible for the
I hereby declare that, having taken all reasonable care to ensure
that such is the case, the information contained in the registration
document is, to the best of my knowledge, in accordance with the
facts and contains no omission likely to affect its import.
I hereby declare that, to the best of my knowledge, the nancial
statements have been prepared in accordance with applicable ac-
counting standards and that they present fairly the assets, nancial
position and results of the company and the consolidated Group.
To the best of my knowledge, the business review accurately pre-
sents the changes in business, results and nancial position of the
company and the consolidated Group, as well as a description of
their principal risks and contingencies.
I obtained a statement from the Statutory Auditors at the end of
their engagement afrming that they had reviewed the entire regis-
tration document and examined the information about the nancial
position and the historical accounts contained therein.
The report on the consolidated nancial statements for the period
ended 31 December 2010 contains an observation referring to the
presentation of the consolidated nancial statements and the new
applicable accounting standards.
Executed on 22 March 2012
On behalf of the Management Board
President and CEO Schneider Electric SA
Pursuant to Article 28 of Commission regulation 809/2004/EC, the following information is incorporated by reference in the pre-
sent registration document:
the consolidated nancial statements and corresponding Auditors Reports provided in Chapter 6 of the registration document
for the ended December 31, 2009 , registered with Autorit des Marchs Financiers (AMF) under number D10 -0125 on
March19 ,2010 ,
the consolidated nancial statements and corresponding Auditors Reports provided in Chapter 5 of the registration document
for the ended Thursday, December 31, 2010 , registered with Autorit des Marchs Financiers (AMF) under number D11 -0151
on March 21 , 2011 ,
the annual company nancial statements and corresponding Auditors Reports provided in Chapter 7 of the registration
document for the ended December 31, 2009 , registered with Autorit des Marchs Financiers (AMF) under number D10 -0125
on March 19 , 2010 ,
the annual company nancial statements and corresponding Auditors Reports provided in Chapter 6 of the registration
document for the ended Thursday, December 31, 2010 , registered with Autorit des Marchs Financiers (AMF) under number
D11 -0151 on March 21 , 2011 ,
the business review provided in Chapter 4 of the registration document for the ended December 31, 2009 , registered with
Autorit des Marchs Financiers (AMF) under number D10 -0125 on March 19 , 2010 ,
the business review provided in Chapter 4 of the registration document for the ended Thursday, December 31, 2010 , registered
with Autorit des Marchs Financiers (AMF) under number D11 -0151 on March 21 , 2011 .
Passages not incorporated in this document are either irrelevant for the investor or covered in another section of the registration
document.
Attestation
PERSONS RESPONSIBLE FOR THEREGISTRATIONDOCUMENT
PERSONS RESPONSIBLE FOR THE AUDIT OFTHEFINANCIAL STATEMENTS
>
Persons responsible for the audit
ofthefinancial statements
Date appointed
Appointment
expires
Statutory Auditors
Ernst & Young et Autres
Tour First- 1, place des Saisons - 92037 Paris-la-Dfense-Cedex
Represented by Yvon Salan 1992 2016
Mazars
Tour Exaltis -61, rue Henri- Regnault - 92400 Courbevoie
Represented byDavidChaudat 2004 2016
Alternate Auditors
Auditex 2010 2016
ThierryBlanchetier 2010 2016
Ernst & Young et Autres and Mazars are members of the Auditors Regional Company of Versailles.
This document was printed in France by an ImprimVert certied printer on recyclable, chlorine-free and PEFC
certied paper produced from sustainably managed forests.
Financial Calendar
Investors relations
May 3, 2012 Shareholders Annual Meeting (Paris)
May 16, 2012 Dividend payment
Financial releases
February 22 , 2012 2011 Annual Results
April 20 , 2012 Q1 2012 Sales
August 1 , 2012 Half Year Results
October 25 , 2012 Q3 2012 Sales
Investors Relations:
Carina Ho
Tl. +33 (0)1 41 39 60 84
Fax +33 (0)1 41 29 71 42
Press Contact:
Vronique Roquet Montegon
Tl: +33 (0)1 41 29 70 76
Fax: +33 (0)1 41 29 88 14
www.schneider-electric.com
Headquarters:
35, rue Joseph Monier - CS 30323
F-92506 Rueil-Malmaison Cedex (France)
Tl. : +33 (0) 1 41 29 70 00
Fax : +33 (0) 1 41 29 71 00
www.schneider-electric.com
Incorporated in France,
governed by a Management Board
and Supervisory Board,
with issued capital of EUR2,195,772,096
Registered in Nanterre, R.C.S. 542 048 574
Siret n: 542 048 574 01 091
Schneider Electric SA

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Schneider Electric Annual Report 2011

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