SCH2017_DRF_EN_Livre.indb

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

Commitments and contingent liabilities

NOTE 29

29.1 – Guarantees and similar undertakings

Dec. 31, 2017

Dec. 31, 2016

Market counter guarantees (1)

2,854

3,075

Pledges, mortgages and sureties (2)

11

7

Other commitments given (3) GUARANTEES GIVEN

435

353

3,300

3,435

Endorsements and guarantees received

68 68

75 75

GUARANTEES RECEIVED

(1) On certain contracts, customers require a guarantee from a bank that the contract will be fully executed by the Group. For these contracts the Group gives a counter guarantee to the bank. If a claim occurs, the risk linked to the commitment is assessed and a provision for contingencies is recorded when the risk is considered probable and can be reasonably estimated. (2) Certain loans are secured by property, plant and equipment and securities lodged as collateral. (3) Other guarantees given comprise guarantees given in rental payments. 29.2 – Purchase commitments The Group is committed in the takeover of IGE+XAO and in the Aveva and Schneider Electric Software business combination, described in note 30. 29.3 – Contingent liabilities Senior Management believes that the provisions recognized in the balance sheet, in respect to the known claims and litigation to which the Group is a party, should be adequate to ensure that such claims and litigation will not have any substantial impact on the Group’s financial position or results. This is notably the case for the potential consequences of a current dispute in Belgium involving former senior executives and managers of the Group.

Subsequent events

NOTE 30

30.1 – IGE+XAO takeover On November 8, 2017, the Group announced the signing of a memorandum of understanding, pursuant to which SEI SAS have filed with the Autorité des Marchés Financiers (AMF) a voluntary public tender offer for the shares of IGE+XAO, at the price of EUR132 per share (coupon attached). With more than 80,000 licences globally, IGE+XAO is a leader in design software for electrical installations through its CAD (Computer Aided Design), PLM (Product Life cycle Management) and simulation software. The company had consolidated revenues of EUR29.4 million for the financial year 2016-2017 and an operational margin of 27%. On January 25, 2018, after the successful public tender offer and following the delivery of the shares tendered to the offer, the Group announced that SEI SAS will own directly and indirectly 70.57% of the share capital of IGE+XAO, and therefore has taken the control of the Company. The public tender offer initiated by Schneider Electric has been re-opened from February 1 st to February 14 th , 2018, in order to allow shareholders who have not yet disposed of their shares to do so under the same terms.

30.2 – AVEVA & Schneider Electric Software Business combination On September 5 th , 2017, the Group announced that it had reached agreement with AVEVA Group plc on the terms and conditions of a Combination of AVEVA and Schneider Electric industrial software business, to create a global leader in engineering and industrial software. On completion, following the issue of ordinary shares in the capital of AVEVA to Schneider Electric, the Group will own 60% of the enlarged AVEVA Group, on a fully diluted basis. Completion is subject to the satisfaction of a number of conditions including, amongst other things, AVEVA shareholder approval of the combination and applicable regulatory and anti-trust approvals having been obtained. Subsequent to the announcement of September 5 th , AVEVA shareholder approval was given at a General Meeting on September 29 th , 2017. All outstanding regulatory clearances required ahead of completion of the Combination have now been received, including the approval of the Committee on Foreign Investments in the United States (“CFIUS”), which gave its approval on February 9, 2018. Therefore, it is expected that completion of the Combination will occur in March 1, 2018.

2017 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

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