2010Annual Report - Schneider Electric CZ, s.r.o.

Note 23 Provisions
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Products Environmental
Economic risks Customer risks risks
risks Restructuring Other risks Provisions
Dec. 31, 2008 324 28 207 43 132 106 840
Long-term portion 121 24 49 30 11 67 302
Additions 64 63 109 2 182 48 468
Discounting effect - - (1) - - - (1)
Utilisations
Reversals of surplus
(21) (2) (41) (2) (96) (11) (173)
provisions (31) (8) (22) - (7) (12) (80)
Translation adjustments
Changes in the scope
of consolidation and
(3) (1) (1) 1 2 (1) (3)
other 85 - 13 - (3) 2 97
Dec. 31, 2009 418 80 264 44 210 132 1,148
Long-term portion 131 31 79 27 28 80 375
Additions 117 18 150 3 39 75 402
Discounting effect - - 1 - - (4) (3)
Utilisations
Reversals of surplus
(36) (9) (95) (2) (124) (34) (300)
provisions (75) (9) (17) - (19) (8) (128)
Translation adjustments
Changes in the scope
of consolidation and
16 4 16 2 5 3 46
other 174 2 90 8 13 12 299
Dec. 31, 2010 614 86 409 55 124 176 1,464
Long-term portion 275 35 104 26 21 127 588
(a) Economic risks
These provisions cover, in particular, tax risks arising from audits
performed by local tax authorities and fi nancial risks arising primarily
on guarantees given to third parties in relation to certain assets and
liabilities.
Variations in scope of consolidation and others amount to
EUR174 million and are principally related to the introduction of Areva
Distribution into the Group.
(b) Customer risks
These provisions are primarily established to covers risks arising
from products sold to third parties. This risk mainly consists of claims
based on alleged product defects and product liability.
Provisions for customer risks also integrate the provisions for losses
at completion for a number of long term contracts, for EUR17 million.
(c) Product risks
These provisions comprise:
• statistical provisions for warranties: the Group funds provisions
on a statistical basis for the residual cost of Schneider Electric
product warranties not covered by insurance;
• provisions for disputes over defective products;
• provisions to cover disputes related to recalls of clearly identifi ed
products.
Changes in the scope of consolidation amount to EUR90 million and
are principally related to the acquisition of Areva Distribution.
(d) Environmental risks
These provisions are primarily funded to cover cleanup costs.
2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 197
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