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Business review
Assurance report on certain human resources,
safety and environment indicators
To the shareholders,
In our capacity as Statutory Auditors of Schneider
Electric and as requested, we have performed a review
that allowed us to provide a moderate level of assur-
ance on the 18 environment, safety and social indica-
tors (hereafter referred to as "the indicators") for 2006
identified in the annual report by the symbol.
Schneider Electric’s Sustainable Development Depart-
ment was responsible for preparing the indicators in
accordance with the frame of reference applicable in
2006. This frame of reference, which may be consult-
ed at Group headquarters, is summarized on page 91.
Our responsibility is to express a conclusion on these
indicators, based on our review.
Nature and scope of our review
We performed a limited review to provide a moderate
level of assurance that the indicators are free of mate-
rial misstatement. A higher level of assurance would
have required a more extensive review.
We reviewed the frame of reference with regard to its
meaningfulness, completeness, neutrality and clarity.
We met with 15 people in charge of the reporting
process at the Group level and in France and the Unit-
ed States to assess the frame of reference’s applica-
tion. At these levels, we reviewed internal control of
data consolidation, analyzed meaningful variations
and verified, on a test basis, calculations and data con-
solidation.
We selected a sample of four operating units at
which we verified understanding and application of the
frame of reference and, on a test basis, verified the cal-
culations and reconciled the data with supporting doc-
umentation.
We used teams specialized in sustainable develop-
ment led by Eric Duvaud to perform this work.
Information and comments
We have the following comments on the reporting
frame of reference defined by Schneider Electric for
the selected data:
The individuals responsible for environmental and
social reporting at the Group’s sites and units should
be more aware of the importance of their work. In
applying the frame of reference, special attention
should be paid to the distinction between "Headcount
by direct variable costs (DVC) and non-direct variable
costs (NDVC)" and to "Number of days lost per
employee (NDL)".
The accuracy of the method for calculating the aver-
age workforce at manufacturing sites should be
improved and the methods for calculating the number
of product environmental profiles compiled and the
percentage of product ranges in compliance with the
RoHS directive should be formalized.
The type of tests to be conducted for all environmen-
tal and social data, as well as the individuals responsi-
ble for testing should be specified and made more effi-
cient to ensure the continued reliability of reporting.
The Group has provided detailed information on the
methodologies used to establish data on page 91 and
in comments to published data. We bring the following
items to your attention with regard to this information:
Environmental data is transmitted in June and
December on the basis of estimates for at least the last
month of each six-month period. The data is not
adjusted at the end of the year.
Environmental data is transmitted for the manufac-
turing operations, which represent around 55% of the
Group’s total workforce.
Conclusion
During our review, we observed the following errors:
The frame of reference was not always correctly
applied in determining the work accident frequency
rate and work accident severity rate.
The frame of reference was not always correctly
applied in determining the breakdown between head-
count by direct variable costs (DVC) and headcount by
non-direct variable costs (NDVC). Our review of this
data did not allow us to reach a conclusion.
On the basis of our review and subject to this reserva-
tion, nothing has come to our attention that causes us
to believe that the reviewed indicators have not, in all
material respects, been prepared in accordance with
the frame of reference.
Neuilly Sur Seine, February 20, 2007
Ernst & Young et Autres Ernst & Young
Ernst & Young Environment and
Sustainability Services
Pierre Jouanne Eric Duvaud
92