APC 2006 Annual Report Download - page 185

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Auditors' report on the proposed employee
share issue with cancellation of shareholders’ pre-emptive
subscription right
Free translation of the original report in French.
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 authorize the Management Board to
issue shares, share equivalents or debt securities, on
one or several occasions, to employees who are mem-
bers of an Employee Stock Purchase Plan set up by
French or foreign related companies, with cancellation
of shareholders’ pre-emptive subscription right. The
maximum nominal amount by which the capital may be
increased may not exceed 5% of the issued capital as
of the date on which this authorization is used. The
maximum discount at which shares may be offered is
set at 20% of the share price.
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.
You are asked to authorize the Management Board, on
the basis described in its report, to increase the Com-
pany’s issued share capital directly or through a repre-
sentative on one or several occasions by issuing com-
mon shares or share equivalents without pre-emptive
subscription rights, for a period of five years as from
the date of this Meeting. If the resolution is adopted,
the Management Board will set the terms and condi-
tions of these transactions.
The Management Board is responsible for reporting to
shareholders on the proposed share issue in accor-
dance with Articles 154 and 155 of the Decree of
March 23, 1967. Our responsibility is to express an
opinion on the fairness of figures taken from the finan-
cial statements, on the proposal to cancel sharehold-
ers’ pre-emptive subscription right and on certain other
information included in this report.
We performed 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
Management Board Report, 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 Decree of March 23, 1967, we will
prepare an additional report at the time the capital
increase(s) is (are) carried out by the Management
Board.
Courbevoie and Neuilly-sur-Seine, February 20, 2007
The Statutory Auditors
Ernst & Young et Autres Mazars & Guérard
Christian Chochon Pierre Sardet
Pierre Jouanne Jean-Louis Simon
Auditors' report on the proposal to grant existing
or new shares without consideration to officers and employees
of the company
Free translation of the original report in French.
To the Shareholders,
In our capacity as Statutory Auditors of Schneider
Electric SA and pursuant to Article L.225-197-1 of the
Commercial Code, we present below our report on the
proposal to grant existing or new shares without con-
sideration to officers and employees of Schneider
Electric SA and its subsidiaries and affiliates, as
defined in article L.225-197-2.
The Management Board is seeking authorization to
grant existing or new shares without consideration. It is
the Board's responsibility to draw up a report on the
grant that it wishes to carry out. It is our responsibility
to comment, if necessary, on the information given to
you about the grant.
Because no professional standard applies to this type
of operation, which was approved by law on December
30, 2004, we have performed the procedures we
deemed necessary to ensure that the methods being
considered are in accordance with the law.
We have no matters to report concerning the informa-
tion provided about the grant in the Management
Board Report.
Courbevoie and Neuilly-sur-Seine, February 20, 2007
The Statutory Auditors
Ernst & Young et Autres Mazars & Guérard
Christian Chochon Pierre Sardet
Pierre Jouanne Jean-Louis Simon
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