SCH2017_DRF_EN_Livre.indb

5 Consolidated financial statements at December 31, 2017 Notes to the consolidated financial statements

26.3.3 Raw material hedges The Group is exposed to fluctuations in energy and raw material prices, in particular steel, copper, aluminium, silver, lead, nickel, zinc and plastics. If we are not able to hedge, compensate for or pass on to customers any such increased costs, this could have an adverse impact on our financial results. The Group has, however, implemented certain procedures to limit exposure to rising non-ferrous and precious raw material prices. The purchasing departments of the operating units report their purchasing forecasts to the Corporate Finance and Treasury Department. Purchase commitments are hedged using forward contracts, swaps and, to a lesser extent, options.

These forward currency hedging positions include EUR952 million in hedges of loans and borrowings of a financial nature (net sales) and EUR939 million in hedges of operating cash flows (net sales). 26.3.2 Interest rate Interest rate risk on borrowings is managed at the Group level, based on consolidated debt and taking into consideration market conditions to optimize overall borrowing costs. The Group uses derivative instruments to hedge its exposure to interest rates through swaps. The Group didn’t use any derivative instrument to hedge its exposure to interest rates during the fiscal year 2017.

All commodities instruments are futures and options designated as cash flow hedge under IFRS standards, of which:

Dec. 31, 2017

Dec. 31, 2016

Carrying amount Nominal amount

12

9

(153)

(159)

26.3.4 Share-based payment Schneider Electric shares are hedged (cash flow hedges) in relation to the Stock Appreciation Rights granted to US employees. Details are as follow:

Dec. 31, 2017

Dec. 31, 2016

Outstanding shares Carrying amount

400,146

629,447

12

16

Nominal amount

(17)

(27)

26.4 – Financial assets and liabilities subject to netting In accordance with IFRS 7 standards, this section discloses financial instruments that are subject to netting agreements.

(a)

(b)

(c) = (a)-(b)

(d)

(e) = (c)-(d)

Related amount not offset in the statement of financial position

Gross amounts offset in the statement of financial position

Net amounts presented in the statement of financial position

Net amount, as per IFRS 7

Gross amounts

Dec. 31, 2017

Financial assets Financial liabilities

354

225

129 (80)

47

82

(305)

(225)

(47)

(33)

(a)

(b)

(c) = (a)-(b)

(d)

(e) = (c)-(d)

Related amount not offset in the statement of financial position

Gross amounts offset in the statement of financial position

Net amounts presented in the statement of financial position

Net amount, as per IFRS 7

Gross amounts

Dec. 31, 2016

Financial assets Financial liabilities

1,894

1,820

74

44

30

(2,089)

(1,820)

(269)

(44)

(225)

2017 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

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