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

3. Notes to the financial statements
COMPANY FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
(All amounts in thousands of euros unless otherwise indicated)
Significant events of the financial year
During the financial year, Schneider Electric SA carried out
EUR635 million in share capital increases, as follows:
• the payment of the 2009 dividend in stock, for EUR330 million;
• the employee share issue carried out on July 8, 2010 as part of the
worldwide Employee Stock Purchase Plan, for EUR144 million;
• the exercise of stock options, for EUR161 million.
The Company carried out several bond issues during the fi nancial
year for a nominal aggregate of EUR1 billion, and redeemed
EUR900 million worth of bonds issued in 2005 upon maturity on
August 11, 2010.
Accounting principles
As in the prior fi nancial year, the fi nancial statements for the fi nancial
year ended December 31, 2010 have been prepared in accordance
with French generally accepted accounting principles.
Non-current assets
Non-current assets of all types are stated at cost.
Intangible assets
Intangible rights are amortised over a maximum of fi ve years.
Property, plant and equipment
Items of property, plant and equipment are depreciated on a straightline
basis over their estimated useful lives, ranging from 3 to 10 years.
Shares in subsidiaries and affiliates
Shares in subsidiaries and affi liates are stated at acquisition cost.
Provisions for impairment may be funded where the carrying amount
is higher than the estimated value in use at the end of the fi nancial
year. This estimate is primarily determined on the basis of the
underlying net assets, earnings outlook and economic forecasts.
For the more recently-acquired investments, the analysis also takes
account of the acquired business goodwill.
For listed securities, the average stock price over the previous
month is used. Unrealised gains resulting from such estimates are
not recognised.
Furthermore, on July 21, 2010 the Company carried out a partial
redemption of the EUR750 million bond issue maturing on July 16,
2013 for a nominal amount of EUR263 million on the basis of a
purchase price of EUR299 million. This deal gave rise to the
recognition of EUR36 million in fi nancial expenses.
Lastly, the Company redeemed the outstanding EUR46 million in
commercial paper.
Own shares
Treasury stock is stated at weighted average cost.
In the case of treasury stock held for allocation on the exercise of
stock options, a provision is recorded if the exercise price is lower
than the carrying value of the related treasury shares or if the average
stock price for the month of December is lower than the weighted
average cost.
Pension obligations
The present value of termination benefi ts is determined using the
projected unit credit method.
Provisions are funded for the supplementary pension benefits
provided by the Company on the basis of the contractual terms of
top-hat agreements.
The Company applies the corridor method to actuarial gains and
losses arising from changes in estimates. Under this method, the
portion of net cumulative actuarial gains and losses exceeding 10%
of the projected benefi t obligation is amortised over 10 years.
Currency risk
Where necessary, a contingency provision is in place for unrealised
exchange losses. However, where there are unrealised exchange
gains and losses on back-to-back transactions in the same currency
and with the same maturity, the amount of the provision is then
limited to the net loss.
Bonds
Redemption premiums and issue costs are amortised over the life
of the bonds.
2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 227
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