ANNUAL REPORT 2006
Independent energy producer WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 SÉCHILIENNE-SIDEC 30 rue de Miromesnil 75008 Paris - FRANCE
Tél : + 33 (0)1 44 94 82 22 Fax : + 33 (0)1 44 94 82 32 website : www.sechilienne-sidec.com mail : [email protected]
SA au capital de 1 061 381.86 euros RCS Paris 775 667 538 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 DATA FOR THE SECHILIENNE-SIDEC GROUP
Key figures 2006 Consolidated sales Stock market T 2006 capitalization at 31/12/06 Million Billion 181.1 euros 1.15 euros
Installed capacity by end 2006
450.5 MW Biomass burned during the year
Power of plants under construction by end 2006 968,000 164.5 MW tonnes Saving the equivalent of over 200,000 tonnes of oil Power generated by end 2006 2,450 GWh
i.e. the annual consumption of a European city of 1,500,000 inhabitants WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Biomass, green energy
The renewable energy par excellence, Biomass combined with coal offers a substantial competitive edge in a world of costly oil and gas. Businesses The use of plant materials from agriculture or forests or their sub-products for energy generation is centred of increasing value for economies that are feeling the impact of the rarefaction and ever-higher costs on the of hydrocarbons and the need to combat the greenhouse effect. The use of biomass enables a Indian renewable local resource to replace exhaustible, imported fossil fuels and reduce pollution by means Ocean and of photosynthesis (absorption of carbon gases by plants that fix the carbon and produce oxygen). the Caribbean Séchilienne Sidec is one of the leading French producers of electricity from biomass, of which it consumed 968,000 tonnes in 2006, thus economising the equivalent of over 200,000 tonnes of oil.
Wind power, an inexhaustible source of natural energy.
Business Electrical generation from wind power is a recent business in the group, but it is already a sizeable located one: 2005 was the first year of full operation of 25 wind turbines generating 37.5 MW total power, set in metro- up in the Pas-de-Calais in northern France (Haute-Lys wind farm). They generated 105 GWh, some 5% politan of all the wind-powered electricity in metropolitan France, in 2006. Séchilienne-Sidec is setting up France other wind farms in metropolitan France, designed to generate 32.5 MW by the end of 2007. Many other projects are currently being studied.
Solar power, another clean, renewable source of energy
Solar power Séchilienne-Sidec has decided to enter the ranks of leaders in photovoltaic electricity generation linked business to the grid. Since December 2006 the Group has been operating the most powerful solar power plant in France, installed on the rooftops of warehouses in Reunion Island, comprising of 6060 photovoltaic cells spread over a total surface area of over 8,000 square metres, representing total installed power of 1 Megawatt. The development of this new solar power business should continue and accelerate in the coming years: 2 more megawatts are being built in Reunion Island, and the commercial actions undertaken in Martinique and Guadeloupe should result in the installation of WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 several megawatts as early as 2007. THERMIC ENERGY
Martinique Guadeloupe Reunion Island Mauritius 400,000 inhabitants 458,000 inhabitants 785,000 inhabitants 1,258,000 inhabitants
Installation, commissioning in Output 2006 Output 2006 Output 2006 1st quarter 409 GWh 1,256 GWh 598 GWh 2007
• Compagnie de Cogénération • Compagnie Thermique • Compagnie Thermique • Compagnie Thermique du Galion du Moule de Bois Rouge de Bellevue • Compagnie Thermique • Compagnie Thermique du Gol du Sud • Compagnie Thermique de Savannah (under construction)
WIND POWER
105 GWh Equivalent to 5% Output of total electricity 2006 generated by wind power in France
• Centrales de la Haute-Lys
SOLAR POWER
The biggest solar power 0.1 GWh plant installed in France: Installation, commissioning 6,060 cells end 2006 installed on 8,000 m2 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Contents
Editorial ...... 3
1. Overview of Séchilienne-Sidec Group businesses and geographical locations ...... 5
2. Key figures ...... 8
3. History ...... 10
4. Séchilienne-Sidec Group structure ...... 12
5. Séchilienne-Sidec Group flow chart ...... 16
6. Human resources ...... 17
7. Séchilienne-Sidec Group expertise ...... 19
8. The technologies used by the Séchilienne-Sidec Group ...... 20
9. Séchilienne-Sidec Group business locations ...... 21
10. The Séchilienne-Sidec Group’s economic operating model ...... 27
11. The Séchilienne-Sidec Group business financing method ...... 28
12. Risk management ...... 29
13. Insurance ...... 32
14. Report on the environment and sustainable development ...... 34
15. Highlights of the year 2006. Résultats and prospects ...... 38
16. Financial statements of Séchilienne-Sidec SA ...... 40
17. Proposal to approve the accounts and allocate profit ...... 41
18. Other proposals to the Annual General Meeting ...... 42
19. Corporate governance ...... 43
20. Proposals to the Extraordinary General meeting ...... 52
21. Report of the Chairman of the Board of Directors ...... 54
22. Report of the Auditors on the Chairman’s report ...... 57
23. Consolidated accounts ...... 58
24. Report of the Auditors on the consolidated accounts ...... 91
25. Parent company accounts ...... 92
26. Report of the Auditors on the company accounts ...... 106
27. Special report of the Auditors on regulated agreements and commitments ...... 107
28. Special report of the Auditors on the twelfth resolution ...... 111
29. Special report of the Auditors on the thirteenth resolution ...... 112
30. Resolutions ...... 113
Board of Directors at 31 December 2006 - Guy RICO, Director - Dominique FOND, Chairman and Managing Director - Claude ROSEVEGUE, Director - Michel BLEITRACH, Director - Jean STERN, Director - FINANCIÈRE HELIOS, represented by Hervé DESCAZEAUX, Director Auditors - Patrick de GIOVANNI, Director - ERNST & YOUNG AUDIT, Titular accountants - Xavier LENCOU-BAREME, Director - MAZARS ET GUERARD, Titular accountants
SÉCHILIENNE-SIDEC • Société Anonyme (public limited company) with registered capital of ¤ 1 061 381,86 30 rue de Miromesnil - 75008 Paris • 775 667 538 RCS Paris
Shareholders’ contact: ARLIS au 01 70 38 21 96 • www.sechilienne-sidec.com • Created by : Duellistes 1 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Report of the board of Directors shareholders’ annual general meetings
Ladies and Gentlemen,
Shareholders’ annual general meeting In conformity with statutory regulations, we have convened this General Meeting to present our report on the state and activity of our Company during the financial year ending December 31 2006 and submit for your approval the annual and consolidated accounts for that year.
We shall provide further clarification and information on the documents required by the statutory provisions in force, which have been made available to you within the statutory period and we shall have the Auditors’ reports read out.
The Chairman and Managing Director of SÉCHILIENNE-SIDEC
2 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Éditorial
2006, a year affording many subjects for satisfaction.
The editorial at the beginning of the last management report The opportunity underlined how our Company was eminently capable of offered by the implementing the strong development strategy desired by its new current favourable principal shareholder APAX Partners, combining rigour and environmental and efficiency, ambition and calculated risk. The year 2006 fully bore regulatory attitudes out this analysis, since the salient features of the year are: towards renewable energies in certain countries was seized upon • Absolutely remarkable technical performances in all our by the Group to take a dominant position. plants in operation. These show: Thus, it signed: — the high propensity of the older plants to have a long working — a partnership agreement with a large Italian industrial group life, with a view to installing a 2.5 MW solar power plant. — the high quality design and building of the more recent plants, — An agreement to acquire Spanish companies having applied for — the exemplary know-how and motivation of our employees, to permits to build and operate solar power plants of 13 MW capacity, whom we address our heartfelt thanks. on condition that the permits are granted. • Ongoing reinforcement of our industrial plants, with: • New growth in financial results and increase in stock — commissioning of the new 65%-held CTG-B plant at Le Gol, market capitalisation Reunion Island, with a capacity of 58 MW, in November/December Consolidated net profit (Group share) amounted to € 47.8 million, 2006, an increase of some 30%, accruing from the aforementioned — preparation for the commissioning of two other thermic plants technical performances, gains in productivity and entering into in early 2007: the 80%-held 40 MW combustion turbine at Le accounts of the investment in CTG (65% held) to help it Galion, Martinique, and the 25%-held, 90 MW Savannah bagasse- commission the new CTG-B plant. coal plant on Mauritius, Consolidated shareholders’ equity amounted to € 227.3 million at — preparation for the staggered commissioning of wind farms December 31 2006. totalling 32.5 MW capacity in the Champagne-Ardenne and Market capitalisation, which was € 627 million at end 2005, rose Lorraine regions, throughout 2007. to € 1,152 million at end 2006, marking the market’s recognition • Broadening our scope of activity to solar power of our Company’s intrinsic qualities and the soundness of its This initiative continues the Group’s historic action in innovative future prospects. renewable energy with its thermic plants burning bagasse • A clear path to growth biomass and its wind farms. 2007 will be the year of full operation of the CTG-B plant commis- The Group began its development into this new branch by sioned at end 2006, and the year in which thermic, wind and solar acquiring 95% of the capital in two companies on Reunion Island power plants will be commissioned. dedicated to setting up and operating solar power plants, one of The Group has ample room for growth in the coming years, based which commissioned the biggest solar power plant (1 MW) in on its high capability to meet the needs for new thermic power France in December 2006, with over 8,000 m2 of photovoltaic capacity in the French overseas territories (DOM) reaching over cells. 150 MW, its large portfolio of carefully-selected wind farm projects It also began the preliminary work for building new solar power under study and development, and finally its successful, active plants on Reunion Island in early 2007, and also in the Antilles- prospection for solar power projects likely to result in output of Guyana region. some 20 MW annually as of 2008. • Opening of new markets in geographical zones suitable for operating the SECHILIENNE-SIDEC development model. Dominique FOND, Chairman and Managing Director
3 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Séchilienne-Sidec Independent energy producer
4 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Generalrapport overview of duthe group’sPrésident businesses and geographical locations RapportSéchilienne-Sidecdu Président du Conseil d’Administration (article L.225-37 du Code de Commerce)
Building the wind farm at Vanault-le-Châtel - France
BUSINESSES GEOGRAPHICAL LOCATIONS The SÉCHILIENNE-SIDEC Group has been involved in the • The Overseas Départements (DOM) of Reunion Island, development of installations for the generation of energy since 1982. Guadeloupe and Martinique, and Mauritius, near Reunion Island, are It designs, funds and operates these plants. Its activity in this field, the regions where most of the Group’s thermic plants are to be found, which originally only covered thermic installations, now includes because : wind farms and solar power plants. — there are cane sugar plants supplying bagasse, • In thermic energy production, the Group has made a speciality of — the types and sizes of production means, in which SECHILIENNE- co-generation technology (simultaneous generation of steam and SIDEC has recognised know-how, are very well adapted to the electricity) and bio-energy (use of renewable plant-based fuel). The needs arising from local energy characteristics. main applications for this are the bagasse-coal co-generation plants It is also in these tropical regions that the Group is making it a priority in the Caribbean ad Indian Ocean zones (bagasse is a by-product of to develop solar power installations, thus benefiting from the the cane sugar industry. It forms a “biomass” capable of generating particularly favourable sunlight conditions and times. calories and allowing it to be used as a fuel in industrial processes). • In Metropolitan France, operation of almost all the thermic It is true that these regions are characteristically rich in cane sugar co-generation plants built by SECHILIENNE-SIDEC for many factories generating large volumes of bagasse and having high industrial clients is carried out by the latter, following expiry of the energy needs. contracts under which our company operated them. The Group’s • In wind power generation, the Group has had a more recent main industrial activity in Metropolitan France is currently the activity, but it is already significant : in 2005, the first year of full installation and operation of wind farms, the first of which are operation, 25 wind turbines of a total 37.5 MW capacity, in the French located in the north-eastern part of France. Pas-de-Calais region (Haute-Lys wind farms) generated 90 GWh. In 2006, they generated 105 GWh . Other wind farms are being either built or developed. • In solar power generation, the Group has decided to become a leader in the field and took significant steps in this direction in the second half of 2006.
5 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Plants Plants WORLD in operation under construction Power Production 2006 (power) TOTAL METROPOLITAN FRANCE 50.5 MW 187.0 GWh 32.5 MW TOTAL CARIBBEAN 64.0 MW 409.5 GWh 40.0 MW TOTAL INDIAN OCEAN * 336.0 MW 1854.0 GWh 92.0 MW TOTAL * 450.5 MW 2450.5 GWh 164.5 MW * of which 58 MW commissioned in December 2006
• The power generated by plants in operation at end 2006, weighted by SECHILIENNE-SIDEC’s percentage of interest in them, was 307.42 MW.
• The power generated by plants in operation during 2006, weighted by SECHILIENNE-SIDEC’s percentage of interest in them, was 1771.73 GWh.
• The power of the plants under construction, weighted by SECHILIENNE-SIDEC’s percentage of interest in them, was 88.90 MW.
GUADELOUPE
MARTINIQUE
Plants Plants % held by CARIBBEAN in operation under construction Séchilienne-Sidec Power Production 2006 (power) Group Le Moule (Guadeloupe) 64 MW 409.5 GWh 99.99 % Galion (Martinique) 40 MW 80 % TOTAL CARIBBEAN 64 MW 409.5 GWh 40 MW
6 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Plants Plants % held by METROPOLITAN FRANCE in operation under construction Séchilienne-Sidec Power Production 2006 (power) Group Péage du Roussillon thermic power plant 13 MW 82 GWh 100 % Haute-Lys wind farms (Pas de Calais) 37.5 MW 105 GWh 40 % Marne et Moselle wind farms 32.5 MW 100 % TOTAL METROPOLITAN FRANCE 50.5 MW 187 GWh 32.5 MW
METROPOLITAN FRANCE
MAURITIUS
REUNION ISLAND
Plants Plants % held by INDIAN OCEAN in operation under construction Séchilienne-Sidec Power Production 2006 (power) Group Bois Rouge (Reunion Island) 108 MW 763.1 GWh 99.99 % Le Gol power plant (Reunion Island) * 122 MW 492.9 GWh 64.62 % Plexus Sol and SCE (Société de Conversion d’Energie) 1 MW 0.1 GWh 2 MW 95.02 % Solar power plants (Reunion Island) Bellevue (Mauritius) 70 MW 358.0 GWh 27 % Centrale Thermique du Sud (CTS) (Mauritius) 35 MW 239.9 GWh 25 % Savannah (Mauritius) 90 MW 25 % TOTAL INDIAN OCEAN * 336 MW 1854.0 GWh 92 MW * of which 58 MW commissioned in December 2006
7 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Key figures
Fauquembergues wind farm - France
Industrial plant (capacity in MWh) Overall electricity generation (in GWh) End 2005 End 2006 2005 2006 Installed capacity Generated by Thermic plants 2014.4 2345.4 Thermic plants 354.0 412.0 Generated by Wind farms 90.2 105.0 Wind farms 37.5 37.5 Generated by Solar power plants - 0.1 Solar power plants 1.0 TOTAL 2104.6 2450.5 TOTAL 391.5 450.5 Plants under construction Thermic plants 188.0 130.0 Wind farms 32.5 32.5 Consumption of biomass (in tonnes) Solar power plants 2.0 2005 2006 TOTAL 220.5 164.5 Tonnage of bagasse used 928 000 967 805 Fossil fuel energy saving (in Tonnes – Equivalent coal) 309 000 319 300 (in Tonnes – Equivalent oil) 192 000 198 000 Human Resources Workforce end … Group SA
200 66,457187 150 49,499175
100
50 30 34 0 2005 2006
8 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Changes in main accounting and financial data. These data take account of the restatement of accounts carried out in 2005 to enable comparison with other financial years and explained in note 2.21 appended to the consolidated accounts.
Evolution of the product from ordinary business Evolution of net earnings per shar (taking account of the division of the share par value) (in € M) (in €/share) 200 1,2 1 1,10 150 181,141 1,0 1.10 160.470 181.141 0,8 1.0 100 0,6 0,4 50 0,2 0 0 2005 2006 2005 2006
Evolution of operating profit Evolution of stock market capitalisation
(in € M) (in € M) 80 1500
60 66.457 1000 1 1152152 40 49.49949,499 500 20 627
0 0 2005 2006 31/12/2005 31/12/2006
Evolution of net profit (Group share) Cash flow and payments on investments Cash flow (in € M) (in € M) Payments on investments 50 100 40 47.771 94.5 80 88.4 30 36.805 60 67.7 20 40 53.0 10 20 0 0 2005 2006 2005 2006
Evolution of net earnings per share Capital and net indebtedness Capital (taking account of the division of share par value) Net indebtedness (in € M) 2 (in €/share) 400 413.4 1,5 1.74 300 364.9 1.34 1 200 227.3 193.8 0,5 100
0 0 2005 2006 31/12/2005 31/12/2006
9 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Séchilienne-Sidec group History
Bellevue plant - Mauritius
1982 1995 Creation of the industrial company for development of coal and co- — Entry of AIR LIQUIDE into the capital of SIDEC, via SECHILIENNE. generation energy – SIDEC – with the Charbonnages de France Group — Commissioning of a second bagasse-coal co-generation plant as majority shareholder. (64 MW), at Gol on Reunion Island, by the«Compagnie Thermique du The purpose of the new company was to help all sectors of industry, Gol» -CTG-. in the wake of the oil crises, to reduce the percentage of oil-based fuels in their energy sources as much as possible, and benefit from 1996 - 2000 technically optimised energy generating installations. Gradual increase of SECHILIENNE’s holding in the company.
1982 AND SUBSEQUENT YEARS 1998 Construction of co-generation plants on some thirty industrial sites Commissioning of a 64 MWh bagasse-coal co-generation plant on belonging to clients in highly varied branches (agrifood, chemicals, Guadeloupe, by our subsidiary «Compagnie Thermique du Moule» - automobile industry, paper industry etc.), operated by the Company CTM. for contractually agreeed periods. 2000 1989 - 1992 Commissioning of a 70 MWh bagasse-coal co-generation plant on Following a study commissioned by a sugar factory on Reunion Mauritius, which the Company asked «Compagnie Thermique de Island into the possibility of improving its energy supply, design and Bellevue» -CTBV- in which if holds 27 % of the shares- to take charge of. building of a bio-energy plant using the sugar factory’s bagasse and enabling supply of the local EDF electricity power plant at low prices 2001 in addition to meeting the needs of the sugar factory. — Merger of SECHILIENNE and SIDEC giving birth to the This decisive phase as regards future developments ended with the SECHILIENNE-SIDEC Group. construction in 1992 of the Bois-Rouge bagasse-coal co-generation — In Metropolitan France, commissioning of a 110 MWh gas plant on Reunion Island (62 MWh), by our subsidiary «Compagnie combustion turbine by «Compagnie Thermique du Rouvray» -CTR- (a Thermique de Bois Rouge» -CTBR-. company later disposed of).
10 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Compagnie de Cogénération du Galion - Martinique
2004 2007 (Planned) — SECHILIENNE-SIDEC took 100 % control of Compagnie — On Martinique, commissioning of a 40 MW combustion turbine Thermique de Bois Rouge and Compagnie Thermique du Moule, by during the first quarter of 2007 by Compagnie de Cogénération du acquiring blocks of shares from fellow shareholders. Galion (80 % held). — On Reunion Island, commissioning of a new 46 MWh bagasse- — Commissioning of a 90 MW bagasse-coal on Mauritius in mid- coal co-generation plant by Compagnie Thermique de Bois Rouge. 2007, by Compagnie Thermique de Savannah (25 % held). — In Metropolitan France, in the Nord Pas-de-Calais region, — In the Champagne-Ardenne and Lorraine regions, staggered commission of a 37.5 MWh wind farm by the Eoliennes de la Haute- commissioning of wind farms totalling 32.5 MW by SAS Eoliennes de Lys company, 40% owned by SECHILIENNE-SIDEC which took charge Marne et Moselle (100 % controlled by SAS Eolienne des Quatre of the building. Vents, itself a subsidiary of SECHILIENNE-SIDEC). — ln French overseas territories (DOM), commissioning of solar 2005 power generating plants totalling over 7 MW. — AIR LIQUIDE disposed of its interests in SECHILIENNE-SIDEC, — Development of solar power business in southern Europe. and was replaced by FINANCIERE HELIOS (APAX PARTNERS) as • In Italy, a partnership is planned with a large local industrial majority shareholder. group to set up solar power facilities, one of which on the site of — Commissioning of a 35 MWh coal powered thermic plant, built on the group’s biggest factory. Mauritius by «Compagnie Thermique du Sud» -CTDS-, 25 % owned • In Spain, agreed acquisition of companies having applied for by the Company. building permits and permits to operate solar power plants, on condition these permits are granted. 2006 — On Reunion Island, commissioning of a new 58 MWh bagasse- coal plant by Compagnie Thermique du Gol (64.62 % interest) — Acquisition of 95.02 % of the shares in two companies specialised in building and operating solar power generating facilities on Reunion Island, — and commissioning of a 1 MWh solar power plant by one of these companies at end December.
11WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Structure of Séchilienne-Sidec
Bois Rouge plant - Reunion Island
SÉCHILIENNE-SIDEC S.A., PARENT COMPANY
TRADE NAME directly or indirectly, of installations enhancing and/or making use of SÉCHILIENNE-SIDEC SA all forms of fossil or renewable fuels and all electro-metallurgical, electronic, electro-chemical, chemical, gaseous, metallurgical, elec- REGISTERED OFFICES trical, mechanical, themic, hydraulic, handling or traction products, 30, Rue de Miromesnil – 75008 PARIS appliances and equipment. Direct or indirect participation in all French or foreign undertakings LEGAL FORM or companies created or to be created, the activity of which might Société Anonyme à Conseil d’Administration de Droit Français (limited assist in achieving the business of this company or might be related liability company under French law) to that business or similar or connected businesses, and manage- ment of these undertakings or companies STOCKMARKET DATA More generally speaking, any industrial, commercial, real-estate or Company listed in compartment B (medium caps) in the Euronext non-real-estate operation relating directly or indirectly to the fore- Paris Eurolist (code ISIN FR0000060402). going or assisting in company business or facilitating the achieve- ment and development thereof. GENERAL MANAGEMENT General management carried out by the Chairman of the Board of TERM Directors (decision by the Board of Directors dated May 17 2006) (article 6 of Memorandum and Articles of Association) The company shall terminate on December 31 2039 save in the event TRADE AND COMPANIES REGISTER of anticipated termination or prolongation. Registered on the Paris Trade and Companies Register under n° 775667538. CAPITAL Following exercise of all the stock options (136,000 after taking BUSINESS OF THE COMPANY account of the division of the share par value by twenty) granted by (Art. 3 of the Memorandum and Articles of Association) the Board of Directors on September 2 2002 in application of a deci- The design, building, funding, supply, operation and sale, either sion of the extraordinary General Meeting dated December 18 2001,
12 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 the number of shares in the share capital was increased from visions of articles 225-209 and ff of the French Commercial Code. 27,432,360 to 27,568,360 between September 2 2006 and December 31 2006. RULES APPLICABLE TO AMENDMENTS OF The capital of the Company at December 31 2006 therefore amoun- THE MEMORANDUM AND ARTICLES OF ted to € 1,061,381.86, divided into 27,568,360 each worth € 0.0385, ASSOCIATION all of the same category. (article 39 of the Memorandum and Articles of Association) At the behest of the Board of Directors, the Extraordinary General SHAREHOLDINGS AT DECEMBER 31 2006 Meeting may make any changes or additions it sees fit to the (articles L.225-100-3, L.225-102 and Memorandum and Articles of Association. L. 233-13 of the French Commercial Code) The Extraordinary General Meeting shall not, however, be entitled to In conformity with the provisions of article L.233-13 of the French change the nationality of the Company except where the country of Commercial Code, we list the shareholders holding over 5% of voting which the Company envisages adopting the nationality and to which rights and the capital in our Company at December 31 2006. it wishes to transfer its registered offices has concluded a special They are: agreement with France enabling such operations and maintaining — holding 43.48 % of the capital and voting rights, FINANCIERE the Company’s legal personality. HELIOS, a simplified limited company the majority shareholders of It may not add to the Shareholders’ undertakings, subject to operations which belong to the group APAX PARTNERS. resulting from properly carried out concentrations of shares. — holding 11.18 % of the capital and voting rights, the company PICTET ASSET MANAGEMENT Limited on behalf of its clients POWERS OF THE BOARD OF DIRECTORS — holding 6.10 % of the capital and voting rights, ECOFIN LIMITED. (article 24 of the Memorandum and Articles of Association) There are no shares held by the company in its own capital. The staff The Board of Directors shall determine the guidelines for Company own 0.54% of the capital under the Employee savings plan. operation and shall supervise their implementation. Subject to the The situation described above results from the following events in powers expressly granted to Shareholders’ meetings and the scope November 2006: disposal by ECOFIN LTD of shares on and off the of the Company’s business, it shall deal with any issue involving the market; acquisition by PICTET ASSET MANAGEMENT of shares in the proper running of the Company and shall rule on business concer- market for customers whose portfolios it manages. ning it in the course of its meetings. These events gave rise to declarations that the lower threshold had The Board of Directors shall proceed to the checks and controls it been crossed for Ecofin and upper threshold had been crossed by sees fit. PICTET, filed with the AMF respectively on 24 and 27 November 2006. The percentages of these holdings take account of the increase in the number of shares in the capital by 136,000 shares between September and December 2006, due to the exercise of stock options
NO ACTION FOLLOWING THE AUTHORISATION FOR THE COMPANY TO BUY BACK ITS OWN SHARES. ABSENCE OF TRADING ON COMPANY SHARES IN THE STOCK MARKET (article L.225-211 of the French Commercial Code) • The AGM s of May 27 2005 authorised, for a period of eighteen months, the Board of Directors to buy back Company shares in accordance with the provisions of articles 225-209 and ff of the French Commercial Code, with a view to cancelling them (an opera- tion for which it had also been given authorisation) or with a view to using them for trading practices allowed by the Financial Markets authority. • This authorisation was used neither in 2005 nor in 2006. • The Company did not trade in its own shares and held none of its own shares at December 31 2006. • One of the resolutions submitted for the approval of this present AGM requests the Shareholders’ authorisation for the Board of Inside the wind turbine mast... Directors to buy shares in the Company in accordance with the pro-
13WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 SUBSIDIARIES AND INTERESTS (article L.233-6 of the French Commercial Code)
A- Companies the main business of which is Compagnie Thermique du Sud -CTDS- (Public Limited electricity generation by thermic plants liability company) • Located on MAURITIUS. 1- In the overseas départements (DOM) • 25 % interest. Compagnie Thermique de BOIS ROUGE -CTBR- (SA) • Operator of a 35 MW bagasse-coal plant at 31 December 2006 • Located on REUNION Island (Saint-André) • Holds 17.06 % of the logistics company «Coal Terminal Management • 99,99 % interest. Cy». • At 31 December 2006 operator of bagasse-coal plants with total Compagnie Thermique de SAVANNAH -CTSAV- (Public Cy capacity of de 108 MWh. Limited by shares) • Holds 99,97 % of the service company «Exploitation Maintenance et • Located on MAURITIUS. Services» -EMS- (SA). • 25 % interest. Compagnie Thermique du GOL -CTG- (SA) • Building a 90 MWh bagasse-coal plant at December 31 2006, • Located on REUNION Island (Saint-Louis) commissioning planned in 2007. • 64.62 % interest. • Holds 22.98% of the logistics company « Coal Terminal Management • At 31 December 2006 operator of bagasse-coal plants with total Cy ». capacity of de 122 MWh. • Holds 99,94 % of the service company «Sud Thermique Production» B- Companies supporting our companies -STP- (SA). operating thermic plants Compagnie Thermique du MOULE -CTM- (SA) RECYCLAGE, CENDRES, MACHEFERS INDUSTRIES • Located on GUADELOUPE (Le Moule) -RCMI- (SA) • 99.99 % interest. • Located on Guadeloupe. • At 31 December 2006 operator of a bagasse-coal plant with total • 99,99 % interest. capacity of de 64 MWh. COMPAGNIE INDUSTRIELLE DES CENDRES ET • Holds 99,94 % of the service company «Caraïbes Thermique MACHEFERS -CICM- (SAS) Production» -STP- (SA). • Located on Reunion Island. CARAIBES ENERGIE (SAS) • 51 % interest. • Located on GUADELOUPE (Le Moule) CTBV Management • 100% owned • Located on Mauritius. • Created with a view to building a new thermic electricity plant on • 62 % held. Guadeloupe • Operating the BELLEVUE plant owned by CTBV. Compagnie de Cogénération du GALION -CCG- (SAS) • Located on MARTINIQUE (La Trinité). C- Companies the main business of which is • 80 % interest. wind-powered electricity generation • Completion in progress at 31 December 2006 of a 40 MWh fuel EOLIENNES DE LA HAUTE-LYS (SA) combustion turbine, to be commissioned in the first quarter of 2007. • Located in the Nord Pas-de-Calais region. • 40 % interest. 2- Abroad • 100 % control of the companies SAS «Eoliennes de Compagnie Thermique de BELLEVUE -CTBV- (Public Fauquembergues», «Eoliennes de Renty-Audincthun», «Eoliennes de Limited liability company) Reclinghem» and «Eoliennes de Vincly» which operate wind farms • Located on MAURITIUS. with installed total capacity of 37.5 MWh. • 27 % interest. EOLIENNES DES QUATRE VENTS –EQV- (SAS) • Owner of a 70 MW bagasse-coal plant. • A holding with registered offices in Paris • Holds 29.75 % of the logistics company «Coal Terminal Management • 100 % controlled. Cy». • Holds 100 % of SAS « Eoliennes de Marne et Moselle » (which at 31 December 2006 was building wind farms of total capacity of 32.5 MWh in the Champagne-Ardennes and Lorraine regions for commissioning in mid-2007) and 100 % of SAS «Eoliennes de CLANLIEU», and 50 % of SARL «Société des Eoliennes de PLOUIGNEAU», a company in creation.
14 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Lirac (SARL) wind farm ELECTROINVEST REUNION OCEAN INDIEN (SAS) La Carnoye (SARL) wind farm • Located in the Indian Ocean zone. Clamanges and Villeseneux (SARL) wind farms • 100% controlled. Porte de France (SAS) wind farm • At 31 December 2006 developing solar power projects. These 4 companies are fully controlled companies developing ELECTROINVEST CARAIBES (SAS) future wind farms in several French regions. • Located in Caribbean zone. • Fully owned D- Companies the main business of which is • At 31 December 2006 developing solar power projects. solar-powered electricity generation ELECTROINVEST ANTILLES (SAS) SCE SOCIETE DE CONVERSION D’ENERGIE (SAS) • Located on Martinique and Guadeloupe. • Located on Reunion Island. • Fully owned • 95.02 % interest. • At 31 December 2006 developing solar power projects. • Operating solar power plant of 1 MWh total capacity at 31 December 2006 and developing other projects. E- Other interests PLEXUS-SOL (SAS) SÉCHILIENNE-SIDEC holds 4 % of ISERGIE, a company located in the • Located on Reunion Island. Rhône-Alpes region and operating a heat network. • 95.02 % interest. • At 31 December 2006 developing solar power projects.
INTERESTS ACQUIRED IN 2006 (article L.233-6 of the French Commercial Code) The following interests were acquired in 2006 in the framework of company creations or acquisitions of shareholdings:
In thermic power : • 40,000 Euros, the equivalent of 100 % of the capital of CARAIBES ENERGIE SAS set up on 31 August 2006 to study suitable answers to meet the electricity needs of Guadeloupe in the medium term.
In wind power: No direct interests taken up by Séchilienne-Sidec SA ( but buyout of its subsidiary Eolienne des Quatre Vents, in the amount of 40,000 Euros ie 100 % of the capital of SAS Centrale Eolienne de Clanlieu, and 1,500 Euros being 50 % of the capital of SARL Société des Eoliennes de Plouigneau – a company currently being created).
In solar power : • 411,000 Euros for the acquisition of 95.02 % of the shares in PLEXUS SOL, SAS set up on 25 July 2005. • 4,868,000 Euros for the acquisition of 95.02 % of the shares in SCE SOCIETE DE CONVERSION D’ENERGIE, SAS set up on 25 July 2005. • 40,000 Euros i.e. 100 % of the capital in SAS ELECTRO INVEST REU- NION OCEAN INDIEN, set up on 18 December 2006. • 40,000 Euros being 100 % of the capital in SAS ELECTRO INVEST CARAIBES, set up on 18 December 2006. • 40,000 Euros being 100 % of the capital in SAS ELECTRO INVEST ANTILLES, set up on 18 December 2006. Solar panels
15WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 SÉCHILIENNE-SIDEC FLOW CHART
METROPOLITAN FRANCE
100 % ÉOLIENNES DES QUATRE-VENTS (SAS)
100 % ÉOLIENNES DE MARNE ET MOSELLE (SAS)* 32.5 MW under construction * Created in 2006 after the Bambesch and Niedervisse wind farms were grouped together
100 % ÉOLIENNES DE CLANLIEU (SAS)
50 % SOCIETE DES ÉOLIENNES DE PLOUIGNEAU (SARL)
100 % CENTRALE ÉOLIENNE DE LIRAC (SARL)
100 % CENTRALE ÉOLIENNE DE LA CARNOYE (SARL)
100 % ÉOLIENNES DE CLAMANGES ET VILLESENEUX (SARL)
100 % ÉOLIENNES DE LA PORTE DE FRANCE (SAS) INDIAN OCEAN 40 % EOLIENNES DE LA HAUTE-LYS (SA) (NORD-PAS DE CALAIS) 37.5 MW installed 99.99 % COMPAGNIE THERMIQUE DE BOIS-ROUGE (SA) 100 % ÉOLIENNES DE FAUQUEMBERGUES (SAS) CTBR (REUNION ISLAND) 108 MW installed of which 46 at end 2004 100 % ÉOLIENNES DE RENTY-AUDINCTHUN (SAS) 99.97 % EXPLOITATION, MAINTENANCE, SERVICES (SA) 100 % ÉOLIENNES DE RECLINGHEM (SAS) EMS (REUNION ISLAND)
100 % ÉOLIENNES DE VINCLY (SAS) 64.62 % COMPAGNIE THERMIQUE DU GOL (SA) CTG (REUNION ISLAND) 64 MW installed + 58 MW under construction 4.00 % ISERGIE (RHÔNES-ALPES) 99.94 % SUD THERMIQUE PRODUCTION (SA) STP
51.00 % COMPAGNIE INDUSTRIELLE DES CENDRES ET MACHEFERS (SAS) CICM (REUNION ISLAND)
CARIBBEAN ZONE 27.00 % COMPAGNIE THERMIQUE DE BELLEVUE 29.75 % (Public limited liability Cy) 99.99 % COMPAGNIE THERMIQUE DU MOULE (SA) CTBV (MAURITIUS) - 70 MW installed CTM (GUADELOUPE) 64 MW installed 25.00 % COMPAGNIE THERMIQUE DU SUD 17.06 % CTM * (Public limited liability Cy) 99,94 % CARAÏBES THERMIQUE PRODUCTION (SA) CTDS ( MAURITIUS) - 35 MW installed CTP 25.00 % COMPAGNIE THERMIQUE DE SAVANNAH 22.98 % 99.99 % RECYCLAGE, CENDRES, MACHEFERS INDUSTRIES (SA) (Public Cy limited by shares) RCMI (GUADELOUPE) CTSAV - 90 MW under construction (MAURITIUS)
80.00 % COMPAGNIE DE COGÉNÉRATION DU GALION (SAS) 62.00 % CTBV MANAGEMENT (MAURITIUS) CCG (MARTINIQUE) 40 MW under construction 95.02 % SOCIETE DE CONVERSION D’ÉNERGIE (SAS)
100 % CARAÏBES ÉNERGIE (SAS) 100.00 % ELECTROINVEST RÉUNION OCÉAN INDIEN (SAS)
100 % ELECTROINVEST CARAÏBES (SAS) 95.02 % PLEXUS SOL (SAS)
100 % ELECTROINVEST ANTILLES (SAS) * COAL TERMINAL MANAGEMENT Cy
16 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Human resources
SÉCHILIENNE-SIDEC GROUP SÉCHILIENNE-SIDEC – SA (Parent company and fully-consolidated companies)
Workforce 2005 2006 Workforce 2005 2006 at December 31 175 187 at December 31 30 34
Recruitments Recruitments - permanent contracts 14 13 - permanent contracts 2 3 - limited time contracts 0 6 - limited time contracts 0 6
Departures 5 7 Departures 4 5 (of which 1 death (of which of which 1 death — and 1 dismissal) 2 deaths)
Numbers of men and women Numbers of men and women - Men 161 171 - Men 24 27 - Women 14 16 - Women 6 7 TOTAL 175 187 TOTAL 30 34
Breakdown per seniority Breakdown per seniority - Seniority under 9 years 79 - Seniority under 9 years 20 - Seniority between 9 and 15 years 88 - Seniority between 9 and 15 years 8 - Seniority over 15 years 20 - Seniority over 15 years 6 TOTAL 187 TOTAL 34
Breakdown of people at workstations or not Breakdown of people at workstations or not - not at workstations 105 112 - not at workstations 30 34 - at workstations 70 75 - at workstations 0 0 TOTAL 175 187
17WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 SÉCHILIENNE-SIDEC GROUP (contd) SÉCHILIENNE-SIDEC SA (contd)
External workforce External workforce Temporary - seasonal 52 45 Temporary - seasonal 0 0
Overtime Overtime - Total overtime 14 218 18 036 - Total overtime 0 0 - Proportion of - Proportion of overtime/working hours 5.05 % 5.88 % overtime/working hours 0 0
Absenteeism Absenteeism - N° hours absence 9 816 10 735 - N° hours absence 378 1 554 - Absentee rate (ratio hours - Absentee rate (ratio hours absence/total working hours) 3.49 % 3.50 % absence/total working hours) 0.75 % 2.83 %
Breakdown of causes of absence Breakdown of causes of absence - Work and travel accidents 7.40 % 12.39 % - Work and travel accidents 0 % 0 % - Illness 64.44 % 72.10 % - Illness 100 % 100 % - Maternity / Paternity 7.21 % 3.15 % - Maternity / Paternity 0 % 0 % - Family events and other 20.95 % 12.36 % - Family events and other 0 % 0 %
ANNUAL SALARY MASS ANNUAL SALARY MASS (in € millions) 13.599 14.364 (in € millions) 4.960 4.900
PROFESSIONAL TRAINING Training courses for people on operating sites mostly focusing on: — safety — adaptation to new installations and equipment — development of skills
Compagnie Thermique du Sud - Mauritius 18 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Séchilienne-Sidec group expertise
Bois-Rouge plant - Reunion Island
The Group’s teams are involved in all aspects of energy production projects, including project development, construction and operation:
For the project development and construction phases: • Defining a financial package • General project development and technical and financial feasibility • Financial monitoring and communication studies, • Negotiations of finance contracts with loan institutions • Choosing a site, the technology and equipment used, • Dealings with loan institutions • Drawing up a budget and controlling expenses, setting deadlines, • Negotiations with insurance companies • Technical, administrative and legal management: The operation and maintenance phases — Preparation of the necessary contracts and other documents • Hiring and training of staff, human resources management, for the project, • Management and monitoring of adjustments and preventive and — Applications to State institutions and the necessary corrective maintenance operations, authorities, particularly in view of obtaining the required • Management of material, equipment and spare parts and related licenses and approval letters, accounting, — Negotiation of energy transfer conditions, • Fuel supply (purchasing, transportation, handling, storage), — Preparation and drawing up of bids for tender, • Logistical organization, — Selection of construction companies, • Pricing and sale of clinkers, ash and other by-products of the — Coordination of on-site activities, energy production process, — Monitoring the start of operations, testing and provisional • Selection and supervision of external service providers, handing over, • Technical and financial analysis of operating problems, — Checking of performance testing and monitoring of contractual •Implementation of prevention plans, safety guidelines and guarantees up to final handing over. operating procedures and monitoring of the their application, Financing the construction: • Administrative, legal, accounts and fiscal management, • Creation of project management companies • Monitoring of compliance with standards and applicable good • Drawing up of financial models practices.
19WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 The technologies used by the Séchilienne-Sidec group
Solar panels
Over the last few years, Séchilienne-Sidec has committed itself to developing technologies which enable an optimized consumption of all primary energy sources which produce steam and electricity. These processes are often innovative and aim to combine technical and economic requirements with environmental safety.
Cogeneration is the combined generation of heat adapted to all fossil fuels and can also give priority to all local and electrical energy renewable energy sources, reducing the quantities of imported fossil High pressure steam from a boiler is expanded in a turbo-alternator fuels. The very nature of dual combustion is environmentally friendly, generating electricity. Low pressure steam is also produced through as it significantly reduces emissions and waste. Moreover, the use of withdrawal or back pressure in the turbine and can be used for biomass, a renewable energy source, effectively limits the impact of industrial heating processes. In this way, the output is optimized as greenhouse gas emissions. the energy which would have been lost through condensation in a conventional power plant is utilized for an industrial process which Combustion turbines acts as a condenser. When related to the input of primary energy SÉCHILIENNE-SIDEC has expert knowledge of these technologies, consumption, the output increases from approximately 30- 33% both for simple-cycle turbines and combined-cycle cogeneration without cogeneration to 70% and over with cogeneration. turbines, and generates energy in excellent conditions as regards Séchilienne-Sidec has expert knowledge of this know-how whatever performance, cost, flexibility and adaptability. the energy source (coal, biomass, domestic oil, natural gas…) in the fields of project development, project management, and plant Wind power plants construction and operation and successfully combines technological, SÉCHILIENNE-SIDEC is making use of the expertise acquired through financial and environmental aspects. many years of project management and the monitoring of power plant The field of developments opened by this expertise is considerable, operations to widen its scope to operating plants. and depends on the opportunities arising from a context in which 25 wind turbines have been in operation in Northern France since late energy prices are constantly changing. 2004 and other production sites are being built or are under study.
Dual-fuel plants (fossil fuel + biomass) Solar power plants The development and construction of this type of plant are SÉCHILIENNE-SIDEC, stepping up its specialisation in renewable particularly effective in regions with biomass renewable energy energies, diversified into solar energy in 2006. Its action in this new sources which are available for a limited period of a few months each field of business included the acquisition of 95.02 % of the capital in year. two companies on Reunion Island specialised in setting up and In order to make the considerable investments made pay off, another operating solar powered electricity cells, some of which, of 1 MW type of fuel is used over the rest of the year (coal, domestic oil, natural capacity, were commissioned in late 2006. gas …). The plant comprises photovoltaic panels, inverters designed to The bagasse-coal fuelled plants built by Séchilienne-Sidec are a prime convert the continuous current generated by the panels into example of this application. The main advantage is to make use of alternating current, and transformers designed to raise the voltage to bagasse, the remains of the sugar cane after the refining process, that of the electricity grid. during the sugar-cutting period and to turn to an alternative fossil fuel The panels can be located on the roofs of buildings covering large the rest of the time to generate electricity all year round. This type of surface areas or mounted in rows on metal frames on the ground so technology used in cogeneration plants is automated to a great as to angle them towards the sun. extent. Electric power plants constructed for this purpose can operate with either fuel or with both simultaneously. Furthermore, it is possible to switch automatically from one to the other without affecting the supply to the electricity network. This technology can be
20 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Group business locations
La Haute-Lys wind farms
Haute-Lys wind power plant IN METROPOLITAN FRANCE Installed capacity : 37.5 MW Industrially operational since : 2004 In PARIS, where it has its registered offices, the Type : wind power plant parent company SECHILIENNE-SIDEC SA, Generation in 2006 : 105 GWh manages its holdings as the parent company of Presence : 5 % of wind energy generated in France the Group, of which it decides the strategy and co-ordinates the activity, while respecting the DUNKERQUE rights of the co-shareholders in the companies it CALAIS does not fully control. Moreover, it provides Gravelines services to Group entities that entrust the building of their investments in it St-Omer
In the NORD PAS-DE-CALAIS REGION, the Boulogne-sur-Mer Group installed and operates the Haute-Lys wind LILLE farms in which it has a 40 % stake. These plants generate a total 37.5 MWh and in 2005 produced Etaples Bethune 90.2 GWh and 2006 105.0 GWh. Montreuil sur-Mer Douai Hesdin Arras
Nord Pas-de-Calais
21WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Isère In the RHÔNE-ALPES REGION, at PEAGE DE ROUSSILLON (Isère), Pont-de-Cheruy SECHILIENNE-SIDEC continues to be sole operator of around thirty coal co- generation plants that it built in in 1982 and Bourgoin-Jallieu later years, for which the contractual term at which the client takes over has not yet Vienne La Tour-du-Pin come. This plant, of 134MWh capacity, is La Côte-St-André
located on a site belonging to RHODIA. In Voiron 2006, it produced 82 GWh and consumed Péage-de-Roussillon 81,043 tonnes of coal. St Laurent-du-Pont Chanas St-Egrève
GRENOBLE Pont-en-Royans
Villard- de-Lans Péage-de-Roussillon Bourg-d’Oisans power plant Installed capacity : 13 MW Industrially operational since : 1992 Monestier-de- La Mure Clermont Type : cogeneration power plant
Lorraine and Champagne Ardenne In the CHAMPAGNE-ARDENNE AND LORRAINE REGIONS, wind farms of 32.5 MWh total installed capacity are being Marne ans Moselle built for commissioning in 2007, using two wind power plant project companies grouped in early 2006 Installed capacity : under the name «Eoliennes de Marne et 32.5 MW ( under construction ) Moselle». Industrially operational since : 2007 Type : wind power plant
In various OTHER RÉGIONS, the Group is actively prospecting and carrying out studies with a view to later development of wind farms in places with suitable climate: Thionville Reims (good local wind), technical (electrical lines METZ nearby) and social and economic Niedervisse Bambesch Châlon possibilities (available and, environmental Faulquemont and landscape integration, support from Vanault le Châtel local authorities, positive reaction from local population etc.). Identical prospection and study has also been carried out in zones with high Troyes sunshine with a view to solar power development.
22 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 IN OVERSEAS DÉPARTEMENTS The SECHILIENNE-SIDEC Group and its subsidiaries Compagnie Thermique de Bois Rouge (CTBR) and Compagnie Thermique du Gol REUNION ISLAND (CTG) are actively involved in developing local potential. On REUNION ISLAND, the Group is particularly active in production of The power plants operated by these companies were built next to two renewable energy, thus significantly contributing to achieving of the island’s sugar factories. They consume all the bagasse European targets in this field and reducing France’s energy produced and in turn supply the factories with energy. By doing so, expenditure. they actively support cane plantations and sugar production, which Reunion Island is located 800 km to the east of Madagascar. The make up an important part of the island’s economy. After the sugar- island has 785 000 inhabitants, a population comparable to that of cutting period, the plants are fuelled by imported solid mineral fossil some European Union Member States such as Cyprus, and greater fuels (South African coal) while the Électricité de France plants use than that of Luxembourg (about 475,000) or Malta (approximately hydrocarbon imports (heavy fuel oil and diesel fuel). 400 000 inhabitants). In 2006, the CTBR and CTG subsidiaries generated a fully operational Since the year 2000, the population has been growing by 1.4% per year’s 1256 GWh of electricity from their three bagasse-coal plants year on average. This rate is much greater than that of metropolitan opened in 1992 (CTBR 1), 1995 (CTG-A) and late 2004 (CTBR 2) France (lower than 0.60%). respectively, and one month’s generation for the fourth bagasse-coal In addition to strong demographic growth, there has been much plant commissioned at the end of 2006 (CTG-B).
Reunion Island Compagnie Thermique de Bois- Rouge Installed capacity : 108 MW Plexus Sol St-Denis Industrially operational since : 1992 ( CTBR-1 ), and late 2004 ( CTBR-2 ) Type : dual-fuel power plants - bagasse-coal Société de St-Suzanne Generation in 2006 : 763 GWh Conversion St-André Le Port Local presence : d’Energie Bras-Panon 30 % of energy on Reunion island Installed capacity : 1 MW Consumption in 2006 : 345,000 metric tons of Industrially operational since : St-Benoit South African coal, 255,000 metric tons of december 2006 bagasse. Type : photovoltaic - solar energy Ste-Rose Generation in 2006 : Compagnie Thermique du Gol non significative St-Leu Installed capacity : 122 MW, Industrially operational since : Entre-Deux 1995 ( CTG-A ) et 2006 ( CTG-B ) Type : dual-fuel power plant - bagasse-coal St-Louis Generation in 2006 : 493 GWh Local presence : St-Philippe St-Pierre 20 % of energy on Reunion island St-Joseph Consumption in 2006 : 195 000 metric tons of South African coal, 269 000 metric tons of bagasse. development of urban areas and collective housing and the number of The Group also took position in 2006 as a leading player in the highly premises with air conditioning has increased significantly promising development of solar power on Reunion Island, with the The per capita gross national product, in dollars, increased by over acquisition of two companies, PLEXUS SOL and SCE –SOCIETE DE 20% between 2001 and 2005 and the gross disposable household CONVERSION D’ENERGIE. The latter commissioned photovoltaic cells income on the island, which includes a large amount of welfare of 1 MW capacity on the roofs of the vast warehouses of a purchasing benefits, has grown sharply by nearly 7% per year. In turn, consumer centre for a retail chain, constituting the largest plant of this type in spending is also constantly on the rise. France to date. Other commissioning of solar energy generation plant These figures explain why the island’s electricity consumption and the will take place in 2007, and many projects destined to come to rate of generation needed to satisfy it is continuing to grow strongly. fruition in the following years are under study. Consumption has risen from slightly less than 1271 GWh in 1995 to 1871 GWh in 2001 and 2270 GWh in 2005. As Reunion Island does not have any fossil fuel resources, its energy supply is obtained from fossil fuel imports and also from the development of local energy potential (mainly hydraulic and biomass power, but also wind and solar power).
23WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 GUADELOUPE On GUADELOUPE, as on Reunion Island, the Group promoted the introduction of electrical generation using bagasse. It is the only operator in this field. Guadeloupe is located in the heart of the Caribbean, 6700 km away from metropolitan France, and is an archipelago made up of six groups of islands. The two main islands, Basse-Terre in the east and Grande-Terre in the west make up “mainland Guadeloupe”. Guadeloupe has a population of 458,000 inhabitants. Compagnie Thermique du Moule The annual demographic growth rate is 1%, which is almost double the rate for metropolitan France. (geothermics, bagasse, hydraulic power, and the tropical wind and The ten –year average growth of per capita gross national product is sunlight). 3.4%; in the past few years it recorded exceptional growth in 2003 (5%), a mediocre figure in 2004 (0.9%), due to very long strike action Compared to 1986, when the fraction of electrical generation on which brought the Pointe-à-Pitre port to a halt and very bad weather, Guadeloupe powered by renewable resources was below 2% (from then returned to the long term trend in 2005 (3.1%). geothermal power), in 2006 it was 14.1%. In addition to its dynamic population growth and the favourable per In 2006, the CTM plant generated 409.5 GWh, of which 74.2% was capita GNP compared to Metropolitan France, other factors induce a from bagasse, thus covering around 28% of the total electricity faster increase in electricity consumption: the greater occurrence of output of Guadeloupe and some 36% of the fraction of that output people sleeping elsewhere than in the household, the gradual from renewable energy sources. alignment of the number of white and audiovisual consumer goods on Via its specially created subsidiaries, the Group also, during 2006, that of Metropolitan France, and the increase in air-conditioning began: systems. — study into solutions it could provide for the medium term energy The commissioning of a 64 MW bagasse-coal plant near the GARDEL needs in this départment identified by the public authorities in the sugar factory in 1998 by the Group’s subsidiary Compagnie framework of its pluri-annual investments in PPI electricity Thermique du Moule -CTM- followed the local policy to make — Furthermore, active prospection with a view to setting up new maximum use of the natural energy potential available locally solar power generation plants.
Compagnie Thermique du Moule Installed capacity : 64 MW Industrially operational since : 1998 Type : dual-fuel power plants - bagasse-coal Generation in 2006 : 410 GWh Anse-Bertrand Local presence : Guadeloupe 28 % of energy in Guadeloupe Port-Louis Consumption in 2006: 176 000 metric tons of bagasse, 173 000 metric tons of South American
Mome-à-l’Eau Sainte-Rose Deshaies GRANDE-GRANDE- Le Moule TERRETERRE Pointe-à-Pitre St François Pointe-Noire Sainte Anne Le Gosier BASSE-BASSE- TERRE TERRE Goyave
Vieux-Habitants
Saint-Claude Basse-Terre
Trois-Rivières
24 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Grand’Rivière Basse-Pointe MARTINIQUE On MARTINIQUE, the Group is Martinique Le Lorrain present through its subsidiary, Compagnie Thermique de Cogénération du Galion (CCG), Saint-Pierre in which it has an 80% Compagnie de Cogénération La Trinité du Galion shareholding. The COFEPP Installed capacity : group, co-shareholder with the 40 MW under construction - end 2006 Deux-Choux remaining 20% share, has a Industrially operational since : number of interests in distilleries First quarter of 2007 Saint-Joseph Type : domestic oil fired peaking power plant and rum factories and jointly Le François ( combustion turbine ) operates the Le Galion sugar factory in the La Trinité district Fort-de-France with the regional and local councils.
Grande Anse d’Arlet La Martinique, located south of Le Marin Guadeloupe in the Antillo- Caribbean islands, has 400,000 inhabitants, and its rate of Sainte-Anne population growth is very similar to that of Metropolitan France. The per capita growth in GDP has been higher than in Metropolitan France for several years, which, Commissioning, initially forecast for the second half of 2006, was to combined with the more moderate population growth, has resulted in take place in the first quarter of 2007. a remarkable rise in the living standards. This improvement has been accompanied by a significant increase in the rate of household The site chosen by CCG could be ideally used for a bagasse-coal plant consumption and use of air conditioning, factors explaining the at a later date. CCG will not fail to offer this suggestion to EDF when sustained rise in electricity consumption on Martinique. saturation of the local network, and then inadequacy, of the current means justify it. CCG has been active since the Government made a call for tender to build and operate a combustion turbine with a capacity of 40 MW to Furthermore, the Group is positioning itself as a major player in meet the peak needs of the local network. developing solar power in Martinique, where the sunshine is of It tendered a bid, won the contract and has since then built the plant. particular interest in this regard.
ABROAD coal plants that they have been able to observe since they are near to REUNION MAURITIUS ISLAND. On MAURITIUS, the Group has become one of the leading players in the local Like Reunion Island (only 220 km away), energy economy, through its Mauritius is part of the Mascarene Islands shareholdings (minority to comply with to the east of Madagascar in the Indian local legislation) in several companies. Ocean.
This situation arose because of the similar constraints bearing upon Mauritius has a population of 1,250,000 inhabitants, one of the the electricity and sugar-cane industries in this country and in other strongest economies in sub-Saharan Africa and a per capita gross French overseas départements. national product reaching 5,000 USD The GNP composition by sector is typical of a developed country: agriculture about 5%, industry 30% As a result of this similarity, the authorities of Mauritius have sought and services 65%. to benefit more generally from SECHILIENNE-SIDEC’s experience and skill in co-generation, more especially the advantages of the bagasse- Confronted with the fierce challenges posed by the end of the
25WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Multifiber agreement in the textile industry and the reform of the Compagnie Thermique du Sud (CTDS), in which SECHILIENNE- European Union’s sugar policy that is affecting APC producers, SIDEC has a 25% shareholding, started operations at the new 35 MW Mauritius has adopted a vigorous policy to break with the practices coal-fired plant on the Union Saint-Aubin sugar factory site in 2005. In based on EC preferences and adapt to the new competitive context. 2006, 239.9 GWh were generated, accounting for around 12% of the total electricity generation on the island. Throughout the Mauritian economy, the emphasis has been placed on streamlining structures and business centre, training a highly Compagnie Thermique de Savannah (CTSAV), in which qualified workforce, positioning in high value-added production, SÉCHILIENNE-SIDEC has a 25% shareholding, has started to build a particularly ICT and financial activities. The changes made more new and important dual-fuel bagasse-coal plant with a 90 MW especially in the textile sector are tending to change the Mauritian capacity. This new plant is due to be industrially operational in 2007. clothing industry into a fashion industry. Compagnie CTBV-Management, in which SÉCHILIENNE-SIDEC has In the sugar industry, an « accelerated plan of action » for the years a 62% shareholding, is specialized in technical assistance and other 2006-2015 has been implemented, in two parts : services in the field of steam and electricity generation.
The first is to reduce production costs in the sugar plantations by regrouping and rationalising farms, removing stones, irrigation, mechanisation and improvement of crops, and in the sugar factories CTBV by concentrating activity in the most competitive installations, Compagnie Thermique investing in modernisation and optimising logistics. de Bellevue The second part concerns development and diversification of the use Installed capacity : 70 MW of sugar by-products. In this regard, it is planned to massively step up Industrially operational since : the use of bagasse to power electricity, both in plants operating on 2000 Type : bagasse only during sugar harvesting time and in those co-generating dual-fuel power plants - bagasse-coal with coal and bagasse throughout the year. Thus, each of the six Generation in 2006 : 358 GWh sugar factories resulting from the current concentration will be fuelled Local presence : 18 % of energy in Mauritius by an electricity plant. Another goal is to develop a large ethanol Consumption in 2006 : 161,000 metric tons of South African coal, 68,000 metric tons of bagasse. manufacturing business by transforming molasses. Cap Malheureux
There are currently four companies representing the Group on Mauritius: Mauritius Poudre d’Or
Compagnie Thermique de Bellevue (CTBV), in which SECHILIENNE-SIDEC has a 27% shareholding, has built and has been Port-Louis operating a dual-fuel bagasse-coal plant with 70 MW capacity in the Rose Hill north of Mauritius since 2000. In 2006, the plant generated 358 GWh Quatre Bornes (99.5 GWh of which fuelled by bagasse from the Bellevue sugar Curepipe factory) which accounted for approximately 18 % of the total electricity generation on the island. Tamarin Grande Rivière Noire Rose Belle Mahébourg La Gaulette CTDS Souillac Compagnie Thermique du Sud CTSAV Installed capacity : 35 MW Industrially operational since : 2005 Type : coal power plant Compagnie Thermique de Generation in 2006 : 240 GWh Savannah Importance locale : Capacity : 90 MW under construction 12 % of energy in Mauritius Industrially operational since : 2007 Consommation 2006 : Type : 142,000 t de charbon sud-africain dual-fuel power plants - bagasse-coal
26 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 The Séchilienne-Sidec economic operating model
La Haute-Lys wind farms
THIS MODEL IS BASED ON THE Purchasing agreements by Électricité de France FOLLOWING KEY ELEMENTS: (EDF) for electricity from the Group’s conventional power plants Virtually systematic recourse to creation of private companies • Very long-term agreements (25-30 years) in which EDF purchases (Sociétés de projet) for the realization and operation of almost every available capacity, electricity supply and supply rate services. significant industrial investment. The SECHILIENNE-SIDEC parent • Indexation of all payment elements. company co-ordinates these companies and has a 20% to 100% share • These contractual provisions ensure good long-term visibility and a in them, according to various criteria such as geographic location. high level of security mainly due to the absence of almost all risks of SECHILIENNE-SIDEC shareholdings include fully-owned subsidiaries the client defaulting. or majority interests in companies which operate power plants located in the French overseas territories and minority interests in Conditions of purchase by Électricité de France companies in Mauritius. (EDF) of electricity generated from wind power The subsidiaries operating wind power plants do business in Financing the majority of these private companies’ requirements compliance with the statutory and regulatory provisions under which through leasing or borrowing, under contracts concluded by these EDF must conclude purchasing agreements with wind energy companies in which the shareholders cannot be held liable by the producers for a period of 15 years at a fixed tariff. lending institutions (non-recourse financing). This tariff has been determined by French authorities to incite the development of wind power by reason of its particular advantages: A very long-standing privity of contract between the companies • It plays a part in the fight against the greenhouse effect and global endorsing the project and their clients, who are mainly electricity warming. network institutions (Électricité de France in France and the Central • It has a positive effect on the French trade balance by replacing Electricity Board in Mauritius) and secondarily the sugar factories to fossil fuel imports. which the bagasse-coal plants supply energy. Conditions of purchase by EDF of solar-powered The development of service operations, in parallel with the electricity operation of power plants, both within the SECHILIENNE-SIDEC In the same way as wind powered electricity producers do, those « parent company and in companies specialized in related or producing electricity via installations using the sun’s radiant energy » supporting activities. benefit from statutory and regulatory provision that impose purchase SECHILIENNE-SIDEC has thus gained a high level of expertise in by EDF. The terms and conditions of purchase set forth in these purchasing coal from South Africa for plants in the Indian Ocean zone provisions have effect for 16 to 20 years and guaranteed prices higher and from Latin-American countries for those in the Caribbean zone, than those fixed for wind powered electricity, this additional incentive chartering boats to ship the fuel, storing it in the ports of arrival and being explained by the unequal development of the two sources. transporting it by special sealed trucks to the industrial sites for A special, even greater incentive is provided for DOM so that the transformation. higher sunlight of these territories can be made full use of. Some of the Group’s companies can share their particular pricing and sales expertise in combustion residues with other subsidiaries.
27WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Financing of the group’s activities
Bellevue thermic power plant - Mauritius
PREFERENCE FOR LEASING For this purpose, a finance agreement over 7 years for a total of €135 million was concluded on February 17 2006 with CALYON as arranger, In 2006, as in previous years, the majority of the Group’s financing agent and lender, the main provisions of which are as follows : needs was covered by leasing under contracts with each of the subsi- • Division into 4 tranches of which : diaries dealing with a project. These contracts are without recourse — Tranche A for €65 million: amortizable loan for refinancing of the finance contracts between the lenders and SECHILIENNE SIDEC. existing debt. The lease undertakings have been restated according to IFRS. — Three tranches B, C and D for a total amount of €70 million: Loans for the financing of new investments and coverage of wor- king capital needs. COVERAGE OF OTHER NEEDS At 31 December 2006, these credit lines were used up to €84,9 M and a swap was made (variable rates instead of fixed rates) in the Needs not covered by the leases are funded by the Group cash flow as amount of €73 M . and where needed, in addition to the short, medium and long term • Rate: Euribor plus 100 basis points. borrowings of SECHILIENNE-SIDEC from financial institutions. • Collateral : the securities held by SECHILIENNE-SIDEC in CTBR, CTG and CTM. Ces emprunts étaient jusqu’en 2006 : • Compliance with specific values for the two following ratios up to • A seven-year loan contracted in 2004 to contribute to the capital of December 31 2012 : CTBR, CTG and CTM. The amount repayable at 31 December 2005 was — « net interest cover ratio » : €47.1 million. This ratio is defined as the relationship between consolidated • A medium-term €13.2 million loan (including capitalised interest) EBITDA (earnings before interest rates, taxes, depreciation and contracted to give an intra-group loan to CTBR, the subsidiary having amortization) and net cash interest (non capitalisable financial itself constituted a pledge deposit of the same amount in a bank. charges less non capitalised financial income). Its value at 31 • A €1.2 million loan repayable in 2006, subscribed by CTG. December 2006 was not permitted to be below 3.65, which was • A confirmed short term credit line of €7.2 million (not used at the case. 31/12/2005). — « leverage ratio » : • An overdraft facility for SECHILIENNE-SIDEC, of which €2,3 million This ratio is defined as the relationship between total net debt was used at 31 December 2005. (total debt less net cash flow and deposits) and consolidated EBIT- In 2006, the Group refinanced all these loans in the framework of a DA. global operation to restructure existing debt, increase structural Its value at 31 December 2006 was not permitted to be below 6.45, finance resources and secure financing of future investments. which was the case.
28 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Risk management (article L.225-100 of the French Commercial Code)
Bois-Rouge plant - Reunion Island
INDUSTRIAL AND ENVIRONMENTAL RISKS ronment (DRIRE). Wind farms and solar power plants are also the subject of scrutiny by a) SÉCHILIENNE-SIDEC’s activities entail risks of this kind the public authorities, although they do not fall under the regulations arising from all industrial activity, with the following specific specfic to ICPE: they are carefully investigated at the building permit features: stage and then inspected for proper maintenance effectiveness. These risks are mainly concentrated in the thermic power plants generating electricity, operation of which entails: c) Each of the risks detailed is dealt with as follows: — technological risks (fire in particular) linked to the presence of • Control of technological risk by: coal stocks, handling of combustible materials (bagasse and coal) — application of suitable measures to the coal stocks (compacting the running of the boilers, and the presence of oil in the turbo- and tarpaulins, limited height, pathways enabling a fire to be alternator generator in the machine room. attacked in several places and at different angles, monitoring of — Risk of polluting floors and water with the various products and temperatures at centre of piles, rotation rules etc.), waste stored, plus effluents. — placing oil storage at a distance from potential heat sources and — Risk that bacteria might appear and develop, especially legio- permanent temperature control on machines, nella-type bacteria in the self-cooling equipment. — boiler supply circuits with automated cutoff in the event of mal- — Risk of atmospheric pollution arisning, first, from dust emission functioning and power supply by a succession of suppliers, due to bagasse and coal handling, and second, from smoke emis- — introduction of suitable fire fighting means approved by the sions from stacks. DRIRE, Wind power and solar facilities have none of these risks. The only — strict supervision of wind turbines in service, with regular ins- type of risk arising from operation of wind turbines is if a vane comes pections and control and maintenance operations. loose and falls. • Prevention of risk of floor and water contamination by bacteria by: — setting up distinct water collection networks so that each type b) The existence of these risks has led to the regulation of ther- of effluent receives appropriate treatment, mic plants of the size of those operated by the Group as «installa- — setting up differentiated water treatment systems with measure- tions classified for purposes of environmental protection» (ICPE) and ment of effluent and suspended matter etc therefore subject to stringent provisions (procedure of granting an — location of equipment containing oil on special oil proof trays, authorisation to operate delivered after a thorough investigation, — monitoring of the surrounding water, imposition of protective measures, periodical monitoring by the ser- — application of the extremely detailed provisions in the decree vices of the Regional Directorates for industry, research and the envi- dated December 12 2004 on water cooling systems by air flow
29WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 subject to authorisation, to prevent legionella, under the super- electricity generating facilities. vision of the DRIRE, This last risk seems limited given the short time the standards appli- — minéraux maximum use made of combustion residue (slag, floa- cable to the plants operated by SECHILIENNE-SIDEC have been ting cinders) by businesses recycling mineral materials applicable. • Prevention of the risk of atmospheric pollution by: — The first plants at Bois-Rouge (CTBR-1), Le Gol (CTG-A) and Le — avoiding coal dust emissions and clouds by using dust proofed Moule (CTM) are governed by maximum emission values fixed by skips for transport, truck unloading under a protective awning, the decree dated 30 July 2003 on existing plants, and they have moving by hooded conveyor belts, screening and crushing in clo- no difficulty in complying with these. The plants are to be equip- sed buildings, ped with permanent analysis means. — compacting and/or covering coal piles with tarpaulins — The Bois-Rouge plant, commissioned at the end of 2004 (CTBR- — Placing floating cinders from combustion in closed silos, 2) and that of Le Gol commissioned in December 2006 (CTG-B) — Adoption of boiler technology enabling the minimum emission are governed by maximum emission values fixed by the decree of levels required by the public authorities to be complied with and June 30 2002 on new plants. To ensure compliance with these introduction of instruments to measure sulphur dioxide, nitrogen values, special technology was chosen (for CTBR-2 an IGNIFLUID oxide and carbon monoxide among others. boiler with de-sulfurisation by injection of slaked lime into the burner, and means to layer injections of air and smoke circula- LEGAL RISKS ARISING FROM ACTIVITIES tion, for CTG-B, a pulverised coal burning boiler comprising downstream de-sulfurisation of smoke by treating it with milk of These are mainly: lime, and layered injection of secondary and tertiary air. a) Possible non-performance of contractual undertakings of The contracts with EDF, comprising a clause maintaining their eco- any kind, especially those concerning electricity supply to network nomic balance, will also enable any cost likely to arise to be car- managers and steam supply to sugar factories. This would lead to ried over into the price of electricity. contractual penalties. The preventive measures adopted by the Company against this type Risk arising from business locations of risk are to exercise great care in building quality plants and main- a) The Indian Ocean and the Caribbean, where the core of the Group’s taining them properly, and ensuring that the human, material and activity is located, are subject to weather such as cyclones or technical means will guarantee efficient, high-performance opera- tropical storms. Moreover, the Caribbean is in an earthquake zone. tion. The design and building of our plants take account of this and comply b) Possible unfavourable changes to the statutory and with very strict rules and are the subject of strict scrutiny. regulatory framework in which the Company exercises its busi- As regards the risk of cyclones, the resistance of the Group’s plants ness, more especially: on REUNION ISLAND, MAURITIUS and in the ANTILLES was — A possible drop in the price of the electricity supplied to network demonstrated during several cyclones. managers bound by statutory obligation to buy. This threat could The plant at Le Moule on GUADELOUPE, operating since 1998, as is affect the rate of development in wind or solar power by making the Le Galion combustion turbine completed a tend 2006, is future contracts less profitable; designed to resist earthquakes. Earthquakes of varying strength — Possible abolition or reeuction of the tax provisions applied in all have struck Guadeloupe since 1998 and did not affect the Le Moule or part of the geographical areas in which our business is conduc- plant. ted. The only tax provision specific to DOM abolition of which Moreover the subsidiaries concerned are insured against these risks. would have recurrent impact on the consolidated profit of SECHI- b) Although certain political parties in the DOM are fighting for LIENNE-SIDEC would be “third party rebate” which represented independence and although Mauritius is confronted with tough €3 million in the Group’s tax for the 2006 financial year. This pro- economic challenges, the Group has no reason to think that there are vision is currently governed by Art. 217 b of the French tax code any risks of instability likely to have significant effect on its property, which is applicable to the profits of financial years closed up to 31 its profits and its financial situation. December 2017. The abolition of any other fiscal incentives such as VAT-NPR or tax relief schemes would have no significant impact on current contracts. — The possible increase in charges due to the status of staff in the electricity and gas industries. This risk is difficult to assess. Its effects would be partly offset by the fact that the price of electri- city sold to EDF is indexed on, among others, the cost of labour in the mechanical and electrical industries. — Possible cutting of the minimum emission values laid down by statute, governing the environmental performances demanded of
30 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 INTEREST RATE RISKS EXCHANGE RATE RISKS a) The credit lines set up during debt restructuring operations on a) Group operations are mainly carried out in euros, except for: February 17 2006 were used in the amount of €84.917 M at • purchases of coal for subsidiaries, in US$, the sale price to clients December 31 2006 and were the subject of swaps in the amount of taking particular account of exchange rate variations. €73.000 M. • the activities of companies on Mauritius in which SECHILIENNE The part of Séchilienne-Sidec’s debt that would expose it to interest SIDEC has minority shareholdings. These companies draw up rate risks is therefore very small. accounts in Mauritius rupees. The exchange rate risk arises mostly b) In subsidiaries, where funding by borrowing or leasing is not at from: fixed rates, the variation in rents is carried over to clients where the — the impact of exchange variations on the overall value of the contracts so provide. When, under these provisions, the rate goodwill (directly entered in capital variation cannot be carried over, the company hedged by means of a — revaluation of financial debts, these being in some cases accoun- tunnel (purchase cap, sale floor) for CTBR-2, a swap was made of a ted for in euros, variable rate for a fixed rate for CTG-B ; and a swap was made of a — partial indexing of contracts for sale of electricity on the euro. variable rate for a fixed rate to fund the CCG combustion turbine at Le b) The acquisition from GENERAL ELECTRIC of the combustion Galion. turbine which CCG installed at Martinique was made in US$ and the future price of the purchase will be $1,368 K as against € 1,309 K. The Group indebtedness may be broken down as follows: Company does not use any other financial instruments to hedge ( In € thousands) 31/12/2006 31/12/2005 against exchange rate risks. Borrowings and financial debt • Fixed rates 110 202 176 652 At 31 December, these could be analysed as follows: • Variable rates 312 870 234 088 Value in euros of assets in Mauritius Rupees Sub-total 423 072 410 740 ( In € thousands) 31/12/2006 31/12/2005 Cash flow and equivalents restated • Bank 361 173 Assets (securities by equity method) 16 250 13 799 • Placement of lessors’ advances 0 28 144 Liabilities 0 0 • Invested securities 9 769 17 886 Net position before management 16 250 13 799 Sub-total 10 130 46 203 Position off balance sheet 0 0 Current accounts of companies Net position after management 16 250 13 799 consolidated by the equity method 512 405 Net financial indebtedness 413 454 364 942 COUNTERPARTY RISKS Not counting funding of non-recourse projects and pre-financing of new plants, net debt amounted to €74,514 K at 31 December 2006 as Given the quality of the signatures on the contracts, not least in against € 47.018 K at 31 December 2005. the subsidiaries, the counterparty risk arising from trade recei- The sensitivity of the financial assets and liabilities to rate variations vables is not significant. Furthermore, the Group has no specific is as follows: dependency on its suppliers. The financial impact of a 1 % rise in interest rates would be € 2808 thousand. This increase in charges would be carried over to the client (as provided for in the contracts for sale of electricity) in the amount LIQUIDITY RISKS of € 1201 thousand. Furthermore, this increase is covered in the amount of €730 thou- At 31 December 2006, the cash position was as follows : sand by the swaps of variable for fixed rates set up by the company. ( In € thousands) 31/12/2006 31/12/2005 Therefore the total real impact would be € 877 thousand. Other current financial assets 52 139 49 246 Cash flow and equivalent 361 173 Unised credit lines 20 000 7 200 Cash position 72 500 56 619
31WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Insurance policy
Le Moule power plant - Guadeloupe
A- General provisions B- Summary of policies other than building covering Séchilienne-Sidec and group companies The activities of the various entities in the Group are covered by a in 2006 series of insurance policies with highly reputable insurance companies. Damage and loss of earnings cover « Construction » policies taken out for new investments (such as For the year 2006, the Compagnies Thermiques de Bois-Rouge, Le the full risk construction assembly and testing contract taken out by Gol and Le Moule were covered by a damage (so-called all damage Compagnie Thermique du Gol for the CTG-B plant., on January 17 except) and loss of earnings policy taken out with Gan Eurocourtage. 2005, and the full risk Assembly and testing contract by the The following sums were guaranteed for direct damage: Compagnie de Cogénération du Galion for its combustion turbine on Fixtures and real estate 447,386,191 € Martinique, on October 1 2005). Costs and loss 10,000,000 € € « Damage » policies the biggest of which are of the type «every Neighbour/third party claims 15,000,000 € risk except» and «damage and loss of earnings due to listed events». Automatic Guarantee 7,800,000 General and professional third party insurance, environmental risk policies and third-party insurance for directors. For loss of earnings the cover was of : 85,600,000 €. Car insurance and individual accident cover. Under this policy the thermic companies were covered for the capital insured with a €150,000,000 contractual ceiling per accident for damage and accumulated loss of earnings for the following events: fire, explosion, lightning, damage to electrical and electronic
32 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 appliances, plane crashes, car crashes, flooding, hail, weight of covered by a «directors third party» policy with AIG Europe of snow, bomb attacks, smoke and natural disasters. €10.000.000 (per insurance period).
For other events, the following sub-limits (direct damage and loss of Full cover for offices earnings) apply: The Séchilienne-SIDEC offices were covered by a full cover policy Tempête / ouragans / cyclones with GAN Eurocourtage guaranteeing €76.330 in the event of fire or not classified as natural disasters: flood. Guadeloupe 50.000.000 € Reunion Island 110.000.000 € Broken machines 36.000.000 € Other events 55.000.000 €
Excess per accident — Direct damage €800,000 (except storm, hurricane, cyclone): 10% of the damage with a minimum of €800. — Loss of earnings 30 x the daily amount of gross profit with a minimum of 500,000 €. Furthermore, in the case of Compagnie Thermique de Bois-Rouge, because of the number of installations on the site, additional cover of €100.000.000 was taken out with AIG Europe to cover damage and loss of earnings over €150,000,000 (a similar measure will be applied for Compagnie Thermique du Gol, in 2007, due to the commissioning of CTG-B).
Third party cover for operations Third party cover for operations was taken out with AGF Courtage Globale for Séchilienne-SIDEC, CTBR, CTG, CTM and Eoliennes de la Haute Lys. Guaranteed amount third party cover on operations 8.000.000 € (per accident or year of operation) Of which : Non-consecutive tangible and intangible loss 3.050.000 € Accidental harm to the environment 1.525.000 € The amount of excess is €5,000 per accident (except corporal injury) for third party cover of operations and €46,000 per accident for pro- fessional third party cover.
Third party cover for harm to the environment CTBR, CTG, CTM were covered with AGF courtage globale by a special third party policy covering harm to the environment as follows: Third party cover for operations « environmental harm » 6.097.961 € (per accident or year of insurance) Tangible or intangible loss 3.048.980 € Excess was €7 622.
Third party cover for employer’s financial loss SÉCHILIENNE-SIDEC, CTBR, CTG, CTM, EMS, STP, and CTP were covered by an «employer’s financial loss» third party policy in the amount of €2,500,000 (per accident or year of insurance) with excess of €15,000 per accident.
Third party cover for directors The directors of SECHILIENNE-SIDEC and its subsidiaries were Gol B power plant - Reunion Island
33WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Environmentalrapportreport du andPrésident sustainable development Rapport du Président du Conseil d’Administration (article L.225-37 du Code de Commerce)
Sugar cane, the basis for bagasse
SÉCHILIENNE-SIDEC addresses sustainable development issues (defined by the United Nations as "development that meets the needs of the present without compromising the ability of future generations to meet their own needs") through its core business activities: constructing and operating power plants which use large amounts of clean and renewable energy resources as a matter of priority
environmentally-friendly renewable energy sources found locally. BIOENERGY: GREEN ENERGY The electricity and steam generated by burning bagasse available at the end of the sugar refining process make the Group one of the rare The use of bioenergy, which includes biomass energy sources French operators to generate so much energy from biomass. (organic-based fuels), biofuels made from agricultural crops (Ethanol, Diester) and biogas (the methanation of organic waste), Impressive figures meets in particular the increasing need to: The five dual-fuel bagasse-coal plants operated by the Group in 2006 • limit the use of exhaustible fossil fuels and promote the priority use on REUNION ISLAND (two plants in Bois Rouge, one in Le Gol), in of renewable resources, GUADELOUPE (one plant in Le Moule) and in MAURITIUS (one plant • limit the use of fuels which give off carbon and greenhouse gas in Bellevue), generated 2023.5 GWh of electricity from 967.805 emissions, metric tons of bagasse over the year. This enabled the Group to save • limit resource imports with high currency costs. on the consumption of approximately 320,000metric tons of fossil fuels (coal). SÉCHILIENNE-SIDEC Group is recognized internationally for using
34 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Cogeneration: remarkable environmental in the islands of French overseas territories (DOM). efficiency and performance — the aim to reduce the consumption of untreated water, in order Cogeneration is the simultaneous generation of steam and to limit the use of natural resources. electricity, which is twice as energy efficient as separate steam and These principles were applied at the new bagasse-coal plant in electricity generation techniques. Furthermore, a cogeneration Bois-Rouge on Réunion Island, which has been industrially power plant has significantly less carbon dioxide emissions than a operational since the end of 2004. The new technology selected for conventional power plant. the boiler has achieved: This technique, in which SECHILIENNE-SIDEC has become highly — a reduction in sulfur oxide content (SOx) in gas emissions from specialized, enables the Group to reduce plant fuel consumption due 1550 mg /m3 to approximately 710 mg /m3, due to slaked lime to its high level of efficiency, and to take part in the fight against the injected into the furnace, greenhouse effect even outside the sugar refining period, when —a reduction in nitrogen oxide content (NOx) from 550 to plants use coal as an alternative fuel. 300 mg/m3.
Continuity and common goals for sustainable The same constant striving for improvementaccompanied the development project development phase of the fourth bagasse-coal plant (Gol 2) The Group is ever-vigilant to improve the technical and environmental on Réunion Island, operational as of December 2006. This new plant performances of its plants, and to optimize the integration of new is geared towards even greater performance, particularly in the projects into their natural surroundings and local life. following ways: — The improvement of the steam cycle specifications to reduce Constantly striving to improve, the Group has chosen a systematic specific fuel consumption, preventive maintenance policy for equipment the ageing of which — The implementation of a smoke desulfurization mechanism could affect energy efficiency levels over time. Moreover, which will reduce sulfur oxide (SOx) emissions to as little as Séchilienne-Sidec has implemented water management measures 655 mg/m3. which have enabled the Group to make considerable savings on the — The use of technologies which make each solid waste product consumption of this precious resource over the last few years. recoverable. Low-carbon bagasse ash is used both as a liming Bagasse ash resulting from the Group’s plant operations during the material and as a fertilizer. Spreading 50 t/ha of ashes sugar refining period can be used as a natural fertilizer. significantly improves crop yield. Moreover, it is a 100% natural fertilizer. Another combustion by-product is gypsum, which can be In plants which have been operational for a number of years, recovered for building materials. emission levels (gas, solid or liquid emissions) remain much lower — The use of a pulverized coal boiler that emits less carbon than the standards in the French overseas territories (DOM). For monoxide (CO) than other alternative technologies. example: — Combustion technology with low nitrogen oxide emissions. — Dust is trapped by a double system (multicyclone dust collector — The use of low NOx burners. and electrostatic precipitator) and measured gaseous effluent levels reach 10 mg/m3 with bagasse, far below the authorized Furthermore, the building of GOL-B gave the opportunity to improve maximum level of 100 mg/m3, and 30 mg/m3 with coal, under the the ongoing control of all emissions from all plants, old and new, on authorized maximum level of 50 mg/m3. the site, by implementing ongoing analyis of gas and liquid waste. — For sulfur oxide (SOx) emissions, the use of low-sulfur coal keeps levels under the legal limit of 1550 mg/m3. Conserving natural resources and limiting impact on the —Nitrogen oxide (NOx) emissions are below the authorized environment maximum level of 650 mg/m3, due to the combustion techniques SECHILIENNE-SIDEC helps to best meet sustainable development used. objectives by using renewable local fuels, increasingly high- performance bioenergy techniques, reducing emissions and by New projects, the design of which is jointly based on environmental recovering waste. The Group successfully combines economic and efficiency improvement, demonstrate additional progress. progress with the conservation of natural resources and limits impact The plans are always governed by: on the environment and the climate. By complying with these — the aim to lower fuel consumption (maximization of cycle standards, the Group’s power plants are of paramount importance for efficiency, boiler technology best adapted to the necessary the future of the sugar cane industry as a whole and they also capacity and giving the highest possible combustion output.) support the local economy of all the islands on which the Group — the aim to use technology which lowers gas emissions in operates. accordance with the regulations for large combustion plants (GIC) Bioenergy aside, Séchilienne-Sidec favors the use of higher-yield and the increasingly restrictive developments of these regulations technology with the least pollution possible. The combustion
35WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 turbine, which the Group is currently installing on the Le Gallion site The desire for strong, fast development of solar power as all the in Martinique after having won the government contract for its stronger in these overseas départements as it not only presents development, was designed using aviation technology and is much all the advantages of renewable energy (lower imports of more efficient than conventional industrial turbines. Séchilienne- exhaustible fossil fuels, no generation of waste or gas emission), Sidec built this plant near a cane plantation, with an aim to installing but also, it is in these zones for which air conditioning is a large bagasse-fuelled facilities at a later date. factor in the demand for electricity, that maximum sunlight In all Group installations comprising self-cooling towers, the latter coincides with the peak in consumption of electricity. This is a are now strictly monitored for bacterial activity in the wake of recent, favourable factor in meeting peak demand in the best conditions. very stringent legislation on the development of legionella. It is also one of the reasons for which EDF’s compulsory purchase price for electricity produced by solar power is a great incentive in the DOM. WIND AND SOLAR POWER: THE MOST NATURAL NEW ENERGY SOURCE Because its declared vocation is the generation of renewable, clean energy and because its industrial experience in the overseas SECHILIENNE-SIDEC is aware of the environmental issues départements is recognised as its expertise, the Group has decided facing the world today, and has therefore added wind and to be a major player in developing the wished-for solar-powered solar power production to its core business activities. electricity generation. Wind and solar power are completely environmentally-friendly as At end 2006 it acquired a 95.02% interest in the capital of two solar they are totally clean, do not contribute to the greenhouse effect, do power generating companies on Reunion Island. They had begun not produce waste and are indefinitely renewable. They are new building plants with a total capacity of 3 MW, the first of which (1 MW) energy sources which the European Union wishes to develop was commissioned before the end of the financial year. considerably. SÉCHILIENNE-SIDEC undertook marketing actions to set up similar plants in Martinique, Guadeloupe and French Guyana. — As regards wind power in France,the decree dated July 7 2006 on The Group is also preparing projects in southern Europe (especially pluri-annual planning of investments in electricity generation Italy and Spain). indicates the additional capacity that will need to be put into service by December 31 2015 to arrive at the targeted 21% coverage of gross domestic consumption by renewable energy. That capacity is 17,000 MW, 13,000 of which must be inland and 4,000 offshore. This plan is ambitious, given that at end 2005 installed capacity in wind power was 757 MW and at end 2006 it was 1,500 MW. The Haute-Lys wind power plants that the SECHILIENNE SIDEC Group set up in the Nord-Pas de Calais region in the last quarter of 2004, have an installed capacity of 37.5 MW. In 2005, they generated 90 GWh and in 2006, 105 GWh, in other words the equivalent of the annual consumption of 52,500 metric tones of coal or 35,000 tonnes of oil. The Group is building new 32.5 MW wind power plants in the Lorraine and Champagne-Ardenne regions. Furthermore, it is developing projects in varying stages of progress for further wind power investments, always bearing in mind environmentally-friendly solutions with optimal landscape integration.
— As regards solar power, the decree dated July 7 2006 adopts a similar attitude to that for wind power, with targets for end 2015 in line with those In the European Directive dated September 27 2001, transposed by France. Thus, it fixes the solar power capacity to be installed by end 2015 at 500 MW, it being recalled that installed capacity at end 2004 was a mere 9 MW, almost half of which was in the DOM.
36 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 DATA ON THE ENVIRONMENTAL The amount of quotas for CTG does not take account of the CTG-B COMPLIANCE OF SÉCHILIENNE-SIDEC plant commissioned at end 2006 after a trial period. As soon as it BIO-ENERGY PLANTS IN DOM obtained permission to operate this plant, applied for on the basis of the regulations on classified installations for environmental 2005 2006 protection (ICPE) on November 21 2006, the company requested Energy consumption quotas of 60,738 tonnes for 2006 and 489,929 tonnes for 2007. Coal (thousands of tonnes) 625 714 Bagasse (thousands of tonnes) 696 700 Water consumption Raw water (thousands of m3 ) 5 924 6 573 Demineralised water (thousands of m3 ) 234 273 Air pollution – gaseous emissions Dust ( tonnes ) 138 152 CO2 ( thousands of tonnes ) 1 537 1 761 SO2 ( tonnes ) 8 344 8 522 NO2 ( tonnes ) 3 694 4 278 Liquid waste (thousands of m3) 1 342 1 524 Solid waste expressed in raw value (thousands of tonnes of cinders and scories) 118 164
QUOTAS OF GREENHOUSE GAS EMISSIONS
SECHILIENNE-SIDEC’s bioenergy plants operating in the French overseas territories (DOM) are among those which are subject to quotas of carbon dioxide (CO2) emissions for the 2005-2007 period. The Order of the Ministry of the Environment and for Sustainable Development dated February 25th 2005 set the following quotas for the Compagnie Thermique de Bois Rouge (CTBR), the Compagnie Thermique du Gol (CTG) and the Compagnie Thermique du Moule (CTM) respectively.
Operators Annual Allowance for (Electricity secteur) allowance 2005-2007 period (metric tons of CO2) CTBR In accordance with Article 3 of the Order dated August 19th 2004 423 316 1 270 084 In accordance with Article 4 of the Order dated August 19th 2004 403 000 1 209 000 TOTAL CTBR 826 361 2 479 084 CTG In accordance with Article 3 of the Order dated August 19th 2004 409 393 1 228 178 CTM In accordance with Article 3 of the Order dated August 19th 2004 402 428 1 207 284 TOTAL 1 638 182 4 914 546
37WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Highlights of the year 2006
Results and prospects
Compagnie Thermique du Sud - Mauritius
HIGHLIGHTS OF THE YEAR 2006 HIGHLIGHTS OF THE YEAR RESULTS AND PROSPECTS The year 2006 was marked by excellent technical market conditions and the remarkable rate of availability in the Group’s plants, none of which encountered any significant problem. KEY EVENTS Availability rate 2005 2006 • February 2006 Plants owned by fully-consolidated companies — Re-financing of all the Group’s loans in the framework of an overall CTBR-1 92.47 % 93.51 % strategy to restructure existing debt, increase the structural financial CTBR-2 (commissioned in Dec. 2004) 80.42 % 89.15 % resources and secure financing of future investments. Total CTBR 86.89 % 91.31 % CTG-A 94.11 % 95.63 % • May 2006 CTG-B (commissioned end 2006) — Not significant — A single person again cumulated the function of Chairman of the Total CTG 94.11 % 95.63 % Board of Directors and Managing Director. Appointment of Mr. CTM 76.60 % 94.14 % Dominique Fond as Chairman and Managing Director (replacing Mr. Plants owned by companies consolidated by the equity method Michel Bourgarel at the head of the Board of Directors). CTBV 94.28 % 93.49 % CTDS (commissioned in Sept. 2005) N.S. 91.57 % • November 2006 Eoliennes de la Haute-Lys 98.51 % 98.34 % — Disposal of SECHILIENNE-SIDEC shareholdings by ECOFIN LIMITED, hitherto the second largest identified shareholder in the company, in and off the market, leading to its declaration that the minimum threshold had GROUP RESULTS IN 2006 been crossed and that it held 6.13% of the capital and voting rights at • The Group Share of net consolidated profit after the 2006 November 23 2006. financial year amounted to €47.8 M €, it being understood that the — Acquisition of SECHILIENNE-SIDEC shares by PICTET ASSET accounts were drawn up in accordance with IFRS and that eleven MANAGEMENT LIMITED, acting on behalf clients whose portfolio it companies were fully consolidated: CTBR and EMS, CTG and STP, CTM manages in the market, leading it to declare that it had crossed the and CTP, CCG, QUATRE VENTS WIND FARMS, MARNE ET MOSELLE WIND maximum threshold and held 11,22 % of the capital and voting rights at FARMS, SCE -Société de Conversion d’Energie- and PLEXUS SOL. 23 November 2006. This Group share of the €47.8 million was 29.8% more than that (€36.8 M) earned in 2005, also under IFRS, and the following were • December 2006 restated to be perfectly comparable : — A new 58 MW bagasse-coal power plant was commissioned by the — An exchange derivative incorporated into the CTBV electricity sale 64.62% - held subsidiary Compagnie Thermique du Gol on Reunion contract. Island. — The effect of applying the IFRIC-4 standard to the PEAGE DE — Acquisition of 95.02% of the capital in two companies (PLEXUS SOL et ROUSSILLON energy sales contract, recognised as a lease. SCE –SOCIETE DE CONVERSION D’ENERGIE) on Reunion Island, The following main developments were noted over the financial year, the generating solar powered energy. At the same time, SECHILIENNE-SIDEC 2005 accounts, restated as mentioned earlier, being used as a published a press release indicating its determination to develop into comparison. the solar power business. • The income from consolidated ordinary business rose by 12.9 % to €181.1 M , of which : — electricity and steam sales 173.4 M€ — services 7.3 M€ — revenue from rentals 0.4 M€
38 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 This variation includes stable figures for SECHILIENNE-SIDEC SA and — €7.5 M financial investments, including the acquisition of 95.02 % various rises, all high, for the various consolidated companies operating of the companies SCE -Société de Conversion d’Energie- and PLEXUS power plants : SOL. + 23.1 % for CTM. • Net borrowings amounted to €413.4 M at end 2006 as against €364.9 M + 15.4 % for CTG. at end 2005. + 9.3 % for CTBR. Not including funding of non-recourse projects (€317.6 M ) and pre-financing These rises may be explained by a factor common to them all, increased of the new plants (€21.3 M), net debt at end 2006 stood at €74.5 M compared availability, and by factors particular to each : to €47.0 M at end 2005. — - First, the rises are varied, but particularly strong for CTM which • All these data show the extremely positive nature of the 2006 results from June 1 to October 5 2005 had been affected by an alternator for the Group, the main grounds for satisfaction being: problem paralysing one of the two tranches in its plant. — confirmation, in the light of all our plants’ performances, of both the — Second,CTG commissioned the new CTG-B plant in November 2006, older plants’ longevity, and the quality of the newer ones’ design and and CTBR benefited from the full power generation over the entire construction, year that CTBR-2 had only attained at the start of the second half of — confirmation of how appropriate the financing means, and how 2005. effective the tax incentives have been, • Operating profit rose by 34.3 % to €66.5 M. — continuation of a vigorous development policy with more The reason for this increase is mainly : particularly the addition of solar power development to our earlier — - Entering into the accounts the fiscal incentive to CTG for the businesses. building of its new CTG-B unit (€12.7 M ) ; — The excellent technical and economic conditions in which all the consolidated companies’ plants ran on full power. Those PROSPECTS FOR 2007 AND THE FUTURE commissioned or only reaching full power during 2005 were extended • The 2007 financial year should be marked by the following events to the full year. which will make it another milestone in Group development.: • The cost of net financial debt increased by €2.3 M. This variation — full-year operation of the new CTG-B plant (64,62 % Group interest) resulted from two movements in opposite directions : on REUNION ISLAND; — the financial costs arising from financing of CTBR-2, the lease for — operation of the 80%§held Galion combustion turbine on which began in the second quarter of 2005, and of CTG§B which was MARTINIQUE as of the second quarter. The commissioning of this was commissioned in November 2006, rose . Also interest rates rose and originally planned for 2006 but was postponed by reason of local the amount of.SECHILIENNE-SIDEC’s debt increased. problems. — financial charges on the other debts the outstanding capital of which — also as of the second quarter, operation of the new fully-controlled decreased, fell. wind farms in Champagne Ardenne and then Lorraine ; • Other financial income and charges remained stable at €4.1 M. — as of the second half, the large (90 MW) SAVANNAH bagasse-coal • The share of associated companies in net profit rose by €4.6 M to plant (25 % interest) on Mauritius to enter into operation; €6.2 M of which €2.3 M in particular for the contribution of CTDS, — development of new wind farms; €1.8 m for that of CTBV and €0.6 M for that of the Haute-Lys wind farms. — growth of solar power business with commissioning of new plants (2 • The effective tax rate was 13.6 %. This can be explained by the MW under construction on REUNION ISLAND at end 2006), building special tax treatment applicable in the Overseas Départements. begun on REUNION ISLAND, GUADELOUPE and MARTINIQUE) and • The Minority shareholders’ share of profit was €6.4 M as developments in all the DOM and some countries with high sunshine against €3,0 M in 2005 due to the increase in CTG’s profits. The Group rates. has a 64.62 % stake in it. • More distant prospects are: • Net earnings per share amounted to €1.74 compared to €1.34 in — the Group’s capability to meet needs for more thermic electricity 2005 (after the par value of the share was divided by twenty). capacity in DOM, amounting to over 150 MW, • Cash flow before variation in working capital needs was €67.7 M — a significant portfolio of wind farm projects under development or compared to €53.0 M in 2005. study ; the target is to commission 15 MW per year, • Working capital needs increased by €12.4 M mostly due to the — accelerated development in solar power, in the light of EU payment of certain invoices for electricity sales after December 31. acknowledgement of how useful this form of energy is and the • Payments on investments amounted to €88.4 M , of which: possibility of incentives granted for such projects. The goal is to — €80.9 M industrial investments (building of the new CTG-B and commission at least 20 MW per year as of 2008. Galion thermic power plants and wind farms in eastern France).
39WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Financial statements of Séchilienne-Sidec SA
Earnings for SECHILIENNE-SIDEC SA in 2006 amounted to €50.6 M as against €11.8 M in 2005. The main reason for this considerable rise was due to growth of financial revenue.
Sales remained stable at €23.9 M.
Operating profit was €1.7 M as against €2.7 M in 2005. This variation was due more especially to the banking expenses arising from debt restructuring in February 2006.
Financial revenue amounted to €42.5 M as against €5.6 M in 2005. This sharp rise was due to a change in subsidiaries’ distribution policy, which is reflected in the change in participation product : €44.3 M in 2006 compared to €6.2 M in 2005. Not counting dividends, a negative variation of €1.1 M arose from increased interest costs on the debt.
A €6,7 M Tax gain accrued from : — first, a €3.3 M tax saving arising from offsetting of CTBR’s tax credit against SECHILIENNE-SIDEC’s tax deficit, which stood at €10.5 M not including the carry back from 31 December 2004, — second, the €3.4 M carry back carried out for the financial year (€10.4 M )
40 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Proposal to approve the accounts and appropriate profits
Le Galion power plant - La Martinique
In addition to the Group’s consolidated accounts, we ask you to approve In accordance with Art. 243 b of the French Tax Code, we remind you that the annual accounts (balance sheet, statement of income and notes) of the dividends paid for the last three financial years were as follows: the Company as we have presented them, and which show an annual profit of 50,615,725 Euros. ( in Euros ) Amount Bet Tax credit Rebate of dividend per share (3) We also ask you to approve our proposal to appropriate this profit as distribution per (1) (2) follows : Financial year share (1) 2003 6 720 928 4.90 2.45 (1) Origin In Euros 2004 9 601 326 7.00 50 % 1) Retained earnings carried forward 9 470 238 2005 27 432 360 20.00 40 % 2) Profit for the year 50 615 725 TOTAL 60 085 963 (1) Prior to the division of share par value by 20 in July 2006. Appropriation En euros (2) On the basis of a tax rebate of 50 %. 3) Legal reserves 524 (3) Rebate provided for by article 158-3-2° of the French Tax Code, for 4) Dividends 30 325 196 which the distribution is eligible 5) Retained earnings carried forward 29 760 243 TOTAL 60 085 963 Furthermore, you will find the table showing the Company’s results for the past five financial years is appended to this report in conformity with The dividend would thus be €1.10 per share. Art.148 of decree n° 67-236 dated 23 March 1967 amended, on trading This distribution is eligible for the 40% tax rebate provided for by Art. companies. 158-3-2° of the French Tax Code. Given these appropriations and the distribution of 30 325 196 Euros, the Shareholders’ Equity would be 48 401 481 Euros. We recommend that the dividends be payable as of June 13 2007.
41WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Other proposals to the annual general meeting
Construction of the Savannah plant - Mauritius
In addition to approval of the consolidated accounts, the company • with the following aims: accounts, appropriation of profits and determination of the dividend, the — Give impetus to the secondary market or make the share more following are the subject of ordinary resolutions submitted to the liquid. Shareholders’ Meeting: — Acquisition or disposal depending on the markets, and more generally, to be used in market practices approved or which might Approval of the agreements and undertakings provided for by Art. come to be approved by the Market Authorities. L.225-38 of the French Commercial Code. — Cancellation for the purpose of optimising capital and net earnings per share in the Company, where the Extraordinary General Meeting Ratification of an director co-opted on 21 September 2006 to replace so authorises. an director who resigned, and the renewal of two directors arriving at — Shares handed over in exchange or payment in the event of external the end of their terms of office at the end of this AGM; these points are growth operations. detailed under Corporate Governance. • in accordance with the following rules: — Period of validity of the authorisation to be fixed at eighteen months Finally, a proposal to authorise the Board of Directors to acquire the as of the day of the resolution passed by the AGM, Company’s own shares, in conformity with the law, more particularly — Share price to be a maximum €55 per share, it being understood Arts. L. 225-209 and ff of the French Commercial Code . that in the event of an operation on capital, not least by incorporating This authorisation is requested in respect of: reserves and distributing free shares, division or concentration of • an amount of up to 10 % of the number of shares in the shareholders’ shares, this price shall be adjusted accordingly by the Board of equity at any time the purchase programme is implemented, or up to 5% Directors, of this number where the shares are acquired for the purpose of keeping — Maximum amount of funds that the Company shall devote to this them and remitting them subsequently in payment or exchange during a operation to be fixed at €151,625,980 merger, disposal or contribution.
42 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Corporate governance
Building the wind farm at Vaneau-le-Châtel - France
Highlights of the year 2006 in this area were : that he made to the development of the Company over a long period, successively as Chairman and Managing Director, and then Chairman — The departure of Mr Michel BOURGAREL as chairman of the Board of the Board of Directors. of Directors. Mr BOURGAREL did not request renewal of his term of — The Board of Directors meeting immediately after the AGM of May office which expired at the end of the AGM on May 17 2006. 17 2006 decided to return to the custom of having a Chairman of the Both the Board of Directors and the Shareholders’ Meeting expressed Board of Directors who was also the Managing Director, and Mr. their hearty thanks to Mr. Michel BOURGAREL for the contribution Dominique FOND was accordingly appointed to that post.
1- THE BOARD OF DIRECTORS co-opted by the Board of Directors at its meeting of July 12 2005 a) Changes in 2006 until the end of the AGM convened to approve the accounts for the The AGM of May 17 2006 : financial year 2006. — Ratified the appointment as director of FINANCIERE HELIOS — Ratified the appointment as director of Mr. Dominique FOND, co- represented by Mr. Hervé DESCAZEAUX, co-opted by the Board of opted by the Board of Directors at its meeting of July 12 2005 until Directors at its meeting of July 12 2005 until the end of the AGM the end of the AGM convened to approve the accounts for the convened to approve the accounts for the financial year 2008. financial year 2008. — Ratified the appointment as director of Mr. Patrick de GIOVANNI, — Appointed as director, on proposal of the meeting of the Board of co-opted by the Board of Directors at its meeting of July 12 2005 Directors on March 29 2006, Mr. Michel BLEITRACH, as of expiry of until the end of the AGM convened to approve the accounts for the the term of office of Mr. Michel BOURGAREL, until the the end of financial year 2006. the AGM convened to approve the accounts for the financial year — Ratified the appointment as director of Mr. Simon MARC, 2009.
43WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 At its meeting on September 21 2006, the Board of Directors: He is a graduate of ESLSCA Paris and a certified accountant. — Noted the resignation tendered by Mr.Simon MARC, and thanked He started his career as a financial analyst with General Electric him for his participation in the Company’s tasks ; Information Systems, and spent three years at Ford France as head of — Co-opted Monsieur Claude ROSEVEGUE to replace Mr. Simon accounts and IT Director, four years at Lawry’s Food France as MARC, for the duration of the latter’s term of office, that is, until the Financial Director and eight years with Levi Strauss where he became end of the AGM convened to approve the accounts for the financial Financial Director for Europe based in Brussels. year 2006. This appointment shall be ratified by the next AGM. He was then General Controller of management at FNAC group, before joining Apax Partners of which he has been Associate Director since b) Composition of the Board of Directors at 31 1987. December 2006 The list of mandates and functions he occupies in all companies is Mr Dominique FOND, Chairman and Managing Director (mandate as under point 3 herebelow, “list of mandates and functions in all Director until the end of the AGM convened to approve the accounts companies by company representatives”. for the financial year 2008). Mr Claude ROSEVEGUE holds 20 SECHILIENNE-SIDEC shares (loaned Mr Michel BLEITRACH, administrator (mandate until the end of the by FINANCIERE HELIOS). AGM convened in 2010 to approve the accounts for the financial year Mr Patrick de GIOVANNI was born on 4 March 1945 in Paris and 2009). resides at 11 sente Bois des Dames - 92420 VAUCRESSON. Financière HELIOS represented by Mr Hervé DESCAZEAUX, director A graduate of Ecole Polytechnique, he began his career at Compagnie (mandate until the end of the AGM convened in 2009 to approve the Française d’Organisation –COFOR- and then occupied various posts accounts for the financial year 2008). at NEIMAN (automobile parts) and in the industrial studies division of Mr Patrick DE GIOVANNI, administrator (mandate until the end of the bank SOCIETE GENERALE before setting up in business and then the AGM convened in 2007 to approve the accounts for the financial joining APAX PARTNERS. He has been an Associate Director of the year 2006). latter since 1983. He is a former chairman of the French association of Mr Xavier LENCOU-BAREME, administrator (mandate until the end capital investors, AFIC. of the AGM convened in 2009 to approve the accounts for the financial He has been an Director of SECHILIENNE-SIDEC since 12 July 2005, year 2008). and is a member of the remunerations committee. Mr Guy RICO, director (mandate until the end of the AGM convened The list of mandates and functions he occupies in all companies is in 2009 to approve the accounts for the financial year 2008). under point 3 herebelow, “list of mandates and functions in all Mr Claude ROSEVEGUE, co-opted director (mandate until the end of companies by proxies”. the AGM convened in 2007 to approve the accounts for the financial Mr Patrick de GIOVANNI holds 400 SECHILIENNE-SIDEC shares year 2006). (loaned by FINANCIERE HELIOS). Mr Jean STERN, director (mandate until the end of the AGM convened in 2009 to approve the accounts for the financial year 2008). 2- GENERAL MANAGEMENT c) c) The decisions concerning directors’ mandates submitted to the AGM of May 2007. a) The change in the operation of the General It is proposed to the AGM : Management in May 2006 — to ratify the appointment as director of the Company Mr Claude At its meeting of May 17 2006 the Board of Directors noted that the ROSEVEGUE, co-opted by the Board of Directors at its meeting of situation arising in October 2005 when the function of Managing September 21 2006, to replace Mr. Simon MARC for the remainder of Director was held by a person different from the Chairman had ceased the latter’s mandate, that is until the end of the AGM convened in May with the effective expiry of the Chairman’s term of office as director at 2007 to approve the accounts for the financial year 2006. the end of the AGM convened immediately prior to the meeting. It — to renew the mandates of directors expiring at the end of this AGM, therefore decided that the Managing Director of the Company should that is, those of Mr. Patrick de GIOVANNI and Mr. Claude ROSEVEGUE, also be Chairman of the Board of Directors and not a person other who so request. The said mandates shall terminate at the end of the than the Chairman. AGM convened in 2011 to approve the accounts for the financial year 2010. b) Following this decision, Mr. Dominique FOND was appointed Chairman and Managing Director In conformity with the provisions of Article 135 of decree n° 67-236 as of May 17 2006. dated 23 March 1967 amended on companies, these proposals are At the aforementioned meeting on May 17 2006 the Board of Directors, accompanied by the following information : following its decision as to the exercise of general management, Mr Claude ROSEVEGUE was born on 26 May 1947 in Paris and appointed Mr. Dominique FOND, Managing Director of the Company resides at n° 19 allée Garenne – 91370 VERRIERES LE BUISSON. since October 2005, Chairman and Managing Director of the Company.
44 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 3- LIST OF MANDATES AND FUNCTIONS Mandates of Mr Patrick de GIOVANNI EXERCISED IN ALL COMPANIES BY OUR - Director of SECHILIENNE-SIDEC, DIRECTORS IN 2006. - Chairman and Managing Director of HORIS SA, (article L.225-102-1 of the French Commercial Code) - Chairman of the Supervisory Board of AMBOISE INVESTISSEMENT, - Managing Director and Director of FINANCIERE HELIOS, Mandates of Mr Dominique FOND - Director of APAX PARTNERS & CIE GERANCE, - Managing Director of SECHILIENNE-SIDEC since 20 October 2005 - Permanent representatie of APAX PARTNERS SA on the SECHE and Chairman and Managing Director of the Company since ENVIRONNEMENT Board of Directors, 17 May 2006., - Permanent Representative of APTAX PARTNERS SA on the SOCIETE - Chairman and Managing Director of Compagnie Thermique de Bois EUROPEENNE BOISSIERE Board of Directors, Rouge, CTBR, - Director of SOCIETE EUROPEENNE KLEBER, - Chairman of Exploitation Maintenance Service, EMS, - Permanent representative of HORIS on the Boards of - Director of Compagnie Thermique du Gol, CTG (Deputy Managing . HMI GRANDE CUISINE SA, Director), . FRIMAVAL SA, - Director of Sud Thermique Production, STP (Deputy Managing - Legal representative of HORIS in HORIS SERVICES SNC, Director), - Manager of SC PLAMET. - Director of Caraïbes Thermique Production, CTP (Deputy Managing Director), Mandates of MrGuy RICO - Director of Recyclage Cendres et Mâchefers Industries, RCMI, - Director of SECHILIENNE-SIDEC, - Director of Compagnie Industrielle des Cendres et Mâchefers, - Chairman of FINANCIERES TUILERIES DEVELOPPEMENT, CICM, - Managing Director of PAUL CAPITAL France, - Director of Compagnie Thermique de Bellevue (Mauritius), - Permanent representative of FTD SAS on the TECTIS Board of - Director of Compagnie Thermique du Sud (Mauritius), Directors, - Director of Compagnie Thermique de Savannah (Mauritius). - Permanent representative of FINANCIERES TUILERIES PARTENAIRES on the Supervisory Board of CLESMECA, Mandates of Mr Xavier LENCOU-BAREME - Director of NEVILLE, - Director of SECHILIENNE-SIDEC, - Director of SOCAV, - Chairman and Managing Director of Compagnie Thermique du Gol, - Permanent representative of FTP 5 & 6 on the Supervisory Board. CTG, - Chairman and Managing Director of Société Sud Thermique Mandates of Mr Claude ROSEVEGUE Production, STP, - Director of SECHILIENNE-SIDEC, - Director of Compagnie Thermique de Bois Rouge, CTBR, - Director of MG PARTICIPATIONS SA, - Director of Compagnie Thermique du Moule, CTM, - Director of HISTOIRE D’OR Participations, - Director of Société Recyclage Cendres et Mâchefers Industries, - Director of CAMELIA Participations SAS, RCMI - Member of the Supervisory Board of ACG Holdings SAS, - Member of the Executive Committee of FINANCIERE SEASON SAS, Mandates of Mr Michel BLEITRACH - Member of the Executive Committee of FINTEL SAS, - Chairman and Managing Director of Keolis, - Permanent representative of MG PARTICIPATIONS SA on the - Chairman of Keolis-Lyon, ARTACREA board, - Chairman of Cariane. - Permanent representative of APAX PARTNERS SA on the COGNITIS board, Mandates of FINANCIÈRE HELIOS and Mr. Hervé - Director of INTERNATIONAL ELECTRONICS ENGINEERING SA DESCAZEAUX (Luxembourg), - FINANCIERE HELIOS is only an director of SECHILIENNE-SIDEC, - Director of CAPTOR SA (Luxembourg), - Mr Hervé DESCAZEAUX is : - Permanent representative of APAX PARTNERS SA on the NWL - Permanen representative of FINANCIERE HELIOS on the Investissements SA (Luxembourg) board, SECHILIENNE-SIDEC Board of Directors, - Director of ODYFINANCE SA (Luxembourg), - Chairman of FINANCIERE HELIOS, - Manager of NWB Investissements SPRL (Luxembourg). - Director of GROUPE OUTREMER TELECOM SA, - Director of AYEUR SAS, - Member of the Executive Committee of FINTEL SAS.
45WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Mandates of MrJean STERN — the significance of the factors introduced to ensure pluri-annual - Director of SECHILIENNE-SIDEC, progress and development. - Chairman of SOGEPROM, - Chairman of COPRIM, Mr Dominique FOND benefits from an additional complementary - Member of the CMA-CGM Supervisory Board, pension with defined provisions, approved by the Board of Directors - Director of services and transport. meeting on December 20 2004, under which a charge concerning him was entered into the accounts in the amount of €305,480. This provision was for executives entering the Company before 1983, 4- REMUNERATION OF COMPANY present in the Company and reaching the age of at least 60 upon DIRECTORS retirement. Mr. Dominique FOND is in this category. The (Article 225-102-1 of the French Commercial Code,) corresponding pension rights will be equal to, respectively, 60% of the average last three years of remuneration (including bonuses) for In accordance with the provisions of article 225-102-1 of the French the proportion of salary lower than three times the annual ceiling of Commercial Code, the following table lists the total remuneration and the French Social Security; 55% of the proportion of the gross salary any advantages of any kind paid to each company director during the at the end of his career comprised between three and six annual financial year, both by the Company and its subsidiaries in the sense ceilings of the Social Security; and 50% of the average last three of Art. L 233-16 of the French Commercial Code. years of remuneration (including bonuses) for the proportion of salary comprised between six and twelve times the ceiling of the Social Mr Michel BOURGAREL, Chairman of the Board of Directors up Security, once pensions from all the compulsory schemes and other to May 17 2006 received a contractual gross annual sum from SECHI- supplementary schemes have been deducted. LIENNE-SIDEC in the amount of 28.584 Euros. ( In Euros ) 2006 For information 2005 ( In Euros ) 2006 For information 2005 Mr FOND Mr BOURGAREL Fixed gross remuneration 299 171 (1) 233 265 (2) Fixed gross remuneration 28 584 68 602 Variable gross remuneration 180 000 150 000 Variable gross remuneration — — Perquisites 3 539 Perquisites 2 951 TOTAL REMUNERATION 482 710 383 265 TOTAL REMUNERATION 28 584 71 553 Charge entered into accounts for additional supplementary Mr Dominique FOND, Managing Director up to 17 May 2006, pension 305 480 329 233 Chairman and Managing Director since that date and holder of a work (1) of which carried over from 2005 : 9171 contract, received an annual gross remuneration paid by (2) payment of 9171 €lower than the amount finally fixed by the Board SECHILIENNE-SIDEC amounting to 479.171 Euros (of which 9171 of Directors meeting on December 13 2005 . carried forward from 2005 on the fixed amount for an director) and 3.539 Euros in perquisites. This remuneration, based on the Board of Mr Dominique FOND is entitled to receive indemnification Directors’ decisions of 26 March 2004, 30 March 2005, 13 December should the Board of Directors dismiss him or fail to renew his 2005 and 29 March 2006, is broken down as follows : mandate, except in the event of a serious fault or misdemeanour. This — fixed amount of 299.171 Euros of which 158.171 Euros for the indemnification would be equal to 24 months of gross remuneration mandate as director (of which 9171 carried forward from 2005) for the period prior to April 1 2002 and for the period subsequent to and 141.000 Euros for the salaries of Finance, Administration and that date, one and a half months of gross remuneration per year Development Director . would be added to the twenty-four months in respect of the mandates — variable amount of 180.000 Euros relating to 2005 paid in 2006 since April 1 2002. The total amount of the indemnification shall not for the mandate as director and the salaries of Finance, Director exceed a maximum amount of 32 months of gross remuneration. and Development Director. These provisions were detailed in the report of the directors for 2005, The variable amount was allocated at the meeting of the Board of approved by the AGM held on May 17 2006, and the meeting of the Directors held on March 29 2006 on the basis of the report from Board of Directors at that date confirmed its applicability after the the Remunerations Committee, in light of the excellent results of appointment of Mr. Dominique FOND as Chairman and Managing 2005, the accounts for which were closed by that meeting, more Director of the Company. especially: — the strong increase in the consolidated income not including variations due to the application of IFRS and not including exceptional gains,
46 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Mr Dominique FOND is further entitled to receive 5- TRANSACTIONS IN COMPANY SHARES indemnification in application of the provisions governing breach of BY THE DIRECTORS his work contract as Director for Finance, Administration and (article L.621-18-2 of the Monetary and Financial Code and Development, except in the event of a serious fault or misdemeanour. article L.222-15 of the general regulations of the French market These provide for nine months’ notice of dismissal and payment of authority (AMF) indemnification of 24 months of gross salary for the period prior to April 1 2002 and for the period subsequent to that date, one and a half The following transactions were declared in 2006 in accordance with months of gross remuneration per year would be added to the twenty- article L.621-18-2 of the Monetary and Financial Code and article four months in respect of the mandates since April 1 2002. The total L.222-15 of the general regulations of the French market authority amount of the indemnification shall not exceed a maximum amount of (AMF) : 32 months of gross remuneration. The contract further provides that at departure or retirement, an • by Mr. Michel BOURGAREL, Chairman of the Board of Directors, additional indemnification equal to 12 months of gross salary is to be who declared : Donation of 180 shares on April 28 2006, at a unit price paid. of , 630 Euros (prior to the division of the share par value by twenty These provisions were detailed in the report of the directors for 2005, decided by the AGM convened on May 17 2006), approved by the AGM held on May 17 2006, and the meeting of the Board of Directors at that date confirmed its applicability after the • by Mr. Michel BLEITRACH, Administrator at the time of the appointment of Mr. Dominique FOND as Chairman and Managing declaration: Purchase of 5 shares on July, 11 2006 at a unit price of Director of the Company. 28.19 Euros and purchase of 15 shares on 18 July 2006 at a unit price of 27.10 Euros (subsequent to the division of the share par value by Mr Dominique FOND received 3500 stock options for the 2002 twenty decided by the AGM convened on May 17 2006), financial year, 6000 for 2003 and 1500 for 2005. The division by twenty of the SECHILIENNE-SIDEC share decided by the AGM of 17 • by Mr. Dominique FOND, Chairman and Managing Director at the May 2006 turned these figures into respectively 70000 options (which time of the declaration : Subscription of 70000 shares (exercise of were always exercised), 120000 options and 30000 options. stock options granted by the Board of Directors on September 2 Mr Dominique FOND received no stock option in 2006. 2002) on December 18 2006, at a unit price of 4.45 Euros (subsequent to the division of the share par value by twenty decided by the AGM Mr Xavier LENCOU-BAREME, Director, on a salary from convened on May 17 2006), SECHILIENNE-SIDEC, received from SECHILIENNE-SIDEC a gross annual remuneration of 103.958 Euros. ( In Euros ) 2006 For information 2005 Mr LENCOU-BAREME Fixed gross remuneration 103 958 99 960 Variable gross remuneration — — Perquisites — — TOTAL REMUNERATION 103 958 99 960
Mr Xavier LENCOU-BAREME received 500 stock options for 2005 that will be exercisable in 2009. The division by twenty of the SECHILIENNE-SIDEC share decided by the AGM of May 17 2006 turned this into 10000 options. Mr. Xavier LENCOU-BAREME received no stock options in 2006.
Mr Jean STERN, Director, received 9.000 Euros in directors’ fees for the year 2005 during the financial year.
Mr Guy RICO, Director, received 1 500. Euros in directors’ fees for the year 2005 during the financial year.
Mr Francesco MUNOZ, Director until 21 September 2005, received, 1 750. Euros in directors’ fees for the year 2005 during the financial year
47WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 6- COMMITTEES SET UP BY THE BOARD Taking account of this operation, they become : OF DIRECTORS Number of options granted These committees, which are the subject of paragraphs in the report on September 2 2002 136,000 at a unit price of 4.45 € of the Chairman of the Board of Directors and Managing Director on Number of options granted the work of the Board and the provisions for internal control of the on December 11 2003 = 246,000 at a unit price of 4.75€ Company, comprise the following: Total number of options granted = 382,000 • for the audit and accounts committee, Mr. Jean STERN (chairman- Total number of undistributed options = 18,000 and FINANCIERE HELIOS represented by Mr. Hervé DESCAZEAUX, • for the remunerations committee, Mr. Dominique FOND, Mr. Patrick • The Extraordinary General Meeting held on May 27 2005 then de GIOVANNI and FINANCIERE HELIOS represented by Mr. Hervé authorised the Board of Directors to grant certain employees and DESCAZEAUX. Mr Dominique FOND does not sit when his own Directors of the Company and associated companies stock options to remuneration is discussed. be issued under a capital increase for a maximum amount of €6 million including premiums and a maximum total of 20,000 shares. These options may be exercised up to seven years following their 7- INFORMATION ON THE PROVISIONS granting and not before a minimum of four years. FOR PARTICIPATION AND INCENTIVE IN The Board made use of this second authorisation on December 13 THE GROUP, AND ON THE STOCK OPTION 2005. It granted 7,500 stock options in the Company to fourteen PLANS employees and Directors at a unit price of 418 Euros. This price was equal to the arithmetical average of the first listed price of the share a) Employee savings plans in the Group depend on at the start of the twenty market days prior to the day the options historical data and the situation of the individual entities within the were granted, rounded to the lower euro). Group. The Board thus granted 7,500 options out of the authorised 20,000, Some agreements on incentives and/or employee participation have 12,500 options not being distributed. The figures thus described were been signed in certain companies. prior to the division of the share par value by twenty by the AGM on 0.54 % of SECHILIENNE-SIDEC capital is held by employees in the May 17 2006. framework of a corporate savings plan. Taking account of this operation, they become
b) Stock option plans Number of options granted • The Extraordinary General Meeting held on December 28 2001 by the AGM of May 27 2005 = 400,000 authorised the Board of Directors to grant certain members of its Number of options granted payroll and the Directorate of the Company and certain subsidiaries on December 13 2005 = 150,000 stock options up to a maximum amount of 1,500,000 euros and Total number of undistributed options = 250,000 bearing upon a maximum total number of 20,000 shares. These options may be exercised up to seven years following their granting • The following table, in which the number of shares takes account of and not before a minimum of four years. the division of the SECHILIENNE-SIDEC share par value by twenty decided by the AGM of May 17 2006, indicates the beneficiaries of the The Board of Directors made use of this first authorisation on stock options, distinguishing the directors from the other September 2 2002 and December 11 2003. These two decisions beneficiaries, and detailing the options exercised or not exercised at granted successively 6,800 stock options in the Company to eleven December 31 2006. employees and Directors at a unit price of 89 Euros, and then 12,300 options to twelve members of the staff and Directorate at a unit price of 95 Euros (on each occasion, this price was equal to the arithmetical average of the first listed price of the share at the start of the twenty market days prior to the day the options were granted, rounded to the lower euro).
The Board thus granted 19,100 options out of the authorised 20,000, 900 options not being distributed. The figures thus described were prior to the division of the share par value by twenty by the AGM on May 17 2006.
48 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Stock options granted 8- INFORMATION ON THE GROUP’S by the Board meetings of AUDITORS 2 sept 2002 11 dec 2003 13 dec 2005 (Article 221-1-2 of the general regulations of the French Market Directors benefiting authorities (AMF) Dominique FOND 70 000 120 000 30 000 Xavier LENCOU-BAREME — — 10 000 Titular auditors Sub Total 1 70 000 120 000 40 000 Other beneficiaries • ERNST & YOUNG AUDIT represented by Madame Emmanuelle Louis DECROP 20 000 30 000 10 000 MOSSE Christian BLANCHARD 14 000 16 000 10 000 41, rue Ybry – 92576 NEUILLY-SUR-SEINE Cedex Jean-Pierre LAGARDE 4 000 16 000 30 000 Auditor the mandate of whom was renewed by the AGM of May Jérôme JAEN 4 000 14 000 10 000 27 2004, for a period of six years expiring at the end of the AGM Jean-Luc COUSIN 4 000 10 000 4 000 convened in 2010 to approve the accounts for the 2009 financial year. Nicolas de FONTENAY 4 000 10 000 10 000 Pascal LANGERON 4 000 10 000 10 000 • MAZARS & GUERARD represented by Messrs Frédéric ALLILAIRE and Jean-Luc CHARLES 4 000 5 000 10 000 Philippe STROHM Claude DECAMP — 5 000 4 000 39, rue de Wattignies – 75012 PARIS Eric FASTREZ 4 000 5 000 4 000 Auditor the mandate of whom was renewed by the AGM of May Frédéric MOYNE 4 000 5 000 4 000 27 2004, for a period of six years expiring at the end of the AGM Joël THEOPHIN — — 4 000 convened in 2010 to approve the accounts for the 2009 financial year. Sub Total 2 66 000 126 000 110 000 TOTAL 136 000 246 000 150 000 Unit price in € 4.45 4.75 20.9 Deputy auditors Options Options all exercised not yet exercised • Valérie QUINT at 31/12/2006 at 31/12/2006 Of ERNST & YOUNG AUDIT Auditor the mandate of whom was renewed by the AGM of May 27 2004, for a period of six years expiring at the end of the AGM convened in 2010 to approve the accounts for the 2009 financial year.
• Patrick de CAMBOURG Domicilié chez MAZARS & GUERARD Auditor the mandate of whom was renewed by the AGM of May 27 2004, for a period of six years expiring at the end of the AGM convened in 2010 to approve the accounts for the 2009 financial year.
Building the wind farm at Vaneau-le-Châtel - France
49WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 9- INDICATIONS ON THE INFORMATION • Quarterly information
PUBLISHED BY THE GROUP on 3rd quarter 2007 put online ...... 13 novembre • Aggregate sales at September 30 2007
a) Information (Publication BALO) ...... 15 novembre In conformity with statutory and regulatory requirements, the Group publishes its quarterly turnover and its half-yearly and annual results c) Reminder of the information published over the in the legal time frame. twelve months prior to this report
Its annual report, as well as all the regulatory information, are • Information on corporate governance and internal control : available on its websit www.sechilienne-sidec.com — Press release following the AGM and meeting of the Board of Directors on May 17 2006, not least mentioning that the mandate In order to apply the AMF’s requirements in respect of transposition of of Chairman Mr. BOURGAREL had expired and that henceforth the the « Transparency » EU Directive, the option chosen to ensure full same person would exercise the function of Managing Director and and effective disclosure of the regulation information to the largest Chairman, in the person of Mr. FOND (on issuer’s site) public possible in the EU by methods ensuring security of that — Chairman’s report on the conditions of work on the Board of distribution is to use the professional publisher « Company NEWS ». Directors and provisions for internal control in 2005, and Auditors’ report on this report (on AMF website TR06-0515 dated 31 May The accounts of registered shares in SECHILIENNE-SIDEC are kept, 2006). and notifications convening shareholders to the annual meetings are carried out on a contractual basis by the company ARLIS. • Information on AGMs — Letters convening shareholders plus enclosed documents on At least once a year, the Group organises a meeting at the Société April 21 2006 (issuer’s website Française des Analystes Financiers -SFAF-. — Press release published after the AGMs and Board meeting of May 17 2006 (on issuer’s website) b) Schedule of publications in 2007 — Communication of the number of votes following the AGM of May The schedule of publications in 2007 is as follows: 17 2006, published in the BALO dated May 29 2006 (bulletin n° 64).
• 2006 annual sales (BALO publications) ...... 15 February — Publication of the minutes of the AGM dated 17 May 2006. — Notification convening shareholders to the AGMs on 10 May • Annual earnings 2006 2007 published in the BALO dated 2 April 2007 (bulletin n° 40). — Press release following the Board meeting closing
the des accounts for 2006 ...... 27 March • Accounting and financial information — Provisional 2006 accounts and draft — Press release published following the Board meeting of March 29
appropriation of profit (BALO Publication) ...... 30 April 2006 on the results of the 2005 financial year (on issuer’s website — Press release following AGM and AMF website).
and Board meeting of May 10 2007 ...... 11 May — Aggregate consolidated sales at 3 March 2006 published in the
— 2006 annual report put on line ...... April BALO dated 10 May 2006 (Bulletin n° 56). — Finalised 2006 annual report and decision — Press release published following the AGMs of May 17 2006 and to appropriate profits approved by the Board meeting following it, commenting the results of the 2005 AGM on May 10 2007 financial year, the decision to appropriate profits and Group
(BALO Publication)...... 25 June prospects (on issuer’s website).
• First quarter sales 2007 (press release) ...... 9 May — 2005 annual report approved by the AGMs on May 17 2006 (on • First quarter sales 2007 issuer’s website).
(BALO Publication) ...... 15 May — Documentation presented at a meeting held on May 18 2006 at • Half-yearly result 2007: the Société Française des analystes financiers SFAF (on issuer’s — Press release at the end of the Board website)
meeting to close the half-yearly accounts ...... 31 August — 2006 Provisional accounts for 2005 financial year published in — Ist half year report 2007 and half-yearly the BALO dated June 2 2006 (Bulletin n° 66) and final accounts
accounts put on line...... 31 August published in the BALO dated June 19 2006 (Bulletin n° 73). — Ist half year report 2007 and — Aggregate consolidated sales at 30 June 2006 published in the
half-yearly accounts (Publication BALO) ...... 31 October BALO dated 11 August 2006 (Bulletin n° 96).
50 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 — Press release at the end of the Board meeting of September 21 — Declaration on 29/12/2006, on AMF website dated 3 January 2006, on the results of the first half of 2006 (issuer’s website). 2007. — Report on the first half year 2006 and half-yearly accounts published in the BALO dated 13 October 2006 (Bulletin n° 123). • Information on exceeding thresholds — Press release on the aggregate consolidated sales at September — Document on AMF website 206 C 2122 dated 22 November 2006: 30 2006 (on issuer’s and AMF websites) Declaration that the threshold had been crossed downwards by — Aggregate consolidated sales at 30 November 2006 published in Ecofin Limited. the BALO dated 30 November 2006 (Bulletin n° 136). — Document on AMF website 206 C 2139 dated 24 November 2006 — Press release on annual aggregate consolidated sales 2006 (on : Declaration that the threshold had been crossed downwards by issuer’s and AMF websites) Ecofin Limited. — Annual consolidated sales 2006 published in the BALO dated — Document AMF website 206 C 2147 dated 27 November 2006 : February 9 2007 (Bulletin n° 18). Declaration that the threshold had been crossed upwards by — Press release published following the Board meeting of March 26 PICTET ASSET MANAGEMENT LIMITED acting on behalf of clients 2007, on the results of the 2006 financial year (on issuer’s and AMF whose portfolios it manages. websites). — Documentation presented at a meeting held on March 29 2007 • Other information with the Société des analystes financiers SFAF (on issuer’s — Press release dated 30 June 2006 repeating the press release on website) Euronext – Paris on the date (3 July 2006) and implementation of the decision to divide the par value of the share by twenty (on • Information on share transactions issuer’s website and Euronext site) — Declaration by directors under Arts. 222-14 and 222-15 of the — Press release on the Board of Directors’ decision at its meeting general regulations of the French market authority (on AMF of November 17 2006 to authorise the acquisition of 95.2% of the website dated May 4 2006) capital in two companies specialised in installation and operation — Declaration by directors under Arts. 222-14 and 222-15 of the of solar power plants on Reunion Island, and to engage the Group general regulations of the French market authority (on AMF significantly in this type of activity. website dated July 20 2006 (press releases) and then March 5 — Press release dated February 28 2007 on the absence of damage 2007 (declarations)) to Group installations on REUNION ISLAND after the passage of — Individual declaration concerning transactions of persons the GAMEDE cyclone in this part of the Indian Ocean. mentioned in Art.L.621-18-2 of the Monetary and Financial Code, on AMF website dated 22 December 2006 (206-D 4640). — Individual declaration concerning transactions of persons mentioned in Art.L.621-18-2 of the Monetary and Financial Code, on AMF website dated 9 February 2007 (206-D 4640).(207D 0773, 0774, 0775, 0776, 0777, 0778, 0779). — Individual declaration concerning transactions of persons mentioned in Art.L.621-18-2 of the Monetary and Financial Code, on AMF website dated 12 February 2007 (207D 0819 and 0820). — Individual declaration concerning transactions of persons mentioned in Art.L.621-18-2 of the Monetary and Financial Code, on AMF website dated 14 February 2007 (207D, 0892 and 0893). — Individual declaration concerning transactions of persons mentioned in Art.L.621-18-2 of the Monetary and Financial Code, on AMF website dated 26 February 2007 (207D 1211, 1212, 1213 and 1214).
• Information on the total number of voting rights and shares in the capital of the Company (Art. 222-12-5 of the AMF general regulations): — Declaration on 31/10/2006, on AMF website dated 2 November 2006. — Declaration on 30/11/2006, on AMF website dated 4 December 2006 Building the wind farm at Vanault-le-Châtel - France
51WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Extraordinary general meeting
Le Gol power plant - Reunion Island
The subjects of the various resolutions to be submitted to economy and by decree n° 2006 – 1566 dated 11 December 2006 the Shareholders’ General Meeting are as follows : amending decree n° 67-236 dated 23 March 1967 on trading companies) apply as of right. Amendment of article 7 of the Memorandum and Articles It nevertheless appears appropriate to place the Memorandum and of Association setting forth the amount of shareholders’ Articles of Association in compliance with these rules and also to take capital and the number of shares the opportunity to re-classify provisions the substance of which has The proposed amendment is to take account of the increased number not changed into the various articles, to achieve homogeneity. of Company shares in the last term of 2006 due to the exercise of The resolution the AGM is asked to adopt concerns Article 13 of the stock options by the beneficiaries thereof who had received them by Memorandum and Articles of Association, and chapter V «General decision of the Board of Directors on September 2 2002. This increase Meetings», more precisely articles 31, 32, 36, 37 and 39. concerned 136,000 shares. The resolution the Extraordinary General Meeting is asked to adopt is Amendment of Art. 19 of the Memorandum and Articles to indicate in the Memorandum and Articles of Association that the of Association on composition of the Board of Directors and shareholders’ capital is fixed at €1,061,381.86, divided into nomination of Directors. 27,568,360 shares of the same category. The present wording of Art. 19 contains provisions of purely circumstantial nature, not least those on directors appointed Harmonisation of the Memorandum and Articles of subsequent to June 16 1999 and still in function at that date, which is Association (articles 13, 31, 32, 36, 37, 39) with statutory and the case of none of the directors, and provisions concerning their regulatory changes not least on declarations where shareholding renewal by turns. thresholds have been exceeded ; the quorum for general meetings, A new article not containing these provisions is proposed. the convening of shareholders to general meetings, and the deadlines for requests to include draft resolutions in the agenda. Authorisation of the Board of Directors to cancel shares That being said, the new statutory and regulatory requirements purchased by the Company, by reducing capital. (introduced especially by the law on trust and modernisation of the The Extraordinary General Meeting is asked to authorise the Board of
52 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Directors to cancel all or part of the shares acquired in the context of compliance with the statutory provisions, not least on the periods the authorisation for the Company to purchase its own shares that during which options may not be granted.. This price shall be equal was asked for by the Ordinary General Meeting, and reduce the to the arithmetical average of the first price listings at opening of capital accordingly. the twenty trading days prior to the day the stock options are This authorisation to cancel is requested for up to 10% of the granted, rounded down to the nearest euro. shareholders’ equity for a period of 24 months as of the day it is — That the new shares that the beneficiaries might take up shall be granted. issued as part of a capital increase, for a maximum amount of 2,750,000 Euros, the total number of shares not exceeding 50,000 Creation of a stock option plan for certain members of subject to statutory changes. staff and/or directors of the Company and certain — That the deadline for exercise of the options shall be seven years subsidiaries thereof. as of their granting. The Extraordinary General Meeting is asked to authorise the Board of You are also asked to note that your authorisation shall imply that the Directors to grant stock options to certain members of the staff, shareholders expressly waive their pre-emptive rights in favour of the management and directors of SECHILIENNE-SIDEC or some of its beneficiaries of the said stock options. subsidiaries associated with it in the meaning of these provisions, pursuant to articles L.225-177 and ff of the French Commercial Code. Power of attorney The purpose of this proposal is to increase the motivation of the The purpose of this resolution is to enable the formalities to be beneficiaries and encourage them to stay in the Company. implemented and publications to be realised in compliance with the statutory and regulatory provisions. For the implementation of these provisions, you are asked to decide particularly: —That the deadline for the Board of Directors to use this authorisation be set at 38 months, — That the price of the share to the beneficiaries be determined on the day the option is granted by the Board of Directors in
Bellevue plant - Mauritius
53WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Report of the chairman of the board of directors (article L.225-37 of the French Commercial Code)
Bellevue plant - Mauritius
Ladies and Gentlemen, decided to appoint Mr. Dominique FOND (Managing Director since October 2005 as Chairman, thus appointing him Chairman and In conformity with article L225-37 of the French Commercial code, you Managing Director of the Company. will find an account of the conditions for preparing meetings and organising the work of the Board of Directors, together with Composition of the Board of Directors provisions for internal control in the Company and the Group. The Board of Directors is composed of eight members appointed by the AGM for four years. I - CONDITIONS FOR PREPARING The members of the Board of Directors are chosen for their skills, their MEETINGS AND ORGANISING THE WORK experience and their knowledge of the company businesses, and their OF THE BOARD OF DIRECTORS integrity and independence of spirit. They represent and take account of the interests of all the From the start of the financial year until the end of the AGM on May 17 shareholders. the functions of Chairman and the Board and Managing Director were Of the eight directors on the Board in 2006, three belonged to Apax separate, as decided by the Board at its meeting of October 20 2005 Partners, SECHILIENNE-SIDEC’s majority shareholder. since the Chairman and Managing Director at the time no longer Each member of the Board must own twenty registered shares for the wished to combine the two functions as the end of his term of office term of their office. approached. Role of the Board of Directors This situation ended with the meeting of the Board of Directors on Among other tasks, the Board of Directors : May 17 2006 immediately after the AGM that day, marking the end of — determines the guidelines for company activity and ensures they the Chairman’s term of office (for which he had not requested are implemented by asking the Chairman (and, where the functions renewal). This Board therefore again discussed the question of are separate, the Managing Director) to present reports on the combining the functions of Chairman and Managing Director and business and projects in progress,
54 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 — draws up and closes the company and consolidated accounts, as of the Board having skills in accounting and financial matters. Its well as the half-yearly accounts ; Chairman is chosen from the Committee by the Board. — examines the management forecasts ; • The Committee meets three times a year in principle, and at all — authorises the investments required by industrial or external events before the Board meetings during which the annual and half- growth projects over the year ; yearly accounts are examined. — fixes the remuneration of the Chairman of the Board of Directors • The agenda is drawn up under the responsibility of the Chairman of and the Managing Director or Deputy Managing Director upon the Committee. Meetings are prepared for under his authority by the examining the report of the Remuneration Committee. Committee secretariat. • Reports are addressed to the Chairman of the Board of Directors for Work of the Board of Directors in 2006 comment. A report is then made to the Board of Directors by the In 2006 the Board of Directors met six times with a 90% presence rate Chairman of the Audit Committee. of its members. • The Committee may request a meeting with the Chairman of the For each meeting, a file is prepared covering the main points on the Board of Directors and the Managing Director where these functions agenda and handed out several days before the meeting. During the are held by two separate people. It may also convene employees of meeting, a detailed presentation of the points on the agenda is made the Company and subsidiaries, through the intermediary of the by the Chairman of the Board of Directors and by the Managing Chairman of the Board of Directors. It may meet the external auditors Director when he is a separate person. The Chairmen of the of the Company and subsidiaries or the members of internal control specialised Committees are heard in respect of their business. The directly. auditors are also heard during meetings to examine the accounts. The Where necessary, it may request the assistance of outside experts, for presentations are followed by questions and debates before which the Company must pay. resolutions are voted on. Detailed written minutes are given to the The Audit and Accounting Committee met on 27 March and 19 members for examination and comments before approval by the September 2006 and the main points examined were : Board of Directors at its next meeting. — the 2005 annual accounts and half-year accounts for 2006 clarified by hearing members of the Management, the head of Audit and Accounts Committee Company accounts, and the auditors; At its meeting on December 11 2003, the Board of Directors set up an — reviewing the incidence of drawing up the Group’s consolidated Audit and Accounts Committee comprising three members one of accounts under IFRS. whom was chairman, and it reduced that number to two at its meeting of October 20 2005. Remunerations Committee The members of the Committee in 2006 were : Mr. Jean STERN At its meeting on October 20 2005 the Board of Directors decided to (Président) and FINANCIERE HELIOS represented by Mr. Hervé set up a Remunerations Committee and designated as its members, DESCAZEAUX. Messrs Michel BOURGAREL, Patrick de GIOVANNI and Hervé The task of the Committee is to prepare for the deliberations of the DESCAZEAUX representing FINANCIERE HELIOS, for the term of their Board of Directors by examining the following points and rendering office as directors. account of its examination: This Committee makes suggestions to the Board on the remuneration • Examination of the accounts and accounting methods used of the directors, especially the fixed and variable parts of the (conformity of the evaluations and accounting choices selected in the Managing Director’s (or Chairman and Managing Director’s where this light of the reference standards, sincere and complete reflection of is one and the same person) remuneration, and the factors that could the Company and its subsidiaries, transparency, clarity, consistency) change the variable part, that is, for that paid in 2006: financial facts : based on the evolution of consolidated profit not including variations — xamination of the quality of internal control (existence and due to the application of IFRS and not counting exceptional results ; effective operation of organisations and control procedures development indicators based on the commissioning and adapted to the Company and its subsidiaries and enabling risks to commissioning calendars of new plants, and on the consolidation of be avoided reasonably and account to be rendered thereof) ; actions to improve market penetration.. • Choice and renewal of external auditors, rotation of associate The Board then decides the amounts of remuneration on the basis of auditors, examination of the fees proposed, information on all fees the observation of these factors and in the light of expectations. with, where necessary, indication of the fees received for tasks Mr de GIOVANNI and Mr. Hervé DESCAZEAUX representing FINANCIERE outside legal requirements. HELIOS, the only members of the Committee still in office after the • The Committee renders account of its tasks to the Board of Directors expiry of that of Mr. BOURGAREL, recommended at the Board meeting concerning any possible problem, observations to the Chairman of of May 17 2006 that the previously agreed provisions concerning Mr. the Board and progress made in respect of these observations. Dominique FOND before his appointment as Chairman and Managing • The Committee, appointed by the Board of Directors, is composed Director be confirmed. The Board therefore confirmed them.
55WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 II - INTERNAL CONTROL 2- Control means In addition to the Board of Directors and the Audit and Accounts Goals Committee Group internal control is the responsibility of : The purpose of the internal control processes in the Company are to: — A Committee composed of the Chairman of the Board of — ensure that its activities and the behaviour of its officers comply Directors, the Managing Director when that person is separate with statutory and regulatory requirements and in-house rules, from the Chairman, and two members of the Board of whom one is and with good practice; an independent director. This Committee meets monthly and — are in line with the targets chosen by the Company, not least in examines the requests for investments and medium and long-term respect of policy to prevent and manage risk ; contractual undertakings. It monitors authorisations already given — ascertain that internal and external communications truly reflect and compares the yield on investment before and after the most the situation and activity of the Company. significant projects have been completed. — An accounts and finance department responsible for the These processes include procedures to ensure compliance with the reliability of the financial and accounting information. statutory and regulatory requirements for the various businesses of the Company and its subsidiaries, and prevent and control the risks it 3- Limited power of attorney for guarantees, surety, incurs. For this purpose, the Company has recourse to the following : collateral At the meeting of September 21 2006, the Board of Directors fixed the 1- A control ethos maximum overall amount of guarantees, surety and collateral that the The main principles and implementation means are: Chairman and Managing Director can give on behalf of the Company — Care in informing Company members of the provisions of the at €50,000 for the year 2007. It also indicated that no guaranteed or various authorities charged with laying down standards and rules collateralised undertaking might exceed the sum of €15,000. of good behaviour, and setting out the most suitable practices for The Chairman and Managing Director was authorised to give compliance therewith. This approach includes, among other, unlimited guarantees, surety and collateral on behalf of the company prevention of insider dealing and directors’ trading in Company to the tax and customs departments. shares. Again, in 2006, this was the subject of a detailed The Chairman and Managing Director may delegate part of the powers explanatory note to make directors, beneficiaries of stock options thus received from the Board. and employees aware of this risk. — standardised processes for collation, assimilation and analysis of financial information (half-yearly financial statements statements and accounts, cash flow statements drawn up by the accounts department of the parent company, monitoring of indebtedness exclusive of leases, and lease debt), and technical and operational information (daily and monthly reports from plant managers, reports on maintenance and upkeep operations in plants) ; — special care taken, in this process of identifying, collating, examining and analysing information, with items concerning the various types of risk, and determination of the technical, legal, financial or other measures designed to deal with it ; — implementation of a cash-pooling system ; — procedures for determining, carrying out and monitoring investments, and procedures for ordering and procurement, ensuring strict separation of tasks and including controls at various levels ; — centralisation of subsidiaries’ accounts at Group headquarters ; — recourse to an external auditor for preparation of consolidated accounts in accordance with IFRS ; — highly centralised payment procedures at central management level ; — decision and implementation processes also highly centralised to control financial risks.
56 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Report of the Auditors on the Chairman of the Board of Directors’ report
Report of the Auditors drawn up under Art. L. 225-235 of the French Code of Commerce, on the report of the Chairman of the Board of Directors of the company SECHILIENNE-SIDEC SA in respect of the internal auditing procedures relating to drawing up and processing accounting and financial information.
Ladies, Gentlemen,
In our capacity as Auditors of the company SECHILIENNE-SIDEC SA, and in application of the provisions of Art. L. 225-235 of the French Code of Commerce, we present our report on the Chairman of your company’s report, in accordance with the provisions of Art. L. 225-37 of the French Code of Commerce, for the financial year ending December 31 2006.
It is for your Chairman in his report to render account of the conditions under which the work of the Board of Directors was prepared and organised and the internal auditing procedures set up in the company.
It is our task to communicate the observations we have in respect of the information in the Chairman’s report on the internal auditing procedures relating to drawing up and processing the accounting and financial information.
We carried out our tasks under the professional rules laid down in France. This requires implementation of due diligence in order to assess the sincerity of the information given by the Chairman’s report in respect of internal auditing procedures for drawing up and processing the accounting and financial information. That diligence included: — ascertaining the goals and general organisation of internal auditing, as well as the internal auditing procedures for drawing up and processing the accounting and financial information presented in the Chairman’s report; — ascertaining the work underlying the information thus presented.
After completing these tasks, we have no comments to make on the information as regards the company’s internal auditing procedures for drawing up and processing the accounting and financial data contained in the report of the Chairman of the Board of Directors, drawn up in application of the provisions of Art. L. 225-37 of the French Code of Commerce.
Paris-La Défense and Courbevoie, 16th April 2006
The auditors ERNST & YOUNG AUDIT MAZARS & GUÉRARD EMMANUELLE MOSSÉ FRÉDÉRIC ALLILAIRE PHILIPPE STROHM
57WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Consolidated accounts at December 31 2006
A Consolidated income statement ...... 59
B Consolidated balance sheet ...... 60
C Table of variations in shareholders’ equity ...... 61
D Table of consolidated cash flows ...... 62
E Notes to the financial statements ...... 63
1 Highlights of the year ...... 63
2 Accounting methods ...... 63
3 Directors’ assessments ...... 68
4 Scope of consolidation ...... 68
5 Intangible fixed assets ...... 70
6 Tangible fixed assets ...... 71
7 Interests in associated companies ...... 72
8 Financial assets ...... 72
9 Inventory ...... 73
10 Other non-current and current assets ...... 73
11 Capital and potential actions ...... 74
12 Financial debt ...... 75
13 Employee benefits ...... 76
14 Provisions for liabilities and charges ...... 77
15 Deferred taxation ...... 78
16 Derivatives ...... 78
17 Other current operating liabilities ...... 79
18 Income from ordinary businesses ...... 79
19 Sectoral information ...... 80
20 Other operating income and charges ...... 82
21 Other operating income and charges ...... 82
22 Cost of financial debt ...... 82
23 Other financial income and charges ...... 82
24 Taxation ...... 83
25 Risk management ...... 83
26 Common interests ...... 87
27 Common interests ...... 89
28 Gas emission quotas ...... 89
29 Events subsequent to closing of accounts ...... 90
58 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 A • Consolidated income statement
( in € thousands ) Note 2006 2005 2005 Restated (a) Published Income from ordinary businesses 19 181 141 160 470 162 475 Procurement (including inventory variation) (56 164) (49 748) (49 748) Logistical costs (6 166) (5 250) (5 250) Employee costs (14 888) (14 188) (14 188) Other operating charges 21 (38 982) (37 069) (37 069) Other operating income 21 558 7 461 7 461 Amortization of intangible fixed assets / contracts (3 632) (2 708) (2 708) Amortization of tangible fixed assets (9 825) (8 971) (10 861) Provisions 387 (1 383) (1 383) Other operating income 22 14 254 894 894 Other operating charges 22 (226) (9) (9)
Operating profit/loss 66 457 49 499 49 614 Cost of financial debt 23 (14 990) (12 682) (12 682) Other financial income 24 4 427 4 287 4 287 Other financial expense 24 (361) (219) (219) Group share of consolidated net income 8 6 168 1 546 2 232
Earnings before tax 61 701 42 431 43 232 Corporate income tax 25 (7 529) (2 669) (2 709)
Net income for the year 54 172 39 762 40 523 Distributed among : Séchilienne shareholders 47 771 36 805 37 563 Minority shareholders 6 401 2 957 2 960
Earnings per share 1,74 1,34 1,37 Diluted earnings per share 1,72 1,33 1,36
(a) –The data published for the 2005 financial year were restated as set forth in note 2.21 to the financial statements.
59WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 B • Consolidated balance sheet
ASSETS ( in € thousands ) Note 31/12/06 2005 31/12/05 Restated (a) Published Non-current assets Goodwill arising upon consolidation 19 785 Intangible fixed assets 5 123 648 123 319 95 770 Tangible fixed assets 6 455 797 376 276 379 589 Non-current financial assets 8 42 637 88 281 84 261 Interests in associated companies 9 19 321 16 268 11 120 Other non-current assets 10 3 462 Deferred tax debt 15 1 252 4 625 4 625 Total non-current assets 646 117 608 769 595 150
Current assets Inventory and work in progress 9 19 592 16 881 16 881 Trade receivables 26 490 13 345 13 345 Other current assets 10 19 023 14 600 18 085 Current derivatives 16 6 931 9 493 9 493 Current financial assets 8 52 139 49 246 49 246 Banks 361 173 173 Total current assets 124 536 103 738 107 223
Total assets 770 653 712 507 702 373
LIABILITIES ( in € thousands ) Note 31/12/06 2005 31/12/05 Restated (a) Published Group share of shareholders’ equity Capital 11 1 061 1 056 1 056 Capital contributed in excess of par 635 35 35 Reserves 141 733 130 055 123 342 Reserves for translation losses (4 868) (1 928) (1 588) Income for the year 47 771 36 802 37 563 Total Group shareholders’ equity 186 332 166 020 160 408 Minority interests 40 958 27 747 26 186 Total shareholders’ equity 227 290 193 767 186 594
Non-current liabilities Employee benefits 13 6 210 4 925 4 925 Provisions for liabilities 14 2 419 4 066 4 066 Deferred tax credits 15 31 556 25 323 18 877 Non-current financial debt 12 362 511 384 812 384 812 Total non-current liabilities 402 696 419 126 412 680
Current liabilities Payables 49 815 45 210 45 210 Tax and welfaer 13 272 7 062 2 644 Current derivatives 16 6 018 12 680 12 680 Current financial debt 12 60 561 25 928 29 413 Other current liabilities 17 11 001 8 734 13 152 Total current liabilities 140 667 99 614 103 099
Total liabilities 770 653 712 507 702 373
(a) –The data published for the financial year 2005 were restated as set forth in note 2.21 to the financial statements.
60 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 C • Table of variations in shareholders’ equity
VARIATION IN CONSOLIDATED SHAREHOLDERS’ EQUITY AT 31 DECEMBER 2006
( in € thousands ) Capital Capital contributed Reserves & Other recycleable in excess of par results capital Shareholders’ equity at 31 December 2004 1 056 35 134 253 Correction following first adoption IAS 32/39 6 174 Effect of first adoption of IFRIC 4 540 Contract re-classification Shareholders’ equity at January 1 2005 - restated (a) 1 056 35 140 967 Variation in translation gains/losses and other Variation in fair value of derivatives (1 243) Total non-accounted-for in income/loss (1 243) Income/loss for period 36 805 Total profit/loss for period 36 805 (1 243) Impact of accounting method changes (1 216) Other variations 1 074 Distributions of dividends (9 595) Stock options 65 Capital increases Shareholders’ equity at 31 December 2005 1 056 35 168 100 (1 243) Variation in translation gains/losses and other Variation in fair value of derivatives 2 125 Total non-accounted-for in income/loss 2 125 Income/loss for period 47 771 Total profit/loss for period 47 771 2 125 Other variations (1) Distributions of dividends (27 430) Stock options 182 Capital increases 5 600 Shareholders’ equity at 31 December 2006 1 061 635 188 623 881
( contd ) Translation Group share Minority Total ( in € thousands ) gains/losess - Shareholders’ equity interests shareholders’ equity Shareholders’ equity at 31 December 2004 (2 619) 132 725 21 323 154 048 Correction following first adoption IAS 32/39 6 174 6 174 Effect of first adoption of IFRIC 4 540 540 Contract re-classification 1 561 1 561 Shareholders’ equity at January 1 2005 - restated (2 619) 139 439 22 884 162 323 Variation in translation gains/losses and other 691 691 (541) 150 Variation in fair value of derivatives (1 243) (677) (1 920) Total non-accounted-for in income/loss (552) (1 218) (1 770) Income/loss for period 36 805 2 957 39 762 Total profit/loss for period 691 36 253 1 739 37 992 Impact if changed accounting methods (1 216) (96) (1 312) Other variations 1 074 95 1 169 Distributions of dividends (9 595) (283) (9 878) Stock options 65 65 Capital increase 3 408 3 408 Shareholders’ equity at 31 December 2005 (1 928) 166 020 27 747 193 767 Variation in translation gains/losses and other (2 940) (2 940) (2 940) Variation in fair value of derivatives 2 125 856 2 981 Total non-accounted-for in income/loss (2 940) (815) 856 41 Income/loss for period 47 771 6 401 54 172 Total profit/loss for period (2 940) 46 956 7 257 54 213 Other variations (1) 315 314 Distributions of dividends (27 430) (1 794) (29 224) Stock options 182 182 Capital increase 5 605 7 433 8 038 Shareholders’ equity at 31 December 2006 -4 868 186 332 40 958 227 290
(a) – The data published for 2005 were re-stated as set forth in note 2.21 to the financial statements. 61WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 D • Table of consolidated cash flow
TABLE OF CASH FLOW AT 31 DECEMBER 2006
( in € thousands ) 31/12/06 2005 31/12/05 Re-stated (a) Published Operating activities: Group share of net income 47 771 36 802 37 563 Minority interests 6 401 2 957 2 957 Corrections . Amortization and depreciation 13 512 12 941 14 831 . Provisions (387) (52) (52) . Variation in deferred taxation 7 796 225 265 . Income/loss from affiliated companies net of dividends received (3 977) (494) (1 180) . Gains/losses arising upon disposal (1 325) (908) (908) . Other items with no impact on cash flow 39 52 52 . Capitalized financial gains (1 831) (1 008) (1 008) . Current tax for financial year (267) 2 444 2 444 Cash flow 67 732 52 959 54 964 Variation in working capital needs(b) (12 431) 9 166 8 679 Income tax paid out (4 200) (1 299) (1 299) Net cash flow generated by operations 51 101 60 826 62 344 Investments : Acquisition of tangible and intangible fixed assets (80 905) (81 937) (81 937) Acquisition of financial assets (3 333) (12 598) (12 598) Income from disposals of tangible and intangible fixed assets 1 596 991 991 Income from disposals and reduction of financial assets 5 844 6 502 4 497 Acquisition / disposal of subsidiaries with acquired/sold cash flow deducted (4 133) (242) (242) Repayment of current accounts of interests (37) (37) Net cash flow generated by investments (80 931) (87 321) (89 326) Financing operations : Capital increase 8 038 3 408 3 408 Distributions of Séchilienne-Sidec dividends (27 430) (9 601) (9 601) Distributions of dividends to minority interests (1 794) (277) (277) Issues or subscription of loans and financial debts 121 024 102 220 102 220 Repayments of loans and financial debts (106 892) (91 659) (91 172) Net cash flow generated by financing activities (7 054) 4 091 4 578
Net variation in cash flow (36 884) (22 404) (22 404) Net cash flow at start of year 43 898 66 302 66 302 Net cash flow at year end 7 014 43 898 43 898 Variation in cash flow (36 884) (22 404) (22 404)
Net cash flow at start and close of the financial year is as follows: ( in € thousands ) 31/12/06 2005 31/12/05 Re-stated (a) Published Cash 361 173 173 Advances from lessors 28 144 28 144 Investment securities 9 769 17 886 17 886 Current bank (3 116) (2 305) (2 305) Net cash flow 7 014 43 898 43 898
(a) – Les données publiées au titre de l’exercice 2005 ont été retraitées comme cela est détaillé dans la note aux états financiers 2.21. (b) – La dégradation du besoin en fonds de roulement au cours de l’exercice clos au 31 décembre 2006 provient essentiellement du retard de paiement de clients de quelques jours de factures d’électricité du mois de décembre.
62 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 E • Notes to the financial statements
1 • HIGHLIGHTS OF THE YEAR included in a net foreign investment in a currency other than that of the entity shall be entered into accounts under shareholders’ • In May 2006, Mr. Dominique Fond was appointed Chairman and equity. Managing Director of the company. • IAS 39, Financial instruments, accounting and valuation relating to • In November 2006, the Group commissioned a new 58 MW bagasse- cover of cash flow in respect of future intra-group transactions. coal plant on Reunion Island. • IAS 39, Financial instruments, accounting and valuation “Option • On December 15 2006, the Group acquired 95.02% of the capital in fair value”. two companies (PLEXUS SOL and SCE –SOCIETE DE CONVERSION • IFRS 4 revisions, Insurance contracts and IAS 39 provisions on D’ENERGIE) on Reunion Island, the sole business of which is Financial guarantee contracts. generating solar powered energy. • IFRS 6, “Prospection for and evaluation of mineral resources” and • In February 2006, the Group re-financed all its loans in the relevant IFRS 1 amendments. framework of an overall strategy to restructure existing debt, increase • IFRIC 4. Application of IFRIC 4, “determining whether an the structural financial resources and secure financing of future agreement contains a lease” led the Group to re-state a contract to investments (cf. note 12). supply energy as a financing lease. • ECOFIN LIMITED, hitherto the second largest identified shareholder • IFRIC 5, Rights to interest accruing from management funds in the company, disposed of its SECHILIENNE-SIDEC shareholdings, dedicated to the dismantling, overhaul and rehabilitation of the leading to its declaration that the minimum threshold had been environment. crossed and that it held 6.13% of the capital and voting rights at • IFRIC 6, Liabilities arising from participation in a specific market – November 23 2006. Waste from electrical and electronic equipment. • Furthermore, PICTET ASSET MANAGEMENT LIMITED, acting on behalf clients whose portfolio it manages in the market, acquired • Standards, interpretations and amendments to SECHILIENNE-SIDEC shares, leading it to declare that it had crossed previously published standards the application of the maximum threshold and held 11,22 % of the capital and voting which was not compulsory at 31 December 2006 rights at 23 November 2006. At 31 December 2006 the Group financial statements did not reflect the possible impact of the standards published in 2006 application of 2 • ACCOUNTING METHODS which was not compulsory. The Group did not apply the following standards and interpretations ahead of time: 2.1 REFERENCE APPLIED IN THE ACCOUNTS - Adopted by the EU at the date accounts were closed : CLOSED AT 31 DECEMBER 2006 — IAS 1, an amendment on information about capital. The Group Group consolidated financial statements for the financial year closed will apply IAS 1 as of the financial year commencing January 1 2007 at 31 December 2006 were drawn up in compliance with the IFRS as — IFRS 7, information to be provided on financial instruments. The adopted by the European Union on December 31 2006. main additional information to be provided concerns analysis of the sensitivity to market risk. The Group will apply IFRS 7 will apply The financial statements are presented in € thousands and were IAS 1 as of the financial year commencing January 1 2007. approved by the Board of Directors on 26/03/2007. — IFRC 7, Applications of the approach to restatement under IAS 29 – financial information in hyper-inflationary economies, applicable • Standards, interpretations and amendments to for financial years opened as of March 1 2006. standards applicable as of January 1 2006 — IFRIC 8, the field of application of IFRS 2, “payment in shares”, Except for IFRIC 4 the effects of which are explained in note 2.21, applicable for financial years opened as of March 1 2006. these changes had no significant effect on the Group’s consolidated — IFRIC 9, “Re-valuation of incorporated derivatives”, applicable for accounts. financial years opened as of June 1 2006. • Amendment IAS 19 : staff perquisites – actuarial gains and losses, group structure and information to be provided : - Not adopted by the EU at the date accounts were The amendment of standard IAS 19 on entry into accounts of closed: actuarial translation gains and losses was applicable as of January — IFRIC 10, « Interim financial statements and depreciation» 2006. The Group did not choose immediate accounting for — IFRIC 11, «Transactions within a Group» actuarial discrepancies except in profit/loss. — IFRIC 12 , « Service concession agreements» • IAS 21, Net investment in foreign activity. This interpretation notes — IFRS 8 «Operational segments » that translation gains/losses arising from debts and receivables IFRS 8 standards on sectoral information, IFRS 7 on the information to
63WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 on financial assets and liabilities to be provided, the amendment to 2.4 INTANGIBLE FIXED ASSETS IAS 1 on presentation of financial statements have no effect on the Intangible fixed assets acquired upon company groupings are evaluation and entry of transactions. The Group is currently analysing accounted for separately where they fall under the categories defined the other rules aforementioned to ascertain the practical by IAS 38, not least: consequences and the effect of their application to the accounts. The fair value of the contracts acquired when companies are taken over is determined by discounting the estimated net cash flow generated by the asset. 2.2 CONSOLIDATION METHODS After initial entry into accounts, contracts are entered at their cost 100% held subsidiaries are fully consolidated. Control means that less the accumulated amortization and accumulated loss of value. the Group can control the financial or operating policy of the Contracts are amortized by the straight line method for their subsidiaries so as to gain advantage from their activities. Control is remaining term, that is, over periods not greater than 35 years. presumed to exist where the Group directly or indirectly holds the The Group considers that its business does not generate expenditure majority of the company’s voting rights. in research and development meeting the criteria for activating The equity method is used for associated companies in which the corresponding expenses. Group has notable influence (generally over 20%) but not control. This method is also used for insignificant subsidiaries merely selling services to Group companies. The equity method retains the net 2.5 TANGIBLE FIXED ASSETS assets and profit of a company in proportion to the parent company’s Tangible fixed assets mainly consist of the steam and energy holding in the capital, and the associated goodwill as the case may generating plants. They are accounted for at cost, less recoverable be. unpaid VAT and amortization. The accounts of consolidated companies are closed at 31 December In conformity with the option provided by IAS 23, the Group opted for of the financial year presented. capitalisation of the financial costs incurred during the building of Reciprocal receivables and payables and reciprocal revenues charges assets. relating to fully consolidated companies are cancelled out Where the components of an asset have different working lives they completely. Internal margins arising between these companies are are accounted for separately and amortized over their own working also cancelled, in particular those arising under guarantees given to lives. Significant spare parts involving safety are thus placed in fixed subsidiaries by the parent company. The Group considers that it does assets and amortized over the period of the plants’ working lives. not make internal profit on the client assistance services to its The Group considers that there are no dismounting and dismantling subsidiaries. Internal profit and loss between companies costs for its assets. Therefore no cost of this kind is included in the consolidated by the equity method and fully consolidated companies cost of the installations. are cancelled in the amount of the Group’s percentage held in the Maintenance costs for the power plants, designed to keep them in capital of the company consolidated by the equity method. good working order, are entered under charges where they occur. Energy generating plants are amortized by the straight line method for their working lives estimated from the date the asset is ready to 2.3 COMPANY GROUPINGS be commissioned, that is, where it is in the place and condition Company groupings are accounted for according to their method of necessary to be operated in the way planned by the management. acquisition. Under this method, acquired assets, liabilities and The power plants are amortized over forty years for the thermic possible liabilities taken on are evaluated at their fair value in power plants and twenty years for the wind farms. conformity with the recommendations of IFRS 3. Goodwill The other tangible fixed assets are amortized by the straight line corresponds to the difference between the price paid when method for periods from 2 to 10 years. The Group reviews working companies group, plus acquisition costs, and the amount of the lives each year. assets acquired less liabilities and possible liabilities taken over. It is determined temporarily upon acquisition and revised within one year. Goodwill is not amortized and is tested for loss of value. 2.6 LEASES Leases on assets for which the Group is lessee and bears the majority of the risk while also benefiting from the economic advantages arising from ownership are accounted for as leases, especially contracts concerning the financing of plants. The Group identifies the agreements which, although not having the legal form of a lease, may be analysed under IFRIC 4 as leases. If the agreements are considered as leases, they are analysed under IAS 17 to be qualified as simple leases or financial leases. The revenues
64 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 from the financial lease activities are considered as revenues from January 1 2005, they have been evaluated under the cost amortized ordinary activities. to effective interest rate method. The discrepancy between the two To restate the financial leases, the Group determines the discounted methods on operating debts is not significant. value of the minimum payments on the lease. These are the payments the lessee is or may be bound to make during the term of the lease, not counting the conditional rent, cost of services and 2.11 DERIVATIVES taxes to be paid or refunded to the lessor. The purpose of the derivatives used by the Group is to cover rate risks on the variable rate borrowing and leases contracted. In accordance with IAS 32 and 39 on evaluation and entering of 2.7 DEPRECIATION AND AMORTIZATION OF financial instruments into accounts, derivatives with positive market ASSETS value are entered under assets and those with negative market value In accordance with IAS 36 the company regularly checks indices of are entered under liabilities. Where derivatives are not considered in loss of value in intangible and tangible assets. Where such indices accounting terms as cash flow hedge, the variations in their fair value are present, it tests loss of value in order to ascertain whether the are recorded in income, and otherwise they are entered into book value is greater than its recoverable value, defined as the shareholders’ equity. higher between fair value less the cost of sale and use value. Furthermore, some leases and sales contracts include clauses that Evaluation of the fair value of an asset is usually performed by may be analysed as interest rate or exchange derivatives. Under IAS discounting the future cash flow generated by the asset. Assets not 39, these incorporated derivatives are entered into accounts as generating very independent cash flows are grouped into units distinct from their original contract, at the date the contract took generating cash flow (UGTs) The Group’s main UGTs are the thermic effect, and are valued at fair value in the same way as autonomous power plants. derivatives concluded with a bank. Where they are not considered in accounting terms as cash flow hedge, the variations in their fair value are recorded in income, and otherwise they are entered into 2.8 INVENTORY shareholders’ equity. Inventory is mostly fuels, supplies and non-strategic spare parts required for running the power plants. They are evaluated at cost price or net recoverable value where the latter is lower than cost. 2.12 EMPLOYEE BENEFITS Employee benefits include welfare schemes with defined contributions and schemes with defined allowances. Schemes with 2.9 FINANCIAL ASSETS defined contributions are those providing retirement benefits under Financial assets include operating receivables, cash deposits and which the Group pays defined sums to various social services. The pledges linked to leases, time deposits, loans, non-consolidated payments are made in consideration for services rendered by staff securities, investments and cash equivalents and derivatives with during the financial year. They are entered under charges when they positive value. The following methods are applied to derivatives with are incurred. positive market value : Schemes with defined allowances are those guaranteeing staff — placements and cash equivalents are classified in the « available additional resources. This guarantee of additional resources is a for sale » category and are evaluated at fair value, value future payment by the Group for which a commitment is calculated. adjustments being recorded in shareholders’ equity, The provision is calculated by estimating the amount of benefits the — operating receivables, guarantees and time deposits are employee will have accumulated in consideration for the services accounted for by the cost method amortized at effective interest rendered during the financial year and the previous financial years. rate. This method does not produce great differences with the The amendment of a scheme or introduction of a new scheme nominal value of the receivables. In the event the receivables are posterior to employment or other long term benefits may lead to an difficult to recover, depreciation is stated on the basis of likely increase in the value of the present value of the commitment in receipt. respect of the defined benefit for services rendered over previous financial years, called ‘cost of past services ». This cost of past services is entered into accounts under charges, using the straight- 2.10 FINANCIAL LIABILITIES line method over the average time remaining until the corresponding Financial liabilities include financial debts, operating debts and rights are granted to the staff. Rights acquired when a scheme is derivatives with negative market value. The specific case of adopted or modified are entered immediately into accounts as derivatives with negative market value is dealt with below. charges for the financial year. In the SÉCHILIENNE-SIDEC Group, Until December 31 2004, operating and financial debt were entered defined allowance schemes include benefits after employment and into the balance sheet at nominal value. Under IAS 39, applied since the other long –term advantages.
65WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 • Benefits after employment 2.15 CORPORATE INCOME TAX These include : The corporate income tax on profit entered into the income — end of career bonuses, statement includes the tax to be paid for the period and deferred —defined allowance schemes for some employees of the parent tax.. company in addition to the previous scheme, Deferred tax is calculated on all the temporal differences between —the special pensions paid to employees in certain subsidiaries accounting and fiscal values of items in assets and liabilities, and on under the scheme set up by Industries Electriques et Gazières the fiscal deficits carried over. Deferred income tax debt is only (IEG) and the guarantee that some specific benefits will be accounted for if their recovery is likely. Most of these deferred taxes maintained after their retirement. come from: Under IAS 19 « Employee benefits», they are evaluated annually — temporal differences linked to certain assets, not least using the projected credit units method and applying a seniority pro intangible, due to grouping of companies and re-statement of rata. The discount rate used at the date of closure corresponds to the leases, yield rate on senior private French bonds the maturity of which is — accounting for deferred taxation on deficit carried over. approximately that of the Group’s commitments. The actuarial Deferred tax is calculated at the tax rate the application of which is discrepancies arising from the evaluations are amortized on the decided by the relevant organisation at the date accounts are closed, likely residual working life of the participants in the scheme. depending on the scheduled date for repaying temporal differences. Amortization is on the part of the actuarial discrepancy exceeding The rule of variable carryover is applied and the effect of any change 10% of the actuarial debt in conformity with the corridor method. in tax rate is accounted for in the income statement, except for changes relating to items accounted for directly in shareholders’ • Other long term advantages equity. Deferred tax is not discounted. Other long term advantages mostly concern additional medical cover. The Group benefits from the tax provisions in force in the French A provision is calculated using methods, hypotheses and frequencies overseas territories (DOM) which do not fall under IAS 12 or IAS 20. identical to those used for evaluation of advantages after Therefore, in application of IAS 8, the Group examined the standards employment. on similar subjects to determine the appropriate accounting The actuarial discrepancies resulting from evaluation of other long treatment. By analogy with IAS 12, the Group immediately accounts term advantages are entered directly into the profit/loss line for the for the tax saving arising from these tax provisions in income for the year in which they occur. financial year.
2.13 PROVISIONS FOR LIABILITIES AND 2.16 PAYMENTS IN SHARES CHARGES The stock options granted to directors and certain key managers are Provisions are entered into accounts : evaluated at fair price at the time of their granting by the Board of — where the Group has a current liability arising from a past event, Directors. This evaluation is not revised subsequently. On the basis — where it is probable that resources representing economic of an estimation of the number of stock options finally acquired at advantage will need to be paid out to discharge the liability, the end of the period during which these can be acquired, the Group — where the amount of the liability can be evaluated reliably. registers the overall charge spread over the period. These charges are set against shareholders’ equity under reserves.
2.14 CO2 QUOTAS Due to the withdrawal of the IFRIC 3 interpretation on greenhouse 2.17 CURRENCY TRANSLATION gas emissions and in the absence of standards and interpretations Currency transactions are accounted for at the exchange rate on the on accounting for CO2 emission quotas, the following provisions day they are carried out. At year end, currency receivables and were implemented. Free quotas were entered for nil value. Possible payables are translated at the rate in force at that date, the discrepancy between available quotas and the obligations to restore translating gains or losses being accounted for in profit/loss. the quota at maturity was the subject of provisions calculated on Investments in companies on Mauritius are accounted for by the book value at the date of closure, appearing in other current equity method in the balance sheet, on the basis of the exchange liabilities. rate in force on the day of closure. The goodwill arising therefrom is accounted for directly in shareholders’ equity.
66 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 2.18 REVENUE FROM ORDINARY BUSINESS 2.21 COMPARABILITY OF FINANCIAL YEARS Revenue from the Group’s ordinary business accrues from: • Correction of the first application of IAS 32/39 at — sales of electricity and steam under contracts to supply energy January 1 2005 over periods between 25 and 35 years, concluded mostly with In order to ensure comparability of the information presented for the EDF, and also with the sugar factories as regards the bagasse - 2005 and 2006 financial years and in conformity with IAS 8, the coal plants. The revenue for the financial year corresponds to the consolidated accounts published for the 2005 financial year were contractual income for each accounting period, restated following correction of the impact of the first adoption of IAS — services carried out by the parent company. These services 32/39 at January 1 2005. relate to the management services invoiced to non-consolidated This correction concerned the evaluation of a derivative incorporated subsidiaries and project management services for building of new into an energy supply contract concluded by Compagnie Thermique plants the investment in which is covered by the leases. Revenues de Bellevue (CTBV) on Mauritius, a company consolidated by the are accounted for in conformity with the contractual provisions, equity method and for which the Group did not possess the —revenue from rental of thermic plants for which the sales necessary information at December 31 2005. At that date, the Group contracts were qualified as leases in conformity with considered that the external debt of this company in euros was interpretation IFRIC 4. covered by the sales partially indexed in euros. The additional analyses carried out in 2006 led the Group to consider that the sale contract included a derivative that had to be evaluated at fair price. 2.19 SECTORAL INFORMATION As a result the latent translating gains/losses relating to the funding Information per business sector is presented in conformity with the debt of the plant (in euros) were accounted for in income/loss. Group internal reporting system used by the General Management to CTBV is consolidated by the equity method. Therefore the impact of measure financial performance and allocate resources. Moreover, the this correction on the financial statements for the financial year 2005 risks and profitability are specific to each business sector. was as follows : Geographical zones are defined depending on their specific — At January 1 2005 : rise in value of the securities of the economic environment and have different risks and profitability associated entities in the amount of € 6 174 K (net of tax effect) profiles. set against shareholders’ equity ; — earnings for 2005 : reduction of the share of associated entities in profit in the amount of € 686 K (net of tax effect). 2.20 CLASSIFICATION AND PRESENTATION PRINCIPLES • Impact of the first application of IFRIC 4 The distinction between current and non-current items presented on The Group proceeded to review the contracts for which IFRIC 4 was the balance sheet as required by IAS 1 corresponds mostly to the likely to apply. division of the assets (fixed, current) and liabilities (long term/short The contracts falling under IFRIC 4 and qualified as leases were term). Non-current items of a significant amount likely to obscure the restated on January 1 2005 in conformity with the principles set forth clarity of the current operating figures are classified as “other in paragraph 2.6 « leases ». This study led the Group to conclude operating income and charges”. These include, among others: that its contracts should be treated as leases. — Certain fiscal benefits arising from funding of plants in DOM- The impact on the financial statements at January 1 2005 was as TOM.. follows: — Gains or losses arising from disposal or large and unexpected — the tangible fixed asset arising from the contract was de- depreciation of non-current assets, tangible or intangible. consolidated in its net book value at January 1 2005, that is,€ 28 — Certain restructuring charges : these are solely restructuring 356 K gross value and € 23 153 K accumulated amortization; costs likely to obscure the clarity of the current operating — this was set against a financial asset in the amount of €6 025 K profit/loss item, by their unusual and substantial nature. and a deferred tax credit of 283 K€. —Other operating charges and income such as a provision relating Consequently the impact on shareholders’ equity at January 1 2005 to a very substantial claim. was 539 K€. Cash and equivalents include cash, current bank accounts, The impacts on the profit/loss for the 2005 financial year were as investment securities realisable at very short notice, easily follows: convertible into cash, and presenting no significant risk of changing — the amortization charge in respect of the de-consolidated fixed value. Cash flow the variation of which is analysed in the asset was € 1 890 K; consolidated cash flow table is represented by net active cash flow — the share of turnover relating to this fixed asset was neutralised from which bank overdrafts have been deducted. Spot credits are in the amount of € 2 658 K; included in indebtedness variation. —interest accruing from the financial asset was accounted for in revenue from ordinary business in the amount of € 653 K; —deferred tax credit was accounted for in the amount of €40 K€.
67WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 As a result, the impact on income/loss for the financial year closed at in conformity with the provisions of IAS 1, the company altered the December 31 2005 was € (75) K. classification of certain items on the balance sheet and cash flow table for the financial year closed at 31 December 2005. • Re-classification of goodwill — Prepaid charges relating to repayment of leases were re- To ensure comparability of the information presented for the financial classified separately from the other current assets to reduce the years 2005 and 2006 and in conformity with IAS 8, the consolidated current financial debts in the amount of € 3 485 K as against € 2 accounts published for 2005 were restated. Goodwill was re- 998 K at January 1 2005. In this respect the impact of re- classified as intangible fixed assets arising from electricity and steam classification in the cash flow table was a fall of € 487 K on the supply contracts in the amount of € 19 785 K. variation in working capital needs and a rise of € 487 K in the amount of loan repayments. • Re-classification of certain items in the balance — Certain tax debts entered in other current liabilities for € 4 418 K at sheet and cash flow table for 2005 December 31 2005 were re-classified in fiscal and corporate debt. In order to improve the presentation of the financial statements and
3 • MANAGEMENT ESTIMATIONS The preparation of the financial statements led the Group to make its estimations are as follows: best estimations and select hypotheses affecting the book value of — provisions for liabilities and charges (note 14), the asset and liabilities items, the information on possible balance — employee benefits (note 13), sheet items, and the book value of the revenue and charges recorded — depreciation and loss of value in long term assets (notes 5 et 6), over the period. The future real results may diverge from these — recognition of deferred tax debt (note 15), estimations. — financial instruments (note 16), — leases (IFRIC 4) (note 2.6), The main items in the financial statements for which the Group uses — period of asset amortization/depreciation (note 2.5).
4 • GROUP STRUCTURE At 31 December 2006 the Group included the following companies :
Fully consolidated % interest % interest at 31/12/2006 at 31/12/2005 Séchilienne-Sidec Parent Parent • On Reunion Island Plexus Sol 95.02 % SCE Société de Conversion d'Energie 95.02 % Compagnie Thermique de Bois Rouge (CTBR) 99.99 % 99.99 % Exploitation Maintenance Services (EMS, subsidiary of CTBR) 99.97 % 99.97 % Compagnie Thermique du Gol (CTG) 64.62 % 64.62 % Sud Thermique Production (STP, filiale de CTG) 64.56 % 64.56 %
• In Guadeloupe Compagnie Thermique du Moule (CTM) 99.99 % 99.99 % Caraïbes Thermique Production (CTP) 99.94 % 99.94 %
• In Martinique Compagnie Cogénération du Gallion (CCG) 80.00 % 80.00 %
• In Metropolitane France Eoliennes des Quatre-Vents 100.00 % Eoliennes de Marne et Moselle 100.00 %
68 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Companies consolidated by the equity method % interest % interest at 31/12/2006 at 31/12/2005 On Reunion Island Compagnie Industrielle des Cendres et Mâchefers (CICM) 51.00 % 51.00 %
In Guadeloupe Recyclage Cendres Mâchefers Industries (RCM Industries) 99.99 % 99.99 %
On Mauritius Compagnie Thermique de Bellevue (CTBV) 27.00 % 27.00 % Compagnie Thermique de Bellevue Management (CTBVM) 62.00 % 62.00 % Compagnie Thermique Du Sud (CTDS) 25.00 %
In metropolitan France Eoliennes de la Haute-Lys et ses filiales 40.00 % 40.00 %
The foregoing equitized companies of which the Group has exclusive The effect of Group enlargement on the consolidated accounts is as control (interest of over 50%) were not fully consolidated due to the follows : non significant effect this would have had on consolidated accounts. ( in € thousands ) SCE and Plexus Sol The companies only deal with Group companies and are not in debt. Assets fixed at fair price 7 876 Debts at fair price -1 287 • New Group companies Deferred tax credits -869 The company Compagnie Thermique du Sud (created by Total 5 720 SÉCHILIENNE-SIDEC), 25 % held, was consolidated by the equity Proportion acquired 95.02% method at January 1 2006. Furthermore, Eoliennes des quatre-vents Net assets acquired per proportion 5 435 and Eoliennes de Marne et Moselle (wind farms created by Acquisition price 5 279 SÉCHILIENNE-SIDEC) were fully consolidated at 1st January 2006). Residual goodwill -156
Plexus Sol and SCE Société de Conversion d’Energie were The fair value of the acquired assets and liabilities was determined consolidated as of the date of acquisition, that is, 15 December 2006. temporarily at December 31. It will be reviewed in one year. Given the The acquisition price for the shares in these companies was date the acquisition was made, it had no impact on the 2006 respectively € 4 868 K and € 411 K. earnings.
69WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 5 • INTANGIBLE FIXED ASSETS
( in € thousands ) Contracts to supply Other intangible Intangible electricity and steam fixed assets fixed assets Gross values : At January 1 2005 128 735 128 735 Acquisitions Disposals Variations in Group structure Other movements Translation gains/losses At December 31 2005 128 735 128 735 Acquisitions Disposals Variation in Group structure 3 866 3 866 Other movements 95 95 Translation gains/losses At 31 December 2006 132 601 95 132 696
Amortization and depreciation : At January 1 2005 (2 708) (2 708) Amortization charge for period (2 708) (2 708) Depreciation Release on Depreciation Disposals Changes in Group structure Translation gains/losses At 31 December 2005 (5 416) (5 416) Amortization charge for period (3 632) (3 632) Depreciation Release on Depreciation Disposals Changes in Group structure Translation gains/losses At 31 December 2006 (9 048) (9 048)
Net values : At January 1 2005 126 027 126 027 At 31 December 2005 123 319 123 319 Total net values at 31 December 2006 123 553 95 123 648
The gross value of intangible fixed assets corresponds to : The fair value of the intangible fixed assets was evaluated by — the fair value of the contracts to supply energy concluded by the discounting future cash flow. The discount rate selected ( about 8.5 thermic plants ( CTBR, CTM et CTG ) with EDF when they were % ) reflects the market assessment by money time value and taken over on October 1 2004, amortized over a residual period of management assessment of the specific risks arising from the 21 – 33 years at 31/12/2006. activity. —and the fair value of the contracts concluded by the companies SCE Société de Conversion d’Energie and Plexus with EDF. The income taken into account to calculate future cash flow was determined on the basis of the contract terms based on the income The depreciation tests, the implementation methods for which are from previous financial years and future trends as anticipated by the indicated below, revealed no loss of value at 31 December 2006. management at closing of accounts.
70 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 6 • TANGIBLE FIXED ASSETS
( in € thousands ) Plants in service Current fixed assets Total Gross values : At 31 December 2004 332 337 82 906 415 243 Effect of 'IFRIC 4 application (28 356) (28 356) At January 1 2005 303 981 82 906 386 887 Acquisitions 17 354 64 583 81 937 Disposals (823) (823) Changes in Group structure 21 21 Re-classification 71 351 (70 394) 957 Translation gains/losses At 31 December 2005 391 884 77 095 468 979 Acquisitions 16 300 69 452 85 752 Disposals (396) (86) (482) Changes in Group structure 4 010 86 4 096 Re-classification 98 449 (98 541) (92) Translation gains/losses At 31 December 2006 510 247 48 006 558 253
Amortization and depreciation : At 31 December 2004 (107 071) (107 071) Effect of IFRIC 4 application 23 158 23 158 At January 1 2005 (83 913) (83 913) Amortization charge for the period (8 816) (8 816) Depreciation Release on depreciation Disposals 31 31 Changes in Group structure Translation gains/losses (5) (5) At 31 December 2005 (92 703) (92 703) Amortization charge for the period (9 880) (9 880) Depreciation Release on depreciation Disposals 123 123 Changes in Group structure Re-classification 4 4 Translation gains/losses At 31 December 2006 (102 456) (102 456)
Net values : At January 1 2005 220 068 82 906 302 974 At 31 December 2005 299 181 77 095 376 276 At 31 December 2006 407 791 48 006 455 797
No index of loss of value in tangible fixed assets was entered in the financial years closed at 31 December 2005 and 2006. • Leases: Most of the Group’s industrial equipment is leased : at the end of the lease the Group may exercise its option to buy the equipment. The net amount of leased equipment amortization was € 347 674 K at 31/12/2006 (€ 261 938 K at 31/12/2005). Financial debt in the form of leases is presented in note 12.
71WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 7 • INVESTMENTS IN SUBSIDIARIES
The variation in investments in subsidiaries may be analysed as follows:
( in € thousands ) 31/12/06 31/12/05 Changes over the financial year Amount at start of year 16 268 15 033 Full consolidation of previously equitized companies Dividends paid out (2 192) (1 056) Group share in profit of associated companies 6 168 1 546 Translation gains/losses arising from Mauritius interests (2 811) 745 Capital increase Changes in Group structure (CTDS) 1 888 Amount at closing 19 321 16 268
Group share of the assets, liabilities and profit/loss of these entities is as follows :
( in € thousands ) 31/12/06 31/12/05 Non-current assets 45 727 24 716 Current assets 12 688 10 621 Total assets 58 415 35 337 Non-current liabilities 32 490 13 645 Current liabilities 6 604 5 424 Total liabilities 39 095 19 069 Net assets 19 321 16 268 Sales 18 324 14 562 Operating profit/loss 5 147 4 851 Profit/loss for the year 6 168 1 546
8 • FINANCIAL ASSETS
Non-current financial assets :
( in € thousands ) 31/12/06 31/12/05 Cash deposits and pledges 35 408 64 449 Time deposits 766 12 586 Non-consolidated securities 4 403 4 989 Loans over one year 2 060 6 257 Total 42 637 88 281
The deposits and pledges related to leases financing the thermic — Companies starting up in which the Group holds an interest of power plants. They bear interest, most of which is capitalizable. They under 50 % (Compagnie Thermique de Savannah in the amount of € are repayable according to fixed schedules or the date the purchase 3 886 thousand), option is taken out. — Group interests of over 50% in a company the activity of which has not yet begun. The time deposit bears interest which is capitalized. Loans over one year mostly relate to the shareholders’ advances to Non-consolidated securities include: the subsidiaries of Eoliennes de la Haute-Lys. — Group interests of less than20 % in these companies ,
72 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Current financial assets :
( in € thousands) 31/12/06 31/12/05 Other financial fixed assets 1 798 Advances received from lessors 28 144 Securities 9 769 17 886 Deposits and pledges under one year 40 572 3 216 Total 52 139 49 246
Advances received from lessors correspond to cash flow not yet used to finance installations in progress.
9 • INVENTORY
Inventory may be broken down as follows :
( in € thousands) 31/12/06 31/12/05 Gross value of inventory Raw materials / fuels 7 558 6 961 Non-strategic spare parts 12 611 10 565 Other current inventory Total gross value of inventory 20 169 17 526 Inventory depreciation Raw materials / fuels Non-strategic spare parts 577 645 Other current inventory Total inventory depreciation 577 645 Net value of inventory Raw materials / fuels 7 558 6 961 Non-strategic spare parts 12 034 9 920 Other current inventory Total net value of inventory 19 592 16 881
10 • OTHER NON-CURRENT AND CURRENT ASSETS
• Other non-current assets These include an outstanding tax debt relating to the carry back of SÉCHILIENNE-SIDEC deficits in the amount of € 3 462 K.
• Other current assets Other current operating assets may be broken down as follows :
( in € thousands ) 31/12/06 31/12/05 Fiscal and corporate receivables 14 033 5 933 Prepaid expenses 4 504 5 137 Other receivables 486 3 530 Total 19 023 14 600
Tax and corporate receivables for the financial year ending 31 December 2006 include a VAT credit of € 7 395 following the sale by CTG to GIE Vaynilla Bail, of the installations of the new CTG-B plant.
73WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 11 • CAPITAL AND POTENTIAL ACTION
11.1 SHAREHOLDERS’ EQUITY AND STOCK On July 3 2006 SÉCHILIENNE-SIDEC divided the par value of its shares by 20. OPTION PLANS Under the authorisations granted by the extraordinary general The shareholders’ equity of € 1 061 381 is divided into 27 568 360 meetings held on December 18 2001 and December 13 2004, the fully paid up shares of € 0,0385 par value. Board of Directors granted the following stock options :
Stock option plans Plan 2002 Plan 2003 Plan 2005
Date of Board meeting/granting 02/09/02 11/12/03 13/12/05 Exercise period From 2 Sept 2006 From 11 Dec 2007 From 11 Dec 2009 to 1 Sept 2009 to 10 Decr 2010 to 10 Dec 2016 Total n° of options originally granted 6 800 12 300 7 500 Original exercise price 89 95 418 Total n° options after correction (a) 136 000 246 000 150 000 Exercise price after correction (a) 4.45 4.75 20.9 Options exercised (136 000) N° options in circulation at 31/12/06 0 246 000 150 000
The exercise prices in the foregoing table are in euros. (a) Following division of the par value of the shares by twenty on July 3 2006, the number of options and their exercise price were corrected.
The evolution of the number of options in circulation was as follows : 2006 2005 Shares Exercise price Shares Exercise price Weighted average Weighted average (in euros) (in euros) Options in circulation at start of year 26 600 184,53 19 100 92.86 Options granted 7 500 418.00 Options exercised (6 800) 89 Correction of options in circulation (1) 376 200 Options in circulation at end of year 396 000 10.87 26 600 184.53 Options exercisable at end of year
(1) Following division of the par value of the shares by twenty on July shares on the market representing 11.22 % of the capital and voting 3 2006, the number of options and their exercise price were rights. corrected. At 31 December 2006, the interests of Financière Hélios and Pictet Asset Management Limited were respectively 43.48 % and 11.22 %. In November 2006 the company Ecofin Limited disposed of At the Shareholders’ General Meeting of May 10 2007 a proposal to SÉCHILIENNE-SIDEC shares on and off the market.. The company distribute a dividend of € 1.10 per share will be made. Pictet Asset Management Limited acquired SÉCHILIENNE-SIDEC
11.2 NUMBER OF SHARES Variations in the number of shares comprising the shareholders’ equity may be broken down as follows:
At 31 December 2004 1 371 618 Shares issued Shares cancelled At 31 December 2005 1 371 618 Shares issued upon exercise of options 136 000 Effect of dividing share par value by 20 26 060 742 Shares cancelled At 31 December 2006 27 568 360
74 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Calculation of dilution effect The weighted average number of diluted shares is calculated resulting from exercise of the rights. according to the share buyback method. Funds which would be In conformity with IAS 33 (earnings per share), the basic and diluted collected when the rights attached to the diluting instruments are earnings per share for the financial year 2005 were retrospectively exercised are presumed to be allocated to buying back of shares at restated to take account of the division of the par value by twenty market price at the date of closing of accounts. The number of shares which took place in the 2006 financial year. thus obtained is then deducted from the total number of shares The dilution effect was generated solely by issuing stock options.
31/12/06 31/12/05 Restated 31/12/05 Published Average weighted number of shares 27 454 716 27 432 360 27 432 360 Dilution effect — Stock options 361 303 276 989 276 989 — Other Weighted average number of diluted shares 27 816 019 27 709 349 27 709 349 Group share of net earnings per share before and after dilution effect : 47 771 36 805 37 563 Group share of weighted average number of shares 1.74 1.34 1.37 Group share of net earnings on weighted average number of shares 1.72 1.33 1.36
12 • FINANCIAL DEBT
12.1 ANALYSIS PER TYPE (CURRENT AND NON CURRENT) Of which : Fixed or variable interest rate 31/12/06 31/12/05 Bank loans : Banque de la Réunion (2011) fixed 3.80 % 0 47 509 Crédit Lyonnais (2007) fixed 3.65 % 0 13 430 CIC, short term credit (2005) variable Euribor 1 month + 0.5 % 2 306 Société Générale, short term credit variable EONIA + 1.625% 3 116 Dexia (2021) variable T4M + 0.6 % 804 Crédit Agricole, Auxifip (2026) variable Euribor 6 months + 0.7 % 16 483 Crédit Agricole (2006) variable Euribor 3 months + 0.4 % 0 1 189 CALYON tranche A (2013) variable Euribor 1 months + 1 % 64 129 CALYON tranche B (2013) variable Euribor 1 month + 1 % 13 388 CALYON tranche C (2013) variable Euribor 1 month + 1 % 7 400 Sub total 105 320 64 434 Lease debt : CTBR, fixed part (2007) fixed 4.00 % 16 532 18 381 CTBR, variable part (2007) variable Euribor 6 months + 1.1 % 17 114 22 161 CTBR 2, variable part (2016) variable Euribor 6 months + 1.15 % 65 282 68 056 CTG (2010) fixed 4.24 % 70 413 76 720 CTG B, variable part variable Euribor 1 yr + 0.8 % 75 754 SCE fixed part (2016) fixed 4.00 % 1 289 CTM fixed part (2016) fixed 3.00 % 13 252 11 754 CTM variable part (2016) variable Euribor 6 months + 1.15 % 49 284 53 376 Péage-de-Roussillon (2007) fixed 9.54 % 4 815 8 857 Sub total 313 735 259 305 Lessor advances for financing of plants variable T4M + 0.6 % 4 017 under construction (2006) variable Euribor 1 yr + 0.8 % 87 000 Miscellaneous 1 Total 423 072 410 740
Of which : 31/12/06 31/12/05 Non-current financial debt 362 511 384 812 Current financial debt 60 561 25 928
At 31 December 2006, the amount of unused short term credit was € 20 million including an authorised overdraft of € 5 million.
75WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 12.2 BREAKDOWN OF DEBT PER MATURITY The breakdown of financial debt per maturity is as follows: ( in € thousands ) Under Between one & Over five yrs Total financial one yr five yrs debt Financial debt 8 776 122 600 8 603 139 979 Lease debt 17 152 153 633 99 976 270 761 Total at 31/12/2005 25 928 276 233 108 579 410 740 Financial debt 10 460 39 246 55 617 105 323 Lease debt 50 101 115 204 152 444 317 749 Total at 31/12/2006 60 561 154 450 208 061 423 072
The amount of minimum payment for leases may be broken down as ( in € thousands ) 31/12/06 follows: Payments : Under one year 41 349 One to five years 112 449 Over five years 105 345 Total 259 143 Residual purchase prices 158 478 Total 417 621
13 • EMPLOYEE BENEFITS
Breakdown of employee benefits is as follows :
( in € thousands ) 31/12/06 31/12/05 Benefits after employment 5 348 4 108 Other long term benefits 862 817 Total 6 210 4 925
• Benefits after employment The provision for retirement commitments (defined allowance gas employees (IEG) in certain subsidiaries (specific pensions and scheme for staff) corresponds to the retirement scheme (IDR) guarantee that specific benefits will be maintained after retirement). required of all French companies, the defined allowance scheme for The amounts entered under liabilities for these schemes may be employees of the parent company, and the scheme for electricity and broken down as follows:
( in € thousands ) 31/12/06 31/12/05 Discounted value of the debt 6 096 5 105 Cost of unrecognised past services -748 -997 Net amount accounted for in balance sheet 5 348 4 108
There are no pension scheme assets. The net charge accounted for in the income statement for post-employment benefit schemes with defined allowances may be broken down as follows:
( in € thousands ) 31/12/06 31/12/05 Cost of services rendered in financial year 787 810 Financial cost 228 191 Amortization of cost of past services 249 249 Amortization of actuarial discrepancies 272 -297 Net charge for financial year 1536 953
76 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 The variation in net amounts entered into the balance sheet may be explained as follows:
( in € thousands ) 31/12/06 31/12/05 Net amount entered into balance sheet at start of year 4 108 2 386 Exchange variation Changes in group structure Net charge for year 1 536 953 Contributions paid -314 -256 Impact of changes in method and other 18 1 025 Net amount entered into balance sheet a tend of year 5 348 4 108
• Other long term benefits The variation in net amounts entered into the balance sheet may: be The amounts entered into liabilities for these schemes may be broken down as follows : broken down as follows : ( in € thousands ) 31/12/06 31/12/05 ( in € thousands ) 31/12/06 31/12/05 Net amount entered into balance sheet Discounted value of debt 863 817 at start of year 817 Cost of past services Net charge for year 102 67 Net amount entered into balance sheet 863 817 Contributions paid -56 -59 Impact of changes in method 809 Net amount entered into balance sheet The net charge for other long term benefits entered into income at end of year 863 817 statement may be broken down as follows: ( in € thousands ) 31/12/06 31/12/05 • Actuarial hypotheses Cost of services rendered The main actuarial hypotheses used are as follows : During financial year 64 30 31/12/06 31/12/05 Financial cost 38 37 Discount rate 4.5% 4.5% Cost of past services Inflation rate 2.0 % 2.0 % Amortization of actuarial discrepancies Mortality table INSEE INSEE Net charge for year 102 67 generational generational
14 • PROVISIONS FOR LIABILITIES AND CHARGES
The variation in provisions for liabilities and charges for the 2006 financial year includes the following:
( in € thousands ) Provisions for Provisions for Total provisions fiscal liabilities industrial risk cover non current and other risks Amount at 31/2/2004 930 2 459 3 389 Provisions 1 500 1 500 Releases for use -823 -823 Releases for non-use 0 Amount at 31/12/2005 930 3 136 4 066 Provisions 0 Releases for use -717 -717 Releases for non-use -930 -930 Amount at 31/12/2006 0 2 419 2 419
77WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 15 • DEFERRED TAXATION
Deferred tax credit and debt entered into the balance sheet may be analysed as follows : ( In € thousands ) ASSETS LIABILITIES NET 2006 2005 2006 2005 2006 2005 Differences between book values and fiscal values: - Fixed assets —27 020 —27 484 —27 020 —27 484 - Provisions 1 645 2 060 1 645 2 060 - Other 2 219 2 106 —410 —351 1 809 1 755 - Leases 2 362 2 969 —9 845 —3 715 —7 483 —746 - Derivatives 168 —417 —249 Fiscal deficits 994 3 717 994 3 717 Total 7 388 10 852 —37 692 —31 550 —30 304 —20 698 Offsetting effect —6 136 —6 227 6 136 6 227 0 0 Net deferred taxation 1 252 4 625 —31 556 —25 323 —30 304 —20 698
The variation in deferred taxation may be analysed as follows :
( In € thousands ) Fixed- Derivatives Provisions Other Leases Tax Total assets deficits Net deferred tax at January 1 2005 —28 500 0 756 2 114 1 092 3 652 -20 886 Credit/debit 1 016 829 —297 —1 838 65 —225 Effect of concentrations Other movements Shareholders’ equity 475 —62 413 Net deferred tax at 31/12/05 —27 484 0 2 060 1 755 -746 3 717 -20 698 Credit/debit 464 —41 223 231 —5 952 -2 723 —7 798 Effect of concentrations —869 —869 Other movements 731 —638 —177 84 0 Shareholders’ equity —939 —939 Deferred tax at 31/12/06 —27 020 —249 1 645 1 809 —7 483 994 —30 304
16 • DERIVATIVES
Derivatives Some loans and leases concluded by our subsidiaries comprise for cash flow, the other derivatives being entered as trading interest variation clauses. The contracts concluded with EDF usually instruments, their variations from fair value mostly cancelling each allow all or part of this variability, to be transferred. Where this risk is other out in the income statement. not transferred, the Group has taken out lender rate swaps at variable rate and borrower swaps at fixed rate. For each of the Analysis of the contracts for sale of electricity concluded with CEB by subsidiaries concerned, the situation of each lease in terms of rate, Compagnie Thermique de Bellevue and Compagnie Thermique du and its incidence in the balance sheet under IAS 39, is described in Sud respectively revealed the presence of incorporated exchange the table below. Swaps concluded by SECHILIENNE SIDEC, its derivatives which were entered at fair value in the accounts of these subsidaries CTG, and CCG and that concluded by the subsidiary CTBR equitized subsidiaries. to cover the residual value of its lease, have been entered as cover
78 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 2005 Fair value on balance sheet Entry of variations in 2005 ( in € thousands ) Notional 31/12/04 31/12/05 Result Temporary account in € millions in Shareholders’ equity Assets Liabilities Assets Liabilities Cover of a variable rate lease: - Sale of a cap 64 (1 462) (990) 472 - Purchase of a floor 64 346 420 74 - purchase of a cap 67 0 (194) (194) - Sale of a floor 67 0 (532) (532) Incorporated derivatives : - Rate swap 82 8 864 9 269 405 - Mirror swap 82 (8 497) (8 667) (169) Cover of a variable rate lease by five rate swaps (lender at variable rate 75 0 (2 492) (2 492) / borrower at fixed rate) Totals (before tax effect) 9 210 (9 959) 9 495 (12 681) 56 (2 492)
2006 Fair values on balance sheet Entry of variations in 2006 ( in € thousands ) Notional 31/12/05 31/12/06 Result Temporary account in € millions in Shareholders’ equity Assets Liabilities Assets Liabilities Cover of a variable rate lease : - Sale of a cap 64 (990) (829) 161 - Purchase of a floor 64 420 121 (299) - Purchase of a cap 67 (194) (207) (13) - Sale of a floor 67 (532) (95) 437 Incorporated derivatives : - Rate swap 82 9 269 5 076 (4 193) - Mirror swap 82 (8 667) (4 580) 4 087 Cover of a variable rate lease by five rate swaps (lender at variable rate 172 (2 492) 1 734 (307) 3 919 / borrower at fixed rate) Totals (before tax effect) 9 495 (12 681) 6 931 (6 018) 180 3 919
17 • OTHER CURRENT OPERATING LIABILITIES Other current operating liabilities may be broken down as follows :
( in € thousands ) 31/12/06 31/12/05 Produits constatés d'avance 6 266 4 444 Other payables 4 735 4 290 Total 11 001 8 734
18 • REVENUES FROM ORDINARY BUSINESS Revenue from ordinary consolidated activities may be analysed as follows:
( in € thousands ) 2006 2005 Sales of electricity and steam 173 456 153 399 Sales of services 7 249 6 418 Sales 180 705 159 817 Income from leases 436 653 Revenue from ordinary activities 181 141 160 470
79WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 19 • SECTORAL INFORMATION
Sectoral information is presented on the basis of the Group’s internal business sectors is as follows: organisation which reflects the various levels of risk and profitability • Thermic power : this activity includes the thermic power plants it is exposed to. supplying electricity to national firms under long term contracts. Division of information into sectors of activity is preferred since risk • Wind power : this activity includes the wind farms supplying and profitability depend mainly on the various types of activity rather electricity to EDF under 15§year contracts (the operating companies than geographical location. have been consolidated by the equity method). The sectoral data presented here are before restatement of • Holdings and other The Holding sector includes Sechilienne’s consolidation and corrections between sectors. functional and financial activities. At 31 December 2006, this also Transactions between sectors are at market prices. included solar power business, not significant at that date
19.1 INFORMATION PER MARKET SECTOR The breakdown selected by the Sechilienne–Sidec Group for
At 31 December 2006 ( in € thousands ) Thermic power Wind power Holding Eliminations Total and other Revenue from ordinary business 164 223 16 918 181 141 Inter-sectors 4 806 (4 806) Revenue from ordinary business 164 223 0 21 724 —4 806 181 141 Operating income/loss 61 322 (20) 5 155 66 457 Income/loss of associated companies 5 114 1 054 6 168 Financial charges and revenue —10 924 Taxation —7 529 Net income for year 54 172
BALANCE SHEET : Goodwill arising upon consolidation 0 0 Intangible fixed assets 119 687 0 3 961 123 648 Tangible fixed assets 440 747 11 035 4 015 455 797 Interests in associated companies 17 853 1 468 19 321 Current assets 111 041 1 492 12 003 124 536 Other non current assets (of which deferred taxation 36 737 2 698 7 916 47 351 Total Assets 726 065 16 693 27 895 0 770 653 Shareholders’ Equity 147 854 1 338 78 098 227 290 Non current financial debt 277 834 4 824 79 853 362 511 Other non current liabilities (of which deferred taxation) 37 812 0 2 373 40 185 Current liabilities 114 921 2 100 23 646 140 667 Eliminations between sectors 122 243 6 480 (128 723) 0 Total Liabilities 700 664 14 742 55 247 0 770 653
OTHER INFORMATION Tangible and intangible investments 74 692 11 035 25 85 752 Provisions for amortization (13 374) (83) -13 457
80 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 At 31 December 2005 ( in € thousands ) Thermic power Wind power Holding Eliminations Total Revenue from ordinary activities 141 358 19 112 160 470 Inter-sectors 4 760 (4 760) 0 Revenue from ordinary activities 141 358 0 23 872 — 4 760 160 470 Operating income/loss 45 996 3 503 49 499 Income/loss of associated companies 1 119 427 1 546 Financial charges and revenue —8 614 Taxation —2 669 Net income for year 39 762
BALANCE SHEET : Goodwill arising on consolidation Intangible fixed assets 123 319 123 319 Tangible fixed assets 372 810 3 466 376 276 Interests in associated companies 15 477 791 16 268 Other non current assets 60 251 32 655 92 906 Current assets 50 475 53 263 103 738 Total Assets 622 332 791 89 384 0 712 507 Shareholders’ equity 139 014 775 53 978 193 767 Non current financial debt 323 873 60 939 384 812 Other non current liabilities 33 515 799 34 314 Current liabilities 80 534 19 080 99 614 Eliminations between sectors 45 396 16 —45 412 0 Total Liabilities 622 332 791 89 384 0 712 507
OTHER INFORMATION Tangible and intangible investments 81 846 91 81 937 Provisions for amortization —11 595 —84 —11 679
(1) Other sectoral assets include inventory, receivables, other debtors charges (not counting provisions for liabilities relating to non (2) Sectoral liabilities include specific liabilities relating to plants, consolidated subsidiaries and those for tax liabilities), trade provisions for employee benefits, other provisions for liabilities and payables and other payables.
19.2 INFORMATION PER GEOGRAPHICAL ZONE The breakdown selected by the Sechilienne–Sidec Group for geographical zones is as follows: — DOM : Guadeloupe, Martinique, Reunion Island — Metropolitan France — Outside France : mainly Mauritius
At 31 December 2006 ( in € thousands ) DOM Metropolitan France Outside France Eliminations Total Revenue from ordinary activities 169 029 16 918 0 —4806 181 141 Income/loss of associated companies 156 1 053 4 959 0 6 168 Goodwill arising from consolidation, intangible and tangible fixed assets 560 434 19 011 0 0 579 445
At 31 December 2005 ( in € thousands ) DOM Metropolitan France Outside France Eliminations Total Revenue from ordinary activities 143 363 21 867 —4 760 160 470 Income/loss of associated companies 672 874 1 546 Goodwill arising from consolidation, intangible and tangible fixed assets 496 129 3 466 499 595
81WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 20 • OTHER OPERATING INCOME AND CHARGES
Other operating charges include all expenditure except procurement, income corresponded mainly to insurance repayments in the amount logistics and staff expenses. of € 7 031 K for the repairs following the two accidents at Compagnie For the financial year ending 31 December 2005, other operating Thermique du Moule.
21 • OTHER OPERATING INCOME AND CHARGES
Other operating income and charges may be analysed as follows:
( in € thousands ) 2006 2005 Income from disposal of CO2 quotas 1 551 894 Other income 12 703 Other operating income 14 254 894 Loss upon disposal of assets -226 -9 Other operating charges -226 -9 Total other operating income and charges 14 028 885
At close of accounts on 31 December 2006, other income equipment it would fund, in consideration for a promise to buy represented GIE Vaynilla Bail’s share of the tax credit it enjoyed from GTG, exercisable after a period of five years and three months under Art. 217 Undecies of the French tax code, which it handed from the date at which Vaynilla Bail acquired ownership of this over to CTG in funding the CTG-B unit. equipment and rented it to CTG. Due to these characteristics, the Le GIE a consenti à la GIE Vaynilla Bai gave CTG a promise to sell acquisition is considered to be definite.
22 • COST OF FINANCIAL INDEBTEDNESS
The various components of the financial debt are as follows:
( in € thousands ) 31/12/06 31/12/05 Financial costs of financial debt (4 055) (2 574) Financial costs of leases (10 935) (10 108) Interest on short term loans and miscellaneous Coût de l'endettement financier (14 990) (12 682)
23 • OTHER FINANCIAL INCOME AND CHARGES
The various components of financial income and charges are as follows:
( in € thousands ) 2006 2005 Interest received 2 954 3 274 Income from disposal of investment securities 538 547 Dividends received IAS 32/39 286 236 Other financial income and miscellaneous 649 230 Other financial income 4 427 4 287 IAS 32/39 -107 -180 Other financial charges -254 -39 Other financial charges -361 -219 Other financial income and charges 4 066 4 068
82 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 24 • INCOME TAX
Corporate Income tax may be analysed as follows: The effective rate of taxation at 31 December 2006 was determined as follows : ( in € thousands ) 2006 2005 Current taxation (3 195) (2 444) ( in € thousands ) 2006 2005 Deficit carried back 3 462 Operating income 66 457 49 499 Deferred tax (7 796) (225) Cost of net financial debt (14 990) (12 682) Total corporate income tax (7 529) (2 669) Other financial income and charges 4 066 4 068 Income before tax and share Deficit carry back led to a release on the deferred tax debt relating to in equitized companies (A) 55 533 40 885 this deficit in the amount equivalent to the current tax credit Tax charge (B) (7 529) (2 669) generated by this operation. Taux d'impôt effectif (B) / (A) 13,56% 6,53%
At 31 December 2006, the difference between the effective and theoretical tax charge was analysed as follows, not counting any additional contribution. 2006 2005 base (K€) Rate Tax (K€) base (K€) Rate Tax (K€) Tax charge 55 533 13.56% 7 529 40 885 6.53% 2 669 Reduced taxation rate in DOM — 11.77% 6 537 — 12.69% 5 188 Variation in deferred tax rates 0,77% 315 % of costs and charges — —0.68% —380 — Tax rebate on DOM investments — 8.14% 4 523 — 10.47% 4 281 Other — 0.54% 298 — 2.87% 1 173 Theoretical tax charge 55 533 33,33% 18 507 40 885 33,33% 13 626
25 • RISK MANAGEMENT
Rate risks the contractual provisions allowed. Where, under these provisions, • The financing lines set up in the financial restructuring operation on the rate variation could not be carried over, the company holding the February 17 2006 were used in the amount of €84,917 M and were financing contract set up appropriated hedge operations: a tunnel by the subject of swaps (variable for fixed rates) in the amount of € which caps were purchased and floors sold. The CTBR-2 plant 73,000 M. The part of its debt exposing SÉCHILIENNE-SIDEC to rate acquired a swap of a variable against a fixed rate, and the CTG-B risk is therefore small. plant a variable-fixed rate swap for the funding of the CCG combustion turbine at Le Galion. •Where funding of subsidiaries via loans or leases was not at fixed rates, the rate variation in the leases was carried over to customers if Group indebtedness may be analysed as follows :
( in € thousands ) 31/12/06 31/12/05 Loans and financial debt : Fixed rates 110 202 176 652 Variable rates 312 870 234 088 Sub total 423 072 410 740
Cash and equivalents : Bank 361 173 Placement of lessors’ advances 0 28 144 Investment securities 9769 17 886 Sub total 10 130 46 203
Current accounts of equitized companies 512 405 Net financial indebtedness 413 454 364 942
83WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Net financial indebtedness at 31 December 2006 was € 413 454 Cash risks thousand as against €364 942 thousand at 31 December 2005. Not At 31 December 2006, the cash position was as follows : including non-recourse project funding and pre-financing of the new ( in € thousands ) 31/12/06 31/12/05 € plants, net debt at 31 December 2006 was 74 514 thousand as Other current financial assets 52 139 49 246 € against 47 018 thousand at 31 December 2005. Cash and equivalents 361 173 Financial asset and liability sensitivity to interest rate variations. Unused credit lines 20 000 7 200 The financial impact of a 1% rise in interest rates would be € 2 808 Cash position 72 500 56 619 thousand. This increase in charges is carried over to the customer (provision in the contracts for sale of electricity) in the amount of € 1 201 thousand. Furthermore, this increase is covered by the Legal risks arising from activities company’s variable/fixed rate swaps in the amount of € 730 These are mainly: thousand. Therefore the true impact would be a loss of € 877 a) Possible breach of any type of contractual obligation, not least thousand. those relating to electricity supply to network managers and steam supply to sugar factories. This would lead to contractual penalties. The company has adopted preventive measures such as paying Exchange risks extreme attention to the quality of building and maintenance of • Group operations are mostly carried out in euros except for : power plants, and to all the human, material and technical factors —subsidiaries’ purchases of coal in US dollars, sale prices to ensuring efficient, high performance operation. customers taking account of the exchange rate variations in particular, b) Possible changes in the statutory and regulatory provisions —the business of companies in which SÉCHILIENNE-SIDEC has governing the company’s business, not least: minority interests in Mauritius. The accounts of these companies are — a possible fall in the price of the electricity supplied to network drawn up in Mauritian rupees. managers constrained by legal obligation to buy. This threat could Exchange rate risk arises mainly from: affect the rate of development in wind or solar power by reducing —the impact of exchange rate variations on the overall value of the profitability of future contracts; equitization (accounted for directly in shareholders’ equity), —A possible abolition or reduction of the tax rebates applicable in — re-valuation of financial debts, which are in some cases entered in all or part of the geographical locations of our businesses. The euros, only abolition of DOM tax rebates that would have a recurrent — partial indexation of the contracts for sale of electricity on the impact on SECHILIENNE-SIDEC’s consolidated net income would euro. be the abolition of the “third party rebate”. Its impact on the Group’s current consolidated tax would have been about € 3 • The acqusition of the GENERAL ELECTRIC combustion turbine million for the 2006 financial year. However, this provision is installed by CCG on Martinique was carried out in US dollars and currently governed by Art. 217 b of the French Tax Code which lays gave rise to a future purchase in the amount of US$ 1 368 thousand down that it is applicable to the results of financial years closed as against € 1 039 thousand. up to 31/12/2017. Abolition of the other tax incentives - TVA-NPR The company uses no other exchange hedge instruments. and tax exoneration measures – would have no significant effect on contracts in progress. At 31 December 2006, exchange risks were analysed as follows : —A possible increase in the charges arising from the particular Value in euros of assets in Mauritian rupees status of the staff in the electricity and gas industry. It is difficult ( in € thousands ) 31/12/06 31/12/05 restated to assess this threat. Its effects would be partly offset by the fact Assets (equitized securities) 16 250 13 799 that the price of electricity sales to EDF is indexed not least on the Liabilities 0 0 cost of labour in the mechanical and electricity industries. Net position before management 16 250 13 799 —A possible decrease of the maximum emission values fixed by the Off-balance-sheet position 0 0 regulations governing the environmental performances required Net position after management 16 250 13 799 of electricity power plants. This threat seems limited given the recent changes in the standards applicable to SÉCHILIENNE-SIDEC plants, as follows: Counterparty risks — the first plants at Bois-Rouge (CTBR-1), Le Gol (CTG-A) and Le Given the quality of the contract signatures, not least in the Moule (CTM) fall under the limit values laid down by the decree subsidiaries, the counterparty risk relating to receivables is not dated 30 July 2003 on existing plants and meet the conditions significant. Moreover, the Group has no particular dependency on its easily. New permanent analysis means will be installed to suppliers. complete the equipment. — The Bois-Rouge plant commissioned at end 2004 (CTBR-2) and
84 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 that at Le Gol commissioned in December 2006 (CTG-B) fall Control of technological risk by: under the limit values laid down by the decree dated June 30 — Application of suitable measures to the coal stocks (compacting 2002 on new installations. To ensure compliance, special and tarpaulins, limited height, pathways enabling a fire to be technological solutions were chosen (an IGNIFLUID burner with attacked in several places and at different angles, monitoring of IGNIFLUID boiler with de-sulfurisation by injection of slaked temperatures at centre of piles, rotation rules etc.), lime into the burner, and means to layer injections of air and — Placing oil storage at a distance from potential heat sources and smoke circulation, for CTG-B, a pulverised coal burning boiler permanent temperature control on machines, comprising downstream de-sulfurisation of smoke by treating it — Boiler supply circuits with automated cut-off in the event of with milk of lime, and layered injection of secondary and malfunctioning and power supply by a succession of suppliers, tertiary air). — Introduction of suitable fire fighting means approved by the DRIRE, The contracts with EDF, comprising a clause maintaining their — Strict supervision of wind turbines in service, with regular economic balance, will also enable any cost likely to arise to be inspections and control and maintenance operations. carried over into the price of electricity.
Prevention of risk of floor and water Industrial and environmental risks contamination by bacteria by a) SECHILIENNE-SIDEC’s activities entail risks of this kind arising from all — Setting up distinct water collection networks so that each type industrial activity, with the following specific features: of effluent receives appropriate treatment, These risks are mainly concentrated in the thermic power plants — Setting up differentiated water treatment systems with generating electricity, operation of which entails: measurement of effluent and suspended matter etc — technological risks (fire in particular) linked to the presence of — Location of equipment containing oil on special oil proof trays, coal stocks, handling of combustible materials (bagasse and coal) — Monitoring of the surrounding water, the running of the boilers, and the presence of oil in the turbo- — Application of the extremely detailed provisions in the decree alternator generator in the machine room. dated December 12 2004 on water cooling systems by air flow — Risk of polluting floors and water with the various products and subject to authorisation, to prevent legionella, under the waste stored, plus effluents. supervision of the DRIRE, — Risk that bacteria might appear and develop, especially — Maximum use made of combustion residue (slag, floating legionella-type bacteria in the self-cooling equipment. cinders) by businesses recycling mineral materials — Risk of atmospheric pollution arising, first, from dust emission due to bagasse and coal handling, and second, from smoke emissions from stacks. Prevention of the risk of atmospheric pollution Wind power and solar facilities have none of these risks. The only by: type of risk arising from operation of wind turbines is if a vane comes — Avoiding coal dust emissions and clouds by using dust proofed loose and falls. skips for transport, truck unloading under a protective awning, moving by hooded conveyor belts, screening and crushing in closed b) The existence of risk has led to the regulation of thermic plants of buildings, the size of those operated by the Group as «installations classified — Compacting and/or covering coal piles with tarpaulins for purposes of environmental protection» (ICPE) and therefore — Placing floating cinders from combustion in closed silos, subject to stringent provisions (procedure of granting an — Adoption of boiler technology enabling the minimum emission authorisation to operate delivered after a thorough investigation, levels required by the public authorities to be complied with and imposition of protective measures, periodical monitoring by the introduction of instruments to measure sulphur dioxide, nitrogen services of the Regional Directorates for industry, research and the oxide and carbon monoxide among others. environment (DRIRE). Wind farms and solar power plants are also the subject of scrutiny by the public authorities, although they do not fall under the regulations specfic to ICPE: they are carefully investigated at the building permit stage and then inspected for proper maintenance effectiveness. c) Each of the risks detailed is dealt with as follows:
85WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Risk arising from business locations a) The Indian Ocean and the Caribbean, where the core of the Group’s designed to resist earthquakes. Earthquakes of varying strength activity is located, are subject to weather such as cyclones or tropical have struck Guadeloupe since 1998 and did not affect the Le Moule storms. Moreover, the Caribbean is in an earthquake zone. plant. The design and building of our plants take account of this and comply Moreover the subsidiaries concerned are insured against these risks. with very strict rules and are the subject of strict scrutiny. As regards the risk of cyclones, the resistance of the Group’s plants b) Furthermore, although certain political parties in the DOM are on REUNION ISLAND, MAURITIUS and in the ANTILLES was fighting for independence and although Mauritius is confronted with demonstrated during several cyclones. tough economic challenges, the Group has no reason to think that The plant at Le Moule on GUADELOUPE, operating since 1998, as is there are any risks of instability likely to have significant effect on its the Le Galion combustion turbine completed a tend 2006, is property, its profits and its financial situation.
La Haute-Lys wind farm - France
86 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 26 • OFF-BALANCE-SHEET COMMITMENTS AT 31 DECEMBER 2006
The Group’s off balance sheet commitments are as follows: In respect of the building of the new CTG B plant: — SECHILIENNE-SIDEC gave the VAYNILLA BAIL banking EIG SÉCHILIENNE-SIDEC commitment to guarantee payment in the funding the new tranche, a guarantee that work would be funding of Centrale Thermique du Moule, completed and that it would refund in the event that the sale was cancelled with the lessor. SÉCHILIENNE-SIDEC commitment to guarantee payment in the — The Compagnie Thermique du Gol made an irrevocable promise funding of Centrale Thermique de Bois-Rouge, to buy all the shares in the VAYNILLA BAIL EIG from its members, exercisable following a period of 5 years and 3 months as of the SECHILIENNE-SIDEC commitment to acquire the GOL thermic power date the plant is commissioned. plant in the event the option under the terms of the lease is not exercised by Compagnie Thermique du Gol, in the amount of ¤ 28 050 thousand. In respect of the SAVANNAH project on Mauritius: — Undertaking to counter-guarantee the SUDS company for 25%, SECHILIENNE-SIDEC commitment to pledge its shareholding in a maximum of € 4.5 million, under SUDS’guarantee to the CEB, C.T.B.V. to the lenders to guarantee all the loans made to C.T.B.V. up to entry into effect of the electricity purchase contract. — Undertaking to subscribe to CTSAV shares in the amount of € 5 SECHILIENNE-SIDEC commitment to acquire all the shares in the million as and when building needs require and letter of Spanish company UBEDA SOLAR at a predetermined price, on guarantee. condition that the relevant authorities grant the permits to build and — Undertaking to underwrite € 2.5 million should the building operate solar power plants of 5.67 MW capacity. costs be overstepped and letter of guarantee. — Granting of priority to the lending institutions over shareholders SECHILIENNE-SIDEC commitment to acquire all the shares in the in the profits arising from pledging of CTSAV shares and direct Spanish company LINARES SOLAR at a predetermined price, on technical assistance from SECHILIENNE-SIDEC in the event that condition that the relevant authorities grant the permits to build and CTSAV defaults. operate solar power plants of 5.67 MW capacity. In respect of the Compagnie de Cogénération du Galion project: SECHILIENNE-SIDEC commitment to acquire all the shares in the — Guarantee given to General Electric and CEGELEC for the turbine Spanish company ORGIVA SOLAR at a predetermined price, on sale and installation contract, and for the building and condition that the relevant authorities grant the permits to build and implementation of infrastructures, in the respective amounts of operate solar power plants of 1.30 MW capacity US$ 17 million and € 7.4 million.. — € 9.1 M counter-guarantee by SECHILIENNE-SIDEC to C.I.C, on In respect of the building of the new CTBR 2 plant, SECHILIENNE- collateral supplied by this bank to CCG for 4 other suppliers. SIDEC undertook to provide collateral in the amount of € 5 782 000 — Guarantee that work will be completed and for repayments to to the banking EIG funding the initial plant, in addition to the the lending institutions of the CREDIT AGRICOLE Group, until previously given collateral, in the event that CTBR did not pay the acceptance of the installations with no major reservation and sums outstanding. performance of the resolutory conditions. — Commitment to maintain the shareholding in CCG and also In respect of the building of the HAUTE LYS wind farms, technical assistance. SECHILIENNE-SIDEC made the following commitments: 1) To maintain its holding in SA EOLIENNES DE LA HAUTE LYS at a Under the 7-year funding agreement concluded with CALYON on minimum 40 % ; February 17 2006, covering an overall amount of € 135 million, 2) To provide a € 3 million first-demand counter guarantee for the including restructuring of previous loans contracted by bank collateral granted by a banking organisation to the wind SECHILIENNE-SIDEC: farms, payable to the lessor — Promise to underwrite the commitments contracted by its subsidiaries in the sense of Art. L-233-3 of the French Commercial Code. — Pledge of all shares in CTBR, CTG and CTM held by SECHILIENNE-SIDEC. — Commitment to comply with specific values for the following two ratios (see “Borrowings and Debt), for the period up to 31 December 2012:
87WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 • Net interest cover ratio : Under the agreement to assign shares in the companies « SCE This ratio is defined as that between consolidated EBITDA and Société de Conversion d’Energie » and « Plexus Sol » concluded by M. net cash interest Alain ORRIOLS, assignor, and SECHILIENNE-SIDEC, assignee, as Its value at December 31 2006 was not to fall below 3.65, which performance of the bilateral promise to assign the shares dated was the case. November 15 2006, approved by the Board of Directors at the meeting At June 30 and 31 December 2007, this ratio must not fall below of November 17 2006: 3.35 and 3.20, respectively. 1- SECHILIENNE-SIDEC commitment to implement the variability and complementary clauses linking the price fixed for the fraction • Leverage ratio: of capital immediately assigned (95.02 %) as follows: This ratio is defined as that between total net debt (total — Under the variability clause, the price will be increased or borrowings less net cash flow and deposits) and consolidated decreased (depending on the amount of shareholders’ equity EBITDA. Its value at 31 December 2006 was to be lower than appearing at the intermediate accounting period at 31 December 6.45, which was the case. 2006), At June 30 and 31 December 2007, this ratio must not exceed — Under the additional price clause, the price will be increased 6.15 and 5.95 respectively. should SCE obtain a decision to exonerate it from corporate taxation under Art. 208 (4) of the French Tax Code, and should In respect of the building of the Bambesch, Niedervisse and the total cumulated capacity of the SCE and PLEXUS SOL Vanault-le-Chatel wind farms by AS EOLIENNES DEMARNE ET projects exceed certain thresholds at December 31 2008. MOSELLE –EMM- : 2) SECHILIENNE-SIDEC commitment to pay a predetermined price — Counter-guarantee to DEXIA CLF BANQUE for three bank for the remaining shares in the companies SCE Société de guarantees issued by DEXIA to GAMESA EOLICA in a maximum Conversion d’Energie and Plexus Sol, in the event that it decides total amount of € 22.10 million ex tax. to execute the promise to dispose thereof as of December 15 2011, — Collateral for all the commitments of SAS EOLIENNE DE MARNE for a period of two years. ET MOSELLE – EMM- towards CEGELEC in a maximum total amount of € 3.765.440 ex tax ; such guarantees terminating no In respect of the building of six solar power plants by the company later than December 31 2007. PLEXUS SOL on Reunion Island, unconditional and irrevocable — Guarantees to lending institutions that works will be completed promise to buy the equipment constituting the plants given by and or refunded up to acceptance with no major reservation, and PLEXUS SOL to SNC SUN 2005 and SUN 2006. performance of resolutory conditions. They include: • advancing EMM the sums needed to complete works on the In respect of the building of three solar power plants by the plant, company SCE –Société de Conversion d’Energie- on Reunion Island, • executing the works needed to complete the plant and unconditional and irrevocable promise to buy the equipment commission it in place of and on behalf of EMM, should the latter constituting the plants given by SCE –Société de Conversion default, d’Energie to SNC ELECT 2005 and SNC ELECT 2006. • refund the sums paid by lenders in the event the funding contracts were terminated during the building phase, • as the case may be, pay the difference between variations of tax rates during the first two financial years following commissioning, • where necessary, pay indemnification for breach of contract where EMM has taken out rate coverage during the building phase — Commitment to provide financial support and remain in the capital of SAS EOLIENNES DE MARNE ET MOSELLE during the financing period.
Solar panel
88 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 27 • COMMON INTERESTS
The consolidated financial statements include the financial The transactions undertaken with partners correspond to those statements of SÉCHILIENNE-SIDEC S.A. and the subsidiaries set made with affiliated companies. The following table shows the forth in note 4. amount of these transactions at close of accounts on 31 December SÉCHILIENNE-SIDEC is the parent company of the Group.. 2005 and 31 December 2006 :
( in € thousands ) Sales to Purchases from Receivables Debts towards Sales /purchases from common interests common interests common interests common interests common interests 2006 1 055 1 060 2005 1 319 1 126
( in € thousands ) Interest Interest Amount due by Amount due to Loans from/to common interests received paid common interests common interests 2006 100 19 1 952 686 2005 98 14 2 130 686
Terms and conditions of transactions with common For the 2005 and 2006 financial years, the Group made no provision interests: for doubtful debt relating to the amounts outstanding from common Sales and purchases with common interests are at market prices. interests. During the financial year closed at 31 December 2006, € 20 Balances outstanding at the end of the financial year are not 000 was paid out under an agreement concluded with one of the guaranteed, do not bear interest and are settled in cash. No Directors of the Group. No amount was paid out at the closing of the guarantee is supplied or received for receivables and debts with 2005 financial year. common interests.
Remuneration of key directors of the Group Group directors were also granted 3 500 stock options for the year Remuneration of the directors and members of the Board of directors 2002, 6 000 stock options for the year 2003 and 2 000 options for the for the financial year 2006 was as follows: year 2005. the division of the par value of the share by twenty decided by the AGM of May 17 2006 transformed these figures to ( in € thousands ) 2006 2005 respectively 70 000 options (at a unit price of € 4.45), 120 000 Salaries 615 555 € € Retirement pensions 305 329 options (at 4.75) and 40 000 options (at 20.9). Directorship fees 10 11 Total 930 895 No loans were granted to directors.
28 • GAS EMISSION QUOTAS
The bio-energy plants of the Séchilienne-Sidec group in DOM are development dated February 25 2005 fixed the following quotas for among those for which CO2 emission quotas have been fixed for the Compagnie Thermique de Bois-Rouge (CTBR), Compagnie Thermique years 2005 - 2007. de Gol (CTG) and Compagnie Thermique du Moule (CTM) Thus, the order by the Minister for Ecology and sustainable
( in tonnes ) 2005 2006 2007 Balances at opening of quotas 60 493 Freely attributed quotas 1 638 182 1 638 182 1 638 182 CO2 emitted 1 537 689 1 709 554 CO2 quotas assigned at € 22.5 40 000 CO2 quotas assigned at € 26.35 4 000 CO2 quotas assigned at € 25.85 57 207 Balance 60 493 (72 086) 1 638 182
The quota deficit gave rise to a provision of € 462 thousand entered for the financial year 2006. This provision is included in “other current liabilities”.
89WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 29 • EVENTS SUBSEQUENT TO CLOSURE
The agreement to acquire 95.02 % of the shares in SCE Société de income tax for ten years. The granting of that exoneration was made Conversion d’Energie and Plexus Sol provided for payment of an known to us at the end of January 2007 and the debt resulting from additional price of € 950 000 in the event that the SCE Société de this event was recorded at 31/12/06 to offset the increase in value of Conversion d’Energie obtained total exoneration from corporate the shares.
Bois-Rouge plant - Reunion Island
90 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Report of the Auditors on the Consolidated Accounts
Ladies and Gentlemen,
In accordance with the terms of our appointment by your Annual General Meeting, we have proceeded to examine the consolidated accounts of SECHILIENNE-SIDEC for the financial year ending December 31 2006, as presented herein. The consolidated accounts were closed by the Board of Directors. It is our task, on thebasis of our audit, to express our opinion thereon.
I. Opinion on the Consolidated Accounts Our examination of the Consolidated accounts was made in accordance with generally accepted professional practice in France: these standards required implementation of diligence enabling us to arrive at a reasonable assurance that the consolidated accounts comprised no significant anomaly. An audit tests the salient items justifying the data in these accounts. It also assesses the accounting principles used and the significant evaluations selected for closure of the accounts and the overall presentation. We consider that our audit has provided a reasonable basis for the opinion set forth below. We hereby certify that the consolidated accounts for the year are regular and sincere in the light of the IFRS reference as adopted in the EU, and give a true and fair view of the assets and financial situation of the company and the results of operations carried out by the people and entities included in the consolidation.
II. Justification of the assessments Under the provisions of Art. L. 823-9 of the Commercial Code on justification of our assessments, we present the following items: — Note 2.6 of the notes presents the accounting methods on leases. In the course of our assessment of the accounting principles and methods of your company we checked the suitability of these methods and the terms of qualification and processing of the lease contracts. We also checked the correct re-statement of the 2005 accounts and the information in note 2.2.1 of the notes under the first application of IFRIC 4. — As indicated in notes 2.7 and 5, intangible fixed assets were tested for loss of value. We reviewed the suitability of the approach taken and the hypotheses used to carry out the tests. — Notes 2.15 and 2.20 presented the accounting methods for entering corporate income tax and certain operations benefiting from special tax treatment. In the course of our assessment of the accounting principles and methods of your company we checked the suitability of these methods and ensured that they were properly applied. The assessments thus made were part of our audit of the consolidated accounts as a whole, and contributed to the forming of our opinion expressed in the first part of this report.
III. Specific checks We also tested the information given in the Group management report in conformity with the rules of French professional practice. We have no observation to make as to their sincerity and correspondence with the consolidated accounts.
Courbevoie and Paris-La Défense, April 16th 2007
Auditors ERNST & YOUNG AUDIT MAZARS & GUÉRARD EMMANUELLE MOSSÉ FRÉDÉRIC ALLILAIRE PHILIPPE STROHM
91WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Parent company accounts at December 31 2006
Balance sheet ...... 93
Income Statement ...... 94
Notes to the Financial Statements ...... 95
A Highlights of the year ...... 95
B Accounting rules and methods ...... 95
C Notes to the financial statements ...... 96
D Other information ...... 100
Results for the last five financial years ...... 102
Subsidiaries and Group companies ...... 103
92 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Balance sheet at 31 December 2006
BALANCE SHEET ASSETS ( in € ) AMOUNT AMORTIZATION AMOUNT AMOUNT GROSS aAND NET NET ASSETS AT 31/12/2006 PROVISIONS AT 31/12/2006 AT 31/12/2005 Specialised industrial plants 4 291 921 4 291 922 -1 -1 Other fixed assets 506 008 406 819 99 190 155 621 TANGIBLE FIXED ASSETS 4 797 930 4 698 740 99 189 155 620 Investments 158 947 510 0 158 947 510 138 813 209 Other financial fixed assets 38 241 830 38 241 830 39 800 937 FINANCIAL FIXED ASSETS 197 189 340 0 197 189 340 178 614 146 TOTAL 1 201 987 270 4 698 740 197 288 529 178 769 766
CURRENT ASSETS 0 0 0 0 Trade receivables 5 473 371 5 473 371 4 727 370 Other receivables 10 896 749 10 896 749 5 486 426 Marketable securities 7 419 319 7 419 319 43 325 583 Banks 88 230 88 230 91 082 CASH FLOW AND EQUIVALENTS 23 877 669 0 23 877 669 53 630 461 PREPAID CHARGES 85 924 85 924 27 306 TOTAL 2 23 963 593 0 23 963 593 53 657 767
DEFERRED CHARGES 0 0 0 TOTAL 3 0 0 0 0 TOTAL ASSETS ( 1+2+3 ) 225 950 862 4 698 740 221 252 122 232 427 533
BALANCE SHEET LIABILITIES LIABILITIES NET NET ( in € ) au 31/12/2006 au 31/12/2005 CAPITAL 1 061 382 1 056 146 . Issue premium 599 964 . Merger premium 34 985 34 985 . Special reserve re-valuation 2 769 2 769 . Statutory reserve 105 615 105 615 . Reserve for re-conversion of amortized shares 770 770 . Tax-regulated reserves 929 939 929 939 . Other reserves 15 905 290 15 905 290 . Retained earnings 9 470 238 25 133 836 INCOME FOR YEAR 50 615 725 11 768 762 TOTAL 1 78 726 677 54 938 112 PROVISIONS FOR LIABILITIES AND CHARGES 2 713 156 2 295 378 LOANS AND ASSIMILATED DEBTS 89 164 021 63 184 170 TRADE PAYABLES 3 894 091 3 632 850 TAXES AND WELFARE 2 492 361 2 643 768 EQUITY STYLE DEBT 1 050 000 0 OTHER DEBT 43 211 815 105 733 254 DEFERRED INCOME 0 0 TOTAL 2 142 525 444 177 489 421 TOTAL LIABILITIES ( 1+2 ) 221 252 122 232 427 533
93WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Statement of Income
( in € ) at 31/12/06 at 31/12/05 SALES Sales of steam 13 762 647 13 600 784 Sales of services 10 183 812 10 270 806 NET SALES 23 946 459 23 871 590 Releases on provisions 0 105 000 Other revenue 0 TOTAL OPERATING REVENUE 23 946 459 23 976 590 OPERATING EXPENSES Purchases of raw materials 6 537 027 7 502 248 Variation in inventory of raw materials 0 0 Other supplies 24 561 48 878 Boiler operating costs 152 449 152 449 Lease payments 4 752 761 4 571 338 Insurance 189 440 147 476 Fees 978 749 699 014 Other external expenses 1 573 801 1 528 327 Banking and similar costs 1 719 965 122 955 Taxation 923 121 917 267 Salaries and welfare 4 895 810 4 962 919 Amortization 83 445 85 463 Provisions 441 709 514 177 TOTAL OPERATING EXPENSES 22 272 838 21 252 511 NET OPERATING EXPENSES 1 673 622 2 724 079
FINANCIAL REVENUE Other interest and related income 2 902 445 2 945 636 Revenue from minority interests 44 281 478 6 207 784 Gains from disposal of securities 512 551 546 963 TOTAL FINANCIAL REVENUE 47 696 474 9 700 382 FINANCIAL EXPENSE Interest on long and medium term loans 3 458 204 2 475 891 Interest on short term loans 1 657 491 1 601 961 Other financial expense 44 731 19 213 Transfer of financial expense (interest, pre-financing) 0 0 TOTAL FINANCIAL EXPENSE 5 160 427 4 097 065 NET FINANCIAL REVENUE 42 536 048 5 603 317 NET INCOME BEFORE TAX 44 209 669 8 327 397
EXCEPTIONAL :EXTRAORDINARY GAINS Gains on disposals of financial fixed assets 0 0 Miscellaneous 0 55 252 Releases on provisions 633 697 0 TOTAL EXCEPTIONAL:EXTRAORDINARY ITEMS 633 697 55 252 EXCEPTIONAL : EXTRAORDINARY LOSSES Book value of financial fixed assets sold 609 766 0 Amortization, prepaid expenses 0 81 742 Provisions 00 Miscellaneous 00 EXCEPTIONAL:EXTRAORDINARY LOSSES 609 766 81 742 NET EXCEPTIONAL:EXTRAORDINARY GAINS:LOSSES 23 931 —26 490
Employee profit sharing 333 845 198 875 TOTAL INCOME BEFORE TAX 43 899 756 8 102 032
CORPORATE INCOME TAX -6 715 969 -3 666 730 TOTAL INCOME 72 276 630 33 732 225 TOTAL CHARGES 21 660 905 21 963 463
NET PROFIT FOR YEAR 50 615 725 11 768 762
94 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Notes to the balance sheet and income statement
Year ending 31/12/2006
A • HIGHLIGHTS
In February 2006, Séchilienne-Sidec completely restructured its debts in On December 15 2006, the Company acquired 95.02% of the capital in an overall transaction designed to re-schedule the existing debt, two SAS companies based on Reunion Island, PLEXUS SOL and SCE increase structural financial resources and secure the funding of future Société de Conversion d’Energie, the business of which is to generate investments (see note on borrowings and debts from credit institutions). electricity from solar power.
B • ACCOUNTING RULES AND METHODS
The accounts of the parent company Séchilienne-Sidec SA have been D) Receivables drawn up in conformity with the French statutory and regulatory Receivables are shown at historical value. A provision for losses has provisions, not least those of the Plan Comptable Général (general been set up wherever realisable value is less than book value. accounting plan) and the Code of Commerce. E) Investment securities A) Tangible fixed assets Investment securities are valued by the weighted average cost method. Tangible fixed assets are accounted for at cost price. They include, first, coal fired boilers and, second, fittings, installations, transport F) Financial instruments equipment and office furniture and equipment. To reduce its exposure to the risk of impairment in value (on cost of The corresponding depreciation is calculated on a straight-line basis and materials) the Company makes use of raw materials swaps when on the estimated working life of the item. necessary. Coal-fired boilers (specialised industrial complexes) 12 years Furthermore, the company also covers the interest rate risk on variable Software 2 years rate loans by swaps. IT hardware 3 years The interest on borrowings and the net result of the swap transactions Other tangible fixed assets 5 years are entered separately under financial charges. The company regularly checks whether there are indexes for loss of value in tangible fixed assets. Where they exist, the Company tests for loss of value G) Provisions for liabilities and charges to ascertain whether the book value of the asset is greater than its Provisions are entered where: recoverable value, defined as the higher between the exact value less sales — the Group has a current liability resulting from a past event, costs and use value. — it is probable that money representing economic advantages will have Evaluation of the exact value of an asset is usually carried out by to be spent to cancel the liability discounting the future cashflow generated by the asset. Assets not — the amount of the liability can be evaluated reliably. generating independent cash flow are grouped into Units generating cashflow (UGT). The main UGTs in the Company are the thermic power H) Retirement and pension commitments plants. Charges for the Company’s retirement bonus commitments have been included in balance sheet provisions. B) Financial fixed assets Furthermore, two additional retirement schemes were set up in 2004 : Financial fixed assets are recorded under their cost value at the date they one with fixed pension contributions concerning 27 members of staff at are entered. Investments are evaluated at acquisition cost and reduced to 31/12/2006, plus another fixed pension scheme for people in the their use value where this is lower than the acquisition cost. Use value is company since before January 1st 1983. considered mainly in relation to the proportion of the shareholders’ equity The charges in respect of fixed contribution pensions are entered of the companies concerned, corrected where necessary by the latent immediately into charges. added value and their likelihood of immediate or ultimate profitability. The charges in respect of retirement bonuses and fixed pension pension schemes are included in balance sheet provisions using the projected C) Inventory credit units method and applying seniority pro rata. Coal stored at clients’ premises is valued at cost price. Actuarial calculations take account mainly of hypotheses concerning salary increases, staff rotation rates, retirement dates and probable
95WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 changes in remuneration, as well as inflation, life expectancy and an Therefore, in accordance with recommendation 2005-G of the National appropriate discount rate. Accounting Council, a provision must be made where restitution of the saving on cash flow (direct payment or entry into the current account) is likely. I) Fiscal consolidation Furthermore, the savings linked to the deficit of the parent company are On 31 March 2005, SECHILIENNE-SIDEC and its subsidiary CTBR concluded a immediately entered into profit/loss. fiscal consolidation agreement to expire on December 31 2010, under which “the application of the rules herein provided shall cause no consolidated company to pay a higher rate of taxation than it would have if it had not been consolidated”. Should the agreement not be renewed or the subsidiary leave the group before expiry thereof, for whatever reason, the parent company will repay any tax levied by reason of the subsidiary’s consolidation within the Group.
C - NOTES ON THE ANNUAL ACCOUNTS
1 BALANCE SHEET ASSETS TANGIBLE FIXED ASSETS
TYPE Gross value Purchases Disposals Gross value Previous amortization/ Disposals VNC 31/12/2005 2006 2006 31/12/2006 amortization depreciation au at 01/01/2006 2006 2006 31/12/2006 Specialised industrial complexes 4 291 921 — — 4 291 921 4 291 921 — — — Other fixed assets 478 994 27 014 — 506 008 323 373 83 445 — 99 190 4 770 915 27 014 — 4 797 929 4 615 294 83 445 — 99 190
FINANCIAL FIXED ASSETS
TYPE Gross value Increases Decreases Gross values at 31/12/2005 at 31/12/2006 Investments 139 422 975 20 154 300 629 766 158 947 509 Other financial fixed assets 39 800 937 1 915 609 3 474 716 38 241 830 TOTAL 179 223 912 22 069 909 4 104 482 197 189 339
A) The item “Investments” includes: — The writeoff of SIAL BIOENERGY for € 609 765.58 and parallel Under increases: release of the provision in the same amount. — The capital increase of COMPAGNIE THERMIQUE DU GOL in the — Disposal of 100 % of CENTRALE EOLIENNE DE LA MONTAGNE for € amount of € 13.570.200. 20.000 . — Our subscription to 25% of the capital of COMPAGNIE THERMIQUE DE SAVANNAH in the amount of € 1 180 296.98. B) The main variations of the item “Other — Capital paid up for five new project companies, in the amount of € financial fixed assets” are as follows: 18 803.49 representing 64.62 % of ENERGIE BEAUFONDS, and € 1) € 162 632 interest accrued in 2006 on the initial cash pledge of € 4 160 000 for four fully consolidated companies (CARAIBES ENERGIE, 573 480 (bringing it to € 6 154 697 at 31/12/06) formed for the funding ELECTROINVEST CARAIBES, ELECTROINVEST ANTILLES, of the COMPAGNIE THERMIQUE DU MOULE plant by the banking EIG ELECTROINVEST REUNION OCEAN INDIEN). FLEUR DE CANNES. — The acquisition of 95.02 % of SOCIETE DE CONVERSION 2) To fund the installation of RHODIA ENERGY Roussillon (boiler n°3) by GIE D’ENERGIE (S.C.E.) in the amount of € 4 814 000. CARBONE BAIL, SECHILIENNE-SIDEC: — The acquisition of 95.02 % of PLEXUS SOL in the amount of € — paid in 1992 a guarantee of € 4 253 328 amounting to 15 % of the € 411 000. 28 355 517 purchase price. The interest calculated at the annual actuarial rate of 10.8 %, i.e. € 598 602, was capitalised on September 30 Under Decreases : 2006. This deposit is thus entered at € 3 719 232, taking account of the
96 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 repayment of € 3 216 674 over the financial year. € 100 419 were entered — lent SECHILIENNE-SIDEC € 12 439 881 until 31/07/2007, at 31 December 2006. — requested SECHILIENNE-SIDEC to grant CTBR an intra-group loan in the same amount - € 12 439 881 - for this company to provide collateral 3) Under the CTBR/CREOLIBAIL lease and ancillary agreements, SIDEC to GIE CREOLIBAIL, deposited a cash pledge of € 3 811 225 with CREOLIBAIL on July 31 1992, — Blocked on a time deposit until 31/07/2007 the funds from the as collateral for the payment by CTBR to CREOLIBAIL, of either the release of SECHILIENNE-SIDEC’s cash pledge guaranteeing its loan in amount of the purchase option at the date the option is taken up, or any the amount of € 10 034 914. The interest calculated at 9.2 % that is, € 1 sum that CTBR still owes on the lease in the event that the lease is 100 897.16, was capitalised at 31 July 2006. This blocked deposit thus terminated between the fifteenth and twenty-fifth year. This deposit was increased to € 13 067 171 at 31/12/2006, and outstanding interest stood remunerated at 9.2% and the annual interest of € 845 432 was at € 500 908 at the same date. capitalised at 31 July 2003, bringing the amount of this cash pledge to € 10 034 914. 4) To fund the HAUTE-LYS wind farms, SECHILIENNE-SIDEC initially, in To fund the new CTBR 2 plant (using a new banking pool) the financier of early 2004, paid out € 7 125 000 in shareholders’ advances. the first tranche wished CTBR to place this cash pledge directly in its Following the disposal of 60 % of the company EOLIENNES DE HAUTE- assets, to cover the financier against any future risk. LYS in August 2004, the balance of these advances at 31 December 2004 stood at € 2 850 000. Following partial refunds in 2005 and 2006, the In this respect, Crédit Lyonnais (GIE CREOLIBAIL) amount was € 1 952 134 at 31/12/2006. — released the existing pledge by SECHILIENNE-SIDEC,
Receivables ACCRUED ASSETS Statement of receivables at 31/12/2006 Gross amount At under one year At over one year FIXED ASSETS Invoices to be sent 1 270 440 € loans 12 489 293 6 145 12 483 148 VAT on invoices other financial fixed assets 25 752 537 17 587 620 8 164 917 not received 306 887 € CURRENT ASSETS Provision for trade receivables 6 022 909 6 022 909 accrued assets 120 001 € other receivables 53 195 53 195 VAT - IS 3 934 931 3 934 931 current accounts subsidiaries 6 239 084 6 239 084 accrued assets 120 001 120 001 54 611 950 33 963 885 20 648 065
2 BALANCE SHEET LIABILITIES SHAREHOLDERS’ EQUITY
at 31/12/2005 Increase Decrease at 31/12/2006 Capital 1 056 146 5 236 1 061 382 Capital contributed in excess of par 599 964 599 964 Merger premium 34 985 34 985 Special reserve for re-valuation 2 769 2 769 Statutory reserve 105 615 105 615 Reserve for re-conversion of redeemed shares 770 770 Tax-regulated reserves 929 939 929 939 Other reserves 15 905 290 15 905 290 Retained earnings 25 133 836 15 663 598 9 470 238 Profit for year 11 768 762 50 615 725 11 768 762 50 615 725 TOTAL 54 938 112 51 220 925 27 432 360 78 726 677
97WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 At December 31 2006, the shareholders’ equity comprised 27 568 360 Under the amended finance law for 2004, which set up an exceptional fully paid-up shares at par value of €0.0385 (after division of their value 2.5% tax discharging the extra tax on long-term added value reserves, a by 20 on 03/07/2006, and exercise of all the stock options arriving at provision of € 395 008 was created, taken from retained earnings at maturity, 136 000), 43.48 % of which are held by Financière Hélios, December 31 2004. 11.18 % by PICTET ASSET MANAGEMENT Limited, 6.12 % by Ecofin Ltd The long-term added value reserve was transferred to the line « other and 39.23 % by various shareholders in the market. reserves » after deducting the discharge tax of € 395 008 taken from retained earnings, where it had been entered at 31/12/2004. Appropriation of profits for 2005 Fifty per cent of this tax was paid in March 2006 and the balance will be In accordance with the decisions of the Shareholders’ Annual General paid on March 15 2007. Meeting on May 17 2006, the profit for the year 2005 was appropriated as follows: — Dividend distributed € 27 432 360 — Retained earnings carried forward — € 15 663 598 €
Provisions for liabilities and charges
Balance at 31/12/2005 Provisions for the fiscal year Retained earnings Balance at and use 31/12/06 — Retirement premiums 582 684 65 209 23 931 623 962 — Fixed pension scheme 798 000 376 500 1 174 500 — Industrial risk cover 914 694 914 694 TOTAL 2 295 378 441 709 23 931 2 713 156
At 31/12/2006, the amount of provisions for liabilities and charges was — Salaries increased by 3% per year € 2 713 156 broken down as follows: — A 5 % discount rate. • Amount of retirement premiums evaluated at € 623 962 at • Under the fixed pension retirement scheme set up in 2004 for 31/12/2006. management in the company since before 1983 : These retirement premium charges were estimated for a group of 30 staff For this, a provision of € 376 500 was entered for the financial year. It on the basis of the collective agreement applied to SECHILIENNE-SIDEC includes € 306 729 for amortization of the cost of past services. The staff. The main hypotheses are as follows: actuarial estimate of this commitment at 31 December 2006 was — Mortality table (table INSEE, French institute of statistics), € 2 213 416. — A rotation rate of 2.5 % for people under 46 and no rotation for staff • Provision of € 914 694 for industrial risk cover. over 46,
Borrowings and debts with credit institutions In February 2006, the Group completely restructured its debts in an — “net interest cover ratio”: overall transaction designed to re-schedule the existing debt, increase This ratio is defined as that between consolidated EBITDA and net structural financial resources and secure the funding of future cash interest investments. Its value at December 31 2006 was not to fall below 3.65, which was For this purpose, a financing agreement over 7 years for a total amount the case. of € 135 million was concluded on February 17 2006 with CALYON as At June 30 and 31 December 2007, this ratio must not fall below 3.35 arranger, agent and lender, the main provisions of which are as follows : and 3.20, respectively. • Division into 4 tranches of which : — “leverage ratio”: — Tranche A , in the amount of €65 million: an amortizable loan to This ratio is defined as that between total net debt (total borrowings restructure existing debt. less net cash flow and deposits) and consolidated EBITDA. Its value — Tranches B, C and D for a total amount of €70 million: loans at 31 December 2006 was to be lower than 6.45, which was the case. designed to fund new investments and cover working capital needs. At June 30 and 31 December 2007, this ratio must not exceed 6.15 and • Rate : Euribor plus 100 basis points. 5.95 respectively. • Collateral : pledge of SECHILIENNE-SIDEC shareholdings in CTBR, CTG and CTM. The costs of this debt restructuring , € 1 544 100, were entered into • Compliance with the usual minimum ratios : charges for the 2006 financial year.
98 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 At 31/12/2006, withdrawals were as follows: During 2006, Séchilienne-Sidec took out swaps (variable rate lender/fixed — Tranche A : € 65 000 000 rate borrower) to cover part of the CALYON loans, in the amount of — Tranche B : € 13 570 000 € 73 000 000. — Tranche C : € 7 500 000
Debts Statement of debts at 31/12/2006 Gross amount Under 1 year 1 – 5 years Over 5 years — Loans and debts with credit institutions 89 164 021 9 594 021 35 481 500 44 088 500 — Trade payables 3 894 091 3 894 091 — Fiscal and corporate debts 2 492 361 2 492 361 — Payables relating to fixed assets 1 050 000 1 050 000 — Other payables (1) 43 211 815 43 211 815 139 812 288 60 242 288 35 481 500 44 088 500 (1) Of which € 41 127 125 are debts to subsidiaries due to centralisation of cash flow, and € 346 619, the debt to CTBR arising from fiscal consolidation.
Charges payable — Invoices not received € 1 430 739 — State € 197 503 — Payroll € 1 432 844 — Provisioned charges payable € 1 726 229 — Welfare contributions € 656 129 — CTBR charges payable — VAT on invoices to come € 199 453 Fiscal consolidation € 346 619
3 EXCEPTIONAL PROFIT/LOSS 5 INCREASES AND REDUCTIONS OF Not counting the removal of the interest in SIAL BIOENERGIE from THE FUTURE TAX DEBT assets, in the amount of € 609 766, covered by a release on provisions for the same amount, the exceptional profit/loss includes no significant Nature of temporary differences Amount Increases item at 31/12/2006. and reductions Increases Total increases of future tax debt 0 0 4 CORPORATE TAXATION Reductions A fiscal agreement was signed on March 31 2005. Fiscal consolidation Provisions not deductible includes SECHILIENNE-SIDEC and its subsidiary CTBR. in the year of book entry: - Provision for retirement pensions and At 31/12/2006, CTBR’s tax credit was absorbed by SECHILIENNE-SIDEC’s additional pension scheme 1 798 462 599 487 tax deficit for the year which amounted to €10 522 646 (not including the - Provision for cover of industrial risks 914 694 304 898 € 10 386 038 deficit carried over from 31/12/2004 and dating from Employee participation 300 000 100 000 before fiscal consolidation : it was carried back for the 2006 financial Other 112 612 37 537 year). This generated a tax credit of € 3 266 210, resulting from the tax Total reductions of future tax debt 3 125 768 1 041 922 saving arising from fiscal consolidation, and a € 3 462 009 carry-back at Deficits carried over 2 743 876 914 624 31/12/2004 for the parent company heading the fiscal consolidation.
99WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 D • OTHER INFORMATION
It should also be noted that SECHILIENNE-SIDEC : • In respect of the building of the new CTBR 2 plant: 1) undertook the following transactions with its associated SECHILIENNE-SIDEC undertook to provide collateral in the amount companies : of € 5 782 000 to the banking EIG funding the initial plant, in ( in euros ) SÉCHILIENNE- SIDEC addition to the previously given collateral, in the event that CTBR Subsidiaries did not pay the sums outstanding. BALANCE SHEET • In respect of the building of the HAUTE LYS wind farms, SECHILIENNE- Loans and interest accrued 12 638 141 SIDEC made the following commitments: Trade receivables 1 259 314 1) To maintain its holding in SA EOLIENNES DE LA HAUTE LYS at a Current accounts debtor subsidiaries 6 239 084 minimum 40 % ; Revenue to come 93 254 2) To provide a € 3 million first-demand counter guarantee for the Current accounts creditor subsidiaries 41 127 125 bank collateral granted by a banking organisation to the wind farms, Interest payable 394 609 payable to the leaser STATEMENT OF INCOME • In respect of the building of the new CTG B plant: OPERATING REVENUES SECHILIENNE-SIDEC gave the VAYNILLA BAIL banking EIG funding the Sales of services 8 566 064 new tranche, a guarantee that work would be completed and that it Re-invoicing staff fees 1 586 498 would refund in the event that the sale was cancelled with the leaser. FINANCIAL CHARGES • In respect of the SAVANNAH project on Mauritius: Interest on subsidiaries’ current accounts 1 657 127 — Undertaking to counter-guarantee the SUDS company for 25%, a FINANCIAL REVENUE maximum of € 4.5 million, under SUDS’ guarantee to the CEB, up to Interest on loan 895 002 entry into effect of the electricity purchase contract. Collateral fees 175 316 — Undertaking to subscribe to CTSAV shares in the amount of € 5 Revenue from investments 44 275 478 million as and when building needs require and letter of guarantee. — Undertaking to underwrite € 2.5 million should the building 2) Paid out €20 K in the course of the financial year ending costs be overstepped and letter of guarantee. December 31 2006, under an agreement concluded with one of the — Granting of priority to the lending institutions over shareholders Group’s directors. in the profits arising from pledging of CTSAV shares and direct technical assistance from SECHILIENNE-SIDEC in the event that 3) Had a staff of 34 (all of which under contract) at 31/12/2006, as CTSAV defaults. against 30 (of whom 29 under contract) at 31/12/2005. • In respect of the Compagnie de Cogénération du Galion project: — Guarantee given to General Electric and CEGELEC for the turbine 4) Paid out a total of € 12 250 in Directors’ fees for 2005 to three sale and installation contract, and for the building and members of the Audit and Accounts Committee. The remuneration paid implementation of infrastructures, in the respective amounts of US$ to the directors by the company in 2006 amounted to € 611 713 €. A 17 million and € 7.4 million. charge relating to the additional retirement scheme of one director was — € 9.1 M counter-guarantee by SECHILIENNE-SIDEC to C.I.C, on entered at 31/12/2006 in the amount of € 305 480. collateral supplied by this bank to CCG for 4 other suppliers. — Guarantee that work will be completed and for refund of the loan 5) Has the following off-balance-sheet commitments: covering the transaction, to the financial institutions. Commitments made : — Commitment to maintain the shareholding in CCG and also • SECHILIENNE-SIDEC undertook to guarantee payment of the funding technical assistance. of the MOULE thermic power plant(see note on financial fixed assets • Under the 7-year funding agreement concluded with CALYON on point B1), February 17 2006, covering an overall amount of € 135 million, • SECHILIENNE-SIDEC undertook to guarantee payment of the funding including restructuring of previous loans contracted by SECHILIENNE- of the BOIS-ROUGE thermic power plant(see note on financial fixed SIDEC: assets point B3), — Promise to underwrite the commitments contracted by its • SECHILIENNE-SIDEC undertook to acquire the GOL thermic power subsidiaries in the sense of Art. L-233-3 of the French Commercial plant in the event the purchase option by the Compagnie Thermique du Code. Col was not taken up, under the terms of the lease contract, for € 28 — Pledge of all shares in CTBR, CTG and CTM held by SECHILIENNE- 050 619 , SIDEC. • SECHILIENNE-SIDEC pledged its shareholding in C.T.B.V. to the — Commitment to comply with specific values for two ratios (see lenders to guarantee all the loans made to C.T.B.V. “Borrowings and Debt), for the period up to 31 December 2012.
100 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 • In respect of the building of the Bambesch, Niedervisse and Vanault- companies concluding a work contract with M. Alain ORRIOLS, and le-Chatel wind farms by AS EOLIENNES DE MARNE ET MOSELLE –EMM- on several clauses of these contracts. : 3) SECHILIENNE-SIDEC commitment to pay a predetermined price — counter-guarantee to DEXIA CLF BANQUE for three bank for the remaining shares in the companies SCE Société de guarantees issued by DEXIA to GAMESA EOLICA in a maximum total Conversion d’Energie and Plexus Sol, in the event that it decides to amount of € 22.10 million ex tax. execute the promise to dispose thereof as of December 15 2011, for — Collateral for all the commitments of SAS EOLIENNE DE MARNE a period of two years. ET MOSELLE – EMM- towards CEGELEC in a maximum total amount • In respect of solar power projects : of € 3.765.440 ex tax ; such guarantees terminating no later than — SECHILIENNE-SIDEC commitment to acquire all the shares in the December 31 2007. Spanish company UBEDA SOLAR at a predetermined price, on — Guarantees to lending institutions that works will be completed condition that the relevant authorities grant the permits to build and and or refunded up to acceptance with no major reservation, and operate solar power plants of 5.67 MW capacity. performance of resolutory conditions. They include: — SECHILIENNE-SIDEC commitment to acquire all the shares in the — advancing EMM the sums needed to complete works on the Spanish company LINARES SOLAR at a predetermined price, on plant, condition that the relevant authorities grant the permits to build and — executing the works needed to complete the plant and operate solar power plants of 5.67 MW capacity. commission it in place of and on behalf of EMM, should the latter — SECHILIENNE-SIDEC commitment to acquire all the shares in the default, Spanish company ORGIVA SOLAR at a predetermined price, on — refund the sums paid by lenders in the event the funding condition that the relevant authorities grant the permits to build and contracts were terminated during the building phase, operate solar power plants of 1.30 MW capacity. — as the case may be, pay the difference between variations of tax rates during the first two financial years following 6) Information on leases: commissioning, A lease was taken out on the RHODIA ENERGY plant in Roussillon in — where necessary, pay indemnification for breach of contract September 1992 in the amount of € 28 355 517, and the commitments where EMM has taken out rate coverage during the building phase linked to this lease at 31/12/2006 are partly covered by a pledge — more generally, undertake to provide financial support and deposit (see note on financial fixed assets point B2). remain in the capital during the financing period. - original amount of financing 28 355 517 € • Under the agreement to assign shares in the companies « SCE Société - payment for financial year 4 752 761 € de Conversion d’Energie » and « Plexus Sol » concluded by M. Alain - aggregate payments 53 258 273 € ORRIOLS, assignor, and SECHILIENNE-SIDEC, assignee, as - outstanding payment up to 1 year 3 716 035 € performance of the bilateral promise to assign the shares dated - outstanding payments from 1 - 5 years 0 € November 15 2006, approved by the Board of Directors at the meeting - payments to be made at over 5 yrs 0 € of November 17 2006: - remaining purchase price 1 417 776 € 1) SECHILIENNE-SIDEC undertook to implement the variability and complementary clauses linking the price fixed for the fraction of 7) Derivatives capital immediately assigned (95.02 %) as follows: Cover of variable rate loans of a notional € 73 000 K, by 3 rate swaps — Under the variability clause, the price will be increased or (lender at variable rate, borrower at fixed rate) the exact value of which decreased (depending on the amount of shareholders’ equity was € 326 K at 31/12/2006. appearing at the intermediate accounting period at 31 December Notional Exact value 2006), depending on the significance of the electricity sale € 65 000 K € 251 K contracts concluded and the solar power plants coupled to the € 4 000 K € 33 K EDF network at June 30 2008, the granting or not of the subsidy € 4 000 K € 42 K agreements for the forecast amounts concerning the SNC ELEC 2006 projects, and the maintenance or not of the fiscal 8) Events subsequent to closing of accounts : authorisations granted to SNC ELEC 2005 and SNC ELEC 2006. • In respect of acquisition of 95.02% of the shares in « SCE Société de — Under the additional price clause, the price will be increased Conversion d’Energie » and « Plexus Sol » the share assignment should SCE obtain a decision to exonerate it from corporate agreement provides for payment of an additional sum of € 950 000 taxation under Art. 208 (4) of the French Tax Code, and should the should SCE Société de Conversion d’Energie obtain authorisation to be total cumulated capacity of the SCE and PLEXUS SOL projects fully exonerated from corporate tax for ten years. exceed certain thresholds at December 31 2008. This authorisation was brought to our notice at end January 2007 and 2) SECHILIENNE-SIDEC commitments in respect of various the debt resulting from this event was recorded at 31/12/2007 operating methods in the companies entering the group, upon these opposite the increased value of the shares.
101WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Results for the last five financial years
( in Euros )
NATURE 2002 2003 2004 2005 2006 CAPITAL EN FIN D'EXERCICE • Capital social 1 056 145,86 1 056 145,86 1 056 145,86 1 056 145,86 (2) 1 061 381,86 • Nombre d'actions émises 1 371 618 1 371 618 1 371 618 1 371 618 (3) 27 568 360
OPERATIONS ET RESULTATS DE L'EXERCICE • Chiffre d'affaires hors taxes 23 662 729 20 263 915 22 364 664 23 871 590 23 946 459 • Résultat avant impôts, amortissements et provisions 24 804 133 12 796 490 10 069 144 8 783 414 43 791 21 • Impôts sur les bénéfices 6 677 858 2 427 528 0 — 3 666 730 — 6 715 969 • Résultat après impôts, amortissements et provisions (1) 17 525 324 9 696 431 9 246 038 11 768 762 50 615 725 • Résultat distribué 6 172 281 6 720 928 9 601 326 27 432 360 30 325 196
RESULTAT PAR ACTION • Résultat après impôts, mais avant amortissements et provisions 13,22 7,56 7,34 9,08 (3) 1,83 • Résultat après impôts, amortissements et provisions 12,78 7,07 6,74 8,58 (3) 1,84 • Dividende distribué 4,50 4,90 7,00 20,00 (3) 1,10
EFFECTIF 24 30 32 30 34
(1) dont plus value, 8,34 M€ après impôt. (2) après exercice de la totalité des options de souscription à partir du 03/09/2006 (plan du 02/09/2002). (3) après division du titre par 20, le 03/07/2006 et (2).
102 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Subsidiaries and Group companies at 31/12/2006
CARAIBES ENERGIE ELECTROINVEST ANTILLES 97160 LE MOULE ( GUADELOUPE ) 30, rue de Miromesnil - 75008 PARIS
CENTRALE EOLIENNE DE LA CARNOYE ELECTROINVEST CARAIBES 30, rue de Miromesnil - 75008 PARIS 30, rue de Miromesnil - 75008 PARIS
COMPAGNIE DE COGENERATION DU GALION ELECTROINVEST REUNION 30, rue de Miromesnil - 75008 PARIS 30, rue de Miromesnil - 75008 PARIS
COMPAGNIE THERMIQUE DE SAVANNAH E.M.S. Anglo Mauricius Building (Exploitation, Maintenance, Services) Adolphe de Plevitz street 2, chemin de Bois Rouge PORT LOUIS ( ILE MAURICE ) 97440 SAINT-ANDRE ( REUNION )
CENTRALE EOLIENNE DE LIRAC ENERGIE BEAUFONDS 30, rue de Miromesnil - 75008 PARIS 8, allée de Beaufonds 97 SAINT BENOIT ( REUNION ) C.I.C.M (Compagnie Industrielle des Cendres et Machefers) EOLIENNES DE CLAMANGES ET DE VILLESENEUX 97419 LA POSSESSION ( REUNION ) 30, rue de Miromesnil - 75008 PARIS
C.T.B.R. EOLIENNES DE LA HAUTE LYS (Compagnie Thermique de Bois Rouge) 30, rue de Miromesnil - 75008 PARIS 2, chemin de Bois Rouge La société EOLIENNES DE LA HAUTE LYS détient 100% des sociétés EOLIENNES 97440 SAINT- ANDRE ( REUNION ) DE FAUQUEMBERGUES, DE RENTY, DE VINCLY, DE RECLINGHEM
C.T.B.V. EOLIENNES DE LA PORTE DE FRANCE (Compagnie Thermique de Bellevue) 30, rue de Miromesnil - 75008 PARIS 18, rue Edith Cavell PORT LOUIS ( ILE MAURICE ) EOLIENNES DES QUATRE VENTS 30, rue de Miromesnil - 75008 PARIS C.T.B.V. MANAGEMENT 18, rue Edith Cavell ISERGIE PORT LOUIS ( ILE MAURICE ) 38042 GRENOBLE
C.T.D.S. PLEXUS SOL (Compagnie Thermique Du Sud) 31, rue Eudoxie Nonge - 97490 SAINTE CLOTILDE PORT LOUIS ( ILE MAURICE ) R.C.M. INDUSTRIES C.T.G. (Recyclage, Cendres, Machefers, Industries) (Compagnie Thermique du Gol) 97160 LE MOULE ( GUADELOUPE ) Le Gol - 97450 SAINT-LOUIS ( REUNION ) SOCIETE DE CONVERSION D'ENERGIE ( S.C.E. ) C.T.M. 31, rue Eudoxie Nonge (Compagnie Thermique du Moule) 97490 SAINTE CLOTILDE 97160 LE MOULE ( GUADELOUPE ) S.T.P C.T.P. (Sud Thermique Production) (Caraîbes Thermique Production) 2, chemin de Bois Rouge 97160 LE MOULE ( GUADELOUPE ) 97440 SAINT-ANDRE ( REUNION )
103WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 ( en euros ) SOCIÉTÉS Capital Autres Nombre d’actions % social capitaux propres détenues détenu C.T.G. 13 354 533,55 48 877 085,39 430 301 64,61 % Compagnie Thermique du Gol ( Réunion ) C.T.B.R. 18 826 301,72 27 221 950,61 1 234 997 100,00 % Compagnie Thermique de Bois-Rouge ( Réunion ) E.M.S. 304 898,03 -1 265 775,65 1 Exploitation, Maintenance, Services ( Réunion ) S.T.P. 152 449,02 -1 313 029,09 1 Sud Thermique Production ( Réunion ) C.T.M. 22 379 515,73 20 949 110,72 1 468 000 100,00 % Compagnie Thermique du Moule ( Guadeloupe ) C.I.C.M. 887 400,00 465 328,00 2 958 51 % Cie Industrielle des Cendres et Mâchefers ( Réunion ) C.T.P. 152 449,02 -679 252,63 1 Caraïbe Thermique Production ( Guadeloupe ) ISERGIE 3 811 226,00 2 164 900,33 10 000 4,00 % ( Grenoble ) R.C.M. INDUSTRIES 686 020,58 213 317,83 44 994 99,99 % Recyclage, Cendres, Mâchefers, Industries ( Guadeloupe ) C.T.B.V. 520 523 500,00 448 100 714,00 5 824 197 27,00 % Compagnie Thermique de Bellevue ( Ile Maurice ) MUR MUR C.T.B.V. MANAGEMENT 100 000,00 575 216,00 6 200 62,00 % 18 rue Edith Cavell ( Ile Maurice ) MUR MUR EOLIENNES DES QUATRE VENTS 40 000,00 -30 425,34 39 995 99,99 % ( Paris ) EOLIENNES DE LA HAUTE LYS ( 1 ) 40 000,00 126 814,59 15 994 40,00 % ( Paris ) C.T.D.S. 255 000 000,00 173 391 664,00 25,00 % Compagnie Thermique du Sud ( Ile Maurice ) MUR COMPAGNIE DE COGENERATION DU GALION 17 040 000,00 783 530,54 32 000 80,00 % ( Paris ) COMPAGNIE THERMIQUE DE SAVANNAH 761 000 000,00 NC 25,00 % ( Ile Maurice ) MUR CENTRALE EOLIENNE DE LIRAC 20 000,00 -1 531,19 2 000 100,00 % ( Paris ) EOLIENNES DE CLAMANGES ET DE VILLESENEUX 40 000,00 -1 491,94 4 000 100,00 % ( Paris ) CENTRALE EOLIENNE DE LA CARNOYE 40 000,00 -1 459,28 4 000 100,00 % ( Paris ) EOLIENNES DE LA PORTE DE FRANCE 40 000,00 -1 413,88 4 000 100,00 % ( Paris ) ENERGIE BEAUFONDS 37 000,00 0,00 1 195 64,62 % ( Réunion ) CARAIBES ENERGIE 40 000,00 0,00 4 000 100,00 % ( Guadeloupe ) SOCIETE DE CONVERSION D'ENERGIE ( S.C.E. ) 50 000,00 NC 4 751 95,02 %
PLEXUS SOL 37 000,00 NC 3 516 95,02 %
ELECTROINVEST CARAIBES 40 000,00 0,00 4 000 100,00 % ( Paris ) ELECTROINVEST ANTILLES 40 000,00 0,00 4 000 100,00 % ( Paris ) ELECTROINVEST REUNION 40 000,00 0,00 4 000 100,00 % ( Paris )
(1) La société EOLIENNES DE LA HAUTE LYS détient 100% des sociétés EOLIENNES DE FAUQUEMBERGUES, DE RENTY, DE VINCLY, DE RECLINGHEM, qui réalisent au total un résultat de 1 375 609,97 €.
104 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 ( en euros ) Valeur comptable des titres Avances Dividendes Chiffre d’affaires Résultat net du dernier Brute Nette d’actionnaires et prêts encaissés en 2005 H.T. 2005 exercice clos 28 054 763,06 28 054 763,06 3 227 572,50 48 546 243,94 8 729 736,08
63 365 926,68 63 365 926,68 12 439 880,77 23 996 050,00 71 811 461,80 11 268 558,34
15,24 15,24 0,00 3 830 000,00 -201 630,96
7,62 7,62 0,00 3 267 825,97 -259 961,97
35 774 603,66 35 774 603,66 14 973 600,00 44 699 176,79 10 484 678,57
468 628,28 468 628,28 147 900,00 4 857 495,00 89 968,00
15,24 15,24 0,00 3 540 868,60 -48 152,83
198 183,72 198 183,72 6 000,00 13 171 935,00 334 136,99
685 929,11 685 929,11 90 000,00 2 012 520,70 109 684,83
5 392 972,36 5 392 972,36 1 465 155,10 955 674 466,00 245 550 908,00 MUR MUR 2 399,82 2 399,82 36 771 387,00 291 896,00 MUR MUR 40 000,00 40 000,00 0,00 -15 352,73
15 994,00 15 994,00 1 952 133,83 375 200,00 0,00 1 083 180,50
1 885 803,23 1 885 803,23 642 156 868,87 127 266 262,19 MUR MUR 13 632 000,00 13 632 000,00 0,00 -152 979,89
3 886 464,21 3 886 464,21 NC NC
20 000,00 20 000,00 0,00 -1 531,19
40 000,00 40 000,00 0,00 -1 491,94
40 000,00 40 000,00 0,00 -1 459,28
40 000,00 40 000,00 0,00 -1 413,88
18 803,49 18 803,49 0,00 0,00
40 000,00 40 000,00 0,00 0,00
4 814 000,00 4 814 000,00 NC NC
411 000,00 411 000,00 NC NC
40 000,00 40 000,00 0,00 0,00
40 000,00 40 000,00 0,00 0,00
40 000,00 40 000,00 0,00 0,00
158 947 509,72 158 947 509,72 14 392 014,60 44 281 477,60
105WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 General Report of the Auditors On the Annual accounts closed at December 31 2006
Ladies and Gentlemen,
In accordance with the terms of our appointment by your Annual General Meeting, we present or report on the financial year ending December 31 2006, concerning: • auditing of the SECHILIENNE-SIDEC accounts for the financial, as presented herein, • justification of our assessment, • the specific checks and information provided for by French law. The annual accounts were closed by the Board of Directors. It is our task, on the basis of our audit, to express our opinion thereon.
I - Opinion on the Annual Accounts Our audit was made in accordance with generally accepted professional practice in France: these standards required implementation of diligence enabling us to arrive at a reasonable assurance that the annual accounts comprised no significant anomaly. An audit tests the items justifying the data in these accounts. It also assesses the accounting principles used and the salient valuations selected for closure of the accounts, and the overall presentation. We consider that our audit has provided a reasonable basis for the opinion set forth below. We hereby certify that the annual accounts are regular and sincere in the light of French accounting rules and principles, and give a true and fair view of the results of operations over the financial year and of the financial and investment position of the company at 31 December 2006.
II - Justification of the assessments Under the provisions of Art. L. 823-9 of the Commercial Code on justification of our assessments, we present the following items: Note B.B of the notes lays down the accounting methods for financial fixed assets. In assessing the accounting principles and methods used by your company, we checked the suitability of these methods, especially as regards valuation of interests. Our assessments were part of the auditing procedure we used on your annual accounts as a whole, and therefore contributed to the forming of our opinion as expressed in the first part of this report.
III - Specific checks and other information We also carried out the tests required by French law in accordance with generally accepted professional practice. We have no comment to make on: • The sincerity and consistency with the annual accounts of the information given in the management report drawn up by the Board of Directors and the documents addressed to shareholders on the financial situation and the annual accounts, • The sincerity of the information in the management report in respect of the remunerations and perquisites paid to the appropriate directors, and the commitments in their favour on the occasion of entering into, leaving or changing functions or subsequently thereto. In accordance with French law, we have verified that the various facts relating to new investments and subsidiaries and the identity of the holders of the capital and voting rights were communicated to you in the management report.
Courbevoie and Paris-La Défense, April 16th 2007
Auditors ERNST & YOUNG AUDIT MAZARS & GUÉRARD EMMANUELLE MOSSE FREDERIC ALLILAIRE PHILIPPE STROHM
106 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Special report of the auditors on regulated agreements
Ladies and Gentlemen,
As Auditors of your company, we present our report on regulated agreements and commitments.
AGREEMENTS AND COMMITMENTS AUTHORISED DURING THE FINANCIAL YEAR In application of Art. 225.40 of the Commercial Code, we have been apprised of the agreements and commitments given prior authorisation by your Board of Directors. It is not our duty to seek out the existence of other possible agreements and commitments but to notify to you, on the basis of the information given to us, the nature and essential characteristics of those of which we were apprised, without giving an opinion as to their usefulness or grounds. It is your duty, under the provisions of Art. 225.30 of the Commercial Code, to assess the justification for concluding these agreements and commitments in order to approve them. We have carried out our task in accordance with the professional practice applicable in France: this requires the implementation of diligence for the purpose of checking the consistency of the information given to us with the basic documents from which it came.
• With the company MBV Person concerned: Mr. Michel Bleitrach Agreement on service provision and consultancy A service and consultancy agreement under which the company MBV provides assistance to your company in the following fields: definition of the company’s strategic choices, intermediation for setting up a development policy for your company, intermediation with the various organisations and players in the energy sector, assistance in reporting and management. The initial term of the agreement was nine months as of October 1 2006, and may subsequently be renewed at yearly intervals by tacit agreement where express notice to terminate has not been served three months before the term, with no justification or compensation. The service provision is invoiced to your company by MBV every quarter on the basis of a contractual sum of € 60,000 for the initial term and then for each renewal. During the 2006 financial year, a charge of € 20 000 was entered by your company. This agreement was authorised by the Board of Directors at its meeting of September 21 2006.
107WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 AGREEMENTS AND COMMITMENTS AUTHORISED DURING PREVIOUS FINANCIAL YEARS THE PERFORMANCE OF WHICH CONTINUED DURING THE FINANCIAL YEAR 2006 Furthermore, in application of the French Commercial Code, we were informed that the performance of the following agreements and commitments, approved during previous financial years, continued during 2006:
1. With Mr. Dominique Fond
1.1. Bonus upon departure • As a company director, Mr. Fond would receive a contractual sum should the Board dismiss him or not renew his mandate, except in the case of a serious fault or misdemeanour. This sum would be equal to 24 months’ gross salary for the period prior to April 1 2002 and one and a half months of gross salary for each year passed as company director subsequent to April 1 2002, in addition to the first amount. The total amount of the departure bonus would not exceed a ceiling of 32 months • As financial, administrative and development director receiving a salary, Mr Fond would receive a contractual sum under his work contract except in the case of a serious fault of misdemeanour, should the company terminate the contract, either by dismissal or by placing him in retirement. This sum would be equal to 24 months’ gross salary for the period prior to April 1 2002 and one and a half months of gross salary for each year passed as employee subsequent to April 1 2002, in addition to the first amount. The total amount of the departure bonus would not exceed a ceiling of 32 months The work contract further provides that in the event of voluntary or compulsory retirement, a further sum equal to 12 months’ gross salary would be paid in addition to the statutory indemnification. These agreements were authorised when Mr. Fond was assistant Managing Director of your company. They were confirmed and renewed in the same terms by the Boards of Directors meeting on March 29 2006 and 17 May 2006.
1.2. Supplementary retirement benefit Management staff who entered the company before 1983 and are still in the company, who are aged at least sixty upon retirement are entitled to retirement benefits under a defined benefit scheme. Mr. Fond is one of these employees. The corresponding retirement benefit would be equal to 60% of the average salary for the last three years (including bonuses) for the proportion of salary lower than three times the annual social security ceiling and 50% of the average salary for the last three years (including bonuses) for the proportion of salary comprised between 3 and 12 times the annual social security ceiling, respectively, once pensions from all the compulsory schemes and other supplementary retirement benefit schemes have been deducted. In this respect, your company entered a charge of € 305 480. This agreement was authorised when Mr. Fond was assistant Managing Director of your company. Following Mr. Fond’s appointment as Managing Director and then Chairman and Managing Director, it was confirmed and renewed in the same terms by the Boards of Directors meeting on March 29 2006 and 17 May 2006.
2. 2. Agreements with the Compagnie Thermique du Gol (CTG), Compagnie Thermique du Moule (CTM), and Compagnie Thermique de Bois-Rouge (CTBR)
2.1. Fiscal consolidation agreement with CTBR Your company and CTBR concluded an agreement for fiscal consolidation under the group tax treatment provision of Artcles 223 A and ff of the French Tax Code. By this means, your company became solely liable for the corporate income tax, additional contributions and annual contractual taxation due by the group comprising Compagnie Thermique de Bois-rouge alone, in which Séchilienne-Sidec holds over 95% of the capital. Under this agreement for fiscal consolidation, the principle of sharing the overall tax debt/credit in the Group is that the tax debt/credit borne by your company would be identical to that it would have been liable for if it had not been a member of the consolidated group.
108 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 2.2. Current account and cash flow agreements with the companies CTG, CTM and CTBR These agreements are concluded for one year renewable by tacit consent, and provide for centralisation of cash flow operations between your company and CTG, CTM and CTBR. They allow the contracting companies to improve their cash flow needs or use up their surplus while at the same time maintaining financial balance within the SECHILIENNE-SIDEC Group. The current accounts arising from these operations are remunerated at the EONIA rate with a margin of 10 basis points over for debtor positions and under for creditor positions. Under these agreements, the interest due to or received by your company for the financial year 2006 amounted to: (in euros) interest payable for Interest received for financial year 2006 financial year 2006 CTG 846 847 — CTM 282 740 — CTBR 527 539 — Placements for longer than one month, decided by the subsidiary, are remunerated on the basis of market rates where the market rates for maturities over one month are higher than the daily rate. No placement of this kind was made by the subsidiaries during the 2006 financial year.
2.3. Assistance agreement with CTG, CTM, CTBR Assistance agreements under which your company provides CTG, CTM and CTBR with its assistance in administrative, financial and technical fields. These agreements were concluded retroactively as of January 1 2005 for an initial period of 15 years. For the 2006 financial year, the sums invoiced by your company in respect of this assistance were as follows: CTG € 831 111 CTM € 928 916 CTBR € 1 493 776
2.4. Guarantee agreement with CTG and CTM Guarantee agreements under which your company acts on behalf of CTG and CTM for the financing and consequences arising from use of cash pledges to EIGs in the framework of leases between these companies and the EIGs. Pledged deposits bear capitalizable interest and are repayable at the date the purchase options are exercised, except where the EIGs exercise the guarantee which would give ownership of the plant to the company. In consideration for this commitment, your company receives an annual remuneration from CTG until the year the purchase option could be exercised. The amounts in the following table are in euros: Company EIG Date option exercised Deposit pledged Interest capitalised on Remuneration at 31/12/06 deposit pledged in 2006 paid CTM FLEUR DE CANNE 31/12/2016 6 154 697 162 633 none CTG SEGABAIL 30/06/2010 none none 112 202
2.5. Agency agreements for Client assistance For the building of the new CTBR 2 and CTG-B plants, your company concluded two agency agreements for Client assistance with CTBR and CTG. The contract with CTBR 2 is remunerated in the contractual amount of € 3 353 880. Under the contractual repayment schedule, the sums invoiced by your company in 2006 amounted to €167 694. The contract with CTG-B is remunerated in the contractual amount of € 5 000 000. Under the contractual repayment schedule, the sums invoiced by your company in 2006 amounted to € 2 000 000.
109WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 2.6. Agreement to guarantee completion and repay with Sogefinerg and Vaynilla Bail For the building of the CTBR 2 and CTG-B plants, your company gave a guarantee that the works would be completed or repayment made respectively to the banking EIG Sogefinerg and the EIG Vaynilla Bail which financed these installations. Only the guarantee to repay is still in force for the CTBR 2 plant. This had no effect on the 2006 financial year. At December 31 2006, no commission had been invoiced to CTG in respect of the guarantees given to EIG Vaynilla Bail.
3. Agreement with the Compagnie Thermique de Savannah (CTSAV) Contract for monitoring of plant construction and operation: When the CTSAV plant was built your company concluded with CTSAV a contract to provide monitoring services for the construction and later the operation of the plant. Under the agreement to monitor construction, your company must invoice € 300 000 annually. To this amount is added a commission in the event of success, in the amount of € 400 0000 due not later than thirty days following the first payout of the project financing. Under the agreement to monitor operations during the working life of the plant, your company must invoice € 400 000 annually. During the 2006 financial year, your company invoiced € 200 900 for this contract.
4. Agreement with Compagnie Thermique du Sud (CTDS) Contract to monitor plant construction and operation Your company concluded an agreement to monitor the construction and operation of the Compagnie Thermique du Sud plant. For the monitoring of operations, your company must invoice an annual amount equal to 4% of the operating profit made by the plant. During the 2006 financial year, your company invoiced € 259 851 under this contract.
Courbevoie and Paris-La Défense, April 16th 2007
Auditors ERNST & YOUNG AUDIT MAZARS & GUÉRARD EMMANUELLE MOSSÉ FRÉDÉRIC ALLILAIRE PHILIPPE STROHM
110 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Report of the Auditors on the reduction of capital by cancelling purchased shares (Art. L. 225 – 209 of the Commercial Code)
(Twelfth Resolution)
Ladies and Gentlemen,
In accordance with the terms of our appointment as Auditors of SECHILIENNE-SIDEC and in execution of our tasks provided for in Art. L.225-209.7 of the French Commercial Code on reduction of capital by cancelling purchased shares, we have drawn up this report to present our assessment of the causes and conditions of the capital reduction envisaged. We have carried out our work in compliance with the professional practice applicable in France. This requires the implementation of diligence to ascertain whether the causes and conditions of the capital reduction envisaged are proper.
This operation would be undertaken during the purchase by your company, in the limit of 10% of its capital, of its own shares, as provided for by Art. L.225-209 of the French Commercial Code. This buy-back authorisation is submitted to this Shareholders’ General Meeting for your approval and would be valid for a period of eighteen months.
Should authorisation be granted to implement the buyback, our consultant requests that you grant him full power of attorney to cancel the shares thus purchased, up to a maximum ten per cent of the capital over that twenty-four month period.
We have no comment to make on the causes and conditions of the envisaged capital reduction, it being recalled that it may only take place if your meeting approves your company’s buy-back of its own shares beforehand.
Courbevoie and Paris-La Défense, April 16th 2007
Auditors ERNST & YOUNG AUDIT MAZARS & GUÉRARD EMMANUELLE MOSSÉ FRÉDÉRIC ALLILAIRE PHILIPPE STROHM
111WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Special report of the Auditors on the opening of stock options to employees and/or directors of the company and its affiliates (in the sense of Art. L.225-180 of the French Commercial Code) (Thirteenth Resolution )
Ladies and Gentlemen,
In accordance with the terms of our appointment as Auditors of SECHILIENNE-SIDEC SA and in execution of our tasks provided for in Art. L.225-177 and R.225-144 of the French Commercial Code we have drawn up this report on the opening of stock options to employees and /or directors of the company and the companies directly or indirectly linked to it as provided for by Art. L.225-180 of the French Commercial Code.
It is the duty of the Board of Directors to draw up a report on the reasons for opening stock options and the methods proposed for fixing the subscription price. It is our duty to give our opinion on the proposed methods for fixing the subscription price.
We have carried out our duties in accordance with applicable French professional standards. These require the implementation of diligence in checking that the methods proposed for fixing the subscription price are mentioned in the report of the Board of Directors, that they conform to the statutory provisions, are expressed in such a way as to enlighten the shareholders, and are not manifestly inappropriate.
We have no comment to make on the methods proposed.
Courbevoie and Paris-La Défense, April 16th 2007
Auditors ERNST & YOUNG AUDIT MAZARS & GUÉRARD EMMANUELLE MOSSÉ FRÉDÉRIC ALLILAIRE PHILIPPE STROHM
112 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Resolutions
DECIDED BY THE ORDINARY GENERAL MEETING
First resolution French Commercial Code and deliberating, the Shareholders in Approval of the consolidated accounts for the 2006 General Meeting hereby approve these agreements and financial year undertakings and the report thereon. After being informed of the following, : — report of the Board of Directors on the running and management Fourth resolution of the Company and its Group in the 2006 financial year and the Dividend fixed at € 1.10 per share. Chairman’s report, Date of payment 13 June 2007 — the Group’s consolidated accounts, The Shareholders in Annual General Meeting hereby approve the — the Auditors’ report, proposal of the Board of Directors concerning appropriation of profit. the Shareholders in Annual General Meeting hereby approve the They hereby fix the dividend for each of the 27,568,360 shares consolidated accounts closed on 31 December 2006 as presented to comprised in the Shareholders’ Equity at December 31 2006 at €1.10. them. This dividend shall be eligible for the 40% rebate provided in Art. 158.3.2° of the French Tax Code. Second resolution This dividend shall be payable as of June 13 2007: Approval of the company accounts for the financial year — for registered shares, directly by the Company in accordance 2006 with the settlement arrangements indicated by their holders, After being informed of the: — for registered shares managed by a third party, and for bearer — report of the Board of Directors on the running and management shares entered into accounts, to the accredited intermediaries in of the Company and its Group in the 2006 financial year and the charge of managing these securities. Chairman’s report, It will be recalled that the dividends distributed over the past three — the Company’s accounts, income statement, balance sheet and financial years were : notes, (in Euros) — the Auditors’ reports, Amount of Amount of Tax credit Tax rebate the Shareholders in Annual General Meeting hereby approve the distribution net dividende per share provided consolidated accounts closed on 31 December 2006 as presented to per share (1) (2) (3) them, and the operations entered into these accounts or mentioned Exercice (1) in these reports. 2003 6 720 928 4.90 2.45 It notes the amount of net profit for the year at € 50,615,725. 2004 9 601 326 7.00 50 % 2005 27 432 360 20.00 40 % Third resolution (1) Prior to the division of the share par value by twenty in July 2006. Approval of the agreements and undertakings provided for (2) On the basis of a tax credit at 50 %. by article L. 225-38 of the French Commercial Code and the (3) Tax rebate provided by Art. 158-3-2° of the French Tax Code, for Auditors’ special report which the distribution is eligible After hearing the reading of the Auditors’ special report on the agreements and undertakings provided for by article L. 225-38 of the
113WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Fifth resolution purchase price for one share at €55, it being understood that in the Ratification of the appointment of Mr Claude ROSEVEGUE event of an operation on the capital, not least by incorporating as Director reserves and allocating free shares, dividing or re-grouping shares, The Shareholders in General Meeting hereby ratify the appointment the foregoing share price shall be adjusted accordingly by the Board of Mr. Claude ROSEVEGUE as Director of the Company, co-opted by of Directors. the Board of Directors at its meeting of September 21 2006 to replace Mr. Simon MARC, who resigned, for the remainder of the latter’s term The Shareholders in General Meeting hereby fix the maximum of office, that is, the end of this AGM convened to approve the amount of funds the Company may allocate to buy back shares under accounts of the 2006 financial year. this authorisation at €151.625.980.
Sixth resolution The Shareholders in General Meeting hereby decide that the Renewal of the Directorship of Mr. Claude ROSEVEGUE purchase, disposal or transfer of shares may be carried out at any Observing that the term of office as Director of Mr. Claude time, including during a public offer involving the Company, and by ROSEVEGUE expires on this day, the Shareholders in General any means, in the market, off market, over the counter or by the use Meeting hereby decide to renew it on the advice of the Board of of options or derivatives or warrants in accordance with the Directors. His new term of office shall expire at the end of the AGM provisions of the Market Authorities, as the case may be by an convened in 2011 to approve the accounts of the 2010 financial year. investment professional via a liquidity contract in conformity with the AMF rules. Seventh resolution Renewal of the Directorship of Mr. Patrick de GIOVANNI The Shareholders in General Meeting hereby vest the Board of Observing that the term of office as Director of Mr. Patrick de Administration with all powers, that may be delegated, to implement GIOVANNI expires on this day, the Shareholders in General Meeting the share buy back programme, proceed with purchases, disposals, hereby decide to renew it on the advice of the Board of Directors. His adjustments, conclude all acts and agreements, carry out all new term of office shall expire at the end of the AGM convened in formalities and declarations and more generally, all that is necessary 2011 to approve the accounts of the 2010 financial year. to apply this resolution and execute the decisions it includes, under the authorisation herein granted. Eighth resolution Purchase of its own shares by the Company The Shareholders in General Meeting hereby note, as and where After receiving knowledge of the Board of Directors’ Report, the necessary, that the period of validity of the authorisation previously Shareholders in General Meeting hereby authorise it, in conformity granted by the General Meetings of May 27 2005 has expired and with the provisions of Arts. L.225-209 and ff of the French that no use was made of that authorisation. Commercial Code to allow the Company to buy back its own shares up to 10% of the number of shares in the Shareholders’ Equity at any time during implementation of the purchase programme, or up to 5% of that number in the case of shares acquired with a view to conserving them and remitting them subsequently in payment or exchange in the course of a merger, exchange, split or contribution.
The Shareholders in General Meeting hereby decide that the Board may, consequently, purchase shares or cause them to be purchased, for the purpose of activating the secondary market or share liquidity, or buy or sell depending on market needs and more generally carry out trading on the market authorised or which comes to be authorised by the Market authority, cancel shares in accordance with the provisions of the twelfth resolution of this Meeting, or remit shares in exchange or payment in the framework of possible external growth operations.
The Shareholders in General Meeting hereby fix the validity of this authorisation at eighteen months as of the date of this resolution.
The Shareholders in General Meeting hereby fix the maximum Solar power plant - Reunion Island
114 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 SUBMITTED TO THE EXTRAORDINARY GENERAL MEETING
Ninth resolution Board of Directors sees fit. Modification of article 7 of the Memorandum and Articles of The Shareholders’ General Meeting shall also be convened, by Association on Shareholders’ Equity default, by the persons provided for by law. Upon the advice of the Board of Directors, the Shareholders in The Shareholders’ General Meeting shall be convened in the General Meeting hereby decide to modify as follows Article 7 of the conditions provided for by the law. Memorandum and Articles of Association, in order to take account of First of all, notice of the General Meeting shall be published in the the increased number of shares in 2006 following the exercise of Bulletin des Annonces Légales Obligatoires (BALO) not later than stock options granted by the General Meeting of September 2 2002 : thirty-five (35) days prior to the date thereof. This notice shall mention the Company name, its legal form, the amount of the Article 7 Shareholders’ Equity, the address of the registered offices, the The Shareholders’ Equity of this Company is € 1,061,381.86, agenda of the General Meeting, the text of the draft Resolutions divided into 27,568,360 shares of € 0.0385 each, of the same submitted for the approval of the General Meeting by the Board of category. Directors, the place and conditions under which proxies and votes by correspondence may be withdrawn, the deadlines for Tenth resolution shareholders to send draft resolutions, the justification to be sent Harmonisation of the Memorandum and Articles of to the Company concerning the entry into accounts of bearer Association and the statutory and regulatory requirements shares and their unavailability until the date of the AGM. arising not least from the law on confidence and Requests to place draft resolutions on the agenda shall be sent as modernisation of the Economy and decree n° 2006-1566 of publication of notice in the BALO and not later than twenty-five dated 11 December 2006 amending decree n° 67-236 dated (25) days prior to the date of the AGM, or not later than twenty (20) 23 March 1967 on trading companies. days where the notice is published more than forty-five (45) days In order to harmonise the Memorandum and Articles of Association prior to the date of the AGM. of this Company with the statutory and regulatory requirements, the Notification convening shareholders shall be placed in a journal Shareholders in General Meeting hereby decide to amend as follows habilitated to receive legal publicity in the département of the Articles 13, 31, 32, 36, 37 and 39 of the Memorandum and Articles of registered offices, not later than fifteen (15) days prior to the AGM Association : for the first notification and not later than six (6) days prior to the AGM for the second notice. Article 13 Notifications shall comprise the items provided by statutory and Without prejudice to the provisions of Art. L.233-7 of the French regulatory requirements. Commercial Code, any direct or indirect holder of a fraction of this Those receiving notification shall be convened to both ordinary Company’s capital equal to one per cent or any multiple of this and extraordinary General Meetings. percentage lower than five per cent shall be bound to inform the Company not later than five days following exceeding the Article 32 threshold of either of these percentages either downwards or The General Meeting shall comprise all shareholders, holding upwards. whatever number of shares, on condition that such shares be fully In conformity with the statutory provisions on this subject, not paid up and not deprived of voting rights. least Art. 228-2 of the French Commercial Code, the Company shall The following persons alone shall participate in General Meetings: at any time be entitled, as the case may be, to ask the central 1- Owners of registered shares entered into the account at least depositor keeping account of the share issues the name or trade three (3) days prior to the date fixed for the Meeting. name, nationality, year of birth or year of creation, and address of 2- Owners of bearer shares having, three (3) working days prior the holders of securities vesting, either immediately or ultimately, to the date fixed for the Meeting, justified the entry into accounts voting rights for the Company’s Shareholders’ General Meetings, of their shares and the unavailability thereof until the date of the and the number of securities held by each of them and, where Meeting. necessary, the restrictions that may be set on those securities. Owners of registered or bearer shares shall, further, file a proxy form or vote by correspondence or the single document replacing Article 31 that not later than three (3) working days prior to the Meeting, or, The Shareholders’ General Meeting shall be convened as of right where the Board of Directors has so decided, a request for an each year, during the first half year, subject to extension of this invitation for admission. period by a court decision. Any shareholder shall be entitled to send a spouse or proxy to It shall meet in extraordinary general meeting at any time the represent him or her on condition that the proxy is also a member
115WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 of the Meeting. Valid representation is also afforded by the majority of the votes possessed by the shareholders present or person’s legal representative. represented, save in legally derogated cases. Shareholders that are legal entities shall delegate to the AGM any The decisions of special meetings shall be valid only where the named associate, director or member of their staff, bearing an shareholders present or represented possess at least one third of attestation of their functions, be they shareholders themselves or the shares with voting rights at the first notification, or at least one not. fifth of the shares with voting rights at t he second, where the §owners of inseparable shares shall be represented at the AGM by decision concerns changing voting rights. Failing this, the second one or other or by a single proxy. In the event of disagreement, the meeting shall be postponed by not later than two (2) months proxy shall be designated by the courts on the application of the following the date at which it was convened. more diligent of the co-owners. Special meetings shall vote in the same conditions as Ordinary The voting right associated with the share shall belong to the General Meetings. holder in ordinary and extraordinary General Meetings. For any proxy sent by a shareholder without mentioning the name Article 37 of the proxy, the Chairman of the AGM shall count a vote In all Annual General Meetings, the quorum shall be calculated on favourable to the adoption of the draft resolutions submitted or the basis of all the shares in the shareholders’ equity, not including agreed by the Board of Directors, and a vote unfavourable to all those deprived of voting rights under statutory or regulatory other draft resolutions. To make any other vote, the shareholder provisions, and each shareholder shall have as many votes as he shall choose a proxy agreeing to vote according to the possesses or represents paid up shares with no other limitation instructions on the proxy. than that provided by the laws in force. Any proxy form shall be accompanied by a vote by correspondence or a single document replacing it, plus all the other ancillary Article 39 documents required by law. Any shareholder may, upon The Extraordinary General Meeting alone is entitled to change the submission or reception at the Company headquarters of the Memorandum and Articles of Association and their provisions. It proper form not later than six (6) days prior to the Meeting, vote by shall not however increase the shareholders’ undertakings, correspondence in the conditions provided by the statutory and subject to operations resulting from properly carried out regulatory requirements in force. regrouping of shares. In the event that, in violation of the established rules, the Company The Extraordinary General Meeting shall not be entitled to change found itself faced with a proxy form and vote by correspondence the Company nationality, save where the country of which the form for the same shareholder, the proxy shall be taken into Company envisages acquiring the nationality and to which it account subject to the votes expressed in the vote by wishes to transfer its registered offices has concluded a special correspondence form. agreement with France permitting these operations and keeping At the AGM, the actual presence of the shareholder shall cancel the Company’s legal personality. any proxy or vote by correspondence on condition that the Any General Meeting’s decision to change the rights relating to any shareholder expressly request an admission invitation not later category of shares shall be final only after it has been approved by than three (3) days prior to the Meeting, where the Board of the special meeting of the shareholders of that category. Directors so decides. Eleventh resolution Article 36 Modification of article 19 of the Memorandum and Articles The decisions of the Ordinary General Meeting shall be valid upon of Association on the composition of the Board of Directors first notification only where the shareholders present or Upon the advice of the Board of Directors, and to remove represented possess at least one-fifth of the shares with voting circumstantial, now obsolete provisions from the Memorandum and rights. Upon the second notification, no quorum is required. Articles of Association the Shareholders in General Meeting hereby The Annual General Meeting or an extraordinary general meeting decide to change Article 19 as follows: shall vote by the majority of the shareholders present or represented. Article 19 Except where legally derogated from, the decisions of The Administration of the Company shall be entrusted in a Board Extraordinary General Meetings shall be valid only where the composed of at least three members and at most twelve members, shareholders present or represented possess at least one quarter appointed by the Shareholders’ Annual General Meeting. of the shares with voting rights on the first notification, or one fifth The term of office of each member of the Board of Directors shall for the second notification. Failing this, the second meeting shall be four (4) years, each year being counted from one AGM to the be postponed by not later than two (2) months following the date next. at which it was convened. Directors arriving at expiry of their terms of office may be re- The Extraordinary General Meeting shall vote by a two-thirds elected.
116 WorldReginfo - 8e66b5f8-9c0e-4d30-b141-4afee9c2e7e9 Should the position of a Director become vacant, through either blocks of stock options in new SECHILIENNE-SIDEC shares to resignation or death, between two AGMs, the Board shall be certain members of staff and management and/or directors of the entitled to make a temporary appointment for the remainder of the Company and some of the companies linked to it in the meaning term of office of the replaced director with a view to keeping the of these provisions; same number of members. — cgrant the Board of Directors this authorisation for thirty eight The Ordinary General Meeting shall proceed to the final election at (38) months as of this date; its first meeting. However, should the number of directors be fewer — decide that the new shares issued in application of this than the statutory minimum of three, the Board, or, failing that, the resolution in the framework of a capital increase shall amount to Auditors, shall immediately convene the Shareholders’ meeting to no more than € 2,750,000 including premiums, the total number complete it. The same power is vested in any interested party in of shares arising therefrom not exceeding 50,000 subject to accordance with the statutory provisions. statutory adjustments ; Should the appointments made by the Board of Directors not be — decide that the share price for the stock option beneficiaries ratified by the Shareholders’ General Meeting, its decisions and shall be determined on the day the options are granted by the acts shall remain valid notwithstanding. Board of Directors in accordance with the statutory provisions, not The number of Directors over the age of seventy shall not be higher least those governing the periods during which options may not than one third of the number of Directors in function. Where this be granted, and this price shall be equal to the arithmetical proportion is exceeded, the oldest Director not having exercised or average of the first listed price of the share at the start of the not exercising the function of Chairman or not having exercised the twenty market days prior to the day the options were granted, function of Managing Director of the Company shall cease his rounded to the lower euro ; functions at the next General Meeting, save where the foregoing — decide that this price shall not be changed save in the event of proportion is laid down by a Board decision in application hereof. operations provided for by article L.225-181 of the French Commercial Code, in which case, the Board of Directors shall take Twelfth resolution the necessary measures to protect the beneficiaries of the stock Cancellation of shares bought back by the Company via a options as provided for in article L.228-99 of that code ; capital reduction — fix the deadline for exercise of the options by the beneficiaries at After gaining knowledge of the report of the Board of Directors and seven years from the date they were granted. the special report of the Auditors, the Shareholders in General The Shareholders in General Meeting hereby note that this Meeting hereby authorise the Board of Directors, in conformity with authorisation implies that the shareholders hereby waive their the provisions of Arts. L 225§209 and ff of the French Commercial preferential rights to the shares issued as and when the options are Code to cancel in one or several steps all or part of the shares exercised, in favour of the beneficiaries of the stock options. acquired pursuant to the authorisation granted in the foregoing eighth resolution up to a maximum of 10% over a 24-month period, The Shareholders in General Meeting hereby grant the Board of and to reduce the capital accordingly. Directors the powers necessary for the implementation of this The Shareholders in General Meeting hereby grant this authorisation resolution, not least : for a period of twenty-four months and grant full powers to the Board — fixing the dates for granting the options, of Directors, which they shall be entitled to delegate, to carry out the — fixing the conditions and methods of their allocation, the operation, complete the required formalities, allocate the difference possible imposition of clauses governing custody deadlines between the book value of the cancelled shares and their par value resulting from the exercise of the options, the list of beneficiaries, among all the reserve and premium items, proceed to the correlative the number of shares each can subscribe, change in the Memorandum and Articles of Association, and — fixing the periods during which the options may be exercised. generally do what is necessary. The Shareholders in General Meeting hereby authorise the Board of Directors to carry out or cause to be carried out all acts and Thirteenth resolution formalities arising from implementation of this authorisation, amend Authorisation given to the Board of Directors valid for the Memorandum and Articles of Association, and generally do what thirty-eight (38) months to grant some members of staff is necessary. and/or directors of the Company and some of its subsidiaries stock options up to a maximum number of Fourteenth resolution 50,000. Power of attorney After gaining knowledge of the report of the Board of Directors and Full power shall be granted to the bearer of a copy of the minutes of the special report of the Auditors, the Shareholders in General this General Meeting to proceed to any publicity and formalities Meeting hereby required by the statutes and regulations in force. — authorise the Board of Directors, under articles L.225-177 to L.225-185 of the French Commercial Code, to grant one or more
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