APC 2012 Annual Report Download - page 149

2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 147
CORPORATE GOVERNANCE
3
INTERNAL CONTROL AND RISK MANAGEMENT
10.6 Internal control procedures governing the production and processing of
consolidated and individual company accounting and financial information
10.7 Report of the Statutory Auditors on the internal control procedure
This is a free translation into English of a report issued in
French language and is provided solely for the convenience
of English-speaking users. This report should be read
in conjunction with and construed in accordance with
French la w and professional auditing standards applicable
forFrance.
Statutory Auditors’ report, prepared
inaccordance with articleL.225-235 of French
Commercial Code (Code de commerce),
onthe report prepared by the Chairman
of theSupervisory Board of the Company
Schneider ElectricSA.
To the shareholders,
In our capacity as Statutory Auditors of Schneider ElectricSA and in
accordance with articleL.225-235 of the French Commercial Code
(Code de commerce), we hereby report on the report prepared by
the Chairman of your company in accordance with articleL.225-68
of the French Commercial Code (Code de commerce) for the year
ended December31, 2012.
It is the Chairman’s responsibility to prepare and submit for the
Supervisory Board’s approval a report on internal control and risk
management procedures implemented by the Company and to
provide the other information required by article L.225-68 of the
French Commercial Code (Code de commerce) relating to matters
such as corporate governance.
Our role is to:
•report on any matters as to the information contained in the
Chairman’s report in respect of the internal control and risk
management procedures relating to the preparation and
processing of the accounting and fi nancial information;
•confi rm that the report also includes the other information
required by article L.225-68 of the French Commercial Code
(Code de commerce). It should be noted that our role is not to
verify the fairness of this other information.
We conducted our work in accordance with professional standards
applicable in France.
In addition to:
•its regulatory tasks;
•its responsibility for overseeing the close of accounts across the
Group;
•its controls of the Group’s results with respect to set targets (see
“Internal Control Organization and Management: Finance and
Control - Legal Affairs”).
The Management Control and Accounting unit is tasked with
overseeing:
•the quality of reporting packages submitted monthly by
subsidiaries;
•the results of programmed procedures;
•the integrity of the consolidation system database.
The Management Control and Accounting unit ensures that:
•given that the Group consolidated fi nancial statements are
fi nalized a few weeks after the annual and half-year balance
sheet date, subsidiaries perform a hard close at May 31 and
November30 of each year so that most closing adjustments for
the period can be calculated in advance;
•the scope of consolidation as well as the Group’s interest and
the type of control (exclusive control, joint control, signifi cant
infl uence, etc.) of each subsidiary, from which the consolidation
method results, are determined in cooperation with the Legal
Affairs Department;
•instructions are issued for the closing process, including reporting
deadlines, required data and any necessary adjustments;
•the Group’s consolidated fi nancial statements are analyzed
in detail, to understand and check the main contributions by
subsidiaries, as well as the substance of transactions refl ected
in the accounts;
•accounting classifi cations are verifi ed;
•the preparation and approval of the statement of changes in
equity and the cash fl ow statement are the key control points.
The internal controls used to confi rm the existence, completeness
and value of assets and liabilities are based on:
•each subsidiary’s responsibility for implementing procedures
providing an adequate level of internal control;
•defi ning levels of responsibility for authorizing and checking
transactions;
•segregating tasks to help ensure that all transactions are justifi ed;
•the integration of statutory and management reporting systems
developed to guarantee the completeness of transaction data
recorded in the accounts;
•all of the subsidiaries apply IFRS with regard to recognition
principles, measurement and accounting methods, impairment
and verifi cation;
•and the Management Control and Accounting unit performs
checks and analyses as described above.