APC 2005 Annual Report Download - page 40

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In line with these terms of reference, it:
Prepares the Board's review of the annual and inter-
im financial statements. In this respect, it particularly:
- Ensures that accounting methods used to prepare
the consolidated and parent company financial state-
ments are appropriate and applied consistently, that
all significant transactions are properly reflected in the
consolidated financial statements and that the rules
governing the scope of consolidation are correctly
applied.
- Analyzes risks, off-balance sheet commitments and
the cash position.
- Reviews draft versions of the annual and interim
reports.
Makes recommendations, based on a review of
service proposals, concerning the appointment or re-
appointment of the Auditors.
Examines the scope of audit engagements and the
results of audits. It verifies the Auditors' independ-
ence, in particular by reviewing fees paid by the Group
to their firm and network.
Reviews the internal audit organization and
resources, as well as the internal audit program and
the executive summary of the internal auditors'
reports and the follow up to the internal auditors rec-
ommendations.
Examines proposed dividend distributions and the
amount of financial authorizations submitted for
shareholder approval at the Annual Meeting.
The Audit Committee examines all financial, account-
ing and risk management issues referred to it by the
Board of Directors or its Chairman.
In addition, prior to the Committee's review of the
annual and interim financial statements, the Audit
Committee Chairman meets with the Auditors alone,
without any Company representatives present.
The Audit Committee Chairman also meets with the
head of Internal Audit four times a year without any
other Company representative present.
The Audit Committee presents its findings and recom-
mendations to the Board and distributes the minutes
of its meetings to the Directors.
Meetings in 2005
In 2005, the Audit Committee met four times under the
chairmanship of Gérard de La Martinière. The aver-
age duration of the meetings was 2 hours and 15 min-
utes and the average attendance rate was 100%.
Each meeting was attended by members of the
Finance Department and the head of Internal Audit.
The Auditors were also present for most of the meet-
ings. In addition, the Committee interviewed the heads
of the operating divisions. Neither the Chairman nor
the Chief Operating Officer attended audit committee
meetings in 2005.
Been disqualified by a court from acting as a mem-
ber of the administrative, management or supervisory
bodies of an issuer or from acting in the management
or conduct of the affairs of an issuer.
Been a corporate officer of a company that declared
bankruptcy.
None of the members of the Board of Directors are
related to each other.
There are no arrangements or understandings with
major shareholders, customers, suppliers or others
pursuant to which a member of the Board of Directors
has been selected as a member of the administrative,
management or supervisory bodies or a member of
senior management.
There are no conflicts of interests between any duties
to Schneider Electric SA of the members of the Board
of Directors and their private interests.
Committees
of the Board of Directors
(members, operating
procedures and meetings)**
The Board of Directors has drafted internal rules gov-
erning the operating procedures and missions of the
Audit Committee and the Remunerations and
Appointments & Corporate Governance Committee.
Their members are appointed by the Board, based on
recommendations from the Remunerations and
Appointments & Corporate Governance Committee.
After checking with the Chairman of the Board, the
Committees may commission research from outside
consultants, and they may also invite any persons of
their choice to attend their meetings, as required.
Audit Committee
Members
Since October 2005, the Audit Committee has been
made up of Gérard de La Martinière, Chairman,
James Ross, Piero Sierra and Serge Weinberg.
All of the members are independent Directors, going
beyond the requirements of the AFEP-MEDEF corpo-
rate governance guidelines.
Responsibilities
A key component of the Company’s internal control
system, the Audit Committee is responsible for
preparing the decisions of the Board of Directors,
making recommendations to the Board and issuing
opinions on financial, accounting and risk manage-
ment issues.
**Paragraphs 2 through 5 make up
the Chairman’s report prepared in accordance with article
L225-37 of the French Commercial Code.
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