APC 2006 Annual Report Download - page 186

Annual and Extraordinary Shareholders’ Meeting of April 26, 2007
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 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. 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 Meet-
ing. The amount of any capital increase carried out
under this authorization would be deducted from the
aggregate amount by which the capital may be
increased under the fourteenth resolution tabled at this
Meeting.
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 18 months. If the
resolution is adopted, the Management Board will set
the terms and conditions 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 issue shares to entities
set up to hold shares on behalf of employees with cancellation
of shareholders’ pre-emptive subscription right
184