APC 2010 Annual Report Download - page 277

ANNUAL AND EXTRAORDINARY SHAREHOLDERS’ MEETING
AUDITORS’ SPECIAL REPORTS
Statutory auditors’ report on the issuance of common stock and/or marketable
securities giving access to equity with or without preemptive rights
Extraordinary Shareholders’ Meeting of 21 April
2011 – resolutions 14, 16, 17, 18 and 19
To the Shareholders,
In our capacity as your company’s statutory auditors and carrying
out the mission stipulated by the French commercial code,
particularly Articles L. 225-135, L. 225-136 and L. 228-92 thereof,
we are submitting our report on the proposals to delegate to the
Management Board with sub-delegation powers, various issues of
common stock and marketable securities, transactions on which
you are called upon to vote.
Based on its report, your Management Board proposes that you:
•empower it for a period of 26 months to decide on the following
transactions and to set the fi nal terms and conditions for these
equity issues. It also proposes that you cancel your preemptive
rights if necessary:
–issuance of common stock for any marketable securities giving
access to the company’s common stock on one or several
occasions or, in accordance with Article L. 228-93 of the
French commercial code, of a company that it holds over one-
half of the equity either directly or indirectly with preemptive
rights maintained (14th resolution),
–issuance through a public tender offer of common stock or any
marketable securities giving access to the company’s common
stock, on one or several occasions, pursuant to Article L. 228-
93 of the French commercial code, of a company in which it
holds over one-half of the equity, either directly or indirectly,
with preemptive rights canceld (16th resolution) it being
understood that these securities may be issued to exchange
for the securities that would be contributed to the company
under a share exchange offer on securities meeting the terms
and conditions set forth in Article L. 225-148 of the French
commercial code (18th resolution),
–issuance on one or more occasions under an offer stipulated
in Section II of Article L. 411-2 of the French monetary and
fi nancial code of common stock or any other marketable
security giving access to the company’s share capital or in
accordance with Article L. 228-93 of the French commercial
code, of a company of which it holds over one- half of the
share capital either directly or indirectly with preemptive rights
canceld (19th resolution).
•to empower it for a period of 26 months to set the terms and
conditions for issuance of common stock and marketable
securities giving access to common shares so as to pay for the
contributions in kind granted to the company and which consist
of equity securities or marketable securities giving access to the
share capital (18th resolution) up to the limit of 10% of the share
capital.
The nominal amount of the capital increases to be conducted
immediately or in the long-term may not exceed EUR800 million
under the 14th resolution, EUR217 million under the 16th resolution
with the upper limit stipulated in the 14th and 16th resolution for the
17th resolution, the upper limit stipulated in the 16th resolution for
the 18th resolution and EUR108 million under the 19th resolution up
to the upper limit stipulated in the 17th resolution. These amounts
will be deducted from the overall upper limit of EUR800 million set
forth in the 14th resolution.
The Management Board also proposes that you empower it for a
period of 26 months to decide to issue marketable securities, other
than equity securities or those giving access to equity securities,
giving access to debt securities with or without preemptive rights
as part of public tender offers or of private placements (14th, 16th
and 19th resolutions).
The overall nominal amount of debt securities that could be issued
may not exceed EUR3 billion for the 14th, 16th and 19th resolutions.
The number of securities to create towards implementing the
delegations of power stipulated in the 14th and 16th resolutions may
be increased under the conditions stipulated in Article L. 225-135-1
of the French commercial code if you adopt the 16th resolution.
The Management Board is responsible for reporting to shareholders
on the proposed share issues in accordance with Articles R.225-
113, R.225-114 and R.225-117 of the French Commercial Code.
Our responsibility is to express an opinion on the fairness of fi gures
taken from the fi nancial statements, on the proposal to cancel
shareholders’ pre-emptive subscription right, and on certain other
information included in this report.
We carried out our work on the fi nancial statements relating to this
mission in accordance with the professional standards of the French
Statutory Auditors Association. Those standards require that we
perform procedures to check the content of the report drawn up
by the Management Board concerning these transactions and the
methods 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 fi nal review of the terms of the proposed capital
increase under the 16th and 19th resolutions.
Furthermore, since this report does not explain the terms and
conditions for determining the issue price of the equity securities to
be issued towards implementing the 14th and 18th resolutions, we
cannot give our opinion on the choice of the methods of calculating
the issue price.
Since the issue price has not yet been set, we cannot formulate an
opinion on the fi nal conditions under which the share issues will be
carried out, and consequently have no opinion on the proposal to
cancel shareholders’ pre-emptive right contained in the 17th and
19th resolutions.
In accordance with Article R. 225-116 of the French commercial
code, we will submit an additional report if necessary at such time
your Management Board uses these authorisations in the event it
issues common stock with preemptive rights canceled and it issues
marketable securities giving access to the share capital and/or giving
right to an allocation of debt securities.
Neuilly-sur-Seine and Courbevoie, March 18, 2011
The Statutory Auditors
French original signed by
Ernst & Young et Autres
Yvon SALAÜN
MAZARS
David CHAUDAT
2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 275
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