APC 2007 Annual Report Download - page 156

6. Statutory Auditors’ Report
on the consolidated financial statements
This is a free translation into English of the Statutory Audi-
tors’ report issued in the French language and is provided
solely for the convenience of English-speaking readers.
This report includes information specifically required by
French law in all audit reports, whether qualified or not, and
this is presented below the opinion on the financial state-
ments. This information includes an explanatory paragraph
discussing the auditors’ assessments of certain significant
accounting matters. These assessments were made for the
purpose of issuing an opinion on the financial statements
taken as a whole and not to provide separate assurance on
individual account captions or on information taken outside
the consolidated financial statements. This report also in-
cludes information relating to the specific verification of in-
formation in the group management report.
This report, together with the Statutory Auditors’ report ad-
dressing financial and accounting information in the Chair-
man's report on internal control, should be read in
conjunction wit, and is construed in accordance with
French law and professional auditing standards applicable
in France.
To the Shareholders,
Following our appointment as Statutory Auditors by your
Annual Shareholders' Meeting, we have audited the accom-
panying consolidated financial statements of Schneider
Electric S.A. for the year ended December 31, 2007.
The consolidated financial statements have been approved
by the Executive Board. Our role is to express an opinion
on these financial statements based on our audit.
I. Opinion on the consolidated
financial statements
We conducted our audit in accordance with professional
standards applicable in France. Those standards require
that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial state-
ments are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles
used and significant estimates made by the management,
as well as evaluating the overall financial statements pres-
entation. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the consolidated financial statements give
a true and fair view of the assets and liabilities and of the fi-
nancial position of the group at December 31, 2007 and of
the results of its operations for the year then ended, in ac-
cordance with IFRSs as adopted by the European Union.
II. Justification of assessments
In accordance with the requirements of Article L. 823-9 of
French Company Law (Code de commerce) relating to the
justification of our assessments, we bring to your attention
the following matters:
Note 1.8 to the consolidated financial statements explains
the method for recognizing research and development
costs and describes the criteria under which development
154
costs may be capitalized. We reviewed the data and as-
sumptions used to identify development costs that qualify
for capitalization, as well as the group's calculations, and
obtained assurance that adequate disclosure is made in
the notes to the consolidated financial statements.
As explained in note 1.10 to the consolidated financial
statements, intangible assets and goodwill are tested for
impairment at least once a year and when factors exist in-
dicating that the related assets may have suffered a loss of
value. We reviewed, on a test basis, the indicators of a loss
of value and the other information evidencing the absence
of any loss of value.
As indicated in notes 1.15 and 12.3 to the consolidated
financial statements, future tax benefits arising from the
utilization of tax loss carry forwards are recognized only
when they can reasonably be expected to be realized. We
obtained assurance about the reasonableness of the as-
sumptions used to produce the estimate of future taxable
income used to support assessments of the recoverability
of these deferred tax assets.
Notes 1.18 and 15 describe the method for valuing pen-
sions and other post-employment obligations. Actuarial val-
uations were performed for these commitments. We
reviewed the data, assumptions used, and calculations
made, and obtained assurance that adequate disclosure
is made in the notes to the consolidated financial state-
ments.
Note 25 ("Other operating income / expenses") states
the amount of restructuring costs recorded in 2007. We
verified that, based on currently available information,
these costs concern restructuring measures initiated or an-
nounced before December 31, 2007, for which provisions
have been recorded based on an estimate of the costs to
be incurred. We also reviewed the data and assumptions
used by the group to make these estimates.
These assessments were thus made in the context of our
audit of the consolidated financial statements taken as a
whole, and therefore contributed to the opinion we formed
which is expressed in the first part of this report.
III. Specific verification
In accordance with professional standards applicable in
France, we have also verified the information given in the
group's management report. We have no matters to re-
port as to its fair presentation and its consistency with the
consolidated financial statements.
Courbevoie and Neuilly-sur-Seine, February 19, 2008
The Statutory Auditors
French original signed by:
Mazars & Guérard Ernst & Young et Autres
Pierre Sardet Pierre Jouanne