SCH2017_DRF_EN_Livre.indb

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Overview of the Group’s strategy, markets and businesses Organizational simplicity and efficiency

in 2011 by the Court of First Instance denying the admissibility of some of the plaintiffs’ claims. The Brussels Court of Appeals delivered its judgment on June 26, 2017, declaring the plaintiffs’ claims to be time-barred or ungrownded. Following this judgment, one of the plaintiffs decided to lodge an appeal on the grounds of procedural irregularity. The case is expected to be heard in 2018. The main issue outstanding following the disposal of Spie Batignolles in 1996 was concerning litigation in France with SNCF Mobilité before the administrative court. The Group discussed the issue with SNCF and the dispute was settled amicably in 2016 at no cost for Schneider Electric beyond its own legal costs. Although SNCF Mobilité is still in a legal dispute with some entities of the Bouygues group in the context of this case, it should not have any impact on this amicable settlement. Schneider Electric was also among 2,000 companies worldwide that were mentioned in the Volcker report on the Oil for Food program published by the UN in October 2005, which stated that the Group had entered into agreements with the Iraqi state-owned entities between 2000 and 2004 under which surcharge payments totaling approximately USD450,000 are alleged to have been made to the Iraqi government. Schneider Electric Industries has been indicted in France Insurance strategy Schneider Electric’s general policy for managing insurable risks is designed to defend the interests of employees and customers and to protect the company’s assets, the environment and its shareholders’ investment. This strategy entails: E identifying and analyzing the impact of the main risks; E preventing risks and protecting industrial equipment; definition of protection standards for sites (including those that are managed by third parties) against the risk of fire and malicious intent, audits of the main sites by an independent loss prevention company, roll-out of a self-assessment questionnaire for the other Group sites; E drawing up of business continuity plans, in particular, for the Group main sites and critical suppliers; E roll-out of crisis management tools by the Group’s Security Department; E carrying out hazard and vulnerability studies and safety management for people and equipment; E implementing global insurance programs negotiated at the Group level for all subsidiaries with insurers meeting appropriate minimum credit ratings; E optimization of financing for high-frequency/low-severity risks through retentions managed either directly (deductibles) or through captive insurance companies. 7.8

in 2010 in relation to this report, then referred in May 2013, along with 13 other French companies, to the criminal court, which rendered its decision on June 16, 2015, discharging all the companies. However, the Bench appealed this decision, which will be judged by the Paris Court of Appeals in late November 2018. In addition, some Group entities worldwide, including in Brazil and Pakistan, are directly or indirectly cited in anti-trust proceedings without, however, any proven or serious risk of conviction in this regard having been identified to date. Various other claims, administrative notices and legal proceedings have been filed against the Group concerning such issues as contractual demands, counterfeiting, risk of bodily harm linked to asbestos in certain older products and work contracts. Although it is impossible to predict the results and/or costs of these proceedings with certainty, Schneider Electric considers that they will not, by their nature, have significant effects on the Group’s business, assets, financial position or profitability. The company is not aware of any other governmental, court or arbitration proceedings, which are pending or which threaten the company, that are liable to have or, during the last 12 months have had, a material effect on the financial position or profitability of the company and/or the Group.

Liability insurance The 3-year insurance program put in place on January 1, 2015 was renewed as from January 1, 2017 for a new period of 3 years. This program, deployed in more than 75 countries, provides coverage and limits in line with the current size of the Group and its evolving risks and commitments. Certain specific risks, such as aeronautic, nuclear and environmental, are covered by specific insurance programs.

Property damage and business interruption insurance

The 3-year insurance program put in place as of July 1, 2016 was continued in 2017. This is an “all risks” policy which covers events that could affect Schneider Electric’s property (including fire, explosion, natural disaster, machinery breakdown) as well as business

interruption resulting from those risks. Assets are insured at replacement value.

2017 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

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