ANNUAL REPORT 2011 REGISTRATION DOCUMENT - Saft

THE FUTURE 

COMES FROM 

EXPERIENCE 

ANNUAL REPORT 

2011 REGISTRATION DOCUMENT 

INCLUDING ANNUAL FINANCIAL REPORT

CONTENTS 

1 GROUP PRESENTATION 02 

LOOKING AHEAD 04 

1.1 OVERVIEW 2011 12 

1.2 ACTIVITIES 26 

1.3 INNOVATION AND COMMITMENTS 40 

FINANCIAL REPORT 50 

2 RISK FACTORS 53 

2.1 Risks related to the market environment and the Group’s activities 54 

2.2 Operational risks 56 

2.3 Credit and counterparty risks 58 

2.4 Liquidity risk 58 

2.5 Market risks 59 

2.6 Contractual and legal risks 59 

2.7 Risks related to the impact of the Group’s business 

on the environment, human health and safety 61 

2.8 Insurance 63 

3 SUSTAINABLE DEVELOPMENT 65 

3.1 Environmental responsibility 67 

3.2 Social responsibility 71 

3.3 Corporate social responsibility 75 

3.4 Auditor’s report on certain environmental and social indicators 76 

4 CORPORATE GOVERNANCE 79 

4.1 Management and Supervisory Boards 80 

4.2 Remuneration and shareholding of the Management and Supervisory Board members 86 

4.3 Report of the Chairman of the Supervisory Board 94 

4.4 Statutory Auditors’ Report on Saft Groupe SA Chairman’s Report 104 

4.5 Main provisions of the Supervisory Board bylaws 105

5 COMMENTS ON THE 2011 FINANCIAL YEAR 109 

5.1 Activity and consolidated results 110 

5.2 Earnings by division 112 

5.3 Other items of consolidated income 115 

5.4 Research and Development 116 

5.5 Investments and fixed assets 117 

5.6 Cash flow and financing 117 

5.7 Group’s statement of financial position 118 

5.8 Other key events in FY 2011 119 

5.9 Related-party transactions 119 

5.10 Changes in the scope of consolidation in 2011 120 

5.11 Basis of preparation of the Consolidated Financial Statements 120 

5.12 Events after the reporting period and 2012 outlook 120 

5.13 Saft Groupe SA activity and results 121 

5.14 Activity of Saft Groupe SA subsidiaries and controlled entities 121 

6 2011 CONSOLIDATED FINANCIAL STATEMENTS 123 

6.1 Consolidated statement of financial position 124 

6.2 Consolidated income statement and consolidated statement of comprehensive income 126 

6.3 Consolidated statement of cash flows 128 

6.4 Statement of changes in equity 129 

6.5 Notes to the Consolidated Financial Statements 130 

6.6 Statutory Auditors’ report on the Consolidated Financial Statements 181 

7 PARENT COMPANY CERTIFIED FINANCIAL STATEMENTS 183 

7.1 Balance sheet – Assets 184 

7.2 Balance sheet – Equity and Liabilities 184 

7.3 Income statement 185 

7.4 Notes to the Parent Company Financial Statements 186 

7.5 Parent company – Financial summary for the last five years 192 

7.6 Statutory Auditors’ report on the Parent Company Financial Statements 193 

8 INFORMATION ABOUT THE COMPANY AND ITS SHARE CAPITAL 195 

8.1 General information about the Company 196 

8.2 Group history 197 

8.3 Group organisation chart 198 

8.4 Significant contracts and commitments 199 

8.5 Main statutory provisions 200 

8.6 Capital and shareholding of Saft Groupe SA 204 

9 ANNUAL GENERAL MEETING 207 

9.1 Overview of key resolutions 208 

9.2 Statutory Auditors’ Special Report on Regulated Agreements 

and Commitments with Third Parties 209 

10 ADDITIONAL INFORMATION 213 

10.1 Documents accessible to the public 214 

10.2 Officers responsible for the Annual Report 215 

10.3 The Saft Group Auditors and related fees 216 

10.4 Registration Document Cross-Reference table 217 

10.5 Annual Financial Report Cross-Reference table 219 

10.6 Management Report Cross-Reference table 220 

10.7 Cross-reference table for environmental, social and corporate social information 221 

SAFT - ANNUAL REPORT 2011 / 01

GROUP PRESENTATION 

SAFT 

IN BRIEF 

02 / SAFT - ANNUAL REPORT 2011 

Saft is the world’s* leading designer, developer and 

manufacturer of advanced technology batteries for industry. 

As the world leader for many years, the Group has an 

in-depth knowledge of its markets and extensive experience 

in complex systems integration. The Group’s prime assets 

also include the excellence of its technical teams, 

its unrivalled expertise, its cutting-edge production 

facilities, and its globally acknowledged know-how. 

As a result, Saft is well placed to pioneer further 

advances in the industry and offer customers new 

generations of batteries tailored to their needs. 

Saft solutions are the outcome of several decades of 

industrial experience and proven battery technologies. 

They contribute significantly to its customers’ 

high-performance innovations. 

They give us confidence in our future. 

A future that comes from experience. 

* Management estimation.

19 

SITES 

WORLDWIDE 

16 

MANUFACTURING 

SITES WORLDWIDE 

9% 

OF SALES INVESTED 

IN RESEARCH AND 

DEVELOPMENT IN 2011 

4,100 

STAFF 

WORLDWIDE 

628.7m 

SALES 

IN 2011 


Looking ahead 

What vision 

for traditional 

technologies? 

04 / 

SAFT - ANNUAL REPORT 2011

FRANçOIS LINCk 

MARkETING MANAGER 

Nickel-based batteries have been around for 100 years, yet they 

continue to evolve – to become more compact, maintenance free, 

more reliable, resistant to extreme temperatures, etc. They are 

in increasing demand in emerging economies, but also in such 

segments as back-up power, railways and telecommunications. 

Saft is in the vanguard of such developments, thanks to its vast 

experience in nickel, primary and rechargeable lithium, and 

beyond the cells, its battery systems engineering and solutions. 

For the past four years, we have launched new nickel-based 

products every year, including the market-leading 100 Wh/litre 

battery for telecoms. 

At the same time, Saft’s leading-edge primary lithium solutions 

continue to penetrate traditional markets and the Group is 

developing ever-higher performance products for new primary 

lithium applications. 


Looking ahead 

06 / SAFT - ANNUAL REPORT 2011

What vision 

for lithium-ion? 

ANNE DE GUIBERT 

RESEARCH DIRECTOR 

The lithium-ion battery first came on the market in the early 

1990s. In its first year on the market, 13 million Li-ion batteries 

were sold. Today, that figure is around two billion. 

Such growth is a consequence of its performance (it has 

the highest specific energy of all batteries) and long life, 

but also the wide variety of applications for the technology. 

These include satellites, where Saft played a pioneering role, 

smart meters, electric vehicles and renewable energy storage, 

where Li-ion is highly suited to frequency regulation. Its flexibility 

in terms of power and energy means that Li-ion can be 

developed for new applications in the stand-by power, 

rail transport and aviation markets for example. 

Industrial Li-ion is still in its infancy in battery development terms. 

Saft is currently working on the next generations, to improve 

performance, extend life, lower costs, and improve the operating 

life cycle of Li-ion. This involves researching new materials, 

technologies and algorithms to optimise battery utilisation.

08 / 

Looking ahead 


What vision 

for renewable 

energy storage? 

BLAkE FRYE 

SALES DIRECTOR AMERICA, 

ENERGY STORAGE 

Wind and solar energy offer the advantage of zero carbon 

emissions. However, they are intermittent, depending on 

the strength of the wind or sunshine. The resulting production 

fluctuations can cause problems for the grid operator. 

So energy storage is needed to smooth out the fluctuations 

and stabilise the network. Various technologies exist – pumpedhydro, 

compressed air, flywheels – but the most effective 

fast-response solution is the lithium-ion battery. Li-ion is versatile 

and efficient in attenuating the intermittency issue. Saft is 

spearheading electrochemical solutions for operators while 

expanding lifetime and improving energy quality. 

As governments push for increased renewable energy, the world 

electrochemical energy storage market, and in particular the 

Li-ion solution, is growing, especially in developed countries. 

Saft is active in this area in generation, transmission, distribution, 

smart buildings and residential consumers. 


10 / 

Looking ahead 


What vision for 

the environment? 

CLéMENCE SIRET 

REACH - ECO-DESIGN MANAGER 

Saft takes a pro-active approach to environmental needs, 

anticipating developments and supporting legislators at various 

levels. Saft complies with the RoHS and REACH legislation, 

often exceeding compliance requirements. 

Special efforts have been reserved for Saft’s pioneering Life Cycle 

Assessment (LCA) programme, which leads to a much better 

understanding of the environmental impacts of batteries in their 

manufacturing, use, and end-of-life phases. LCA provides a series 

of impact measurements that were not previously available. 

They can be used by customers for their own LCA programmes. 

This will remain a key strategic area of development for Saft 

in the coming years. 


12 / 


OVERVIEW 

2011 

MESSAGE FROM THE CHAIRMAN 14 

INTERNATIONAL PRESENCE 16 

KEY EVENTS 18 

RESULTS 20 

SHAREHOLDER AND STOCK MARKET INFORMATION 22 

MANAGEMENT 24 


OVERVIEW 2011 


MESSAGE FROM 

JOHN SEARLE, 

CHAIRMAN OF THE 

MANAGEMENT BOARD 

I am pleased to report that the recovery that 

began in the second half of 2010 continued 

in 2011. The first half of 2011 was particularly 

strong for Saft’s activity, while the second half 

remained positive in almost all our businesses. 

In 2011, sales increased more strongly than 

originally forecast, ending the year up 7.1% 

excluding non-recurring revenues. Resulting 

profitability, at 16.5%, was affected by higher 

than expected start-up costs of our new 

production facility in Jacksonville, Florida. 

However, the underlying profitability of our 

business remains solid. 

Two key challenges punctuated 2011. Firstly 

the launch of the Jacksonville factory. This highly 

sophisticated and automated facility represents 

the biggest investment the company has ever 

made. The first products were delivered at the 

end of the year and the first two lines will be 

operational during 2012. In parallel, we have 

completed a major capacity extension to our 

Chinese factory. 

2011 was also the year in which we sold our 

share in the joint venture with Johnson Controls. 

A strategic difference on the direction of the 

joint venture and its future role arose between 

the two companies. The issue was concluded 

in a mutually acceptable way in September. 

However, the automotive market is full of 

promise and we have to decide whether there 

is an attractive role to play for Saft. We are 

now reviewing our options, based on the 

knowledge we have gained in this market, and 

a decision will be made in 2012. 

A promising outlook 

Given our clear vision and our wealth of 

experience, I am convinced that the company’s 

positive evolution will continue in the future. 

Our established business can be expected to 

show steady growth, while demand for lithium 

solutions is accelerating, both in terms of 

industry segments and geographic markets. 

This is driven by such applications as 

telecommunications back-up, aviation and 

space, and the more recent segments of motive 

power and renewable energy storage. 

We have brought out new products such as 

Intensium Max, a megawatt scale containerised 

energy storage system, and produced a 

maintenance-free nickel-based standby power 

battery. We have increased R&D spending, 

complemented the development teams with 

system integration skills, and continue to work 

on next-generation solutions. And we are 

making the investments necessary to assure our 

future. The Saft Group, with its international 

spread and multi-technology offering, is 

uniquely positioned to profit from growth. With 

our strong market positions in our established 

businesses and our leadership in Li-ion, we are 

ready to seize the opportunities to grow the 

business and sustain our profitability.

“I am convinced 

the company’s positive 

evolution will continue.” 



Glasgow 

Madrid 


SAFT, INTERNATIONAL 

PRESENCE 

Osteraas 

South Shields 

Växjö 

Oskarshamn 

Harlow 

Büdingen 

Eindhoven 

Prague 

Bagnolet Nuremberg 

Raskovice 

Poitiers Bourges 

Bordeaux Nersac Milan 

19 

COUNTRIES 

AROUND 

THE WORLD 

25 

SALES 

OFFICES 

EUROPE 

Head office 

Specialty Battery Group production site 

High-performance primary and rechargeable lithium and silver batteries for the electronics, 

defence and space industries. 

Industrial Battery Group production site 

Rechargeable nickel and lithium-based batteries for demanding industrial applications. 

Saft sales network 

ASB 

(50% Saft, 50% EADS). 

16 

PRODUCTION 

SITES

Limassol 

Moscow 

Port Washington 

Valdese 

Jacksonville 

Valdosta 

Bangalore 

North Haven 

Cockeysville 

West Palm Beach 

São Paulo 

Zhuhai 

Shanghai 

Singapore 

Hong kong 

Sydney 

THE AMERICAS 

ASIA-PACIFIC 




kEY EVENTS 


2011 was an eventful year, highlighted by the opening 

of the Jacksonville production facility. Other important events 

marked the year – new products, new contracts, inroads 

into emerging markets – opening the way to future success. 

MARCH 

THE US MARINE CORPS SIGNS 

4-YEAR CONTRACT WITH SAFT 

The development contract is for Li-ion advanced 

energy storage systems for engine start power 

– replacing traditional technology – and energy 

for extended silent watch missions. 

SAFT LI-ION BATTERIES EQUIP 

THE NEW E-VIVACITY SCOOTERS 

FROM PEUGEOT 

Saft has specially developed lithium-ion 

maintenance-free battery modules for Peugeot’s 

latest scooter, the e-Vivacity. They can be fully 

recharged at least 1000 times with no performance 

deterioration and provide 60 km of autonomy. 

MAY 

CEMAT 2011 SHOWCASES FORkLIFT 

TRUCkS FEATURING SAFT BATTERIES 

Two forklift truck manufacturers, STILL and Linde, 

choose Saft state-of-the-art lithium-ion batteries, 

tailor-made to power their vehicles.

JUNE 

ENERGY STORAGE FOR SEPTA 

The Southeastern Pennsylvania Transportation 

Authority (SEPTA) choose Saft Li-ion technology 

for one of the first dual-purpose trackside 

energy storage systems in the U.S.A. Saft will 

provide one containerised Intensium Max 20 

Li-ion megawatt energy storage system to 

capture train braking energy and then 

discharge it back to the power rail to power 

trains leaving the station. 

JULY 

SAFT ENERGY STORAGE SYSTEMS 

SUCCESSES 

Saft is selected for two important energy 

storage system projects – the “Nice Grid” 

project in France to design the power grid of 

the future, and the Millener smart grid project 

of photovoltaic installations on French island 

territories. 

SEPTEMBER 

SAFT INAUGURATES THE WORLD’S 

MOST ADVANCED LI-ION BATTERY 

FACTORY IN JACkSONVILLE, 

FLORIDA 

Saft’s high-volume, state-of-the-art production 

facility at Jacksonville, an investment of over 

$200 million, is dedicated to building 

advanced Li-ion cells and batteries for energy 

storage for renewable energy, smart grid 

support, broadband back-up power, 

transportation and defence. Its fully automated, 

totally flexible production lines are capable of 

building multi new-generation Li-ion technologies. 

5-STAR 

It is Saft’s 16 th facility worldwide, its 5 th in the 

USA and a unique example of technical 

innovation, including the production of 1 MW 

of solar power from the largest rooftop 

photovoltaic system in Florida. With an annual 

sales capacity of $300 million, the 235,000 

square-foot Jacksonville facility will meet growing 

customer demand for high-performance energy 

storage solutions and will play an important 

part in the development of the new-energy 

economy. 

SAFT FINALISES AGREEMENT TO 

SELL ITS SHARES IN THE JOHNSON 

CONTROLS-SAFT JOINT VENTURE 

The Saft Group has now sold its 49% 

shareholding in the Johnson Controls-Saft joint 

venture, marking the termination of that 

company. 

OCTOBER 

CONTAINERISED ENERGY 

STORAGE SYSTEM FOR HAWAII 

For the new energy storage project on 

Hawaii, Saft will provide a Li-ion energy 

storage system comprising two Intensium Max 

20E containers. The system will be 

manufactured at the Jacksonville facility. 

NOVEMBER 

SAFT LI-ION BATTERIES 

TO POWER IRIDIUM NEXT LEO 

SATELLITE CONSTELLATION 

Saft will supply all 81 onboard battery systems 

for the Iridium NEXT Low-Earth Orbit satellite 

constellation scheduled to start launching in 

2015. They will comprise four battery modules 

based on Saft’s MPS 176065 space-qualified 

prismatic format Li-ion cells. 

SAFT BATTERY CONTRACT 

FOR HONG kONG METRO 

Saft has locally manufactured and delivered 

onboard battery systems to support control 

and safety functions on 15 new trainsets for 

Hong kong’s new West Island metro line. 

SUPPLIER EXCELLENCE AWARD FROM RAYTHEON 

NETWORk CENTRIC SYSTEMS WON BY SAFT 

FOR THE 2 ND CONSECUTIVE YEAR. 



SALES 

(in e million) 

628.7 

RESULTS 


591.1 

559.3 

2011 2010 2009 


2011 CONSOLIDATED SALES 

BY MARkET SEGMENT 


82.5 

Military 

activities 

188.5 

Civil 

activities 

7.4 

Other 

activities 

CONSOLIDATED SALES BY MARkET SEGMENT 


271.1 

260.0 

241.6 

2011 2010 2009 2011 2010 2009 

Specialty 

Battery Group 

350.2 

331.1 

168.6 

Stationary 

back-up 

power 

54.9 

Small nickel 

batteries 

317.7 

Industrial 

Battery Group 

126.8 

Transportation

EBITDA 


110.0 

406.6 

108.4 

341.2 

100.4 

2011 2010 2009 

NET INCOME FROM 

CONTINUING ACTIVITIES 


51.1 

48.4 

38.4 

2011 2010 2009 

SHAREHOLDER’S EQUITY 


306.8 

EBIT 


80.3 

NET INCOME 


NET DEBT 


75.0 

69.6 

2011 2010 2009 2011 2010 2009 

78.3 

2011 2010 2009 

36.6 

2011 2010 2009 

135.4 

68.8 

28.9 

108.5 




SHAREHOLDER AND STOCk 

MARkET INFORMATION 

Saft’s share price decreased by more than 20% in 2011, 

in a year of sharp decline accross European stock markets. 

IDENTIFICATION 

Listing: Euronext Paris 

Market: Eurolist Compartiment B 

Indexes: SBF 120, CAC Mid 60, 

CAC IT, CAC Industrial Index 

ISIN code: FR 0010208165 

Eligible value in the SRD 

FINANCIAL CALENDAR 2012 

Q1 turnover 

April 26, 2012 

Shareholders general annual meeting 

May 11, 2012 

Q2 turnover and half year earnings 

July 25, 2012 

Q3 turnover 

October 25, 2012 

MAIN SHAREHOLDERS* 

(at January 31, 2012) 

Ameriprise Financial Inc.: 6.35% 

Carmignac Gestion: 4.50% 

* See p. 205 for source. 

DIVIDEND (in euros) 

2010 0,70 

2009 0,68 

2008 0,68 

Saft will propose an ordinary dividend of e0.72 

per share as well as a special dividend of e1.0 

per share to shareholders at their annual General 

Meeting in May 2012. 

DISTRIBUTION OF THE CAPITAL 

(Based on an analysis of the shareholding of January 2012) 

Institutional shareholders: 

Institutional shareholders represent 

83.54% of Saft’s capital. The split 

by region is as follows: 

31.17% 

France 

10.30% 

United kingdom 20.04% 

Other Europe 

Individual shareholders: 10.97% 

including management and employees 

of the Group. 

Others: 5.49% 

20.76% 

United States 

of America 

1.27% 

Rest of the world

35 

30 

25 

20 

STOCk MARkET INFORMATION 

Share price (in euros) 2011 2010 2009 

Highest 31.60 34.90 36.99 

Lowest 18.995 23.00 14.76 

Closing price for the year 21.85 27.55 33.76 

Change in the year (20.69)% (18.39)% 93.51% 

Change in the CAC 40 index during the year (16.95)% (3.32)% 22.32% 

Change in the SBF 120 index during the year (16.21)% 0.06% 23.73% 

Change in the CAC Mid 60 index during the year (21.58)% 18.70% 37.81% 

Stock market capitalisation at December 31 

(in million euros) 

550 692 824 

Annual transaction volume (millions of shares) 21.31 19.70 24.57 

Number of shares comprising the share capital 

at December 31 

25,174,845 25,125,840 24,684,093 

Annual share capital turnover x 0.85 x 0.78 x 1.28 

SHARE PRICE from January 1, 2011 to January 31, 2012 

(in euros) 

January 


Share volume 

(in thousands of shares) 

15 0 

February March April May June July August September October November December 


Saft SBF 120 CAC 40 CAC Mid 60 Volume 

January 

2012 

1,200 

1,000 

800 

600 

400 

200 




MANAGEMENT 

An experienced, international and forward-looking 

management team. 

MANAGEMENT BOARD 

XAVIER 

DELACROIX 

Director & 

General 

Manager, IBG 

JOHN 

SEARLE 

Chairman 

JILL 

LEDGER 

Director Corporate 

Communications 

& Investor 

Relations 

THOMAS 

ALCIDE 

Director & 

General 

Manager, SBG 

President of Saft 

America Inc. 

BRUNO 

DATHIS 

Chief Financial 

Officer

MANAGEMENT COMMITTEE 

Saft’s Management Committee also includes: 

1 

2 3 

4 

5 

SUPERVISORY BOARD 

YANN 

DUCHESNE 

Chairman 

Audit committee 

1-FRANçOIS 

BOUCHON 

Director 

of the Energy 

Storage Unit 

JEAN-MARC 

DAILLANCE 

Vice-Chairman 

2-IGAL 

CARMI 

Managing 

Director 

of Tadiran 

Batteries Ltd 

CHARLOTTE 

GARNIER- 

PEUGEOT 

Jean-Marc Daillance Chairman / Bruno Angles / Yann Duchesne 

Remuneration and nominations committee 

Yann Duchesne Chairman / Ghislain Lescuyer / Bruno Angles / Charlotte Garnier-Peugeot 

Strategy and technology committee 

3-FRANCk 

CECCHI 

Automotive 

Strategy 

Director 

GHISLAIN 

LESCUYER 

Ghislain Lescuyer Chairman / Yann Duchesne / Jean-Marc Daillance 

4-kAMEN 

NECHEV 

Chief 

Technical 

Officer 

5-FREDERIC 

THIELEN 

Purchasing 

Director 

BRUNO 

ANGLES 


26 / 


ACTIVITIES 

INDUSTRIAL BATTERY GROUP 28 

SPECIALTY BATTERY GROUP 34 

Saft’s business is divided into two key 

divisions. The Industrial Battery Group 

(IBG) manufactures rechargeable 

batteries for transport, stationary 

back-up power and energy storage, 

while the Specialty Battery Group 

(SBG) builds primary and 

rechargeable batteries for civil 

and military activities. 



350.2m 

SALES IN 2011 

The oil and gas segment recovered strongly in 2011 and currently represents around one third of Saft’s sales 

in the stationary back-up power market.

ACTIVITIES 

INDUSTRIAL 

BATTERY 

GROUP 

Nickel-based batteries represent the major share 

of the Industrial Battery Group (IBG) and will continue 

to do so into the future. However, an important step has 

been taken to introduce lithium-ion technology in this 

activity. An increasing number of applications demand 

the benefits of smaller, lighter and longer-life batteries 

and the flexibility of this technology; energy storage 

systems being a prime example of an emerging but 

high-potential business. Another significant development 

is the expansion of systems integration in order to be able 

to offer customers complete systems. 

MAIN APPLICATIONS 

Aircraft safety and starting systems, high-speed trains, urban transport networks 

(trams, metros and signalling systems), back-up power systems for oil and 

gas plants and industrial facilities, power generation and distribution systems, 

storage for renewable energy systems, telecommunications networks, emergency 

lighting, professional electronics. Electric mobility is opening promising new 

markets such as scooters and forklift trucks. 


ACTIVITIES 

INDUSTRIAL BATTERY GROUP 


2011 was an eventful year for the Industrial Battery 

Group. The division recorded good sales, underpinning 

the recovery that started in 2010. Its traditional 

nickel-based business grew 

and was complemented by 

the year’s major event, the 

opening of the Jacksonville 

production facility in Florida, 

which is focused on lithium-ion 

technology. 

This $200 million project is 

the biggest ever investment in 

Saft’s history and clearly positions 

the company at the 

leading edge of lithium-ion 

technology. The Jacksonville 

facility opened towards the 

end of the year. Its first products are now rolling off 

the manufacturing line. The new factory will focus on 

a new product range, energy storage systems, for 

which demand is expected to grow substantially in 

the coming years. It will also produce high-performance 

Li-ion products for the telecommunications and 

aviation markets. The Li-ion technology is beginning 

to open up new possibilities in the industrial markets. 

TRANSPORTATION 

Aviation 

Saft is the world’s leading producer of high-technology 

batteries for the aviation market. In both commercial 

and military aircraft, Saft batteries ensure critical 

safety functions such as power back-up for emergency 

systems, avionics and engine starting. Saft is a key 

supplier for all the leading aircraft manufacturers in 

industrial countries as well as for all major air forces, 

and the exclusive battery supplier for Airbus aircraft. 

This activity in 2011 continued to show solid 

growth, with the replacement business expanding 

particularly well. Nickel-based technology is still 

dominant in this area, but Li-ion is the technology of 

choice for the next generation of aircraft. 

Rail transport 

Saft supplies leading railway and mass transit operators 

as well as train manufacturers with nickelbased 

batteries for back-up power, communication, 

56.4% 

OF GROUP SALES 

12.5% 

OF EBITDA MARGIN 

(WITH JACkSONVILLE) 

lighting, air-conditioning systems, and critical safety 

applications such as emergency braking and dooropening 

systems. 

A number of important orders 

were received in 2011. These 

include major orders for the 

Saft MRX specialised battery 

systems from Bombardier for 

express services between 

Stansted Airport and London 

city and for the MITRAC locomotives 

in New Jersey and 

Montreal. In Asia, Saft batteries 

will equip trainsets on the 

Hong kong West Island line 

and on the kTM network in 

Malaysia, the latter to be 

supplied by China’s leading rolling stock manufacturer, 

CSR Zhuzhou. Indeed, China is investing heavily in 

its railway industry. That is why Saft is building up its 

Chinese operations and expanding its production 

capacity there. 

Saft, also launched its new SRM+ compact costeffective 

solution for high-energy back-up onboard 

rolling stock for applications covering passenger 

safety and comfort, as well as fail-safe engine 

starting. The SRM+ delivers high performance, 

reliability, and a 15-year+ service life in a fully 

recyclable single cell package that has the same 

footprint as a block battery. 

Electric mobility 

This is a promising new business area for IBG. Saft 

has customised lithium-ion batteries for a leading 

German forklift truck manufacturer offering increased 

power and optimum energy density in a compact, 

lightweight design. Both of these products were 

showcased at the 2011 Hannover Fair. 

Another first for the company was the supply of a specially 

developed Li-ion battery to power Peugeot’s 

new electric scooter, e-Vivacity. This is a compact, 

maintenance-free battery that is rechargeable from a 

domestic 220 V socket and offers the scooter 60 km 

of autonomy. 

It is also to be noted that Saft has supplied Li-ion 

batteries for the kERS systems for five Formula One 

racing teams during the 2011 season.

“The role of batteries 

for telecommunications 

network back-up 

is to provide power 

in case of grid failure.” 

A major event during the 2011 was the launch of the Evolion Li-ion back-up power battery 

for telecommunications networks. 


ACTIVITIES 

INDUSTRIAL BATTERY GROUP 

kEY EVENT 


STATIONARY 

BACk-UP POWER 

Industrial standby 

The IBG division develops and manufactures nickelbased 

batteries capable of guaranteeing back-up 

power in the event of a grid failure. The oil and gas 

industry represents approximately one third of the 

company’s sales in this segment. Other uses include 

emergency back-up for the power generation and 

electricity distribution sector, as well as railway signalling 

systems. 

Sales of standby nickel-based battery solutions for 

the oil and gas industry were buoyant, marking a 

strong recovery over 2010. Sales to the Middle East 

were particularly strong, after a turnaround in the 

market situation. In 2011, Saft launched its new 

maintenance-free Uptimax battery, which continues 

to provide enhanced performance even in high 

ambient temperatures (+40° C). 

Telecommunications networks 

The role of batteries for telecom network back-up is 

to provide power in case of grid failure. Whatever 

the application, fixed wireline, cable or cellular, Saft 

can offer the most appropriate battery technology 

– nickel-based or lithium-ion. This enables Saft to 

design, manufacture and supply optimum, efficient 

and reliable back-up power systems. 

Saft is investing heavily in telecom solutions and 

sales in 2011 made solid progress. Saft already 

offers two ranges of battery solutions using different 

technologies. A major event during the year was the 

launch of the Evolion Li-ion back-up power battery 

for telecom networks. Designed to fit even the smallest 

cabinets in the network, it maintains power in 

IN 2011, SAFT INAUGURATED 

THE WORLD’S MOST ADVANCED 

AUTOMATED LI-ION BATTERY 

FACTORY IN JACkSONVILLE, 

FLORIDA. 

The $200 million facility builds products and 

systems for renewable energy storage, telecom, 

back-up power, transportation and defence. 

case of grid failure. The Evolion is ultra-compact and 

lightweight and can be installed inside or outside, 

on or off-grid and in extreme temperatures. 

ENERGY STORAGE 

Saft’s IBG division is beginning to benefit from the 

new opportunities in the energy storage market, 

driven particularly by increased demand for renewable 

energy. Lithium-ion batteries are ideally suited for 

several applications in this market. 

Saft is addressing energy storage systems at different 

levels – in homes with solar panels for store and use 

– in neighbourhood micro-networks where a battery 

can be used to share stored energy – and on the 

grid to store energy from solar farms to smooth output 

variations, regulate the frequency, and stabilise 

the grid. The Jacksonville factory is now producing 

the battery systems to meet the growing demand 

of these applications. 

Saft has also received a number of important orders 

for its energy storage solutions. For example, Saft will 

supply renewable energy storage for 2500 R Street, 

California’s first micro-grid distributed energy community 

housing project. Saft is also a partner in the 

Nice Grid project in France, a life-size demonstration 

of the flexibility and versatility of electricity storage 

using Li-ion batteries with an overall storage capacity 

of some 2.7 MWh. In addition, Saft will deliver two 

containerised Intensium Max 20E energy storage 

batteries to the Big Island of Hawaii and will support 

the Millener smart grid project in France’s Island territories 

with its state-of-the-art Li-ion energy storage 

systems. 

Energy storage systems is expected to be a highgrowth 

area for Saft in the coming years.

Saft launched the SRM+ compact solution for high-energy back-up onboard rolling stock 

for applications covering passenger safety and comfort, as well as fail-safe engine starting. 

THE EXPERT EXPLAINS 

PIERRE-MARC LEROY 

IBG SALES DIRECTOR 

“The forklift truck market 

shows promising growth.” 

Why is the forklift truck market growing strongly? 

This market fluctuates with economic cycles. In 2009 it dropped sharply. With the 

recovery, it is growing fast. In 2011, it rose 25-30%. Assuming the economic 

improvement continues, we expect the forklift truck market to grow similarly. 

How can lithium-ion technology penetrate this market? 

Until now, forklift trucks have been driven by lead-acid batteries. But Li-ion has 

some key advantages to optimise usage. It charges faster, making the machines 

available faster, it is almost maintenance free, it has a longer operating life, 

and the power-to-volume ratio is better. 

What is Saft’s expertise and position in this market? 

Saft has years of expertise in Li-ion for mobility applications, but for forklift trucks it 

is an emerging technology. We are working in partnership with the world’s No. 2 

producer and expect to expand substantially in the next 3-4 years. 



271.1m 

SALES IN 2011 

Saft equips satellites with pioneering lithium-ion technology combining lighter weight with improved thermal management.

ACTIVITIES 

SPECIALTY 

BATTERY 

GROUP 

In 2011, Saft’s Specialty Battery Group (SBG) growth was 

driven by major civil electronics markets such as metering 

and smart metering, but also by some niche markets in 

the medical and oil and gas sectors for example. Saft’s 

technical leadership in civil activities delivered a record 

year for sales growth in space. In the defence sector, 

SBG’s wide customer base underpinned the company’s 

ability to cement its leadership position. 

MAIN APPLICATIONS 

Utility meters, electronic toll collection, military communication systems, satellites, 

torpedoes, space launchers, military hybrid vehicles, small submarines, missiles, 

night-vision goggles, GPS systems, medical equipment, asset tracking, sonobuoys. 


ACTIVITIES 

SPECIALTY BATTERY GROUP 


The rebound in the Specialty Battery Group’s civil 

business during 2011 was substantial. The first half 

of the year showed outstanding growth, while the 

second half – compared to a 

solid second half 2010 – was 

also very positive. Overall, the 

division posted solid growth. 

The military sector though was 

less dynamic. The economic 

climate during 2011 did not 

have a significant impact on 

Saft’s business. 

CIVIL ACTIVITIES 

Civil electronics 

The Group, with its two major 

brands, Saft and Tadiran, has 

maintained its world leadership as a supplier of primary 

lithium technologies for the main market segments 

of industry. With their high performance, long 

life, reduced weight and high reliability, lithiumbased 

batteries are used to power a wide variety of 

applications. 

Saft is the main supplier for most of the large AMR 

and Smart Meter manufacturers. This is thanks to 

the high level of reliability and long life of the batteries. 

On the strength of the excellent customer 

satisfaction with Saft batteries, and as water, gas 

and power utilities gear up for the smart grid, the 

company is strongly penetrating the next generation 

of meters with the goal of being the supplier of 

choice for the majority of meter manufacturers in all 

segments and all geographies. This will be a key 

component of SBG’s growth in future years. 

The Group’s medical business continues to flourish, 

helping customers to successfully roll out new products. 

The oil and gas drilling market also saw 

strong sales growth this year. 

In 2011, for the emergency call battery market, 

Saft was able to demonstrate very high reliability 

and very long life for primary batteries that do not 

need daily testing. This market shows considerable 

promise for the future. 

Geographically, activity in Europe and the USA 

was strong, while business in China was excellent. 

43.6% 

OF GROUP SALES 

23.8% 

OF EBITDA MARGIN 

Sales here achieved double-digit growth in 2011, 

and the company is expanding its production facility 

in China to satisfy the continuation of healthy growth 

in the future. Also of note during 

the year was the launch of 

a new brand of battery, the 

Eternacell. It is designed spe- 

cifically for special meter markets 

in emerging countries and 

will be a very competitive 

product while maintaining the 

Saft levels of quality and performance. 

In addition, the distribution 

channel is expanding significantly 

throughout the world 

thanks to the company’s 

efforts to empower distributors through greater 

emphasis on training and partnering to enhance 

their success. 

Space 

Saft is the world’s leading company for the design, 

development and manufacture of batteries for satellites 

used in communications, scientific and defence 

applications and is continually breaking new ground 

in this area. Satellites represent the major share of 

Saft’s space activity. However, the company also 

equips satellite launchers, where it has pioneered 

innovative solutions based on lithium-ion technology 

combining lighter weight with improved thermal management. 

Saft remains the only manufacturer with a 

complete range of battery technologies for the space 

market. As this sector grows, Saft is acquiring an 

outstanding track record for the reliability and safety 

of its products for space applications. 

In 2011, space continued to be a very strong performer, 

with a number of major contract wins. Highlights 

of the year included delivery of the 50 th 

lithium-ion onboard battery module for Thales 

Alenia Space’s Spacebus medium-class GEO 

(Geosynchronous Earth Orbit) telecommunications 

satellite platform. This achievement confirms Saft’s 

Li-ion batteries as the technology of choice for 

mission-critical space flight applications.

“The company is strongly 

penetrating the next generation 

of meters.” 

Smart meters, with more powerful batteries, offer two-way communication. 

They are read several times a day, offering consumers the potential of substantial savings. 


ACTIVITIES 

SPECIALTY BATTERY GROUP 

kEY EVENT 


A major contract was awarded by Boeing Space 

and Intelligence Systems for battery packs of highenergy 

Li-ion batteries for Boeing’s GEO satellites 

for the Inmarsat-5 series. This is part of a multi-year, 

multi-contract agreement. Saft also received the 

contract to supply the totality (81) of the onboard 

battery systems for the Iridium NEXT Low Earth 

Orbit (LEO) satellite constellation. This is the first 

major LEO constellation win for Saft, which in the 

past has predominantly supplied batteries for geosynchronous 

satellites. 

Saft also signed a multi-year agreement to provide 

Li-ion batteries for Orbital Science Corporation’s 

STAR-2 GEO satellite platform. The first order will 

cover batteries for the Azerspace/Africasat-1a 

commercial communications satellite. Saft also won 

the order for Li-ion batteries for the MEXSAT-1 and 

MEXSAT-2 GEO satellites. 

Several other significant orders for satellite and 

launcher batteries came in during 2011, confirming 

Saft’s leadership role in this segment, which is 

very demanding in terms of technical quality, long 

service life and reliability. 

Military activities 

Saft maintains its position as a leading designer, 

developer and manufacturer of high-performance 

lithium solutions for military applications. These batteries 

power equipment ranging from communications 

systems and night-vision goggles to thermal-imaging 

cameras and missile launchers. 

SBG’s main clients in this market include the Australian, 

Canadian, French, German, Israeli, Indian, Uk and 

US armed forces. 

While a large proportion of sales in this market is 

represented by replacement batteries, the Group 

also notched up a number of new contracts. For 

example, Saft was awarded a major contract to 

provide advanced battery systems capable of 

delivering high-level power and energy for demonstration 

laser weapons systems of the US Defense 

Advanced Research Project Agency. Saft’s innovative 

solution is a highly powered yet compact battery 

featuring a complete electronics management 

system. Also in the USA, Saft was selected to supply 

high energy and high power Li-ion batteries to 

be demonstrated in military ground vehicles. 

The naval segment remains a growth market for 

Saft because of its future potential. Both military 

and civil adoption of advanced hybrid drives and 

distributed energy storage approaches are accelerating. 

In Europe, several opportunities are emerging 

for civil hybrid drive ships and boats. 

No competitor has Saft’s experience in this field, 

so the growth prospects for Saft are very promising. 

ASB GROUP 

Thermal battery specialist 

Saft holds 50% of this company, in a joint venture with 

EADS. ASB Group manufactures thermal batteries for 

tactical missiles and smart weapons. It has two subsidiaries: 

MSB in Scotland and ATB in the United 

States. 

The year 2011 was one of further growth and high 

profitability for ASB, which continued to achieve 

good progress in particular in the United States and 

United kingdom markets. 

Saft intends to maintain its 50% share in the ASB jointventure. 

IN 2011 LOCkHEED MARTIN 

SELECTED COMPLETE BATTERY 

SYSTEMS FROM SAFT AND, 

FOR THE FIRST TIME, LI-ION 

BATTERIES FOR A GEO SATELLITE. 

The GOES-R series are NASA satellites 

providing weather monitoring. Saft will 

deliver two 150Ah Li-ion batteries each per 

satellite and design the battery configuration.

THE EXPERT EXPLAINS 

Each battery system in the defence market is designed for a specific application; 

all must be robust and shock-resistant. 

SOL JACOBS 

VICE-PRESIDENT & 

GENERAL MANAGER FOR TADIRAN 

“The batteries last as long 

as the meters themselves.” 

Why are smart meters considered a high-potential market? 

With the advent of smart grids, the utilities need much more sophisticated meters 

to replace the previous generation. These are read electronically several times 

a day, and communications are two-way. This offers users the potential of 

substantial savings, but it places new demands on the batteries, which have 

to be more versatile and robust. 

What are the opportunities for Saft? 

Replacing the meters and their batteries is a huge opportunity for Saft and 

Tadiran (a Saft company), since they are the biggest manufacturers of primary 

lithium batteries that go into meters. Their “Pulses Plus” technology today equips 

most of the water and gas meter markets in North America. 

What feedback do you have from the market? 

The quality of Saft and Tadiran products is widely acknowledged. They are 

proven to work in meters for up to 25 years, in demanding environmental 

conditions, meaning they last as long as the meters themselves, reduce 

replacement costs and ensure that the meters will consistently operate reliably. 


40 / 

INNOVATION & 


COMMITMENTS 

RESEARCH & DEVELOPMENT 42 

SUSTAINABLE DEVELOPMENT 46 

Innovation is key at Saft and enables 

us to maintain our technological 

leadership. The Group sets the highest 

sustainability standards in the industry, 

continually improving its environmental 

track record. 



56.3m 

INVESTED IN RESEARCH 

& DEVELOPMENT IN 2011 

Saft is proud of the accumulated expertise of its R&D specialists, who are working to develop innovative 

turnkey solutions and custom-designed battery systems.

INNOVATION & 

COMMITMENTS 

RESEARCH & 

DEVELOPMENT 

Research and development are key contributors to Saft’s 

leadership in cell and battery system design and 

production. Saft has a long heritage of development of 

new technologies and improvements to existing solutions 

to respond to the changing needs of the market. This is 

an asset that only a few companies possess, allowing Saft 

to achieve its market goals and differentiate its technology 

from competition. Saft is also focusing its efforts on 

developing complete systems for customers with embedded 

electronics. Saft is continuing to build on the accumulated 

expertise of its R&D specialists both sides of the Atlantic, 

working to develop innovative solutions and customdesigned 

battery systems for a variety of industrial 

and specialty applications. 


INNOVATION & COMMITMENTS 

RESEARCH & DEVELOPMENT 

kEY EVENT 


In 2011, Saft gross research and development effort 

increased to around e56.3 million, representing 

some 9% of sales. R&D headcount also increased to 

around 411. This reflects the 

sustained effort called for by 

the Next Generation Li-ion 

Plan and Saft’s commitment 

to system development. During 

the year 11 patents were 

filed to add to our portfolio of 

140 families of patents. 

Most of the research and 

development effort in 2011 

was concentrated on Li-ion 

technology. Because Saft has 

developed and is offering to 

the market two Li-ion chemistries 

the company is able to provide different solutions 

depending on the demands of the application. Saft 

is working on two more Li-ion chemistries as well as 

on a prismatic cell solution to be manufactured in 

Jacksonville. 

NEW DEVELOPMENTS 

The most significant development highlight of the 

year is the completion of Generation 2.0 baseline 

NCA chemistry. An important achievement was the 

much improved mechanical cell hardware designed 

for ease of manufacturing and greater reliability in 

operation. This technology has now transitioned to 

the Jacksonville facility. In 2011 Saft also started 

the development activities on Generation 2.1 Li-ion 

9% 

OF SALES INVESTED 

IN RESEARCH 

AND DEVELOPMENT 


products. As part of this activity Saft is adding a 

prismatic cell to its portfolio. 

In 2011 Saft completed its very competitive Super 

Phosphate TM Li-ion product with 

dramatically improved calendar 

life, far superior to any 

other iron phosphate technology 

on the market. This technology 

is in the process of 

being transferred to Jacksonville. 

In 2011 the R&D team 

has also started a new development 

program aiming at creating 

the next generation of 

Li-ion products for Space. This 

important activity will allow 

Saft to maintain its leadership 

position in the Space market. 

A team within Corporate Research is working on 

developing performance and aging related models 

and algorithms for Saft’s complete range of Li-ion 

cells. This capability enables system developers to 

size complex batteries meeting required performance 

characteristics. It also gives customers better 

understanding of overall product performance 

including expected end-of-life under different use 

scenarios. 

System development 

An important decision in 2011 was to increase system 

development activities by creating an extension 

of the system development unit (SDU) in Jacksonville. 

THE PLUG & PLAY PROGRAMME 

AIMS AT DEVELOPING STANDARDISED 

BATTERY BUILDING BLOCkS, 

COMPLETE WITH THEIR MANAGEMENT 

SYSTEM. 

These modules, connected in series or parallel 

depending on application needs, comprise 

qualified, proven sub-assembly components, 

offering customers not only a customised 

solution, but faster time to market. Standardised 

modules also bring benefits to Saft – lower 

development costs for customised battery 

systems and efficient industrial mass production.

This is a very important next step reinforcing Saft’s 

commitment to developing and offering complete 

systems. 

Turnkey solutions 

In an ongoing effort to minimise development costs 

Saft has initiated a programme that targets designing 

components and modules that can be used in 

multiple configurations. To date, 48-volt modules 

have been developed that can be stacked in series 

or in parallel. The challenge is less the physical 

packaging than the software required to support 

the system content. Benefits for customer are time 

to market of a customised solution, as well as use 

of qualified, proven sub-assembly components. 

LONG-TERM RESEARCH 

Saft’s Corporate Research consists of a 50-people 

team in France and a smaller team in the USA. In 

addition to supporting product development the 

teams conduct long-term research focused on the 

energy storage of the future. Focus is on disruptive 

technologies with long-term potential to deliver dramatic 

improvement in energy, power and life. Saft 

long-term research encompasses novel cathode, 

anode and electrolyte materials. Such materials outperform 

traditional materials by either storing two 

lithium ions (while traditional materials store only a 

single ion) or operating at higher potentials. This 

also necessitates working on more stable electrolytes 

as well as novel processes. Novel process 

development is another area where Saft is focusing 

significant effort. 

Most of Saft’s long-term “generic” research is focused on novel materials for cathodes, anodes and electrolytes. 



The environmental key Performance Indicators cover elements that are taken from the planet, 

such as water, and those that are released, such as gas emissions or waste water.

INNOVATION & 

COMMITMENTS 

SUSTAINABLE 

DEVELOPMENT 

As a developer and manufacturer of industrial and 

specialty batteries, Saft works constantly with a certain 

number of chemicals. As such, the Group, with its in-depth 

knowledge of their impact, shares the issues of the 

chemical industry and manages them as a responsible 

company. This involves managing risks to health, safety 

and the environment, regulatory requirements, and the 

perception of stakeholders, and customers of safe 

products. Saft takes these matters seriously and has 

instituted programmes to protect people and the planet. 


INNOVATION & COMMITMENTS 

SUSTAINABLE DEVELOPMENT 


Saft develops and manufactures the broadest 

range of high-technology industrial and specialty 

batteries on the market. In addition to bringing 

growing benefits to users, 

they are designed and managed 

to minimise their environmental 

impact. They are 

increasingly compact and 

lighter, the chemicals they 

use are controlled, and they 

are subject to stringent endof-life 

programmes. Saft consistently 

endeavours to be 

pro-active in the areas of 

Sustainable Development. It 

is always more efficient to 

anticipate changes in laws 

and regulations, and even to contribute to them 

with our expertise. 

PLANTS AND PRODUCTS 

In 2011, Saft pursued the incremental improvements 

it makes at factory level to reduce the environmental 

footprint. Importantly, these projects are 

cross-fertilised among sites to generate a multiplier 

effect. One initiative was to install solar panels on 

the roof of the new Jacksonville facility to generate 

its own electricity and so reduce the power it draws 

from the grid. Saft uses a set of key Performance 

Indicators (kPIs) to track its environmental perfor- 

26 

COUNTRIES COVERED 

BY SAFT’S USED 

BATTERY TAkE-BACk 

PROGRAMME 

mance. These include elements that are taken from 

the planet, such as water, and those released. 

These kPI allow improvements to be made, and in 

most cases Saft has shown 

good progress. 

On the product side, a number 

of adjustments were 

made to the end-of-life programmes. 

The associated 

European directives have 

now been translated into 

national laws, and Saft has 

signed the necessary agreements 

making the company 

fully compliant with the laws 

of each member state of the 

European Union. An important 

component of the end-of-life programmes is 

recycling. For many years Saft has accepted its 

batteries for recycling on an innovative voluntary 

basis and at no cost to customers before it was 

legally required to do so. Meanwhile, the company 

has established a set of standards to raise the efficiency 

level and recycle a certain percentage of 

the product weight. It monitors its contracted recyclers 

to ensure they meet the thresholds. 

The newly introduced Life Cycle Assessment (LCA) 

will lead to further improvements. LCA involves 

collecting a whole series of measurements at the 

design, manufacture, transport, use, maintenance 

and end-of-life phases of a component or system to 

The solar panel array on the roof of the Jacksonville factory will produce 10% of the facility’s electricity needs.

kEY EVENT 

Saft policy is to fully comply with – and even exceed – regulations governing health, 

safety and the environment, laws, directives and voluntary targets concerning chemicals, 

and ethical standards advocated by the Global Compact for business. 

highlight where changes are necessary to reduce 

CO 2 emissions, for instance, or energy usage. This 

can lead to changes in design or materials or 

manufacturing process, or the maintenance requirements. 

A maintenance-free battery causes less environmental 

impact, for example. The current focus 

at Saft is on lithium-based batteries. The Evolion 

battery, launched in 2011, was the first to undergo 

a complete LCA. 

HEALTH AND SAFETY 

Saft makes every effort to fully comply with legal 

health and safety requirements to reduce risks to a 

strict minimum. It monitors scientific data on possible 

effects of substances used in batteries to implement 

mitigating projects. Saft uses a number of 

bio-indicators to track risk areas. The results 

achieved have been consistently good – always 

below mandatory or self-imposed levels – and they 

continue to improve. 

Saft complies with the RoHS (Restriction of Hazardous 

Substances) and with the REACH directive for the 

registration of chemicals. 

GLOBAL COMPACT 

In 2011, Saft signed the United Nations Global 

Compact initiative in order to show its commitment 

to the highest standards of business practices. The 

Global Compact’s 10 principles will be progressively 

integrated into Saft’s way of doing business, 

although they already form a part of the Group’s 

values and vision for the future. 

THE BENEFITS OF LCA 

Saft’s Evolion battery, developed for telecom 

applications and launched in 2011, was the first 

Saft product to be subjected to a full Life Cycle 

Assessment. Other than the undeniable advantages 

for customers, the Evolion Li-ion battery is more 

compact and lighter than conventional batteries, 

making it less burdensome to transport and install. 

It has a long calendar life and requires no 

maintenance. It minimises generator run time, 

thus saving fuel and reducing CO 2 emissions. 

And it is RoHS compliant. 


50 / 


FINANCIAL 

REPORT 

RISK FACTORS 53 


CORPORATE GOVERNANCE 79 

COMMENTS ON THE 2011 FINANCIAL YEAR 109 

2011 CONSOLIDATED FINANCIAL STATEMENTS 123 

PARENT COMPANY CERTIFIED FINANCIAL STATEMENTS 183 

INFORMATION ABOUT THE COMPANY AND ITS SHARE CAPITAL 195 

ANNUAL GENERAL MEETING 207 

ADDITIONAL INFORMATION 213 


52 / 


RISK FACTORS 

2.1 Risks related to the market 

environment and the Group’s 

activities 54 

2.1.1 Risks related to exposure to a high level of 

competition and price pressure 54 

2.1.2 Risks related to technologies used 54 

2.1.3 Risks related to development of new markets in 

which Saft is making a signifi cant investment 55 

2.1.4 Risks related to the Group’s dependence on certain 

customers or core sectors 55 

2.1.5 Risks related to the geopolitical environment 56 

2.2 Operational risks 56 

2.2.1 Risks related to defective or poor quality products 56 

2.2.2 Risks related to the ability to recruit and retain 

qualifi ed staff 56 

2.2.3 Risks related to potential disagreements between 

Saft and its partners relating to their joint subsidiaries 57 

2.2.4 Risks related to purchases and suppliers 57 

2.2.5 Risks of Internal Control failure and risk of fraud 57 

2.3 Credit and counterparty risks 58 

2.3.1 Credit risk 58 

2.3.2 Counterparty risk 58 

2.4 Liquidity risk 58 

2.5 Market risks 59 

2.5.1 Raw material price risks 59 

2.5.2 Foreign exchange risk 59 

2.5.3 Interest rate risk 59 

2.5.4 Share price risk 59 

2.6 Contractual and legal risks 59 

2.6.1 Risks related to products sold 59 

2.6.2 Risks related to export control 60 

2.6.3 Litigation risks 60 

2.6.4 Risks related to intellectual property 60 

2.7 Risks related to the impact of 

the Group’s business on the 

environment, human health and 

safety 61 

2.7.1 Environmental risks related to operating factories 61 

2.7.2 Risks related to the availability and use of chemical 

substances 61 

2.7.3 Risks related to the end of life of products sold 62 

2.7.4 Risks to human health and safety 62 

2.8 Insurance 63 

2 


2 Risks 

RISK FACTORS 

related to the market environment and the Group’s activities 

Since 2004, the Saft Group has established a risk identifying system through a risk mapping of the major risks to which it is exposed. 

The risk mapping, which is updated regularly, ranks all risks identifi ed based on their potential impact, on the probability they will 

occur and on an assessment of the level of control for each one of them. The process of evaluating risks is described in the report 

prepared by the Chairman of the Supervisory Board, presented hereafter in chapter 4 “Corporate Governance” of this annual report. 

Along with the risk mapping, this section describes the signifi cant risks which the Group considers it is exposed to through its activities 

and environment, as well as the steps taken to lower the probability of such risks materialising and to reduce their potential impact. 

At the time that this Annual Report was prepared, the Company performed a review of risks that could have a material adverse effect 

on its business, fi nancial position or results and its ability to achieve its objectives, and it feels there are no risks, other than those 

listed below, that the Company deems relevant and meaningful. 

2.1 RISKS RELATED TO THE MARKET ENVIRONMENT 

AND THE GROUP’S ACTIVITIES 

2.1.1 RISKS RELATED TO EXPOSURE TO A 

HIGH LEVEL OF COMPETITION AND 

PRICE PRESSURE 

Types of risks 

Certain segments of the Group’s activities are exposed to 

competition from low-cost battery producers, mainly in Asia. 

The pressure that this competition exerts on prices could force 

the Group to reduce its prices, leading to a contraction of its 

margins. 

Moreover, the possible relocation of some of the commercial or 

manufacturing operations of the Group’s customers to Asia or 

other lower labour cost countries could lead to these customers 

deciding to source their batteries from competitors of the 

Group already located in these territories. This could have a 

considerable negative impact on the Group’s business and its 

results. 

Risk management 

In order to minimise this risk, the Group prioritises its innovation 

strategy, with the aim of differentiating itself from its competitors 

in terms of the products it offers, while also seeking to improve 

its competitiveness. The Group has therefore implemented an 

investment policy in some low-labour cost countries, such as 

the Czech Republic, China, India and Brazil, by setting up 

commercial units and/or manufacturing facilities there. 

2.1.2 RISKS RELATED TO TECHNOLOGIES 

USED 

Loss of the Group’s competitive advantage in 

an environment of fast-changing technological 

development 


Saft’s business is focused on specialised markets for advanced 

technology batteries. Saft holds leading positions in many of 


these markets because it provides high value-added products 

based on innovative technologies and its ability to customise 

its products in line with the changes in specifi cations of its 

customers. However, the batteries market involves rapidly 

evolving technology. Therefore, it cannot be ruled out that the 

technological advances in the manufacture of batteries will not 

affect the competitiveness of the products made by Saft, and 

lead to a loss of the competitive advantages currently held by 

the Group. 


To develop and gain access to new technologies, the Group 

channels signifi cant resources into Research and Development. 

Accordingly, over the last three fi nancial years, the Group has 

invested the equivalent of 6.6% in 2009, 7.8% in 2010 and 

9.0% in 2011 of its revenue in Research and Development. 

Uncertainties with regard to the success of lithiumion 

technology 


The Group currently develops and sells lithium-ion battery 

components and systems, which it considers will enable it 

to satisfy a range of requirements in a number of evolving 

sectors, notably those regarding storage of renewable energy 

and traction batteries. Saft has therefore invested in the 

construction of a manufacturing plant for lithium-ion batteries 

and components in Jacksonville, Florida (USA). 

The Group cannot guarantee that this technology will be a 

success, and it cannot be ruled out that different technologies 

will meet the same needs. Thus, some companies have recently 

developed batteries using emerging technologies that are likely 

to be in competition with the lithium-Ion technology developed 

by the Group. 


In the context of the ongoing development of this technology, 

the Group has established a multi-year plan to launch a 

second generation of lithium-ion on the market. In addition, 

it is pursuing Research and Development work in other

technologies, while maintaining a forward-looking approach 

to its research activities at all times, and constantly monitoring 

the development of technologies that could potentially compete 

with lithium-ion. 

2.1.3 RISKS RELATED TO DEVELOPMENT 

OF NEW MARKETS IN WHICH 

SAFT IS MAKING A SIGNIFICANT 

INVESTMENT 


The development prospects for the Group’s activities based on 

products requiring manufacture at the Jacksonville facility are, 

as with all commercial activities, subject to a certain number of 

risks. These risks are principally the following: 

� uncertainties related to the development of the energy 

storage sector; 

� dependence on national and international energy policies; 

� impact of commodity and fossil energy prices; 

� exposure to competition. 

Uncertainties related to the development of the 

energy storage sector 

The markets for energy storage, and in particular those 

relating to the storage of renewable energy in which Saft is 

positioning itself, are emerging markets where production 

volumes are currently low. Moreover, although the prospects 

for development of these markets over the next few years 

are generally considered as signifi cant, estimates relating 

to the level that these markets could reach vary signifi cantly 

and the exact pace of this development remains uncertain. 

Accordingly, the growth of these markets might not reach the 

expected levels, and the future profi tability of Saft’s investments 

therein could be affected. 

Dependence on national and international energy 

policies 

The markets for energy storage are partly dependent on 

political decisions, both at the national and international level. 

These decisions may involve the introduction of subsidies and/ 

or tax incentive mechanisms, or the adoption of various pieces 

of legislation. 

Impact of commodity and fossil energy prices 

The development of certain new markets for which Saft is 

investing in its new production facility in Jacksonville (USA) 

could be affected by fl uctuations in prices, supplies of raw 

materials and/or fossil energies (oil and natural gas, for 

example). A large decrease in the price of fossil energies could 

thus cause a fall in demand for lithium-ion batteries to be used 

for energy storage. 


Risks related to the market environment and the Group’s activities 

Exposure to competition 

In certain new markets, and in particular the market for energy 

storage, Saft is exposed to strong competition: 

� some competitors, already present in these markets or 

seeking to establish themselves therein, may have more 

signifi cant commercial, fi nancial, technical or human 

resources than those of the Group; 

� some customers in these markets may consider in-sourcing 

the design or production of the type of components and 

products offered by the Group. 

The pressure that this competition may exert on prices could 

force the Group to limit its prices and reduce its margins, 

and in consequence could affect its ability to generate the 

expected profi tability in the anticipated timeframe. This could 

have a considerable negative impact on the Group’s business, 

fi nancial position and results. 


In order to limit these risks, the Group strives: 

� fi rst, to maintain a balance between existing profi table 

activities and markets and developing activities and markets 

that generally consume cash; 

� and secondly, to identify other markets or applications that 

can benefi t from the advantages of lithium-ion products for 

which Saft is making signifi cant investments. 

2.1.4 RISKS RELATED TO THE GROUP’S 

DEPENDENCE ON CERTAIN 

CUSTOMERS OR CORE SECTORS 


Saft’s sales are made to numerous industrial customers 

present in very diverse sectors such as the aeronautics and 

rail industries, road infrastructure, public transport, the oil 

industry, telecommunications, gas and electricity production, 

defence and space. However, the Group makes a signifi cant 

portion of its sales to a few strategic customers. Thus, for the 

2011 fi nancial year, the Group’s sales to its top 10 customers 

accounted for 22% of the Group’s consolidated revenue. The 

Group’s top customer in terms of revenue in 2011 accounted 

for less than 4% of consolidated revenue, as compared to less 

than 3% in 2010 and 3.5% in 2009. 

Moreover, the Group’s revenue and operating profi t are partly 

related to the cyclical nature of certain activities. In particular, 

a signifi cant portion of the Group’s consolidated revenue is 

made from the Defence sector. In 2011, this represented 15% 

of consolidated revenue. 

Defence spending for each country depends on a complex 

mix of geopolitical considerations and budgetary constraints. It 

may therefore vary signifi cantly from year to year. Accordingly, 


2 Operational 

RISK FACTORS 

risks 

a reduction in defence spending or the postponement of 

particular programmes could have a negative effect on the 

Group’s sales, operating profi t and cash fl ow, as well as 

having signifi cant repercussions for certain production facilities. 


To limit this risk, Saft, on the one hand, constantly looks to 

diversify its customer portfolio to avoid dependence on a single 

client or too limited number of clients and, on the other hand, 

implements a global strategy aimed at striking a balance in its 

portfolio of activities. 

2.1.5 RISKS RELATED TO THE 

GEOPOLITICAL ENVIRONMENT 


The Group carries out a signifi cant portion of its commercial and 

manufacturing operations in emerging countries, which have 

recently undergone or are likely to undergo periods of political 

or economic instability. In 2011, revenue recorded outside of 

the “Europe” and “North America” zone represented 31% of 

consolidated revenue. Moreover, some countries where the 

2.2 OPERATIONAL RISKS 

2.2.1 RISKS RELATED TO DEFECTIVE OR 

POOR QUALITY PRODUCTS 


The success of Saft’s business depends on the quality of its 

products and its relationships with customers. As the batteries 

manufactured are often complex and are mostly used in critical 

applications, Saft cannot guarantee that its customers will not 

encounter defects or quality problems with its products. In the 

event that its products or services fail to meet its customers’ 

standards, Saft’s reputation could be harmed, which could 

adversely affect its marketing and sales efforts, and therefore 

impact on its competitive position. 


In order to mitigate these risks, Saft operates detailed 

development, manufacturing and testing processes, as well as 

quality control procedures, at all times. Furthermore, Saft has 

brought all of its continuous improvement processes for quality 

and performance under a global umbrella programme called 

Saft World Class. Proven quality management procedures are 

thus deployed at all Group sites: 

� quality standards: all of the Group’s sites have ISO 9001 

certifi cation (2000 version) and most of them have 


Group operates have underdeveloped or un-protective legal 

frameworks, which can affect the Group’s ability to enforce 

contractual rights. 

Saft is therefore exposed to risks that could affect its fi nancial 

position, notably: 

� a more restrictive control of foreign exchange that could 

limit or block a currency leaving a customer country and in 

turn its capacity to honour its debts; 

� discriminatory measures taken against Saft that could pose 

a threat to the Group’s business in a particular country 

(expropriation, nationalisation, etc.); 

� an unexpected breach of contract or commitment; 

� diffi culties in protecting the Group’s intellectual property. 


Although Saft’s growing internationalisation enables it to spread 

geopolitical risk, the Group makes every effort to identify ways 

of limiting the fi nancial impact of this risk. Where necessary, it 

may turn to insurers to take out appropriate insurance policies 

or resort to fi nancial payment protection instruments for certain 

countries (bank guarantees, Coface guarantees, etc.). 

supplementary certifi cations depending on market 

requirements; 

� the 5S and visual management: each Saft production facility 

employs this type of management so that any anomalies can 

be identifi ed as soon as possible and appropriate corrective 

action can be taken by the problem solving teams; 

� process management: various tools are used, such as 

equipment design standards, error-proofi ng systems and 

Statistical Process Control (SPC). 

2.2.2 RISKS RELATED TO THE ABILITY TO 

RECRUIT AND RETAIN QUALIFIED 

STAFF 


Saft’s success is highly dependent on the quality and experience 

of its management team, and of key employees responsible for 

manufacturing processes and Research and Development. These 

highly qualifi ed employees have generally been at the Group 

for a number of years, and have an excellent knowledge of its 

business and the sectors in which it operates. The departure of 

one or more managers or key employees could lead to a loss

of expertise and affect the Group’s ability to grow some of its 

businesses or attain certain strategic objectives. 

The Group’s future success will partly depend on its ability to 

attract, train, motivate and retain highly qualifi ed employees 

and managers. However, given the intense competition to 

attract employees with such qualifi cations, there can be no 

assurance that Saft will be able to do so. 


In order to limit the impact of this risk, Saft has put in place a 

number of human resource management programmes based 

on anticipating needs and retaining staff: 

� drafting of a succession plan for key employees; 

� implementation of a process for rewarding performance 

and retaining staff such as: 

� development of geographical and functional mobility, 

� implementation of a skills development and support for 

change policy through trainings, 

� implementation of an attractive remuneration system. 

These measures are described in more detail in section 3.2 

“Social Responsibility” of this Annual Report. 

2.2.3 RISKS RELATED TO POTENTIAL 

DISAGREEMENTS BETWEEN SAFT 

AND ITS PARTNERS RELATING TO 

THEIR JOINT SUBSIDIARIES 


As part of its manufacturing and commercial activities and 

in line with its strategic goals, Saft may decide to enter into 

joint venture agreements with specifi c partners. Should the 

relationship between Saft and any of its partners deteriorate, or 

the terms of their agreement no longer be respected, Saft’s assets 

and commercial activities could be affected. Furthermore, any 

dispute between the parties, management disagreement or any 

decision to terminate the joint venture agreement could have a 

material adverse impact on the Group’s commercial activities. 


In order to limit the risk inherent in any partnership and to 

safeguard its interests as best as it can, Saft endeavours to 

ensure that any such agreements contain a certain number 

of governance rules regarding the joint management of the 

company, including for example the need for the two parties to 

agree on all important decisions. 

At present, the Saft Group’s only joint venture is ASB, in which 

it holds a 50% interest, the same as the EADS Group. This 

company mainly produces thermal batteries for military use. 

The relationship between the shareholders is governed by a 

shareholder agreement, which was renewed in 2006. This 

agreement contains provisions designed to protect the Group’s 

interests, notably in the event of a change in control, as 

2 

RISK FACTORS 

Operational risks 

described in the “Additional information” section of the Annual 

Report. 

Note 29 to the Consolidated Financial Statements details the 

key fi nancial data concerning the Saft Group’s joint venture as 

of the end of the 2011 fi nancial year. 

2.2.4 RISKS RELATED TO PURCHASES 

AND SUPPLIERS 

Regulatory risk related to purchases 


The Group is subject to a large number of regulations at 

the local, European and international levels in relation to its 

purchasing activities. 

Non-compliance with these requirements would entail legal 

and fi nancial risks and in some cases restrictions on access to 

public sector contracts. Saft therefore takes particular care in 

ensuring it complies with these regulations. 


In order to mitigate these risks, the Group’s buyers are regularly 

informed of changes in the legal and regulatory framework 

in which they operate. Moreover, compliance with certain 

legislation is subject to specifi c monitoring, for example, the 

European regulation on chemical substances “REACH”. 

Supplier risks 


As with any manufacturing company, Saft is exposed to a risk 

related to the quality and durability of its raw materials and 

components supplies. Like any company that manufactures high 

technology products, Saft regularly uses a number of suppliers 

of specialised products. If one or more of these suppliers were 

to cease trading, this could have a signifi cant impact on the 

Group’s business and fi nancial performance. 


In order to limit these risks, each unit has supplier risk evaluation 

procedures in place, as does the management of the Group’s 

Purchasing Department. In addition, progress plans and 

specifi c action plans are regularly drawn up and implemented 

according to the risk levels identifi ed. 

2.2.5 RISKS OF INTERNAL CONTROL 

FAILURE AND RISK OF FRAUD 


Saft’s international profi le means that its administrative, 

fi nancial and operational processes are managed in a number 

of different legal and regulatory environments, with varying 


2 Credit 

RISK FACTORS 

and counterparty risks 

degrees of Internal Control and risk management awareness 

from one entity to another. Moreover, they may be managed 

with different information systems. 

In this context, Saft cannot rule out a failure of Internal Control 

or an instance of fraud that could have a signifi cant fi nancial 

impact and/or harm the Group’s reputation. 


In order to mitigate these risks, Saft has set up a review process 

of its Internal Control, based on a set of rules and procedures it 

2.3 CREDIT AND COUNTERPARTY RISKS 

2.3.1 CREDIT RISK 


Credit risk is the risk that a debtor does not settle a debt in 

due time. Due to the nature of the Group’s business, trade 

receivables constitute the main source of credit risk to which 

the Group is exposed. 


Information on exposure to credit risk and its management is 

provided in Note 3 of the Consolidated Financial Statements. 

2.4 LIQUIDITY RISK 


Liquidity risk relates to the risk of Saft being unable to meet its 

monetary needs with the fi nancial resources it generates from 

its business activities or those it mobilises through third parties. 

The Group’s main liquidity risk is linked to its borrowings. 


has circulated to all its subsidiaries. In addition, regular audits 

of different Group sites or audits of processes are carried out 

according to a programme established and approved annually 

by General Management and the Audit Committee. Lastly, Saft 

has implemented a number of initiatives to raise the awareness 

of employees of risks relating to fraud, corruption or noncompliance 

with the Group’s rules of ethics. 

This process is described in more detail in the report prepared 

by the Chairman of the Supervisory Board. 

2.3.2 COUNTERPARTY RISK 


Counterparty risk relates to the inability of a counterparty to 

fulfi l its obligations. The Group is exposed to counterparty risks 

in relation to the transactions on the fi nancial and banking 

markets that it uses to manage foreign exchange and interest 

rate risks and to manage its payment fl ows. 


Information on counterparty risk and its management is 



Information on exposure to liquidity risk and its management is 


The Company has conducted a review of its liquidity risk 

and considers that it is able to meet its future payment terms. 

These are presented in Note 18 of the Consolidated Financial 

Statements.

2.5 MARKET RISKS 

2.5.1 RAW MATERIAL PRICE RISKS 


Some of the metals used by Saft in manufacturing batteries, 

nickel and cobalt in particular, are traded on international 

raw material markets. Other metals, such as lithium, are 

negotiated by mutual agreement with suppliers, rather than on 

international commodities markets. Raw material costs fl uctuate 

based on supply and demand, or according to fi nancial 

market forecasts, and cannot therefore be controlled by the 

Group. These fl uctuations may result in considerable variations 

in production costs and could therefore have a signifi cant 

impact on the Group’s profi tability. 


Quantitative information on exposure to raw material price risk 

and its management is provided in Note 3 of the Consolidated 

Financial Statements. 

2.5.2 FOREIGN EXCHANGE RISK 


Given the Group’s international presence, it is exposed to 

fl uctuations in exchange rates: 

� in relation to its operational activities, both industrial and 

commercial; 

� in relation to its fi nancing activities; 

� during the euro conversion process of the accounts of its 

subsidiaries denominated in foreign currencies. 

The Group’s exposure to foreign exchange risk is mainly related 

to fl uctuations of the US dollar, Swedish krona and pound 

2 

RISK FACTORS 

Contractual and legal risks 

sterling against the euro, and of the shekel and the Swedish 

krona against the US dollar. 


Information on exposure to foreign exchange risk and its 

management is provided in Note 3 of the Consolidated 


2.5.3 INTEREST RATE RISK 


The Group is subject to fl uctuations in interest rates, almost 

exclusively as a result of its long-term debt. 


Information on exposure to interest rate risk and its management 

is provided in Note 3 of the Consolidated Financial Statements. 

2.5.4 SHARE PRICE RISK 

2.6 CONTRACTUAL AND LEGAL RISKS 

2.6.1 RISKS RELATED TO PRODUCTS SOLD 


In relation to the sale of batteries, Saft generally provides 

warranties on its products lasting from one to ten years on the 

proper functioning of its products and/or the conformity of a 

product with the specifi cations defi ned by customers. In the 

event of the failure to function properly of a battery produced 

by Saft, Saft could face contractual or tort liability for bodily 

injury, or for property or consequential damage suffered as a 


The Group has implemented a liquidity contract in order to 

improve the liquidity of Saft Groupe SA stock on the Paris stock 

exchange (Euronext). The Group’s exposure to equity market 

risks only relates to fl uctuations in the price of treasury shares. 


The data relating to transactions in the Company’s own 

shares throughout the fi nancial year, and the measures taken 

to manage this risk, are presented in the “Information on the 

Company and its Share Capital” section of this Annual Report. 

result. In addition, if a device equipped with a Saft battery is 

faulty, there is no assurance that the manufacturer of the device 

may not allege that the Saft battery is responsible, even if the 

battery complies with contractual specifi cations. 

The failure of a Saft battery or a device equipped with a 

Saft battery to function properly could involve additional 

costs related to the return of products by customers, require 

new investment in Research and Development and demand a 

disproportionate amount of technical and economic resources. 

Any such costs could have a signifi cant impact on the Group’s 


2 Contractual 

RISK FACTORS 

and legal risks 

profi tability and cash fl ow. Saft’s commercial reputation could 

also be damaged, leading to a loss of certain customers and a 

signifi cant reduction of its consolidated revenue. 


In order to mitigate these risks, Saft subjects the products it 

manufactures to highly detailed operational tests consistent with 

customer specifi cations. Furthermore, the nature and source of 

any defects in products returned by customers are analysed so 

that appropriate corrective action can be taken. 

The Group has also set up external insurance cover for risks 

related to products sold. 

Lastly, in the case of warranties provided under certain 

contracts, Saft may have to account for provisions which are 

calculated using adapted statistical estimates. The amount of 

these provisions and the information pertaining to them are 

detailed in notes 2.22 and 21 of the Consolidated Financial 

Statements. 

2.6.2 RISKS RELATED TO EXPORT 

CONTROL 


Exports represent a signifi cant portion of Saft’s business, and 

mainly involve batteries produced for sensitive sectors such as 

space or defence. 

The export of these batteries from the countries in which they 

are manufactured may be restricted or subject to the granting 

of licences. This applies to the Group’s exports from the USA, 

the UK, France, Israel and Germany. 

There is no guarantee that the export controls to which Saft is 

subject will not become more restrictive, that new generations 

of products developed by the Group will not also become 

subject to similar or more rigorous controls and that geopolitical 

factors will not make it impossible to obtain export licences. 

This could reduce Saft’s ability to fulfi l contracts and could 

have a negative effect on its revenue, fi nancial position and 

profi tability. 


In order to mitigate these risks, Saft has established specifi c 

procedures for its various sales administration teams that enable 

it to ensure that its operations comply with export regulations 

and controls. 

2.6.3 LITIGATION RISKS 


To the Company’s knowledge, as of the date of this Annual 

Report and for at least the last twelve months, there have 

been no exceptional developments, or governmental, judicial 


or arbitration proceedings (including any suspended or 

threatened proceedings known to the Company), which have 

had recently, or might be liable to have, any signifi cant impact 

on the fi nancial position or profi tability of the Company or the 

Saft Group. 


The amounts of provisions set aside for pending litigation is 

disclosed in Note 21 of the Consolidated Financial Statements. 

2.6.4 RISKS RELATED TO INTELLECTUAL 

PROPERTY 


The use of a certain number of brand names is central to the 

Group’s business. In many of the market segments in which the 

Group operates, its reputation is closely related to its brand 

names. 

Unauthorised use of the Group’s brand names is diffi cult to 

control, however. Saft cannot guarantee that its brands will not 

be copied or otherwise used without its consent or that such 

acts will not have a signifi cant negative impact on its reputation 

or results of operations. 

The Group also owns inventions or know-how related to the 

technologies and products it develops, which represent an 

important component of its assets. The Group’s Research 

& Development Department is responsible for protecting 

and defending these assets at an international level and, in 

particular, for ensuring patent applications are fi led with the 

appropriate authorities. 


In order to limit the risk of counterfeiting or the unauthorised use 

of its brands, they are registered so as to protect them from any 

improper use. Moreover, the Group’s Legal Department carries 

out monitoring work to prevent or stop any such unauthorised 

use, although it cannot guarantee the effectiveness of these 

measures, especially in countries whose laws do not provide 

effective protection of intellectual property rights. 

The protection of know-how is organised around the 

implementation of policies relating to the retention of personnel, 

the transmission of knowledge, the inclusion of confi dentiality 

clauses in employment contracts or contracts with third parties, 

and non-competition clauses in employment contracts. 

Furthermore, the contracts signed with customers, distributors, 

sub-contractors and other suppliers generally include clauses 

informing the signatories of the risks they may face in the event 

of unlawful or fraudulent use of the Group’s brands, its knowhow, 

or in the event of the counterfeiting of its products. 

Lastly, the Saft Group is not dependent on any patent or 

licence, the loss of which might have a material impact on its 

operations or profi tability.


Risks related to the impact of the Group’s business on the environment, human health and safety 

2.7 RISKS RELATED TO THE IMPACT OF THE GROUP’S 

BUSINESS ON THE ENVIRONMENT, HUMAN HEALTH 

AND SAFETY 

2.7.1 ENVIRONMENTAL RISKS RELATED 

TO OPERATING FACTORIES 


In each country where the Group operates an industrial 

installation, it is subject to a large number of local, national 

and international laws and regulations on protecting the 

environment. In particular, these laws and regulations impose 

increasingly restrictive rules on atmospheric emissions and 

waste water discharge; the use, storage and disposal of 

hazardous substances, soil protection; removal of asbestos; 

and the recycling and disposal of waste. 

These environmental laws and regulations therefore expose 

the Group to the risk of having to bear signifi cant costs and 

responsibilities, including in relation to assets sold, transferred 

or past activities: 

� the Group could be required to incur signifi cant additional 

operating expenses and signifi cant investment obligations 

in the event that new laws, regulations or government 

policies are adopted, decided or required or in the event of 

additional demands by competent authorities; 

� additional regulations could limit the Group’s ability to 

modify its processes or expand its factories or to continue 

to operate a facility; 

� additional regulations could also oblige the Group to 

implement pollution prevention measures, or to incur new 

costs for the remediation of existing sites; 

� the Group could be required, in the future, to contribute to 

the remediation of sites or plants owned or operated by 

third parties, and on or in which the Group has stored or 

disposed of the waste it has generated; 

� failure to comply with these requirements could result 

in administrative or criminal sanctions (fi nes), or civil 

compensation claims. 


The Group invests signifi cant sums to ensure that it minimises 

the risks of harming the environment in conducting its activities, 

and regularly makes the investments necessary for meeting 

regulatory requirements. In particular: 

� The Group’s central objectives comply with these legal 

requirements and the control systems operated at each 

manufacturing site in order to ensure such compliance have 

been documented and certifi ed in accordance with the 

international ISO 14000 standard for most European sites; 

� The Group has gradually set up indicators that are used 

to evaluate the impact of its operations on the natural 

environment, which are subject to consolidation and 

internal monitoring and are also communicated to the 

local supervisory authorities. Detailed information on 

these indicators is provided in section 3.1 “Environmental 

responsibility” of this Annual Report. 

In addition, when Doughty Hanson acquired the Alcatel 

Group’s battery business, Saft Finance Sarl (a direct subsidiary 

of Saft Groupe SA) was granted a certain number of contractual 

guarantees in respect of environmental matters, including in 

particular – subject to certain limits – any costs of remediation 

of sites and land affected by the Group’s operations prior to 

2004. These guarantees will remain applicable until 2014. 

2.7.2 RISKS RELATED TO THE AVAILABILITY 

AND USE OF CHEMICAL 

SUBSTANCES 


On 30 December 2006, a European Union regulation named 

REACH (Registration, Evaluation, Authorisation and Restriction 

of Chemicals) was published in the Offi cial Journal of the 

European Union. The purpose of REACH is to improve the 

protection of human health and of the environment via systematic 

evaluation of the properties of chemical substances and the 

risks they pose. This regulation also provides for replacement 

of the most dangerous chemical substances, termed “extremely 

preoccupying substances”, whenever adequate alternatives 

have been identifi ed. 


In 2008, Saft completed an evaluation of the impact of 

REACH on its operations and identifi ed the steps necessary for 

compliance with this regulation. The Saft Group continues to 

roll out this multi-year programme. 

Certain substances widely used in industrial batteries are 

classifi ed as hazardous under the currently applicable 

regulations and may be classifi ed as “extremely preoccupying 

substances” under REACH. However, to its current knowledge, 

Saft does not expect that the REACH authorisation process will 

lead to the Group having to stop making or selling any of its 

fi nished products. 

The steps taken by Saft to comply with this regulation are 

described in section 3.1 “Environmental responsibility” of this 

Annual Report. 


2 Risks 

RISK FACTORS 

related to the impact of the Group’s business on the environment, human health and safety 

2.7.3 RISKS RELATED TO THE END OF LIFE 

OF PRODUCTS SOLD 


On 26 September 2006, a directive dealing with batteries 

and accumulators was published in the Offi cial Journal of 

the European Union under the reference 2006/66/EC. 

The aim of this directive, which has been applicable since 

September 2008, is to: 

� on the one hand, ensure that used batteries and accumulators 

are collected and recycled at the end of their lifecycle; 

� on the other, limit the use of mercury in most batteries and 

accumulators for non-military purposes and of cadmium in 

batteries for non-industrial, non-professional or non-military 

purposes. 

The commercial restrictions on the use of mercury and cadmium 

do not affect Saft’s products, except for some very minor 

segments of its product portfolio. This directive has therefore 

no signifi cant impact on the Group’s operations. However, the 

European Commission is likely at any time to re-examine the 

current derogations in respect of the ban on certain substances 

and could issue additional proposals for prohibitions to be 

imposed, and such prohibitions may affect market segments in 

which Saft is present. 


Since the mid-1980s, Saft has participated in instituting and 

developing a network of partners engaged in collection and 

recycling in most of the world’s industrialised countries. This 

network – see the http://www.saftbatteries.com website for 

details – enables Saft to comply with the obligation for recovery 

of products imposed by this directive on producers of batteries 

and accumulators in the European Union. The steps taken by 

the Group on recycling are described in detail in section 3.1 

“Environmental responsibility” of this Annual Report. 

In addition, the Group ensures that it complies with this directive 

through constant monitoring and information gathering. 


2.7.4 RISKS TO HUMAN HEALTH 

AND SAFETY 

Risks related to the use of toxic or hazardous 

substances 


In the manufacture of its products, the Group has used and 

continues to use signifi cant amounts of toxic or hazardous 

materials. Some employees or sub-contractors may also have 

been or are being exposed to these substances which are 

harmful to health and could develop diseases for which they 

may seek to hold the Group liable. 


The corresponding risks are the subject of strict prevention 

measures and monitoring, such as the use of suitable protective 

materials, frequent training programmes as well as regular, 

compulsory health checks for employees. 

Industrial risks 


Due to the high energy density of certain batteries and 

accumulators manufactured by the Group, the batteries may 

pose a fi re risk, either in the Group’s factories or at the premises 

of battery users. Accidents of this nature, should they occur, 

could lead to considerable production or shipping delays for 

which the Group could be held liable and could therefore 

become subject to customer compensation claims. Any such 

occurrence could have an adverse effect on the Group’s 

business, income, fi nancial position, or image. 


To limit this risk, Saft has established safety procedures in 

its Research and Development activities and production 

operations, and has taken steps to raise awareness among 

and provide regular training for its employees. 

In addition, the Group implements an external insurance policy 

to cover these industrial risks. 

The provisions set aside by the Group to confront current 

environmental risks are described in section 3.1 “Environmental 

responsibility” (section i) “Provisions for environmental risks” 

and in Note 21 of the Consolidated Financial Statements.

2.8 INSURANCE 

The Group has a policy of obtaining external insurance 

coverage for risks relating to the manufacture and sale of 

its batteries, and insuring such risks at reasonable rates. In 

order to obtain the best possible coverage for all the Group’s 

companies, Saft uses the services of an international insurance 

broker, which negotiates insurance policies on its behalf. In 

general, most of the Group’s insurance policies contain a 

coverage limit that applies either per claim or per year and per 

claim. In some cases, coverage is limited by a certain number 

of customary exclusions for these types of policies. 

The principal risks covered are as follows: 

� the Group’s civil liability in connection to businesses resulting 

from bodily harm, property or consequential damage 

caused to third parties; 

2 

RISK FACTORS 

Insurance 

� damage to assets and resulting business interruption. This 

coverage is designed to avoid a signifi cant loss and ensure 

continuation of operations in the event of an accident; 

� damage caused by transport of its production assets 

or equipment, fi nished or semi-fi nished products or raw 

materials; 

� the Group’s liability due to its activities as a supplier to the 

aeronautics industry; 

� the Group’s liability due to its activities as a supplier to the 

space industry; 

� fi nancial losses resulting from fraudulent acts committed by 

third parties or by employees to the detriment of the Group 

or a customer of the Group; 

� environmental risks related to the Group’s production sites. 


RISK FACTORS 

2 Insurance 


SUSTAINABLE 

DEVELOPMENT 

3 

3.1 Environmental responsibility 67 

3.1.1 General environmental policy 67 

3.1.2 Legal and regulatory compliance 67 

3.1.3 Chemical substances – REACH Regulation 67 

3.1.4 End of life - Batteries Directive (2006/66/EC) 67 

3.1.5 Environmental performance indicators 68 

3.1.6 Environmental objectives assigned 

to our foreign subsidiaries 69 

3.1.7 Environmental impact of Group activities 70 

3.1.8 Cleaning up contaminated sites 70 

3.1.9 Provisions for environmental risks 70 

3.1.10 Resource conservation 71 

3.1.11 Helping respond to and control global warming 71 

3.1.12 Biodiversity 71 

3.2 Social responsibility 71 

3.2.1 Changes in resources 71 

3.2.2 A vision and values 72 

3.2.3 Human resource management 73 

3.2.4 An attractive remuneration policy 73 

3.2.5 Labour-management relations and collective 

Group-level agreements 73 

3.2.6 Occupational health and safety 74 

3.2.7 Other employment data 74 

3.3 Corporate social responsibility 75 

3.3.1 Local, economic and social impact 75 

3.3.2 Subcontracting and suppliers 75 

3.4 Auditor’s report on certain 

environmental and social indicators 76 


3 


Saft promotes sustainable development principles, based on three pillars: society, the economy and the environment. This approach 

draws in particular on the introduction of reporting of indicators designed to measure the Group’s performance as regards its 

environmental, social and corporate responsibility. These non-fi nancial indicators are collated globally for publication in this Annual 

Report, in line with the provisions of Articles R. 225-104 and R. 225-105 of the French Commercial Code. In order to refl ect its 

commitment to further enhancing these indicators and in anticipation of the order implementing Act no. 2010-788 of 12 July 2010 

(known as Grenelle 2), the Group undertook to have non-fi nancial information audited by an independent third party from 2011. 

Scope and consolidation method of non-financial 

data 

The indicators relating to Sustainable Development are 

consolidated globally across all subsidiaries and companies 

in which Saft holds a majority interest (> 50%). Changes in 

scope (opening or closing of new sites, production increases, 

hiring, etc.) are included in the information supplied, thereby 

explaining certain year-on-year differences. In fact, it was 

decided not to freeze the scope but instead to have the 

fi nancial information refl ect the scope. Nevertheless, where 

these changes in scope give rise to variations that impact the 

consistency of the data or a proper understanding of how they 

have changed, additional information is provided with respect 

to changes on a like-for-like basis and explanations are given 

on key events during the fi nancial year. 

The above principles are applied subject to the following 

reserves: 

� the environmental indicators only cover the facilities 

operated by the Group. They do not therefore cover the 

assembly and distribution units, in light of their marginal 

impact on the various environmental indicators tracked by 

the Group; 

� the environmental indicators published below do not 

include information on the Indian subsidiary AMCO-Saft, 

these data not yet being fully usable; 

� where the numbers for an environmental indicator for the 

fi nal month of the year are not available when they are 

being collated for the purposes of this report, the information 

collated and published is, in order of descending priority: 

� the actual data for the December 2010-November 2011 

period, 

� the actual data for the January 2011-November 2011 

period, with an estimated amount being added for 

December 2011. 

Collation and consolidation of non-financial data 

The data are tracked throughout the year by the reporting 

offi cers designated at each site. The data are centralised 

annually by HQ, which collates, processes and consolidates 

the information. The environmental data are reported via a 

common framework for all sites introduced some eight years 

ago. 


The labour-related data are collated via a special reporting 

system used by all sites within the scope, accompanied by a 

methodology note detailing for example how the requested 

data is defi ned. This procedure and documentation were put 

together in 2008 and are regularly updated. A consistency 

check is carried out by the Group HR Department, which also 

carries out a series of additional calculations, compares the 

data with those from the previous year and reconciles them 

with certain data reported elsewhere by Group management 

controllers. 

Methodological limitations 

There may be limitations to the methodologies underpinning 

certain environmental and labour-related indicators by 

virtue of the absence of recognised defi nitions nationally or 

internationally and of required estimates. In particular, the 

collation of data on waste levels is dependent on defi nitions 

as regards the hazardous or non-hazardous nature of waste, 

something that varies from one country to the next. The lack 

of agreement as regards defi nitions for certain labour-related 

indicators led the Group HR Department to establish a common 

framework. The Group thus established a common defi nition 

for statistics on occupational accidents (excluding commuting 

accidents, having resulted in at least one lost day). 

External audit 

The auditing of environmental, labour-related and corporate 

information by an independent third party is split into three 

separate phases: 

� a review of the procedures used to collate information: 

chosen scope, organisation of collation process and 

systems used; 

� the checking, with a moderate level of assurance, of the 

accuracy of data reported on a selection of labour-related 

and environmental indicators and on a representative 

sample of sites; 

� a review of the consolidation of indicators. 

The indicators that have been evaluated in this way are 

identifi ed by the P sign on the following pages. 

The exact nature of the work done and the conclusions 

of this work are presented in the auditor’s report on certain 

environmental and social indicators, which can be found on 

page 76 of this Annual Report.

3.1 ENVIRONMENTAL RESPONSIBILITY 

For Saft, the environment and sustainable development are 

key priorities. The batteries manufactured by the Group supply 

electrical energy without producing any direct emissions during 

use. Furthermore, the impact of our products in the other 

phases of their lifecycles, during manufacturing and recycling 

in particular, are duly analysed in order to reduce it. Saft also 

strives to maximise the use of secondary rather than primary 

raw materials, such that the Group’s products make a real 

contribution to sustainable development. 

3.1.1 GENERAL ENVIRONMENTAL POLICY 

Compliance with regulatory requirements and reducing the 

environmental impact of the Group’s activity has been at 

the core of the Group’s values for many years. In order to 

implement this policy, the Group has created a dedicated team 

responsible for monitoring and minimising the environmental 

impact of its activities and products throughout their life cycle. 

Coordinated by the Environmental Director, this team consists 

of environmental managers located on each production 

site, an eco-design manager and a health and environment 

programme manager. 

On-site environmental managers are under the direct authority 

of the plant directors who are themselves responsible for 

implementing Group policy at the operational level. Each 

environmental manager is trained on the specifi c areas of 

impact of the site at which he or she works. This team of 

environmental specialists thus monitors compliance with 

environmental regulations and coordinates all ongoing 

improvement measures. It is also tasked with identifying any 

planned new environmental regulations in advance so that 

they can be incorporated into practical action plans in a timely 

manner. 

The eco-design manager implements the Life Cycle Assessment 

methodology (LCA) in the Group and provides specialised 

support to the development teams in each division. The goal 

is to identify and implement efforts to reduce the impact of 

products manufactured. 

The health and environment programme manager also 

contributes her expertise in the development of new products in 

order to ensure compliance with environmental obligations. She 

is also responsible for monitoring the Group’s environmental 

performance by means of the performance indicators detailed 

below. 

3.1.2 LEGAL AND REGULATORY 

COMPLIANCE 

In every country in which Saft operates a production facility, 

this facility operates within a technical and legal framework 

as part of an “operating permit”, which strictly governs 

industrial activities with a view to minimising impacts. Such 

permits notably cover the handling, storage, and emissions of 

hazardous substances, as well as the management of waste 

generated at the site. 

3 


Environmental responsibility 

3.1.3 CHEMICAL SUBSTANCES – REACH 

REGULATION 

In 2010, Saft registered all of the substances requiring 

registration on or before 1 December 1 2010, as well as 

several other substances for which Registration deadline is set 

at a later date (1 June 2013 or 1 June 2018). 

Saft is also monitoring the list of Substances of Very High 

Concern (SVHC), drawn up by the European Chemicals 

Agency (ECHA), and actively exchanges information with 

its supply chain to ensure the effective dissemination of all 

information regarding the presence of SVHC substances in 

a purchased preparation or item, thereby complying with its 

disclosure requirements towards the downstream chain. 

Saft does not expect that the REACH registration process will 

result in the discontinuation of any of its products. 

3.1.4 END OF LIFE - BATTERIES DIRECTIVE 

(2006/66/EC) 

Over the years, the Group has progressively introduced a 

policy of collecting and recycling its spent batteries, and in 

particular its nickel-based range. The policy originated at our 

Oskarshamn plant in Sweden, which built a recycling unit 

originally established for the recycling of production scrap. 

The scope of this plant’s recycling capacity has gradually been 

extended. During the 1980s, the recycling of spent batteries 

from Swedish industrial customers started to be offered. 

This service was progressively extended to customers located 

in other Northern European countries. During the 1990s, this 

recycling service became a full-fl edged policy which was 

gradually extended to all customers located in the European 

Union and in North America. To this end, the Group established 

a network of voluntary bring-back points in a position to collect 

spent batteries from industrial end users, to sort them and redispatch 

them to our Oskarshamn recycling facility. 

More recently, efforts have been devoted to identifying 

voluntary bring-back points within the new Member States of 

the European Union as well as in more distant countries, such 

as Taiwan, Australia, South Africa, and several other African 

countries. During the coming years, efforts will concentrate on 

developing countries with less developed waste management 

infrastructures. 

In parallel, partnerships with a number of recyclers have been 

established in Europe and North America, with the result 

that the Group is now able to offer recycling solutions for all 

chemical systems used. 

As a result of this policy and partner network, the vast majority 

of our customers now have the option of dropping off their 

spent batteries at a designated bring-back point, from which 

the waste can be dispatched to an authorised recycler, in 

compliance with the rules governing cross-border waste 

transportation. 


3 Environmental 


responsibility 

A few years ago, a European Union directive (2006/66/EC) 

was adopted by the Council and the EU Parliament with a view 

to regulating the design and end of life of batteries marketed 

in the European Union. This directive establishes some design 

limitations as well as an extended producer responsibility 

regarding the end of life and the recycling of spent batteries. 

As the transposition instruments for this directive differ across 

the 27 EU Member States, Saft endeavours to ensure it is in full 

compliance with directive 2006/66/EC and its transposition 

instruments in each Member State. 

The design requirements mandated by this directive (capacity 

labelling, marking with a crossed-out wheeled bin symbol and 

indication of the presence of certain substances) have already 

been implemented by the Group. 

3.1.5 ENVIRONMENTAL PERFORMANCE 

INDICATORS 

The Saft Group has progressively developed a range of 

indicators to assess the impact of its activity on the environment. 

These indicators are consolidated and monitored for internal 

purposes but are also communicated to the local authorities 

responsible for issuing the operating permits under which our 

manufacturing sites generally operate. 

Water usage 

Total water usage, whether for manufacturing or sanitary use, 

is monitored at all our sites. The water used by our sites is 

either supplied by local authorities, private companies or is 

taken directly from the water table. Such used is conducted 

in compliance with public regulations governing the use and 

protection of water resources. 

There are no particular constraints as regards the use of water 

from the natural environment surrounding industrial sites. 

The Group’s water usage is directly correlated to production 

volumes and is strongly linked with its product mix. In fact, usage 

per facility varies greatly depending on battery technologies 

and manufacturing processes. It is therefore diffi cult to assess 

the evolution of water usage over time. Reduction in usage 

can be achieved by implementing more economical industrial 

processes or closed circuit systems (in particular for cooling 

systems). 

It should be noted that only a minor fraction of the water used 

by the Group is incorporated into our products. The majority 

is returned, after proper treatment, to the environment (as a 

liquid or atmospheric release) in compliance with the technical 

specifi cations of our sites’ operating permits. 

The results of the Group’s efforts can be seen in the table below. 

Since 2008, water usage has been cut by 22%. Furthermore, 

since 2003, when consolidated tracking was implemented for 

this indicator, water usage overall by 40%. 


Quality of water releases 

All chemical substances in our water discharges having an 

environmental impact have been identifi ed and are monitored 

in terms of both concentration and absolute quantity released. 

Process water is treated by water treatment stations, either 

(most frequently) on site or by public waste treatment plants with 

which the Group subsidiaries have agreements specifying the 

nature and maximal admissible quantity of pollutants in order 

to ensure the water fl ow remains within the capabilities of these 

treatment plants. 

Several avenues are available for reducing the quantities of 

pollutants present in wastewater: process changes and release 

abatement. 

With regard to process changes, performance requirements 

of the fi nished products drive the manufacturing processes to 

a large extent. Some of these processes are responsible for 

generating process waste water, and it is not always possible 

to modify those processes without altering battery performance. 

More direct improvements on water releases are possible via 

the design and operation of water treatment stations. 

The results of the Group’s efforts can be seen in the table 

below. Since 2008, the levels of cadmium and nickel in 

water discharges have fallen by 52% and 26% respectively. 

Additionally, since 2003, when consolidated tracking was 

implemented for this indicator, the volume of these substances 

released in water decreased by 63% and 50% respectively. 

Quality of air releases 

In a similar way, chemical substances with environmental 

impacts present in air releases have been identifi ed and 

are monitored for both concentration and absolute quantity 

released. Air emissions from our production sites are subject to 

appropriate treatment. 

Several avenues are available to reduce the quantities of 

pollutants present in the air releases: process changes and 

release abatement (e.g. fi ltration of particulate matters, 

condensation of substances such as solvents, etc.). 

When process changes are implemented, the performance 

requirements of the fi nished products drive the manufacturing 

processes to a certain extent, some of which generate 

atmospheric releases, and it is not always possible to modify 

those processes without altering battery performance, which 

must comply with very precise specifi cations. 

More direct improvements of air releases are possible by 

improving the performance of air capture and fi ltration systems. 


below. Since 2008, air emissions of cadmium have risen 1% 

while emissions of nickel have fallen 32%. The increase in air 

emissions of cadmium is due to higher production volumes. 

Additionally, since 2003, when consolidated tracking was 

implemented for this indicator, the volume of these substances 

released in air has decreased by 29% and 69% respectively.

Type and amount of waste generated by our plants 

All waste fl ows generated by our sites are duly identifi ed, 

weighed and then recorded in the waste register. Our waste 

fl ows are thus precisely monitored and recorded based on 

their characteristics (hazardous or non-hazardous) and fi nal 

destination (recovery or elimination). 

The quantities of waste generated may be reduced by 

improving control over manufacturing processes. However, 

since our products are constantly evolving and new products 

typically require novel manufacturing processes, we are often 

required to discard non-conforming products, treating them as 

waste. 

We constantly strive to identify new recovery solutions and 

better segregate waste fl ows in order to decrease the fraction 

of non-recovered waste. 

The results of the Group’s efforts can be seen in the table below. 

Since 2008, the amount of waste generated by the Group 

has decreased by 9%. On a like-for-like basis (i.e. excluding 

the new sites and assuming similar production volumes), we 

estimate that the amount of waste generated has decreased by 

approximately by 18% since 2008. 

3 


Environmental responsibility 

Furthermore, 34% of hazardous waste and 65% of nonhazardous 

waste undergoes recovery, thereby allowing the 

materials extracted to be reused for industrial purposes P (1) . 

Energy consumption 

All energy consumption is metered, whether it be electricity 

(from all sources), natural gas or steam. Energy consumption 

can be reduced by optimising the energy effi ciency of industrial 

processes and buildings (heating, lighting, air conditioning, 

etc.). 


below. Since 2008, energy consumption has stabilised, and 

since 2005, when consolidated tracking was implemented for 

this indicator, energy consumption has decreased by 8%. 

ISO 14001 Certifi cation 

(1) P Data has been subject to verifi cation by a Statutory Auditor with moderate assurance. 

It is the Group policy to certify the environmental management 

systems that are implemented on our industrial sites. All 

European facilities are now ISO 14001 certifi ed, except for 

our plant in the UK. 

ISO 14001 certifi ed manufacturing operations P (1) Date of certifi cation 

Saft Zhuhai – China 2010 

Saft Bordeaux – France 2008 

Saft Poitiers Space and Defence – France 2007 

Saft Poitiers Lithium Battery Division – France 2007 

Saft Nersac – France 2007 

Friwo – Germany 2004 

Saft Ferak – Czech Republic 2003 

Tadiran – Israel 2000 

Saft Oskarshamn – Sweden 1999 

Tadiran – Germany 1999 

3.1.6 ENVIRONMENTAL OBJECTIVES 

ASSIGNED TO OUR FOREIGN 

SUBSIDIARIES 

The Group makes no distinction between its sites and aims 

to apply the same policy as regards regulatory compliance, 

environmental impact reduction and sharing of best practices 

across all its sites. 

It should nevertheless be noted that although the Group’s 

environmental policies are being progressively rolled out 

within the Indian company Amco-Saft, in which the Group is a 

majority shareholder, the environmental data set out in the table 

below does not include the data for this company, these data 

not being fully exploitable. 

Conversely, the environmental impact of the Saft Zhuhai facility 

in China has been fully included in the Group’s consolidated 

data since 2010. The increase seen in a number of indicators 

between 2009 and 2010 is the result of its inclusion. 

Finally, the environmental impact of the new facility in 

Jacksonville, which began production in September 2011, 

has been included in the performance indicators. This inclusion 

notably explains the increase in 2011 of energy consumption 

and waste generation indicators. This site fully applies Saft’s 

environmental policy. 


3 Environmental 



3.1.7 ENVIRONMENTAL IMPACT OF GROUP* ACTIVITIES 


Units 2011 2010 2009 2008 

Change 

since 

2008 

Change 

since fi rst 

consolidation 

Quality of water discharges 2003 

Quantity of Cd kg 15.4 23.3 22.3 32.4 (52)% (63)% 

Quantity of Ni kg 57.8 59.3 51.3 78.1 (26)% (50)% 

Quality of air emissions 2003 

Quantity of Cd kg 10.9 9.7 9.7 10.8 1% (29)% 

Quantity of Ni kg 3.86 46.2 46.2 56.4 (32)% (69)% 

IPA t 185.6 167 176.5 155.8 19% NA 

Water abstraction 2003 

Total abstraction kt 520.0 P (1) 510 501.6 670.6 (22)% (40)% 

From the water distribution 

network kt 362.1 P (1) 365.4 335.4 409.6 (12)% (49)% 

From the water table kt 157.9 P (1) 144.6 166.2 261 (40)% (1)% 

Waste generation 2005 

Total waste generated t 7,038 P (1) 7,162 6,821 7,711 (9)% 6% 

Hazardous t 2,268 P (1) 2,640 2,547 2571.5 (12)% (8)% 

Of which recycled t 777 P (1) 959 828 958 NA NA 

Non-hazardous t 4,770 P (1) 4,522 4,274 5,139.5 (7)% 13% 

Of which recycled t 3,078 P (1) 3,313 2,945 3,405 NA NA 

Energy consumption 2005 

Total energy consumed kWh 233,886,692 P (1) 230,607,218 215,779,226 234,300,089 0% (9)% 

■ Electricity kWh 142,190,227 P (1) 131,465,912 121,378,512 126,802,851 12% 5% 

■ Gas kWh 75,058,465 P (1) 83,178,306 79,904,714 95,397,238 (21)% (32)% 

■ Steam kWh 16,638,000 P (1) 15,963,000 14,496,000 12,100,000 38% 50% 

For the sake of document coherence, parentheses are used to indicate negative values. 

(1) P Data has been subject to verifi cation by a Statutory Auditor with moderate assurance. 

3.1.8 CLEANING UP CONTAMINATED 

SITES 

In 2009, the Kalmar County Board and the Municipality of 

Oskarshamn, in which the Swedish facility of Saft AB is located, 

entered into two agreements with Saft AB under which Saft AB 

agreed to partly fund, up to a maximum of SEK 41 million, the 

cost of cleaning up the Oskarshamn harbour, where sediment 

was discovered. The costs incurred by Saft AB will be called 

between 2010 and 2014. 

Ninety percent of these costs are covered by various provisions 

of the agreement governing the sale in 2004 of the Saft Group 

by Alcatel and the Group is thus reimbursed by Alcatel as these 

costs are incurred. 

* Excluding the Indian subsidiary, Amco-Saft Limited. 

3.1.9 PROVISIONS FOR ENVIRONMENTAL 

RISKS 

The Group has set aside provisions for environmental 

risks totalling €14.1 million as of 31 December 2011 

(compared to €13.5 million and €12.4 million respectively 

as of 31 December 2010 and 31 December 2009). These 

provisions cover the future cost of collecting and recycling spent 

batteries and certain costs incurred cleaning up contaminated 

sites, which in principle, would only be expected to be incurred 

were the sites in question to be closed. 

The change over the prior year is mainly due to exchange rate 

fl uctuations of the euro against the US dollar.

3.1.10 RESOURCE CONSERVATION 

Sustainable development also means preserving resources, and 

Saft recycling programs make a signifi cant contribution towards 

achieving this goal. As detailed above, Saft endeavours to 

minimise its water and energy consumption in the course of its 

industrial activities. 

Furthermore, the sophisticated technologies used in Saft 

batteries make it possible to save raw materials, having 

markedly longer life spans than traditional batteries. 

The Group also supports the development of renewable energy. 

In fact, batteries developed by the Group used notably as 

temporary storage for solar and wind farms and the electricity 

grid, make it possible to manage the intermittent nature of these 

facilities. 

3.1.11 HELPING RESPOND TO AND 

CONTROL GLOBAL WARMING 

In order to improve the impact of our plants on the environment, 

in 2012 we will prepare a summary of the greenhouse gases 

generated by our business. 

We already measure emissions of the main Volatile Organic 

Compound (VOC) released by our plants: isopropyl alcohol 

(IPA). The data is consolidated in the table of environmental 

indicators. 

3.2 SOCIAL RESPONSIBILITY 

3.2.1 CHANGES IN RESOURCES 

At 31 December 2011, the Saft Group had 4,121 employees 

worldwide, up 2.5% on 31 December 2010. 

The average number of employees was up 5% over the past 

year, at 4,099 employees compared to an average of 3,902 

in 2010. 

The level of temporary contracts was unchanged in 2011, 

representing an average of 10% of total headcount. 

Over the past year, the Group hired 720 people P (1) , 

including 342 on permanent contracts (of which 134 engineers 

(1) P Data evaluated by a Statutory Auditor with a moderate level of assurance. 

3 


Social responsibility 

Furthermore, despite an increase of this indicator on a 

consolidated scope driven by higher Group volumes, we 

have seen a signifi cant reduction at certain sites where major 

reduction efforts have been undertaken. In particular, two of 

the Group’s major manufacturing sites cut their emissions in half 

compared to the previous year. 

Lastly, we should add that the installation of solar panels on 

the roof of the new facility in Jacksonville makes it possible to 

provide up to10% of the site’s electricity needs. 

3.1.12 BIODIVERSITY 

Biodiversity is managed locally, with actions being taken at a 

number of sites: 

� Saft Valdese: study on the aquatic environment and 

assessment of possible contamination; 

� Saft Jacksonville: plan to prevent the pollution of rainwater 

with a view to protecting wetland areas; 

� Saft Nersac: analysis of the ambient air, ecotoxicological 

study of the water. 

Furthermore, the Group’s plants measure waste water quality. 

One indicator of this quality is Chemical Oxygen Demand 

(COD), measured upon output from the treatment plant at our 

sites. 

and managers, 73 technicians and administrative staff, 

135 operatives) and 378 on fi xed-term contracts (of which 

31 engineers and managers, 47 technicians and administrative 

staff, 300 operatives). The increase in the number of 

permanent positions is primarily due to the commissioning 

of the facility in Jacksonville (Florida, US). Over the same 

period, 618 P (1) employees left the Group, of which 285 left 

voluntarily, 59 retired, and 30 were made redundant, mainly 

at Valdosta (Georgia) in the US and at Nersac in France, with 

the completion of the restructuring plan put in place in 2009. 

A breakdown of employees by country, division and category 

is shown below. 


3 Social 



NUMBER OF EMPLOYEES BY COUNTRY 

Country 31 December 2009 31 December 2010 31 December 2011 

France 1,714 1,731 1,719 P (1) 

US 697 726 802 P (1) 

Sweden 434 500 521 P (1) 

Israel 313 332 351 P (1) 

Czech Republic 197 230 216 P (1) 

Rest of the World 475 500 512 P (1) 

TOTAL 3,830 4,019 4,121 

NUMBER OF EMPLOYEES BY DIVISION 

Divisions 2009 2010 2011 

SBG 1,679 1,686 1,741 

IBG (1) 2,029 2,216 2,261 

Other Group activities (2) 122 117 119 

TOTAL 3,830 4,019 4,121 

(1) This includes employees from the former RBS division, which was merged with the IBG division on 1 July 2009. 

(2) Other activities mainly include corporate support activities such as IT, research, corporate management, and fi nance and administration. 

Breakdown of Group employees by category 

and gender 

At 31 December 2011, women represented 35.2% P (1) 

of the Group’s total workforce, compared with 35.6% at the 

end of 2010. The breakdown of men and women by socioprofessional 

category as of the same date was as follows: 

� “Managers and Engineers”: 204 women/771 men 

(compared to 185 women/719 men in 2010); 

� “Technicians and Administrative Staff”: 356 women/ 

695 men (compared to 353 women/673 men in 2010); 

� “Operatives”: 892 women/1,203 men (compared to 

892 women/1,197 men in 2010). 

The proportion of women in each category is relatively stable 

from one year to the next. 

3.2.2 A VISION AND VALUES 

The human dimension is a major vector of Saft’s strategic vision, 

which strives to be a high quality employer by: 

� recruiting and managing its employees in an ethical way; 

� developing employee skills; 

� favouring professional development through rewarding and 

stimulating careers. 



Employees are united around the key values of the Group, 

which are: 

� leadership, characterised by business performance, 

management style and innovation; 

� respect, meaning, above all, customer focus and team 

spirit; 

� progress, based on continuous improvement and personal 

development. 

The importance the Group has long placed on its people has 

translated into signifi cant staff loyalty at present. Thus, 24% of 

employees have been with the Group for more than 25 years. 

This stability is attributable to a strong corporate culture, 

nurtured by the transfer of skills and sharing of experiences on 

a global scale. 

The dissemination of a Code of Ethics to which Group 

employees can refer helps strengthen the Group’s vision 

and values. This code promotes the essential elements in 

establishing a working environment in which every employee 

feels at ease, thanks to clear and regular communications, 

respect for diversity and equality of opportunity, together with 

health and safety protection. 

An ethics committee is furthermore responsible for ensuring 

that the code is continually updated to refl ect changes in the 

company’s environment.

3.2.3 HUMAN RESOURCE MANAGEMENT 

The retention of talent is central to the Group’s human resources 

strategy and to its processes of induction, career management, 

skills development and remuneration. 

An induction process that facilitates information 

sharing 

Newly-recruited engineers and managers undergo an induction 

process organised each year around a visit to three French 

production sites. In addition to an introduction to the Saft 

Group’s products, businesses and activities, the involvement 

of members of the Group’s Management Committee (Saft 

Management Committee) represents an important part of this 

process. By favouring interaction, this induction process also 

helps the participants to gain an understanding of the Group’s 

values. 

Employee engagement and their ability to be autonomous are 

key to the Group’s business model, which moreover draws on 

the wealth of interaction offered by its multi-cultural teams. 

Career management facilitating professional 

development 

The Group encourages the geographic and functional mobility 

of its employees and to this end provides them with extensive 

information on opportunities within the organisation, both 

through “Echo Job”, the system used to advertise available 

posts on the Group’s intranet, as well as through career 

interviews. These interviews are carried out by local and/or 

corporate human resources teams, and are mainly aimed at 

facilitating employees’ career development, and promoting 

and optimising internal mobility. 

In total, 153 employees changed jobs within the Group in 

FY 2011, of which around six moved to a different country. 

Mobility opportunities are down on 2010, a great year from 

this perspective given the demand for expertise generated by 

the development of the new facility in Jacksonville (US). 

More specifi c career management tools are also used to 

facilitate career development. For example, programmes 

called “People Reviews” are regularly undertaken with a 

view to identifying and monitoring development plans for 

high potential employees. The Group, moreover, puts in 

place succession plans for management teams and other key 

company employees. 

Constant attention to skills development 

In FY 2011, the Group continued to invest in skills development, 

with 80% of employees (83% in 2010) receiving training, 

representing a total of 58,658 hours of training (as against 

52,203 hours in 2010). 

The major recurring themes of Group employee training are 

safety, quality and ongoing improvement processes, along with 

management, technology and information systems. 


3 


Social responsibility 

In FY 2011, the Saft Group continued to roll out its global 

training programmes (Sales & Marketing, Leadership), with a 

more specifi c emphasis on Project Management skills, at all 

levels of the organisation. Alongside these initiatives, work was 

undertaken to improve and harmonise our project management 

practices, both in terms of methodology & systems as well as 

of project portfolio management. The strengthening of the 

project culture is of strategic importance for the Group, given 

its international footprint, diversity and the scale of projects, 

underpinning the Group’s growth. 

3.2.4 AN ATTRACTIVE REMUNERATION 

POLICY 

In order to strengthen the commitment of teams it is necessary 

to operate a coherent and attractive remuneration policy for 

all employees. The Group’s salary schemes, which take into 

account local factors, are coordinated in a transparent and 

equitable manner. In particular, they refer to research into 

remunerations for different job categories and geographical 

areas, which is carried out regularly. 

The remuneration of Engineers and Managers includes both 

a basic salary and variable incentives determined according 

to performance targets set at the beginning of the year. The 

targets partly relate to the fi nancial performance of the Group 

or entity, and partly to individual performance. 

In France, employees may benefi t from additional remuneration 

under various legal forms: incentive profi t-sharing, mandatory 

profi t-sharing and employee savings plans. 

Since the fl otation in 2005, fi ve new stock option plans have 

been introduced by the Group. With each new plan, over a 

hundred managers and experts are awarded stock options. 

3.2.5 LABOUR-MANAGEMENT 

RELATIONS AND COLLECTIVE 

GROUP-LEVEL AGREEMENTSP (1) 

In 2011, 35 collective agreements P (1) were signed within 

the Group. These agreements mainly relate to pay, working 

conditions, health and safety. Specifi cities in relation to work 

time organization are subject to collective agreements, as this 

was the case in 2011 at the sites of Bordeaux (France) and 

Büdingen (Germany). In other cases, local law applies. In 

France, following a number of years of concerted efforts to 

reduce the disparity between men and women, a negotiated 

agreement was reached with the social partners. It involves an 

action plan covering this issue for the 2012 to 2014 period. 


3 Social 



3.2.6 OCCUPATIONAL HEALTH 

AND SAFETY 

The number of occupational accidents totalled 73 in 2011, 

a reduction of almost 4% compared with FY 2010. The 

frequency rate in 2011 was 9.2, as against 10.7 in 2010 

and 9.2 in 2009. 

3.2.7 OTHER EMPLOYMENT DATA 


The number of workdays lost to occupational accidents totalled 

1,712 in 2011, compared with 1,509 days in 2010. The 

severity rate was 0.2 in 2011, as in 2010, and 0.15 in 

2009. 

In 2011, 3,024 people were trained on safety, representing 

67% of employees (registered and average number of 

temporary staff), as against 3,281 in 2010 (77% of employees) 

and 2,768 in 2009 (66% of employees). 

2009 2010 2011 

Overall workforce 

Engineers and managers 21% 22% 24% 

Employees and technicians 28% 26% 25% 

Operatives 

Women: 35.2% of employees P 

51% 52% 51% 

(1) 



Operatives 

Men: 64.8% of employees P 

43% 43% 43% 

(1) 



Operatives 

Age structure 

57% 57% 57% 

Under 25 6% 8% 7% 

25 to 39 30% 29% 29% 

40 to 49 29% 29% 29% 

50 and over 

Length of service 

35% 35% 35% 

0 to 4 28% 32% 32% 

5 to 14 26% 25% 26% 

15 to 24 21% 18% 17% 

Over 25 years 

Disabled employees (according to legal defi nitions 

of the countries concerned) 

25% 25% 24% 

Number of disabled employees 

Professional training 

98 107 121 

Number of employees trained 3,005 3,345 3,278 

% of total employees 78% 83% 80% 

Number of training hours 

Absenteeism 

56,734 52,203 58,658 

Total rate for the year 4.4% 4.4% 4.1% 

(1) P Data evaluated by a Statutory Auditor with a moderate level of assurance.

3.3 CORPORATE SOCIAL RESPONSIBILITY 

3.3.1 LOCAL, ECONOMIC AND SOCIAL 

IMPACT 

Most of Saft’s production facilities are long-standing operations 

that have been well received by local residents. In fact, the 

Group endeavours to recruit locally and is often recognised 

as being one of the major employers in the regions in which 

it operates. In Jacksonville (Florida, US), the construction of the 

plant in 2010, followed by its commissioning in 2011 have 

already helped create jobs for a couple of hundred people in 

a region with unemployment rates of over 10%. 

Furthermore, at most sites Saft is involved in local industrial 

and economic development, taking part in professional and 

industrial associations, and sitting on Chambers of Commerce 

and Industry and other local committees. 

Saft also plays an active role in local communities by supporting 

or participating in a range of social, environmental and 

humanitarian initiatives. In FY 2011, donations were made 

to communities or organisations (fi re services, schools, social 

centres, etc.) in most localities in which Saft operates. The 

Group also took part in initiatives to support minority groups 

(the disabled, senior citizens, people suffering from illnesses) 

in most countries (the Czech Republic, the United Kingdom, 

Israel, Italy, Singapore), in charity initiatives for medical 

research associations in the US and Sweden, not to mention 

support for NGOs and international organisations (UNICEF, 

Red Cross, Energies Sans Frontières, etc.). 

Furthermore, Saft regularly sponsors cultural venues and events 

and sports clubs and events in Europe (particularly in Spain, 

Sweden, France and the Czech Republic). 

Finally, the Group’s sites in the US and Europe regularly sponsor 

schools and professional associations. In particular, this means 

organising meetings between students and professionals, visits 

to factories and internships, as well as providing fi nancial 

support for university events or associations (seminars, 

newspapers, junior enterprise schemes), awarding grants to 

students and entering into partnerships with engineering schools 

and universities as part of research programmes (French and 

European). 

3 


Corporate social responsibility 

3.3.2 SUBCONTRACTING AND SUPPLIERS 

The Saft Group is looking to implement a responsible purchasing 

policy and to work with suppliers whose commercial and 

industrial practices respect this principle. 

Saft’s Code of Ethics details the rules that must be respected by 

all employees in business dealings, and in particular in dealings 

with suppliers. The Purchasing Department is responsible in this 

respect for ensuring that buyers are regularly informed of the 

need to respect these rules. 

Where Group suppliers operate in countries in which 

the governance indicators published by the World Bank 

(Worldwide Governance Indicators) fall below the median 

of the countries evaluated, they must formally undertake to 

comply with commitments built on three principles: corporate 

responsibility, ethics and environmental responsibility. This, for 

example, encompasses respect for conventions 29, 111, 138 

and 182 of the International Labour Organisation. 

In addition, in the US the Group complies with the obligations 

of the Federal Acquisition Act with regard in particular to 

respect for minorities and principles of non-discrimination. 

In the course of its dealings with sub-contractors, in France 

the Group particularly endeavours to follow the general 

recommendations of the report of 30 August 2010 of the 

Médiateur des Relations Interindustrielles et de la Soustraitance, 

detailing unfair practices. Furthermore, in the US it 

complies with the provisions of the Davis-Bacon Act as regards 

daily rates paid to sub-contractors. 


3 Auditor’s 


report on certain environmental and social indicators 

3.4 AUDITOR’S REPORT ON CERTAIN ENVIRONMENTAL 

AND SOCIAL INDICATORS 

Year ended 31 December 2012 

SAFT Groupe SA 

12, rue Sadi-Carnot 

93170 Bagnolet 

To the Shareholders, 

At the request of the SAFT Group (the “Group”) and in our capacity as the Group’s Statutory Auditor, we performed a review with 

the aim of providing assurance on certain environmental and social indicators selected by the Group. 

These data, which are the responsibility of the HR, Health and Safety department on the one hand, and Environment & Research 

department on the other hand, were prepared in accordance with internal procedures available for consultation at these departments 

(hereinafter “reporting criteria). 

The note on reporting methodology on page 66 of the 2011 Annual Report explains the data collection methodologies used to 

calculate the published indicators. 

It is our responsibility, based on the work performed, to express a conclusion on the selected indicators, as defi ned below. The 

conclusions formulated in our report relate to these indicators alone and not to all of the environmental and social data appearing in 

the 2011 Annual Report, and therefore not to all of the information in the 2011 Annual Report. 

I. SCOPE , NATURE AND FIELD OF WORK 

We conducted our procedures in accordance with the applicable professional guidelines. 

We conducted the following procedures in order to provide moderate assurance that the indicators (1) identifi ed by the symbol P 

on pages 69 to 74 of the 2011 Annual Report do not contain any material anomaly for the selected entities (2) , based in particular 

on the signifi cance of their contribution to the indicators and also to refl ect the Group’s diversity. A higher level of assurance would 

have required more extensive work. 

In accordance with the professional guidelines, we have assessed the reporting criteria with respect to their relevance, reliability, 

objectivity, clarity and completeness. 

Interviews were carried out with the persons responsible for the application of the reporting criteria at the HR, Health and Safety, 

and Environment & Research department. 

We performed tests on the application of the reporting criteria at the selected entities. We verifi ed the data reporting process at these 

entities and examined, on a sampling basis, the calculations at different consolidation levels. 

II. COMMENTS ON REPORTING CRITERIA 

In order to ensure a homogeneous reporting, some defi nitions and procedures for calculation should be specifi ed in the reporting 

criteria. The notion of recovered waste, in particular, should be clarifi ed. 

(1) These data are [The contribution of the selected entities to the Group’s data for our work are mentioned in brackets. It takes account of 

work done during on-site visits.]: Number of ISO 14OO1 certifi ed site [ 25%]; Water consumption (city water, well water) [49%]; Energy 

consumption (electricity, gas, steam) [ 38%]; Total of produced waste (hazardous and non-hazardous) [34%]; Percentage of recovered 

waste [43%]; Total headcount (by gender and geographical zone) [26%]; Recruitments (permanent contract, fi xed term contract) and 

Departures (resignations, retirements, death, lay off, others) [26%]; Number of collective agreement signed [34%]. 

(2) Saft AB Oskarshamn (Sweden) and Saft Bordeaux (France). 


III. CONCLUSION 

Moderate assurance 


Auditor’s report on certain environmental and social indicators 

Based on our work, we did not identify any material anomaly likely to call into question the fact that the data identifi ed by the symbol 

P were prepared, in accordance with the reporting criteria. 

La Défense, 13 February 2012 

Mazars 

Emmanuelle Rigaudias Juliette Decoux 

Sustainable development Partner Partner 


3 Auditor’s 


report on certain environmental and social indicators 


CORPORATE 

GOVERNANCE 

4 

4.1 Management 

and Supervisory Boards 80 

4.1.1 Management Board 80 

4.1.2 Supervisory Board 82 

4.1.3 Management Committee 85 

4.1.4 Corporate governance repository 85 

4.1.5 Disclosures concerning Management and 

Supervisory Board members 85 

4.2 Remuneration and shareholding 

of the Management and 

Supervisory Board members 86 

4.2.1 Remuneration of Management Board members 86 

4.2.2 Remuneration paid to Supervisory Board members 89 

4.2.3 Stock options allocated by the issuer during 2011 

to each member of the Management Board 89 

4.2.4 Stock options exercised during the 2011 fi nancial 

year by Management Board members 89 

4.2.5 Performance shares granted to management 89 

4.2.6 History of stock options granted 90 

4.2.7 Information on employment contracts, pension 

plans and termination compensation for members 

of the Management Board 92 

4.2.8 Shares held by management in the Company’s 

share capital as of 31 December 2011 93 

4.2.9 Transactions in Company shares by management 

and persons in a similar position 93 

4.3 Report of the Chairman 

of the Supervisory Board 94 

4.3.1 Corporate Governance 94 

4.3.2 Risk management and Internal Control procedures 100 

4.4 Statutory Auditors’ Report 

on Saft Groupe SA Chairman’s 

Report 104 

4.5 Main provisions of the 

Supervisory Board bylaws 105 

4.5.1 Preparation and organisation 

of Supervisory Board meetings 105 

4.5.2 Duties and responsibilities 

of Supervisory Board members 107 


4 Management 

CORPORATE GOVERNANCE 

and Supervisory Boards 

4.1 MANAGEMENT AND SUPERVISORY BOARDS 

Saft Groupe SA was incorporated on 7 June 2005 in the 

form of a Société Anonyme (limited company) with Directoire 

(Management Board) and Conseil de Surveillance (Supervisory 

Board). This structure allows for separation between the 

management functions exercised by the Management Board 

and the oversight functions of the Supervisory Board, with no 

member of the latter being on the Management Board. 

The articles of association are supplemented by Supervisory 

Board bylaws. They establish the rules regarding how the 

Supervisory Board should operate, structure its interaction with 

the Management Board as well as how it is to be controlled. 

The functioning and the composition of the Management and 

Supervisory Boards are set out below. 

4.1.1 MANAGEMENT BOARD 

The Management Board is appointed by the Supervisory 

Board which sets the number of its members. The Supervisory 

Board appoints the Chairman of the Management Board who 

represents the Company vis-à-vis third parties. 

The Management Board has the broadest powers to act in all 

circumstances in the Company’s name, for all matters falling 

within the scope of the Company’s corporate purpose, except 

The Management Board had the following members during the 2011 fi nancial year: 

Name Date appointed 

John Searle 

Chairman 


Date of 

renewal 

expressly for those matters which, by law, may only be dealt 

with by the Supervisory Board or by shareholders at the Annual 

General Meetings. Thus, in accordance with the law, the 

Supervisory Board’s prior approval must be obtained for any 

sale of real property, the sale of all or part of equity interests, 

the granting of any sureties, endorsements and guarantees, in 

accordance with current regulations. 

The Management Board must also obtain the prior approval 

of the Supervisory Board before committing the Company to 

any investment or divestment that would change the scope 

of consolidation of the Company and its subsidiaries. The 

Management Board must also obtain the prior approval of the 

Supervisory Board for any investment relating to an acquisition 

or any commitment representing over thirty (30) million euros 

that is outside the scope of the Company’s budget or is not 

a routine operating transaction. Finally, the Management 

Board must obtain the prior approval of the Supervisory 

Board before using any authorisation granted by the Annual 

General Meeting, including the issuance of shares or any other 

securities carrying immediate or deferred rights to conversion 

into Company equity. 

The members of the Management Board must be individuals 

who can be chosen from outside the shareholders. The 

Management Board is appointed for a two-year term. 

Date of end 

of term 

of offi ce Other activities and other main offi ces held 

23 March 2005 5 May 2011 5 May 2013 Chairman and Managing Director of Saft SAS, 

Director of Saft Finance Sàrl, 

Director of Saft America Inc., 

Chairman of Saft Ltd., Chairman of Tadiran Batteries Ltd., 

Chairman and Managing Director of Aérospatiale Batteries (ASB), 

Director of MSB, an ASB subsidiary, 

Chairman of the Revolt Technology GmbH Board of Directors. 

Thomas J. Alcide 22 April 2005 5 May 2011 5 May 2013 General Manager of SBG, 

Chairman and CEO of Saft America Inc., 

Saft Federal Systems Inc., Florida Substrate Inc., 

Saft JV Holding Co., Saft Zhuhai (FTZ) Batteries Co. Ltd. 

Bruno Dathis 5 May 2008 5 May 2011 5 May 2013 Chief Financial Offi cer 

Director of Saft Finance Sàrl, 

Xavier Delacroix 11 January 2007 5 May 2011 5 May 2013 General Manager of IBG, 

Chairman of Saft Ferak AS Supervisory Board, 

Chairman of the Board of Directors of Amco-Saft India Ltd. 

and of Saft AB, 

Director of Saft Baterias SL. 

Elizabeth Ledger 22 April 2005 5 May 2011 5 May 2013 Director of Communications and Investor Relations.

A short presentation of each Management Board member is displayed below: 

JOHN SEARLE 

Chairman 

of the Management Board 

Born in 1954 

British 

Date appointed: 23 March 2005 

Date term of office ends: 5 May 2013 

Number of shares held as of 31 December 2011: 

258,175 

Business address: 

Saft – 12, rue Sadi Carnot – 93170 Bagnolet 

John Searle is Chairman of the Company’s Management 

Board. He has been in charge of Saft Group’s operations 

since 2002. John Searle is also Chairman and Managing 

Director of Saft SAS. He joined the Saft Group in 1990 and 

has held various sales and management posts in the UK and 

then in France. In 1999, John Searle was appointed to head 

the Specialty Battery Group division. Before joining the Saft 

Group, he was Operations Manager at Manchester Steel and 

Sales Manager at Saunders Valve in the UK. John Searle holds 

an engineering degree from Cambridge University. John Searle 

does not perform, nor has he performed over the past fi ve 

years, any duties other than those mentioned above. 

THOMAS J. ALCIDE 

Member 

Born in 1958 

US National 

Date appointed: 22 April 2005 


Number of shares held as of 31 December 2011: 36,420 


Saft America Inc. – 13575 Waterworks Street, Jacksonville, 

FL. 32221 – USA 

Thomas Alcide has been the SBG division’s Director since 

2004. Before that, he was Director of the Group’s lithium 

batteries division from 2002 to 2004 and Director of its Valdese 

plant until 2002. Previously, he held various management 

positions within the Group in the United States. Before joining 

Saft in 1988, Thomas Alcide performed engineering duties 

at Duracell. He holds an engineering degree from California 

Coast University and an electronics technology degree from 

the Arizona Institute of Technology. Thomas Alcide does not 

perform, nor has he performed over the past fi ve years, any 

duties other than those mentioned above. 

4 


Management and Supervisory Boards 

BRUNO DATHIS 

Member 

Born in 1958 

French 

Date appointed: 7 May 2008 


Number of shares held as of 31 December 2011: 426 



Bruno Dathis joined Saft Group in March 2008 as Chief 

Financial Offi cer. He is a graduate of the Institut d’Études 

Politiques de Paris and holds a Masters degree in economics 

from the University of Paris. He is also a Certifi ed Public 

Accountant. A former audit partner with Ernst and Young, in 

1999, Bruno Dathis was appointed Chief Financial Offi cer 

of Balmain and was a member of the Board of Directors. 

He joined Myers Industries Incorporated in 2004 as Chief 

Financial Offi cer for its European Allibert Buckhom division. 

Bruno Dathis does not perform, nor has he performed over the 

past fi ve years, any duties other than those mentioned above. 

XAVIER DELACROIX 

Member 

Born in 1964 

French 

Date appointed: 11 January 2007 





Xavier Delacroix has served as General Manager of IBG since 

January 2007. He joined the Space and Defence division 

of Saft Group in 1992, and became Site Manager of the 

SBG division’s Poitiers plant early in 2006. Xavier Delacroix 

started his career with the French Defence Procurement Agency 

(DGA). He holds an engineering degree from ESTACA and a 

Master’s degree from ENSAM Paris. Xavier Delacroix does not 

perform, nor has he performed over the past fi ve years, any 

duties other than those mentioned above. 


4 Management 




ELIZABETH LEDGER 

Member 

Born in 1961 

British 

Date appointed: 22 April 2005 





4.1.2 SUPERVISORY BOARD 

The Supervisory Board currently has fi ve members. Each 

member of the Supervisory Board must hold a minimum of 

one hundred shares in registered form throughout their term 

of offi ce. 

The members of the Supervisory Board are as follows: 

Name 

Date 

appointed 

Date of 

renewal 

Yann Duchesne 12 May 2005 4 May 2011 AGM approving 

the accounts for 

2012 

Jean-Marc 

Daillance 

12 May 2005 4 May 2011 AGM approving 


2013 

Bruno Angles 12 May 2005 4 May 2011 AGM approving 


2013 

Ghislain Lescuyer 12 May 2005 4 May 2011 AGM approving 


2012 

Charlotte 

Garnier-Peugeot 

4 May 2011 - AGM approving 


2012 

Elizabeth Ledger is Director of Corporate Communications 

and Investor Relations at Saft after having led the Group’s 

Communications Department since 1999 and its internal 

communications since 1998. Elizabeth Ledger previously 

held various posts at the Department of Health and Social 

Security in the United Kingdom from 1983 to 1991. From 

1991 to 1998, she was a business communications consultant 

at RSCG Consulting. She is Chairman of the Recharge 

Association, which represents the world’s rechargeable battery 

manufacturers. A foreign alumnus of France’s École Nationale 

d’Administration, she also holds a Bachelor’s degree in 

languages from the University of Leeds and a Master’s in 

marketing from the University of Manchester. Elizabeth Ledger 

does not perform, nor has she performed over the past fi ve 

years, any duties other than those mentioned above. 

Supervisory Board members are bound by the “Bylaws of 

the Supervisory Board”, the main provisions of which are 

presented in section 4.5 “Main provisions of the Supervisory 

Board bylaws” of this Annual Report. 

The Supervisory Board appoints a Chairman and a Vice- 

Chairman from among its members. 

Date of end of 

term of offi ce Offi ce held Other positions and main offi ces held in 2011* 

Chairman 

of the 

Supervisory 

Board 

Vice - 

Chairman 

of the 

Supervisory 

Board 

Member 

of the 

Supervisory 

Board 

Member 

of the 

Supervisory 

Board 

Member 

of the 

Supervisory 

Board 

Senior Principal of Doughty Hanson & Co. (UK), 

Director of IPSOS (France), Balta Industries group 

(Belgium), Director of Tumi Inc. (USA), 

Member of the Supervisory Board of Laurent Perrier 

(France) and of HDF Finance (France), 

Chairman of the Supervisory Board of KP1 

(France). 

Director of the Harvard Business School de France, 

Director and Secretary General of the École 

Polytechnique’s alumni association. 

Chairman France, Macquarie Infrastructure and 

Real Assets (Europe) Limited, 

Director of APRR (Autoroutes Paris-Rhin-Rhône), 

AREA, SAS Eiffarie, SAS Financière Eiffarie, 

(France). 

Director of Brussels Airport Company (Belgium). 

Chairman of the Board of Directors for Arlanda 

Express (Sweden), 

Member of the Supervisory Board of Assystem 

(France). 

Director of Strategy and Development for the 

Alstom group (France). 

Director of Marketing and Corporate 

Communications for the Edmond de Rothschild 

group (France), 

Managing Director of Edmond Rothschild 

Communication. 

(*) None of the above mandates are within any of the Saft Group entities. IPSOS, Laurent Perrier, APRR, AREVA, Assystem and Alstom are listed on Euronext.

You will fi nd hereafter a short resume of each Supervisory Board member. 

YANN DUCHESNE 

Chairman 

of the Supervisory Board 

Born in 1956 

French 


Date term of office ends: Annual General Meeting 

approving the fi nancial statements for the fi nancial year ending 

31/12/2012 



Doughty Hanson & Co. – 45 Pall Mall, London, SW1Y 5JG, 

UK 

Yann Duchesne has been Chairman of the Company’s 

Supervisory Board since 12 May 2005. He is also Chairman 

of the Remuneration and Appointments Committee. He has 

served as Senior Principal of Doughty Hanson in London 

since January 2003. Previously, he held several positions at 

McKinsey & Company over a period of twenty years and 

headed the consulting fi rm’s Corporate Finance and Private 

Equity Department in France for many years. In 1997, he 

became the General Manager of the Paris offi ce of McKinsey 

& Company. Author of a book on economic policy (France 

SA), he has been awarded the French Legion of Honour. Yann 

Duchesne is a graduate of France’s École Polytechnique, the 

École des Mines de Paris and the IEP de Paris. He is a member 

of the Supervisory Boards of Laurent Perrier and HDF France. 

He is also Chairman of KP1’s Supervisory Board and a Board 

member at IPSOS, Balta Industries and Tumi Inc. 

JEAN-MARC DAILLANCE 

Vice-Chairman 


Born in 1957 

French 




31/12/2013 



54, avenue Sainte-Foy – 92200 Neuilly-sur-Seine, France 

Jean-Marc Daillance has been on the Company’s Supervisory 

Board since 12 May 2005 and has served as Vice-Chairman 

of the Supervisory Board and Chairman of the Audit Committee 

since 14 May 2007. After holding a number of positions 

within the Zodiac group since 1984, he was appointed 

General Manager of Zodiac’s Marine Division and sat on its 

Management Committee from 2002 to August 2007, then 

serving as Chairman of the Management Board at Zodiac 

Marine Holding until January 2008. He is a Senior Advisor 

at Roland Berger Strategy Consultants. Over the past number 

4 



of years, Jean-Marc Daillance has also held the following 

offi ces: Chairman of Zodiac European Pools (France), Zodiac 

International SASU (France), Zodiac Pool Care Europe SASU 

(France), P.S.A. (France), Evac International O.y, Chairman 

of Zodiac group Australia Pty Ltd., Zodiac Pool Care Inc., 

Manager of Debes & Wunder GmbH, Zodiac Kern GmbH, 

General Manager of Marine Holding US Corp. Previously, he 

worked as an engineer at SAT (Paris) and at IBM Corporation 

in Raleigh (USA). Jean-Marc Daillance is a graduate of 

France’s École Polytechnique and holds a Master of Business 

Administration from the Harvard Business School. He served 

as Vice-Chairman of the Harvard Business School Alumni 

Association (Boston) and is a Director of Harvard Business 

School de France and Director and Secretary General of the 

École Polytechnique alumni association. 

BRUNO ANGLES 

Member of the Supervisory 

Board 

Born in 1964 

French 




31/12/2013 



Macquarie Infrastructure and Real Assets (Europe) Ltd., 

41, avenue George V – 75008 Paris, France 

Bruno Angles has been a member of SAFT’s Supervisory Board 

since 12 May 2005. He is Chairman France of Macquarie 

Infrastructure and Real Assets (Europe) Limited. In this capacity, 

he is Director of Autoroutes Paris-Rhin-Rhône, AREA, SAS 

Eiffarie, SAS Financière Eiffarie and of Aéroport de Bruxelles. 

He is also Chairman of the Board of Directors of Arlanda 

Express and member of the Supervisory Board of Assystem. 

Bruno Angles was formerly Senior Partner of Mercer Delta 

(2006-2007) after having been General Manager of Vinci 

Energies (2004-2005). 

Before that, he held several positions at McKinsey & Company 

from 1996 to 2004 and became a principal in 2000. He 

also served as General Manager of the Mont Blanc Tunnel 

Company (SMTB) (1994-1996), Technical Advisor to the 

offi ce of Bernard Bosson (1993-1994), and Head of the 

Major Infrastructure Projects Department at the Direction 

départementale de l’équipement (DDE) in Ille-et-Vilaine (1990- 

1993). 

Bruno Angles, a structural engineer, is a graduate of École 

Polytechnique and of the Collège des Ingénieurs. He was 

the Chairman of the Association des Ingénieurs des Ponts et 

Chaussées (2003-2005) and was Chairman of the Fondation 

de l’Ecole Nationale des Ponts et Chaussées (2006-2011). 

Bruno Angles is a Knight of the National Order of Merit (France) 

and a Knight of the National Order of the Legion of Honour. 


4 Management 




GHISLAIN LESCUYER 


Board 

Born in 1957 

French 




31/12/2012 



ALSTOM, 3, Avenue André Malraux 92300 Levallois-Perret, 

France. 

Ghislain Lescuyer has been a member of the Company’s 

Supervisory Board since 12 May 2005. He is also Chairman 

of the Strategy and Technology Committee. He has also been 

Senior Vice President of Corporate Strategy and Development at 

the Alstom group since July 2010. Previously, Ghislain Lescuyer 

held a number of positions within the AREVA group including, 

from 2007, the position of Executive Vice-President of Areva- 

TD. Deputy Managing Director of Thomson from 2003 to 

2007, he held a number of positions including at Europ@web 

where he was General Manager from 2000 to 2003. He 

joined Bull in 1994 and was appointed Co-Chairman of Bull 

in Services in 1999. He has also spent time as a Management 

Consultant at McKinsey & Company (1989-1993) and Sales 

Manager at Hewlett-Packard (1983-1987). Ghislain Lescuyer 

has a civil engineering degree in telecommunications and 

holds a Master of Business Administration. 

The Supervisory Board makes sure it has independent members 

in accordance with the rules of good corporate governance 

and the recommendations of the April 2010 Afep-Medef Code 

of Corporate Governance for Listed Companies, namely that 

they meet the following conditions: 

� they are not an employee or corporate offi cer of the 

Company or its parent company or of a company falling 

within its scope of consolidation either at the present time 

and have not held such a position within the past fi ve years; 

� they are not a corporate offi cer of a company in which 

the Company directly or indirectly holds a directorship or 

in which any employee designated as such or corporate 

offi cer of the Company (either at the present time or within 

the past fi ve years) holds a directorship; 

� they are not a major customer, supplier, investment banker 

or commercial banker of the company or of one of its 

consolidated subsidiaries; 

� they do not have a close family tie with a corporate offi cer; 

CHARLOTTE 

GARNIER-PEUGEOT 


Board 

Born in 1960 

French 

Date appointed: 4 May 2011 



31/12/2012 



Groupe Edmond de Rothschild, 47, rue du Faubourg Saint- 

Honoré - 75008 Paris, France 

Charlotte Garnier-Peugeot has been Director of Marketing 

and Communications at the Edmond de Rothschild group 

since 2007, encompassing both its banking and non-banking 

businesses. She is also Managing Director of Rothschild 

Communication and, since 2002, Director of Marketing and 

Corporate Communications at Compagnie Financière Edmond 

de Rothschild, a French subsidiary of the Edmond de Rothschild 

group. 

Before that, from 1999 to 2002, she held the position of 

deputy Director of Communications at CCF (which became 

HSBC France in 2000). From 1994 to 1999, she worked 

as a manager at the Fortiter Expansion fi rm, which she also 

helped found. She previously worked for the Sun Expansion 

communications agency from 1991 to 1994, was a freelance 

writer from 1987 to 1991 and spent two years in the External 

Communications Department of IBM-France. 

Charlotte Garnier-Peugeot is a graduate of Celsa where, in 

parallel with her day job, she also worked as a part-time 

lecturer in institutional communications from 1997 to 2000. 

� they have not been a Company auditor during the previous 

fi ve years; 

� they have not been directors of the Company for more than 

twelve years; and 

� they do not have legal ties with a shareholder who directly 

or indirectly holds over 10% of the share capital or voting 

rights of the Company. 

Based on these criteria, four Supervisory Board members out of 

fi ve are considered independent: Charlotte Garnier-Peugeot, 

Bruno Angles, Jean-Marc Daillance and Ghislain Lescuyer. 

The Supervisory Board is assisted by three permanent 

committees, the remit and mode of operation of which are set 

out in the Supervisory Board’s bylaws: 

� an Audit Committee; 

� a Remuneration and Appointments Committee; 

� and, since 5 May 2011, a Strategy and Technology 

Committee.

The members of the Committees are: 

Audit Committee 

Jean-Marc Daillance, Chairman 

Bruno Angles 

Yann Duchesne 

Remuneration and Appointments Committee 

Yann Duchesne, Chairman 

Bruno Angles 

Charlotte Garnier-Peugeot 

Strategy and Technology Committee 

Ghislain Lescuyer, Chairman 

Jean-Marc Daillance 

Yann Duchesne 

The number of meetings held in 2011 by the Supervisory 

Board and its Committees was as follows: 

� Supervisory Board: 11 meetings (compared to 6 in 2010); 

� Audit Committee: 5 meetings (compared to 6 in 2010); 

� Remuneration and Appointments Committee: 8 meetings 

(compared to 5 in 2010); 

� Strategy and Technology Committee: one meeting (none in 

2010, since it was created in 2011). 

The organisation of the work of the Supervisory Board and 

of its Committees as well as that of the Company’s Internal 

Control is described in the Supervisory Board Chairman’s 

report in section 4.3 of this Annual Report. 

4.1.3 MANAGEMENT COMMITTEE 

A Saft Management Committee also exists within the Group, 

which serves as a forum for discussing and implementing the 

Group’s strategy. In addition to the members of the Management 

Board, the Management Committee is comprised of Igal 

Carmi, General Manager of Tadiran Batteries Ltd., François 

Bouchon, Director of the energy storage business, Franck 

Cecchi, Director of the automotive business, Frédéric Thielen, 

Group Purchasing Director, and Kamen Nechev, Group 

Technology Director. 

The Management Committee meets once a month. 

4 



4.1.4 CORPORATE GOVERNANCE 

REPOSITORY 

The Company complies with the April 2010 Afep-Medef 

Code of Corporate Governance for Listed Companies, with 

the exception of the items listed in the Supervisory Board 

Chairman’s report included in section 4.3 of this Annual Report. 

The full text of this Code may be consulted on Medef’s website 

(www.medef.fr). 

4.1.5 DISCLOSURES CONCERNING 

MANAGEMENT AND SUPERVISORY 

BOARD MEMBERS 

The Company’s corporate offi cers have no family ties with any 

other corporate offi cers and have not been found guilty of fraud 

for at least the past fi ve years. 

No charges have been made and/or no offi cial public 

sanction has been ordered against them by statutory or 

regulatory authorities including trade associations, and they 

have not been prevented by a court from acting as members 

of the Board of Directors, Management Board or Supervisory 

Board of an issuer or from being involved in the management 

or conduct the business dealings of an issuer for at least the 

past fi ve years. They do not have any potential confl ict of 

interest with Saft Groupe SA. 

No arrangement or agreement has been entered into with the 

core shareholders, customers, suppliers or others under which 

these persons have been selected to be corporate offi cers. 

These persons have not agreed to any restriction concerning 

the sale within a certain time span of their equity interests in 

Saft Groupe SA, except for 1) rules relating to the prevention 

of insider trading 2) statutory obligations requiring Supervisory 

Board members to hold at least 100 Company shares for the 

length of their term in offi ce and 3) obligations which could 

apply to the members of the Management Board with regard 

to the retention of shares. The corporate offi cers have not been 

associated with any bankruptcy, receivership or liquidation 

whatsoever for at least the past fi ve years. 

There are no service agreements between members of the 

issuer’s Management or Supervisory Boards and the Company 

or any of its subsidiaries. 

On the date on which this Annual Report was fi led, the 

Company was not aware of any potential or actual confl ict 

of interest between the Management Board and Supervisory 

Board members’ duties with regard to the Company and their 

private interests and/or other duties. 


4 Remuneration 


and shareholding of the Management and Supervisory Board members 

4.2 REMUNERATION AND SHAREHOLDING 

OF THE MANAGEMENT AND SUPERVISORY 

BOARD MEMBERS 

The principles and rules for determining the remuneration and 

benefi ts in kind granted to the corporate offi cers, along with 

terms and conditions governing the granting and exercise 

4.2.1 REMUNERATION OF MANAGEMENT BOARD MEMBERS 


of stock options, are described in the Supervisory Board 

Chairman’s report included in section 4.3 of this Annual Report. 

The members of the Management Board of Saft Groupe SA received the following gross remuneration, stock options and other 

benefi ts of all kinds whether paid by the Company, by companies controlled (within the meaning of article L. 233-16 of the French 

Commercial Code) by Saft Groupe SA or by companies controlling (within the meaning of the same article) Saft Groupe SA: 

TABLE AND SUMMARY OF REMUNERATION AND STOCK OPTIONS 

GRANTED TO EACH MEMBER OF THE MANAGEMENT BOARD 

2009 Financial Year 2010 Financial Year 2011 Financial Year 

John Searle – Chairman of the Management Board 

Remuneration for the period €619,851 €735,354 €740,511 

Value of stock options granted during the period €87,680 €124,000 €0 

Value of performance shares granted during the period n.a. n.a. n.a. 

TOTAL 

Thomas Alcide – Member of the Management Board 

€707,531 €859,354 €740,511 

(1) 




TOTAL 

Bruno Dathis – Member of the Management Board 

€291,456 €356,253 €272,184 




TOTAL 

Xavier Delacroix – Member of the Management Board 

€323,013 € 391,842 €320,725 




TOTAL 

Elizabeth Ledger – Member of the Management Board 

€299,496 €359,865 €290,748 




TOTAL €206,876 € 243,256 €181,525 

(1) The remuneration of Thomas Alcide, which is expressed in euros above, is in fact calculated and paid in dollars.


Remuneration and shareholding of the Management and Supervisory Board members 

The table below shows the breakdown by type of the “Remuneration for the period” row in the above table, along with the amounts 

actually paid during the fi nancial year in question. 

SUMMARY TABLE OF REMUNERATION OF EACH MEMBER OF THE MANAGEMENT BOARD 

John Searle – 

Chairman of the Management Board 


Amounts 

due 

Amounts 

paid 

Amounts 

due 

Amounts 

paid 

Amounts 

due 

Amounts 

paid 

Fixed remuneration €514,033 €514,033 €514,672 €514,672 €531,368 €531,368 

Variable remuneration €98,402 €133,690 €213,187 €128,502 €201,411 €203,187 

As a % of fi xed remuneration (1) 19% - 41% - 57% - 

Maximum % authorised (1) 60% - 60% - 65% - 

Exceptional remuneration None None None None None None 

Attendance fees None None None None None None 

Benefi ts in kind: 

■ Company car €7,416 €7,416 €7,495 €7,495 €7,732 €7,732 

TOTAL €619,851 €655,139 €735,354 €650,669 €740,511 €742,287 

Thomas Alcide – 

Member of the Management Board (1) 


Amounts 

due 

Amounts 

paid 

Amounts 

due 

Amounts 

paid 

Amounts 

due 

Amounts 

paid 








■ Company car €1,396 €1,396 €1,763 €1,763 €2,977 €2,977 

TOTAL €220,216 €222,889 €263,253 €229,772 €272,184 €267,746 

Bruno Dathis – 

Member of the Management Board 


Amounts 

due 

Amounts 

paid 

Amounts 

due 

Amounts 

paid 

Amounts 

due 

Amounts 

paid 








■ Company car €1,102 €1,102 €1,102 €1,102 €1,102 €1,102 

TOTAL €251,773 €247,830 €298,842 €259,197 €320,725 €317,327 

(1) Variable pay measured as a percentage of its calculation basis, a fraction of fi xed remuneration. 

(2) The remuneration and benefi ts in kind allocated to Thomas Alcide, which are expressed in euros, are calculated and paid in dollars. 





Xavier Delacroix – 




Amounts 

due 

Amounts 

paid 

Amounts 

due 

Amounts 

paid 

Amounts 

due 

Amounts 

paid 








■ Company car €4,925 €4,925 €4,925 €4,925 €4,925 €4,925 

■ Housing allowance €4,400 €4,400 None None None None 

TOTAL €228,256 €228,314 €266,865 €231,522 €290,748 €286,521 

Elizabeth Ledger – 



Amounts 

due 

Amounts 

paid 

Amounts 

due 

Amounts 

paid 

Amounts 

due 

Amounts 

paid 




Maximum % authorised (1) 37,5% - 37,5% - 37,5% - 




■ Company car €3,767 €3,767 €3,767 €3,767 €4,066 €4,066 

TOTAL €157,556 €160,464 €181,256 €160,598 €181,525 €185,853 

(1) Variable pay measured as a percentage of its calculation basis, a fraction of fi xed remuneration.



4.2.2 REMUNERATION PAID TO SUPERVISORY BOARD MEMBERS 

At the Combined Ordinary and Extraordinary General Meeting held on 4 May 2011, the maximum annual amount of attendance 

fees to be shared amongst members of the Supervisory Board for the 2011 fi nancial year was set at €200,000. The total amount 

of attendance fees paid to members of the Supervisory Board for the 2011 fi nancial year amounted to €151,237. 

The attendance fees paid to members of the Supervisory Board during the last three years were as follows: 

TABLE OF ATTENDANCE FEES AND OTHER REMUNERATION RECEIVED BY THE MEMBERS OF THE SUPERVISORY BOARD, 

NON-EXECUTIVE CORPORATE OFFICERS 

Non-executive corporate offi cers Amounts paid in 2009 Amounts paid in 2010 Amounts paid in 2011 

Yann Duchesne 

Attendance fees €48,693.00 €48,693.00 €48,693.00 

Other remuneration 

Jean-Marc Daillance 

None None None 



Bruno Angles 




Ghislain Lescuyer 




Charlotte Garnier-Peugeot 


Attendance fees €0.00 €0.00 €5,158.34 

Other remuneration None None None 

TOTAL €146,079.00 €146,079.00 €151,237.34 

Only Supervisory Board members are eligible for attendance fees. 

4.2.3 STOCK OPTIONS ALLOCATED BY THE ISSUER DURING 2011 TO EACH MEMBER 

OF THE MANAGEMENT BOARD 

No stock options were awarded to corporate offi cers during the 2011 fi nancial year. 

4.2.4 STOCK OPTIONS EXERCISED DURING THE 2011 FINANCIAL YEAR BY MANAGEMENT 

BOARD MEMBERS 

No stock options were exercised by members of the Management Board during the 2011 fi nancial year. 

4.2.5 PERFORMANCE SHARES GRANTED TO MANAGEMENT 

To date the Group has never set up any performance share plan. 





4.2.6 HISTORY OF STOCK OPTIONS GRANTED 

The History of stock option plans put in place by the Group is as follows: 

HISTORY OF STOCK OPTIONS GRANTED 

Plan and date of 

Shareholders’ Meeting 

Date of Management Board 


Plan No. 1 Plan No. 1bis Plan No. 2 Plan No. 3 Plan No. 3bis Plan No. 4 Plan No. 5 

29 June 

2005 

29 June 

2005 

29 June 

2005 

22 June 

2006 

28 September 27 November 

2005 2006 

17 December 

2007 

22 January 

2008 

17 December 

2007 

5 November 

2008 

12 June 

2008 

23 March 

2009 

9 June 

2010 

2 September 

2010 

Total number of shares 

available for subscription: 421,900 34,500 400,000 390,000 10,000 400,000 400,000 

■ of which available for 

subscription by corporate 

offi cers: 

John E. Searle 15,000 - 20,000 15,000 - 16,000 20,000 

Elizabeth Ledger 8,000 - 8,000 8,000 - 9,000 10,000 

Thomas J. Alcide 12,500 - 12,500 12,500 - 13,000 15,000 

Xavier Delacroix 6,000 - 10,000 12,500 - 13,000 15,000 

Bruno Dathis - - - - 10,000 13,000 15,000 

Earliest date for exercise 

of the options 

Date of expiry 

30 June 

2009 

29 June 

2015 


2009 2010 


2015 2016 

23 January 

2012 

22 January 

2018 

6 November 

2012 

5 November 

2018 

24 March 

2013 

23 March 

2016 

2 September 

2014 

1 September 

2017 

Initial subscription price €26.00 €30.50 €26.00 €27.00 €26.00 €19.80 €25.34 

Adjusted subscription price €23.33 €27.36 €23.33 €24.22 €23.33 €17.76 €25.34 

Details of exercise - - - - - - - 

Number of shares subscribed 

as of 31 December 2011: 2,658 860 45,458 - - - - 

■ by Management Board 

members - - - - - - - 

■ by employees other than 

corporate offi cers 2,658 860 45,458 - - - - 

Total number of plan stock 

options cancelled or expired: 100,844 6,600 46,721 37,701 - 22,743 6,500 

■ of which options granted 

to Management Board 

members 32,500 - 12,500 - - - - 

■ of which options granted 

to employees other than 

corporate offi cers 

Adjusted number of stock 

options outstanding at the end 

68,344 6,600 34,221 37,701 - 22,743 6,500 

of the year and available for 

exercise: 88,675 27,873 330,368 395,801 11,145 423,134 393,500 

■ of which held by corporate 

offi cers 18,429 - 56,281 53,511 11,145 71,354 75,000 

■ of which held by 

employees other than 

corporate offi cers 70,246 27,873 274,087 342,290 - 351,780 318,500 

Current members of the Management Board who have received stock options may not hedge the risks to which the stock options 

they have been awarded are exposed.

No stock options were awarded to employees in 2011. 

Stock options exercised by the ten employees (who were 

not corporate offi cers) with the largest numbers of options 



STOCK OPTIONS GRANTED TO THE TEN EMPLOYEES (OTHER THAN CORPORATE OFFICERS) IN RECEIPT OF THE LARGEST 

NUMBER AND OPTIONS EXERCISED BY THEM 

Plans No. 1 

and 1 bis 

Stock options granted 

during the year, by 

the issuer, to the ten 

employees in receipt 

of the largest number 

purchased or subscribed during the year 2011 are disclosed 

in the following table. 

Stock options 

exercised during 

the year by the ten 

employees having 

subscribed to the 

largest number 

Stock options granted 

to the ten employees 

(other than corporate 

offi cers) in receipt of 

the largest number, 

and cancelled 

or expired as of 

31 December 2011 

Adjusted number 

of stock options 

outstanding at the 

end of the year 

and available for 

subscription by the ten 

employees other than 

corporate offi cers in 

receipt of the largest 

number 

Number 

of stock options 70,000 - - 8,919 

Adjusted 

weighted 

average price €23.33 - - €23.33 

Plan No. 2 Number 

of stock options 63,500 5,573 - 56,284 

Adjusted 

weighted 

average price €23.33 €23.33 - €23.33 



Adjusted 

weighted 

average price €24.22 - - €24.22 

Plan No. 3 bis Number 

of stock options - - - - 

Adjusted 

weighted 

average price - - - - 



Adjusted 

weighted 

average price €17.76 - - €17.76 



Adjusted 

weighted 

average price €25.34 - - €25.34 





4.2.7 INFORMATION ON EMPLOYMENT CONTRACTS, PENSION PLANS AND 

TERMINATION COMPENSATION FOR MEMBERS OF THE MANAGEMENT BOARD 

The status of each Management Board member with regard to employment contract, pension plans and termination compensation 

or other benefi ts is as follows: 

Name of the Management Board 

member 


Contract of 

employment 

Supplementary 

pension plan 

Compensation 

or other benefi ts 

payable (or liable 

to be payable) 

in the event 

of termination or 

change of function 

Compensation as 

consideration for a 

non-compete clause 

John Searle Yes Yes (defi ned 

Yes Yes 

Chairman of the Management Board 

Appointment date: 05/05/2011 

Date offi ce ends: 05/05/2013 

contribution plan) 

Thomas J. Alcide 




Yes No No No 

Bruno Dathis Yes Yes (defi ned 

No No 





Xavier Delacroix Yes Yes (defi ned 

No No 





Elizabeth Ledger Yes Yes (defi ned 

No No 





Pension plan for members of the Management Board 

The Chairman and three members of the Management Board 

(Elizabeth Ledger, Bruno Dathis and Xavier Delacroix) benefi t 

from the same defi ned contribution supplementary pension 

plan as all Group executives in France, in the form of a multiemployer 

pension plan (“PERI“), the fi nancing of which is borne 

by the Group. The amounts accrued or set aside under this 

plan on behalf of these four Management Board members 

amounted to €58,734 in 2011. This overall sum breaks down 

as follows: 


John Searle €21,820 €22,018 €22,484 

Bruno Dathis €11,289 €11,993 €16,144 

Xavier Delacroix €9,765 €9,968 €13,864 

Elizabeth Ledger €4,466 €4,401 €6,242 

TOTAL €47,340 €48,380 €58,734



4.2.8 SHARES HELD BY MANAGEMENT IN THE COMPANY’S SHARE CAPITAL AS OF 

31 DECEMBER 2011 

SUPERVISORY BOARD MEMBERS 

Number of shares % of share capital % of voting rights 

Yann Duchesne 140 n.m. n.m. 

Jean-Marc Daillance 133 n.m. n.m. 

Bruno Angles 138 n.m. n.m. 

Ghislain Lescuyer 135 n.m. n.m. 

Charlotte Garnier-Peugeot 140 n.m. n.m. 

n.m.: not material. 

MANAGEMENT BOARD MEMBERS 

Number of shares % of share capital % of voting rights 

John Searle 258,175 1.03% 1.03% 

Thomas J. Alcide 36,420 0.14% 0.14% 

Bruno Dathis 426 n.m. n.m. 

Xavier Delacroix 27,770 0.11% 0.11% 

Elizabeth Ledger 55,549 0.22% 0.22% 

n.m.: not material. 

4.2.9 TRANSACTIONS IN COMPANY SHARES BY MANAGEMENT AND PERSONS 

IN A SIMILAR POSITION 

The transactions subject to mandatory reporting pursuant to articles 223–22-A et seq. of the General Regulation of the Autorité des 

Marchés Financiers (AMF) and carried out in 2011 were as follows: 

Corporate offi cers 

Share purchases* Share sales 

Date 

Number 

of shares Date 

Number 

of shares 

Charlotte Garnier-Peugeot 1 July 2011 140 - - 

Elizabeth Ledger - - 25 February 2011 6,000 

* Excluding the exercise of stock options to subscribe for new shares and excluding exercise of the option for payment of a stock dividend. 

These transactions were reported to the Autorité des Marchés Financiers (AMF) and are detailed on the Group’s website 

(http://www.saftbatteries.com) under “Investor Centre/AMF regulated information”. 


4 Report 


of the Chairman of the Supervisory Board 

4.3 REPORT OF THE CHAIRMAN OF THE SUPERVISORY 

BOARD 

This report has been prepared in accordance with article 

L. 621-18-3 of the French Monetary and Financial Code 

(Code monétaire et fi nancier) and article L. 225-68 (7) of the 

French Commercial Code (Code de commerce). 

It was approved by the members of the Supervisory Board at 

its meeting on 25 January 2012. 

It provides information on: 

� the preparation and organisation of the work of the 

Supervisory Board and its Committees during the fi nancial 

year ended 31 December 2011; 

� the changes in the Group’s Internal Control and risk 

management procedures; and 

� the principles and rules set by the Supervisory Board to 

determine the remuneration and benefi ts in kind of any 

nature granted to corporate offi cers. 

This report has been provided by the Chairman of the 

Supervisory Board on the basis of the following information: 

� the Board’s bylaws as well as the work done by its Board 

Committees in 2011; 

� the progress report and summaries of the reports of the 

Group’s internal audit team; 

� the discussions held with certain members of the Group’s 

management, and in particular those in charge of the 

Finance Department, the Legal Department and the Internal 

Control and Audit Department; 

� review of the summary of the work of the Statutory Auditors 

notably in relation to the examination of the fi nancial and 

accounting internal control. 

This report was reviewed by the Audit Committee at its meeting 

on 25 January 2012. 

The Company uses the April 2010 Afep-Medef Corporate 

Governance Code for Listed Companies as its basis. The 

text of this code may be consulted on the Medef website 

(www.medef.fr). 

4.3.1 CORPORATE GOVERNANCE 

a) Composition and conditions for 

preparation and organisation of the work 


Members of the Supervisory Board 

The membership of the Supervisory Board changed during 

the 2011 fi nancial year with the appointment at the Annual 

General Meeting on 4 May 2011 of Charlotte Garnier- 

Peugeot as a new member of the Supervisory Board. It now 

has fi ve members: 

� Yann Duchesne, Chairman; 


� Jean-Marc Daillance, Vice-Chairman; 

� Charlotte Garnier-Peugeot, Bruno Angles and Ghislain 

Lescuyer, ordinary members. 

The criteria applied by the Supervisory Board to assess the 

independence of its members are those provided for in the 

Afep-Medef Code of Corporate Governance. These criteria 

are listed in section 4.1 “Management and Supervisory 

Boards” of this Annual Report. 

Under these criteria, Charlotte Garnier-Peugeot, Jean- 

Marc Daillance, Bruno Angles and Ghislain Lescuyer are 

independent. 

Supervisory Board bylaws 

Supervisory Board bylaws were introduced in 2005. Amended 

in 2006, and again in 2010, the bylaws were once again 

updated in 2011, following, fi rstly the establishment of the 

Strategy and Technology Committee and, secondly, the 

changing of the procedure for renewing terms of offi ce on 

the Supervisory Board. The Supervisory Board’s bylaws are 

available on the Group’s website (www.saftbatteries.com) 

in the section Investor Centre/AMF regulated information/ 

Reports on Internal Control and Corporate Governance. The 

main provisions of the bylaws are set out in section 4.5 of this 


Role and responsibilities of the Supervisory Board 

Within the scope of its role defi ned in the Supervisory Board 

bylaws, the Supervisory Board oversees the work of the 

Management Board on an ongoing basis. In this role, it may 

perform the checks and controls that it deems appropriate at any 

time of the year, and may request that the Management Board 

provide any documents that it considers useful for carrying out its 

duties. The Management Board presents the Supervisory Board 

with a report on the Company’s management at least once 

a quarter. In addition, the Company’s articles of association 

and the bylaws of the Supervisory Board stipulate that certain 

decisions taken by the Management Board are subject to the 

prior approval of a majority vote of the Supervisory Board. In 

the event of a split decision, the Chairman of the Supervisory 

Board has a casting vote. 

Method of functioning of the Supervisory Board 

The Board meets at least once per quarter and, prior to 

meetings, is sent all the documentation and information 

required to carry out its duties, as defi ned in its bylaws. During 

the 2011 fi nancial year, the Supervisory Board met eleven 

times (compared to 6 times during the 2010 fi nancial year), 

on the following dates: 21 January, 11 February, 22 March, 

26 April, 5 May, 17 May, 27 June, 22 July, 30 August, 

23 September and 25 October 2011. 

The average rate of attendance of members of the Supervisory 

Board at meetings was 96% in 2011 (compared to 100% in 

2010).

During the 2011 fi nancial year, the Supervisory Board 

reviewed inter alia the following points: 

Closing of the fi nancial statements: 

� the Supervisory Board reviewed the Consolidated and 

Corporate Financial Statements for the 2010 fi nancial year 

as well as the 2010 annual report, the half-year fi nancial 

statements on 30 June 2011 and the related fi nancial 

report; 

� it approved the reports and resolutions submitted to the 

Combined Ordinary and Extraordinary General Meeting 

held on 4 May 2011; 

� it approved the Statutory Auditors’ fees for the 2010 

fi nancial year. 

Business reviews: 

� following an analysis by the Audit Committee, the 

Supervisory Board reviewed the budget forecasts for 2011 

and the 2011-2013 Strategic Plan; 

� it reviewed the negotiations entered into with Johnson 

Control Inc. regarding the future of the Johnson Control- 

Saft joint venture, and the subsequent disposal by Saft of 

its interest in that joint venture. It approved the related press 

releases; 

� it reviewed the Management Board’s quarterly business 

reports; 

� it presented its annual report for 2010 to the French 

Government Commissioner, in accordance with the 

agreement of 4 May 2005, signed by Saft and the French 

Government (see section 8.4.5 of this Annual Report); 

� it authorised the signing of related-party agreements, as 

detailed in the Statutory Auditors’ special report; 

� it authorised various sureties, endorsements and guarantees 

issued. 

Financial communication: 

� the Supervisory Board reviewed all the press releases with 

regard to revenue and the Group’s annual and half-year 

results. It also examined the documents presenting these 

results to fi nancial analysts and investors. 

Remuneration: 

� the Supervisory Board proceeded to set and allocate 

attendance fees among its members; 

� it set the objectives and calculation methods used to 

determine the remuneration of Management Board members 

and Saft Management Committee members. 

Internal audit: 

The Supervisory Board reviewed the work and assignments of 

the Group’s Internal Control and Audit Department in 2010, 

and approved the internal audit action plan for the 2011 


Corporate governance: 

� the Supervisory Board approved the Chairman’s report 

on the preparation and organisation of the Board’s work 

during the 2010 fi nancial year, Internal Control and risk 

management procedures and the principles and rules for 

setting the remuneration of corporate offi cers; 

4 


Report of the Chairman of the Supervisory Board 

� it carried out an annual review of its operations. The 

conclusions of this review are presented below in the section 

“Assessment and functioning of the Supervisory Board”; 

� it approved the proposal to expand the Supervisory Board 

and asked the Combined Ordinary and Extraordinary 

General Meeting on 4 May 2011 to appoint a new 

member; 

� it approved the proposal to reorganise the Supervisory 

Board and its Committees, following the appointment of a 

new member; 

� it examined and approved the aforementioned amendments 

to the Supervisory Board bylaws; 

� lastly, it reviewed the work of its Board Committees, as 

presented below. 

Board Committees 

The Supervisory Board now has three permanent Board 

Committees, which are tasked with improving the way it 

operates and facilitating decision-making through a prior 

review of specifi c matters. These are: 

� the Audit Committee; 

� the Remuneration and Appointments Committee; 

� and, since 5 May 2011, the Strategy and Technology 

Committee. 

The roles and methods of functioning of these committees are 

as follows. 

Audit Committee 

The Group’s Audit Committee is composed of three Supervisory 

Board members, two of whom are independent members 

who are appointed on an individual basis and may not be 

represented at meetings by another person. The members of the 

Audit Committee are Jean-Marc Daillance, Chairman, Bruno 

Angles and Yann Duchesne. As a result of their current and/ 

or past professional responsibilities described in section 4.1 

of this Annual Report, entitled “Management and Supervisory 

Boards”, the three Audit Committee members are, individually 

or collectively, competent as regards accounting, audit and 

fi nancial matters, notably with regard to the Group’s activities. 

In accordance with legal and regulatory provisions, the Audit 

Committee is responsible for monitoring: 

� the process of preparation of fi nancial information; 

� the effectiveness of internal control and risk management 

systems; 

� the statutory audit of the annual fi nancial statements and the 

Consolidated Financial Statements by the Statutory Auditors; 

� the independence of the Statutory Auditors. 

The Audit Committee regularly reports to the Supervisory Board 

regarding the work they have carried out. 

The role of the Audit Committee is described in more detail 

in the Supervisory Board bylaws. In particular, it takes into 

account the conclusions of the report dated July 2010 

produced by the working group established by the AMF on 

the Audit Committee. 


4 Report 



The Audit Committee met fi ve times over the past fi nancial 

year (compared to six times in 2010) on the following dates: 

21 January, 11 February, 26 April, 22 July and 24 October 

2011. 

The attendance rate of members of the Audit Committee at 

meetings was 100% in 2011 (it was also 100% in 2010). 

During its meetings, the Audit Committee reviewed, before their 

submission to the Supervisory Board, inter alia, the following 

subjects and matters: 

� as of the closing of the annual fi nancial statements for 

2010 and for the fi rst half of 2011, the Audit Committee 

verifi ed the organisation of the account closing, reviewed 

the fi nancial statements and the other related fi nancial 

information (and in particular any proposal to change the 

accounting standards or principles), held discussions with 

the Group Chief Financial Offi cer and with the Statutory 

Auditors, and reviewed their reports; 

� it examined and approved the Group refi nancing strategy 

presented by the Chief Financial Offi cer; 

� it reviewed the amount of fees paid to the Statutory Auditors 

for the 2010 fi nancial year; 

� it coordinated the process of selecting Statutory Auditors, 

whose term of offi ce was due to expire, and submitted the 

fi ndings of this selection process to the Supervisory Board. 

The process of selecting Statutory Auditors went as follows: 

� call for applications, 

� review of the service proposals, 

� interview of a number of fi rms by the Audit Committee 

and the Group Finance Department, 

� choice of Statutory Auditors submitted to the Annual 

General Meeting of 4 May 2011; 

� it examined the various press releases with regard to 

quarterly revenue and the annual and half-year results as 

well as the various documents presenting these results to 

fi nancial analysts; 

� it reviewed the annual budget for 2011 as well as the 

Management Board’s quarterly business reports; 

� it held discussions with the Group head of internal audit and 

reviewed the annual business report and the various work 

carried out, and in particular: 

� the presentation of the fi ndings of the audits carried out 

in 2010, 

� the follow-up in 2010 of issues identifi ed during site 

and/or thematic audits carried out in 2009, 

� the follow-up of actions taken in 2010 with respect to 

the management of major risks identifi ed in the course of 

updating the risk mapping, 

� the implementation of various procedures to improve 

internal control, 

� the updating of the Saft Group internal control repository, 


� the analysis carried out on the Group’s corporate 

governance practices, comparing them with the various 

recommendations made by Afep-Medef and the AMF 

in 2010, 

� the audit and Internal Control action plans for the 2011 

fi nancial year; 

� it examined the Statutory Auditors’ audit plan for the 2011 

fi nancial year; 

� it examined the Chairman’s report on the preparation and 

organisation of the Board’s work in 2010, Internal Control 

and risk management procedures and the principles and 

rules for setting the remuneration of corporate offi cers. 

Remuneration and Appointments Committee 

The Remuneration and Appointments Committee comprises 

three members of the Supervisory Board, two of whom are 

independent. Committee members are appointed on an 

individual basis and may not be represented at meetings 

by another person. The members of the Remuneration and 

Appointments Committee are Charlotte Garnier-Peugeot, Yann 

Duchesne, Chairman, and Bruno Angles. 

The main role of the Remuneration and Appointments 

Committee is to consider and to put forward recommendations 

to the Supervisory Board on the issues listed below: 

On remunerations: 

� the amount of attendance fees awarded to Supervisory 

Board members, and how they are distributed; 

� remuneration and benefi ts for members of the Management 

Board and members of the Saft Management Committee; 

� stock option plans, 

On appointments: 

� the appointment and re-appointment of Management and 

Supervisory Board members; 

� the structure and composition of the Supervisory Board and 

its committees; 

� the review of forecast changes to management resources 

of the Saft Management Committee (SMC), the succession 

and/or re-appointment of its members; 

� the review of the independence of Supervisory Board 

members, in accordance with the criteria set out in the Afep- 

Medef Code. 

In the course of its work, the Remuneration and Appointments 

Committee can rely on external studies and reports. 

The Remuneration and Appointments Committee met eight times 

over the past fi nancial year (compared to fi ve times in 2010), 

on the following dates: 21 January, 11 February, 24 February, 

10 March, 22 March, 26 April, 5 May and 22 July 2011. 

The attendance rate of the members of the Remuneration and 

Appointments Committee at meetings was 96% in 2011 

(compared to 100% in 2010).

In the course of its meetings, the Remuneration and Appointments 

Committee considered, inter alia, the following matters: 

� the independence of its members, as per the rules set out in 

the Afep/Medef Code of Corporate Governance; 

� the balance amongst members of the Supervisory Board 

and its Committees, and in particular the gender balance 

on the Board. Following this analysis, it began a selection 

process to appoint a woman to the Supervisory Board; 

it submitted the outcome of this selection process to the 

Supervisory Board, which recommended that the Annual 

General Meeting appoint a woman as an extra member; 

� the organisation of the Supervisory Board and its Committees 

following the expansion of Supervisory Board membership 

to fi ve; 

� the terms governing the reappointment and staggering of 

the terms of offi ce of Supervisory Board members, as per 

the rules set out in the Afep/Medef Code of Corporate 

Governance; 

� the reappointment of the Chairman of the Audit Committee, 

Jean-Marc Daillance; 

� the reappointment of the members of the Management 

Board; 

� annual changes in the remuneration of the Chairman and of 

members of the Management Board, as well as of members 

of the Saft Management Committee. In this respect, it had 

recourse to a study it commissioned during the fourth quarter 

of 2010 from an external fi rm on the remuneration of 

corporate offi cers; 

� the methods for calculating and setting the variable portion 

of 2011 remuneration for members of the Saft Management 

Committee; 

� setting the Group’s quantitative performance objectives to 

be used as a basis for calculating the variable portion of 

2011 remuneration for members of the Saft Management 

Committee (“SMC”); 

� the amount of attendance fees awarded to Supervisory 

Board members for the 2011 fi nancial year. 

Strategy and Technology Committee 

The Strategy and Technology Committee, established on 5 May 

2011, is composed of three Supervisory Board members, two 

of whom are independent. Committee members are appointed 

on an individual basis and may not be represented at meetings 

by another person. The members of this committee are: Ghislain 

Lescuyer, Chairman, Jean-Marc Daillance and Yann Duchesne. 

The main role of the Strategy and Technology Committee 

is to aid the Supervisory Board with the assessment of the 

Group’s overall strategic and technological objectives set 

by the Management Board. To this end, it regularly reviews 

the Company’s strategic objectives and those of its main 

subsidiaries and assesses the soundness of the key strategic 

decisions recommended by the Management Board together 

with their consequences. 

The role of the Strategy and Technology Committee is described 

in detail in the Supervisory Board bylaws. 

4 



The Strategy and Technology Committee met once, on 26 July 

2011. The attendance rate was 100%. At this meeting, the 

Strategy and Technology Committee: 

� carried out a review of the technologies used by the 

Group as well as the Group’s research and development 

programmes. This review was attended by the Group 

Technology Director with whom it held discussions; 

� examined the 2011-2013 strategic plan. 

Assessment of the functioning of the Supervisory Board 

In January 2011, the Supervisory Board carried out its annual 

review of its activities in 2010. Upon completion of the review, 

the Board established a number of objectives, notably: 

� to continue strengthening its role in framing the Group’s 

strategic objectives, and to enhance its grasp of the Group’s 

Research and Development policy; 

� to improve membership balance by increasing the number 

of women on the board; 

� to introduce a mechanism for the reappointment of Board 

members that would allow reappointments to be staggered 

and not have all members come up for reappointment 

together, in line with the recommendations of the Afep/ 

Medef Code. 

These discussions resulted in the establishment of a Strategy 

and Technology Committee in May 2011, the appointment of 

a woman as a new member of the Supervisory Board and a 

restructuring of the reappointment of Board members. 

Compliance by the Company with the recommendations of 

the April 2010 Afep-Medef Code of Corporate Governance 

for listed companies 

The Company complies with the recommendations of the 

Afep-Medef Code of Corporate Governance except for the 

following three points (compared to fi ve in 2010): 

� the coexistence of a term of offi ce on the Management Board 

and an employment contract in the case of John Searle, the 

Chairman of the Management Board: the position of the 

Supervisory Board remains unchanged. The Supervisory 

Board considers that, while the recommendation of the 

Afep-Medef Code is understandable for a manager who 

has recently joined a company, it cannot be justifi ed for 

a manager who has had a long and successful career in 

the Group, and in particular as an employee not holding 

any corporate offi ce. The Supervisory Board consequently 

decided to authorise the continuation of the employment 

contract entered into between Saft Acquisition SAS and 

John Searle alongside his term of offi ce as Chairman of the 

Company’s Management Board; 

� stock option plans: no specifi c rules have been established 

to set the frequency and/or regularity of implementation of 

stock option plans. The Group considers that it would be 

appropriate to maintain a certain degree of fl exibility in 

this area, given that any stock option plan must receive the 

prior authorisation of shareholders at an Annual General 

Meeting and of the Supervisory Board; 


4 Report 



� distribution of attendance fees amongst the members of 

the Supervisory Board: considering the current number of 

members on the Supervisory Board and the involvement 

of each in the various activities of the Board and of its 

Committees, the Board decided not to alter the procedures 

for setting the attendance fees for its members, which are 

paid on a fl at-fee basis. 

b) Limitations placed on the Management 

Board’s powers by the Supervisory Board 

The Management Board has the broadest powers to act in all 

circumstances in the name of Saft Groupe SA regarding all 

matters falling within the scope of the Company’s corporate 

purpose, except for powers reserved by law for other persons 

or bodies. 

However, the Company’s articles of association and the 

Supervisory Board bylaws stipulate that certain decisions 

require the prior approval of the Supervisory Board in the 

following matters: 

� disposals of properties and shareholdings, and granting of 

guarantees; 

� investments or divestments changing the Group’s scope of 

consolidation; 

� investments relating to an acquisition or any commitment 

over and above a certain amount; 

� issuance of bonds, and the implementation of any 

authorisation in this area. 

In addition, any forecasts, management documents and related 

analytical reports drawn up by the Management Board must 

be provided to the Supervisory Board. 

c) Statutory provisions governing 

shareholders’ participation in the Annual 

General Meeting 

Shareholders’ participation in the Annual General meetings is 

governed by articles 13, 14 and 22 of the Company’s articles 

of association. The articles of association can be consulted on 

the website www.saftbatteries.com under the section “Investor 

Centre/Shareholder information”. 

d) Principles and rules adopted to determine 

the remuneration and benefits of any kind 

granted to the corporate officers 

The fi xing of the remuneration of the Company’s Management 

Board members is the responsibility of the Supervisory Board, 

which bases itself on the opinions and recommendations of the 

Remuneration and Appointments Committee. 

Supervisory Board members 

No remuneration other than attendance fees is paid to 

Supervisory Board members. For 2011, an overall maximum 

amount of €200,000 in attendance fees was approved by 

the Combined Ordinary and Extraordinary General Meeting 

on 4 May 2011. This amount is unchanged from the 2010 



Following a proposal by the Remuneration and Appointments 

Committee, the Supervisory Board has, in accordance with 

article L. 225-83 of the French Commercial Code, determined 

the following individual and fl at-fee attendance fee amounts for 

the 2011 fi nancial year: 

� Yann Duchesne, Chairman: €50,154 (€48,693 in 2010); 

� Charlotte Garnier-Peugeot: €21,877; 

� Bruno Angles, Jean-Marc Daillance and Ghislain Lescuyer: 

€33,437 each (€32,462 in 2010). 

The total amount of attendance fees paid during the 2011 

fi nancial year thus amounted to €151,247. 

Management Board members 

The membership of the Management Board, which includes 

fi ve members, was as follows as of 31 December 2011: 

� John Searle, Chairman; 

� Thomas Alcide; 

� Bruno Dathis; 

� Xavier Delacroix; 

� Elizabeth Ledger. 

The remuneration of the Chairman and of members of the 

Management Board is set by the Supervisory Board, based 

on proposals from the Remuneration and Appointments 

Committee, in accordance with the principles set out in the 

Afep-Medef Code of Corporate Governance. 

The remuneration comprises a fi xed annual portion, set on the 

basis of the level of responsibilities and experience of each 

member and with reference to market practices. 

It also includes a variable portion based on the Group’s 

fi nancial performance objectives: For the 2011 fi nancial year, 

these objectives were based on the following criteria: revenue 

growth, the EBITDA margin as a percentage of revenue 

(EBITDA is defined as operating profit before amortisation 

and depreciation, restructuring costs and other income and 

expenses) and the level of operating working capital at the end 

of each quarter, as measured at the level of the Consolidated 

Financial Statements of Saft Groupe SA. The weight of each 

quantitative criterion in calculating the variable remuneration of 

Management Board members is identical. The expected level 

of achievement of the quantitative targets set for managers 

has been defi ned in a precise manner. The Supervisory Board 

considers that this information should remain confi dential. The 

amount of the variable portion is based solely on quantitative 

criteria. The ratio of variable remuneration to fi xed remuneration 

is not the same for all Management Board members. This 

information is set out in section 4.2 “Remuneration and 

shareholding of the Management and Supervisory Board 

members” of this Annual Report. 

The Chairman and members of the Management Board all 

benefi t from a vehicle, with the cost of rental and use of such 

vehicle being borne by the Company.

The Chairman of the Management Board is contractually 

eligible for compensation, in the event of termination of his 

employment contract, the calculation basis of which is the fi xed 

and variable remuneration and the benefi ts in kind. Payment 

of the indemnity is subject to performance conditions that must 

be met by the benefi ciary, which are assessed in light of the 

performance of Saft Groupe SA. This payment will therefore 

only be made if the following two criteria are met: 

� payment at least once over the past three years of at least 

20% of the maximum annual performance bonus; 

� positive EBIT (defi ned as operating profi t before restructuring 

costs and other operating income and expenses) of Saft 

Groupe SA throughout the benefi ciary’s terms of offi ce. 

This clause provides for the payment of eighteen months’ 

average remuneration (calculated over the last 12 months at the 

Company). The potential combined amount of the termination 

indemnity and the non-competition indemnity shall not in any 

case exceed 24 months of remuneration. 

Detailed information on the remuneration and other benefi ts of 

any kind granted to Management Board members is provided 

in tabular form in section 4.2 “Remuneration and shareholding 

of the Management and Supervisory Board members” of this 


Management Board members receiving attendance fees for 

offi ces held in the Saft Group subsidiaries and/or joint ventures 

return these fees to the Company. 

With the exception of the Chairman of the Management Board, 

the Management Board members employed in France benefi t 

from the incentive and mandatory profi t sharing schemes of 

Saft SAS. 

The Chairman and three members of the Management Board 

(Elizabeth Ledger, Bruno Dathis and Xavier Delacroix) benefi t 

from the same defi ned contribution supplementary pension 

plan as all Group executives in France, in the form of a multiemployer 

pension plan (“PERI“), the fi nancing of which is borne 

by the Group. This pension plan meets the criteria of the Afep- 

Medef Code of Corporate Governance. 

e) Policy regarding the granting of stock 

options 

Nature of options 

All stock options issued so far are options for the subscription of 

new shares approved by the Group’s shareholders at Annual 

General Meetings. 

Grant conditions 

Stock options are granted, following a proposal by the 

Management Board, by a decision of the Supervisory Board. 

The benefi ciaries of these stock options are Group executives. 

For each stock option plan, the number of benefi ciaries of stock 

options is approximately 100-150 Group employees. As of 

31 December 2011, the total number of outstanding stock 

options represented 6.64% of the number of shares comprising 

the share capital of Saft Groupe SA. 

4 



With regard to Management Board members, the Supervisory 

Board has set the following rules for stock options to be granted: 

� when making a new grant of stock options, the value of the 

stock options granted to each member of the Management 

Board, calculated pursuant to IFRS, must not exceed a 

maximum of 35% (thirty-fi ve percent) of all the components 

of the annual remuneration of each benefi ciary; 

� the maximum percentage of stock options that may be 

granted to all members of the Management Board compared 

to the total overall number voted at the Annual General 

Meeting may not exceed 25% (twenty-fi ve percent), and the 

maximum percentage granted to each Management Board 

member may not exceed 6% (six percent) of this total overall 

number. 

Frequency of stock option plans 

The stock option plans are established at a frequency of more 

than one year. Five main plans have been implemented by 

the Management Board since the Company was listed: in 

June 2005, November 2006, January 2008, March 2009 

and September 2010. 

Stock option price 

No discount may be applied at the time stock options are 

granted. 

In addition, the current members of the Management Board 

who have received stock options may not have recourse to 

transactions to hedge the risks to which they are exposed. 

Conditions for the exercise of stock options 

The conditions for the exercise of stock options are as 

follows: any prohibited periods of exercise are defi ned and 

communicated to all option benefi ciaries. During these periods, 

no benefi ciary may exercise his or her options. 

With regard to Management Board members, the Supervisory 

Board has set the following supplementary rules: 

� on each occasion that a member of the Management 

Board exercises some of his or her stock options, he or she 

must keep at least 15% of the shares thus issued throughout 

his or her term of offi ce. This rule applies starting from plan 

no. 3 authorised by the Shareholders’ General Meeting on 

17 December 2007; 

� the exercise by Management Board members of their stock 

options is dependent on achievement of the following 

performance conditions: 

� for stock options granted under the fi rst four plans 

implemented, the Group’s consolidated EBITDA margin 

must be positive in the year that the stock options are 

granted (where the stock options are granted by 30 June 

at the latest) and in the following two fi nancial years (or 

the next three fi nancial years if the stock option grant is 

made after 30 June), 


4 Report 



� for stock options granted under the plan adopted on 

2 September 2010, the Group’s consolidated EBIT 

margin must be positive in the fi nancial year that the 

stock options are granted (if the grant takes place in 

the fi rst half of the calendar year) and in the following 

two fi nancial years (or the next three fi nancial years if 

the stock option grant is made in the second half of the 

year). This amendment was ratifi ed by the Supervisory 

Board at its meeting on 2 November 2010; 

� Management Board members must abstain from exercising 

their options during the following windows: 

� a period of 60 days prior to publication of the press 

releases with regard to the annual results, 

� a period of 30 days prior to publication of the press 

release with regard to the half-year results, 

� a period of 15 days prior to publication of press releases 

with regard to quarterly revenues. 

Full information on the remuneration of corporate offi cers is 

provided in tabular form in section 4.2 “Remuneration and 

shareholding of the Management and Supervisory Board 

members” of this Annual Report. 

4.3.2 RISK MANAGEMENT AND 

INTERNAL CONTROL PROCEDURES 

a) Internal Control and risk management 

procedures 

The Company has put in place Internal Control procedures 

and risk management processes designed to ensure that the 

information contained in the Consolidated Financial Statements 

is reliable and to exercise Internal Control over the Group’s 

companies. The Saft Group includes the parent company Saft 

Groupe SA and its consolidated subsidiaries, detailed in the 

notes to the Consolidated Financial Statements. The Group 

does not include the ASB joint venture, as it is accounted for 

under the equity method. 

Defi nition and objectives 

The Group’s defi nition of internal control is based on that drawn 

up by the Committee of Sponsoring Organisations (COSO) of 

the Treadway Commission, whose report was published in the 

United States in 1992. 

Within the Group, Internal Control is defi ned as the set of 

processes contributing to the control of activities and effi ciency 

of operations, designed to ensure the rigorous and effective 

management of the Group. 

The purpose of the Group’s Internal Control system is therefore 

to provide reasonable assurance regarding the achievement of 

the following objectives: 

� compliance with applicable laws and regulations, as 

well as with the Group’s defi ned strategies and internal 

procedures; 

� protection of the Group’s assets; 


� prevention and control of fraud and error, particularly in the 

area of accounting and fi nance; 

� reliability of fi nancial and accounting information. 

Its purpose is also to avoid and control the risks arising from the 

Group’s activities. 

As in any control system, it cannot provide an absolute 

guarantee related to the implementation of the Group’s 

objectives and the control of all the risks. 

In this respect, the likelihood of achieving these objectives is 

subject to the limits inherent in any Internal Control system and 

in particular human error, cases of deliberate collusion between 

several people making it possible to elude the control system in 

place, or cases where the implementation, or maintenance of 

control, is more burdensome than the risk which it is supposed 

to mitigate. 

Persons responsible for Internal Control procedures and risk 

management 

The Internal Control and risk management system was 

designed and implemented by the Management Board, and 

applied and deployed by all staff under the responsibility of 

the Group’s managers. It is under the control of the Supervisory 

Board, which receives regular reports on the functioning of the 

Internal Control system and the work carried out. 

Since 2010, Audit and Internal Control activities have been 

managed by a person working full-time in this area, reporting 

to the Group’s Chief Financial Offi cer, but able to refer matters 

directly to the Chairman of the Management Board and/or the 

Audit Committee, when necessary. To carry out certain tasks, 

the Audit and Internal Control Manager regularly uses specifi c 

external resources. 

The Group’s Internal Control processes 

The Group has based its Internal Control approach on the 

following fi ve components set out in the COSO report: 

� control environment; 

� risk assessment; 

� control activities; 

� information and communication; 

� monitoring Internal Control. 

Control environment 

The Group has created a strict control environment underpinned 

by the role of the Saft Management Committee (SMC), 

which is responsible for discussing and setting the Group’s 

strategic goals. The SMC is chaired by the Chairman of the 

Management Board and meets at least once a month. Based 

on the fi les presented to it and information exchanged at 

meetings, the Committee marks out the path to be followed by 

the Group, sets the foundations for the decisions to be taken by 

the Group’s corporate governance structures, and monitors all 

projects and activities at the highest level. 

Furthermore, the Group has an Audit Committee, a 

Remuneration and Appointments Committee and a Strategy 

and Technology Committee, established in 2011.

The control environment is subject to a continuous improvement 

process which forms part of the Group’s objectives. As a result, 

over the last few years the Group has put in place the following 

instruments: 

� an ethics code defi ning Saft’s values and a Code of 

Conduct to be respected collectively and individually; 

� a specifi c Information Systems Security Committee (ISSC) 

dedicated to ensuring information system security. The goal 

of this Committee is to strengthen the control environment 

related to information systems. Since its creation in 2009, 

it has carried out, in particular, a review of the information 

systems charter and updated and distributed the Group’s 

general policies on information security and passwords. 

In 2010, it approved the organisation of various training 

sessions for users to raise their awareness of confi dentiality 

and data protection requirements. In 2011, it worked on 

the roll-out of new data protection tools; 

� a handbook to raise awareness of issues relating to fraud 

and corruption, which was distributed to the Group’s 

managers in 2010. 

Risk assessment 

Risk assessment is the identifi cation and analysis of all the 

internal and external risks that may affect the Group’s ability to 

achieve its objectives. It also forms a basis for determining the 

Company’s control activities and certain tasks carried out by 

the Internal Audit Department. 

In order to monitor this essential Internal Control component, 

the Group’s management regularly undertakes risk mapping, 

which enables: 

� risks to be prioritised in terms of their potential impact should 

they materialise; 

� a control level to be assessed for each risk. 

The Group’s risk map was updated at the end of 2009. 

This update did not bring to light any signifi cant change in 

the main risks as compared to those identifi ed at the time of 

the previous update made in 2007. It nevertheless led to a 

change in the ranking of the main risks related to the Group’s 

business activities and to the environment in which it performs 

its business. 

The risks to which the Group is exposed and the procedures for 

managing them (including the programme of external insurance 

coverage) are described in section 2 “Risk factors” of this 


In addition, the Group undertook a specifi c risk mapping 

linked to information system availability in 2010. This mapping 

resulted in the preparation of an improvement plan in 2011 

and is regularly updated. 

Control activities 

Control activities involve monitoring the operations and 

performance of the Group’s divisions, ensuring the proper 

application of the standards and procedures that contribute 

4 



to the implementation of the policies adopted by Group 

management, as well as compliance with the laws and 

regulations in force. 

In addition, the Group has put in place a rigorous and 

pro-active system for monitoring the performance of each 

division and the application of Group policies. This system is 

implemented as follows: 

� the department in charge of management control carries out 

in-depth monthly reviews of the operations of subsidiaries 

and business units, based on the budget, actual results, and 

forecasts which are periodically updated. Each subsidiary 

or business unit performs a monthly reporting process using 

dedicated Magnitude software, which is carefully reviewed 

by the divisions’ management controllers and the SMC, 

and specifi c analyses are conducted at subsidiaries where 

necessary; 

� the Chairman of the Management Board, the Chief Financial 

Offi cer, and the heads of the Group’s divisions meet each 

month to examine the monthly performance of each division 

and the units within them, whether commercial (e.g. orders, 

sales, etc.) or fi nancial, and also reviews forecasts and 

their periodic updates. The sales managers of each division 

regularly participate in these reviews. 

A certain number of tools are used in these control activities. 

Firstly, under the supervision of the Saft Management Committee, 

a set of rules and procedures has been established for each 

executive management team across the Group’s divisions. 

Furthermore, the Group has an internal control manual that 

covers all the key controls of the Group’s major processes, i.e. 

those considered essential for the proper performance of Saft’s 

operations. This manual is updated as required. 

The Internal Control manual serves as the basis for a periodic 

self-assessment process carried out by each operating entity 

on the quality of its Internal Control. The results of these selfassessments 

are periodically checked by the Group’s Statutory 

Auditors, on a sample basis, and are communicated to the 

head of Internal Control and audit. 

Information and communication 

This component of the Group’s Internal Control system entails 

identifying, collating and communicating pertinent information 

in a form and timeframe that enables all the Group’s employees 

to fulfi l their responsibilities. It consists of the information fl ows 

essential to effective Internal Control procedures, from the 

dissemination of strategies adopted by the Management 

Board through to their implementation in each of the Group’s 

companies and units. 

The Group uses intranet and messaging systems enabling it 

to effectively share information between the Management 

Board, the Saft Management Committee and the subsidiaries 

or business units. Through these systems, each participant can 

access the qualitative and quantitative information required for 

performing their duties. 


4 Report 



Each category of information is fed through effective specifi callytailored 

communication channels, enabling the following data 

to be relayed: 

� information on budget control; 

� accounting and fi nancial information provided by the 

subsidiaries to the Group’s head offi ce; 

� operating and business-specifi c information exchanged 

between the Saft Management Committee and the 

management team of each manufacturing division. 

For example, the fi nancial control function in relation to the 

subsidiaries is carried out by divisional controllers and the 

heads of management control within the units or subsidiaries, 

and reports are made to the Saft Management Committee in 

the form of the following documents: 

� the three-year business plan (updated once per year); 

� the budget, drawn up on a yearly basis and subject to gap 

analyses are carried out and a full reforecast is performed 

at minimum at the end of each quarter; 

� monthly fi nancial reporting packages using the Magnitude 

software application. 

The Group also has a specifi c information and control system 

for decision-making and monitoring in respect of investments. 

Investment spending information is thus reported to Group 

management on a monthly basis, as part of a strict and 

formally documented authorisation procedure overseen by a 

specifi cally appointed offi cer. 

Finally, Saft is endeavouring to strengthen management 

and information dissemination tools such as the intranet 

and the shared databases that offer effective sharing of 

quality information within the Group. For example, in 2011 

Saft implemented a new system designed to improve the 

management of risk and of foreign exchange positions, thereby 

enabling the various Group entities to interactively communicate 

standardised forecasts to the Central Treasury. 

Monitoring Internal Control 

Internal Control systems need to be supervised in order to 

assess their relevance over time. 

This is accomplished through ongoing monitoring activities, 

notably via internal audits. 

Internal audits are to be performed in relation to all Group 

companies, businesses and processes by the Internal Audit 

Department. The audit programme is approved by the Audit 

Committee before being presented to the Saft Management 

Committee. Group entities which have been subject to 

internal audits draw up action plans whose implementation 

is systematically monitored. One of the main roles of the 

internal audit function is to independently check that Internal 

Control procedures are in place and that they are effective. 

Professional internal audit standards are applied, as drawn 

up by international professional bodies (notably, the Institute of 

Internal Auditors). 


In the context of the internal audit plan for 2011, the following 

assignments were carried out: 

� performance of three site audit assignments: 

� audit of administrative and fi nancial processes and of 

information systems at the Indian subsidiary, 

� audit of all processes at the Spanish sales subsidiary, 

� audit of four processes (project management, expense 

notes, fi xed assets, cash) at the manufacturing and 

development site in Bordeaux, France. 

These audits led to the issue of reports containing 

recommendations that will be subject to a follow-up in 

2012; 

� follow-up of measures taken in response to specifi c areas 

for improvement identifi ed during the audit of business units 

carried out in 2010, at the sites in Oskarshamn (Sweden), 

North Haven (USA) and Cockeysville (USA); 

� the continued updating of the Internal Control manual: in 

2011, three processes were the subject of in-depth reviews 

together with the people responsible for each process. 

This work utilized the results of the fi rst Internal Control selfassessment 

campaign and included the development of the 

Group’s activities; 

� the implementation of the self-assessment process for three 

major processes: 

� information systems, 

� management of fi xed assets, 

� purchases; 

The results of these self-assessments were sent to the persons 

responsible for each process, the Group Chief Financial 

Offi cer and the Audit Committee, and gave rise to the 

implementation of an action plan for 2012; 

� the performance of two thematic audits on the contracting 

process and sales commissions; 

� the implementation of awareness actions for Group fi nancial 

controllers regarding fraud and corruption; 

� lastly, the updating of various procedures. 

The results of the work carried out by the Internal Audit 

Department were presented to the Audit Committee in 

January 2012. 

Internal Control procedures related to preparing fi nancial 

and accounting information 

The Group’s fi nancial and accounting information is produced 

by the Finance Department, which coordinates the accountsclosing 

procedures for Saft Groupe SA and its subsidiaries. 

In addition to the points relating to accounting and fi nancial 

information described above in each of the components of the 

Internal Control system, the following specifi c points should be 

highlighted: 

� Group-wide consolidation software based on a standard 

reporting package ensures that the Group management

eceives the consistent accounting and fi nancial information 

it needs for the accomplishment of its duties and for public 

disclosure. This information is regularly expanded in order 

to improve the quality of the fi nancial information available 

at the Group level; 

� statutory accounting and fi nancial information is produced 

in line with a defi ned schedule, and is based on formally 

documented procedures and control processes. Each entity 

compiles a «closing fi le» in order to ensure the traceability 

of accounts-closing operations; 

� the Saft Group’s Finance Department draws on the 

work conducted by the Finance Departments of each 

subsidiary, as well as on the management and budgetary 

control procedures set up within the Group. This structure 

enables objectives to be set and accounting and fi nancial 

information to be collected and analysed at different levels 

of the organisation. It also permits swift application of any 

requisite corrective measures; 

� the Saft Group has drawn up a “Manual of Accounting 

and Consolidation Principles” which is used by all 

Group companies. This manual defi nes the accounting 

measurement methods used by the Group. It specifi es the 

consolidation principles that must be respected. It also 

4 



includes a detailed analysis of International Financial 

Reporting Standards (IFRS) and their application within 

the Saft Group. The manual is available on the Group’s 

intranet; each quarter, consolidation instructions issued by 

the Group are sent to each entity. These instructions are 

amended regularly in order to integrate any changes in 

disclosure requirements or control procedures; 

� a basic set of accounting and fi nancial procedures that are 

regularly reviewed and updated is made available on the 

Group’s intranet. 

b) Information that may have an impact in 

the event of a public offer (article L. 225- 

100-3 of the French Commercial Code) 

With the exception of clauses pertaining to a change in control 

included in loan agreements and disclosed in the notes to 

the Consolidated Financial Statements, the Company has not 

entered into any major agreement that would be amended or 

automatically terminated in the event of a change in control at 

the Company. 

The commitments made by the Company with regard to the 

French and Israeli governments are described in section 8.4 

“Signifi cant contracts and commitments” of this Annual Report. 


4 Statutory 


Auditors’ Report on Saft Groupe SA Chairman’s Report 

4.4 STATUTORY AUDITORS’ REPORT 

ON SAFT GROUPE SA CHAIRMAN’S REPORT 

This is a free translation into English of the Statutory Auditors’ report prepared in accordance with article L. 225-235 of the French 

Commercial Code, on the report prepared by the Chairman of the Supervisory Board of Saft Groupe SA, issued in the French 

language and is provided solely for the convenience of English speaking readers. This report should be read in conjunction with, 

and construed in accordance with, French law and professional auditing standards applicable in France. 

Year ended 31 December 2011 

Saft Groupe SA 

12, rue Sadi-Carnot 



In our capacity as Statutory Auditors of Saft Groupe SA, and in accordance with article L. 225-235 of the French Commercial 

Code (Code de commerce), we hereby report to you on the report prepared by the Chairman of your Company in accordance with 

article L. 225-68 of the French Commercial Code for the year ended 31 December 2011. 

It is the Chairman’s responsibility to prepare, and submit to the Supervisory Board for approval, a report describing the internal control 

and risk management procedures implemented by the Company and providing the other information required by article L. 225-68 

of the French Commercial Code (Code de commerce) in particular relating to corporate governance. 

It is our responsibility: 

� to report to you on the information set out in the Chairman’s report on Internal Control and risk management procedures relating 

to the preparation and processing of fi nancial and accounting information; 

� to attest that the report also includes the other information required by article L. 225-68 of the French Commercial Code (Code 

de commerce), it should be noted that it is not our responsibility to assess the fairness of this other information. 

We conducted our work in accordance with professional standards applicable in France. 

Information concerning the Internal Control and risk management procedures relating to the preparation and processing of 

fi nancial and accounting information 

The professional standards require that we perform procedures to assess the fairness of the information on Internal Control and risk 

management procedures relating to the preparation and processing of fi nancial and accounting information set out in the Chairman’s 

report. 

These procedures mainly consisted of: 

� obtaining an understanding of the Internal Control and risk management procedures relating to the preparation and processing 

of fi nancial and accounting information on which the information presented in the Chairman’s report is based, and of the existing 

documentation; 

� obtaining an understanding of the work performed to support the information given in the report and of the existing documentation; 

� determining if any material weaknesses in the Internal Control procedures relating to the preparation and processing of fi nancial 

and accounting information that we may have identifi ed in the course of our work are properly described 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 the accounting and fi nancial information contained in the 

report prepared by the Chairman of the Supervisory Board in accordance with article L. 225-68 of the French Commercial Code 

(Code de commerce). 


Other information 

4 


Main provisions of the Supervisory Board bylaws 

We attest that the Chairman of the Supervisory Board’s report sets out the other information required by article L.225-68 of the French 

Commercial Code. 

Neuilly-sur-Seine and Courbevoie, on 13 February 2012 

The Statutory Auditors 

PricewaterhouseCoopers Audit Mazars 

Françoise Garnier Juliette Decoux 

4.5 MAIN PROVISIONS OF THE SUPERVISORY BOARD 

BYLAWS 

Supervisory Board bylaws, in line with the recommendations 

of the Apef/Medef report were approved and implemented 

by the Supervisory Board at its meeting of 22 April 2005 

and were subsequently modifi ed in 2006, 2010 and 2011. 

These bylaws are available on the Company’s website 

(www.saftbatteries.com). 

The main provisions of the bylaws are as follows: 

4.5.1 PREPARATION AND 

ORGANISATION OF SUPERVISORY 

BOARD MEETINGS 

a) Strategic objectives 

The Supervisory Board makes decisions regarding the 

Company’s overall strategic, economic, social, fi nancial and 

technological objectives and ensures that they are implemented 

by management. 

Saft’s medium-term business strategy is defi ned in an annual 

business plan that is drawn up in draft form and presented 

by the Management Board to the Supervisory Board for 

approval. This draft business plan includes forecasts for Saft’s 

key operating and fi nancial indicators as well as a provisional 

annual budget. 

The Management Board is responsible for implementing the 

strategies set out in the business plan. 

The Management Board must obtain prior authorisation from 

the Supervisory Board before carrying out any acquisitions 

or divestments that would change the Group’s scope of 

consolidation. 

Prior approval from the Supervisory Board is also required for 

any investment made in connection with an external growth 

transaction, or any commitment representing over €30 million 

that is not included in the Company’s budget and does not 

correspond to a routine operating transaction. 

The Chairman or any other member of the Management Board 

must inform the Supervisory Board of any problem or any other 

factor that could affect the implementation of the strategies 

contained in the Group’s Business Plan. 

b) Information provided to members 


All Supervisory Board members shall be provided with the 

agenda of Board meetings as well as any documents that will 

enable them to make fully informed decisions. 

At each Board meeting, the Chairman informs the members 

of the main signifi cant events relating to the Group that have 

occurred since the previous meeting. 

Any Supervisory Board member wishing to visit a Group site 

in order to obtain information required to carry out his or her 

duties should make a written request to the Chairman of the 

Management Board through the secretary of the Supervisory 

Board, stating the aim of the visit. 


4 Main 


provisions of the Supervisory Board bylaws 

c) Controls carried out by the Supervisory 

Board 

The Chairman of the Supervisory Board or the Chairman of the 

Audit Committee may refer matters to the Supervisory Board for 

checks or controls. 

Where the Supervisory Board decides that such checks 

or controls are required, the Board will precisely defi ne the 

purpose, terms and conditions thereof in the minutes of the 

related meeting. The Supervisory Board may carry out such 

checks or controls itself or entrust them to one of the Board 

Committees, a Supervisory Board member or an external party. 

If the Supervisory Board decides to entrust the checks and 

controls concerned to one of its members or an external party, 

that person’s assignment shall be defi ned as set out below. 

The Chairman of the Supervisory Board defi nes the terms 

and conditions of the checks or controls to be performed. In 

particular, measures shall be taken in order to ensure that these 

checks and controls cause minimum disruption to the Group’s 

business. 

Meetings may be held with Group employees where required. 

The Chairman of the Supervisory Board is responsible for 

ensuring that any information that may be useful in performing 

the checks or controls is provided to the person carrying out 

the assignment. 

Any party performing such checks or controls may not interfere 

in the management of the Group’s business. 

When the controls or checks are completed a report shall be 

presented to the Supervisory Board. The Board then specifi es 

the measures to be subsequently adopted. 

d) Specific assignments carried out 

by Supervisory Board members 

When the Supervisory Board decides to entrust a specifi c 

assignment to one or more of its members or one or more 

third parties, the Board shall draw up the principle terms and 

conditions of the assignment concerned. 

If such an assignment is to be carried out by one or more 

members of the Supervisory Board, the members concerned 

shall not take part in the vote concerning their appointment. 

Following the meeting held to appoint the persons responsible 

for a specifi c assignment, the Chairman of the Supervisory 

Board shall draw up a draft engagement letter which: 

� defi nes the precise aims of the assignment; 

� specifi es the type of report required on conclusion of the 

assignment; 

� sets the duration of the assignment; 

� fi xes the amount of compensation payable to the person(s) 

responsible for the assignment, as well as payment terms 

and conditions, after consultation with the Remuneration 

Committee where required; 


� where appropriate, sets a ceiling for the reimbursement of 

travel and other expenses incurred during the performance 

of the assignment. 

Where relevant, the Chairman of the Supervisory Board 

shall submit this draft engagement letter to the relevant Board 

Committees for their opinion, and shall provide a copy of the 

signed letter to the Chairmen of said committees. 

In addition, a copy of the assignment report shall be given to 

Supervisory Board members by the Chairman of the Board. 

The Supervisory Board subsequently decides what action to 

take based on the assignment report. 

e) Board Committees 

In order to help with the preparation of its work, the Supervisory 

Board has set up an Audit Committee, a Remuneration and 

Appointments Committee and a Strategy and Technology 

Committee. 

The modus operandi and terms of reference of these committees 

are determined by the Supervisory Board’s bylaws. 

f) Supervisory Board meetings 

On the recommendation of its Chairman, each year the 

Supervisory Board draws up a list of meeting dates for the 

coming twelve months. This list includes the dates of the Board’s 

routine meetings – for reviewing the fi rst- and third-quarter sales 

fi gures, fi rst-half results and the annual fi nancial statements 

and for preparing General Shareholders’ Meetings – as well 

as, where appropriate, any dates that the members of the 

Supervisory Board should keep free for possible additional 

Supervisory Board meetings. 

The Chairman of the Board is responsible for approving the 

agenda of each Board meeting and circulating the agenda to 

the Board members within a reasonable timeframe and by any 

appropriate method. 

The Chairman shall provide the Board members with the 

documents required to enable them to make informed decisions 

concerning the items on the agenda at least forty-eight hours 

before the meeting concerned, except in urgent cases or where 

such communication is impossible for confi dentiality reasons. 

In urgent cases, the Chairman of the Board may propose 

additional matters for discussion that were not included in the 

original meeting agenda. 

Part of one Board meeting per year shall be devoted to 

reviewing the Board’s performance. 

g) Participation in Supervisory Board 

meetings by video conferencing link 

Subject to compliance with the applicable laws and regulations, 

Supervisory Board members may participate in meetings by 

video conferencing link. 

The Chairman of the Supervisory Board shall ensure that a 

video conferencing link or other means of telecommunication 

that continuously broadcasts the meeting is provided to Board 

members wishing to take part in a meeting.

4.5.2 DUTIES AND RESPONSIBILITIES OF 

SUPERVISORY BOARD MEMBERS 

The duties and responsibilities of the members of the Supervisory 

Board are set out in the code of ethics below which forms an 

integral part of these bylaws. 

Code of ethics for the members of the Supervisory 

Board 

Presentation 

The Supervisory Board has approved this code of ethics which 

sets out the rights and duties of the Board’s members. 

The purpose of the code is to enhance the quality of work 

performed by the Supervisory Board, in line with the Company’s 

overriding corporate governance principles of independence, 

integrity, loyalty and professionalism. 

The members of the Supervisory Board undertake to comply 

with and apply the guidelines contained in this code of ethics. 

Acting in the best interests of the Company 

Each Supervisory Board member must act in all circumstances 

in the best interests of the Company and consider himself as 

representing all of the shareholders, irrespective of the reason 

for his appointment. 

Compliance with the law and the Company’s articles 

of association 

Before accepting their position, Supervisory Board members 

must be fully aware of their rights and obligations. In particular, 

they must familiarize themselves with and comply with all the 

legal and regulatory provisions concerning their offi ce, as 

well as the applicable corporate governance codes and best 

practices, and the Company’s own rules as set out in its articles 

of association and the Supervisory Board’s bylaws. 

Independence 

Supervisory Board members must in all circumstances ensure 

that they retain their independence as regards their analysis, 

judgment, decisions and actions. Similarly, during their term of 

offi ce each Board member must act independently at all times 

and in the sole interest of the Company. 

Confl icts of interest 

Supervisory Board members must do everything in their power 

to avoid any confl ict between their personal/material interests 

and those of the Company or any other Group company. They 

must inform the Board of any potential confl ict of interest in 

which they could be involved. If an actual confl ict of interest 

does arise which a Supervisory Board member is unable to 

avoid, he must refrain from taking part in the debates and votes 

on the matters concerned. 

Duty of confi dentiality 

Supervisory Board members personally undertake to treat 

as strictly confi dential all of the information they receive, as 

4 


Main provisions of the Supervisory Board bylaws 

well as the debates in which they participate and the votes 

taken. In general, they are not authorized to issue any external 

communications in their capacity as Board members, especially 

to the press. 

The Chairman of the Supervisory Board informs Board members 

of any information to be released to the markets and provides 

them with the wording of any press releases issued for that 

purpose in the name of Saft Groupe SA. 

If a Board member breaches his duty of confi dentiality, the 

Chairmen of the Board Committees shall meet to discuss 

the matter and give their opinion to the Chairman of the 

Supervisory Board. The Chairman of the Supervisory Board 

subsequently reports to the Board on the action to be taken in 

relation to said breach (which may include legal proceedings 

where appropriate). 

Inside information and trading in the Company’s shares 

The members of the Supervisory Board must not use any inside 

information to which they are privy for their own personal 

benefi t or the benefi t of any third party. In particular, Supervisory 

Board members must not use any information concerning the 

Company that is not in the public domain, for the purposes of 

carrying out trades in the Company’s shares, either directly or 

through a third party. 

Shares owned by members of the Supervisory Board must be 

held in registered form. This requirement applies both to shares 

already held at the start of a Board member’s term of offi ce and 

any shares subsequently acquired during said term. Supervisory 

Board members must provide to the Chairman of the Board, in 

a timely manner, the information to be disclosed to the French 

securities regulator (Autorité des marchés financiers) concerning 

any trades they may have carried out in the Company’s shares. 

Supervisory Board members shall not: 

� trade in the shares of any Group company that is listed on a 

regulated market if they hold any inside information; 

� directly or indirectly carry out short sales of said shares. 

� The fi rst above-mentioned trading prohibition particularly 

applies during the following “blackout” periods: 

� (i) the periods during which Saft’s annual and interim 

results are prepared and published; (ii) the quarterly 

reporting process; and 

� (iii) the preparation period for projects or transactions 

that require the application of said prohibition. 

The Chairman of the Supervisory Board sets or confi rms the 

start and end dates of the above blackout periods and informs 

the Supervisory Board thereof in a timely manner. 

The Chairman of the Supervisory Board reports to the Board 

on the measures taken to ensure that the above-mentioned 

rules are also respected by any Saft employees holding inside 

information as a result of their position or duties or participating 

in a project or transaction as mentioned in point (iii) above. 


4 Main 


provisions of the Supervisory Board bylaws 

Duty of due care, professionalism and involvement 

The members of the Supervisory Board undertake to devote 

the necessary time and attention to their duties. In particular, 

they must: 

� ensure that the overall number of Supervisory Board 

positions and/or directorships that they hold and the 

ensuing responsibilities enable them to have the requisite 

time and availability to perform their duties for the Company, 

particularly if they hold an executive position as well; 

� ensure that they are appropriately informed about the 

Company’s businesses and specifi c characteristics as well 

as its goals and corporate values, including by putting 

questions to Management; 

� devote the necessary time to examining issues dealt with by 

the Supervisory Board and by any committee(s) of which 

they are a member; 

� request any additional information that they deem necessary 

for them to make fully informed decisions concerning matters 

that fall within the Supervisory Board’s remit and use their 

best efforts to obtain such information on a timely basis; 

� take all necessary measures to keep abreast of all issues 

and information that may be useful to them in their role as a 

Supervisory Board member. To that end, they may receive 


training – particularly when they are fi rst elected to the 

Board and where they deem it necessary – in order to better 

understand the specifi c characteristics of the Saft Group, 

including its businesses, industry and fi nancial affairs; 

� actively participate in all meetings of the Supervisory Board 

and the committees of which they are members, unless they 

have a valid reason for being absent; 

� attend all General Shareholders’ Meetings. 

Duty of effectiveness 

Supervisory Board members are expected to (i) contribute to 

the cohesion and effectiveness of the Board and its committees 

and (ii) help continually enhance the quality of the information 

provided to shareholders. They must also ensure that the 

Board’s bylaws are complied with and make any and all 

proposals aimed at improving the working conditions of the 

Board and its committees, notably during the Board’s selfassessment 

procedure. 

In addition, Supervisory Board members must agree to any 

assessment of their own work within the Board. 

Each member of the Board undertakes to tender their 

resignation if they consider in good faith that they are no longer 

in a position to effectively perform their duties.

COMMENTS 

ON THE 2011 

FINANCIAL YEAR 

5 

5.1 Activity and consolidated results 110 

5.2 Earnings by division 112 

5.2.1 Industrial Battery Group (IBG) 112 

5.2.2 Specialty Battery Group (SBG) 113 

5.2.3 Joint ventures 114 

5.2.4 Other activities 115 

5.3 Other items of consolidated 

income 115 

5.3.1 Other items of operating profi t 115 

5.3.2 Operating profi t 115 

5.3.3 Net fi nancial expense 115 

5.3.4 Profi t (loss) before tax from continuing operations 115 

5.3.5 Income tax on continuing operations 116 

5.3.6 Net profi t (loss) from continuing operations 116 

5.3.7 Net profi t (loss) from discontinued activities 116 

5.3.8 Net profi t (loss) for the period, earnings per share 

and dividend 116 

5.4 Research and Development 116 

5.5 Investments and fi xed assets 117 

5.5.1 Investments 117 

5.5.2 Property, plant and equipment 117 

5.6 Cash fl ow and fi nancing 117 

5.6.1 Cash generated from operations 117 

5.6.2 Cash and debt 118 

5.7 Group’s statement of fi nancial 

position 118 

5.8 Other key events in FY 2011 119 

5.8.1 Annual General Meeting and dividend 119 

5.8.2 Investment projects 119 

5.9 Related-party transactions 119 

5.10 Changes in the scope of 

consolidation in 2011 

5.11 Basis of preparation of the 

120 

Consolidated Financial Statements 120 

5.12 Events after the reporting period 

and 2012 outlook 120 

5.12.1 Events after the reporting period 120 

5.12.2 2012 Outlook 120 

5.13 Saft Groupe SA activity and 

results 

5.14 Activity of Saft Groupe SA 

121 

subsidiaries and controlled entities 121 


5 Activity 

COMMENTS ON THE 2011 FINANCIAL YEAR 

and consolidated results 

5.1 ACTIVITY AND CONSOLIDATED RESULTS 

The pace of Group revenue growth picked up during the 2011 

fi nancial year. Totalling €628.7 million, reported revenue 

was up 8.4% at constant exchange rates and 7.1% on a 

comparable basis, i.e. on the basis of 2011 revenue restated 

for the non-recurring €7.4 million upfront royalty payment 

recorded in the fi nancial year as part of the agreement to end 

the joint venture with Johnson Controls. 

The key fi gures for 2011 are as follows: 

(in € million) 


Year ended 31 December 

Restated (1) Reported (3) 

2011 2010 % Growth (2) 2011 2010 % Growth (2) 

Revenues 621.3 591.1 7.1% 628.7 591.1 8.4% 

Gross profi t 178.1 179.6 (0.8)% 185.5 179.6 3.3% 

Gross margin (%) 28.7% 30.4% 29.5% 30.4% 

EBITDA (4) 102.6 108.4 (5.4)% 110.0 108.4 1.5% 

EBITDA (%) 16.5% 18.3% 17.5% 18.3% 

EBIT (5) 72.9 78.3 (6.9)% 80.3 78.3 2.6% 

EBIT margin 11.7% 13.2% 12.8% 13.2% 

Operating profi t 72.5 78.7 (7.9)% 79.9 78.7 1.5% 

Net profi t from continuing operations 45.8 48.4 (5.3)% 51.1 48.4 5.6% 

Net profi t from discontinued operations 23.9 (11.8) 23.9 (11.8) 

Net profi t for the period 69.7 36.6 90.5% 75.0 36.6 104.9% 

EPS total (€ per share) 2.76 1.46 89.0% 2.98 1.46 103.4% 

EPS from continuing operations (€ per share) 1.82 1.93 (5.7)% 2.02 1.93 4.7% 

(1) The restated fi gures for 2011 exclude the impact of the non-recurring €7.4 million upfront royalty payment recorded in 2011 as part of the agreement to end the joint 

venture with Johnson Controls. 

(2) Changes are measured at current exchange rates except for the change in revenue, which is measured at constant exchange rates. 

(3) Reported data for 2010 has been restated to separate the earnings from operations carried on from discontinued operations. Discontinued operations relate to the Saft 

Group’s 49% interest in the Johnson Controls-Saft joint venture, an interest that the Group disposed of on 30 September 2011. Up to the date of its disposal, this joint 

venture was accounted for under the equity method in the Group’s fi nancial statements. 

(4) EBITDA is defi ned as operating profi t, before depreciation (net of the depreciation of deferred grants relating to assets), amortisation, restructuring costs and other income 

and expenses 

(5) EBIT is defi ned as operating profi t before depreciation, amortisation, restructuring costs and other income and expenses. 

Reported gross profi t for the Group totalled €185.5 million, 

amounted to 29.5% of revenue, a decrease of 90 basis points 

compared to its level during the 2010 fi nancial year. As 

restated to exclude the €7.4 million positive impact of the nonrecurring 

up-front royalty payment, 2011 gross profi t margin 

totalled €178.1 million or 28.7% of revenue against a gross 

profi t margin of 30.4% in 2010. 

At current exchange rates, revenue grew 6.4% in 2011 (5.1% 

excluding the aforementioned upfront royalty payment) versus 

growth at current exchange rates of 5.7% in 2010. 

If one also excludes the negative impact of 7.6 million unit of 

Jacksonville, the 2011 gross margin of traditional activities of 

the Group amounted to 29.9% of sales against a comparable 

gross margin of 30.6% in 2010. 

This decrease by 70 basis points in gross margin of traditional 

activities of the Group resulted from a decrease in the Industrial 

Battery Group’s gross margin under the double impact of the 

rising cost of nickel and overall unfavorable currency exchange 

rates.

5 


Activity and consolidated results 

The reported EBITDA margin totalled €110.0 million or 17.5% 

of revenue in 2011, compared to €108.4 million or 18.3% 

of revenue in 2010. 

Restated to exclude the impact of non-recurring up-front 

royalty fee of €7.4 million, the Group EBITDA margin totaled 

€102.6 million, or 16.5% of sales against an EBITDA 

margin of 18.3% in 2010. This decrease is mainly due to 

the impact of the launch of the lithium-ion production unit of 

Jacksonville. Indeed, if we exclude from the reported data on 

one hand the mentioned above non-recurring up-front royalty 

fee and, secondly, the negative contribution by €9.6 million 

of Jacksonville production unit, the 2011 EBITDA margin of 

traditional activities of the Group amounted to €112.2 million, 

a margin of 18.1% of sales against a restated comparable 

margin of 18.6% in 2010. 

This overall performance, in line with the initial forecast of the 

Group, covers an increase by 100 basis points in the EBITDA 

margin of Specialty Battery Group division and a decrease 

by 120 basis points from that of the Industrial Battery Group 

division following a decline in gross margin described above. 

Depreciation, amortisation and impairment of non-current 

assets amounted to €30.5 million in 2011, a modest 

€0.4 million increase from the previous fi nancial year. Net 

of depreciation of deferred grants related to the Jacksonville 

facility’s, 2011 depreciation, amortisation and impairment 

amounted to €29.7 million. 

The reported EBIT margin totalled €80.3 million, or 12.8% 

of revenue in the 2011 fi nancial year, compared to 

€78.3 million, or 13.2% of revenue in 2010. As restated, 

the 2011 EBIT margin amounted to 72.9 million, or 11.7% of 

sales against a 2010 EBIT margin adjusted for €78.7 million 

and 13.3% of sales. Excluding the impact of Jacksonville, the 

EBIT margin amounted to €83.3 million against an EBIT margin 

of €79.8 million on a comparable basis in 2010. 

The Group’s 2011 operating profi t registered an annual 

increase of 1.5%, to €79.9 million, compared to an operating 

profi t of €78.7 million in the 2010 fi nancial year, the 

€7.4 million upfront royalty payment recognised in income in 

the fi nancial year partly offsetting the €10.4 million operating 

loss recognised for the Jacksonville facility. 

The net fi nancial expense for the 2011 fi nancial year was 

€11.0 million, down €7.8 million on the net expense 

recorded in 2010. This improvement came on the back of 

i) a €1.7 million reduction in net borrowing costs and ii) a 

€3.7 million foreign exchange gain in 2011, the 2010 

fi nancial year having seen a net foreign exchange loss of 

€2.5 million. 

The tax expense on continuing operations (1) totalled 

€19.6 million for the 2011 fi nancial year. This represented 

an overall tax rate of 27.7%. Excluding one-off tax revenue 

recorded in 2010, the overall tax rate of continuing operations 

for this fi nancial year was 24.2%. 

The net profi t from continuing operations for the 2011 fi nancial 

year thus amounted to €51.1 million, compared to a 2010 

net profi t on a comparable basis of €48.4 million. Earning 

per share from continuing operations was up 4.7%, rising from 

€1.93 in 2010 to €2.02 in 2011. 

Restated to exclude the impact of non-recurring up-front royalty 

fee of €7.4 million, net profi t from continuing operations for 

2011 totaled €45.8 million, against a 2010 net profi t from 

continuing operations of €48.4 million on a comparable basis. 

The net profi t from discontinued activities, which encompassed 

Saft’s 49% share in the net profi t (loss) of the Johnson Controls- 

Saft joint venture from 1 January to 30 September 2011, the 

date on which Saft disposed of this interest, and the Profi t and 

Loss impact of the disposal itself, came to €23.9 million (after 

tax). In 2010, this joint venture’s contribution net of tax to the 

Group’s consolidated profi t amounted to (€11.8) million. 

The Group’s total net profi t for the 2011 fi nancial year 

thus totalled €75.0 million, compared to a net profi t of 

€36.6 million for the 2010 fi nancial year. 2011 earnings per 

share amounted to €2.98 versus €1.46 in 2010. 

At €69.8 million, cash generated from operations decreased 

€5.0 million as compared to that in 2010 fi nancial year. This 

reduction was due to a €15.4 million change in working 

capital and also to an expected €6.1 million increase in the 

amount of tax effectively paid. 

Excluding changes in working capital, the Group’s activities 

generated cash fl ow of €108.9 million in 2011, a 3.3% 

increase from the previous fi nancial year. 

This strong cash generation together with the proceeds of the 

Group’s disposal of its interest in the Johnson Controls-Saft 

joint venture for €104.5 millions (US$145 million) led to a 

sharp increase in the Group’s cash position. The Group’s cash 

position thus stood at €267.2 million as of December 31, 

2011, compared to €194.6 million from the previous year. 

Although investments remained very high in 2011, at 

€68.1 million, the Group’s free cash fl ow (2) in 2011 (excluding 

fl ows related to discontinued activities) was broadly positive at 

€23.2 million, compared to €24.3 million in 2010. 

In light of these good results, and in accordance with the Group’s 

dividend distribution policy, the Ordinary General Meeting on 

May 11, 2012 will be asked to approve an ordinary dividend 

of €0.72, an increase of 2.9%. Furthermore, in light of the 

proceeds from the disposal of the interest in Johnson Controls- 

Saft received by the Group in 2011, shareholders at the 

aforementioned Ordinary General Meeting will be asked to 

approve an extraordinary dividend of €1 per share. 

(1) Namely excluding Saft Group’s 49% share in the net loss of Johnson Controls-Saft from January 1st to September 30, 2011 and excluding 

the impact of transactions associated with the disposal by Saft of its 49% interest in that joint venture. 

(2) Defi ned as cash generated from operations and not allocated to investing and fi nancing activities, but before equity investments and 

dividend payments, and excluding fl ows related to discontinued activities. 


5 Earnings 


by division 

5.2 EARNINGS BY DIVISION 

The following table shows changes in revenue and EBITDA margin by division. 

Revenues 

(€m) 


Financial year 2011 Financial year 2010 

Change 

(%) 

Restated 

EBITDA 

(€m) 

EBITDA 

margin 

(%) 

Revenues 

(€m) 

Restated 

EBITDA 

(€m) 

EBITDA 

margin 

(%) 

IBG (1) 350.2 7.5% 53.3 15.2% 331.1 54.2 16.4% 

SBG 271.1 6.7% 64.4 23.8% 260.0 59.2 22.8% 

Other (2) - - (5.5) n.s. - (3.5) n.s 

TOTAL 621.3 7.1% 112.2 18.1% 591.1 109.9 18.6% 

Data provided at actual exchange rates, except for the change in revenue, which is at constant exchange rates. 

(1) EBITDA of the IBG division is restated to exclude the impact of the Li-ion production facility in Jacksonville, representing an EBITDA contribution of €(9.6) million in 2011 

and €(1.5) million in 2010. 

(2) The “Other” cost centre includes the cost of corporate support services, i.e. primarily IT, research, corporate management, fi nance and administration. In 2011, 

it furthermore includes a non-recurring upfront royalty payment of €7.4 million booked as a result of the agreement to end the joint venture with Johnson Controls. 

This revenue is excluded from the data in the above table. 

Changes in consolidated revenue by market segment are shown below: 

2011 2010 

Change at constant 

exchange rates 

Stationary back-up power applications 168.5 140.5 22.7% 

Transportation (aviation and rail) 126.8 126.0 1.7% 

Small nickel batteries 54.9 64.6 (13.9)% 

TOTAL IBG 350.2 331.1 7.5% 

Civil activities 188.6 164.3 17.6% 

Defence activities 82.5 95.7 (12.0)% 

TOTAL SBG 271.1 260.0 6.7% 

5.2.1 INDUSTRIAL BATTERY GROUP (IBG) 

At €350.2 million, IBG division sales increased 7.5% at 

constant exchange rates over the fi nancial year. At current 

exchange rates, sales increased 5.7% compared to the 2010 

fi nancial year. This strong performance refl ects growth across 

all its various markets, except for the small nickel batteries 

market. 

As in 2010, this growth was mainly driven by the Stationary 

back-up power applications batteries market, which generated 

revenue of €168.6 million, an annual progression of close 

to 23% at constant exchange rates. The business grew in all 

regions, with the strongest performance being seen in Asia/ 

Oceania and Middle East/Africa. 

The industrial infrastructure back-up battery segment played 

a major part in this performance, in particular sales to the 

(1) Excluding sales to Johnson Controls-Saft. 

oil sector and to the electricity production, transmission and 

distribution sectors. 

As for the telecommunications networks market, the number two 

market for the division’s stationary applications, growth was 

slower, but still strong, with notably a sharp increase in the 

North American market. 

Overall, the proportion of the division’s revenue generated from 

stationary applications rose markedly, going from 44% of the 

division’s (1) sales in 2010 to 49% in 2011. 

After what was generally a slack 2010, transportation markets 

(aviation and rail) posted growth in 2011, with revenue (1) 

up 3.0% at constant exchange rates compared to the 2010 

fi nancial year. Within this business, the aviation sector, which 

had been one of the fi rst to see a return to growth in Q1 2010, 

continued to grow by over 5% in 2011, almost in line with the 

growth in global traffi c.

5 


Earnings by division 

Following a year of contraction in 2010, the rail market 

was very slightly positive in 2011. Although with contrasting 

developments occuring across different regions, growth was 

primarily seen in European and Middle-Eastern markets. 

In 2011, transportation markets (1) accounted for 35% of the 

division’s revenue (1) , compared to 36% in 2010. 

Sales to small nickel battery markets which had enjoyed a 

16.6% surge in the 2010 fi nancial year, fell back 13.9% in 

2011 in what was a very competitive market. This decline 

in sales was strongest in North America and had a broadly 

similar impact on the professional electronics and emergency 

lighting markets. 

In 2011, these markets accounted for 16% of revenue at the 

IBG division (1) , compared to 20% in 2010. 

In terms of profi tability, the 2011 fi nancial year saw a 120 

basis point decline in the division’s EBITDA margin, the 

latter being calculated, excluding the negative €9.6 million 

contribution from the new Li-ion facility in Jacksonville (compared 

to a negative €1.5 million contribution in 2010), at 15.2% of 

revenue in 2011 versus 16.4% in 2010. 

This reduction was mainly due to the gross margin being driven 

down by the twin impact of higher nickel purchasing costs and 

a broadly negative exchange rate effect. 

Over the past three fi nancial years, the price of nickel has 

risen sharply on the London Metal Exchange. The average 

price per ton of nickel thus rose from US$14,655 in 2009 

to US$21,809 in 2010 and most recently US$22,894 in 

2011, representing an increase of 56% over two fi nancial 

years. 

In line with the hedging policy adopted to protect the 

profi tability of a large portion of IBG division’s order book, 

the division’s estimated needs for the fi rst half of 2012 were 

already 60% hedged by the end of the 2011 fi nancial year. 

As far as possible, Saft will continue to apply the strategy of 

making forward purchases for part of the division’s requirements 

at a price consistent with that to be charged to customers in 

respect of the orders they have placed with IBG. 

Continuing the work undertaken in 2009, the division 

intensifi ed its sales and marketing efforts in renewable energy 

storage markets, strengthening the teams assigned to these 

markets. 

Accordingly, from a commercial standpoint and with regard to 

the development of new markets, the 2011 fi nancial year saw 

a large number of successes, and in particular: 

� the signing of new contracts to supply energy storage 

systems designed i) to manage electricity production, 

(1) Excluding sales to Johnson Controls-Saft. 

transmission and distribution networks, and ii) for community 

and residential energy storage applications. These 

successes were achieved both in the US and in Europe. 

Total orders for energy storage systems received in 2011 

represent about 10MWh capacity; 

� the supply of lithium-ion battery prototypes designed to 

provide on-board power for the new generation of electric 

forklift trucks presented by the Linde and Still brands of the 

European market leader Kion at the intralogistics trade show 

in Hannover; 

� in the rail sector, the development of the fi rst Li-ion batteries 

for two leading equipment makers in this market; 

� the launch of the Evolion® line of lithium-ion high-energy 

batteries for telecommunications applications, with high 

demand for batteries for completion of tests by customers; 

� in the fi eld of mobility, the signing of a production agreement 

with Peugeot Scooters to supply lithium-ion batteries for the 

new zero-emissions scooter “e-Vivacity” that is scheduled to 

be launched in 2012. 

The IBG division’s traditional technologies and markets also 

saw a large number of successes, in particular in Asia in the 

rail sector. Thus, two major contracts were signed with the two 

leading Chinese manufacturers CNR and CSR, respectively for 

the supply of back-up batteries for the “West Island” metro line 

in Hong Kong (contract with CNR) and the supply of batteries 

for 38 railcars for Malaysia (contract with CSR). 

The division’s industrial investments and capitalised Research 

and Development expenditure totalled €56.2 million in 2011, 

compared to €66.2 million in 2010 and €12.5 million in 

2009. The largest single investment represented a gross 

amount of €40.3 million (US$56.1 million), excluding a 

€20.4 million (US$28.4 million) subsidy, and was for the new 

Li-ion facility in Jacksonville, which is described below. 

5.2.2 SPECIALTY BATTERY GROUP (SBG) 

At €271.1 million, revenue at the Specialty Battery Group 

division recorded a sharp 6.7% increase at constant exchange 

rates after growth of 4.0% in 2010, despite a decline in 

military markets. At current exchange rates, sales were up 

4.3% year-on-year. 

This growth came from civil activities where revenue was up 

17.6% at constant exchange rates after an 18.7% increase 

in 2010. In the metering and smart metering systems market, 

the strongest growth came from European markets and China. 

Other markets with strong growth in 2011 were the medical 

equipment market as well as the oil drilling market. 


5 Earnings 


by division 

On the back of record high order levels in 2010 and a strong 

order intake in 2011, sales in the space market grew very 

strongly in 2011. The long-standing European leader in the 

fi eld of geostationary satellites and launchers, the Group has 

over the past number of years considerably strengthened its 

position in the US and Russia, but also in the Low Earth orbit 

satellite sector. The 2011 commercial successes detailed below 

reaffi rm Saft’s outstanding performance in the space market. 

Civil markets accounted for 70% of 2011 revenue at the SBG 

division, compared to 63% in 2010 and 56% in 2009. 

In line with expectations, the improvement in sales in military 

activities in the second half of the year made it possible to 

curb the decline in defence sales in 2011 to 12% at constant 

exchange rates. This overall performance masks higher sales 

of batteries used in portable equipment such as radios, night 

vision goggles and positioning systems, and a decline in 

project activities. Overall, defence activities accounted for 

30% of the SBG division’s revenue in 2011, compared to 37% 

of sales in 2010. 

The SBG division also recorded some signifi cant commercial 

successes in 2011, including: 

� a multi-annual contract with Orbital Sciences Corporation 

to supply lithium-ion batteries for the STAR-2 geostationary 

satellite platform; 

� a contract with General Atomics Aeronautical Systems Inc. 

to supply a high-power lithium-ion battery system for a laser 

application; 

� a contract with Thales Alenia Space to supply 81 battery 

systems for the Iridium NEXT low orbit satellite constellation; 

� a four-year and up to US$20 million contract with the 

United States Marine Corps (USMC) to supply advanced 

lithium-ion energy storage systems for its Improved Battery 

System programme (IBS), batteries potentially being for 

use in applications to start future ground defence vehicles, 

but also for electric mode traction during reconnaissance 

missions. 

The growth in sales at the SBG division was accompanied by 

an increase in its profi tability. The EBITDA margin was 23.8% 

of revenue in 2011, compared to 22.8% in 2010. This 

improvement in operating profi tability stemmed from a higher 

gross margin driven by higher volumes twinned with strong cost 

control efforts. 

Total investments and capitalised Research and Development 

expenditures at the SBG division amounted to €11.2 million 

versus €9.3 million in 2010 and €8.0 million in 2009. 

(1) After tax. 


5.2.3 JOINT VENTURES 

ASB 

ASB, a group that manufactures and sells thermal batteries 

for the defence market, reported revenue of €28.0 million in 

2011, an annual growth of 9.2% at constant exchange rates. 

All ASB Group markets grew in 2011, with the strongest growth 

being seen in the US and the UK. On the back of a large 

number of commercial successes, the Group saw very high 

order levels in 2011. Net profi t for the 2011 fi nancial year 

totalled €3.6 million, compared to a net profi t of €3.2 million 

in 2010, representing a very good performance in what is a 

competitive market. 

The Group’s share of this profi t, namely €1.8 million for 

the 2011 fi nancial year, was recognised in the Group’s 

consolidated income statement under “Share of profi t of 

associates”. 

Saft plans to retain its 50% interest in the ASB joint venture. 

Johnson Controls–Saft (JC-S) 

During the 2011 fi nancial year, Saft disposed of its 49% 

interest in the Johnson Controls-Saft joint venture to Johnson 

Controls Inc. 

This disposal followed an agreement between Saft and Johnson 

Controls Inc. to end this joint venture, as a result of a dispute 

between the partners regarding the future of this company, 

which was established in 2006, to develop and manufacture 

lithium-ion batteries for the automotive sector. 

Under this agreement, on September 30, 2011, Johnson 

Controls acquired Saft’s interest in Johnson Controls-Saft for 

US$145 million in cash. This agreement also provides for: 

� an upfront royalty payment of US$10 million (i.e. 

€7.4 million) by Johnson Controls to Saft in consideration for 

a license extension allowing Johnson Controls to use certain 

Saft Li-ion technologies beyond the automotive sector; 

� the transfer to Saft, from the end of 2012, of the Nersac 

production facility in France for US$10 million. 

This agreement also brought an end to all outstanding legal 

proceedings and all cooperation between Saft and Johnson 

Controls Inc. Saft has since been free to follow its own strategy 

and now has additional resources with which to meet the 

needs of the markets in the future. 

From a fi nancial perspective, the Saft Group’s share of the 

joint venture’s net loss up to the date of disposal, together with 

the impact of the actual disposal itself, were included on a 

separate line of the Group income statement “Net profi t (loss) 

from discontinued activities”. This represented a profi t after tax 

of €23.9 million, compared to net losses (1) of €11.8 million 

in 2010 and €9.5 million in 2009. The analysis of this 

comprehensive income can be found in Note 30 of the 

Group’s Consolidated Financial Statements.

5.2.4 OTHER ACTIVITIES 

5 


Other items of consolidated income 

Expenses that are not allocated to the operational divisions, 

and which mainly comprise the costs of corporate support 

services such as IT, research, fi nance and administration and 

corporate management resulted in a positive EBITDA margin of 

€1.9 million, following the non-recurring €7.4 million upfront 

royalty payment recorded in the fi nancial year. Restated for 

this non-recurring income, the EBITDA for the Group’s support 

activities generated a net expense of €5.5 million for the 

2011 fi nancial year versus a loss of €3.5 million for the 2010 


5.3 OTHER ITEMS OF CONSOLIDATED INCOME 

5.3.1 OTHER ITEMS OF OPERATING 

PROFIT 

Distribution and sales expenses in the 2011 fi nancial 

year increased 4.5% compared to the 2010 fi nancial 

year. Administrative expenses were moreover up 3.6% to 

€45.8 million in the 2011 fi nancial year, versus €44.2 million 

in 2010. It should be noted that the Jacksonville facility 

accounted for more than a third of the increase in these two 

expense lines between 2010 and 2011. 

Finally, the Group’s Research and Development expenditure 

recognised in income was up €0.7 million in the fi nancial 

year to €22.1 million, with, in particular, the establishment 

of development resources within the Jacksonville facility. The 

Group’s overall research budget represented 9.0% of revenue 

in 2011. This is analysed in section 5.4 below. 

No restructuring costs were incurred during the 2011 

fi nancial year. They had amounted to €0.7 and €2.8 million 

respectively in 2010 and 2009, costs that were incurred by 

the IBG division as part of the restructuring of certain industrial 

activities following the merger with the RBS division which 

started in 2009 and completed in 2010. 

5.3.2 OPERATING PROFIT 

Adjusting for a non-material amount (€0.4 million) of other 

operating income and expenses, the Group’s 2011 operating 

profi t totalled €79.9 million, up 1.5% compared to the 2010 

fi nancial year. Restated for the impact of Jacksonville and the 

non-recurring €7.4 million upfront royalty payment booked in 

2011, it totalled €82.9 million, €2.7 million or 3.7% up on 

the previous fi nancial year. 

Group’s restating operating profi t represented 13.3% of 2011 

revenue, compared to an operating profi t on a comparable 

basis of 13.6% in 2010. 

5.3.3 NET FINANCIAL EXPENSE 

The Group’s net fi nancial expense amounted to €11.0 million 

in 2011, compared to a net expense of €18.8 million in 

2010 and an expense of €18.5 million in 2009. 

Net borrowing costs, after factoring in income from cash 

investments, amounted to €12.2 million in 2011, compared 

to a net expense of €13.9 million in 2010 and €13.2 million 

in 2009. 

The composite interest rate on the Group’s bank debt, net of 

hedging, amounted to 3.32% in 2011, compared to 3.68% 

in 2010 and 3.58% in 2009. This reduction was mainly due 

to lower dollar borrowing costs, after factoring in the cost 

of interest rate hedges. Euro borrowing costs for their part 

increased compared to the previous fi nancial year because of 

the higher Euribor. 

During the 2011 fi nancial year, the Group posted a net 

foreign exchange gain of €3.7 million compared to net foreign 

exchange losses of €2.5 million and €2.2 million recognised 

in 2010 and 2009. The foreign exchange gain posted in 

2011 was mainly the result of the revaluation of the Group’s 

dollar holdings at the end of the fi nancial year. 

5.3.4 PROFIT (LOSS) BEFORE TAX FROM 

CONTINUING OPERATIONS 

Profi t before tax from continuing operations (1) totalled 

€70.7 million in 2011, compared to a profi t before tax 

of €61.5 million in 2010, representing an increase of 


In addition to the net fi nancial expense, profi t (loss) from 

ordinary activities includes the Group’s share of profi t of joint 

ventures in which the Group has an interest, i.e. in 2011 only 

the ASB joint venture with the EADS Group. Saft’s 50% share 

of ASB’s net profi t amounted to €1.8 million for the 2011 

fi nancial year, compared to a profi t of €1.6 million in 2010 

and €1.3 million in 2009. 

(1) Namely, stripping out the Group’s share of profi t of the Johnson Controls-Saft joint venture from 1 January to 30 September 2011 and 

excluding the impact of the disposal of that interest. 


5 Research 


and Development 

5.3.5 INCOME TAX ON CONTINUING 

OPERATIONS 

2011 tax expense for continuing operations totalled 

€19.6 million, compared to an expense of €13.1 million 

in 2010 and an expense of €12.5 million in 2009, on a 

comparable basis. 

This expense represents an overall tax rate of 27.7%, compared 

to a rate of 21.3% in 2010 and 24.6% in 2009. The low 

overall tax rate in 2010 was partly due to non-recurring current 

tax income of €1.4 million following the extension of the tax 

consolidation regime in France to include Saft Groupe SA in 

respect of 2008 and 2009. Restated for this non-recurring 

item, the overall tax rate of continuing operations for the 2010 

fi nancial year stood at 24.3%. 

5.3.6 NET PROFIT (LOSS) FROM 

CONTINUING OPERATIONS 

The net profi t from continuing operations for the 2011 fi nancial 

year thus amounted to €51.1 million, compared to a 2010 net 

profi t on a comparable basis of €48.4 million. Earnings per 

share from continuing operations thus grew 4.7%, going from 

€1.93 in 2010 to €2.02 in 2011. 

5.3.7 NET PROFIT (LOSS) FROM 

DISCONTINUED ACTIVITIES 

The activities discontinued by the Group in 2011 involved the 

manufacture and sale of lithium-ion batteries for the hybrid and 

electrical vehicle market in the automotive sector, a business 

carried on within the Johnson Controls-Saft joint venture in 

which Saft held a 49% interest until 30 September 2011. This 

joint venture (and business) was accounted for under the equity 

method in the Group’s fi nancial statements. 

5.4 RESEARCH AND DEVELOPMENT 

Research and Development efforts were further enhanced 

in 2011 in terms of both manpower and expenditure and 

investments. At year-end 2011, the company employed 

411 engineers and technicians in its Research and Development 

teams, a 9% increase over the previous year. The teams were 

strengthened primarily for research under the fi ve-year plan to 

develop a new generation of Saft’s lithium-ion technology and 

for development of battery management systems. 


Net income from discontinued operations in 2011 is constituted 

by the sum of the share of Saft’s share in net loss of the joint 

venture until the transfer date and of the capital gain from the 

disposal of such participation. This result (net of tax) is a net 

profi t of €23.9 million against net losses of $11.8 million in 

2010 and $9.5 million in 2009 on a comparable basis. The 

analysis of this result is presented in note 30 to consolidated 

fi nancial statements. 

5.3.8 NET PROFIT (LOSS) FOR THE 

PERIOD, EARNINGS PER SHARE 

AND DIVIDEND 

The Group’s net profi t for the 2011 fi nancial year totalled 

€75.0 million, compared to a net profi t of €36.6 million in 

2010. 

Accounting for the non-controlling interests at the Amco-Saft 

Indian subsidiary, the net profi t for the period attributable to 

owners of the parent totalled €74.6 million in 2011 compared 

to a profi t of €36.4 million in 2010 and €28.5 million in 

2009. 

Earnings per share, calculated on the basis of the weighted 

average number of shares outstanding over the fi nancial year, 

25,086,737 shares in 2011 (compared with an average 

24,865,856 shares in 2010), thus stood at €2.98, compared 

to €1.46 for the 2010 fi nancial year. 

The Ordinary General Meeting of 11 May 2012 will be 

asked to approve an ordinary dividend of €0.72, an increase 

of 2.9%. Furthermore, in light of the proceeds from the disposal 

of the interest in Johnson Controls-Saft received by the Group in 

2011, shareholders at the aforementioned Ordinary General 

Meeting will be asked to approve an extraordinary dividend 

of €1 per share. 

Research and Development costs and investments, including 

subsidies and customer fi nancing (before deduction of the 

research tax credit), represented 9.0% of Group consolidated 

revenue in 2011, compared to 7.8% of consolidated revenue 

in 2010. Given the share of development costs charged to 

customers, 58% of Research and Development costs were paid 

for by the Group in 2011, versus 62% in 2010.

5 


Cash fl ow and fi nancing 

This increase in Research and Development costs relate 

primarily to costs of developing new products, but also new 

industrial processes. This increased effort in Research and 

Development also covers a signifi cant increase in investments 

for equipment, which amounted to €2.7 million in 2011. 

5.5 INVESTMENTS AND FIXED ASSETS 

5.5.1 INVESTMENTS 

The Group’s investments in the 2011 fi nancial year totalled 

€68.7 million, compared to €76.3 million in 2010. 

Direct industrial investments totalled €59.6 million in 2011, 

compared to €69.6 million in 2010 and €16.7 million in 

2009. 

As in 2010, the new facility in Jacksonville represented the 

largest project over the fi nancial year, involving a gross 

investment of €40.3 million (US$56.1 million) in 2011. In 

accordance with the contract signed with the US Department 

of Energy, Saft is receiving a 50% public subsidy on this 

project, up to a maximum of US$95.5 million. The subsidy 

effectively received in the 2011 fi nancial year totalled 

€20.4 million (US$28.4 million). This subsidy is reported in 

the consolidated statement of cash fl ows, under cash fl ow 

from fi nancing activities. This subsidy is recognised in income 

on the same basis as the amortisation of equipment it helped 

fi nance and accordingly reduces the impact of the Group’s 

overall amortisation expense. Amortisation of this subsidy was 

€0.8 million in the 2011 fi nancial year. 

In addition to investing in the new Li-ion facility in Jacksonville, 

the Group invested €1.1 million in its Zhuhai facility in China in 

5.6 CASH FLOW AND FINANCING 

5.6.1 CASH GENERATED 

FROM OPERATIONS 

Net cash generated from continuing operations amounted to 

€69.8 million, €5.0 million down from the 2010 fi nancial 

year. This reduction was mainly due to a €15.4 million 

increase in overall working capital. Operating working capital 

In 2011, the share of research efforts devoted to lithium-ion 

technology has represented more than 60% of the Group’s total 

effort in Research and Development. 

Research and Development costs capitalized during the 2011 

fi nancial year are shown in Note 7 of the Group’s Consolidated 


order to increase manufacturing capacity. A container assembly 

workshop for large capacity “Intensium Max” batteries was 

also established in Bordeaux in response to the development of 

energy storage markets in Europe. 

The Group’s investment in intangible assets totalled €9.1 million 

in 2011, compared to €6.7 million in 2010 and €4.8 million 

in 2009. These investments mainly comprise capitalised 

Research and Development expenditure, primarily as part of 

the 2010-2015 5-year plan to develop next generation lithiumion 

products. 

Commitments for future investments made by the Group as of 

December 31, 2011 amounted to €27.2 million. They mainly 

relate to ongoing capital expenditure at the production facility 

in Jacksonville. These investments will be funded by Group 

current treasury. 

5.5.2 PROPERTY, PLANT AND EQUIPMENT 

The Group’s main manufacturing locations are fully-owned by 

the Group. They are not subject to any major individual charge. 

only slightly increased by €6.2 million, the balance of the 

overall increase resulting from non-operating items, including 

the increase in grants receivable and tax receivables. 

In addition, the reduction in interest effectively paid was 

more than offset by the expected €6.1 million increase in tax 

effectively paid by the Group in the 2011 fi nancial year. 


5 Group’s 


statement of fi nancial position 

Excluding changes in working capital, the Group’s activities 

generated cash fl ow of €108.9 million in 2011, a €3.5 million 

or 3.3% increase from the previous fi nancial year. 

Cash flow from investing activities 

Net cash fl ow from investing activities amounted to 

€68.1 million overall, compared to €74.5 million in the 2010 

fi nancial year and €21.2 million in 2009. It should be noted 

that the Saft Group’s share in the fi nancing of the Johnson 

Controls-Saft joint venture over each of the fi nancial years 

presented was reclassifi ed under “Cash fl ow from discontinued 

operations” in the consolidated statement of cash fl ows. 

Cash flow from financing activities 

The Group’s fi nancing activities generated total positive cash 

fl ow of €3.9 million in the 2011 fi nancial year, compared to a 

positive cash fl ow of €16.6 million in 2010 and €84.8 million 

in 2009, a year in which the Group carried out a €115 million 

capital increase to fund its industrial investments. 

The main cash fl ows in 2011 relating to fi nancing activities 

consisted of i) the receipt of a €20.4 million subsidy from the 

US Department of Energy with respect to its 50% share of the 

fi nancing of the Jacksonville project, and ii) a 2011 dividend 

payout totalling €17.6 million. 


Free cash flow (1) 

Despite the high level of capital expenditure totalling 

€68.1 million, the Group generated €23.2 million in free 

cash fl ow in 2011. In the 2010 fi nancial year, free cash fl ow 

amounted to €24.3 million. 

5.6.2 CASH AND DEBT 

At the end of the 2011 fi nancial year, the Group’s cash 

position stood at €267.2 million, compared to €194.6 million 

on 31 December 2010. 

The Group’s bank debt at the end of the 2011 fi nancial year 

totalled €339.0 million, up €9.0 million as a result of the 

US$/€ exchange rate at the reporting date. This debt will 

mature on 2 July 2012. The refi nancing of bank debt of the 

Group is now well advanced and the Group expects to fi nalize 

its refi nancing before the end of fi rst quarter 2012. 

The Group’s net debt stood at €69.6 million at the end of 

the 2011 fi nancial year, compared to €135.4 million the 

previous year. The net debt to EBITDA ratio stood at 0.54 

on 31 December 2011, compared to a ratio of 1.24 on 

31 December 2010 and a contractual maximum of 2.8. 

The interest coverage ratio was 12.1 for the 2011 fi nancial 

year, compared to 9.3 in 2010. The contractual minimum is 

4.5. 

5.7 GROUP’S STATEMENT OF FINANCIAL POSITION 

The Group’s fi nancial performance during the 2011 fi nancial 

year helped strengthen the Group’s consolidated statement 

of fi nancial position and its equity. At €406.6 million on 

31 December 2011 versus €341.2 million on 31 December 

2010, equity was up €65.4 million (over 19%) after taking 

account of net profi t for the period of €75.0 million and the 

payment of a €17.6 million dividend. 

The Group’s statement of fi nancial position as of 31 December 

2011 showed total assets of €1.09 billion and refl ected: 

� an €8.5 million increase in non-current assets, mainly 

resulting from ongoing industrial investments in the United 

States and also from the decrease in investments in 

associated companies following the sale of the Group 

share in the Johnson Controls-Saft joint-venture; 

� a healthy cash position of €267.2 million; 

� a €9.0 million increase in the Group’s fi nancial liabilities, 

solely attributable to the level of the €/US$ exchange rate 

at the reporting date. 

(1) Defi ned as cash generated from operations and not allocated to investing and fi nancing activities, but before equity investments and 

dividend payments, and excluding fl ows related to discontinued activities.

5 


Related-party transactions 

5.8 OTHER KEY EVENTS IN FY 2011 

5.8.1 ANNUAL GENERAL MEETING 

AND DIVIDEND 

At the Annual General Meeting on 4 May 2011, Saft 

Groupe SA’s shareholders voted for a €0.70 per ordinary 

share dividend for the 2010 fi nancial year, an increase of 

2.9% on the dividend paid out in 2010. 

The shareholders furthermore empowered the Management 

Board to resolve, within certain limits, to issue shares and/ 

or securities. The prevailing authorisations are detailed in 

Chapter 8 of this Annual Report. 

5.8.2 INVESTMENT PROJECTS 

Jacksonville project: a new Saft plant for the 

production of lithium-ion batteries in Florida 

This project, which is currently under way, involves the 

construction of a facility to manufacture lithium-ion batteries in 

Jacksonville, Florida. The Jacksonville high-capacity production 

facility should enable the Group, through its subsidiary Saft 

America Inc., to serve new markets by producing components 

and integrating lithium-ion batteries for renewal energy storage, 

telecommunications stand-by networks, aviation applications 

and certain military applications. Once the project is complete 

in mid-2013, total production capacity at Jacksonville should 

be around US$300 million. 

The fi rst of three planned production lines was brought on line 

in Q4 2011. The second line will be installed in the second 

half of 2012 and the third in the fi rst half of 2013. 

5.9 RELATED-PARTY TRANSACTIONS 

The nature of the transactions entered into by the Group in 

2011 with related parties changed markedly as a result of 

the disposal by the Saft Group on 30 September 2011 of its 

interest in the Johnson Controls-Saft joint venture. Accordingly, of 

the services typically invoiced by the Group to the joint venture 

since it was founded in 2006, from 30 September 2011 it no 

longer provided any new Research and Development services. 

Since then, the Group has only invoiced this company for 

(1) Capex and project costs. 

This project, costing a total of approximately US$200 million 

over 2010-2013 (including both capital investments and 

operating expenses to bring the facility into operation), is 

receiving a subsidy under a cost-sharing programme representing 

50% of the cost, up a maximum of US$95.5 million, under the 

provisions of the Federal American Recovery and Reinvestment 

Act (ARRA). This subsidy is received on a monthly basis in line 

with the progress of the project. 

As of 31 December 2011, total investment (1) to date 

amounted to €108.6 million (i.e. US$147.8 million out of a 

total estimated cost of US$200 million). The subsidies received 

from the American Department of Energy (DoE) as of that date 

amounted to €56.2 million (i.e. US$76.4 million). 

The project also qualifi es for additional assistance from the 

State of Florida and the City of Jacksonville, which could total 

a maximum of US$20.8 million. Most of the assistance/ 

tax credits are spread over several fi nancial years (in some 

cases, over 10 years or more). This assistance and these tax 

credits will mostly result in reduced operating expenses for 

the Jacksonville plant in future years. In consideration of the 

assistance/tax credits, the Company will have to respect a 

number of commitments primarily related to job creation and 

maintaining a minimum average wage. 

The Jacksonville facility, which is at the cutting edge of 

technology, should enable competitive battery solutions to 

be made available rapidly on both the US and international 

markets. 

Saft’s targets for the facility for 2015 are annual revenue of 

US$200 million and an EBITDA margin of 15%. 

so-called support services and supply of personnel, use of 

premises and supplies necessary to operate the Nersac Li-ion 

production facility in France. 

Information on the ASB joint venture in which Saft has a 50% 

interest can be found in Note 29 of the Consolidated Financial 

Statements and that relating to Johnson Controls-Saft can be 

found in Note 30 “Net income from discontinued activities” of 

the Consolidated Financial Statements. 


5 Changes 


in the scope of consolidation in 2011 

5.10 CHANGES IN THE SCOPE OF CONSOLIDATION 


There was one change to the scope of consolidation in the 

2011 fi nancial year: it relates to the deconsolidation of 

the Johnson Controls-Saft joint venture, which is no longer 


accounted for under the equity method following Saft’s disposal 

of its interest in that joint venture on 30 September 2011. 

5.11 BASIS OF PREPARATION OF THE CONSOLIDATED 

FINANCIAL STATEMENTS 

In accordance with EC regulation 1606/2002 of 19 July 

2002 on international accounting standards, Saft Groupe SA’s 

Consolidated Financial Statements for the fi nancial year ended 

31 December 2011 were prepared in accordance with the 

IFRS accounting basis, as adopted in the European Union and 

in compliance with the IFRS as issued by the IASB. 

The new accounting standards and interpretations applicables 

for periods beginning from 1 January 2011 onwards have 

been applied by the Company and have not led to any 

signifi cant changes in methods of valuation and fi nancial 

statement presentation. 

The Company has not opted for the early application of 

standards and interpretations that do not have to be mandatorily 

used in 2011. 

5.12 EVENTS AFTER THE REPORTING PERIOD AND 2012 

OUTLOOK 

5.12.1 EVENTS AFTER THE REPORTING 

PERIOD 

No event has occurred since 31 December 2011 that is liable 

to have a material impact on the Group’s fi nancial position at 

that date. 

However, it is worth mentioning that the refi nancing of bank 

debt of the group is now well advanced and the group expects 

to fi nalize its refi nancing before the end of fi rst quarter of 2012. 

Refi nancing will be structured in the form of a fi ve-year maturity 

Euro bank debt and a dollar bonds issue in form of a private 

placement in the United States. The Group should also benefi t 

from a new revolving credit facility that shall increase its 

fi nancial fl exibility. 

(1) And in particular a €/US$ exchange rate of 1.39. 

5.12.2 2012 OUTLOOK 

Considering the uncertainties surrounding the near-term 

economic performance of the major developed countries, the 

Group anticipates that its revenue will grow by at least 5% in 

2012 at constant exchange rates (1) . 

As regards the Group’s profi tability, Saft expects an EBITDA 

margin of between 16.5% and 17.0% of revenue in the 2012 

fi nancial year.

5 


Activity of Saft Groupe SA subsidiaries and controlled entities 

5.13 SAFT GROUPE SA ACTIVITY AND RESULTS 

Saft Groupe SA is a fi nancial holding company. It owns 100% 

of the shares of Saft Finance Sarl which owns, directly or 

indirectly, the different subsidiaries of the Saft Group. 

Revenue for the 2011 fi nancial year totalled €6.5 million, 

compared to revenue of €6.4 million in 2010. This was 

mainly generated from the different services provided by the 

Company to the various Saft Group subsidiaries. 

Operating expenses amounted to €5.4 million, compared to 

€5.3 million in 2010. They primarily consisted of fees and 

the cost of services provided by Saft SAS. At €1.1 million, 

operating profi t was unchanged on the previous fi nancial year. 

Net fi nancial revenue was €29.8 million and was mainly 

comprised of dividends received from Group subsidiaries. The 

dividends received in the 2010 fi nancial year amounted to 


Extraordinary items constituted a net expense of €0.3 million, 

unchanged from the net amount for the 2010 fi nancial year. 

These expenses represented the cost of trading in Saft shares 

under the liquidity contract. 

Saft Groupe SA recognised tax income of €0.4 million in the 


Saft Groupe SA’s 2011 net profi t totalled €31.0 million, 

compared to a net profi t of €11.4 million in 2010. 

Total assets amounted to €372.1 million, virtually unchanged 

on the previous fi nancial year. 

Non-current assets primarily comprised Saft Finance Sàrl shares 

valued at €309 million, unchanged on the previous fi nancial 

year. 

Current assets were mainly composed of various receivables 

plus cash of €43.4 million at the end of the 2011 fi nancial 

year, compared to cash of €35.7 million as of 31 December 

2010. 

As detailed in the notes, a capital increase was carried out 

in the 2011 fi nancial year for a total amount, including share 

premiums, of €1.2 million as a result of the exercise of stock 

options. 

Total liabilities were comprised of equity of €361.1 million 

after taking into account the profi t for the period, with current 

liabilities amounting to €11.0 million. 

5.14 ACTIVITY OF SAFT GROUPE SA SUBSIDIARIES 

AND CONTROLLED ENTITIES 

Revenue posted in 2011 by consolidated subsidiaries of the Saft Groupe SA is as follows: 

CONSOLIDATED SUBSIDIARIES OF SAFT GROUPE SA. 

(Saft Groupe SA’s percentage control of and interest in the Group’s subsidiaries can be found in Note 4 of the Consolidated Financial 

Statements) 

(Revenue in € thousand, excluding inter-company transactions) 

Company name Country Activity 

Outside 

Group sales 

2009 

Outside 

Group sales 

2010 

Outside 

Group 

sales 2011 

Saft Groupe SA France 

Group Holding 

company - - 

Saft Australia Pty Ltd. Australia Holding company 

Assembly and 

- - 

Saft Batteries Pty Ltd. Australia 

commercial 7,772 6,927 8,944 

Saft Do Brasil Brazil Commercial 

Manufacturing and 

- - 0 

Saft Zhuhai (Ftz) Batteries Co, Ltd. China 

commercial 6,198 5,788 7,952 

Saft Nife ME Ltd. Cyprus Commercial 8,701 5,546 6,018 


5 Activity 


of Saft Groupe SA subsidiaries and controlled entities 

(Revenue in € thousand, excluding inter-company transactions) 

Company name Country Activity 


Outside 

Group sales 

2009 

Outside 

Group sales 

2010 

Outside 

Group 

sales 2011 

Saft Ferak AS Czech Republic 


commercial 


10,691 12,016 16,020 

Saft SAS (previously Saft SA) France 

commercial 200,914 208,456 210,562 

Saft Acquisition SAS France Holding company 


commercialisation of 

- - 

ASB Group France thermal batteries 


Friemann & Wolf Batterietechnik GmbH (Friwo) Germany 

commercial 3,018 3,158 4,139 

Saft Batterien GmbH Germany Commercial 1,304 1,798 1,542 

SGH GmbH Germany Holding company 


- - 

Tadiran Batteries GmbH Germany 

commercial 15,758 21,100 25,164 

Saft Hong Kong Ltd. 

Holding company and 

Hong Kong commercial 


8,889 9,675 8,399 

Tadiran Batteries Ltd. Israel 

commercial 10,196 11,948 12,921 

Saft Batterie Italia Srl Italy Commercial 


822 672 1,131 

Amco-Saft India Ltd. (51%) India 

commercial 6,671 7,468 8,727 

Saft Finance Sarl Luxembourg Holding company 480 480 7,406 

Saft Batterijen BV Netherlands Commercial 425 286 304 

Saft AS Norway Norway Commercial 

Holding company 

1,143 1,038 840 

Saft Batteries Pte Ltd. Singapore and commercial 8,913 4,676 4,276 

Saft Baterias SL Spain Commercial 13,558 10,387 10,543 

Alcad AB Sweden Commercial 

Property investment 

25,699 23,392 40,579 

Fast Jung KB Sweden 

company 


- - 

Saft AB Sweden 

commercial 45,534 45,507 49,302 

Saft Sweden AB Sweden Holding company 


- - 

Saft UK Ltd. United Kingdom 

commercial 

Manufacture of nickel- 

12,858 11,246 7,971 

Florida Substrate Inc. (PPF) United States plated strips 


784 1,046 1,139 

Saft America Inc. United States 

commercial 137,373 155,936 155,096 

Saft Federal Systems Inc. (Tadiran US) United States Commercial 31,569 42,596 39,732 

Saft JV Holding Co United States Holding company - - 

TOTAL 559,270 591,142 628,707 

EQUITY ACCOUNTED JOINT-VENTURES 

(sales in € million) 

Company name 

ASB Group France 

Country of 

incorporation Activity 

Percentage 

of shares held 

by Saft Group 2009 2010 2011 


commercialisation of 

thermal batteries 50% 26.0 25.8 28.0

2011 CONSOLIDATED 

FINANCIAL STATEMENTS 

6.1 Consolidated statement 

of fi nancial position 124 

6.2 Consolidated income statement 

and consolidated statement 

of comprehensive income 126 

6.3 Consolidated statement 

of cash fl ows 128 

6.4 Statement of changes in equity 129 

6 

6.5 Notes to the Consolidated 

Financial Statements 130 

6.6 Statutory Auditors’ report 

on the Consolidated 


IMPORTANT LEGAL INFORMATION AND CAUTIONARY STATEMENTS: 

The Consolidated Financial Statements for the year ended 31 December 2011 presented in this document 

have been approved by the Management Board, reviewed by the Audit Committee and approved by the 

Supervisory Board of Saft. 

Certain statements contained herein are forward-looking statements including, but not limited to, statements 

that are predictions of or indicate future events, trends, plans, objectives or results of operation. Undue 

reliance should not be placed on such statements because, by their nature, they are subject to known 

and unknown risks and uncertainties and can be affected by other factors that could cause actual results 

and Saft’s plans and objectives to differ materially from those expressed or implied in the forward looking 

statements. 


6 Consolidated 

2011 CONSOLIDATED FINANCIAL STATEMENTS 

statement of fi nancial position 

6.1 CONSOLIDATED STATEMENT OF FINANCIAL 

POSITION 

ASSETS 

(in € million) Note 31/12/2011 31/12/2010 31/12/2009 

Non-current assets 

Intangible assets, net 7 218.1 222.2 228.2 

Goodwill 8 112.7 110.3 104.8 

Property, plant and equipment, net 9 214.4 166.8 109.9 

Investment properties 9 0.1 0.1 0.2 

Investments in joint undertakings 29 13.3 49.6 30,0 

Deferred income tax assets 27 5.9 6.6 10.1 

Other non-current fi nancial assets 11 0.4 0.8 0.9 

Current assets 

564.9 556.4 484.1 

Inventories 12 85.5 76.5 63.1 

Tax credits 10.0 5.3 12.4 

Trade and other receivables 13 159.5 148.4 128.7 

Derivative fi nancial instruments 14 3.9 2.1 2.2 

Cash and cash equivalents 15 267.2 194.6 207.4 


526.1 426.9 413.8 

TOTAL ASSETS 1,091.0 983.3 897.9

LIABILITIES 

6 


Consolidated statement of fi nancial position 

(in € million) Note 31/12/2011 31/12/2010 31/12/2009 

Shareholders’ equity 16 

Ordinary shares 25.2 25.1 24.7 

Share premium 103.2 102.1 92.5 

Treasury shares (1.8) (0.7) (0.3) 

Cumulative translation adjustments 34.8 24.9 11.8 

Fair value and other reserves (3.7) 3.1 12.8 

Group consolidated reserves 246.2 185.3 164.3 

Minority interest in equity 2.7 1.4 1.0 

Total shareholders’ equity 406.6 341.2 306.8 

Liabilities 

Non-current liabilities 

Debt 18 101.2 327.7 312.7 

Other non-current fi nancial liabilities 19 5.3 6.1 8.1 

Deferred grants related to assets 17 47.3 25.5 0.0 

Deferred income tax liabilities 27 71.0 60.0 69.0 

Pensions and other long-term employee benefi ts 20 10.3 9.9 8.5 

Provisions 21 33.1 35.0 33.3 

268.2 464.2 431.6 

Current liabilities 

Trade and other payables 22 162.3 156.2 136.4 

Taxes payable 27 6.6 8.1 5.3 

Debt 18 237.8 2.3 3.2 

Derivative instruments 14 1.2 1.8 2.1 

Pensions and other long-term employee benefi ts 20 1.1 1.0 1.0 

Provisions 21 7.2 8.5 11.5 

416.2 177.9 159.5 

TOTAL LIABILITIES AND EQUITY 1,091.0 983.3 897.9 




income statement and consolidated statement of comprehensive income 

6.2 CONSOLIDATED INCOME STATEMENT AND 

CONSOLIDATED STATEMENT OF COMPREHENSIVE 

INCOME 

CONSOLIDATED INCOME STATEMENT 

(in € million) Note 2011 2010 Restated (1) 2009 Restated (1) 

Revenues 6 628.7 591.1 559.3 

Cost of sales 23 (443.2) (411.5) (397.7) 

Gross profi t 185.5 179.6 161.6 

Distribution and sales costs 23 (37.3) (35.7) (32.3) 

Administrative expenses 23 (45.8) (44.2) (42.4) 

Research and Development expenses 23 (22.1) (21.4) (18.1) 

Restructuring costs 24 0.0 (0.7) (2.8) 

Other operating income and expenses 25 (0.4) 1.1 2.1 

Operating profi t 79.9 78.7 68.1 

Finance costs, net 26 (11.0) (18.8) (18.5) 

Share of profi t/(loss) of associates 29 1.8 1.6 1.3 

Profi t before income tax from continuing operations 70.7 61.5 50.9 

Income tax on continuing operations 27 (19.6) (13.1) (12.5) 

Net profi t/(Loss) from continuing operations 51.1 48.4 38.4 

Net profi t/(Loss) from discontinued operations 30 23.9 (11.8) (9.5) 

Net profi t for the period 75.0 36.6 28.9 

Attributable to: owners of the parent Company 74.6 36.4 28.5 

Attributable to: non-controlling interests 0.4 0.2 0.4 

Earnings per share (in € per share): 28 

■ basic 2.98 1.46 1.50 

■ diluted 

Earnings per share of continued operations (in € per share): 

2.96 1.45 1.50 

■ basic 2.02 1.93 2.00 

■ diluted 

Earnings per share of discontinued operations (in € per share): 

2.01 1.92 2.00 

■ basic 0.96 (0.47) (0.50) 

■ diluted 0.95 (0.47) (0.50) 

(1) Following the sale by the Group, on 30 September 2011, of its 49% stake in the Johnson Controls-Saft joint venture, the 2011 transactions relating to this entity which 

was previously consolidated in the Group’s accounts using the equity method, have been presented on a separate line of the income statement “Net profi t/(loss) from 

discontinued operations”. The data for 2010 and 2009 have been restated for comparability with the data for 2011. These restatements consisted of reclassifying the 

Group’s share in the net loss of Johnson Controls-Saft and the corresponding tax income in the line “Net profi t/(loss) from discontinued operations”. The detail of the net 

profi t/(loss) from discontinued operations is presented in Note 30. 


6 


Consolidated income statement and consolidated statement of comprehensive income 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 

(in € million) Note 2011 2010 2009 

Net profi t for the period 

Other comprehensive income 

Actuarial gains and losses recognised against Statement 

75.0 36.6 28.9 

of Comprehensive Income 

Tax effect on actuarial gains and losses recognised against 

20 0.4 (1.6) 0.3 

Statement of Comprehensive Income (0.1) 0.5 0.1 

Items that will not be reclassifi ed to profi t or loss 0.3 (1.1) 0.4 

Fair value gains/(losses) on cash fl ow hedge (1.5) 0.5 5.6 

Fair value gains/(losses), net on investment hedge 18 (5.9) (13.0) (0.3) 

Currency translation adjustments 9.8 13.2 4.1 

Tax effect on income/(expenses) recognised directly in equity 27 2.5 3.9 (2.0) 

Items that may be reclassifi ed subsequently to profi t or loss 4.9 4.6 7.4 

Total other comprehensive income for the period, net of tax 5.2 3.5 7.8 

Total comprehensive income for the period 

Attributable to: 

80.2 40.1 36.7 

Owners of the parent Company 80.0 39.7 36.3 

Non-controlling interests 0.2 0.4 0.4 




statement of cash fl ows 

6.3 CONSOLIDATED STATEMENT OF CASH FLOWS 

(in € million) Note 2011 


2010 

Restated (1) 

2009 

Restated (1) 

Net profi t for the period from continuing operations 51.1 48.4 38.4 

Adjustments : 

Share of profi t/(loss) of associates (net of dividends received) (0.8) (0.7) (0.8) 

Income tax expense from continued activities 20 19.6 13.1 12.5 

Property, plant and equipment and intangible assets amortisation 

and depreciation 30.5 30.1 31.6 

Amortisation of deferred grants related to assets (0.8) 0.0 0.0 

Finance costs, net 11.0 18.8 18.5 

Stock option plans 1.6 1.4 1.6 

Net movements in provisions 21 (3.5) (4.4) (1.2) 

Other 0.2 (1.3) (0.1) 

108.9 105.4 100.5 

Change in inventories (7.8) (9.1) 15.9 

Change in trade and other receivables 2.8 (13.2) 6.9 

Change in trade and other payables (1.2) 5.2 (8.0) 

Change in other receivables and payables (9.2) 5.6 (2.8) 

Changes in working capital (15.4) (11.5) 12.0 

Cash fl ows from operations before interest and tax 93.5 93.9 112.5 

Interest paid (12.6) (14.1) (14.5) 

Income tax paid (11.1) (5.0) (4.6) 

Net cash generated by operating activities 

Cash fl ows from investing activities 

69.8 74.8 93.4 

Purchase of property, plant and equipment (59.6) (69.6) (16.7) 

Purchase of intangible assets (9.1) (6.7) (4.8) 

Proceeds from sale of property, plant and equipment 0.3 1.7 0.1 

Variation of other non-current fi nancial assets and liabilities 0.3 0.1 0.2 

Net cash used in investing activities 

Cash fl ows from fi nancing activities 

(68.1) (74.5) (21.2) 

Capital increase 2.2 0.7 120.9 

Purchase/Sale of treasury shares - liquidity contract (1.1) (0.4) 0.8 

New debt 0.0 0.0 315.3 

Debt repayments 0.0 0.0 (349.6) 

Grants related to assets 20.4 24.5 0.0 

Increase/(decrease) in other long-term liabilities 0.0 (0.8) 4.4 

Dividends paid to Company shareholders (17.6) (7.4) (7.0) 

Net cash generated by/(used in) fi nancing activities 3.9 16.6 84.8 

Net cash generated by/(used in) continuing operations 5.6 16.9 157.0 

Net cash generated by/(used in) discontinued operations 60.0 (35.9) (25.6) 

Net increase/(decrease) in cash 65.6 (19.0) 131.4 

Cash and cash equivalents at beginning of period 194.6 207.4 68.8 

Impact of changes in exchange rates 7.0 6.2 7.2 

CASH AND CASH EQUIVALENTS AT END OF PERIOD 267.2 194.6 207.4 

(1) Restated to reclassify all cash-fl ows related to Johnson Controls-Saft former investment as cash-fl ows from discontinued operations.

6 


Statement of changes in equity 

6.4 STATEMENT OF CHANGES IN EQUITY 


Number 

of shares 

making up 

the capital 

Share 

Capital 

Owners of the parent Company 

Share 

Premium Reserves 

Profi t for 

the period 

attributable 

to equity Total 

Noncontrolling 

interests Shareholders’ 

equity 

Balance at 31 December 2008 18,514,086 18.5 (27.7) 124.1 38.3 153.2 0.6 153.8 

Appropriation of 2008 earnings - - 38.3 (38.3) - - 0.0 

Employee stock option plans 

(value of employee services) - - 1.6 - 1.6 - 1.6 

Capital increase with maintenance 

of preferential subscription rights 

of 2 December 2009 5,696,328 6.0 114.4 (5.5) - 114.9 - 114.9 

Capital increase by exercise 

of stock options 231,864 0.2 5.8 - - 6.0 - 6.0 

Dividend paid 241,815 - - (7.0) - (7.0) - (7.0) 

Buyback of treasury shares - - 0.8 - 0.8 - 0.8 

Total comprehensive income - - - 36.3 36.3 0.4 36,7 

Balance at 31 December 2009 24,684,093 24.7 92.5 152.3 36.3 305.8 1.0 306.8 




Payment of dividend in shares 410,647 0.4 8.9 0.1 - 9.4 - 9.4 


of stock options 31,100 - 0.7 - - 0.7 - 0.7 

Dividend paid - - (7.4) - (7.4) - (7.4) 

Dividend to be paid - - (9.4) - (9.4) - (9.4) 

Purchase/Sale of treasury shares - - (0.4) - (0.4) - (0.4) 

Total comprehensive income - - - 39.7 39.7 0.4 40,1 

Balance at 31 December 2010 25,125,840 25.1 102.1 172.9 39.7 339.8 1.4 341.2 




Capital increase 

at Amco-Saft India Ltd. - - - - - 1.1 1.1 


of stock options 49,005 0.1 1.1 - - 1.2 - 1.2 

Dividend paid - - (17.6) - (17.6) - (17.6) 

Purchase/Sale of treasury shares - - (1.1) - (1.1) - (1.1) 

Total comprehensive income - - - 80.0 80.0 0.2 80.2 

BALANCE AT 31 DECEMBER 2011 25,174,845 25.2 103.2 195.5 80.0 403.9 2.7 406.6 


6 Notes 


to the Consolidated Financial Statements 

6.5 NOTES TO THE CONSOLIDATED FINANCIAL 

STATEMENTS 

DETAILED SUMMARY OF NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 

NOTE 1 Information relative to the Company 131 

NOTE 2 Accounting policies 131 

NOTE 3 Market risks and fi nancial risks 

management policies 141 

NOTE 4 Scope of consolidation 148 

NOTE 5 Changes in the scope of consolidation 148 

NOTE 6 Information by business segment 

and geographical segment 149 

NOTE 7 Intangible assets 154 

NOTE 8 Goodwill 155 

NOTE 9 Property, plant and equipment 157 

NOTE 10 Asset impairment tests 158 

NOTE 11 Other non-current fi nancial assets 159 

NOTE 12 Inventories 160 

NOTE 13 Trade and other receivables 160 

NOTE 14 fi nancial Derivatives 161 

NOTE 15 Cash and cash equivalents 161 

NOTE 16 Equity 162 

NOTE 17 Public subsidies 162 

NOTE 18 Debt 163 


NOTE 19 Other non-current fi nancial liabilities 165 

NOTE 20 Pensions, retirement indemnities 

and other employee benefi ts 165 

NOTE 21 Provisions for other liabilities and charges 169 

NOTE 22 Trade and other payables 171 

NOTE 23 Expenses by type 171 

NOTE 24 Restructuring costs 171 

NOTE 25 Other operating income and expenses 172 

NOTE 26 Financial costs 172 

NOTE 27 Income taxes 173 

NOTE 28 Earnings per share 175 

NOTE 29 Related-party transactions and investments 

in associates 176 

NOTE 30 Net profi t/(loss) from discontinued 

operations 177 

NOTE 31 Contractual obligations and other 

off balance sheet commitments 177 

NOTE 32 Remuneration of members 

of the Management Board 178 

NOTE 33 Share-based payments 179 

NOTE 34 Post balance sheet events 180

6 


Notes to the Consolidated Financial Statements 

NOTE 1 INFORMATION RELATIVE TO THE COMPANY 

Saft Groupe SA (the “Company”, and collectively with its 

consolidated subsidiaries the “Group” or “Saft”) was formed 

on 23 March 2005. Saft Groupe SA, a French Public Limited 

Company (société anonyme) whose registered offi ce is at 12, 

rue Sadi Carnot, 93170 Bagnolet, France, has been listed on 

Euronext Paris (compartment B) since 29 June 2005. 

NOTE 2 ACCOUNTING POLICIES 

2.1 BASIS OF PREPARATION 

OF THE CONSOLIDATED FINANCIAL 

STATEMENTS 

Pursuant to European Regulation 1606/2002 of 19 July 2002 

on international accounting standards, the Consolidated 

Financial Statements of Saft Groupe SA for the year ending 

31 December 2011 have been prepared in accordance with 

the International Financial Reporting Standards as approved 

by the European Union. These standards are available on the 

following website: 

http://ec.europa.eu/internal_market/accounting/ias_ 

fr.htm#adopted-commission. 

The Consolidated Financial Statements have been prepared 

in accordance with the historical cost convention, except 

for the revaluation of fi nancial assets (including derivative 

fi nancial instruments) and fi nancial liabilities (derivative 

fi nancial instruments) which are measured at fair value. For 

comparative purposes, they include fi gures for the years ended 

31 December 2010 and 31 December 2009 prepared under 

the same reporting standards. 

The Group Consolidated Financial Statements have been 

prepared using the accounting principles and policies 

described below. These are consistent with those applied by 

the Company in its Consolidated Financial Statements for the 

years ended 31 December 2010 and 31 December 2009. 

The main assumptions and estimates made in preparing the 

Consolidated Financial Statements are set out in Note 2.3 

below. 

New IFRS standards, revisions, amendments or interpretations 

of existing standards, as adopted by the EU for periods 

beginning from 1 January 2011, have been applied by the 

Company. They have not led to any signifi cant changes in 

measurement and presentation of assets, liabilities, income and 

expenses. 

The Company has not opted for the early application of 

standards and interpretations that do not have to be mandatorily 

used in 2011. These standards are presented in Note 2.2 

below. 

Unless otherwise indicated, the Consolidated Financial 

Statements are presented in millions of euro. 

2.2 STANDARDS, INTERPRETATIONS AND 

AMENDMENTS TO STANDARDS 

ALREADY PUBLISHED AND WHICH 

HAVE NOT BEEN APPLIED EARLY 

The new standards, interpretations and amendments to existing 

standards applicable to accounting periods opened prior 

to 1 January 2011 but which can be applied early in the 

Consolidated Financial Statements are the following: 

� IAS 1 – Presentation of fi nancial statements: this amendment 

of the standard relates to the presentation of other 

comprehensive income; 

� IFRS 7 – Financial instruments: this amendment to the 

standard concerns information to be provided in a note on 

transfers of fi nancial assets. 

2.3 USE OF ASSUMPTIONS 

AND ESTIMATES 

The preparation of Consolidated Financial Statements, in 

accordance with the IFRS conceptual framework, requires the 

use of estimates and assumptions that affect amounts shown 

in the fi nancial statements, such as depreciation, amortisation 

and provisions. 

These estimates are prepared on a going concern basis 

using information available at the time of preparation. They 

may be revised if new information leads to a change in the 

circumstances on which they were based. Actual results may 

differ from these estimates. 

Revision of an estimate does not constitute correction of an 

accounting error. 

The use of assumptions and estimates in the preparation of the 

Consolidated Financial Statements mainly relates to: 

� assessment of the recoverable value of goodwill and other 

assets; 

� the calculation of pension and retirement benefi t obligations 

and other provisions; 

� the determination of certain provisions; 

� the recognition of revenue and results relating to construction 

contracts; 

� the recognition of deferred tax assets. 


6 Notes 



Main assumptions and estimates used by the Group when 

performing asset impairment tests are disclosed in Note 10 

below. 

2.4 CONSOLIDATION METHODS 

The Consolidated Financial Statements at 31 December 

2011 include the Financial Statements of Saft Groupe SA 

and its subsidiaries. The Financial Statements of consolidated 

subsidiaries and associates have been restated in accordance 

with Group accounting policies. 

Subsidiaries are consolidated from the date on which the 

Group takes control of the entity until the date on which control 

of the subsidiary is transferred outside the Group. Control is 

defi ned as the direct or indirect power to govern the fi nancial 

and operational policies of a Company in order to benefi t from 

its activities. 

Companies under sole control are fully consolidated. When a 

company under sole control is consolidated for the fi rst time, 

its identifi able assets and liabilities are re-measured at fair 

value. The residual difference is recognised as goodwill (see 

Note 2.9). 

Jointly-controlled undertakings are consolidated using the equity 

method. 

The equity method is also used to account for all other companies 

over which the Group exercises signifi cant infl uence, which is 

presumed to exist when the percentage of voting rights held by 

the Group exceeds 20%. 

Investments in associates and the related goodwill are initially 

recognised in the balance sheet at cost and are subsequently 

adjusted upward or downward for post-acquisition changes in 

the Group’s share in the net assets of the associate, less any 

impairment in value. 

Group’s share in net income of associates for the period is 

recorded in the consolidated income statement under the 

heading “Share of profi t/(loss) of associates”. 

Material inter-company transactions are eliminated on 

consolidation. Inter-company losses are not eliminated unless 

the value of the assets transferred exceeds their recoverable 

amount. 

2.5 BUSINESS SEGMENT INFORMATION 

A business segment is a component of an entity: 

� that engages in business activities from which it may 

earn revenue and incur expenses (including revenue and 

expenses relating to transactions with other components of 

the same entity); 


� whose operating results are reviewed regularly by the 

entity’s chief operating decision-maker to make decisions 

about resources to be allocated to the segment and assess 

its performance; and 

� for which discrete fi nancial information is available. 

The business segment is the primary reporting format used 

by the Group and the geographical segment is the second 

format. Until 30 June 2009, Saft Group was organised in three 

main business segments (as hereafter listed and as described 

in Note 6). From 1 July 2009, two of these three business 

segments have been merged. As business segment information 

on the three former business segments is no longer available 

since 1 January 2010, 2009 business segment information 

has been restated according to the new business segments 

following the above-mentioned merger between two of the 

Group’s divisions. 

Financial information on business segments as per the 

Group reporting and as hereafter disclosed is prepared in 

accordance with the same accounting standards as those used 

for the preparation of the Consolidated Financial Statements, 

as disclosed in current Note 2. 

Each business segment’s performance is measured by 

reference to EBITDA, EBIT and Operating Profi t. EBITDA and 

EBIT aggregates are defi ned as follows: 

� EBITDA is defi ned as operating profi t, before depreciation,, 

restructuring costs and other operating income and 

expenses; 

� EBIT is defi ned as operating profi t, before restructuring costs 

and other operating income and expenses. 

2.6 TRANSLATION OF FOREIGN 

CURRENCY TRANSACTIONS 

AND BALANCES 

Items recognised in the Financial Statements of each individual 

Group entity are measured using the currency of the principal 

economic environment in which the entity operates (the 

functional currency). 

Accordingly, transactions denominated in foreign currencies 

are initially recorded in the functional currency of the entity 

using the exchange rate at the date of the transaction. 

At the balance sheet date, monetary assets and liabilities 

of individual entities denominated in foreign currencies are 

translated into the functional currency at the exchange rate 

prevailing on that date. All exchange gains and losses arising 

on translation are recognised in the income statement as 

fi nancial income or expense.

6 



2.7 TRANSLATION OF FINANCIAL 

STATEMENTS DENOMINATED 

IN FOREIGN CURRENCY 

The Consolidated Financial Statements of Saft are presented in 

euros, which is the Group’s functional and reporting currency. 

The balance sheets of companies whose functional currency 

is not the euro are translated into euros using the exchange 

rate at the balance sheet date, and their income statements 

and statements of cash fl ow are translated into euros using an 

average exchange rate for the period. 

Translation differences resulting from the use of different 

exchange rates for the opening balance sheet position, the 

net profi t (loss) for the period and the closing balance sheet 

position are recorded directly in equity. These translation 

differences are only recorded in the income statement when 

the entity in question is sold. 

Average rate 

for the year 

Translation differences arising on the Group’s net investments 

in entities whose functional currency is not the euro, and on 

debt and other currency instruments designated as hedges 

of such investments, are taken to shareholders’ equity under 

“Translation reserves”. 

Goodwill and other fair value adjustments arising on 

acquisitions of foreign entities whose functional currency is not 

the euro are treated as assets or liabilities of such entities and 

are translated in euro at the closing exchange rate. 

The table below shows the main exchange rates used in the 

preparation of the Consolidated Financial Statements. The 

closing rate is used in the preparation of the statement of 

fi nancial position, and the average rate for the year is used 

in the preparation of the income statement and statement of 

cash fl ow. 

2011 2010 2009 

Closing rate at 

31 December 

Average rate 

for the year 


31 December 

Average rate 

for the year 


31 December 

Norwegian krona 7.79 7.75 8.00 7.80 8.73 8.30 

Swedish krona 9.03 8.91 9.54 8.97 10.58 10.25 

Czech krona 24.59 25.79 25.28 25.06 26.43 26.47 

US dollar 1.39 1.29 1.33 1.34 1.39 1.44 

Australian dollar 1.35 1.27 1.44 1.31 1.77 1.60 

Singapore dollar 1.75 1.68 1.81 1.71 2.02 2.02 

Pound sterling 0.87 0.84 0.86 0.86 0.89 0.89 

2.8 INTANGIBLE ASSETS EXCLUDING 

GOODWILL 

In accordance with IAS 38 “Intangible assets”, assets are only 

capitalised if the cost of the asset can be measured reliably 

and it is probable that the future economic benefi ts attributable 

to the asset will fl ow to the Group. 

Intangible assets are derecognised when the risks and rewards 

incidental to ownership of the asset are transferred or when 

there is no future economic benefi t expected from the asset’s 

use or sale. 

The Group’s main intangible assets are: 

� brand names and customer relationships from the 

acquisition of the battery operations of the Alcatel Group in 

January 2004; 

� purchased technologies from the above-mentioned business 

combination, most of them being protected; 

� Research and Development projects capitalised in 

accordance with IAS 38. 

Brand names were valued using the same royalty-based method 

as was applied in the valuation of existing technologies. 

Regular investments are made with regard to brand names that 

have an indefi nite useful life and are not amortised. 

The value attributed to customer relationships was the present 

value of future surplus profi ts to be generated from such 

customers over the remaining life of the commercial relationship. 

The resulting asset is amortised using the straight-line method 

applied over the estimated period of expected benefi ts, which 

are as follows: 

� Specialty Battery Group division: 20 years, 

� Industrial Battery Group division: 14 years. 

Saft owns an extensive portfolio of technologies thanks 

to its substantial R&D capacity, the majority of which is 

devoted to product development and standardisation. Most 

Saft technologies are protected because of their strategic 

importance. 

On the acquisition of the Alcatel group’s battery operations, 

Saft’s technologies were valued using the royalty method, 

which involves estimating the value of the royalties Saft would 

have to pay a third party to use the technologies. 


6 Notes 



Each technology is amortised by the straight-line method on the 

basis of their estimated useful lives and commercial prospects. 

The periods used are: 

� Lithium-ion 21 years 

� Primary Lithium 11 years 

� Nickel-Cadmium 11 years 

� Nickel-Metal Hydride 7 years 

� Other Technologies 4 years 

Research and Development costs 

Research and Development expenditure is recognised as an 

expense in the year in which it is incurred, except for some 

development costs that are capitalised as an intangible asset 

in accordance with IAS 38 when all of the following six criteria 

are strictly met: 

� the technical feasibility of completing the intangible asset so 

that it will be available for use or sale; 

� the intention to complete the intangible asset and use or sell 

it; 

� the ability to use or sell the intangible asset; 

� the existence of a market for the output of the intangible 

asset; 

� the availability of adequate technical, fi nancial and human 

resources to complete the development; and 

� the ability to measure the expenditure attributable to the 

intangible asset during its development reliably. 

The cost of a capitalised development project is the sum of 

expenditure incurred from the date when the project fi rst meets 

the six criteria listed above. Development expenditure initially 

recognised as an expense is not capitalised in subsequent 

periods. 

Capitalised development costs are amortised over: 

� the useful life (of a process) or the commercial life (of a 

product), if this can be determined; or 

� the useful life of the underlying technology. 

Amortisation of capitalised development costs does not start 

until the related product begins to be sold. 

Capitalised development costs are generally amortised over 

a period of between 3 and 21 years. These periods are 

reviewed annually, and any adjustments required as a result of 

these reviews are recognised prospectively. 

Billable Research and Development expenditure incurred under 

a contract with a customer is included in long-term contract 

work in process. 


2.9 GOODWILL 

In accordance with IFRS 3 “Business combinations”, at the 

acquisition date, the difference between the acquisition cost of 

the subsidiary and the Group’s interest in its net assets stated at 

fair value, is accounted for as goodwill. 

Goodwill is not amortised but is tested for impairment as soon 

as an indication of potential impairment appears and at least 

on an annual basis. 

Goodwill is allocated to the Cash Generating Units (CGUs) 

or groups of CGUs to which it relates to carry out impairment 

tests. In accordance with IAS 36 “Impairment of assets”, 

the methodology used by the Group to identify potential 

impairments primarily involves comparing the recoverable 

amount of each CGU or group of CGUs with the carrying 

amount of their respective assets. 

The recoverable amount is the higher of the fair value less exit 

costs or the value in use determined as the present value of 

future cash fl ows associated with the CGU. 

Recoverable amounts of CGUs are determined on the basis of: 

� projections of cash fl ows generated by operations for the 

relevant CGU over its three-year business plan, plus a 

terminal value; 

� discounting such projected cash fl ows at the Group’s 

Weighted Average Cost of capital (WACC). 

Any impairment losses identifi ed are charged to the income 

statement in the operating profi t. Impairment losses recognised 

against goodwill may not be reversed. 

Main assumptions and estimates used for these calculations by 

the end of 2011 are described in Note 10. 

2.10 PROPERTY, PLANT AND EQUIPMENT 

In accordance with IAS 16 “Property, Plant and Equipment” 

assets are only capitalised if the cost of the asset can be 

measured reliably and it is probable that the future economic 

benefi ts attributable to the asset will fl ow to the Group. 

Items of property, plant and equipment are derecognised 

when the risks and rewards incidental to ownership of the asset 

are transferred or when there is no future economic benefi t 

expected from the asset’s use of sale. 

Any gain or loss arising from the derecognition of an asset 

(calculated as the difference between the net disposal 

proceeds and the carrying amount of the asset) is recognised 

in the income statement in the period in which the asset is 

derecognised. 

Items of property, plant and equipment are initially recognised 

at historical cost of acquisition or production. 

Property, plant and equipment costs may include, if applicable, 

borrowing costs when the asset is eligible under IAS 23 R 

(asset requiring a long preparation period before it can be 

used or sold).

6 



The historical cost of property, plant and equipment is reduced 

by accumulated depreciation and by recognised impairment 

losses. 

Depreciation is usually charged over the estimated service life 

for the relevant asset. 

� Buildings used for administrative 

and selling activities 10 to 40 years 

� Industrial buildings and plants: 

� Industrial buildings 20 to 30 years 

� Industrial buildings held under fi nance 

lease 15 years 

� Infrastructure works 10 to 20 years 

� Technical installations, plant equipment 

and tooling 5 to 10 years 

� Small tools 3 years 

The Group applies the straight-line method of depreciation. 

Depreciation is calculated on the basis of acquisition cost or 

production cost net of any residual value, when it is deemed 

signifi cant. 

The initial and remaining useful service lives of assets are 

reviewed at each balance sheet date, and adjusted if 

necessary. 

Investment properties 

Investment properties are properties held to generate rentals 

or for capital appreciation or both, rather than for use in the 

production or supply of goods or services, for administrative 

purposes, or for sale in the ordinary course of business. 

Investment properties are recognised as an asset when it is 

probable that the future economic benefi ts attributable to the 

property will fl ow to the Group and the cost of the property can 

be measured reliably. 

Investment properties are accounted for at historical cost, less 

accumulated depreciation. 

Finance leases 

Fixed assets acquired under fi nance leases (as defi ned in 

IAS 17) are capitalised in the balance sheet as described in 

Note 2.30. 

2.11 IMPAIRMENT OF INTANGIBLE 

AND TANGIBLE ASSETS 

Intangible assets which have an indefi nite useful life and are 

not amortised, are tested for impairment annually, or whenever 

events or changes in market conditions indicate that they might 

be impaired. Amortisable intangible assets and depreciable 

items of property, plant and equipment are also tested for 

impairment whenever events or changes in market conditions 

indicate that they might be impaired. Impairment tests involve 

comparing the carrying amount of an asset with the discounted 

future operating cash fl ows expected from that asset. 

If the test shows that these estimated future cash fl ows are less 

than the carrying amount, the Group takes account of the effect 

on future cash fl ows of alternative strategies. 

If there is still a shortfall, an impairment loss is recognised in 

the form of a provision, reducing the carrying amount of the 

asset to its value as measured by reference to discounted future 

operating cash fl ows (or, if it can be determined, to its fair 

value). 

Main assumptions and estimates used for these calculations by 

the end of 2011 are described in Note 10. 

2.12 OTHER NON-CURRENT FINANCIAL 

ASSETS 

Other non current fi nancial assets are measured and recognised 

in accordance with IAS 39 “Financial instruments”. 

Available-for-sale securities 

Investments in non-consolidated undertakings are “availablefor-sale” 

fi nancial assets, and are therefore measured at fair 

value. In the case of listed securities, fair value is the listed 

market price. If fair value cannot be measured reliably, the 

investment is measured at cost. Changes in fair value are taken 

directly to shareholders’ equity. If there is objective evidence 

that a fi nancial asset is impaired, part of the AFS reserve 

corresponding to that impairment must be recycled through the 

income statement. If the impairment loss decreases in the future, 

the impairment previously recorded is released to shareholders’ 

equity in the case of equity securities (release to profi t or loss is 

possible in the case of debt securities). 

Loans and other financial receivables 

Loans are initially recognised at fair value, and subsequently 

measured at amortised cost. If there is objective evidence that 

a loan is impaired, a provision for impairment is recorded. The 

impairment loss, equal to the excess of the carrying amount of 

the loan over its recoverable amount, is recognised through 

the income statement; it is reversible if the carrying amount 

increases in the future. 

Other fi nancial receivables mainly comprise security deposits 

paid. 

The Group reviews its investments in non-consolidated 

undertakings and other fi nancial assets at each balance 

sheet date in order to assess if there is objective evidence of 

impairment. 

2.13 INVENTORIES 

Inventories and industrial work in process are measured at 

the lower of cost (including indirect production costs) and net 

realisable value. Cost is usually calculated using the weighted 

average cost method. 


6 Notes 



Net realisable value is the estimated selling price in the ordinary 

course of business, less the estimated costs of completion and 

the estimated costs necessary to make the sale. 

2.14 TRADE AND OTHER CURRENT 

RECEIVABLES 

Trade receivables are measured at fair value net of any 

required provisions for impairment. 

A provision for impairment of trade and other current receivables 

is recorded when it becomes probable that a receivable will 

not be collected in full. Impairment losses are recognised 

through the income statement, in the operating profi t. 

2.15 CASH AND CASH EQUIVALENTS 

Cash and cash equivalents as shown in the consolidated cash 

fl ow statement comprise cash at bank and in hand plus shortterm 

investments that are liquid and easily convertible into a 

measurable amount of cash. 

The same defi nition also applies to cash and cash equivalents 

as shown in the balance sheet. 

In accordance with IAS 39 “Financial Instruments”, short-term 

investment securities are measured at fair value. 

Changes in the fair value of securities classifi ed as held-fortrading 

are taken to fi nancial profi t or loss without exception. 

2.16 EQUITY 

Share capital 

Ordinary shares are classifi ed in “Share capital”. Costs incurred 

on new share issues are offset against the issue proceeds, net 

of taxes. 

Other equity components 

In addition to share capital, consolidated equity includes the 

following: 

� “Share premium”, which corresponds to the excess paid 

by shareholders of the parent company over the par-value 

price of a stock issue; 

� “Treasury shares”, deducted from equity at their acquisition 

cost. Any gains or losses from the sale of these shares are 

recognised directly in equity and not taken to the income 

statement; 

� “Cumulative translation adjustment”, which records currency 

translation adjustments deriving from the translation of 

the fi nancial statements of foreign subsidiaries having a 

functional currency different from the euro; 


� “Fair value and other reserves”, which primarily records 

changes in market values of derivatives designated as cash 

fl ow hedges and investment hedges; 

� “Consolidated reserves”, which comprises the nondistributed 

net income of the parent company as well as the 

Group’s share in the retained earnings of fully-consolidated 

companies and companies accounted for by the equity 

method since their fi rst consolidation date; 

� “Minority interest in equity”, which comprises the nondistributed 

net income share of non Group shareholders in 

consolidated subsidiaries. 

2.17 SHARE-BASED PAYMENTS 

The Group has put in place long-term remuneration plans which 

will be settled in equity instruments (stock options). The fair 

value of services rendered by employees in exchange for the 

grant of the options is recognised in expenses, with a double 

entry to shareholders’ equity. The total amount recognised in 

expenses over the vesting period is determined on the basis 

of the fair value of the options granted, without taking into 

account conditions for vesting which are not market conditions. 

Conditions for vesting which are not market conditions are 

taken into account in the assumptions concerning the number 

of options that are likely to become exercisable. 

At each balance sheet date, the entity reviews the number of 

options that are likely to become exercisable. If necessary, 

it recognises the impact of changes in its estimates through 

profi t and loss with a corresponding double entry adjusting 

shareholders’ equity. 

Amounts received when the options are exercised are credited 

to the “Share capital” and “Share premium” captions, net of 

directly attributable transaction costs. 

2.18 DEBT 

In accordance with IAS 39 “Financial Instruments”, debt 

is initially recognised at cost, which is the fair value of the 

consideration received net of transaction costs. Subsequent 

to initial recognition, interest-bearing debt is measured at 

amortised cost using the effective interest method. The effective 

interest rate is the rate which makes it possible to equalise 

the net cash of the loan with all the cash fl ows produced by 

servicing the loan. Amortised cost is calculated taking into 

account all issuance costs and any redemption discounts or 

premiums.

6 



2.19 OTHER NON-CURRENT LIABILITIES 

Other non current fi nancial liabilities are measured and 

recognised in accordance with IAS 39 “Financial instruments”. 

They mainly include: 

� contingent advances, which consist of reimbursable 

Government advances to subsidise research; 

� deferred investment grants received. These grants are 

described in Note 17 hereafter; 

� other non-current fi nancial liabilities described in Note 19. 

In accordance with IFRS 3 revised “Business combination”, 

this liability resulting from the acquisition of the batteries 

sector of the Alcatel Group has been recognised for its 

discounted value. 

This debt is reduced with effective payments made by the 

Group. 

2.20 DEFERRED TAXES 

In accordance with IAS 12, deferred taxes are recognised 

on all temporary differences between the taxable amount of 

assets and liabilities and their value for the purposes of the 

“Consolidated Financial Statements”. 

Main temporary differences are resulting from: 

� the elimination of entries made in the individual company 

fi nancial statements of subsidiaries to refl ect elective tax 

treatments that differ from accounting rules; 

� adjustments made to restate fi nancial statements of 

consolidated subsidiaries in accordance with Group 

accounting policies. 

However, in accordance with IAS 12, deferred tax assets or 

liabilities are not recognised on temporary differences resulting 

from goodwill for which amortisation is not deductible for tax 

purposes. 

Deferred tax assets and liabilities are stated using the liability 

method, based on tax rates adopted or virtually adopted at the 

balance sheet date. 

The effects of changes in tax rates are recognised in net income 

for the year in which the change in rate is enacted. 

A deferred tax liability is recognised for temporary differences 

arising from dividends which may be distributed from reserves 

by subsidiaries unless the Group controls the dividend policy 

and it is probable that the temporary difference will not reverse 

in the foreseeable future. 

Deferred tax assets and liabilities are not discounted. Deferred 

tax assets and liabilities are presented at their net amount when 

taxes are levied by the same taxation authority and the latter 

authorizes such netting. 

Deferred tax assets are recognised in the balance sheet when it 

is likely that they will be recovered in future years. Factors taken 

into account in assessing the Group’s ability to recover deferred 

tax assets include the following: 

� estimates of future taxable profi ts and losses; 

� any taxable timing difference; 

� the extent to which exceptional expenses that are unlikely to 

recur in the future were included in past tax losses; and 

� fi nally, actual taxable profi ts and losses for previous years. 

2.21 PENSIONS, RETIREMENT 

INDEMNITIES AND OTHER 

EMPLOYEE BENEFITS 

The Group offers its employees pension, retirement benefi t and 

healthcare plans in accordance with the law and custom in the 

countries in which it operates. 

In France, each Group employee is entitled to a lump sum 

retirement benefi t. In other countries, the type of plan depends 

on local legislation, and on the business activities and historical 

practice of the subsidiary. 

In addition to basic State schemes, pension plans are of two 

types: defi ned-contribution and defi ned-benefi t. Defi ned-benefi t 

plans are partially or wholly funded by earmarked investments 

in plan assets such as equities, bonds, insurance policies or 

other types of investment. 

Basic State schemes 

In some countries, including France, Saft contributes to basic 

State social security schemes. The cost recognised in respect 

of these schemes is the amount of contributions payable to the 

social security authorities. 

Defined-contribution plans 

The benefi ts paid depend entirely upon the cumulative 

contributions paid and the return on the investments in which 

these contributions are invested. The Group has no obligation 

beyond the contributions paid, which are recognised as an 

expense. 

Defined-benefit plans 

The Group’s obligation under defi ned-benefi t plans is calculated 

annually by independent actuaries using the “Projected Unit 

Credit” method, in accordance with the provisions of IAS 19 

“Employee benefi ts”. 

Under this method, each period of service gives rise to an 

additional unit of benefi t entitlement and each unit is measured 

separately to build up the fi nal obligation. These actuarial 

calculations build in assumptions regarding: 

� retirement dates; 

� employee turnover; 

� mortality tables; 

� future salary increases and infl ation rates; 

� expected returns on plans assets; 

� discount rates. 

The estimated future benefi ts are discounted using rates 

appropriate to each country. Discount rates are determined by 

reference to the yield on government bonds and high-quality 

corporate bonds. 


6 Notes 



The amount recognised in the balance sheet is the net amount 

of the obligation less the fair value of dedicated plan assets at 

the balance sheet date. 

Two types of defi ned-benefi t plan are operated by Saft: 

� annuity: retirees are paid a pension throughout their 

retirement (the pension plan in Germany and an additional 

retirement scheme for “cadres” in France); 

� lump sum on retirement or cessation of employment (the 

pension plan in France and Israel). 

In addition, the Group participates in a multi-employer 

defi ned benefi t plan in Sweden but does not have suffi cient 

information to account for it as a defi ned-benefi t plan. This plan 

is accounted for as a defi ned-contribution plan. 

Actuarial gains and losses are generated when differences 

arise between actual fi gures and the assumptions previously 

used, or following a change in actuarial assumptions. 

In the case of post-employment benefi ts, such actuarial gains 

and losses are recognised directly in shareholders’ equity in the 

year in which their amount is determined. 

In the case of long-term benefi ts payable during the period of 

employment, actuarial gains and losses are recognised directly 

in operating profi t (loss) in the year in which they arise (longservice 

awards or equivalent). 

2.22 PROVISIONS 

In accordance with IAS 37 “Provisions, contingent liabilities 

and contingent assets”, provisions are recorded when the 

Group has a present obligation (legal or constructive) resulting 

from a past event, it is probable that an outfl ow of resources 

will be necessary to settle the obligation, and the amount of the 

obligation can be reliably measured. 

The amount recognised as a provision is the best estimate 

of the expenditure required to settle the present obligation at 

the balance sheet date. Where the effect of the time value of 

money is material, the amount of the provision is the present 

value of the expenditure expected to be required to settle the 

obligation; this applies in particular to provisions for end of life 

battery recycling costs. 

The costs actually incurred by the Group may differ from these 

estimates, which may have a material impact on its fi nancial 

position. 

Where the Group expects the amount provided for to be 

reimbursed to it in full or in part, for example under an insurance 

policy or a vendor’s guarantee of liabilities, the reimbursement 

is recognised only if recovery is certain. 


Provisions for restructuring 

Restructuring costs are provided for immediately and in full 

in the year when the Group has an obligation towards third 

parties, arising from a decision by an appropriate corporate 

body, which is evidenced before the balance sheet date by 

the announcement of the decision to the third parties involved. 

The amount of this provision mainly corresponds to severance 

payments, termination notice periods paid but not worked by 

employees, costs for retraining of employees made redundant, 

and site closure costs. 

Retirements of fi xed assets and impairment of inventories and 

other assets directly attributable to restructuring plans are also 

included in these provisions. 

Provisions for other liabilities and charges 

Provisions for contractual claims relate mainly to product 

warranties and other specifi c risks. Provisions for product 

warranties primarily cover the risk of valid product returns during 

the warranty period. Except in exceptional cases, the warranty 

period ranges from twelve months for standard batteries up to 

ten years. Saft also recognises provisions to cover claims from 

customers in respect of products shipped by the Group. 

Provisions for contractual claims are determined on the basis 

of information indicating that a technical problem has arisen 

on a product, whether sold or in inventory. Information may be 

obtained from internal sources (Quality Control Department), 

or from external sources (customer claims referred to the Sales 

Department). The information is then processed by the Technical 

and Quality Departments, which analyse and calculate on a 

statistical basis the quantities affected. 

The Group recognises warranty provisions by reference to 

contractual terms and statistics based on past experience, and 

on the basis of estimates and assumptions made by Group 

management in the light of information about the underlying 

risks. 

These estimates and assumptions are determined on the basis of 

formal claims made by the Group’s customers. The information 

contained in these claims is compared with internal technical 

data in order to quantify the extent of the risk. 

2.23 REVENUE AND CONSTRUCTION 

CONTRACTS 

Revenue comprises income derived from sales of bought-in 

goods, manufactured goods and services in connection with 

the Group’s principal activities, net of VAT, customer discounts 

and contract penalties.

6 



In accordance with IAS 18 “Revenue recognition”, revenue 

from the sale of goods and equipment are recognised when 

there is a formal agreement with the customer, the amount 

of revenue can be reliably measured, it is probable that the 

economic benefi ts associated with the transaction will fl ow 

to the Group, and the Group has transferred substantially all 

the risks and rewards of ownership to the purchaser. If the 

contract requires formal acceptance of the goods, equipment 

or services by the customer, revenue recognition is in principle 

deferred until the date of such acceptance. 

Revenue is measured at the fair value of the consideration 

received or receivable. Where payment is deferred and the 

effect on fair value is material, this effect is taken into account 

by discounting the future payments. 

For products sold through distributors, revenue is recognised on 

delivery to the distribution network. Product returns, estimated 

in accordance with contractual commitments and statistics on 

past sales, are recognised at the same date. 

Construction contracts 

IAS 11 defi nes a “Construction contract” as a contract 

specifi cally negotiated for the construction of an asset or 

a combination of assets that are closely interrelated or 

interdependent in term of their design, technology and function 

or their ultimate purpose of use. 

Group sales from constructions contracts are primarily for the 

construction or design of specifi c batteries, mainly in military 

applications and satellites. 

In accordance with IAS 11, in recognising revenue and profi ts 

on construction contracts the Group applies the percentage of 

completion method based on contractually-agreed milestones 

(determined on the basis of costs incurred compared with total 

estimated contract costs). 

Probable losses on completion are recognised immediately. 

In the event of uncertainty regarding customer acceptance, or 

in the case of relatively short-term contracts, revenue is only 

recognised up to the amount of recoverable costs. 

Work in process on long-term contracts is recorded at 

production cost and does not include any administrative or 

selling expenses. 

Movements in contract penalties (late delivery or noncompliance) 

are recognised as a deduction from revenue. 

Partial payments received under construction contracts are 

recognised as a liability in the balance sheet under “Prepayments 

on long-term contracts” for the portion of such payments 

corresponding to work not yet carried out. The amount of costs 

incurred, plus recognised gains and less recognised losses (in 

particular provisions for losses to completion), is calculated 

individually for each contract. If this amount is positive, it is 

recorded as an asset under “Long-term contract receivables”. 

If negative, it is recorded as a liability under “Prepayments on 

long-term contracts”. 

2.24 COST OF SALES 

Cost of sales mainly includes: 

� the cost of production, which includes the acquisition cost 

of raw materials and other components used in production, 

direct production costs (mainly salaries), and indirect 

production costs that are attributable to the production of 

the goods sold; 

� depreciation of property, plant and equipment and 

amortisation of intangible assets; 

� depreciation of deferred grants related to assets; 

� provisions for product returns; and 

� direct selling costs (freight, packaging and sales 

commissions). 

2.25 GROSS PROFIT 

Gross profi t is calculated as net revenue less cost of sales. 

2.26 OPERATING PROFIT (LOSS) 

Operating profi t is made up of gross profi t, administrative and 

selling expenses, Research and Development expenses, other 

operating income/expenses and restructuring costs. 

Other operating income and expenses consists primarily of: 

� gains or losses on forward contracts for purchases and 

sales of commodities, where the hedging contracts do not 

satisfy the IAS 39 criteria for hedge accounting; 

� gains or losses on available-for-sale securities; 

� gains or losses on disposals of investments, of property, 

plant and equipment, and of intangible assets; 

� income and expenses that are non-recurring during the 

Group’s day-to-day operations. They are characterised by 

their unusual nature and/or amount. 

Operating profi t excludes net fi nancial expense and income 

tax expense. 

2.27 FINANCIAL INCOME AND EXPENSES 

Financial income and expenses include interest income and 

expense, changes in the fair value of held-for-trading and 

available-for-sale fi nancial assets, impairment losses on 

other non-current fi nancial assets, foreign exchange gains 

and losses, changes in the fair value of fi nancial instruments 

(excluding hedges of non fi nancial assets and liabilities) and 

other fi nancial income and expenses. 


6 Notes 



Financial expenses also include the fi nancial component of 

pension costs and the effect of unwinding of discount on assets 

and liabilities. 

Interest income and expense is accounted for on a timeproportion 

basis in accordance with the effective interest rate 

method. 

2.28 DERIVATIVE FINANCIAL 

INSTRUMENTS 

The Group may, from time to time, use fi nancial derivatives to 

manage and reduce exposure to risks of movements in interest 

rates, exchange rates and the prices of certain metals. 

Financial derivatives that qualify for hedge accounting 

according to IAS 39 are classifi ed as hedges. The fi nancial 

derivatives that do not qualify for hedge accounting, although 

set up for the purpose of managing risk, are designated as and 

accounted for as trading instruments. 

Financial derivatives are measured at fair value. 

The fair value of a fi nancial derivative is classifi ed as a noncurrent 

asset or liability when the outstanding maturity of the 

related hedged item is greater than twelve months. When the 

outstanding maturity of the related hedged item is less than 

twelve months, the fi nancial derivative is classifi ed as a current 

asset or liability. 

Financial derivatives held for trading are classifi ed as current 

assets or liabilities. 

2.29 HEDGE ACCOUNTING 

Cash flow hedges 

A cash fl ow hedge makes it possible for the Group to protect 

itself against the risk of future changes in one or more cash 

fl ows affecting consolidated income. The hedged cash fl ows 

may derive from contracts on fi nancial or non-fi nancial assets 

already translated in the statement of fi nancial position, or 

future transactions not yet translated in the statement of fi nancial 

position, when these transactions are highly probable. 

When a derivative fi nancial instrument is designated as a 

hedge of the variability in cash fl ows of a recognised asset 

or liability, or a highly probable forecasted transaction, the 

effective part of any gain or loss on the fi nancial derivative 

is recognised directly in equity and the ineffective part of any 

gain or loss is recognised immediately in profi t or loss. 

Changes in the fair value of the derivative fi nancial derivatives 

are taken to other comprehensive income for the effective 

part and profi t or loss for the ineffective part. Gains or losses 

accumulated in equity must be reclassifi ed in income, in the 

same section as the element hedged - namely operating profi t 

for hedges of operating fl ows and fi nancial income for other 


hedges - during the same periods in which the hedged cash 

fl ow affects income. 

When a hedging instrument expires or is sold, terminated or 

exercised, or the Group revokes the designation of the hedge 

relationship but the hedged forecast transaction is still expected 

to occur, the cumulative gain or loss at that point is retained in 

equity and is recognised in accordance with the above policy 

when the transaction occurs. If the hedged transaction is no 

longer expected to take place, then the cumulative unrealised 

gain or loss recognised in equity is recognised immediately in 

profi t or loss. 

Fair value hedge 

A fair value hedge makes it possible for the Group to protect 

itself against the risk deriving from changes in the fair value 

of assets, liabilities, such as fi xed-rate loans and borrowings 

or assets, liabilities or fi rm commitments in foreign currencies. 

Fair value hedge accounting is used when a fi nancial derivative 

is designated as a hedge of the variability of the fair value of a 

recognised asset or liability (or fi rm commitment). 

The hedging instrument is measured at fair value with changes 

in fair value recognised in net profi t (loss) for the period. The 

hedged item is re-measured symmetrically to its fair value. These 

two re-measurements offset each other in the consolidated 

income statement, with the exception of the ineffective part of 

the hedge. 

Hedge of net investments 

A hedge of a net investment makes it possible for the Group 

to protect itself against the currency risk of a net investment 

(investments, long-term loans, provisions to branches, 

unrepatriated income) in an entity consolidated abroad. 

Hedges of net investments in foreign entities are recognised 

in the same manner as cash fl ow hedges. The portion of the 

gain or loss on the hedging instrument that is determined to 

be an effective hedge is recognised directly in equity; the 

ineffective portion of the gain or loss on the hedging instrument 

is recognised in profi t or loss, as fi nancial income or expense. 

Cumulative gains and losses recognised in equity are 

recognised to profi t and loss when the foreign entity is sold. 

2.30 FINANCE LEASES 

Under IAS 17, leases, which transfer to the Group substantially 

all the risks and rewards incident to ownership of the leased 

asset, are classifi ed as fi nance leases. They are recognised as 

assets on inception of the lease at the lower of the fair value 

of the leased asset or the present value of the minimum lease 

payments. 

Lease payments are apportioned between the fi nance charge 

and the reduction of the outstanding liability so as to produce 

a constant periodic rate of interest on the remaining balance of 

the liability for each period.

6 



Assets held under fi nance leases are depreciated over the 

shorter of the useful life of the asset or the lease term. 

Leases under which the lessor retains substantially all the risks 

and rewards incident to ownership of the leased asset are 

classifi ed as operating leases. 

Payments made as lessee under an operating lease are 

recognised as an expense in the income statement on a 

straight-line basis over the lease term. 

2.31 DISTRIBUTION OF DIVIDENDS 

When a dividend is declared, a liability is recognised in the 

fi nancial statements in the year in which the dividend was 

approved by the shareholders. 

NOTE 3 MARKET RISKS AND FINANCIAL RISKS MANAGEMENT POLICIES 

3.1 CAPITAL RISK MANAGEMENT 

In managing its capital structure, the Group’s objectives are 

to ensure its ability to continue as a going concern whilst 

providing returns to shareholders, benefi ts to other stakeholders 

and maintaining an optimal capital structure. 

In order to maintain or adjust the capital structure, the Group 

may adjust the amount of dividends paid to shareholders, 

return capital to shareholders, issue new shares, or sell assets 

to reduce debt. 

It should also be noted that the Group has put in place a 

liquidity contract in order to improve the liquidity of Saft Groupe 

SA shares on the stock market. 

Exposure to share market risks only relates to variations in the 

price of own shares held. 

The data relating to transactions in the Company’s own shares 

during 2011, and the measures taken to manage this risk, is 

presented in the “Information on the Company and its Capital” 

section of this Annual Report. 

3.2 LIQUIDITY RISK 

Risk identification and measurement 

Liquidity risk is the risk of not having the necessary funds to 

honour commitments when they fall due. It involves, fi rstly, 

the risk that assets cannot be sold quickly under satisfactory 

conditions if need be and, secondly, the risk that liabilities will 

be called in advance or that the Group would not have access 

to credit on satisfactory terms. 

With respect to fi nancial assets, with the exception of fi nancial 

assets allocated to fi nance its pension obligations, severance 

packages and other long-term commitments to employees (see 

Note 20 below) and trade receivables (see credit risk), the 

Group has mainly cash and cash equivalents (see Note 15 

below). Hence, the Group does not have a signifi cant amount 

of fi nancial securities that could pose a liquidity risk. 

With respect to the liquidity risk stemming from its indebtedness, 

the Group’s bank debt and its amortisation terms and conditions 

are disclosed in Note 18. These terms and conditions include 

repayment on 2 July 2012 of the balance of the debt at such 

date, i.e. €150 million and $240 million. 

The Group has already started the process of refi nancing 

its bank debt and is confi dent in its ability to complete the 

refi nancing before maturity of current bank debt, at acceptable 

conditions. 

The signifi cant level of Saft’s debt is liable to: 

� render the Group more vulnerable to any unfavourable 

change in the economic and industrial environment and in 

particular, to any increase in interest rates since a large 

portion of the Group’s debt has been contracted at fl oating 

rates; 

� oblige the Group to devote a signifi cant portion of its 

operating cash fl ow to the payment of interest, thus reducing 

its ability to fi nance its working capital, capital expenditure, 

cost reduction programmes or acquisitions; 

� limit the Group’s ability to pay dividends; 

� limit the Group’s ability to engage in forward planning or 

react to changes in its activities or in the markets in which it 

operates; 

� limit the Group’s ability to launch new products, develop 

new technologies or derive benefi t from new opportunities; 

� impede the Group’s competitiveness when confronted with 

proportionately less indebted competitors; and 

� limit the Group’s ability to incur additional borrowings in 

the future given the covenants contained in its current loan 

agreements. 


6 Notes 



The Group’s loan agreements contain fi nancial commitments, 

including the requirement for the Group to comply with the 

following fi nancial ratios (measured on a six-month basis): 

� contractual maximum gearing ratio (net fi nancial debt to 

EBITDA): 3.00 (for each 12-month period ending 30 June 

and 31 December of each year with a maximum of 2.80 

for each 12-month period ending 31 December 2011 and 

30 June 2012; and 

� minimum interest coverage ratio (contractually defi ned 

EBITDA to total net interest): 4.50 (for each 12-month 

period ending on 30 June and 31 December). 

The defi nition of EBITDA is included in the contractual 

commitments with the banks. This defi nition is in line with 

NET DEBT TO EBITDA RATIO: 

(1) Net of the amortisation of deferred grants related to assets. 


that used by the Group in its fi nancial reporting. EBITDA is 

defi ned as operating profi t or loss before depreciation and 

amortisation (1) , restructuring costs and other operating income 

and expenses. 

Net fi nancial indebtedness is defi ned as being borrowings 

minus cash and cash equivalents. In relation to the fi nancing 

agreement, it is calculated in euro using the average €/$ 

exchange rate for the period. 

Non compliance with any of these two ratios could allow the 

lenders to require early repayment of the loans. The Group has 

fully complied with these ratios in 2011. 

Below are the changes in these ratios as at fi nancial year-end. 

31/12/2011 31/12/2010 31/12/2009 

Cash and cash equivalents (267.2) (194.6) (207.4) 

Borrowings 335.5 325.9 310.7 

Accrued interest 0.1 1.7 2.0 

Finance leases and other fi nancial liabilities 1.2 2.4 3.2 

Net debt 69.6 135.4 108.5 

EBITDA (last 12 months) 110.0 108.4 100.4 

RATIO OF TOTAL NET DEBT TO EBITDA (a) 0.54 1.24 1.09 

(a) This ratio is calculated from the amount of the net debt expressed in euros using the average €/$ exchange rate for the fi nancial year. 

NET INTEREST COVERAGE RATIO: 

2011 2010 2009 

Net interest expense 9.1 11.7 11.4 

EBITDA (last 12 months) 110.0 108.4 100.4 

EBITDA TO NET INTEREST EXPENSE RATIO 12.1 9.3 8.8 

Hence, at 31 December 2011, the Group’s liquidity position was as follows: 

2011 2010 2009 

Undrawn confi rmed revolving credit facilities - 33.5 33.5 

Undrawn unconfi rmed credit facilities - - 27.1 

Cash and cash equivalents 267.2 194.6 207.4 

TOTAL 267.2 228.1 268.0 

Given its high cash levels, during the fourth quarter of 2011 

the Group cancelled its undrawn confi rmed revolving credit 

facility of €33.5 million. 

The analysis of fi nancial liabilities by contractual maturity is 

shown in Note 18 below.


6 



The Group has centralised cash pooling systems that allow 

for pooling cash denominated in the main currencies at the 

Group level among its various subsidiaries. This system enables 

the Group to reduce its bank fi nancing requirements, with the 

surplus cash of some subsidiaries being used to fi nance the 

cash requirements of other entities. 

The Group’s treasury offi ce monitors the cash position of each 

of its units and subsidiaries on a weekly basis. This weekly cash 

position is reported to the senior management. 

The Group also has a comprehensive liquidity forecasting 

program that operates on quarterly cash fl ow predictions but 

also in the longer term based on the budgetary data and/or 

the three-year plan drawn up at the end of each fi nancial year. 

On 31 December 2011, the Company believes it is able to 

meet its future payments. It is also confi dent of its ability to 

complete refi nancing before its current bank debt falls due for 

repayment. 

3.3 INTEREST RATE RISK 


Excluding those fi nancial assets allocated to fi nance its pensions, 

retirement indemnities and other long-term commitments to 

employees (see Note 20 below), the Group does not incur 

signifi cant interest rate risk on its fi nancial assets, which consist 

mainly of cash and cash equivalents. At 31 December 2011, 

Type of instrument Currency 

Notional amount 

(in million local currency) 

the Group’s cash position consists almost entirely of cash and 

cash equivalents. 

Nevertheless, the Group regularly invests its cash in the form 

of overnight money market funds, commercial paper and 

short term deposits. Almost all of the instruments used in 2011 

comply with the risk and liquidity criteria corresponding to cash 

equivalents as defi ned by IAS 7. 

The Group is exposed to interest rate risk nearly exclusively 

due to its long-term debt and investments. Its long-term fi nancial 

debt, which is described in Note 18 to the Consolidated 

Financial Statements, is contracted at variable rates regardless 

of whether it is in euro or in US Dollars. 

The Group therefore seeks to limit its exposure to fl uctuations 

in the interest rate by partially hedging the variable part of its 

debt and limiting its investments to a maximum maturity of three 

months. 

The Group’s interest rate risk is measured and managed in a 

centralised fashion by the Group’s Treasury Department. 


The strategies and policies for managing interest rate risk are 

reviewed and approved by the Group’s senior management. 

The instruments used to hedge the interest rate risk are rate 

swaps, options or option combinations (Collars). The fi nancial 

counterparties of these hedges are leading fi nancial institutions 

that are part of the Group’s fi nancing bank pool. 

As at 31 December 2011, the fair values of the Group’s 

interest rate risk management derivative instruments are broken 

down as follows: 

Market value 


< to 5 years > 5 years 31/12/2011 31/12/2010 31/12/2009 

COLLAR 

Pay fi xed rate/receive 3M dollar Libor USD 170.0 - (0.5) (1.5) - 

Pay fi xed rate/receive 6M dollar Libor USD 210.0 - - - (2.1) 

Pay fi xed rate/receive Euribor 3M EUR 100.0 - 0.0 (0.5) - 

CAP - - 

Pay fi xed rate/receive Euribor 6M EUR 130.0 - - - 0.0 

The impact (changes in fair value) on the net profi t for 2011 

of the ineffective part (time value) of these interest rate risk 

hedging fi nancial instruments was €0.2 million. This profi t was 

recorded under fi nance costs line of the profi t and loss account. 

The short-term management of interest rate risk consists mainly 

of meeting the objectives set by senior management to: 

� optimise the cost of long-term debt by fi xing interest 

periods from three to six months depending on yield curve 

expectations over the next six months; 

� optimise the return on surplus cash. Decisions taken in this 

area are subject to prior approval from senior management. 


6 Notes 



Interest rate risk on the Group’s bank debt after management can be broken down as follows: 


31/12/2011 31/12/2010 31/12/2009 

Debt in US$ 

Fixed interest rate debt 0.0 0.0 0.0 

Variable interest rate debt 

Debt in euros 

185.2 177.8 163.7 

Fixed interest rate debt 0.0 0.0 0.0 

Variable interest rate debt 149.7 148.1 147.0 

Total fi nancial liabilities at variable rate 334.9 325.9 310.7 

Financial assets at variable rate 0.0 (22.5) 0.0 

Net position before management 334.9 303.4 310.7 

Euro debt hedging collar (100.0) (100.0) 0.0 

Euro debt hedging cap 0.0 0.0 (130.0) 

Dollar debt hedging collar (131.4) (127.2) (145.8) 

NET POSITION AFTER MANAGEMENT 103.5 76.2 34.9 

A 1% increase in the interest rate on the net debt at 

31 December 2011 would result in an increase in the interest 

expense of €0.6 million per annum (before tax), net of the 

impact of hedging instruments. 

Inversely, on the same net position after management, a 1% 

reduction in the interest rate would reduce the interest expense 

by €0.2 million. 

3.4 RISK OF FLUCTUATIONS IN 

COMMODITY PRICES 


The Group is mainly exposed to price changes in the raw 

materials used in its production processes, either through 

its purchases of manufactured products or more directly its 

purchases of primary or transformed raw materials. The 

prices of these materials fl uctuate with changes in supply and 

demand, and thus are beyond the Group’s control. 

Their fl uctuation could have a signifi cant impact on the costs 

of production, and consequently, on the Group’s profi tability. 

The main raw material, excluding energy, used by the Group is 

nickel, the prices of which are negotiated on the London Metal 

Exchange (LME), an international commodities market. Its other 

purchases of non-ferrous metals, which are less signifi cant, 

concern cobalt, cadmium and lithium. Cobalt prices are 

negotiated over the counter based on the LME’s quotations. The 

price of cadmium is indexed to that published in the London 

Metal Bulletin. Lithium prices are negotiated directly with the 

suppliers. 

The Group’s exposure to fl uctuations in the price of nickel 

affects the Industrial Battery Group division, whose annual 

consumption (net of recycling) is about 1,500 to 2,000 metric 

tons. 

The average price of nickel on the LME increased by almost 

5% between 2010 and 2011, from an average price 

of US$21,809 per ton in 2010 to an average price of 

US$22,894 per ton in 2011. 


In order to protect itself against fl uctuations in the price of nickel, 

the Group‘s hedging policy consists mainly of a hedging pool 

covering all or part of estimated needs within the IBG division 

(excluding small nickel batteries activities). As of 31 December 

2011, 60% of IBG’s forecasted total needs for the fi rst six 

months of 2012 were hedged (excluding small nickel batteries 

activity). This is done by purchasing forward contracts or other 

derivatives such as swaps and/or options denominated in 

US dollars, the currency used to buy nickel 

According to the so called surcharge policy used on the 

markets for small nickel batteries consisting in indexing the 

selling prices of its products to the price of nickel on the 

London Metal Exchange, no specifi c and automatic hedging 

of nickel purchases beyond the fl oor price of the indexation 

mechanism is required. However, the Group may enter into 

certain hedging transactions on a selective basis by means of 

the aforementioned derivative instruments. 

The hedging policy, and its implementation, must be approved 

by a special committee comprising the Group General 

Manager, Group Purchasing Director, IBG General Manager, 

and the Group Chief Financial Offi cer.

6 



The general principles for the accounting treatment of derivatives 

used to hedge the risks of fl uctuations in commodities prices are 

explained above in Note 2.29 to the Consolidated Financial 

Statements in the paragraph relating to cash fl ow hedges. 

Gains and losses resulting from hedging contracts are 

recognised in cost of sales of the division whose future needs 

are hedged when these contracts satisfy the criteria for hedge 

accounting under IAS 39. 

If these contracts are not eligible for hedge accounting under 

IAS 39, then the realised gains and losses are recorded in 

“Other operating income and expenses”. 

As at 31 December 2011, the Group purchased the following fi nancial derivatives to hedge the risk of changing commodities 

prices: 

Nominal value 

of contracts 

Contract market value at 31 December 2011 

Future cash 

fl ow hedge 

Fair value 

hedge 

Non allocated 

(trading) Total 

Silver swaps 2.0 0.04 - - 0.04 

Nickel swaps 14.6 (0.02) - - (0.02) 

TOTAL 14.6 0.02 - - 0.02 

The impact from existing hedges on the Group’s Consolidated Financial Statements at fi nancial year end is shown below: 

Amount in shareholders’ 

equity as at 

31 December 2011 

Impact on 2011 

income statement 

Sensitivity of impact 

on shareholders’ equity 

to an increase of 10% 

in the nickel 

and silver prices 

Silver swaps 0.1 - - 

Nickel swaps (1.1) - 0.7 

TOTAL (1.0) - 0.7 

As indicated in the above table, the impact from existing nickel 

and silver hedging instruments on Group consolidated equity 

resulting from a 10% increase of nickel and silver market prices 

would be €0.7 million. A decrease by 10% of the nickel and 

silver prices would result in a symmetrical positive impact of 


CURRENCY RISK 


Given the geographic diversity of its facilities and its activities, 

the Group is exposed to exchange rate fl uctuations, particularly 

in the euro-US dollar parity, but also in the euro- and US dollar- 

Swedish krona parities and in the US dollar-Israeli shekel parity. 

Changing parities can thus have a signifi cant impact on the 

Group’s fi nancial position and on the comparability of certain 

data from one year to the next. The impact may arise in two 

ways: 

� translation risk: the risk associated with movements in a 

currency other than the euro in which a Group company 

maintains its fi nancial accounts; and 

� transaction risk (operational and fi nancial): the risk 

associated with movements in a currency other than that in 

which a Group company maintains its fi nancial accounts. 

The Group‘s exposure to currency risk stemming from its 

companies’ purchases and sales in currencies other than 

their functional one (transaction risk) mainly affects those units 

engaged in both manufacturing and marketing, while the 

purely sales units mainly make their purchases and bill their 

clients in their functional currency. 

The principal currency risk affecting manufacturing units with 

an extensive international activity concerns their local currency’s 

parity with the euro and the US dollar, a currency in which 

the Group earns an average of between 35% and 40% of its 

revenue. 


6 Notes 



The following table shows the respective weightings of the principal currencies in the Group’s revenue: 


Euro USD GBP Other currencies 

2011 fi nancial year 49.92% 38.53% 2.81% 8.70% 

2010 fi nancial year 49.11% 40.29% 3.05% 7.60% 

2009 fi nancial year 50.93% 35.76% 4.92% 8.40% 

The identifi cation and measurement of transactional currency 

risks is carried out locally by each entity, and sent to the Group’s 

treasury offi ce on a quarterly basis. The treasury offi ce then 

consolidates the existing and forecast positions by currency 

pairs. The Finance Department uses these consolidated 

positions to make decisions relating to management of these 

risks and their potential hedging. These decisions, and in 

particular hedging transactions, may be implemented either 

centrally or locally under the supervision of the Group’s treasury 

offi ce. 

Transaction risk management 

The Group’s overall sensitivity to the US dollar/euro parity is 

limited by a hedging policy consisting mainly of: 

� buying or manufacturing in the same currency as used for 

billing; 

� using the net cash fl ows in US dollars to service the Group’s 

US dollar debt. 

Outstanding cash fl ow hedges at 31 December 2011 are as follows: 

Hedging instruments 

It should be noted that the Group pays for its purchases of raw 

materials in US dollars, particularly those of nickel and other 

metals. A signifi cant part of the Group’s investments in 2012- 

2013, especially within the framework of the Jacksonville 

facility project, will be made in US dollars. 

As of 31 December 2011, the forward exchange transactions 

implemented in order to manage transaction risk were as 

follows: 

� forward sale of €2.0 million against Swedish krona and; 

� forward sale of US$12.6 million against Israeli shekel. 

These transactions overall represent, as of 31 December 2011, 

a €14.6 million hedge position of forward 2012 transactions. 

< 1 year 

Currency €M 

between 

1 and 5 years Market value 

Forward exchange contracts 

ILS/USD 16.3 12.6 0 (0.7) 

SEK/EUR 18.4 2.0 0 0.1 

A 10% change in foreign exchange parity of hedged 

transactions at 31 December 2011 would impact Group 

shareholders’ equity by €1.3 million. Impact on profi t and loss 

account of the same change in foreign exchange parity would 

not be material. 

The following table shows the current assets and liabilities for 

the Group’s main currencies of exposure as at 31 December 

2011 along with a sensitivity measurement of the residual 

positions, after taking into consideration foreign exchange 

hedging transactions. 

(countervalue in € million) GBP SEK USD ILS 

Current assets 5.6 20.2 475.2 4.7 

Current liabilities 2.9 (24.9) (605.4) (9.1) 

Net balance sheet position before management 8.5 (4.7) (130.3) (4.5) 

Current hedging as at 31 December 2011 0.0 0.0 98.2 0.0 

Net balance sheet position after management 

Foreign exchange rates against euro 

8.5 (4.7) (32.1) (4.5) 

as at 31 December 2011 0.84 8.91 1.29 4.94 

Impact in euro of a 5% decrease in the euro 0.5 (0.2) (1.7) (0.2) 

Impact in euro of a 5% increase in the euro 0.5 0.2 1.7 0.2

6 



Fair value hedges consist of foreign exchange swaps and are broken down as follows: 

Hedging instruments 

< 1 year 

Currency €M 

between 

1 and 5 years Market value 

Foreign exchange swaps 

USD/EUR 127.0 98.2 0 3.7 

The Group considers that with all other parameters remaining 

the same, a 10% change in the dollar-euro parity has 

approximately a 4% impact in the same direction on revenue 

and a 6% impact in the same direction on EBITDA as it is 

defi ned in the Consolidated Financial Statements. 

Although Group revenue is less sensitive to change in parity of 

currencies other than dollar against euro, this is not the case of 

Group EBITDA margin, due to the number and size of Group 

plants located in countries outside the dollar and euro zones. 

In particular, the Group has two large production plants in 

Sweden and Israel. These plants have sizeable cost bases in 

their local currencies but make most of their sales in euros or 

dollars. The Group’s EBITDA margin is therefore sensitive to 

changes in the euro- and dollar- parities to the Swedish krona 

and the dollar parity to the Israeli shekel. 

Translation risk management 

The Group holds certain investments in activities located 

abroad whose net assets are exposed to foreign currency 

translation risk. The currency risk associated with holding the 

net assets of the Group’s foreign units is mainly managed 

through borrowings denominated in the local currency. 

The Group has not entered into any specifi c hedging contracts 

on its net assets abroad other than through borrowings 

denominated in those units’ local currencies. 

The Group had US$240 million of debt at 31 December 

2011. This debt is matched by the Group’s US dollar assets. In 

this respect, it is considered as a hedge of Group net foreign 

investments in US$ and the impact from currency fl uctuations on 

this debt is recorded under shareholders’ equity 

3.5 CREDIT AND COUNTERPARTY RISKS 

The credit risk to which the Group is exposed stems mainly from 

its trade receivables and commitments vis-à-vis its customers 

and from its cash and cash equivalents on deposit with banks 

and other fi nancial institutions, and from over-the-counter 

fi nancial instruments and derivative products contracted with 

fi nancial institutions. 

Credit risk from receivables 

Due to the nature of Saft’s business, trade receivables constitute 

the main source of credit risk. Owing to the very broad diversity 

of its markets and customers, the biggest customer accounted 

for less than 4% of consolidated revenue in 2011 (as against 

3% in 2010 and less than 3.5% in 2009), and the Group’s ten 

largest customers together represented 22%, 22% and 21% of 

consolidated revenue in 2011, 2010 and 2009 respectively. 

Each unit manages its own credit risk locally. An assessment 

of the risk of non-recovery is made quarterly or when an event 

makes collection of a receivable uncertain. 

The Group’s fi nancial offi cers also conduct periodic reviews of 

its main customers. 

Bank and financial counterparty risk 

The counterparty risk stemming from cash and cash equivalents 

and from the fi nancial instruments and derivative products 

entered into with banks or fi nancial institutions is managed at 

Group level by the Group’s Treasury Department. Derivatives 

transactions and cash investments made by the Group takes 

into account the need to diversify Group’s counterparty risks 

over fi nancial partners. 

As of 31 December 2011, the majority of the Group’s cash 

was deposited with various banks which provide the Group’s 

long-term fi nancing, all of them having at least a Standard & 

Poor’s A+ long-term rating. 

Raw material price, foreign exchange and interest rate risks 

hedging derivatives are also concluded with the Group’s 

lending banks. 

3.6 ESTIMATING THE FAIR VALUE 

OF FINANCIAL INSTRUMENTS 

The market values of the interest rate or commodities derivatives 

used as a basis of preparation of the Consolidated Financial 

Statements were calculated on the basis of the fair market 

values reported by the counterparties to these transactions. 


6 Notes 



NOTE 4 SCOPE OF CONSOLIDATION 

The scope of consolidation at 31 December 2011 comprises the following companies: 

Company name Activity Country 

NOTE 5 CHANGES IN THE SCOPE OF CONSOLIDATION 


Percentage of 

control and 

interest 

Consolidation 

method 

Saft Groupe SA Group Holding Company France 100 Full 

Saft Australia Pty Ltd. Holding company Australia 100 Full 

Saft Batteries Pty Ltd. Assembly and commercial Australia 100 Full 

Saft Do Brazil Commercial Brazil 100 Full 

Saft Zhuhai (Ftz) Batteries Co, Ltd. Manufacturing and commercial China 100 Full 

Saft Nife ME Ltd. Commercial Cyprus 100 Full 

Saft Ferak AS Manufacturing and commercial Czech Republic 100 Full 

Saft SAS (previously Saft SA) Manufacturing and commercial France 100 Full 

Saft Acquisition SAS Holding company 

Manufacturing and sale 

France 100 Full 

ASB (and its subsidiaries) 

Friemann & Wolf Batterietechnik 

of thermal batteries France 50 EA 

GmbH (Friwo) Manufacturing and commercial Germany 100 Full 

Saft Batterien GmbH Commercial Germany 100 Full 

SGH GmbH Holding company Germany 100 Full 

Tadiran Batteries GmbH Manufacturing and commercial Germany 100 Full 

Saft Hong Kong Ltd. Commercial Hong Kong 100 Full 

Amco-Saft India Ltd. Manufacturing and commercial India 51.04 Full 

Tadiran Batteries Ltd. Manufacturing and commercial Israel 100 Full 

Saft Batterie Italia Srl Commercial Italy 100 Full 

Saft Finance Sarl Holding company Luxembourg 100 Full 

Saft Batterijen BV Commercial Netherlands 100 Full 

Saft AS Norway Commercial 

Holding company 

Norway 100 Full 

Saft Batteries Pte Ltd. 

and commercial Singapore 100 Full 

Saft Baterias SL Commercial Spain 100 Full 

Alcad AB Commercial Sweden 100 Full 

Fast Jung KB Property investmet company Sweden 100 Full 

Saft AB Manufacturing and commercial Sweden 100 Full 

Saft Sweden AB Holding company Sweden 100 Full 

Saft UK Ltd. Manufacturing and commercial 

Manufacture 

United Kingdom 100 Full 

Florida Substrate Inc. (PPF) 

of nickel-plated strips United States 100 Full 

Saft America Inc. Manufacturing and commercial United States 100 Full 

Saft Federal Systems Inc. (Tadiran US) Commercial United States 100 Full 

Saft JV Holding Co Holding company United States 100 Full 

In the table above, “Full” signifi es that a company is consolidated using the full consolidation method and “Equity Accounting” 

signifi es that a company is consolidated using the equity accounting consolidation method. 

The only change in the scope of consolidation during the year 

relates to the sale by the Saft Group, on 30 September 2011, 

of its 49% stake in the Johnson Controls-Saft joint venture. This 

company was formerly consolidated in the Group’s fi nancial 

statements using the equity method. 

The impact of this joint venture on the Group’s 2011 

consolidated income statement is presented in Note 30 “Net 

profi t (loss) from discontinued operations”. Data from the 2010 

and 2009 consolidated income statements have been restated 

for comparability.

6 



NOTE 6 INFORMATION BY BUSINESS SEGMENT AND GEOGRAPHICAL 

SEGMENT 

6.1 INFORMATION BY BUSINESS 

SEGMENT 

The Group’s Management Board defi ned the business segments 

based on the reporting which it regularly examines in order to 

make decisions regarding allocation of resources to segments 

and evaluation of their performance. 

Since 1 July 2009, Group reporting has been structured based 

on the following business segments: 

� the Specialty Battery Group (SBG) division, which 

manufactures batteries for applications including water, gas 

and electricity utility meters, automated meter readers and 

road tolling systems, computer memory back-up systems, 

satellites, radios and other portable systems for military use, 

missiles, and torpedoes; 

� the Industrial Battery Group (IBG) division, which 

manufactures batteries used for standby power supplies 

Operating profit by division 

FINANCIAL YEAR 2011 

for industrial applications, telecommunications networks 

and the aviation and rail industries, as well as the storage 

of renewable energies. It also manufactures a specialised 

range of rechargeable batteries used in emergency lighting 

and professional electronics; 

� the Johnson Controls-Saft (JCS) division, which is 

specialised in the development, production and selling 

of advanced technology batteries for hybrid and electric 

vehicles; Given that the Group sold its 49% stake in the 

joint venture on 30 September 2011, information relating 

to Johnson Controls-Saft is shown in Note 30 «Net profi t/ 

(loss) from discontinued operations”; 

� The Other segment comprises the Group’s holding 

companies. It also includes central functions such as 

IT, research and central management, fi nance and 

administration. 

(in € million) IBG SBG Other Total 

Total segment revenues 437.0 351.9 7.4 796.3 

Minus intra-segment revenues (86.8) (80.8) 0.0 (167.6) 

Consolidated revenues 350.2 271.1 7.4 628.7 

EBITDA 43.7 64.4 1.9 110.0 

Depreciation of intangible assets (5.4) (7.4) (0.3) (13.1) 

Amortisation of property, plant & equipment (8.9) (7.5) (0.6) (17.0) 

Impairment of intangible assets 0.0 (0.4) 0.0 (0.4) 

Amortisation of deferred grants related to assets 0.8 0.0 0.0 0.8 

EBIT 30.2 49.1 1.0 80.3 

Provisions for restructuring 0.0 0.0 0.0 0.0 

Other operating income/(expenses) 0.0 (0.4) 0.0 (0.4) 

Operating profi t 30.2 48.7 1.0 79.9 


6 Notes 



FINANCIAL YEAR 2010 





EBITDA 52.7 59.2 (3.5) 108.4 

Depreciation of intangible assets (6.0) (7.8) 0.0 (13.8) 


Impairment of intangible assets 0.0 0.0 0.0 0.0 

EBIT 38.3 44.0 (4.0) 78.3 

Provisions for restructuring (0.7) 0.0 0.0 (0.7) 

Other operating income/(expenses) 1.5 (0.4) 0.0 1.1 

Operating profi t 39.1 43.6 (4.0) 78.7 






EBITDA 51.7 53.2 (4.5) 100.4 

Depreciation of intangible assets (5.2) (6.7) (0.1) (12.0) 


Impairment of intangible assets (0.3) (0.2) 0.0 (0.5) 

EBIT 36.0 37.7 (4.9) 68.8 

Provisions for restructuring (2.5) (0.3) 0.0 (2.8) 

Other operating income/(expenses) 0.0 2.1 0.0 2.1 

Operating profi t 33.5 39.5 (4.9) 68.1 


Balance sheet by business segment 

AS AT 31/12/2011 


6 



Continued operations 

Discontinued 

operations 

IBG SBG Other JCS 

Total segment assets 327.6 265.2 341.7 0.0 934.5 

Total non-allocated assets 156.5 

TOTAL ASSETS 1,091.0 

Total segment liabilities (76.5) (67.8) (58.3) 0.0 (202.6) 

Total non-allocated liabilities 

TOTAL LIABILITIES 

(481.8) 

(EXCLUDING SHAREHOLDERS’ EQUITY) (684.4) 

AS AT 31/12/2010 



Discontinued 

operations 




TOTAL ASSETS 983.3 


Total non-allocated liabilities 


(442.4) 


AS AT 31/12/2009 



Discontinued 

operations 




TOTAL ASSETS 897.9 


Total non-allocated liabilities (409.8) 



Total 

Total 

Total 


6 Notes 



Investments by business segment 

FINANCIAL YEAR 2011 


Acquisitions of property, plant and equipment 50.9 8.5 1.3 60.7 

Capitalisation of development costs 5.3 2.7 0.0 8.0 

TOTAL 56.2 11.2 1.3 68.7 





TOTAL 66.2 9.3 0.8 76.3 





TOTAL 12.5 8.0 1.0 21.5 


6 



6.2 INFORMATION BY GEOGRAPHICAL SEGMENT 

CONSOLIDATED REVENUES BY GEOGRAPHICAL SEGMENT 

(in € million) 2011 2010 2009 

Europe 311.4 293.0 287.3 

North America 198.9 195.4 165.1 

Asia/Oceania 71.6 64.2 65.6 

Middle East and Africa 41.6 32.9 38.7 

South America 5.2 5.6 2.6 

TOTAL 628.7 591.1 559.3 

Revenues are allocated according to the geographical location of the customer. 

TOTAL ASSETS BY GEOGRAPHICAL SEGMENT 

(in € million) 31/12/2011 31/12/2010 31/12/2009 

Europe 794.5 684.8 649.6 

North America 226.5 235.3 199.3 

Asia/Oceania 27.1 25.9 23.1 



TOTAL 1,091.0 983.3 897.9 

Assets are allocated according to the geographical location of the asset. 

ACQUISITIONS OF PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS INCLUDING CAPITALISATION 

OF DEVELOPMENT COSTS 


Europe 20.4 18.3 14.1 

North America 45.3 54.0 4.7 

Asia/Oceania 1.2 1.6 0.4 



TOTAL 68.7 76.3 21.5 

Acquisitions of property, plant and equipment and intangible assets are allocated according to the geographical location of the 

asset. 


6 Notes 



NOTE 7 INTANGIBLE ASSETS 

The table below shows movements in the carrying amount of intangible assets: 

(in € million) Software Brand names 


Development 

costs 

Other 

intangible 

assets Total 

Carrying amount at 01/01/2009 0.1 125.8 21.9 88.2 236.0 

Acquisitions 0.2 0.0 3.9 0.7 4.8 

Disposals 0.0 0.0 0.0 0.0 0.0 

Amortisation (0.1) 0.0 (2.9) (9.0) (12.0) 

Translation adjustment 0.0 0.0 (0.2) 0.0 (0.2) 

Transfers 0.0 0.0 0.0 0.0 0.0 

Impairment 0.0 0.0 (0.4) 0.0 (0.4) 

Carrying amount at 31/12/2009 

At 31/12/2009 

0.2 125.8 22.3 79.9 228.2 

Gross value 3.6 125.8 31.8 135.1 296.3 

Accumulated amortisation (3.4) 0.0 (9.5) (55.2) (68.1) 

Carrying amount 0.2 125.8 22.3 79.9 228.2 

Carrying amount at 01/01/2010 0.2 125.8 22.3 79.9 228.2 

Acquisitions 0.3 0.0 5.8 0.6 6.7 

Disposals 0.0 0.0 0.0 0.0 0.0 

Amortisation (0.3) 0.0 (4.7) (8.8) (13.8) 

Translation adjustment 0.0 0.0 1.0 0.0 1.0 

Transfers 0.3 0.0 0.0 (0.2) 0.1 

Impairment 0.0 0.0 0.0 0.0 0.0 


At 31/12/2010 

0.5 125.8 24.4 71.5 222.2 

Gross value 4.3 125.8 33.1 135.4 298.6 


Carrying amount 0.5 125.8 24.4 71.5 222.2 

Carrying amount at 01/01/2011 0.5 125.8 24.4 71.5 222.2 

Acquisitions 0.9 0.0 8.0 0.2 9.1 

Disposals 0.0 0.0 0.0 0.0 0.0 

Amortisation (0.7) 0.0 (3.4) (9.0) (13.1) 

Translation adjustment 0.0 0.0 0.2 0.1 0.3 

Transfers 0.1 0.0 0.0 (0.1) 0.0 

Impairment 0.0 0.0 (0.4) 0.0 (0.4) 

Carrying amount at 31/12/2011 

At 31/12/2011 

0.8 125.8 28.8 62.7 218.1 

Gross value 5.4 125.8 38.7 135.2 305.1 


CARRYING AMOUNT 0.8 125.8 28.8 62.7 218.1 

Other intangible assets mainly include technologies and customer relationships recorded in 2004 when the Doughty Hanson Funds 

acquired the Alcatel Group’s battery activities.

NOTE 8 GOODWILL 

6 



Main goodwill dates from January 2004, when the Alcatel 

Group sold its battery activities to the Doughty Hanson Funds. 

The acquisition price paid by the Doughty Hanson Funds 

for the operating entities of the Group was allocated in 

part to the assets and liabilities transferred, measured at 14 

January 2004 at fair value based on an independent expert’s 

valuation. This re-measurement compared with the carrying 

amounts in the consolidated balance sheet of the year ended 

31 December 2004 related to: 

� intangible assets for €201 million. Intangible assets, 

primarily consisting of brand names, Research and 

The table below shows movements in goodwill: 

Development projects and customer relationships by product 

line; 

� property, plant and equipment for €24 million. The 

estimated useful lives of these assets were also reviewed. 

The residual unallocated acquisition value, amounting to 

€117.1 million, was recognised as goodwill. 


Carrying amount at 1st January 110.3 104.8 107.3 

Newly consolidated/deconsolidated entities 0.0 0.0 0.0 

Impairment 0.0 0.0 0.0 

Translation adjustment 2.4 5.5 (2.5) 

Carrying amount at 31 December 112.7 110.3 104.8 

Goodwill is allocated to the Cash Generating Unit to which it relates. It should be noted in this regard that the merger as of 1 

July 2009 between the IBG and RBS divisions had no impact on allocation of the Group’s goodwill. 

Goodwill per CGU and geographic segment breaks down as follows: 

AT 31/12/2011 

(in € million) IBG SBG Total 

Europe 20.2 14.7 34.9 



TOTAL 65.5 47.2 112.7 

AT 31/12/2010 


Europe 20.2 14.7 34.9 



TOTAL 64.2 46.1 110.3 


6 Notes 

AT 31/12/2009 




Europe 20.2 14.7 34.9 



TOTAL 61.0 43.8 104.8 


6 



NOTE 9 PROPERTY, PLANT AND EQUIPMENT 

The table below shows movements in the carrying amount of property, plant and equipment: 

(in € million) Land Buildings 

Technical 

installations, 

plant and 

tooling 

Assets under 

construction 

Other property, 

plant and 

equipment Total 

Carrying amount at 01/01/09 8.3 22.8 68.1 7.5 6.1 112.8 

Acquisitions 1.1 1.2 11.2 2.6 0.6 16.7 

Disposals 0.0 0.0 (0.1) 0.0 0.0 (0.1) 

Depreciation 0.0 (1.6) (16.6) 0.0 (0.9) (19.1) 

Translation adjustment 0.0 0.0 (0.2) 0.0 0.0 0.0 

Transfers 0.0 1.4 0.4 (1.9) 0.1 0.0 


At 31/12/2009 

9.4 23.8 62.8 8.2 5.9 110.1 

Gross value 9.4 42,0 179.5 8.2 12.5 251.6 

Accumulated depreciation 0.0 (18.2) (116.7) 0.0 (6.6) (141.5) 

Carrying amount 9.4 23.8 62.8 8.2 5.9 110.1 


Acquisitions 1.1 0.5 7.2 60.0 0.8 69.6 

Disposals 0.0 0.0 (0.5) 0.0 0.0 (0.5) 

Depreciation 0.0 (2.1) (13.1) 0.0 (1.1) (16.3) 

Translation adjustment 0.3 0.7 2.9 0.2 0.1 4.2 

Transfers 0.0 1.9 5.7 (8.1) 0.3 (0.2) 


At 31/12/2010 

10.8 24.8 65.0 60.3 6.0 166.9 

Gross value 10.8 45.7 200.1 60.3 13.6 330.5 


Carrying amount 10.8 24.8 65.0 60.3 6.0 166.9 


Acquisitions 0.0 12.3 20.2 26.3 0.8 59.6 

Disposals 0.0 (0.5) 0.0 0.0 (0.1) (0.6) 

Depreciation 0.0 (2.9) (13.1) 0.0 (1.0) (17.0) 

Translation adjustment (0.1) 3.4 3.2 (0.8) 0.0 5.7 

Transfers 0.0 32.7 22.4 (55.7) 0.5 (0.1) 


At 31/12/2011 

10.7 69.8 97.7 30.1 6.2 214.5 

Gross value 10.7 94.2 246,0 30.1 13.5 394.5 


CARRYING AMOUNT 10.7 69.8 97.7 30.1 6.2 214.5 

Assets under construction amounted to €30.1 million by the end 

of 2011, almost 50% of which relates to the new Jacksonville 

production unit in Florida. 

Property, plant and equipment under fi nance leases or long-term 

lease contracts represented a carrying value of €2.9 million 

as at 31 December 2011, against €3.2 million by the end 

of 2010 and €3.3 million by the end of 2009. They are 

accounted for under the caption “Other property, plant and 

equipment” in the above table. 

The carrying amount of investment properties was €0.1 million 

as of 31 December 2011 (gross value of €0.1 million) as 

compared to €0.1 million at 31 December 2010 (gross value 

of €0.3 million) and €0.2 million at 31 December 2009. 

Investment properties relate to an offi ce building leased to a 

third party. 


6 Notes 



NOTE 10 ASSET IMPAIRMENT TESTS 

In the second half of each year, the Group conducts asset 

impairment tests on its property, plant and equipment and 

intangible assets, as well as on its goodwill, in accordance 

with the principles set forth in Note 2.11. 

These tests are conducted every year on unamortised intangible 

assets and goodwill. They are only carried out for depreciable 

fi xed assets when events or changes to the market environment 

point to an impairment risk. 

At the close of the 2011 fi nancial year, there was no impairment 

identifi ed concerning the Group’s depreciable property, plant 

and equipment. 

MAIN ASSUMPTIONS USED 

The future cash fl ows used to determine the going concern value 

of the assets result from discounted forecasts of the second half 

of the current year and of the three-year strategic plan, i.e. next 

year’s budget data plus the data for the following two years. 

The strategic plan covering the 2012-2014 period was drawn 

up with economic assumptions of sales revenue, commodity 

prices and energy prices which Group management deemed 

to be realistic. 

The discount rate used was the Weighted Average Cost of 

Capital calculated on the basis of industry parameters where 

applicable plus a spread refl ecting the specifi c degree of risk 

for the asset tested. The data used to determine these rates 

mainly come from an independent outside source. 

Taking into account the above-mentioned parameters, the 

Weighted Average Cost of Capital used to perform the 

impairment tests (excluding any spread) is 8.8% in 2011 as 

compared to 10.5% in 2010. 

VALUATION TEST FOR UNAMORTISED 

INTANGIBLE ASSETS 

Brands 

The brand valuation tests rely on the present value of the future 

royalties that would be paid by a third party wishing to use 

them on the basis of sales revenue forecasts for each brand in 

the strategic plan. The discount rate used was the Weighted 

Average Cost of Capital indicated above, plus a spread of 

1%, i.e. a rate of 9.8%. The going concern value calculated 

also includes a terminal value based on a long-term growth 

rate which differs according to the extent to which the brands 

valued are strategic or not. 


The trademark royalty rates used in 2011 were not modifi ed 

from the previous fi nancial year in the absence of any 

signifi cant improvement or deterioration of the profi tability of 

the Group’s brands. 

Similarly, the long-term growth rates used are unchanged from 

those used in the previous tests performed in 2010 (between 

1.5% and 2.5% depending on the brands). 

Following these tests, the Group did not recognise any 

impairment of brand value at the close of 2011 as compared 

with their book value at this date, even after taking the following 

sensitivity factors into account: 

� a 50% decline in sales growth over the plan’s term: this 

change would result in an 11.5% decline in brand value, 

which nevertheless would not fall below their book value; 

that would require a decline of 16.5% in sales over the 

plan’s term; 

� a 100 basis point decline in long-term growth over the 

plan’s term: this decline would result in an 10.3% decline 

in brand value, which nevertheless would not fall below 

their book value; that would require a decline of 11.1% 

in the long-term growth rate (negative long term growth of 

between 8.6% and 9.6%, depending on brands); 

� fi nally, a 100 basis point increase in the Weighted Average 

Cost of Capital: this increase would result in an 11.8% 

decline in brand value, which nevertheless would not fall 

below their book value; that would require an increase 

of 8.1% in the Weighted Average Cost of Capital (i.e. a 

discount rate of 17.9%). 

Goodwill 

The Group’s biggest goodwill item is the “Saft” goodwill 

resulting from the acquisition and takeover by the Doughty 

Hanson Funds of Alcatel’s battery operations in January 2004. 

The goodwill impairment test consists of comparing the net 

book value of each Cash Generating Unit with its recoverable 

value, which is defi ned as the greater of its going concern value 

or its fair value minus the disposal costs. The Group selected 

as Cash Generating Units those business segments existing at 

the time the Alcatel Group’s battery operations were acquired 

and transferred to the Doughty Hanson Funds in January 2004. 

No goodwill was recognised for the Cash Generating Unit 

comprising the Rechargeable Battery Systems division, which 

merged in July 2009 with the Industrial Battery Group (IBG) 

Cash Generating Unit. 

The going concern value is calculated based on the discounted 

future cash fl ows resulting from the strategic plan and a terminal 

value composed of a single growth rate for all Cash Generating

6 



Units. It is identical to the growth rate used to value the Saft 

brand (2.5%), and is the same as that for the previous year. 

The discount rate used is the same for all Cash Generating Units. 

It is based on the Weighted Average Cost of Capital with no 

mark-up spread (i.e. a rate of 8.8%). It is therefore independent 

of the Group’s fi nancial structure and of the manner in which 

the Group funded the acquisition of assets belonging to the 

Cash Generating Unit or group of CGUs tested. 

Management did not recognise any loss of value in goodwill 

after comparing the going concern value as calculated with the 

net book value of the Cash Generating Units. 

The sensitivity tests described below confi rm the absence of 

any impairment in the Group’s goodwill: 

� a decline of 10% in the operating profi t of the CGUs over 

the term of the strategic plan would lead to a decline in their 

going concern value of 11.3% for IBG and 9.9% for SBG, 


that would require a decline in their operating profi t of 22% 

for IBG and 65% for SBG; 

� a decline of 100 basis points in the long-term growth over 

the term of the strategic plan would lead to a decline in 

their going concern value of 14.2% for IBG and 12.1% for 

SBG, which nevertheless would not fall below their book 

NOTE 11 OTHER NON-CURRENT FINANCIAL ASSETS 

Other non-current fi nancial assets break down as follows: 

value; that would require long-term growth limited to 0.50% 

for IBG and a decline of 14.9% for SBG; 

� an increase of 100 basis points in the Weighted Average 

Cost of Capital would lead to a decline in their going 

concern value of 15.7% for IBG and 13.6% for SBG, 


that would require an increase of 177 basis points for IBG 

and 1,190 basis points for SBG. 

The other goodwill item on the Group’s balance sheet results 

from Saft’s January 2006 acquisition of 51.04% of Amco 

Power Systems Limited’s stock through its Saft Batteries Pte Ltd. 

subsidiary based in Singapore. The Company was renamed 

Amco-Saft India Limited. 

A valuation test on this goodwill was performed using a 

methodology similar to that described above, but which 

factored in specifi cs relating to India’s economic and fi nancial 

environment. The Weighted Average Cost of Capital used to 

perform the impairment tests of Amco goodwill is 13.7% in 

2011 (15.3% in 2010) and the long-term growth rate is 5.2%, 

as in 2010. 

Saft did not recognise any impairment of Amco’s goodwill after 

comparing Amco-Saft India Limited’s going concern value with 

its net book value. 

(in € million) At 31/12/2011 At 31/12/2010 At 31/12/2009 

Assets available for sale 0.1 0.2 0.3 

Security deposits 0.3 0.6 0.6 

TOTAL 0.4 0.8 0.9 


6 Notes 



NOTE 12 INVENTORIES 

Inventories break down as follows: 


Raw materials and bought-in goods 

■ Gross value 40.5 36.9 27.8 

■ Impairment (3.6) (3.8) (2.9) 

Carrying amount 

Industrial work in process 

36.9 33.1 24.9 

■ Gross value 33.9 30.0 25.0 

■ Impairment (1.2) (1.2) (1.0) 

Carrying amount 

Finished goods (at cost) 

32.7 28.8 24.0 

■ Gross value 17.1 15.7 15.1 

■ Impairment (1.2) (1.1) (0.9) 

Carrying amount 15.9 14.6 14.2 

TOTAL INVENTORIES NET 85.5 76.5 63.1 

All inventories are classifi ed as current assets. 

NOTE 13 TRADE AND OTHER RECEIVABLES 

Trade and other receivables comprise the following: 


Trade receivables - gross value 128.7 130.7 114.1 

Trade receivables - impairment (1.8) (2.3) (2.1) 

Trade receivables - carrying amount 126.9 128.4 112.0 

Long-term contract receivables 9.6 6.5 6.2 

Other taxes and duties 3.7 4.4 5.1 

Prepaid expenses 6.9 3.8 4.3 

Amounts due from employees 0.1 0.1 0.1 

Advance payments to suppliers 0.6 0.8 0.8 

Others 11.7 4.4 0.2 

TOTAL TRADE AND OTHER RECEIVABLES 159.5 148.4 128.7 

Trade receivables are all due within a year. Other receivables 

contractually due at more than one year as at 31 December 

2011, amounted to €7.7 million. 


This amount corresponds to the upfront license fee to be 

received from Johnson Controls Inc., for the license extension 

to use some of Saft’s lithium-ion technologies beyond the 

automotive sector. This receivable is due on January 1, 2013.

6 



NOTE 14 FINANCIAL DERIVATIVES 

Financial derivatives break down as follows: 


At 31/12/2011 At 31/12/2010 At 31/12/2009 

Assets Liabilities Assets Liabilities Assets Liabilities 

Interest rate risk hedging derivatives - 0.3 - 1.7 - 2.1 

Currency risk hedging instruments 3.7 0.7 0.5 - - - 

Commodity price risk hedging derivatives 0.2 0.2 1.6 0.1 2.2 - 

TOTAL 3.9 1.2 2.1 1.8 2.2 2.1 

Saft Group is exposed to the risk of interest rate rises on its 

senior debt, which was contracted at variable rates. To protect 

itself against this exposure, Saft has contracted a succession 

of interest rate swaps, caps and collars to coincide with each 

refi nancing of the debt. 

The balance sheet amounts set out above correspond to the 

interest rate risk hedging instruments described in Note 3 

“Market risks and fi nancial risks management policies” to the 

Consolidated Financial Statements. 

NOTE 15 CASH AND CASH EQUIVALENTS 

Cash and cash equivalents comprise the following: 

Foreign exchange hedging instruments concern forward 

purchasing contracts matched by future fi nancial cash fl ows 

and currency swaps. These are described in Note 3 to the 


Derivatives contracted by Saft to protect itself against the risk 

of fl uctuation in raw material prices are mainly nickel price risk 

hedging derivatives. These instruments are described in Note 3 

to the Consolidated Financial Statements. 


Cash 264.2 119.4 114.5 

Cash equivalents 3.0 75.2 92.9 

TOTAL 267.2 194.6 207.4 

Cash includes funds deposited in interest-bearing current accounts. 

Cash equivalents held at year-end are highly liquid overnight money market funds and term deposits. 


6 Notes 



NOTE 16 EQUITY 

16.1 ORDINARY SHARES AND SHARE 

PREMIUMS 

At 31 December 2011, following the capital increase, there 

were 25,174,845 ordinary shares of Saft Groupe SA with a 

par value of 1 euro, as compared to 25,125,840 shares at 

31 December 2010. 

Share premiums amounted to €103.2 million at 31 December 

2011, as compared to €102.1 million at 31 December 2010. 

16.2 CHANGES IN CONSOLIDATED 

SHAREHOLDERS’ EQUITY 

The changes in consolidated shareholders’ equity between 1 

January and 31 December 2011 break down as follows: 

Capital increases 

Following the exercise of stock options by Group employees, 

the Saft Group carried out a capital increase in 2011. This 

created 49,005 new shares in fi nancial year 2011. 

NOTE 17 PUBLIC SUBSIDIES 

The Group is currently carrying out the construction of a new 

Li-ion battery production facility in Jacksonville, Florida, in the 

USA. 

This project, costing a total amount of approximately 

$200 million over the period 2010-2013 (including both 

capital expenditure and operating expenses relating to 

project management), has been selected to receive, within the 

framework of the provisions of the Federal American Recovery 

and Reinvestment Act (ARRA), a federal public grant awarded 

by the US Department of Energy in the form of a cost-sharing 

programme for 50% that may amount to up to $95.5 million. 

Receipt of this grant will be spread over time according to the 

progress of the project. It covers capital expenditure and some 

of the project management costs. 

This project is also receiving additional funding from the State 

of Florida and the City of Jacksonville for an amount of up to 

$20.8 million. 

Furthermore, the Saft Group receives, primarily in France, tax 

credits related to research. Such tax credits are being treated 

as grants from an accounting standpoint. 


Distribution 

At the Annual General Meeting on 4 May 2011, Saft 

Groupe SA’s shareholders set the dividend for the 2010 

fi nancial year at €0.70 per ordinary share. The total amount 

of dividends paid out in 2011 was €17.6 million. 

Treasury shares 

At 31 December 2011, the Company held 93,096 treasury 

shares under the liquidity contract set up with an independent 

fi nancial institution to stabilise the secondary market or ensure 

the liquidity of the Company’s shares. The total value of these 

shares amounted to €1,905,806 on the basis of the purchase 

price and €2,034,148 in terms of market value. 

Stock options 

No stock option plan was set up during fi nancial year 2011. 

17.1 PUBLIC GRANTS RELATED TO ASSETS 

Public grants received that relate to assets are presented under 

balance sheet liabilities as deferred income on a specifi c line 

called “Deferred grants related to assets”. These grants are 

recorded as income over the depreciation period of the assets 

that they are used to fund. This income is recorded in cost of 

sales like the depreciation expense for the related assets. 

At 31 December 2011, the amount of the public grants received 

with regard to assets totals €48.1 million ($62.4 million). 

Following the start of the Jacksonville production facility in the 

second half of 2011, amortisation in the income statement of 

these deferred grants relating to assets totalled €0.8 million 

during 2011 fi nancial year.

17.2 PUBLIC GRANTS RELATED 

TO RESULTS 

6 



Public grants related to results, i.e. grants other than those 

related to assets, are recorded in income as a deduction from 

the expenses to which they relate. 

Most of the grants from the State of Florida and the City of 

Jacksonville are grants related to results. Spread over several 

NOTE 18 DEBT 

18.1 DESCRIPTION AND CHANGE 

IN GROUP INDEBTEDNESS 

On 3 July 2009, the Company fi nalised the refi nancing of its 

bank debt with a consortium of six credit institutions. The main 

aim was to ensure the medium-term fi nancing of the Group’s 

existing activities. The refi nancing consists of: 

� two term loans of €150 million and $240 million 

respectively. These loans have a three-year maturity (up until 

2 July 2012) with repayment at the end of this period; 

� a revolving credit facility of €33.5 million, also covering a 

period of three years, with the possibility of making draw 

downs on this facility in various different currencies. This 

revolving credit facility was cancelled on 14 October 

2011. 

The initial margin was set at 275 basis points over Euribor for 

euro loans and 300 basis points over Libor for the US dollar 

loan. From 1 January 2010 onwards, the margin is calculated 

on a half-yearly basis depending on the ratio of the Group’s 

net debt to the Group’s consolidated EBITDA over the 12-month 

period prior to the date when this margin is set. This margin 

could therefore vary from 2.0% to 3.0% for euro facilities and 

from 2.25% to 3.25% for the US dollar facilities. 

In 2011 the margin was 2.00% on the euro loan and 2.25% 

on the dollar loan. 

The fi nancing agreement comprises a certain number of the 

usual provisions contained in this type of agreement. 

Sales and acquisitions made by the Group are thus subject to 

a certain number of usual conditions. Similarly, any additional 

loan contracted by the Group for an amount of over €90 million 

is subject to contractual limitations. 

The agreement contains change of control clauses concerning 

the Company, enabling each lender to request early repayment 

of the share of the credit facilities that it granted. 

fi nancial periods (of up to ten years), this aid will mainly 

lead to a reduction in operating expenses for the Jacksonville 

production facilities in future years. In consideration of these 

grants, the Company has to comply with a certain number of 

commitments primarily related to job creation and a minimum 

level of average salaries. 

Public grants related to results recorded in 2011 in respect of 

the Jacksonville project amounted to €6.2 million ($8.5 million). 

The guarantees given under these agreements remain limited 

to surety bonds (or equivalent guarantees) from some Group 

companies, in compliance with the legal provisions in force. 

Finally, pursuant to the agreement, the granting and continuation 

of the loans is conditional upon meeting certain fi nancial ratios: 

� maximum leverage ratio (net fi nancial debt to EBITDA): 

3.00 (for each 12-month period ending 30 June and 

31 December of each year) with a maximum of 2.80 for 

each 12-month period ending 31 December 2011 and 

30 June 2012; and 

� minimum interest coverage ratio (contractually defi ned 

EBITDA to total net interest): 4.50 (for each 12-month 

period ending on 30 June and 31 December). 

At 31 December 2011, the Group’s gearing ratio, calculated 

according to the contractual terms and conditions, amounted 

to 0.54 (compared to 1.24 at 31 December 2010) and 

the interest coverage ratio to 12.1 (compared to 9.3 at 

31 December 2010). 

Finally, the Group has committed to providing the lenders with 

certain periodic information such as its audited consolidated 

annual fi nancial statements within 120 days of each fi nancial 

year-end, as well as its consolidated interim fi nancial statements 

within 90 days of the close of each six-month period. 

The Group has already embarked upon the process of 

refi nancing that part of its bank debt due to expire on 

2 July 2012 and is confi dent that it will be able to fi nalise this 

refi nancing at acceptable conditions prior to end of Q1. 

The portion of current bank debt held as non-current borrowings 

at December 31, 2011, amounting to €100 million, is the part 

of the euro bank debt being refi nanced under similar conditions 

to those applying to current bank debt, and being refi nanced 

with counterparties participating in the existing bank debt. 


6 Notes 



18.2 BREAKDOWN OF DEBT AT YEAR-END 

Breakdown of debt by maturity 


Non-current 

Senior debt – Facility in euro 100.0 150.0 150.0 

Senior debt – Facility in USD 0,0 179.6 166.6 

Deferred bank fees 0,0 (3.7) (5.9) 

Other debts 0.5 0.7 0.7 

Finance leases 0.7 1.1 1.3 

Current 

101.2 327.7 312.7 

Senior debt – Facility in euro 50.0 0.0 0.0 

Senior debt – Facility in USD 185.5 0.0 0.0 

Accrued interest 0.1 1.7 2.0 

Finance leases 0.2 0.2 0.2 

Other debts 1.6 0,0 0,0 

R&D grants 0.4 0.4 1.0 

237.8 2.3 3.2 

Breakdown of non-current debt by maturity 


Between 1 and 2 years 0.7 330.4 2.9 

Between 2 and 5 years 100.5 1.0 315.5 

More than 5 years 0.0 0.0 0.2 

101.2 331.4 318.6 

Bank fees 0.0 (3.7) (5.9) 

101.2 327.7 312.7 

Breakdown of debt by currency 


Euro 153.7 151.9 153.0 

USD 185.9 181.8 169.5 

339.6 333.7 321.8 

Bank fees (0.6) (3.7) (5.9) 

339.0 330.0 315.9 

At 31 December 2009, 2010 and 2011, as the debt is at fl oating rate, its fair value is the same as its carrying value. 


6 



18.3 INTEREST RATE RISK MANAGEMENT 

No changes were made in the methods of management and 

hedging of interest rate risk with regard to the Group’s debt 

during the 2011 fi nancial year. The aim remains to provide the 

Group with hedging against signifi cant rises in interest rates. 

The following interest rate risk hedging methods are in place: 

� as from 6 July 2010 and up until 27 April 2012, the US 

LIBOR interest rate for the senior debt in US dollars will 

be capped at a maximum rate of 3.5% with a fl oor rate 

of 1.23%; the hedged amount is $170 million (for a total 

US dollar debt of $240 million at 31 December 2011); 

� as from 6 July 2010 and up until 27 April 2012, the 

EURIBOR interest rate for the senior debt will be capped 

at a maximum rate of 3.5% with a fl oor rate of 1.40%; the 

hedged amount is €100 million (for a total euro debt of 

€150 million at 31 December 2011). 

NOTE 19 OTHER NON-CURRENT FINANCIAL LIABILITIES 

18.4 HEDGE OF NET INVESTMENTS 

IN FOREIGN OPERATIONS 

A portion of the Group’s dollar-denominated debt contracted 

in the successive refi nancing operations on 5 July 2005 and 

3 July 2009 has been designated as a hedge of the net 

investments in the Group’s American and Israeli subsidiaries. 

The negative translation adjustment of €(5.9) million as of 31 

December 2011 (versus a negative adjustment of €(13.0) 

million as of 31 December 2010 and of €(0.3) million at 31 

December 2009) arising on the translation of this debt into 

euro at the balance sheet date has been recognised in fair 

value reserves in shareholders’ equity for an amount of €(3.9) 

million (as compared to €(8.7) million at 31 December 2010 

and €(0.5) million at 31 December 2009) net of tax. 

Other fi nancial liabilities comprise repayable subsidies. These totalled €5.3 million as of 31 December 2011, as compared to 

€5.1 million as of 31 December 2010 and €6.2 million as of 31 December 2009. 

NOTE 20 PENSIONS, RETIREMENT INDEMNITIES 

AND OTHER EMPLOYEE BENEFITS 

Provisions for pensions and other long-term employee benefi ts comprise: 

� pensions and retirement benefi ts; 

� other long-term employee benefi ts (long-service benefi ts, early retirement plans, etc.). 


Obligations recognised in the balance sheet: 

■ pensions and retirement benefi ts 11.4 10.9 9.5 

■ other long-term employee benefi ts 3.2 3.3 3.3 

14.6 14.2 12.8 


7 

PARENT COMPANY CERTIFIED FINANCIAL STATEMENTS 

Income statement 

7.3 INCOME STATEMENT 

Note 2011 2010 2009 

Total revenues 6,543 6,444 5,997 

Operating expenses 

Purchases of raw materials and other supplies - - - 

Other purchases and external expenses (5,229) 5,157 4,881 

Taxes (other than on income) (24) (23) (15) 

Other expenses (172) (146) (146) 

(5,425) (5,326) (5,042) 

Operating profi t/(loss) 1,118 1,118 955 

Financial income 

Income from investment in subsidiaries (dividends) 29,500 7,500 7,100 

Other interest and related income 295 273 37 

Foreign exchange gains 58 26 - 

29,853 7,799 7,137 

Financial expenses 

Interest and similar expenses (2) - - 

Foreign exchange losses (6) (10) (13) 

(8) (10) (13) 

Net fi nancial income/(loss) 29,845 7,789 7,124 

Income from ordinary activity before tax 30,963 8,907 8,079 

Non-recurring income from capital transactions 241 221 617 

Non-recurring expenses on capital transactions (533) (473) (48) 

Net non-recurring profi t/(loss) (292) (252) 569 

Income tax 12 351 2,755 (106) 

NET INCOME/(LOSS) FOR THE YEAR 31,022 11,410 8,542 


6 Notes 



20.1 PENSIONS AND RETIREMENT BENEFITS 

Balance sheet provision 

Changes in defi ned benefi t plan obligations and in the fair value of plan assets are as follows: 



Retirement obligations 

31/12/2011 31/12/2010 31/12/2009 

Changes in the obligations: 

Total present value of obligation at start of year 36.0 29.9 32.1 

Cost of services rendered in the year 1.4 1.3 1.2 

Interest expense 1.5 1.5 1.8 

Change in plan 0.0 2.2 (5.9) 

Foreign exchange differences (0.5) 1.7 0.3 

Actuarial losses/(gains) (0.6) 1.5 2.4 

Benefi ts paid (2.4) (2.1) (2.0) 

Total present value of obligations at end of year 35.4 36.0 29.9 

■ Of which: partly or fully funded plans 31.8 31.4 25.8 

■ Of which: unfunded plans 3.6 4.6 4.1 

Changes in plan assets: 

Market value of plan assets at start of year 22.5 19.9 15.7 

Actual return on plan assets 0.9 1.0 1.0 

Actuarial gains (0.2) (0.1) 2.7 

Foreign exchange differences (0.7) 1.8 0.3 

Contributions 0.5 0.3 0.3 

Benefi ts paid (1.4) (0.4) (0.1) 

Fair value of plan assets at end of year 21.6 22.5 19.9 

Net obligations 13.8 13.5 10.0 

Costs of non-recognised services (2.4) (2.6) (0.5) 

PROVISION RECOGNISED IN THE BALANCE SHEET 11.4 10.9 9.5 

A 2.2 million euro impact of “Change in regime“ was 

recognised in 2010, following changes in the provisions of the 

French regulations on retirement benefi ts and other dismissal 

indemnities.

Pension and retirement indemnity costs 

6 



The table below sets out a breakdown of pension and retirement indemnity expenses for the year: 


Cost of services rendered in the year 1.4 1.3 1.2 

Interest expense 1.5 1.5 1.8 

Expected return on plan assets (0.9) (1.0) (1.0) 

Past services costs amortisation 0.2 0.0 0.3 

Other 0.2 0.1 0.0 

NET EXPENSE FOR THE YEAR 2.4 1.9 2.3 

Changes in the provision recognised in the balance sheet are as follows: 


Total provision at beginning of year (10.9) (9.5) (9.7) 

Net expense for the year (2.4) (1.9) (2.3) 

Reclassifi cation of Israeli provisions 0.0 0.0 0.0 

Contributions/benefi ts paid 1.5 2.1 2.2 

Amount recognised in the consolidated statement of comprehensive income 0.4 (1.6) 0.3 

TOTAL PROVISION AT END OF YEAR (11.4) (10.9) (9.5) 

Differences between actual and expected fi gures were as follows: 


Difference between actual and expected returns on assets 0.3 (0.1) (0.1) 

Differences between actual and expected changes in obligations 0.1 (0.2) 0.3 

Actuarial assumptions 

The basic assumptions used in actuarial calculations under 

defi ned-benefi t pension and retirement benefi t plans take 

account of conditions in each country, while specifi c 

assumptions (staff turnover and salary infl ation) are calculated 

separately for each company. 

Discount rates 

In France, at 31 December 2011, retirement benefi ts are 

measured on the main assumption of retirement taking place 

at the employee’s initiative, with payment of retirement benefi ts 

subject to social security expenses. 

The table below shows the rates used in each geographical 

area in 2011: 

2011 2010 2009 

France 4.50% 4.20% 4.60% 

4.50 – 4.75% 

4.60 – 4.90% 

Germany 

(depending on duration) 3.90% (depending on duration) 

4.05 – 4.90% 

Norway 3.30% 

3.23 – 5.03% 

4.00% (depending on duration) 

Israel 

(depending on duration) 4.50% 5.80% 

Italy 4.75% 3.75% 4.60% 

The discount rates used are obtained by reference to the yield on high-quality bonds (listed issuers with minimum AA rating) with a 

term equivalent to that of the plan being measured (Bloomberg reference). 


6 Notes 



Sensitivity of current commitment value 

to the discount rate 

The sensitivity of commitments for pensions and other retirement 

indemnities to changes in the discount rate is as follows: 

� an increase of 0.50% in the discount rate would reduce the 

commitments for pensions and other retirement indemnities 

by 4.73%; 

Long-term salary breakdown 

The following assumptions were used to determine commitments: 


� a reduction of 0.50% would lead to an increase of 5.04% 

in the same commitments. 

2011 2010 2009 

France 3.00% 3.00% 3.00% 

2.50 – 3.00% 

2.50 – 3.00% 

Germany 

(depending on duration) 2.50% (depending on duration) 

Norway 4.00% 4.00% 4.30% 

2.11 – 5.37% 2.80 – 5.70% 2.80 – 5.00% 

Israel 

(depending on duration) (depending on duration) (depending on duration) 

Italy n.a. 3.50% 3.50% 

Long-term return on assets 

Expected return on assets has varied over the last three fi nancial years as set out below: 

2011 2010 2009 

France 3.50% 3.90% 3.90% 

Germany 4.00% 4.00% 4.00% 

Norway 4.80% 5.40% 5.90% 

Israel 4.40% 5.40% 5.80% 

Italy n.a. n.a. 5.50% 

The return on plan assets depends on the composition of 

the portfolio, the term of the assets, and the expected future 

performance. 

The Group’s hedging assets in France are invested in insurance 

contracts. The Group does not expect to make contributions 

in 2012. 

Yields from hedging assets in 2011 were: 

The Group’s hedging assets in Israel are invested in a multiemployer 

asset management fund. Approximately 61% of 

the assets comprise Israeli state or private sector bonds, 25% 

are invested in insurance contracts and the remaining assets 

(around 13%) in equity. 

France 3.17% 

Germany 1.96% 

Norway 0.63% 

Israel 2.55% 

2011

Expected retirement benefits for 2012 

6 



Benefi ts to be paid by the Group in 2012 for those entities 

for which this information is available at the date on which 

the Consolidated Financial Statements are drawn up represent 

approximately 88.5% of the Group’s total commitments and 

are estimated to be €2.4 million. 

20.2 OTHER LONG-TERM EMPLOYEE 

BENEFITS 

Provisions for other long-term employee benefi t plans amounted 

to €3.2 million at 31 December 2011 (€3.3 million at both 

31 December 2010 and 2009). 

These employee benefi t plans mainly comprise bonus payments 

and long-service leave entitlement schemes in various Group 

countries. 

20.3 DEFINED-CONTRIBUTION PLANS 

The Group has no obligation beyond the contributions 

paid, which are recognised as an expense. The amount of 

contributions recognised in expenses in respect of the Group’s 

own plans (excluding legal plans such as those linked to social 

security) was €5.1 million in 2011 (€4.3 million in 2010 and 

€3.9 million in 2009). 

NOTE 21 PROVISIONS FOR OTHER LIABILITIES AND CHARGES 

As at 31 December 2011, provisions for other liabilities and charges as shown in the balance sheet are as follows: 


Provisions for 

Contractual 

claims Restructuring Other provisions Total 

At 1 January 2009 31.6 1.8 12.2 45.6 

Charges in year 5.5 2.1 0.8 8.4 

Releases of provisions on use (2.6) (0.2) (0.2) (3.0) 

Releases of unused provisions (5.3) (0.1) (0.4) (5.8) 

Transfers 0.2 0.0 (0.3) (0.1) 

Translation adjustments (0.2) 0.0 (0.2) (0.4) 

Adjustment to discount rate 0.1 0.0 0.0 0.1 

At 31 December 2009 29.3 3.6 11.9 44.8 

At 1 January 2010 29.3 3.6 11.9 44.8 


Releases of provisions on use (5.7) (1.0) 0.2 (6.5) 

Releases of unused provisions (4.1) 0.0 (0.4) (4.5) 

Transfers 0.2 0.0 (0.1) 0.1 

Translation adjustments 1.5 0.0 0.7 2.2 


At 31 December 2010 27.5 2.9 13.1 43.5 

At 1 January 2011 27.5 2.9 13.1 43.5 


Releases of provisions on use (4.7) (1.0) (0.2) (5.9) 

Releases of unused provisions (3.6) 0.0 (0.7) (4.3) 

Transfers 0.0 0.0 (0.2) (0.2) 

Translation adjustments 0.4 0.0 0.2 0.6 


AT 31 DECEMBER 2011 24.3 2.0 14.0 40.3 


6 Notes 



These provisions break down by maturity as follows: 


Non-current liabilities 33.1 35.0 33.3 

Current liabilities 7.2 8.5 11.5 

21.1 PROVISIONS FOR CONTRACTUAL CLAIMS 


40.3 43.5 44.8 

Provisions for contractual claims include primarily provisions for product warranties, litigations and the cost of recycling batteries sold. 

At 31 December 2011, provisions for contractual claims break down as follows: 


Provisions for warranties on products 15.4 18.0 21.7 

Provisions for litigations 1.1 1.8 1.6 

Provisions for losses on long-term contracts 0.1 0.1 0.1 

Provisions for battery recycling 5.1 4.8 4.4 

Other provisions 2.6 2.8 1.5 

24.3 27.5 29.3 

The reduction in provisions for warranties is mainly due to the 

release of most of the provision set up in 2009 relating to 

the BESS contract (in Alaska). This provision, for an amount of 

€4.1 million in 2009, was reduced to €2.1 million in 2010 

and to €0.1 million at 31 December 2011. 

Provisions have been recognised for all litigations identifi ed in 

2011 insofar as the Company considered it necessary for the 

amount of the outlays of funds that could result therefrom. No 

individual litigation is signifi cant. 

21.3 OTHER PROVISIONS 

21.2 PROVISIONS FOR RESTRUCTURING 

The provision for restructuring is relative to battery recycling 

costs of a discontinued activity. This provision amounts to 

€1.9 million at 31 December 2011 (€1.8 and €1.6 million 

respectively at 31 December 2010 and 2009). 


Provision for environmental risks (site decontamination costs) 7.1 6.9 6.4 

Provisions for long-service awards 2.7 3.2 3.1 

Other provisions 4.2 2.9 2.4 

14.0 13.0 11.9 

The provision for environmental risk relates to the decontamination costs at the Valdosta site in the United States.

6 



NOTE 22 TRADE AND OTHER PAYABLES 

This item breaks down as follows: 


Trade payables 75.7 71.4 61.5 

Prepayments on long-term contracts 5.0 4.1 2.5 

Accrued expenses and other liabilities 

Tax liabilities (other than income taxes) 

16.6 16.3 9.9 

and employee-related liabilities 48.0 45.9 40.4 

Other prepayments received from customers 16.7 17.8 21.1 

Other liabilities 0.3 0.7 1.0 

162.3 156.2 136.4 

All trade and other payables fall due within less than one year. 

NOTE 23 EXPENSES BY TYPE 

The table below gives a breakdown of depreciation, amortisation, impairment, personnel expenses and other items charged in 

arriving at operating profi t: 


Consumption of raw materials and components 208.3 185.5 194.1 

Salaries and social security charges 199.0 185.1 168.4 

Depreciation, amortisation and provisions on non-current assets (1) 29.8 30.1 31.6 

(1) These amounts are net of the amortisation of deferred grants relating to assets. 

In 2011, raw materials and components represented 47.0% 

of cost of sales, as compared to 45.1% in 2010 and 48.8% 

in 2009. 

Almost all the depreciation, amortisation and impairment 

expenses of property, plant and equipment and intangible 

NOTE 24 RESTRUCTURING COSTS 

No signifi cant restructuring expenses were recognised in 

fi nancial year 2011. Restructuring expenses during the two 

assets have an impact on the “Cost of sales” item in the income 

statement. Amortisation of deferred grants relating to assets 

was treated in the same way. 

previous years were mainly related to restructuring of Group 

facilities in France. 


6 Notes 



NOTE 25 OTHER OPERATING INCOME AND EXPENSES 

Other operating income and expenses comprise: 


Losses on disposals of non-current assets (0.4) 0.0 0.0 

Other operating income 0.0 1.1 2.1 

(0.4) 1.1 2.1 

In 2010, other operating income mainly corresponds to an 

insurance payment received in respect of a past insurance 

claim. 

NOTE 26 FINANCIAL COSTS 

Net fi nancial expense breaks down as follows: 


In 2009, other operating income consisted primarily of 

compensation received by the Group for non-renewal of a 

lease of premises. 


Financial income from cash and cash equivalents 1.9 0.7 0.5 

Finance costs on gross debt (14.1) (14.6) (13.7) 

Net debt 

Other fi nancial income and expenses: 

(12.2) (13.9) (13.2) 

■ Unwinding of discounts on provisions for pensions 

and other fi nancial liabilities (2.7) (2.1) (2.7) 

■ Fair value remeasurement of fi nancial instruments (1) 0.2 (0.3) (0.1) 

■ Foreign exchange gains/(losses) 3.7 (2.5) (2.2) 

■ Provisions for impairment of non-consolidated investments 0.0 0.0 (0.3) 

(1) Ineffective portion of hedging instruments. 

(11.0) (18.8) (18.5) 

The net foreign exchange gain includes the fair value of fi nancial instruments hedging foreign exchange risk, which was positive 

€3.7 million in 2011 against a negative fair value of €(0.3) in 2010 and €(0.1) million for fi nancial year 2009. 

26.1 FINANCE COSTS ON GROUP DEBT 

The composite interest rate on the Group’s bank debt, after taking into account hedging instruments, amounted to 3.32% in 2011 

as compared to 3.68% in 2010 and 3.58% in 2009. 

2011 2010 2009 

Senior debt in euro 3.44% 3.05% 2.71% 

Senior debt in USD 3.22% 4.20% 4.23% 

COMPOSITE INTEREST RATE 3.32% 3.68% 3.58%

NOTE 27 INCOME TAXES 

6 



27.1 BREAKDOWN OF INCOME TAX EXPENSE 


Income tax expense on profi t from continuing operations 

■ Current tax expense (13.9) (10.5) (4.9) 

■ Net deferred tax revenue/(expense) (5.7) (2.6) (7.6) 

Total income tax expense on profi t from continuing operations (19.6) (13.1) (12.5) 

Income tax revenue/(expense) from discontinued operations (6.3) 5.1 5.1 

INCOME TAX EXPENSE (25.9) (8.0) (7.4) 

It should be noted that since 2010 and following the reform 

of the Business Tax (Taxe Professionnelle) in France, income tax 

expenses due include an amount known as the Local Business 

Tax (Contribution Economique Territoriale or CET). It is Saft 

Group’s opinion that the “CVAE” component of CET, which 

is determined by applying the applicable tax rate to income 

less some operating expenses, is a measure of income and, 

considering the industrial activity of the Group and IAS 12 

accounting standard, has to be recorded as a component of 

the income tax provision. 

2010 current income tax on continuing operations also includes 

non-recurring tax revenue of €1.4 million corresponding to 

the profi t in respect of the 2008 and 2009 fi nancial years, 

from the extension of the tax consolidation regime in France to 

include Saft Groupe SA. 

27.2 RATIONALISATION OF INCOME TAX EXPENSE ON CONTINUING OPERATIONS 

The tax on the Group’s profi t before tax differs from the theoretical amount that would arise using the weighted average tax rate 

applicable to profi ts of the consolidated companies as follows: 

(in € million) 2011 2010 Restated (1) 2009 Restated (1) 

Profi t before tax from continuing operations 70.7 61.5 50.9 

Notional tax charge (based on the French tax rate) (24.1) (21.1) (17.4) 

Impact of differences in tax rates between France and other countries 1.2 2.1 2.4 

Effect of change in tax rate 0.4 1.4 1.1 

Permanent differences (including Research Tax Credit) 1.1 2.1 0.7 

Use of prior year losses for which no deferred tax asset was recognised 1.8 2.3 1.8 

Tax losses of the current period on which no deferred tax was recognised 0.0 0.0 (1.2) 

INCOME TAX EXPENSE FROM CONTINUING OPERATIONS (19.6) (13.1) (12.5) 

Effective tax rate on continuing operations 27.7% 21.4% 24.6% 

(1) To enable comparison with data from the year 2011, data from fi nancial years 2010 and 2009 have been restated to remove income tax revenue or expense relating to 

activities discontinued during fi nancial year 2011 

27.3 DEFERRED TAXES RECOGNISED IN THE BALANCE SHEET 


Deferred tax assets to be recovered after more than 12 months 3.3 4.7 5.5 

Deferred tax assets to be recovered within 12 months 2.6 1.9 4.6 

Total deferred tax assets 5.9 6.6 10.1 

Deferred tax liabilities to be paid after more than 12 months (44.6) (44.5) (52.7) 

Deferred tax liabilities to be paid within 12 months (26.4) (15.5) (16.3) 

Total deferred tax liabilities (71.0) (60.0) (69.0) 

The increase of more than €10 million in deferred tax liabilities comes mainly from tax bonus depreciation relating to industrial 

equipment from the new Jacksonville facility, in Florida. 


6 Notes 



The sources of deferred tax assets are as follows: 



Fair value 

adjustments 

(acquisition) (1) 

Elimination of 

internal margin 

on inventory 

Temporary 

differences 

Total deferred tax 

assets 

At 01/01/2009 

Deferred tax income/(expense) recognised in income 

2.5 1.1 9.7 13.3 

statement 0.0 (0.3) (1.7) (2.0) 

Deferred tax income/(expense) recognised in equity 0.0 0.0 (1.3) (1.3) 

Translation adjustment 0.0 0.0 0.1 0.1 

At 31/12/2009 


2.5 0.8 6.8 10.1 

statement (0.3) 0.3 (2.9) (2.9) 



At 31/12/2010 


2.1 1.1 3.4 6.6 

statement (0.4) (0.1) 1.0 0.5 



AT 31/12/2011 1.7 1.0 3.2 5.9 

(1) These adjustments relate to the acquisition by the Doughty Hanson Funds, in January 2004, of the Alcatel Group battery operations. See Note 8 “ Goodwill” to the 


The sources of deferred tax liabilities are as follows: 


Fair value 

adjustments (1) 

Impairment of 

assets 

Other temporary 

differences 

Total deferred tax 

liabilities 

At 01/01/2009 


(50.1) (9.9) (6.8) (66.8) 

statement 4.9 (4.9) (0.4) (0.4) 


Translation adjustment (0.4) 0.0 0.0 (0.4) 

At 31/12/2009 


(45.6) (14.8) (8.6) (69.0) 

statement 5.4 (4.1) 4.1 5.4 

Deferred tax income/(expense) recognised in equity 0.0 0.0 6.5 6.5 


At 31/12/2010 


(43.1) (18.9) 2.0 (60.0) 

statement 2.7 (8.8) (6.4) (12.5) 

Deferred tax income/(expense) recognised in equity 0.0 0.0 3.5 3.5 


AT 31/12/2011 (42.4) (27.7) (0.9) (71.0) 

(1) These adjustments relate to the acquisition by the Doughty Hanson Funds, in January 2004, of the Alcatel Group battery operations. See Note 8 “ Goodwill” to the 

Consolidated Financial Statements.

6 



Movements in net deferred tax are shown in the table below: 


At 01/01/2009 (53.5) 

Deferred tax expense recognised in income statement (2.4) 

Deferred tax income recognised in equity (2.7) 

Translation adjustment (0.3) 

At 31/12/2009 (58.9) 

Deferred tax income recognised in income statement 2.5 

Deferred tax income recognised in equity 5.7 


At 31/12/2010 (53.4) 

Deferred tax expense recognised in income statement (12.1) 

Deferred tax expense recognised in equity 2.3 


AT 31/12/2011 (65.1) 

At 31 December 2011, unrecognised deferred tax assets 

(taxable basis amounts) amount to €13.6 million as against 

€20.5 million at 31 December 2010. These losses relate 

mainly to Friemann und Wolf Batterietechnik GmbH in 

Germany and to Saft Groupe SA in France. 

NOTE 28 EARNINGS PER SHARE 

27.4 INCOME TAX RISKS 

Regular tax audits are carried out on the Group by the tax 

authorities of the countries in which it is established. As of the 

date hereof, Saft does not have any information to the effect 

that the tax audits in process, which have not yet led to any tax 

reassessments, could have a material impact on the Group’s 

fi nancial position. 

Earnings per share are calculated on the basis of the average number of Saft Groupe SA shares in issue during the year, treasury 

shares held on average over the same period being deducted. 

2011 2010 2009 

Weighted average outstanding number of Saft Groupe SA ordinary shares 25,153,229 24,920,115 19,017,831 

Less average number of treasury shares held (66,493) (54,259) (43,550) 

Number of shares used to compute basic earnings per share 25,086,737 24,865,856 18,974,281 

Effect of potential dilutive ordinary shares: unexercised stock options 123,682 225,837 60,373 

Number of shares used to compute diluted earnings per share 25,210,419 25,091,693 19,034,654 

The calculation of earnings per share is presented with the Group’s consolidated income statement. 


6 Notes 



NOTE 29 RELATED-PARTY TRANSACTIONS AND INVESTMENTS 

IN ASSOCIATES 

Following the sale by the Group of its 49% stake in the 

joint venture Johnson Controls-Saft on 30 September 2011, 

investments in associates are limited to a 50% interest in ASB, 

the joint venture with EADS. 

Transactions regarding Johnson Controls-Saft and its sale 

are detailed in Note 30 “Net profi t/(loss) from discontinued 

operations” of the Consolidated Financial Statements. 

29.1 INVESTMENTS IN ASSOCIATES 

The Saft Group holds a 50% interest in the share capital of 

ASB and its subsidiaries, jointly with the EADS Group. ASB 

manufacture and sell thermal batteries for military applications. 


As mentioned in Note 2.4 relative of the consolidation 

methods, ASB is consolidated under the equity method, being 

a jointly controlled venture. 

29.2 RELATED-PARTY TRANSACTIONS 

The Group does not realise any sales with ASB, a company in 

which it holds a 50% interest and which is consolidated under 

the equity method. Support services provided and invoiced by 

the Saft Group to the ASB Group amounted to €0.3 million in 

2011 as compared to €0.3 million both in 2010 and 2009. 

The Group’s share of the balance sheets of ASB and Johnson Controls-Saft (JCS) (none of which is listed on a stock market) is as 

follows: 


Non-current assets 8.7 8.4 8.0 

Current assets 11.7 11.5 10.0 

Total assets 20.4 19.9 18.0 

Non-current liabilities 0.0 0.0 0.0 

Current liabilities 7.1 7.4 6.2 

Total liabilities 7.1 7.4 6.2 

Group’s share in net assets of ASB Group 13.3 12.5 11.8 

Group’s share in net assets of JCS 0.0 37.1 18.2 

TOTAL INVESTMENTS IN ASSOCIATES 13.3 49.6 30.0 

The Group’s share of the income statement of ASB is as follows: 


Sales 14.0 12.9 13.0 

Cost of sales (10.4) (9.0) (8.7) 

R&D costs (Engineering) 0.0 0.0 0.0 

Other operating expenses (1.8) (1.7) (2.3) 

Operating income 1.8 2.2 2.0 

GROUP’S SHARE IN NET ASSETS NET INCOME (LOSS) 

FOR THE YEAR OF ASB GROUP 1.8 1.6 1.3

6 



NOTE 30 NET PROFIT/(LOSS) FROM DISCONTINUED OPERATIONS 

In 2011 Saft sold its stake in the joint venture Johnson Controls- 

Saft to Johnson Controls Inc. This sale was the result of an 

agreement between Saft and Johnson Controls Inc. to end 

the joint venture following differences between the partners 

regarding the future of this company, created in 2006 to 

develop and produce lithium-ion batteries for the automobile 

industry. 

Under the terms of this agreement, which ended all legal 

proceedings undertaken and all cooperation between Saft and 

Johnson Controls Inc., on 30 September 2011 Saft sold its 

49% stake in Johnson Controls-Saft to Johnson Controls Inc. for 

a cash amount of $145 million. 

Net profi t (loss) from discontinued operations in 2011 therefore 

only concerns transactions related to the Johnson Controls-Saft 

joint venture which was 49% owned by the Group until 30 

September 2011. 

Profi t from discontinued operations (net of income tax) of 

€23.9 million recognised during the year included: 

� the 49% Group share of the net loss of the joint venture 

from 1 January to 30 September 2011, i.e. a loss of 

€19.7 million; 

� the €49.9 million capital gain from the disposal of that 

investment; 

� a €6.3 million related income tax expense. 

Data for fi nancial years 2010 and 2009 have been restated 

to enable comparison with data from the year 2011. This 

restatement consisted of reclassifying in line “Net profi t (loss) 

from discontinued operations”, the Group’s share in the net 

loss of Johnson Controls-Saft previously recorded under the 

line “Share of profi t/(loss) of associates” and reclassifying the 

Group’s tax revenue in 2010 and 2009 given its share of the 

losses of the joint venture during these two years. 


Share of profi t/(loss) of associates (19.7) (16.9) (14.6) 

Capital gain on disposal of Saft Group’s stake in Johnson Controls-Saft 49.9 0,0 0,0 

Income tax revenue/(expense) from discontinued operations (6.3) 5.1 5.1 

NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS 23.9 (11.8) (9.5) 

As stated in the Group’s consolidated statement of cash fl ows, 

the net increase in Group cash in 2011 following (i) fi nancing 

transactions on the joint venture until 30 September 2011, and 

(ii) the sale of this investment, was €60 million as compared 

to net decreases in Group cash fl ow of €35.9 million and 

€25.6 million in 2010 and 2009 respectively. 

Finally, it should be noted that revenue realised by the Group 

from the joint venture Johnson Controls-Saft amounted to 

€7.3 million in 2011 as compared to €8.6 and €8.4 million 

in 2010 and 2009 respectively. 

NOTE 31 CONTRACTUAL OBLIGATIONS AND OTHER OFF BALANCE 

SHEET COMMITMENTS 

Off balance sheet commitments are summarised in the table below: 


Tender guarantees 0.2 1.2 0.1 

Customer prepayment guarantees 5.9 4.5 5.8 

Performance bonds 6.6 7.1 7.0 

Unmatured discounted bills & similar items 0.0 0.0 0.0 

Other commitments 4.8 4.3 5.4 

17.5 17.1 18.3 


6 Notes 



31.1 GUARANTEES 

Saft has given various guarantees to customers concerning the 

execution of contracts awarded to the Group (performance 

bonds, customer prepayment guarantees, refunds, etc.). The 

total amount of such commitments at 31 December 2011 was 

€12.7 million. This represents the maximum potential amount 

(undiscounted) that the Group could be required to pay under 

these guarantees, and has not been reduced to refl ect any 

sums that the Group might be able to recover through legal 

proceedings or via counter-guarantees received. 

The other guarantees given, for an amount of €4.8 million, 

principally consist of guarantees given to fi nancial institutions in 

the United States in relation with the implementation of Standby 

Letters of Credit. 

31.3 OTHER COMMITMENTS 


31.2 DEBT AND ADVANCES SECURED 

BY COLLATERAL 

Following the fi nancing at 3 July 2009, no assets were 

pledged to the lending banks. 

Saft has pledged no other assets as collateral, and does not 

use discounting of bills or receivables as a source of fi nancing. 


Unconditional purchase obligations 0.0 0.0 0.0 

Obligations to purchase property, plant and equipment 27.2 38.6 3.7 

Sub-total - Purchase commitments 27.2 38.6 3.7 

Commitments with regard to receivables – Dailly assignments 0.0 0.0 0.0 

Unused fi rst demand fi nancial guarantees 19.0 18.4 7.0 

TOTAL - OTHER COMMITMENTS 46.2 57.0 10.7 

Property, plant and equipment purchasing commitments include 

the buyback of the Li-ion production facility at Nersac, France 

for the amount of €7.7 million ($10 million). 

The above-mentioned fi rst demand fi nancial guarantees 

concern guarantees given with regard to surety lines used by 

the Group’s US subsidiary to US credit institutions. 

Pursuant to IAS 32 “Financial Instruments”, purchase and/or 

sale commitments in respect of commodities or forward foreign 

currency contracts are recognised in the Group’s consolidated 

statement of fi nancial position at fair value. 

NOTE 32 REMUNERATION OF MEMBERS OF THE MANAGEMENT BOARD 

Remuneration paid to members of the Group Management Board in the past three fi nancial years is broken down as follows: 

(in €) 2011 2010 2009 

Salaries and other short-term benefi ts 1,799,734 1,531,758 1,514,636 

Post-employment benefi ts (Peri) 58,734 48,380 47,340 

Other long-term employee benefi ts - - - 

Share-based payments Note 33 

At 31 December 2011, provisions recognised in the Group’s balance sheet in respect of pension obligations for senior management 

amounted to €0.1 million (€0.1 million at 31 December 2010 and €0.3 million at 31 December 2009).

6 



NOTE 33 SHARE-BASED PAYMENTS 

33.1 EXISTING STOCK OPTION PLANS 

No stock option plan was set up during fi nancial year 2011. 

The main initial features of the new stock option plans in force at 31 December 2011 are as follows: 

Plan 

No. 1 

Plan 

No. 1 bis 

Plan 

No. 2 

Plan 

No. 3 

Plan 

No. 3 bis 

Plan 

No. 4 

Plan 

No. 5 

Date of plan 29/06/2005 28/09/2005 27/11/2006 22/01/2008 05/11/2008 23/03/2009 02/09/2010 

Number of options granted 421,900 34,500 400,000 390,000 10,000 400,000 400,000 

Adjusted exercise price (1) €23.33 €27.36 €23.33 €24.22 €23.33 €17.76 €25.34 

Vesting period 4 years 4 years 4 years 4 years 4 years 4 years 4 years 

Term of plan 10 years 10 years 10 years 10 years 10 years 7 years 7 years 

(1) Above-listed exercise prices for stock option plans 1 to 4 have been adjusted to refl ect the impact of the share capital increase on 2 December 2009. 

33.2 CHANGE IN THE NUMBER OF STOCK OPTIONS 

The change in the number of stock options over the last three fi nancial years is as follows 

Number 

of options 

Average exercise 

price 

Number of 

exercisable options 

Options outstanding at 31/12/08 1,128,400 €26.47 - 

Options granted 400,000 

Options cancelled (15,000) 

Options exercised (233,414) 

Number of options adjusted following capital increase 147,174 

Options outstanding at 31/12/09 1,427,160 €21.95 136,712 





Options granted 0 




Stock options outstanding at 31 December 2011 are broken down as follows: 

Date of grant 

Outstanding 

number of options 

Adjusted 

exercise price (€) 

Remaining 

period until 

expiry 

Plan No. 1 dated 29 June 2005 88,675 23.33 3.5 years 

Plan No. 1 bis dated 28 September 2005 27,873 27.36 3.7 years 

Plan No. 2 dated 27 November 2006 330,368 23.33 4.9 years 

Plan No. 3 dated 22 January 2008 395,801 24.22 6.1 years 

Plan No. 3 bis dated 5 November 2008 11,145 23.33 6.9 years 

Plan No. 4 dated 23 March 2009 423,134 17.76 4.2 years 

Plan No. 5 dated 2 September 2010 393,500 25.34 5.7 years 


6 Notes 



33.3 FAIR VALUE OF INSTRUMENTS GRANTED 

The fair values of stock options are determined by an independent valuer using a binomial model. The assumptions used to determine 

the fair value of the options are as follows: 


Plan No. 1 

dated 

Plan No. bis 

dated 

Plan No. 2 

dated 

Plan No. 3 

dated 

Plan No. 3 bis 

dated 

Plan No. 4 

dated 

Plan No. 5 

dated 

Date of grant 29/06/2005 28/09/2005 27/11/2006 22/01/2008 05/11/2008 23/03/2009 02/09/2010 

Price at date of grant €26.00 €31.00 €23.26 €23.10 €23.35 €19.06 €25.60 

Initial exercise price €26.00 €30.50 €26.00 €27.00 €26.00 €19.80 €25.34 

Expected term 10 years 10 years 7 years 7 years 7 years 7 years 7 years 

Expected volatility 40% 40% 40% 40% 42.25% 40% 30% 

Risk-free rate 3.20% 3.20% 3.73% 3.84% 3.51% 2.75% 2.00% 

Rate of dividend distribution 3.00% 3.00% 2.90% 2.90% 3.24% 3.57% 2.80% 

Fair value €10.40 €12.53 €6.08 €5.91 €7.35 €5.48 €6.20 

The expected volatility of the share price was determined on the basis of historical volatility for comparable groups. 

33.4 IMPACT ON PROFIT AND LOSS OF SHARE-BASED PAYMENTS 

The share-based payment expense recognised in accordance with IFRS 2 is broken down as follows: 

(in € thousand) 2011 2010 2009 

Plan No. 1dated 29 June 2005 - - 315 

Plan No. 1bis dated 28 September 2005 - - 50 

Plan No. 2 dated 27 November 2006 - 301 439 

Plan No. 3 dated 22 January 2008 610 442 456 

Plan No. 3bis dated 5 November 2008 18 18 18 

Plan No. 4 dated 23 March 2009 495 433 347 

Plan No. 5 dated 2 September 2010 515 162 - 

TOTAL 1,638 1,356 1,625 

NOTE 34 POST BALANCE SHEET EVENTS 

No event has occurred since the balance sheet date which is 

likely to have a material effect on the fi nancial position of the 

Group. 

However, it is worth mentioning that the refi nancing of the 

Group’s bank debt is now well advanced and the Group 

expects to fi nalize its refi nancing before the end of the fi rst 

quarter of 2012. Refi nancing will be structured in the form of 

a fi ve-year maturity Euro bank debt and a dollar bonds issue 

in form of a private placement in the United States. The Group 

should also benefi t from a new revolving credit facility that shall 

increase its fi nancial fl exibility.

6 


Statutory Auditors’ report on the Consolidated Financial Statements 

6.6 STATUTORY AUDITORS’ REPORT ON THE 

CONSOLIDATED FINANCIAL STATEMENTS 


This is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience 

of English speaking users. The Statutory Auditors’ report includes information specifi cally required by French law in such reports, 

whether modifi ed or not. This information is presented below the opinion on the Consolidated Financial Statements and includes an 

explanatory paragraph discussing the auditors’ assessments of certain signifi cant accounting and auditing matters. These assessments 

were considered for the purpose of issuing an audit opinion on the Consolidated Financial Statements taken as a whole and not to 

provide separate assurance on individual account captions or on information taken outside of the Consolidated Financial Statements. 

This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards 

applicable in France. 

SAFT GROUPE SA 

12, rue Sadi Carnot 



In compliance with the assignment entrusted to us by your Shareholders’ General Meeting, we hereby report to you, for the year 

ended 31 December 2011, on: 

� the audit of the accompanying Consolidated Financial Statements of SAFT GROUPE SA ; 

� the justifi cation of our assessments; 

� the specifi c verifi cation required by law. 

These Consolidated Financial Statements have been approved by the Management Board. Our role is to express an opinion on 

these Consolidated Financial Statements based on our audit. 

I OPINION ON THE CONSOLIDATED FINANCIAL STATEMENTS 

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 Financial 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 Consolidated Financial 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 Consolidated Financial Statements. We believe that the audit evidence we have obtained is suffi cient and 

appropriate to provide a basis for our audit opinion. 

In our opinion, the Consolidated Financial Statements give a true and fair view of the assets and liabilities and of the fi nancial 

position of the Group as at 31 December 2011 and of the results of its operations for the year then ended in accordance with 

International Financial Reporting Standards as adopted by the European Union. 


6 Statutory 


Auditors’ report on the Consolidated Financial Statements 

II JUSTIFICATION OF OUR ASSESSMENTS 

In accordance with the requirements of article L. 823-9 of the French Commercial Code (Code de Commerce) relating to the 

justifi cation of our assessments, we bring to your attention the following matter(s): 

� The Company tests goodwill and indefi nite-lived intangible assets for impairment at each balance sheet date, and also assesses 

whether there is any indication that non-current assets may be impaired, in accordance with the methods described in Notes 

2.9 and 10. We reviewed the methods used to perform this impairment test as well as the underlying cash fl ow forecasts and 

assumptions, and verifi ed that the disclosures contained in said note are appropriate. 

� The Company records provisions for other liabilities and borrowings, mainly to cover restructuring costs and risks related to 

warranties given on goods sold (provisions for contractual claims), in accordance with the methods set out in Note 2.22. As part 

of our work, we assessed the data and assumptions on which these estimates were based, reviewed the calculations made by 

the Company, compared the accounting estimates from prior periods with the corresponding actual fi gures, and examined the 

management approval procedures applicable to these estimates. As part of our assessments, we obtained assurance that the 

estimates used were reasonable. 

� These assessments were made as part of our audit of the Consolidated Financial Statements taken as a whole, and therefore 

contributed to the opinion we formed which is expressed in the fi rst part of this report. 

III SPECIFIC VERIFICATION 

As required by law, we have also verifi ed in accordance with professional standards applicable in France the information presented 

in the Group’s management report. 

We have no matters to report as to its fair presentation and its consistency with the Consolidated Financial Statements. 


Neuilly-sur-Seine and Paris, 13 February 2012 



Françoise Garnier Juliette Decoux

PARENT COMPANY 

CERTIFIED FINANCIAL 

STATEMENTS 

7.1 Balance sheet – Assets 184 

7 

7.2 Balance sheet – Equity 

and Liabilities 184 

7.3 Income statement 185 

7.4 Notes to the Parent Company 


7.5 Parent company – Financial 

summary for the last fi ve years 192 

7.6 Statutory Auditors’ report on 

the Parent Company Financial 

Statements 193 

IMPORTANT LEGAL INFORMATION AND CAUTIONARY STATEMENTS 

The Parent Company Financial Statements for the year ended 31 December 2011 presented in this 

document have been approved by the Management Board, reviewed by the Audit Committee and 

approved by the Supervisory Board of Saft. 

Certain statements contained herein are forward-looking statements including, but not limited to, statements 

that are predictions of or indicate future events, trends, plans, objectives or results of operation. Undue 

reliance should not be placed on such statements because, by their nature, they are subject to known 

and unknown risks and uncertainties and can be affected by other factors that could cause actual results 

and Saft’s plans and objectives to differ materially from those expressed or implied in the forward looking 

statements. 


7 Balance 


sheet – Assets 

Unless otherwise indicated, the Parent Company Financial Statements are presented in thousand euros. 

7.1 BALANCE SHEET – ASSETS 


Note 31/12/2011 31/12/2010 31/12/2009 


Shares in subsidiaries and associates 3 308,955 308,955 268,955 

Other non-current fi nancial assets 6 1 1 1 

308,956 308,956 268,956 


Advance payments to third parties 2 - - 

Trade receivables 6 0 1 134 

Other receivables 6 17,417 5,018 374 

Marketable securities 2,313 2,099 2,347 

Cash and cash equivalents 43,426 35,664 72,447 

63,158 42,782 75,302 

TOTAL 372,114 351,738 344,258 

7.2 BALANCE SHEET – EQUITY AND LIABILITIES 

Note 31/12/2011 31/12/2010 31/12/2009 

Equity 

Share capital 4 25,175 25,126 24,684 

Additional paid-in capital 295,313 294,215 284,635 

Legal reserve 2,513 2,468 2,124 

Retained income 7,119 13,340 21,892 

Net income/(loss) for the year 31,022 11,410 8,542 

Liabilities 

13 361,142 346,559 341,877 

Bank borrowings and fi nancial debts - - - 

Trade payable 5 958 1,158 2,371 

Taxes and social benefi ts owed 5 11 12 10 

Other liabilities 5 10,003 4,009 - 

7 10,972 5,179 2,381 

TOTAL 372,114 351,738 344,258

7 Notes 


to the Parent Company Financial Statements 

7.4 NOTES TO THE PARENT COMPANY FINANCIAL 

STATEMENTS 

DETAILED SUMMARY OF NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS 

NOTE 1 Information relative to the company 187 

NOTE 2 Summary of accounting policies 187 

NOTE 3 Long-term fi nancial assets 187 

NOTE 4 Share capital 188 

NOTE 5 Accrued expenses 188 

NOTE 6 Accounts receivables 188 

NOTE 7 Accounts payables 189 

NOTE 8 Impact from ad valorem tax appraisals 189 

NOTE 9 Increases and relief in future tax debt 189 


NOTE 10 Management compensation as 

of 31 December 2011 189 

NOTE 11 Average number of employees 189 

NOTE 12 Breakdown of income tax 190 

NOTE 13 Changes in shareholders’ equity 190 

NOTE 14 Financial position with affi liates as 

of 31 December 2011 190 

NOTE 15 Miscellaneous borrowings 

and fi nancial debts 191 

NOTE 16 Stock option plans 191

7 


Notes to the Parent Company Financial Statements 

NOTE 1 INFORMATION RELATIVE TO THE COMPANY 

Saft Groupe SA was created in March 2005 by a group of 

investment funds managed by Doughty Hanson & Co Limited 

(the “Doughty Hanson Funds”). Its purpose was to group, 

under the control of a French company, the various operating 

subsidiaries of the Saft Group directly or indirectly acquired by 

Saft France Sarl, a Luxembourg company created as part of 

the purchase by the Doughty Hanson Funds in January 2004 

of Alcatel Group’s battery activities. 

The fi nancial year ran from January 1 to December 31. 

Consolidating entity: 

NOTE 2 SUMMARY OF ACCOUNTING POLICIES 

The annual accounts are drawn up in accordance with the 

rules laid out in the 1999 chart of accounts and the French 

Commercial Code, as well as with French generally accepted 

accounting principles. The fundamental accounting policies 

were applied in accordance with the prudence principle, and 

the following basic assumptions: 

� on-going business; 

� consistent accounting methods from one year to another; 

� independence of fi nancial years; 

� and, in accordance with the general rules for drawing up 

and presenting annual fi nancial statements. 

The basic method adopted for evaluating the items recorded in 

the books is the historical cost method. 

The principal methods used are as follows: 

a) Shareholdings, other investments 

Shareholdings and other investments are entered at their cost 

of purchase plus miscellaneous expenses. When the inventory 

value is lower than the book value, a depreciation provision is 

entered to account for the difference. 

The inventory value of the shares corresponds to their market 

value for the Company. It is determined according to the net 

asset value of the Company under consideration, its return on 

investment and its future prospects. 

NOTE 3 LONG-TERM FINANCIAL ASSETS 

Saft Groupe SA, whose registered offi ce is 12, rue Sadi Carnot, 

93170 Bagnolet, France is the Group’s parent company 

consolidating the Saft Group’s entities. 

b) Marketable securities 

Marketable securities constitute short-term investments of cash in 

the form of money market funds with a daily liquidity. 

c) Accounts receivables 

Receivables are valued at their nominal value. An impairment 

provision is entered when the inventory value is lower then the 

book value. 

d) Debts 

Debts are reported as liabilities at their nominal value. 

e) Basis of conversion for items expressed in foreign 

currencies 

Where applicable, items expressed in foreign currencies are 

recorded for their exchange-value on the date of the transaction. 

Receivables, cash, cash equivalents and liabilities in foreign 

currencies are shown in the balance sheet at the year-end 

exchange rates. The difference resulting from updating 

receivables and liabilities in foreign currencies at their yearend 

value is disclosed on the balance sheet as unrealised 

translation gains or losses. Unrealised losses on foreign currency 

translation are subject to a provision for contingencies. 

01/01/2011 Acquisitions Sales 31/12/2011 

Shares in subsidiaries and associates 308,955 - - 308,955 

Loans and other fi nancial fi xed assets 1 - - 1 

TOTAL 308,956 - - 308,956 

Saft Groupe SA only holds a 100% shareholding in Saft 

Finance Sarl for an amount of €308,955,256. Saft Finance 

Sarl net equity as of 31 December 2011 was €179.3 million 

and its net income for the 2011 fi nancial year was a profi t of 


The Saft Group subsidiaries indirectly held by Saft Groupe SA 

are listed in section 5.14 of this Annual Report. 


7 Notes 



NOTE 4 SHARE CAPITAL 

At 31 December 2011, the company’s subscribed share capital was fully paid up and comprised 25,174,845 fully paid ordinary 

shares with a par value of €1. 

At 31/12/2011 Number Nominal value 

Shares or share rights in the share capital at the start of the fi nancial year 25,125,840 €1 

Shares or share rights issued during the fi nancial year 49,005 €1 

Shares or share rights redeemed during the fi nancial year 

SHARES OR SHARE RIGHTS COMPOSING THE SHARE CAPITAL 

- - 

AT THE END OF THE FINANCIAL YEAR 25,174,845 €1 

The Saft Group carried out one capital increase during the 

2011 fi nancial year as a result of the exercise of stock options, 

leading to the creation of 49,005 new shares. 

TREASURY SHARES 

As the Annual General Meeting of 4 May 2011 renewed the 

authorisation granted to the Management Board to trade in 

NOTE 5 ACCRUED EXPENSES 


the Company’s shares on the stock market in order to stabilise 

the secondary market or ensure the liquidity of the Company’s 

shares, the liquidity contract with Exane BNP Paribas has been 

renewed. 

At 31 December 2011, the total value of the 93,096 treasury 

shares held amounted to €1,905,806 on the basis of the 

purchase price and €2,034,147 in terms of market value. 

At 31/12/2011 Amount 

Trade payables 958 

Taxes and social benefi ts owed 11 

Other liabilities 10,003 

TOTAL ACCRUED EXPENSES 10,972 

Other liabilities represent tax liability of Saft Groupe SA, the head of the French tax consolidation group, to its French subsidiaries 

part of the tax consolidation group. 

NOTE 6 ACCOUNTS RECEIVABLES 

At 31/12/2011 Gross value Up to 1 year Over 1 year 


Other fi nancial assets 


1 - 1 

Trade receivables - - - 

Tax credits 9,043 - 9,043 

Taxes (VAT) 214 214 - 

Shareholder advances to subsidiaries 8,160 431 7,729 

TOTAL ACCOUNTS RECEIVABLE 17,418 645 16,773

7 



NOTE 7 ACCOUNTS PAYABLES 

At 31/12/2011 Gross value Up to 1 year 1 to 5 years Over 5 years 

Bank borrowings and other fi nancial debts - - - - 

Trade payables 958 958 - - 

Accrued taxes 11 11 - - 

Group current accounts 10,003 10,003 - - 

Other current debts - - - - 

TOTAL DEBTS 10,972 10,972 - - 

Loans taken out during the fi nancial year - - - - 

Loans repaid during the fi nancial year - - - - 

NOTE 8 IMPACT FROM AD VALOREM TAX APPRAISALS 

2011 net income has not been impacted by any ad valorem tax appraisal. 

NOTE 9 INCREASES AND RELIEF IN FUTURE TAX DEBT 

As shown below, Saft Groupe SA will benefi t from tax relief in future years, mainly as a result of tax losses to be carried forward. 

At 31/12/2011 Tax base Deferred tax 

Increases in future tax debt - - 

Relief in future tax debt 

■ Organic (sales tax) 10 3 

■ Tax losses carried forward 2,223 760 

INCREASE/(RELIEF) IN THE FUTURE TAX DEBT 2,233 763 

NOTE 10 MANAGEMENT COMPENSATION AS OF 31 DECEMBER 2011 

Compensation paid to members of the Management Board 

in 2011 totalled €1,799,734. This amount includes benefi ts 

in kind. 

NOTE 11 AVERAGE NUMBER OF EMPLOYEES 

The company has no employee. 

Compensations paid to members of the Supervisory Board in 

2011 totalled €151,237. 


7 Notes 



NOTE 12 BREAKDOWN OF INCOME TAX 

Corporate income tax can be broken down as follows: 


Tax base Rate Tax 

Income/(loss) from ordinary activities 30,963 33.33 (1,036) 

Income/(loss) from non-current activities (292) - 1,387 

NET INCOME FOR THE FINANCIAL YEAR 30,671 - 351 

NOTE 13 CHANGES IN SHAREHOLDERS’ EQUITY 

Change in shareholder’s equity during fi nancial year 2011 was as follows (in euros): 

(in euros) 01/01/2011 

Appropriation of 

2010 earnings 

Dividend 

paid 

Capital 

increases 

Result of 

the period 31/12/2011 

Share capital 25,125,840 - - 49,005 - 25,174,845 

Additional paid-in capital 294,215,191 - - 1,097,748 - 295,312,939 

Statutory reserve 2,468,409 44,175 - - - 2,512,584 

Special reserve 

on long-term capital gains 0 - - - - - 

Other reserves 0 - - - - - 

Retained earnings 13,339,600 11,365,903 (17,586,357) - - 7,119,146 

Net income/(loss) for the year 11,410,078 (11,410,078) - - 31,022,193 31,022,193 

Tax-regulated provisions 0 - - - - - 

TOTAL 346,559,118 0 (17,586,357) 1,146,753 31,022,193 361,141,707 

NOTE 14 FINANCIAL POSITION WITH AFFILIATES AS OF 31 DECEMBER 2011 

Balance sheet and income statement items relating to transactions with affi liates can be analysed as follows at 2011 year-end: 

Amount 

Balance sheet 

Trade receivables 0 

Shareholder advances to subsidiaries and affi liates – assets 40,906 

Shareholder advances to subsidiaries and affi liates – debts (10,004) 

Income statement 

Income from investments in subsidiaries 29,500 

Interest revenue 288 

Interest expenses -

7 



NOTE 15 MISCELLANEOUS BORROWINGS AND FINANCIAL DEBTS 

The parent company has no fi nancial indebtedness. 

NOTE 16 STOCK OPTION PLANS 

The main initial features of the new stock option plans in force at 31 December 2011 are as follows: 

Plan 

No. 1 

Plan 

No. 1 bis 

Plan 

No. 2 

Plan 

No. 3 

Plan 

No. 3 bis 

Plan 

No. 4 

Plan 

No. 5 

Date of plan 29/06/2005 28/09/2005 27/11/2006 22/01/2008 05/11/2008 23/03/2009 02/09/2010 

Number of options granted 421,900 34,500 400,000 390,000 10,000 400,000 400,000 

Adjusted exercise price (1) €23.33 €27.36 €23.33 €24.22 €23.33 €17.76 € -25.34 

Vesting period 4 years 4 years 4 years 4 years 4 years 4 years 4 years 

Term of plan 10 years 10 years 10 years 10 years 10 years 7 years 7 years 

Remaining period until expiry 3.5 years 3.7 years 4.9 years 6.1 years 6.9 years 4.2 years 5.7 years 

Number of options cancelled (100,844) (6,000) (46,721) (37,701) - (22,743) (6,500) 

Options exercised (243,274) (3,360) (65,335) - - - - 

Number of options adjusted 10,893 3,333 42,424 43,502 1,145 45,877 - 

Options outstanding at 

31 December 2011 88,675 27,873 330,368 395,801 11,145 423,134 393,500 

Of which options exercised 

after adjustment 88,675 27,873 330,368 - - - - 

* Above listed exercise prices for stock option plans 1 to 4 have been adjusted to refl ect the impact of the share capital increase made on 2 December 2009. 

CHANGE IN THE NUMBER OF STOCK OPTIONS 

The change in the number of stock options over the last three fi nancial years is as follows: 

Number 

of options 

Average 

exercise price 

Number of 

exercisable options 

Options outstanding at 31 December 2008 1,128,400 €26.47 - 




Number of options adjusted following capital increase 147,174 

Options outstanding at 31 December 2009 1,427,160 €21.95 136,712 




Options outstanding at 31 December 2010 1,769,736 €22.70 516,799 

Options granted 0 



Options outstanding at 31 December 2011 1,670,496 €22.67 446,916 


7 Parent 


company – Financial summary for the last fi ve years 

Stock options outstanding at 31 December 2011 are broken down as follows: 

Date of grant 


Outstanding number 

of options 

Adjusted exercise 

price (euros) 

Remaining period 

until expiry 

Plan No. 1 dated 29 June 2005 88,675 23.33 3.5 years 

Plan No. 1 bis dated 28 September 2005 27,873 27.36 3.7 years 

Plan No. 2 dated 27 November 2006 330,368 23.33 4.9 years 

Plan No. 3 dated 22 January 2008 395,801 24.22 6.1 years 

Plan No. 3 bis dated 5 November 2008 11,145 23.33 6.9 years 

Plan No. 4 dated 23 March 2009 423,134 17.76 4.2 years 

Plan No. 5 dated 2 September 2010 393,500 25.34 5.7 years 

7.5 PARENT COMPANY – FINANCIAL SUMMARY 

FOR THE LAST FIVE YEARS 

The results of Saft Groupe SA over the past fi ve years are as follows: 

Description (amounts in euros) 31/12/2007 31/12/2008 31/12/2009 31/12/2010 31/12/2011 

Share capital at year-end 

a) Share capital 18,514,086 18,514,086 24,684,093 25,125,840 25,174,845 

b) Number of ordinary shares in issue 18,514,086 18,514,086 24,684,093 25,125,840 25,174,845 

c) Number of bonds convertible into shares - - - - - 

Operations and results of the period 

a) Sales (excluding VAT) 

b) Income before tax, employee profi t sharing, 

6,359,932 6,576,701 5,996,869 6,443,590 6,542,509 

depreciation, amortisation and provisions 1,084,488 34,508,681 8,648,852 8,655,078 30,670,728 

c) Income tax revenue/(expense) 

d) Income after tax, employee profi t sharing, 

- (62,956) (106,371) 2,755,000 351,467 

depreciation, amortisation and provisions 1,084,488 34,445,725 8,542,481 11,410,078 31,022,194 

e) Earnings distributed 

Earnings per share 

a) Income after tax, employee profi t sharing but 

12,563,036 12,553,998 16,750,647 17,586,357 n.d. 

before depreciation, amortisation and provisions 

b) Income after tax, employee profi t sharing, 

0.06 1.86 0.35 0.45 1.23 

depreciation, amortisation and provisions 0.06 1.86 0.35 0.45 1.23 

c) Dividend per share 

Employees 

0.68 0.68 0.68 0.70 n.d. 

a) Average employee headcount - - - - - 

b) Salary expenses in the period 

c) Amounts paid in respect of employee social 

- - - - - 

security benefi ts in the period - - - - - 

n.d.: not yet determined.

7 


Statutory Auditors’ report on the Parent Company Financial Statements 

7.6 STATUTORY AUDITORS’ REPORT ON THE PARENT 

COMPANY FINANCIAL STATEMENTS 

This is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience of 

English speaking users. The Statutory Auditors’ report includes information specifi cally required by French law in such reports, whether 

modifi ed or not. This information is presented below the opinion on the fi nancial statements and includes an explanatory paragraph 

discussing the auditors’ assessments of certain signifi cant accounting and auditing matters. These assessments were considered for 

the purpose of issuing an audit opinion on the fi nancial statements taken as a whole and not to provide separate assurance on 

individual account captions or on information taken outside of the fi nancial statements. 

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 articles of association, we hereby report to you, for the year ended 

31 December 2011, on: 

� the audit of the accompanying fi nancial statements of Saft Groupe SA 

� the justifi cation of our assessments; 

� the specifi c verifi cations and information required by law. 

These fi nancial statements have been approved by the Management Board. Our role is to express an opinion on these fi nancial 

statements based on our audit. 

I OPINION ON THE FINANCIAL STATEMENTS 

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 fi 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 fi 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 fi nancial statements. We believe that the 

audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion. 

In our opinion, the fi nancial statements give a true and fair view of the assets and liabilities and of the fi nancial position of the 

Company as at 31 December 2011 and of the results of its operations for the year then ended in accordance with French 

accounting principles. 

II JUSTIFICATION OF OUR ASSESSMENTS 

In accordance with the requirements of article L. 823-9 of the French Commercial Code (Code de Commerce) relating to the 

justifi cation of our assessments, we bring to your attention the following matter: 

Note 2.a) to the fi nancial statements describes the accounting policies and valuation methods applied for recognizing and measuring 

investments in subsidiaries and affi liates and other long-term equity investments. As part of our assessment of the accounting policies 

and principles applied by Saft Groupe S.A., we obtained assurance that these accounting policies and methods and the related 

disclosures were appropriate, and that they had been correctly applied. 

These assessments were made as part of our audit of the fi nancial statements, taken as a whole, and therefore contributed to the 

opinion we formed which is expressed in the fi rst part of this report. 


7 Statutory 


Auditors’ report on the Parent Company Financial Statements 

III SPECIFIC VERIFICATIONS AND INFORMATION 

We have also performed, in accordance with professional standards applicable in France, the specifi c verifi cations required by 

French law. 

We have no matters to report as to the fair presentation and the consistency with the fi nancial statements of the information given in 

the management report of the Management Board, and in the documents addressed to the shareholders with respect to the fi nancial 

position and the fi nancial statements. 

Concerning the information given in accordance with the requirements of article L. 225-102-1 of the French Commercial Code 

(Code de Commerce) relating to remunerations and benefi ts received by the directors and any other commitments made in their 

favour, we have verifi ed its consistency with the fi nancial statements, or with the underlying information used to prepare these 

fi nancial statements and, where applicable, with the information obtained by your Company from companies controlling your 

Company or controlled by it. Based on this work, we attest the accuracy and fair presentation of this information. 

In accordance with French law, we have verifi ed that the required information concerning the identity of shareholders and holders of 

the voting rights has been properly disclosed in the management report. 


Neuilly-Sur-Seine and Courbevoie, 13 February 2012 



Françoise Garnier Juliette Decoux

INFORMATION ABOUT 

THE COMPANY AND ITS 

SHARE CAPITAL 

8 

8.1 General information 

about the Company 196 

8.2 Group history 197 

8.3 Group organisation chart 198 

8.4 Signifi cant contracts 

and commitments 199 

8.4.1 Credit facilities 199 

8.4.2 A multi-year contract with 

the US Defence Logistics Agency (DLA) 199 

8.4.3 Contract with the US Department of Energy 199 

8.4.4 Joint ventures 199 

8.4.5 Undertakings made to France and Israel 199 

8.5 Main statutory provisions 200 

Social purpose 

(Article 2 of the articles of association) 200 

Annual General Meetings 


Form of shares 


Sale of shares 


Threshold disclosure 


Results of operations – appropriation 

of net income 


8.6 Capital and shareholding 

of Saft Groupe SA 204 

8.6.1 Share capital of Saft Groupe SA 204 

8.6.2 Voting rights 204 

8.6.3 Share buyback programme 204 

8.6.4 Shareholding of Saft Groupe SA 204 

8.6.5 Securities other than shares 205 

8.6.6 Stock option plans 205 

8.6.7 Dividends 205 

8.6.8 Authorisations in force in relation to capital increases 206 

8.6.9 Saft Groupe credit rating 206 


8 General 

INFORMATION ABOUT THE COMPANY AND ITS SHARE CAPITAL 

information about the Company 

8.1 GENERAL INFORMATION ABOUT THE COMPANY 

Company name: 


Registered offi ce: 

12, rue Sadi Carnot, 93170 Bagnolet (Seine-Saint-Denis, 

France) 

Tel: +33 (0)1 49 93 19 18 

Legal form: 

French Limited Company with Management and Supervisory 

Boards (Société Anonyme à Directoire et Conseil de 

Surveillance) formed on 23 March 2005. 

Duration: 

99 years, i.e. until 24 March 2104 

Purpose: 

(Summary of section 2 of the Company’s articles of association) 

In all countries, the design, manufacture, sale and rental 

of all forms of electric accumulators and batteries and their 


components, and of all derivative applications, and more 

generally of all mechanical, electric or electronic appliances 

contributing to their proper functioning and incidentally, of 

all other products susceptible of being manufactured with the 

Company’s tooling, as well as the manufacture and sale of all 

other electric or electronic equipment; the acquisition, use and 

sale of all forms of patents, licences, manufacturing processes 

and trade secrets, ideas, models or trademarks, relating to 

the abovementioned appliances and equipment; and more 

generally, the performance of any industrial, commercial, 

fi nancial, investment or property transactions related, directly 

or indirectly and in total or in part, to any of the purposes 

specifi ed in the Company’s articles of association or to any 

similar or subsidiary purpose. 

Companies registry: 

The company is included in the Bobigny company register 

under the number B481 480 465; its APE code is 6420 Z. 

Accounting period: 

From 1 January to 31 December.

8 


Group history 

8.2 GROUP HISTORY 

� 1918 

Société des Accumulateurs Fixes et de Traction (Saft SA) is 

founded in France by two Swiss electrochemists to manufacture 

and distribute nickel-based batteries for industrial applications 

and forklift trucks. 

� 1928 

Acquisition of Saft by Compagnie Générale d’Electricité (which 

later became Alcatel). 

� 1940-1980 

Saft develops its operations in the United Kingdom (1940s) 

and in the United States (1970s). 

In the early 1980s, Saft commences operations in Asia 

(Singapore). 

� 1980-1995 

The shares of Saft SA are listed on the Paris Bourse. At the start 

of the 1990s, Alcatel repurchases all the shares of Saft SA, 

which was de-listed in 1995. 

In the late 1980s and early 1990s, the Group acquires two 

of its major competitors, Nife and Alcad, as well as the Czech 

company Ferak, to strengthen its position in the industrial 

battery market. 

� 2000 

Acquisition of Tadiran, an Israeli manufacturer of lithium 

batteries, with operations in Israel, the United States and 

Germany including a 50% stake in Sonnenschein Lithium in 

Germany. 

� 2001 

Saft signifi cantly downsizes its rechargeable battery division 

(now the RBS division), through the closure of a manufacturing 

facility in Tijuana, Mexico and the sale of its battery assembly 

facility in Korea and its Uniross distribution facility, resulting 

in a workforce reduction of approximately 1,300 employees. 

Acquisition of Hawker Eternacell, a leading provider of lithium 

batteries to the US and UK armed forces. Saft also increases 

its stake in ASB from 22% to 50%, and increases its stake 

in Sonnenschein Lithium from 50% to 100%. All of these 

companies are now part of its SBG division. 

� 2003 

Acquisition of the German company Friemann und Wolf 

Batterietechnik GmbH (Friwo) and the assets of Emisa and 

Centra from Exide. These companies produce industrial nickelbased 

batteries, lithium batteries for the defence industry and 

batteries for torpedoes. 

� 2004 

Acquisition from Alcatel of all of the Group’s businesses by the 

Doughty Hanson Funds. 

� 2005 

Reorganisation of the Group into Saft Groupe SA, to which 

are directly or indirectly linked all the subsidiaries in the Group, 

and admission of Saft Groupe SA shares to trading on the 

Eurolist market of Euronext Paris on 29 June 2005. Set-up of a 

production plant at Zhuhai in southern China, via the creation 

of a wholly-owned subsidiary. 

Acquisition of a 51% stake in the capital of AMCO Power 

Systems, an Indian manufacturer of nickel-based batteries 

located in Bangalore. 

� 2006 

Creation of the Johnson Controls-Saft joint venture to address 

the hybrid and electric vehicle market. Saft holds 49% and 

Johnson Controls holds 51% of the joint venture. 

� 2008 

Start-up of the new Johnson Controls-Saft production line in 

Nersac, France, dedicated to lithium-ion batteries for hybrid 

and electric vehicles. 

� 2009 

Launch of two major industrial projects to build two lithiumion 

production plants, one in Florida (Saft plant) and the other 

in Michigan (project led by the Johnson Controls-Saft joint 

venture). 

To fi nance these two projects and achieve greater fi nancial 

fl exibility, the Group carried out a capital increase of 

€120 million. 

� 2011 

Start of production and fi rst deliveries of lithium-ion cells from 

the new lithium-ion manufacturing plant at Jacksonville. 

Disposal by the Group of its 49% stake in the joint venture 

Johnson Controls-Saft on 30 September 2011. 


8 Group 


organisation chart 

8.3 GROUP ORGANISATION CHART 

Saft Acquisition 

SAS 

(France) 

Saft Batterie 

Italia Srl 

(Italy) 

50% 

Aérospatiale 

Batteries («ASB») 

(France) 

Missiles & Space 

Batteries Ltd. 

(United Kingdom) 

Advanced 

Thermal 

Batteries Inc. 

(USA) 

Saft Ferak AS 

(Czech 

Repuplic) 


Saft do Brasil 

Ltda 

(Brazil) 

Saft SAS 

(France) 

Friwo GmbH 

(Germany) 

Saft Batterien 

GmbH 

(Germany) 

Saft Australia 

Pty Ltd. 

(Australia) 

Saft Batteries 

Pty Ltd. 

(Australia) 

Saft Finance Sarl 

(Luxembourg) 

98% 

Saft Hong Kong 

Ltd. 

(Hong Kong) 

Saft (Zhuhai FTZ) 

Batteries Co Ltd. 

(China) 

Saft AS 

(Norway) 

2% 51.04% 

Fast Jung KB 

(Sweden) 

Saft Batteries 

Pte Ltd. 

(Singapore) 

AMCO-Saft 

India Ltd. 

(India) 

Saft Baterias SL 

(Spain) 

Tadiran Batteries 

Ltd. 

(Israel) 

Spezialgeratebau 

Hamburg GmbH 

« SGH » 

(Germany) 

Tadiran Batteries 

GmbH 

(Germany) 

When no specifi c percentage is mentioned, the controlling interest amounts to 100%. 

Saft Sweden AB 

(Sweden) 

Saft AB 

(Sweden) 

Saft Federal 

Systems Inc. 

(USA) 

Saft Ltd. 

(United Kingdom) 

ALCAD AB 

(Sweden) 

Saft America Inc. 

(USA) 

Florida 

Substrate Inc. 

(USA) 

Saft Nife ME Ltd. 

(Cyprus) 

Saft Batterijen BV 

(Netherlands) 

Saft JV 

Holding Co 

(USA)

8 


Signifi cant contracts and commitments 

8.4 SIGNIFICANT CONTRACTS AND COMMITMENTS 

8.4.1 CREDIT FACILITIES 

On 3 July 2009, a syndicate of banks provided new debt 

facilities for Saft Groupe SA and various Group companies 

comprising a fi xed term, non-renewable loan composed of two 

tranches of €150 million and $240 million respectively, and 

a multicurrency revolving credit facility in a maximum amount 

of €33,5 million. Main provisions of the new facilities are 

described in Note 18 of the 2011 Consolidated Financial 

Statements within this Annual Report. 

8.4.2 A MULTI-YEAR CONTRACT WITH 

THE US DEFENCE LOGISTICS 

AGENCY (DLA) 

On 16 July 2008 Saft America Inc. signed a major multi-year 

contract with the US Defence Logistics Agency (DLA) to supply 

the US Army, Navy, Air Force and Marine Corps with BA5590 

lithium sulfur dioxide (Li-SO2) batteries. The terms of the 

contract include Li-SO2 batteries for several portable military 

applications such as communications and electronics systems. 

This contract was awarded to Saft for 100% of the US military 

needs for this type of battery. The contract with DLA is an 

indefi nite quantity contract with a two-year base period for an 

amount of up to $64 million and three one-year option periods 

for a total contract value of up to $170 million. Orders under 

the contract are placed by the customer as needed. 

This contract maintains Saft’s position as the leading supplier of 

lithium batteries to the US Army. The contract will be supplied 

from Saft’s Valdese NC facility that has been the leading 

supplier of these types of military batteries since the 1980s. 

8.4.3 CONTRACT WITH THE 

US DEPARTMENT OF ENERGY 

On 1 st December 2009, Saft America Inc. signed a contract 

with the US Department of Energy, by which it will receive 

a cost-sharing subsidy representing 50% of the cost for a 

maximum amount of $95.5 million under the provisions of the 

Federal American Recovery and Reinvestment Act (ARRA). The 

grant will support the funding of the construction, in Jacksonville, 

Florida, of a manufacturing plant to produce advanced lithiumion 

cells and integrate lithium-ion batteries for renewable 

energy storage, telecommunication networks markets, as well 

as aviation and military markets. 

8.4.4 JOINT VENTURES 

ASB group 

One of Saft’s subsidiaries is a party, with EADS France, to 

a shareholder agreement renewed in 2006 and governing 

an equal shareholding in ASB, a company mainly engaged 

in the manufacture of thermal batteries for military uses. The 

agreement provides that in the event of a change of control of 

either of the two ASB shareholders, the other will dispose of a 

purchase option for all the shares in the joint venture held by the 

shareholder subject to the change of control. In this event, and 

in the absence of any other agreement between the parties, 

the price would be determined by an expert designated in 

accordance with section 1843-4 of the French code of civil 

law. 

Johnson Controls-Saft 

The Group’s 49% stake in the joint venture created in 2006 to 

meet the needs of the market for hybrid and electric vehicles 

was sold to Johnson Controls Inc. on 30 September 2011. 

8.4.5 UNDERTAKINGS MADE TO FRANCE 

AND ISRAEL 

By letter dated 11 December 2003 and in the context of 

Alcatel’s sale of the Saft Group to the Doughty Hanson 

Funds, Tadiran, the Company’s Israeli subsidiary, provided 

an assurance to the Israeli Minister of Defence (MOD) that it 

would preserve the confi dentiality of any information relating 

to MOD orders for batteries classifi ed under the provisions of 

the Israeli Security Directorate. Tadiran also undertook that its 

general manager would remain an Israeli citizen subject to strict 

security clearance. Any change in the control of Tadiran must 

be notifi ed to the MOD and requires the prior authorisation of 

the Chief Scientist’s Offi ce and the Investment Centre of the 

Israeli Ministry of Industry and Commerce. 

Given the products that are the subject of these commitments, 

Saft does not expect the effect of the commitments to have 

a signifi cant negative impact on the fi nancial situation of the 

Group. 

On 4 May 2005 the French government signed an agreement 

with the Company, applicable for ninety years, under which the 

Company undertook to retain its Group general management 

and associated functions in France. The Company provided 

certain other assurances and guaranteed the proper 

performance by its French subsidiaries of its direct or indirect 


8 Main 


statutory provisions 

obligations towards the French Ministry of Defence relating 

in particular to the future supply by its French subsidiaries, at 

fair and reasonable conditions for all the parties, of products 

for use in the framework of French space and national 

defence applications. The Company also undertook, subject 

to certain conditions relating in particular to the competitive 

environment, to maintain and develop in France certain assets 

and technologies judged critical for the purposes of France’s 

national defence. Those assets and technologies represent an 

insignifi cant portion of the Group’s assets as a whole. They 

are defi ned as the Group’s existing or future assets (during 

the period of application of the agreement) relevant to French 

defence contracts and relating to the design, manufacture, 

integration and operating maintenance of the batteries 

incorporated in particular in the arms of nuclear dissuasion, 

airplanes and missiles equipping the French armed forces. 

Finally, the French government will appoint an offi cial envoy to 

Saft Groupe SA as was already the case for Saft SA and ASB 

8.5 MAIN STATUTORY PROVISIONS 

SOCIAL PURPOSE 

(ARTICLE 2 OF THE ARTICLES 

OF ASSOCIATION) 

Directly or indirectly, the purpose of the Company both in 

France and in foreign countries, is as follows: 

1. the study, creation, operation, supervision and 

management of all commercial, industrial, real property 

or fi nancial matters, businesses and entities; 

2. the acquisition, leasing, rental with or without the 

agreement to sell, construction and operation of all 

factories, workshops, offi ces, and premises; 

3. the acquisition, management and operation, rental (with 

or without option to purchase) and, as the case may be, 

sale of all capital goods, fi xed or moveable equipment or 

rolling stock, machinery and tools, as well as any land, 

sea or air vehicles; 

4. the direct or indirect participation in all transactions 

or undertakings through the creation of companies, 

establishments, or groups of a real property, commercial, 

industrial, or fi nancial nature, the participation in the 

formation of the foregoing or in capital increases of 

existing companies; 


in 2004. The envoy will be provided with certain fi nancial 

information, with information relating to major changes in 

the Group’s shareholders and with all the information also 

provided to the members of the Company’s Supervisory 

Board. The provision of such information shall not be deemed 

to affect any confi dentiality provisions to which the Company 

or its subsidiaries may be subject. Any change of control of 

the Company would not have any impact on the Company’s 

undertakings towards the French State. 

In the event of any breach of the abovementioned undertakings, 

the French government would have recourse against the 

Company in accordance with the applicable law. Saft 

Finance Sarl and Saft Acquisition SAS, two of the Company’s 

subsidiaries, have been absolved from any responsibility under 

the authorisation in respect of foreign investment issued on 

9 January 2004. 

5. the management of an equities and securities portfolio 

and associated transactions; 

6. the ownership and management of real estate; 

7. the study, manufacture, sale and rental of all accumulators, 

batteries and electrical storage batteries and their 

components, of all other derived applications, generally 

of all mechanical, electrical or electronic devices as may 

contribute to the proper functioning of the foregoing, 

and any derivative products that can be manufactured 

therefrom; and the manufacture and sale of any electrical 

or electronic equipment; 

8. the acquisition, use and sale of all patents, licences, 

manufacturing and trade secrets, know-how, models or 

trademarks with regard to the devices and equipment 

referred to in the preceding paragraph; and more 

generally, 

9. the performance of any industrial, commercial, fi nancial, 

personal property and real property transactions directly 

or indirectly relating to any of the purposes set forth above, 

in whole or in part and to any similar or related purpose.

8 


Main statutory provisions 

ANNUAL GENERAL MEETINGS 



1. Decisions are taken by shareholders during their General 

Meetings, whether of an ordinary, extraordinary or 

special nature according to the nature of the business to 

be transacted. 

2. Shareholders’ decisions are binding on all shareholders 

even when absent, in disagreement or legally a minor. 

Convocation of Annual General Meetings 

3. Annual General Meetings are convened as provided 

by law by the Supervisory Board or, failing that, by the 

Statutory Auditors or any other legally authorised person. 

4. Annual General Meetings are held at the Company’s 

registered offi ce or any other location indicated in the 

notice. 

Agenda 

5. The agenda for Annual General Meetings is determined 

by the author of their convocation. 

6. However one or several shareholders, or the works 

committee, may also, subject to the conditions posed by 

the applicable legal and regulatory provisions, request 

that draft resolutions be added to the agenda. 

7. Shareholders may not discuss matters not included in the 

agenda but they do have the faculty of revoking one or 

more members of the Supervisory Board and proceeding 

to their replacement. 

8. The agenda for a General Meeting may not be modifi ed in 

the event of the meeting requiring a second convocation. 

Participation in General Meetings 

9. All shareholders have the right to attend Annual General 

Meetings and to participate in the deliberations, personally 

or via a representative, irrespective of the number of 

shares owned and subject to simple justifi cation of his or 

her identity. 

10. To dispose of the right to participate in Annual General 

Meetings, to vote by correspondence or to be personally 

represented, shareholders must have been registered as 

such either on a nominative basis, or via a bearer share 

account administered by an authorised intermediary, by 

zero hours Paris time on the third working day prior to the 

meeting. 

The holders of bearer shares must prove their quality 

by virtue of an attestation delivered by the authorised 

intermediary administering their investment, eventually 

by electronic means, and appended to the postal vote 

bulletin, the proxy form or the request for an attendance 

card prepared in the name or on behalf of the shareholder. 

A similar attestation must be delivered to any shareholder 

wishing to attend a General Meeting in person but not 

having received his or her attendance card by zero hours 

Paris time on the third working day prior to the meeting. 

11. Any shareholder may be represented by his or her spouse 

or by another shareholder subject to production of a duly 

completed form of proxy. 

12. Any shareholder may equally send the Company a blank 

proxy, in which case the chairman of the Annual General 

Meeting will vote in favour of draft resolutions presented 

or approved by the Management Board and against any 

other draft resolutions; to vote differently, a shareholder 

must choose another proxy agreeing to vote as directed. 

13. Each shareholder may vote by correspondence using 

a bulleting prepared and sent to the Company in 

accordance with the applicable law and regulations. The 

bulletin must be received by the Company three days prior 

to the date of the General Meeting otherwise it will not be 

taken into account. 

14. Shareholders may, if so decided by the Supervisory 

Board, participate in General Meetings using video 

conferencing or other facilities enabling them to be 

identifi ed in accordance with the applicable regulations. 

Voting rights 

15. Every shareholder has as many voting rights as the number 

of shares he or she holds or represents. 

Register of attendance – officials – minutes 

16. A register of attendance must be prepared in accordance 

with the applicable law and regulations. 

17. Annual General Meetings are chaired by the President 

of the Management Board or the Chairman of the 

Supervisory Board or, in their absence, by the oldest 

member of the Management or Supervisory Boards present 

at the meeting. In the event of convocation by the Statutory 

Auditors or any other person so authorised by law, the 

meeting is chaired by the author of the convocation. 

Otherwise, the meeting elects its own chairman. 

18. The role of returning offi cer is performed by the present 

and willing shareholders disposing, in their own name or 

by proxy, of the largest number of votes. 

19. The abovementioned offi cials in turn designate a secretary 

who need not be a shareholder. 

20. The abovementioned offi cials are responsible for verifying, 

certifying and signing the register of attendance, ensuring 

proper debate, dealing with any incidents, registering 

and validating votes expressed and preparing minutes for 

the meeting. 

21. The minutes must be signed by the abovementioned 

offi cials and incorporated in a special register kept at the 


8 Main 


statutory provisions 

Company’s registered offi ce. Copies or extracts thereof 

must be signed by the Chairman or Vice-Chairman of the 

Supervisory Board or by a member of the Management 

Board. 

Ordinary General Meetings 

22. Ordinary General Meetings are held to take all decisions 

not involving any change to the Company’s articles of 

association. At least one such meeting must be held each 

year, within the applicable legal and regulatory time 

limits, to approve the fi nancial statements of the previous 

year. 

23. Following its fi rst convocation, the shareholders present, 

represented or voting by postal bulletin must possess 

at least one fi fth of the Company’s voting rights for the 

meeting to be valid; if a second convocation is required, 

no quorum is imposed. 

24. Decisions are taken at Ordinary General Meetings by 

simple majority of the votes held by the shareholders 

present, represented or voting by postal bulletin. 

Extraordinary General Meetings 

25. Only an Extraordinary General Meeting can modify the 

Company’s articles of association subject to the proviso 

that it has no right to increase the shareholders’ liability 

except in the event of those changes resulting from a duly 

completed merger. 


represented or voting by postal bulletin must possess at 

least one quarter of the Company’s voting rights for the 

meeting to be valid; this also applies in the event of a 

second convocation being required. 

27. Decisions are taken at Extraordinary General Meetings by 

a two thirds majority of the votes held by the shareholders 


Special General Meetings 

28. Special General Meetings assemble the holders of shares 

of a particular category in order to determine any changes 

in the rights attaching to such shares. 


represented or voting by postal bulletin must possess 

at least one half of the Company’s voting rights for the 

meeting to be valid and at least one quarter in the event 

of a second convocation being required. 

30. Decisions are taken at Special General Meetings by a 

two thirds majority of the votes held by the shareholders 


FORM OF SHARES 



1. Fully paid-up shares can be held as registered or bearer 

shares, at the option of the shareholder. 

2. Other than when registered in an account on behalf of 

an intermediary in accordance with applicable law and 

regulations, ownership of shares results from their being 


recorded in the name of their holder(s) either in registers 

maintained by, or on behalf of, the Company (in the case 

of registered shares) or in registers maintained by an 

authorised fi nancial intermediary (in the case of bearer 

shares). 

3. In order to identify holders of bearer shares, the Company 

may request the central custodian maintaining its issued 

share account to provide the information specifi ed in 

section L. 228-2 of the French Commercial Code (Code 

de Commerce). Accordingly, the Company may request 

at any time, for a fee payable by the Company, the name 

and year of birth or, in the case of legal entities, the name 

and year of incorporation, nationality and address of 

holders of securities with existing or future voting rights 

at its Annual General Meetings, as well as the number 

of securities held by each such person or entity and, if 

applicable, any restrictions that may exist with respect to 

the securities. 

4. Based on the list provided by the central custodian and 

under the same conditions, the Company is entitled to 

request, either from the custodian or directly from persons 

or entities appearing on the list provided by the custodian 

(and which the Company has reason to believe may hold 

their shares on behalf of others), the same information with 

respect to the owners of the shares. If such persons are 

intermediaries, they are required to provide the identity 

of the underlying owners of the shares. The information is 

furnished directly to the authorised fi nancial intermediary 

account holder, which is responsible for reporting such 

information to the Company or to the central custodian, as 

the case may be. 

5. In the case of registered equity or equity-linked securities, 

the intermediary recorded in the register on behalf of 

an owner who does not reside in France is required to 

provide the identity of the owners of the securities, as well 

as the number of securities held by each such owner, upon 

request by the Company or its representative, which may 

be made at any time. 

6. Whenever the Company believes that certain shareholders 

whose identity has been provided to the Company hold 

their shares on behalf of third parties, the Company 

may request that these holders provide the identity of 

the owners of the securities. Following such request, the 

Company may request of any legal entity that owns its 

shares and whose holdings exceed 2.5% of the share 

capital or voting rights, to provide the identity of the 

person or entities who directly or indirectly hold more than 

one third of the share capital or voting rights of such legal 

entity. 

7. If any of the aforementioned obligations are not complied 

with, the equity or equity-linked securities in respect of 

which such obligations have not been satisfi ed, shall be 

deprived of voting rights at any Annual General Meeting 

held up until such time as the identifi cation procedures have 

been complied with, and payment of the corresponding 

dividend will be deferred until such date. 

8. Moreover, if the individual or entity recorded in the register 

knowingly fails to meet these obligations, the court with 

jurisdiction where the Company’s registered offi ce is 

located, upon the request of the Company or one or more

8 


Main statutory provisions 

shareholders holding at least 5% of the share capital, may 

pronounce, for a period not to exceed 5 years, the total or 

partial forfeiture of voting rights attached to the shares in 

respect of which the Company has requested information 

and may also pronounce, for the same period, forfeiture 

of the right to payment of the corresponding dividend. 

SALE OF SHARES 



1. Shares may be freely traded except as otherwise provided 

by applicable law or regulations. 

2. Sales or transfers of shares, whether registered or bearer 

shares, are effected on behalf of the Company and 

third parties by means of account-to-account transfers 

under conditions established under applicable law and 

regulations. 

3. Shares that are not fully paid-up may not be transferred 

from one account to another. 

THRESHOLD DISCLOSURE 



1. Pursuant to the provisions of the French Commercial Code 

(Code de Commerce), any person or legal entity, acting 

alone or in concert, holding shares in bearer form entered 

in an account with an authorised intermediary and which 

comes to own a number of shares in the Company 

representing more than one twentieth, one tenth, one 

fi fth, one third, one half, or two thirds of the Company’s 

share capital or voting rights, must inform the Company 

and the AMF, within fi ve trading days of exceeding the 

relevant threshold, of the total number of shares or voting 

rights held by such person or legal entity. This information 

is made public according to the terms of the General 

Regulations of the AMF. This information must also be 

provided, under the same conditions and within the same 

time period, when the ownership of share capital falls 

below one of these thresholds. 

2. In the case of failure to declare share ownership as 

provided above, the shares exceeding the threshold in 

relation to which disclosure was required are deprived 

of voting rights at any Annual General Meeting for a 

period of two years following the date on which the nondisclosure 

is cured. 

3. Moreover, the Company’s articles of association stipulate 

that any person or legal entity which, acting alone or in 

concert, comes to hold, directly or indirectly, a number 

of shares representing a proportion of the share capital 

or voting rights equal to or greater than 1%, or any 

additional amount representing 1% of the share capital or 

voting rights, must inform the Company of the total number 

of shares and securities giving access to the Company’s 

share capital or voting rights held by such person, 

by certifi ed letter with acknowledgement of receipt, 

addressed to the Company’s registered offi ce, within fi ve 

trading days of exceeding such investment threshold(s). 

4. At the request of one or more shareholders holding at least 

1% of the Company’s share capital or voting rights, the 

failure to comply with this disclosure requirement may be 

sanctioned by the forfeiture of voting rights of the shares 

exceeding the fraction that should have been disclosed 

at any Annual General Meeting held for a period of two 

years following the date on which the non-disclosure is 

cured. 

5. This same disclosure requirement applies, under the same 

conditions and within the same time period, each time 

the portion of share capital or voting rights owned by a 

shareholder falls below one of the above thresholds. 

RESULTS OF OPERATIONS – APPROPRIATION 

OF NET INCOME 



1. At least 5% of net income for the year, less any losses 

brought forward from prior years, shall be transferred 

to the legal reserve until such time as the legal reserve 

represents one tenth of the Company’s share capital. 

Further transfers shall be made on the same basis if the 

legal reserve falls to below one tenth of the share capital. 

2. Income available for distribution corresponds to net 

income for the year, less any losses brought forward from 

prior years and any amounts appropriated to reserves in 

compliance with the law and the Company’s articles of 

association, plus any retained earnings. 

3. Shareholders may decide to appropriate all or part of 

income available for distribution to any discretionary, 

ordinary or extraordinary reserves or to retained earnings. 

Any balance is allocated to the shareholders in proportion 

to the number of shares held. 

4. Shareholders may decide to pay dividends to shareholders 

out of distributable reserves, in which case the related 

resolution must stipulate the reserve accounts from which 

the dividend is to be deducted. However, insofar as 

possible, dividends must be paid from income available 

for distribution. 

5. The terms and conditions for the payment of dividends 

voted by an Annual General Meeting are set by the 

said meeting or failing this by the Management Board in 

accordance with sections L. 232-12 to L. 232-20 of the 

French Commercial Code (Code de Commerce). 

6. The Annual General Meeting may offer shareholders the 

option of receiving all or part of the annual dividend or 

any interim dividend in the form of newly-issued shares of 

the Company as provided for by law. 


8 Capital 


and shareholding of Saft Groupe SA 

8.6 CAPITAL AND SHAREHOLDING OF SAFT GROUPE SA 

8.6.1 SHARE CAPITAL OF 


The share capital of the Company at 31 December 2011 was 

€25,174,845, divided into 25,174,845 shares with a par 

value of €1, all fully paid-up and all of the same class. 

Changes in the share capital of the Company over the last three were as follows: 


8.6.2 VOTING RIGHTS 

At 31 December 2011 the number of voting rights amounted 

to 25,081,749, i.e. the total number of 25,174,845 shares 

comprising the Company’s share capital less the 

93,096 treasury shares held at that date that are stripped of 

their voting rights. No double voting rights exist. 

Date Type of operation Shares issued Total shares Capital in euros 

31 December 2008 - - 18,555,901 18,555,901 

31 December 2009 Capital increase 

Capital increase following the exercise of share 

6,128,192 24,684,093 24,684,093 

12 April 2010 

subscription options 

Capital increase following options exercised for the 

4,450 24,688,543 24,688,543 

9 July 2010 

payment of a scrip dividend 


410,647 25,099,190 25,099,190 

13 July 2010 



3,344 25,102,534 25,102,534 

15 December 2010 



12,374 25,114,908 25,114,908 

31 December 2010 



10,932 25,125,840 25,125,840 

10 June 2011 

subscription options 49,005 25,174,845 25,174,845 

During the last fi ve years, the changes in the Company’s 

shareholding structure have essentially related to the sale by the 

Doughty Hanson & Co Funds, in April 2007, of their residual 

36.6% shareholding in Saft that Doughty Hanson & Co had 

held since the Group’s fl otation in June 2005. 

8.6.3 SHARE BUYBACK PROGRAMME 

A share buyback plan was authorized by shareholders at their 

Annual General Meeting held on 4 May 2011. 

The purpose of the share buyback plan was to facilitate 

transactions in the Company’s shares via an independent 

investment service provider and in the framework of a liquidity 

contract complying with an ethical charter recognised by the 

Autorité des Marchés Financiers, the French capital market 

regulator. The investment service provider retained was Exane 

BNP Paribas (16, avenue Matignon – 75008 Paris). 

During the 2011 fi nancial year, the following purchases and 

sales of the Company’s shares took place: 

� purchases: 388,346 shares at an average purchase price 

of €24.80 per share; 

� sales: 339,554 shares at an average sales price of 

€25.05 per share. 

The total number of shares traded during 2011 in the framework 

of the liquidity contract thus amounted to 727,900 shares. The 

Company did not pay any trading fees in respect of these 

transactions. 

At 31 December 2011, the Company held 93,096 treasury 

shares (representing 0.37% of its share capital). Their overall 

acquisition cost amounted to €1,905,806. Their market value 

at 31 December 2011 is €2,034,147. 

8.6.4 SHAREHOLDING OF 


The Company’s share capital was allocated as follows at 

31 December 2011: 

� Management and employees 2.49%; 

� Free Float 97.51%. 

Management Board members’ interests in the Company’s 

share capital at 31 December 2010 are detailed in section 

4.2 “Remunerations and shareholding of the management 

and Supervisory Board members” of this Annual Report. They 

represented 1.51% of the Company’s share capital at that 

date. 

Identifi ed employees held 0.98% of the capital (of which 

0.09% of the capital is held through the “Fonds Commun 

d’Entreprise Saft Energy”).

8 


Capital and shareholding of Saft Groupe SA 

Based on the latest shareholders identifi cation study performed 

during the month of January 2012, the main shareholders of 

Saft Groupe SA as of January 31, 2012 are those listed in the 

As of 10 February 2012, we are not aware of any change in 

the above mentioned shareholdings. 

To the Company’s knowledge: 

� no shareholder other than those listed above owns more 

than 5% of the capital or voting rights; 

� no shareholder was in a position to exercise signifi cant 

infl uence over the Group at the date of registration of this 

document; 

� no shareholder agreements or actions in concert exist. 

8.6.5 SECURITIES OTHER THAN SHARES 

At the date of registration of this document, the Company had 

not issued any other securities than shares. 

8.6.6 STOCK OPTION PLANS 

Stock-options plan set up as of 31 December 2011 and 

related fi gures are described in Note 33 of the Consolidated 

table below. Main shareholders as of 31 December 2010 and 

February 2, 2010 were identifi ed on the basis of statements of 

thresholds crossings. 

31 January 2012 31 December 2010 2 February 2010 

Ameriprise Financial Inc. * 6.35% Pictet Assets Management 5.37% Pictet Assets Management 5.37% 

Carmignac Gestion 4.50% Commerzbank 5.31% Fidelity Investments 5.03% 

Ameriprise Financial Inc. * 5.03% Carmignac Gestion 4.99% 

Taube, Hobson, 

Taube, Hobson, 

Stonex Partners 4.98% Stonex Partners 4.98% 

FMR LLC (Fidelity Investments) 4.96% Fortis Investment Management 4.94% 

Fortis Investment Management 4.94% Schroders Investment Mgt Ltd 4.91% 

Schroders Investment Mgt Ltd 4.91% Oppenheimer Finds Inc. 4.84% 

* Ameriprise Financial Inc is acting through the following entities which it controls: of Columbia Wanger Asset Management LLC, Columbia Management Investment 

Advisers LLC and Threadneedle Asset Management Holdings Ltd. 

Financial Statements and Note 16 to the parent company’s 

fi nancial statements presented in this Annual Report. 

8.6.7 DIVIDENDS 

The Company’s policy is to distribute dividends to its 

shareholders. The amount of the dividend is determined after 

taking into consideration the Company’s capital needs, return 

on capital, current and future profi tability and market practices 

in terms of dividend distribution, especially in the Group’s 

industry. Saft’s target is to pay dividends in the range of 30% 

to 40% of net income. 

At the Annual General Meeting on 4 May 2011, Saft Groupe 

SA’s shareholders voted for a payment of €0.70 per ordinary 

share for the 2010 fi nancial year. 

At the Annual General Meeting of May 2012, Saft will 

propose an ordinary dividend of €0.72 per share and will 

also propose an extraordinary dividend of €1.00 per share. 

The dividends paid by the Company for the last three years 

are: 

Year Date paid Dividend Number of shares Distribution 

2008 July 6, 2009 €0.68 10,316,277 (1) 7,015,068 

2009 July 9, 2010 €0.68 10,955,270 (2) 7,449,584 

2010 May 4, 2011 €0.70 25,123,367 17,586,357 

(1) Out of a total number of 18,461,763 shares making up the share capital (excluding treasury shares) on the date of payment of the dividend, shareholders representing a 

total of 8,145,486 shares chose the payment of a stock dividend, as decided by the shareholders at the Annual General Meeting on 3 June 2009. 

(2) Out of a total number of 24,688,543 shares making up the share capital (excluding treasury shares) on the date of payment of the dividend, shareholders representing a 

total of 13,733,273 shares chose the payment of a stock dividend, as decided by the shareholders at the Annual General Meeting on 9 June 2010. 

Unclaimed dividends become State property fi ve years after their initial date of payment. 


8 Capital 


and shareholding of Saft Groupe SA 

8.6.8 AUTHORISATIONS IN FORCE IN RELATION TO CAPITAL INCREASES 

Summary of the outstanding authorisations granted to the Management Board by the Annual General Meeting and allowing for 

share capital increases (paragraph 7 of Article L. 225-100 of the French Commercial Code). 

Authorisation description 

Capital increase by issue of shares and/ 

or securities giving access, immediately 

or in the future, to the share capital of 

the Company, with maintenance of 

preferential subscription rights 

Capital increase by issue of shares and/ 

or securities carrying immediate and/ 

or deferred rights to the share capital 

of the Company, without pre-emptive 

subscription rights, as part of a private 

placement governed by Section II of 

Article L. 411-2 of the French Monetary 

and Financial Code 

Capital increase by issue of ordinary 

shares reserved to participants in a 

company savings plan (PEE) open 

to employees of the Company and 

related companies, without pre-emptive 

subscription rights 


Authorisation 

Date 

Shareholders’ 

Meeting of 

9 June 2010 

(10 th Resolution) 


Meeting of 

4 May 2011 

(19 th Resolution) 

8.6.9 SAFT GROUPE CREDIT RATING 

Expiration 

date 

8 August 

2012 

3 October 

2012 

Combined 


Meeting of 

4 May 2011 

(22 nd Resolution) 3 July 2013 

Authorised limits 

Ordinary shares and 

securities giving access 

to share capital (nominal 

value of the issuance) Exercise date 

Maximum nominal amount 

of the capital increases 

that may be carried out 

immediately or in the future: 

€10 million maximum. 

Maximum nominal amount 

of share capital increases 

that may be carried out 

immediately or in the future: 

€2.5 million maximum. 

€250,000 

(nominal amount) 

The Saft Group is not subject to any external credit rating (or rating) by any fi nancial rating agencies. 

Amount 

used 

Not used 

in 2011 None 

Not used 

in 2011 None 

Not used 

in 2011 None

ANNUAL GENERAL 

MEETING 

9.1 Overview of key resolutions 208 

9 

9.2 Statutory Auditors’ Special Report 

on Regulated Agreements and 

Commitments with Third Parties 209 


9 Overview 

ANNUAL GENERAL MEETING 

of key resolutions 

9.1 OVERVIEW OF KEY RESOLUTIONS 

The Annual General Meeting is scheduled on 11 May 2012. 

During this meeting, in addition to resolutions on the approval 

of the parent company and Consolidated Financial Statements 

and related reports, the following main resolutions will be 

proposed to shareholders: 

� the distribution of an ordinary dividend of €0.72 per share; 

� the distribution of a special dividend of €1.00 per share. 

In terms of fi nancial authorities, given the current authorisations 

in force presented in section 8.6.8 “Authorisations in force” of 

this document, it will be proposed to shareholders: 

� to renew the authorisation for the Company to trade its own 

shares; 

� to issue a delegation of authority to the Management Board 

with the effect of increasing the share capital by issuing 

shares and/or securities giving immediate and/or future 

access to the capital of the Company, with maintenance of 

preferential subscription rights; 


� to issue a delegation of authority to the Management 

Board with the effect of increasing the share capital by 

issuing shares and/or securities giving access to capital, 

with cancellation of preferential subscription rights of 

shareholders but with the obligation to give shareholders 

a right of priority. 

These request are intended to give the Company (i) the 

fl exibility to seize, if and when appropriate, and at the best 

possible conditions, any external growth opportunities and (ii) 

to renew, improve or increase its fi nancing. 

Finally, it will be proposed that shareholders approve the 

Statutory Auditors’ special report. This report describes 

related-parties agreements requiring Supervisory Board prior 

approval and describes their fi nancial impact during the last 

fi nancial year. This report is presented below.


Statutory Auditors’ Special Report on Regulated Agreements and Commitments with Third Parties 

9.2 STATUTORY AUDITORS’ SPECIAL REPORT ON 

REGULATED AGREEMENTS AND COMMITMENTS 

WITH THIRD PARTIES 

This is a free translation into English of the Statutory Auditors’ special report on regulated agreements and commitments with third 

parties that is issued in the French language and is provided solely for the convenience of English speaking readers. This report 

on regulated agreements and commitments should be read in conjunction with, and construed in accordance with, French law 

and professional auditing standards applicable in France. It should be understood that the agreements reported on are only those 

provided by the French Commercial Code and that the report does not apply to those related-party transactions described in IAS 24 

or other equivalent accounting standards. 




93170 BAGNOLET 

In our capacity as Statutory Auditors of your Company, we hereby report on regulated agreements and commitments with third 

parties. It is our responsibility to communicate to you, based on information provided to us, the principal terms and conditions of 

these agreements and commitments brought to our attention which we or may have identifi ed as part of our engagement, without 

expressing an opinion on their usefulness or their merit or searching for other agreements or commitments. It is your responsibility, 

pursuant to article R. 225-58 of the French Commercial Code (Code de Commerce), to assess the interest of entering into these 

agreements with a view to approving them. 

Where applicable, it is our responsibility to communicate to you the information pursuant to article R. 225-58 of the French 

Commercial Code (Code de Commerce) relating to carrying out the agreements and commitments already approved by the Annual 

General Meeting during the year. 

We conducted the procedures we deemed necessary in accordance with professional standards applicable in France; those 

standards require that we check that the information provided to us agree with the relevant source documents. 

AGREEMENTS AND COMMITMENTS AUTHORIZED BY THE ANNUAL GENERAL MEETING 

DURING THE YEAR 

Pursuant to article L. 225-86 of the French Commercial Code (Code de Commerce), the following agreements and commitments, 

which were previously authorized by your Supervisory Board, have been brought to our attention. 

1. Severance benefits payable to John Searle on the termination of his employment contract – renewal 

of the approbation 

Executive concerned: 

John Searle, Chairman of the Management Board of Saft Groupe SA and Chairman of the Board of Directors of Saft SAS, which is 

wholly-owned by Saft Acquisition SAS which in turn is indirectly controlled by Saft Groupe SA. 

Type of agreement and purpose: 

Article 10 of the employment contract entered into on 14 January 2004 between John Searle and Saft Acquisition SAS provides for 

the payment of severance benefi ts in the event that the contract is terminated for any reason other than gross or willful misconduct. 

This article states that the benefi ts payable correspond to 18 months of John Searle’s average compensation and also sets out the 

applicable terms and conditions for their payment. 

According to the French Act 20071223 of 21 August 2007, the Supervisory Board decided to add the following wording to the 

severance benefi ts clause included in John Searle’s employment contract: 

“These contractual severance benefi ts shall only be payable if the following two performance criteria, based on individual and 

Company related objectives, are met: 

� the benefi ciary has received at least 20% (twenty percent) of the maximum amount of his annual performance related bonus at 

least once in the previous three years; 

� Saft Groupe SA has posted positive EBIT fi gures for the entire duration of the benefi ciary’s terms of offi ce.” 


9 Statutory 


Auditors’ Special Report on Regulated Agreements and Commitments with Third Parties 

This agreement has been renewed by your Supervisory Board at its meeting of 5 May 2011 at the same time of the reappointment 

of John Searle as Chairman of the Board. 

Terms and conditions: 

This commitment had no impact in 2011. 

AGREEMENTS AND COMMITMENTS AUTHORIZED IN PRIOR YEARS BY THE ANNUAL GENERAL 

MEETING AND HAVING CONTINUING EFFECT DURING THE YEAR 

In addition, pursuant to article R. 225-57 of the French Commercial Code (Code de Commerce), we have been informed that 

the following agreements and commitments, approved by the Annual General Meeting in prior years, have had continuing effect 

during the year. 

1. Term and Revolving Facilities Agreement 

Executives concerned: 

John Searle, Chairman of the Management Board of Saft Groupe SA and also: 

� Chairman of the Board of Directors of Saft SAS (previously Saft SA), which is wholly-owned by Saft Acquisition SAS, which in turn 

is indirectly controlled by Saft Groupe SA; 

� Managing Director of Saft Finance Sarl, wholly-owned by Saft Groupe SA; 

� Member of the Board of Saft America Inc.; 

� Chairman of Saft Ltd; 

� Chairman of the Board of Tadiran Batteries Ltd. 

Thomas Alcide, member of the Management Board of Saft Groupe SA and Chairman and CEO of Saft America Inc. and Saft 

Federal Systems Inc. 

Bruno Dathis, member of the Management Board of Saft Groupe SA and Managing Director of Saft Finance Sarl, wholly-owned 

by Saft Groupe SA 


The “Term and Revolving Facilities Agreement” dated 13 June 2005 to fi nance the Group’s working capital and investments has 

been repaid and refi nanced on 3 July 2009. 

The Supervisory Board authorized the signature of the “Term and Revolving Facilities Agreement” at its meeting of 30 June 2009. 


The credit facilities covered by the agreement include (i) non-renewable loans representing a maximum of €150 million (“Facility A”) 

and US$240 million (“Facility B”) respectively; and (ii) a Revolving Multicurrency Facility representing a maximum of €33,5 million. 

Under the credit agreement, each borrowing company listed as “Revolving Facility Borrowers” undertook to honor, at the lender’s 

request, the commitments of any other borrowing company party to the agreement in the event of default. The credit agreement also 

states that each underwriting company’s commitment (“Original Obligor”) is subject to the limits described in the credit agreement. 

2. Management Services Agreement (MSA) 


At its meeting of 29 June 2005, the Supervisory Board decided that as the holding company of the Saft Group, Saft Groupe SA 

should assist certain of the operating companies that it controls either directly or indirectly by providing them with management 

services. 

As a result, on 1 October 2005 the Company signed a Management Services Agreement for an initial period of 39 months expiring 

on 31 December 2008. The agreement is subsequently automatically renewable on an annual basis unless terminated with six 

months’ notice. 

As consideration for the services provided by the Company, the operating subsidiaries concerned pay a quarterly fee representing 

1.1% of their external revenue. 


In 2011, the Company billed €6,543,000 (excl. VAT) to the operating subsidiaries for services provided under the Management 

Services Agreement. 

The full amount of these fees had been paid by 31 December 2011. 


3. Services Agreement 



Statutory Auditors’ Special Report on Regulated Agreements and Commitments with Third Parties 

At its meeting of 29 June 2005 the Supervisory Board authorized the Company to sign a Services Agreement with Saft SA (which 

became Saft SAS on 8 December 2010). 

This Services Agreement was entered into on 1 October 2005 for a period expiring on 31 December 2008. It is subsequently 

automatically renewable on an annual basis unless terminated with three months’ notice. The Company pays Saft SAS for the services 

provided on an actual cost basis. 


At 31 December 2011, Saft SAS billed the Company a total of €4,453,000 (excl. VAT) for services provided under this agreement. 

The full amount of these fees had been paid by 31 December 2011. 

4. Supplementary retirement plan for four of the members of the Management Board 

Executives concerned: 

John Searle, Chairman of the Management Board of Saft Groupe SA and Chairman of the Board of Directors of Saft SAS, which is 

wholly-owned by Saft Acquisition SAS, which in turn is indirectly controlled by Saft Groupe SA. 

Elizabeth Ledger, member of the Management Board of Saft Groupe SA and an employee of Saft SAS which is indirectly controlled 

by Saft Groupe SA. 

Xavier Delacroix, member of the Management Board of Saft Groupe SA and an employee and Director of Saft SAS which is 

indirectly controlled by Saft Groupe SA. 

Bruno Dathis, who is a member of the Management Board of Saft Groupe SA, is an employee of Saft SAS, which is indirectly 

controlled by Saft Groupe SA. 


A defi ned-benefi ts supplementary retirement scheme was set up for the top executives and managers of Saft SAS and of Saft 

Acquisition SAS as part of an intercompany retirement savings plan (PERI in French). The contributions paid into this plan by Saft 

Acquisition SAS are based on the following rates : 

� 0 to 3 x ASSC (1) : 0.2%; 

� over 3 x ASSC to 4 x ASSC: 7%; 

� over 4 x ASSC to 11 x ASSC: 8%. 


The Company retirement savings plan call undertaken by Saft SAS and by Saft Acquisition SAS for the fi nancial year from 1 January 

to 31 December 2011 on behalf of John Searle, Elizabeth Ledger, Xavier Delacroix and Bruno Dathis came to €22,438.92, 

€6,266.98, €13,863.99 and €16,144.22 respectively. 

(1) Social Security annual cap. 

Neuilly-sur-Seine and Courbevoie, on 13 February 2012 



Françoise Garnier Juliette Decoux 


9 Statutory 


Auditors’ Special Report on Regulated Agreements and Commitments with Third Parties 


ADDITIONAL 

INFORMATION 

10 

10.1 Documents accessible 

to the public 214 

10.2 Offi cers responsible 

for the Annual Report 215 

10.3 The Saft Group Auditors 

and related fees 216 

10.4 Registration Document 

Cross-Reference table 217 

10.5 Annual Financial Report 


10.6 Management Report 


10.7 Cross-reference table 

for environmental, social 

and corporate social information 221 


10 Documents 

ADDITIONAL INFORMATION 

accessible to the public 

10.1 DOCUMENTS ACCESSIBLE TO THE PUBLIC 

The annual reference documents, including historical fi nancial 

information relating to the Company, fi led with the AMF, 

are available on the company’s website: www.saftbatteries. 

com. Copies of the documents may also be obtained at the 

Company’s registered offi ce at 12, rue Sadi Carnot, 93170 

Bagnolet. 

All the regulated information published by the Company, 

pursuant to article 221-1 et seq of the AMF’s General 

Regulations, is available on the Company’s website in the 

“Investor centre/Regulated information” section. 

Press Release 


The Company’s articles of association, the minutes of Annual 

General Meetings, the Statutory Auditors’ reports and all other 

corporate documents may be consulted at the Company’s 

registered offi ce. 

Pursuant to article 227-7 of the AMF’s General Regulations, the 

list below displays the information disclosed to the public by the 

Company during the 2011 fi nancial year in order to comply 

with its obligations relating to the stock exchange regulations. 

This list is also available on the Company’s website and on the 

AMF’s website: www.amf-france.org. 

07-11 Saft Groupe SA reports 2010 fourth quarter sales, and full year sales and earnings 

08-11 Saft lithium-ion battery technology selected for solar energy storage project in California 

10-11 SAFT: 2010 Registration Document - Annual Report available 

14-11 Peugeot Scooters launches its new scooter e-Vivacity using Saft lithium-ion batteries 

15-11 Sourcing in Japan 

18-11 Saft Li-ion batteries equip the major Formula 1 teams for new season 

JC-S 01 Johnson Controls-Saft to supply advanced batteries to the Beijing Electric Vehicle Company 

20-11 Saft Groupe SA reports Quarterly Financial Information for the fi rst quarter of 2011 

21-11 STILL’s electric forklift and warehouse trucks shown at CeMAT rely on Saft lithium-ion batteries to deliver increased power 

and autonomy 

22-11 Linde launches electric forklift trucks powered by Saft lithium-ion batteries 

25-11 Saft opposes Johnson Controls fi ling for dissolution of Johnson Controls-Saft Joint Venture 

27-11 Saft selected by Viridity Energy to provide energy storage for Southeastern Pennsylvania Transportation Authority 

31-11 The Saft Group - Investor Day 

32-11 Details of the Company’s share buy-back programme for its liquidity contract, authorised by the Ordinary and 

Extraordinary General Meeting dated 4 May 2011 

33-11 Saft Groupe SA reports strong sales growth in H1 2011 and increases FY sales guidance 

34-11 Saft to act as a partner in the NICE GRID project 

35-11 Saft to deploy state-of-the-art lithium-ion energy storage systems for MILLENER Smart Grid project 

JC-S 02 Johnson Controls and Saft reach an agreement to end Li-ion automotive battery joint venture 

42-11 Saft launches industrial production at Jacksonville lithium-ion battery plant 

43-11 Saft fi nalises the agreement to sell its shares in the Johnson Controls-Saft joint venture 

45-11 Saft Group: increased resources allocated to the liquidity contract 

51-11 Saft Groupe SA reports Quarterly Financial Information for the third quarter of 2011 

52-11 Saft selected by SOLON to supply Li-ion battery for Arizona energy storage solutions project 

53-11 Saft to deliver containerized Li-ion energy storage to Hawaii 

54-11 Saft Li-ion batteries to power Iridium NEXT LEO satellite constellation in multi-million Euro contract with Thales Alenia Space 

61-11 Saft begins deliveries of fi rst lithium-ion batteries produced by new Jacksonville plant

ADDITIONAL INFORMATION10 

Offi cers responsible for the Annual Report 

10.2 OFFICERS RESPONSIBLE FOR THE ANNUAL REPORT 

Responsible for the Annual Report 

Mr John Searle, Chairman of the Management Board 

Mr Bruno Dathis, Member of the Management Board and 

Chief Financial Offi cer 

Responsible for fi nancial information 

Mr Bruno Dathis, Member of the Management Board and 

Chief Financial Offi cer 

Statement by the Offi cers 

We certify that, having taken all reasonable care to ensure that 

such is the case, the information contained in this document is, 

to the best of our knowledge, in accordance with the facts and 

contains no omission likely to affect its import. 

We certify that, to the best of our knowledge, these fi nancial 

statements have been prepared in accordance with the 

relevant accounting standards and give a true and fair value 

of the assets and liabilities, fi nancial position and the results 

of operations of the Company and of all the entities included 

in the consolidation, and that the management report whose 

content is specifi ed in section 10.6 “Management report crossreference 

table” of this Annual Report, presents a faithful picture 

of the business trends, earnings and fi nancial position of the 

Company and of all the entities included in the consolidation, 

as well as a description of the principal risks and uncertainties 

they are facing. 

We obtained an end-of-assignment letter from the Statutory 

Auditors, stating that they have completed their verifi cation of 

the information related to the fi nancial position and fi nancial 

statements provided in the Annual Report, and their reading of 

this entire report. 

Information included by reference 

In accordance with article 28 of the European Commission 

regulation No. 809/2004 dated 29 April 2004, the 

following information is included by reference in this Annual 

Report: 

� the 2009 Consolidated Financial Statements and related 

Statutory Auditors’ report, on pages 103 to 157 of the 

Annual Report No. R10-10 registered by the Autorité des 

Marchés Financiers on 24 February 2010; 

� the 2010 Consolidated Financial Statements and related 

Statutory Auditors’ report, on pages 115 to 168 of the 

Annual Report No. D11-0062 fi led with the Autorité des 

Marchés Financiers on 16 February 2011. 


10 The 


Saft Group Auditors and related fees 

10.3 THE SAFT GROUP AUDITORS AND RELATED FEES 

Statutory Auditors 

PricewaterhouseCoopers Audit 

63, rue de Villiers 

92208 Neuilly-sur-Seine Cedex 

Represented by Françoise Garnier-Bel 

Appointed on: 4 May 2011 

End of mandate: AGM 2017 

Mazars 

61, rue Henri Regnault 

92075 Paris-La-Défense Cedex 

Represented by Juliette Decoux 




Substitute Auditors 

Mr Yves Nicolas 

63, rue de Villiers 

92208 Neuilly-sur-Seine Cedex 



Mr David Chaudat 

61, rue Henri Regnault 

92075 Paris-La-Défense Cedex 



AUDIT FEES PAID BY THE SAFT GROUP TO STATUTORY AUDITORS AND COMPANIES IN THEIR 

NETWORK IN 2011, 2010 AND 2009 

(in € thousand) 

PricewaterhouseCoopers Audit 

Mazars (2011)// SYC SA-Moore Stephens SYC 

(2010 and 2009) 

Amounts % Amounts % 

2011 2010 2009 2011 2010 2009 2011 2010 2009 2011 2010 2009 

Audit 

Statutory audit and 

contractual audits: 573 920 870 75.3% 70.4% 76.6% 360 135 134 96.8% 90.6% 81.7% 

Parent company 

Consolidated 

35 45 45 4.6% 3.4% 4.0% 35 45 45 9.4% 30.2% 27.4% 

subsidiaries 

Other audit related 

538 875 825 70.7% 67.0% 72.6% 325 90 89 87.4% 60.4% 59.3% 

services: 167 94 12.7% 8.3% - 30 - 18.3% 

Parent company 

Consolidated 

- 86 - 7.6% - 6 - 3.7% 

subsidiaries 167 8 12.7% 0.7% - 24 - 14.6% 

Sub-total 

Other services 

573 1,087 964 75.3% 83.2% 84.9% 360 135 164 96.8% 90.6% 100.0% 

Legal and tax 188 220 172 24.7% 16.8% 15.1% 12 14 - 3.2% 9.4% - 

Sub-total 188 220 172 24.7% 16.8% 15.1% 12 14 - 3.2% 9.4% 0.0% 

TOTAL 761 1,307 1,136 100.0% 100.0% 100.0% 372 149 164 100.0% 100.0% 100.0%


registration document Cross-Reference table 

10.4 REGISTRATION DOCUMENT CROSS-REFERENCE TABLE 

The cross-reference table below highlights the main information required by European Union regulation No. 809/2004 dated 

29 April 2004. 

Information Pages 

1 Persons assuming responsibility for the document 215 

2 Auditors 216 

3 Selected fi nancial data 3, 20, 21 

4 Risk factors 53 to 63 

5 Information about Saft 

5.1 History and development of the Company 2, 196, 197 

5.2 Investments 113, 114, 117, 

152 to 154, 157 

5.2.1 Main completed investments 113, 114, 152, 

153, 154, 157 

5.2.2 Main ongoing investments 117, 119 

5.2.3 Main future investments 117, 119 

6 Business overview 

6.1 Principal activities 27 to 39 

6.2 Principal markets 27 to 39, 153 

6.3 Exceptional events 114, 177 

6.4 Dependences 54, 55 

6.5 Elements on which all issuer representations regarding its competitive position are based 2 

7 Group chart 

7.1 Summary description of the Group 196 to 198 

7.2 List of subsidiaries 121, 122, 148 

8 Property, plant and equipment 

8.1 Signifi cant existing or planned tangible fi xed assets 16, 17, 113, 114, 

117, 157 

8.2 Environmental issues that could infl uence the use of tangible fi xed assets 47 to 49, 66 to 71, 

76, 77 

9 Operating and fi nancial review 

9.1 Financial condition 117, 118, 124, 125, 

128, 129, 162 to 165 

9.2 Operating results 110 and seq. 

10 Liquidity and capital resources 117, 118 

11 Research and Development, patents and licenses 42 to 46, 116, 117 

12 Trend information 14, 112, 113, 114, 120 

13 Profi t forecasts or estimates 120 

14 Administrative and management bodies 

14.1 Members of management and supervisory bodies 80 to 85, 105 to 108 

14.2 Confl icts of interest 85 

15 Remunerations and benefi ts 86 to 93, 178, 

189, 191, 192 

16 Management and Supervisory Board practices 80 to 85, 105 to 108 

17 Employees 

17.1 Workforce 3, 71, 72, 74 

17.2 Shareholdings, stock options 73, 90, 91, 179, 180 

17.3 Issue of share capital reserved for employees 204 


10 registration 


document Cross-Reference table 

Information Pages 

18 Main shareholders 22, 204, 205 

19 Related-party transactions 176 

20 Financial information containing Saft’s assets and liabilities, fi nancial position and profi ts 

and losses 

20.1 Historical fi nancial information 192 

20.2 Proforma fi nancial information n.a. 

20.3 Consolidated Financial Statements 123 to 180 

20.4 Auditing of historic annual fi nancial information 181, 182, 193, 194 

20.5 Age of latest fi nancial information 31st december 2011 

20.6 Interim and other fi nancial information n.a. 

20.7 Dividend policy 205 

20.8 Legal and arbitration proceedings 59, 60, 169, 170 

20.9 Signifi cant change in Saft fi nancial or trading position 14, 114, 116, 177 

21 Additional information 

21.1 Share capital 162, 190, 204 

21.2 Incorporation and articles of association 200 to 203 

22 Material contracts 199, 200 

23 Third party information, statements by experts and declaration of any interest n.a. 

24 Documents available to the public 214 

25 Information on shareholdings 121, 122, 142, 176, 187 

n.a.: not applicable 



Annual fi nancial Report Cross-Reference table 

10.5 ANNUAL FINANCIAL REPORT CROSS-REFERENCE TABLE 

The cross-reference table below highlights the fi nancial information required in the Annual Financial Report. 

Information Page(s) 

Declaration by the person responsible 215 

Management Board report See the cross-reference table of the Management Board Report 

in section 10.6 of this Annual Report 

Parent Company Financial Statements 183 to 192 

Consolidated Financial Statements 123 to 180 

Statutory Auditors’ report on the Parent Company Financial Statements 193, 194 

Statutory Auditors’ report on the Consolidated Financial Statements 181, 182 


10 Management 


Report Cross-Reference table 

10.6 MANAGEMENT REPORT CROSS-REFERENCE TABLE 

The cross-reference table below highlights the fi nancial information required in the management report (rapport de gestion) as per 

articles L. 225-100 to L. 225-100-3 and L. 225-211, paragraph 2 of the French Commercial Code (Code de Commerce). 

Information 


Page(s) of this 

Annual Report 

Activity and results 

Summary of activities of the Group during the past year, uncertainties and future prospects 

Presentation of activities of the Group by business segment, the results of these activities, progress made and 

14, 110 to 120 

diffi culties encountered 112 to 114 

Activity of Group subsidiaries and controlled companies 114, 121, 122 

Analysis of business trends, results and the fi nancial situation of the Group 110 to 120, 161 to 165 

3, 16, 20 to 23, 

Financial and non-fi nancial key performance indicators 

65 to 77 

59, 141 to 147, 

Information on the use of fi nancial instruments 

161, 165 

Research and Development activities 42 to 45, 116, 117 

Signifi cant events that occurred between the closing date and the time of writing the management report 120 

Changes made to the presentation of annual and/or consolidated fi nancial statements 

Information on social and environmental impact 

110, 116, 126 

Social information 61, 71 to 77 

Environmental information 

Information on risks 

47 to 50, 66, 67 to 71 

Risk factors 

Equity investments 

53 to 63 

Signifi cant equity investments during the past year in companies registered in France n.a. 

Subsidiaries and affi liates 

Information on share capital and shareholding 

121, 122, 148 

Information on shareholding 22, 204, 205 

Transactions on Company’s shares and share buyback programs 

89 to 91, 93, 179, 180, 

191, 192, 204, 205 

Dividends and other revenue distribution over the last three years 21, 162, 192, 205 

Evolution of share price 

Stock options granting and exercising conditions set by the Supervisory Board to the Management Board 

23 

members 

Corporate offi cers 

99, 100 

List of corporate offi ce mandates 80 to 84 

Remunerations and benefi ts in kind granted to corporate offi cers 86 to 89 

Transactions on Company’s share by Board members and their relatives 

Other information 

Information that may have an impact in the event of a public offer (article L. 225-100-3 of French 

89, 90, 93 

Commercial Code) 

Appendices 

103 

Five-year fi nancial summary 192 

Special report of Statutory Auditors on stock option plans granted to corporate offi cers and employees n.a. 

Report of the Chairman of the Supervisory Board about governance and internal control 

Authorisations and powers granted by the Annual General Meeting to the Management Board with respect 

104, 105 

of share capital increase 206 

n.a.: not applicable


Cross-reference table for environmental, social and corporate social information 

10.7 CROSS-REFERENCE TABLE FOR ENVIRONMENTAL, 

SOCIAL AND CORPORATE SOCIAL INFORMATION 

Articles R. 225-104 and R. 225-105 of the French Commercial Code (Code de Commerce) and draft law No. 2010-788 of July 

2010 (known as Grenelle 2). 

Cross-reference table for social and environmental information 


Annual Report 

Environmental information 

General environmental policy 

Global organisation and assessment and certifi cation policy 67, 68, 69 

Trainning and information for employees about environmental protection 67 

Resources allocated to the prevention of environmental and pollution risks 68 to 70 

Provisions and guarantees for environmental risks 70, 170 

Pollution and waste management 

Prevention, reduction and correction of waste released into the air, water and ground with severe 

environmental consequences 68, 69 

Prevention of waste production, recycling and waste disposal 67, 68 

Recognition of noise pollution n.a. 

Recognition of any other activity-related pollution 70 

Sustainable use of resources 

Water consumption and supply depending on local constraints 68, 70 

Raw material consumption and measures to improve effi ciency in use 67, 70 

Energy consumption, measures taken to improve energy effi ciency and the use of renewable energy 68 to 71 

Land use n.a. 

Contribution to the adaptation and the fi ght against climate change 

Greenhouse gas emissions 71 

Recognition of the impact of climate change 

Protection of biodiversity 

Measures to limit damage to the biological balance, the natural environment and protected animal 

71 

and plant species 

Social information 

Employment 

71 

Total workforce 71, 74 

Hirings and redundancies 71 

Remuneration 

Work organisation 

78, 178, 189 

Work time organisation 73 

Absenteeism 

Labour relations 

74 

Concertation 73 

Collective agreements 73 

Welfare services 

Health and safety 

n.a. 

Health and safety conditions 73 

Health and safety at work agreements signed with trade unions and employee representatives 73 

Work accident frequency rates, work accident severity rates and occupational illness 73 

Respect of ILO conventions 

Training 

72 

Total number of training hours 72, 73, 74 

Professional training programmes for employees 72, 73 


10 Cross-reference 


table for environmental, social and corporate social information 

Cross-reference table for social and environmental information 



Annual Report 

Diversity and equal opportunities 

Policies and measures taken towards gender equality 73 

Policies and measures taken towards employment and integration of disabled people 72 

Policies and measures taken towards the fi ght agains discrimination and the promotion of diversity 

Information on corporate social responsibility 

Territorial, economic and social impact of activities 

72 

Business impact on unemployment and regional development 75 

Business impact on local populations 

Relationships with stakeholders 

75 

Dialogue with stakeholders‹ 75 

Support, partnership and sponsorship activities 

Outsourcing and suppliers 

75 

Social and environmental challenges in purchasing policy 75 

Importance of outsourcing and social & environmental responsibility in supplier and outsourcing relationships 

Ethical practices 

57, 67, 75 

Action agains all forms of corruption 100 to 102 

Measures to promote health and safety of consumers n.a. 

Action to promote human rights 72, 75 

n.a.: not applicable

The information contained in the management report relating to the financial year ended December 31, 2011, presented in this document has been 

prepared by the Management Board and approved by the Supervisory Board of Saft. 

Certain statements contained herein are forward-looking statements relating, in particular, to future events, trends, plans or objectives. By their nature, 

these forecasts are subject to known or unknown risks and uncertainties could cause Saft’s actual results and objectives to differ materially from those 

expressed or implied in these forward-looking statements. 

The French version of the 2011 Registration Document has been registered with the AMF. It is therefore the only version that is binding in law. 

This Registration Document was registered with the Autorité des marchés financiers (AMF) on February 16, 2012, in accordance with the article 212–13 

of the AMF’s General Regulations. It may be used in support of a financial transaction if accompanied by a transaction circular approved by the AMF. 

The annual Registration Documents are available on the company’s website: www.saftbatteries.com. 

Copies of the Registration Documents may also be obtained at the company’s registered office at 12 rue Sadi Carnot, 93170 Bagnolet. 

This document is printed in France on FSC-certified paper from sustainable sources. 

Stéphane Lefebvre, Saft (pp. 4–5), La Company, Saft (pp. 6–7), Buena Vista Images, Saft (pp. 8–9), artpartner-images, Saft (pp. 10–11), Philippe Castaño (p. 15), 

Courtesy Courtesy Digital Video Arts, Peugeot Scooters, SEPTA (pp. 18–19), Philippe Castaño (pp. 24–25), Eduardo Garcia (p. 28), Roc Canals Photography 

(p. 31), Courtesy Digital Video Arts (p. 32), Jorg Greuel, Saft (p. 33), CNES/ESA/Arianespace/Optique Vidéo CSG/JM Guillon, 2010 (p. 34), Joseph Sohm – 

Visions of America (p. 37), Michael Dunning, Sagem, Saft (pp. 38–39), Courtesy Digital Video Arts (p. 42), Saft, Apostrophe Productions (pp. 44–45), 

Courtesy Digital Video Arts (p. 46), Courtesy Digital Video Arts (p. 48), Saft (p. 49). 

Document no. 50036-2-0211 – Published by the Communication Department 

Saft Groupe SA – Société Anonyme à Directoire et Conseil de surveillance 

S.A. au capital de 25,174,845 euros – RCS Bobigny B 481 480 465 

Creation and design: - 01 55 76 11 11


93170 Bagnolet France 

Tél.: +33(0)1 49 93 19 18 – Fax: +33(0)1 49 93 19 55 

www.saftbatteries.com

ANNUAL REPORT 2011 REGISTRATION DOCUMENT - Saft

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