APC 2005 Annual Report Download - page 151

149
Free translation of the original report in French
Auditors' report on the proposal to issue
shares to entities set up to hold shares
on behalf of employees 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
et seq.
of the Commercial Code, we present below our report
on the proposal to issue shares to entities set up to
hold shares on behalf of employees. Shareholders will
be asked to waive their pre-emptive right to subscribe
the issue(s). This authorization would be granted to
the Management Board – or, if the seventh resolution
of this Meeting is not adopted, the Board of Directors.
The maximum nominal amount by which the capital
may be increased may not exceed 0.5% of the issued
capital as of the date of this Meeting. The amount of
any capital increase carried out under this authoriza-
tion would be deducted from the aggregate amount by
which the capital may be increased under the twelfth
resolution of the Annual and Extraordinary Sharehold-
ers’ Meeting of May 12, 2005 and the twenty-sixth res-
olution of this Meeting concerning the issuance of
shares to employees who are members of a Corporate
Savings Plan, which you have also been asked to
approve.
These authorizations are submitted for your approval
in accordance with Article L.225-129-6 of the Com-
mercial Code and Article L.443-5 of the Labor Code.
The Board of Directors is seeking an 18-month author-
ization, on the basis described in the Board's report,
for the Management Board – or, if the seventh resolu-
tion of this Meeting is not adopted, the Board of Direc-
tors – to increase the capital on one or several occa-
sions. Shareholders will be asked to waive their pre-
emptive right to subscribe the issue(s). The Manage-
ment Board – or, if the seventh resolution of this Meet-
ing 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 share issue in accor-
dance with Articles 154 and 155 of the March 23, 1967
Decree. Our responsibility is to express an opinion on
certain information included in the report and the pro-
posal 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
Annual and Extraordinary Shareholders’ Meeting of May 3, 2006