APC 2005 Annual Report Download - page 150

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148
Free translation of the original report in French
Auditors' report on the proposed
employee share issue with
cancellation of shareholders’
pre-emptive subscription right
To the shareholders,
In our capacity as Statutory Auditors of Schneider
Electric SA and pursuant to Article L.225-135 of the
Commercial Code, we present below our report on the
proposed issue of shares to employees who are mem-
bers of a Corporate Savings Plan set up by French or
foreign related companies, as presented to sharehold-
ers for approval. The aggregate nominal amount by
which the capital may be increased under the authori-
zation has been set at 5% of the capital issued and
outstanding when the authorization is used. This
authorization would be granted to the Management
Board – or, if the seventh resolution of this Meeting is
not adopted, the Board of Directors.
This issue is submitted for your approval in accor-
dance with Article L.225-129-6 of the Commercial
Code and Article L.443-5 of the Labor Code.
The Board of Directors is seeking a five-year authori-
zation, on the basis described in the Board's report, for
the Management Board – or, if the seventh resolution
of this Meeting is not adopted, the Board of Directors
– to increase the capital on one or several occasions.
Shareholders will be asked to waive their pre-emptive
right to subscribe the issue(s). The Management
Board – or, if the seventh resolution of this Meeting is
not adopted, the Board of Directors – will set the terms
and conditions of the employee share issue.
The Board of Directors is responsible for reporting to
shareholders on the proposed employee share issue
in accordance with Articles 154 and 155 of the Decree
of March 23, 1967. Our responsibility is to express an
opinion on certain information included in the report
and the proposal to waive shareholders’ pre-emptive
subscription right.
We carried out our work in accordance with French
professional standards. Those standards require that
we perform procedures to check the content of the
report drawn up by the competent management body
concerning this operation and the method used to
determine the share issue price.
We have no matters to report concerning the method
for determining the issue price as described in the
Report of the Board of Directors, contingent upon our
final review of the terms of the proposed capital
increase.
Since the issue price has not yet been set, we cannot
formulate an opinion on the final conditions under
which the share issue will be carried out, and conse-
quently have no opinion on the proposal to cancel
shareholders' pre-emptive subscription right,
Should this resolution be approved and as required by
Article 155-2 of the March 23, 1967 Decree, we will
prepare an additional report at the time the capital
increase is carried out by the Management Board – or,
if the seventh resolution of this Meeting is not adopted,
the Board of Directors.
Paris and Neuilly Sur Seine, February 16, 2006
The Statutory Auditors
Mazars & Guérard Barbier Frinault & Autres
Pierre Sardet Christian Chochon
Jean-Louis Simon Pierre Jouanne