Corporate Governance
1. GROUP STRUCTURE AND SHAREHOLDERS
Actelion's articles of incorporation, its by-laws including the charters of the Board Committees and its policy on ethical conduct provide the basis for its principles of corporate governance. These documents can be found on www.actelion.com under "Investor Relations", "Corporate Governance"1.1 Group Structure
1.1.1 Description of Actelion’s operation group structure
Actelion Ltd is the holding and finance company of the Group.
Actelion Pharmaceuticals Ltd, based in Allschwil, a 100% subsidiary of Actelion Ltd is in charge of the discovery, development, registration, production, quality assurance, safety, marketing coordination, group management and coordination. Actelion Pharmaceuticals Ltd further holds the intellectual property rights of the group.
Actelion Registration Ltd, based in London, a 100% subsidiary of Actelion Ltd, holds the marketing authorizations for products marketed by Actelion.
Actelion Percurex AG, based in Basel, a 100% subsidiary of Actelion Ltd, performs research and development services on behalf of the Group.
Actelion Clinical Operations, Inc., based in New Jersey, a 100% subsidiary of Actelion Ltd performs clinical operations on behalf of the Group.
Actelion Pharmaceuticals Israel Ltd, based in Ramat-Gan, a 100% subsidiary of Actelion Ltd, performs clinical operations on behalf of the Group.
Actelion Paris Organisation SAS, based in Paris, a 100% subsidiary of Actelion Ltd, performs administrative and marketing services in Europe for the Group.
Actelion Finance SCA and Actelion Partners SNC, both based in Luxembourg, and Actelion Participation, all three 100% subsidiaries of Actelion Ltd, as well as Actelion Luxembourg SARL, based in Luxembourg, a 100% subsidiary of Actelion Participation GmbH, perform financing for the Group.
The remaining group companies serve as import, marketing and sales companies for the group.
1.1.2 All listed companies belonging to the issuer’s group
Actelion Ltd
Gewerbestrasse 16
CH-4123 Allschwil
Switzerland
Listed on the SWX Swiss Exchange under the code ATLN
ISIN CH0010532478
Market capitalisation as of 31st December 2005: CHF 2’450’700’959
Actelion Ltd
Gewerbestrasse 16
CH-4123 Allschwil
Switzerland
Listed on the SWX Swiss Exchange under the code ATLN
ISIN CH0010532478
Market capitalisation as of 31st December 2005: CHF 2’450’700’959
1.1.3 The non-listed companies belonging to the issuer’s consolidated entities
See Financial Section, note 2
See Financial Section, note 2
1.2 Significant shareholders
See Financial Section, note 8
Shareholder structure
Registered shareholders: there were 6’842 shareholders registered in the Share Register on 31st December 2005. The distribution of shareholdings is divided as follows:
See Financial Section, note 8
Shareholder structure
Registered shareholders: there were 6’842 shareholders registered in the Share Register on 31st December 2005. The distribution of shareholdings is divided as follows:
| Number of shares | Number of registered shareholders on 31st December 2005 |
| 1 to 100 | 3,678 |
| 101 to 1’000 | 2,771 |
| 1’001 to 10’000 | 301 |
| 10’001 to 100’000 | 72 |
| 100’001 to 1’000’000 | 17 |
| More than 1’000’000 | 3 |
The shareholder body on 31st December 2005 was constituted as follows:
Shareholder structure according to category of investors (number of shares)
Shareholder structure according to category of investors (number of shares)
| Private persons | 23.50% |
| Institutional shareholders | 39.40% |
| Not registered | 37.10% |
Shareholder structure by country (number of shares)
| Not registered | 37.10% |
| Switzerland | 33.80% |
| United Kingdom | 13.50% |
| USA | 7.30% |
| Other | 8.30% |
1.3 Cross-shareholdings
None
None
2.2 Authorized and conditional capital in particular
- Conditional share capital
See Financial Section, note 4 and article 3a of the articles of incorporation
- Authorized share capital
See Financial Section, note 5 and article 3b of the articles of incorporation
- Conditional share capital
See Financial Section, note 4 and article 3a of the articles of incorporation
- Authorized share capital
See Financial Section, note 5 and article 3b of the articles of incorporation
2.4 Shares and participation certificates
- Shares
See Financial Section, note 3
- Participation certificates
None
- Shares
See Financial Section, note 3
- Participation certificates
None
2.5 Profit sharing certificates
None
None
2.6 Limitation on transferability and nominee registrations
2.6.1 Limitations on transferability for each share category, along with an indication of statutory group clauses, if any, and rules on making exceptions.
Article 5 of the articles of incorporation
There are no rules on making exceptions
2.6.1 Limitations on transferability for each share category, along with an indication of statutory group clauses, if any, and rules on making exceptions.
Article 5 of the articles of incorporation
There are no rules on making exceptions
2.6.2 Reasons for making exceptions in the year under review.
Not applicable
Not applicable
2.6.3 Admissibility of nominee registrations, along with an indication of percent clauses, if any, and registration conditions.
Article 5 of the articles of incorporation
Article 5 of the articles of incorporation
2.6.4 Procedure and conditions for cancelling statutory privileges and limitations on transferability.
Article 5 of the articles of incorporation
Article 5 of the articles of incorporation
2.7 Convertible bonds and options
-Convertible bonds and options
See Financial Section, note 16
- Options
The Standard Share Option Plan is intended to promote the interests of the Company by providing employees with the opportunity to acquire a proprietary interest, or otherwise increase their proprietary interest, in the Company as an incentive for them to remain in the service of the Company and to help align the employees’ interests with those of the shareholders. Options are normally granted annually to employees who are already employed at the Company based on the function within the Company and on the achievement of defined performance criteria. Upon hiring, the Company may grant options depending on the future function at the Company. Grant levels are reviewed by the Compensation Committee and approved by the Board. Once options are granted, the Board is not entitled to materially increase the benefit accruing to the Optionee without the approval of the Actelion stockholders.
For further information, see Financial Section, note 20
-Convertible bonds and options
See Financial Section, note 16
- Options
The Standard Share Option Plan is intended to promote the interests of the Company by providing employees with the opportunity to acquire a proprietary interest, or otherwise increase their proprietary interest, in the Company as an incentive for them to remain in the service of the Company and to help align the employees’ interests with those of the shareholders. Options are normally granted annually to employees who are already employed at the Company based on the function within the Company and on the achievement of defined performance criteria. Upon hiring, the Company may grant options depending on the future function at the Company. Grant levels are reviewed by the Compensation Committee and approved by the Board. Once options are granted, the Board is not entitled to materially increase the benefit accruing to the Optionee without the approval of the Actelion stockholders.
For further information, see Financial Section, note 20
3. THE BOARD OF DIRECTORS
3.1 Members of the Board of Directorsand
3.2 Other activities and functions of the members of the Board of Directors
Robert E. Cawthorn
Education: B.A. degree in agriculture, Cambridge University, England.
Professional background: Managing Director of Global Health Partners, DLJ Merchant Banking Partners, 1997 to 2001; Chairman and CEO of Rhone-Poulenc-Rorer, Inc. (formerly Rorer Group), 1985 to 1996; President of Biogen Inc., 1979 to 1982; various executive positions at Pfizer International.
Other activities and functions: Member of the Board of Directors of the following unlisted companies: The March Group, NextPharma Technologies, Leerink Swann & Co..Chairman and Trustee of the Bermuda Biological Station for Research.
Education: B.A. degree in agriculture, Cambridge University, England.
Professional background: Managing Director of Global Health Partners, DLJ Merchant Banking Partners, 1997 to 2001; Chairman and CEO of Rhone-Poulenc-Rorer, Inc. (formerly Rorer Group), 1985 to 1996; President of Biogen Inc., 1979 to 1982; various executive positions at Pfizer International.
Other activities and functions: Member of the Board of Directors of the following unlisted companies: The March Group, NextPharma Technologies, Leerink Swann & Co..Chairman and Trustee of the Bermuda Biological Station for Research.
Juhani Anttila
Education: Master’s degree in law at the University of Helsinki, Finland, 1978.
Professional background: Managing Partner at CA Corporate Advisers, Zurich, 1981 to 1985; Managing Director of Nokia GmbH, Zurich, 1985 to 1988; Member of the Executive Board of Nokia Consumer Electronics Division1989 to 1995; Chairman of the Executive Board of Nokia (Deutschland) GmbH, Germany, 1990 to 1995; President and CEO of the Swisslog Holding Ltd, 1996 to 2002; CEO of Ascom Holding Ltd, 2003 to 2004.
Other activities and functions: Member of the Board of Directors of the following listed companies: Ascom Holding Ltd (Chairman), since 2002.
Education: Master’s degree in law at the University of Helsinki, Finland, 1978.
Professional background: Managing Partner at CA Corporate Advisers, Zurich, 1981 to 1985; Managing Director of Nokia GmbH, Zurich, 1985 to 1988; Member of the Executive Board of Nokia Consumer Electronics Division1989 to 1995; Chairman of the Executive Board of Nokia (Deutschland) GmbH, Germany, 1990 to 1995; President and CEO of the Swisslog Holding Ltd, 1996 to 2002; CEO of Ascom Holding Ltd, 2003 to 2004.
Other activities and functions: Member of the Board of Directors of the following listed companies: Ascom Holding Ltd (Chairman), since 2002.
Jean-Paul Clozel
Education: medical degree in France; further training in pharmacology and physiology at the
University of Montreal, Canada, and the University of California, San Francisco.
Professional background: Practicing Cardiologist for 11 years; Head of Drug Discovery Group in the Cardiovascular Department of F. Hoffmann-La Roche for 12 years, Founder and Chief Executive officer of Actelion.
Other activities and functions: None.
Education: medical degree in France; further training in pharmacology and physiology at the
University of Montreal, Canada, and the University of California, San Francisco.
Professional background: Practicing Cardiologist for 11 years; Head of Drug Discovery Group in the Cardiovascular Department of F. Hoffmann-La Roche for 12 years, Founder and Chief Executive officer of Actelion.
Other activities and functions: None.
Carl Feldbaum
Education: bachelor's degree in Biology from Princeton University; law degree from the University of Pennsylvania Law School.
Professional background: Assistant special prosecutor for the Watergate special prosecution force, 1973 to 1975;Inspector General for defense intelligence in the U.S. Department of Defense, 1976 to 1979; Assistant to the Secretary of Energy, 1979 to 1980; president and founder of the Palomar Corporation, 1980 to 1988; Chief of staff to Senator Arlen Specter (R-PA) of Pennsylvania, 1988 to 1993; President of the Biotechnology Industry Organization (BIO) in Washington, D.C., 1993 to 2005.
Other activities and functions: Member of the Board of Directors of the following listed company: Connetics Corporation, Palo Alto CA. Consultant, Biotechnology Industry Organization.
Education: bachelor's degree in Biology from Princeton University; law degree from the University of Pennsylvania Law School.
Professional background: Assistant special prosecutor for the Watergate special prosecution force, 1973 to 1975;Inspector General for defense intelligence in the U.S. Department of Defense, 1976 to 1979; Assistant to the Secretary of Energy, 1979 to 1980; president and founder of the Palomar Corporation, 1980 to 1988; Chief of staff to Senator Arlen Specter (R-PA) of Pennsylvania, 1988 to 1993; President of the Biotechnology Industry Organization (BIO) in Washington, D.C., 1993 to 2005.
Other activities and functions: Member of the Board of Directors of the following listed company: Connetics Corporation, Palo Alto CA. Consultant, Biotechnology Industry Organization.
Werner Henrich
Education: Chemist and European Patent Attorney.
Professional background: Former Head of Global Intellectual Property and Licensing, F. Hoffmann-La Roche Ltd, Basel.
Other activities and functions: Member of the Board of Directors of the following listed company: Basilea Pharmaceutica (chairman), a biotechnology company involved in antibiotics, and of the following unlisted companies: Addex Pharmaceuticals, an R&D company focusing on the treatment of central nervous system disorders, TLT Medical (chairman), TET Systems and Opthalmopharma and CEO of Pivalor AG, a consultant company.
Education: Chemist and European Patent Attorney.
Professional background: Former Head of Global Intellectual Property and Licensing, F. Hoffmann-La Roche Ltd, Basel.
Other activities and functions: Member of the Board of Directors of the following listed company: Basilea Pharmaceutica (chairman), a biotechnology company involved in antibiotics, and of the following unlisted companies: Addex Pharmaceuticals, an R&D company focusing on the treatment of central nervous system disorders, TLT Medical (chairman), TET Systems and Opthalmopharma and CEO of Pivalor AG, a consultant company.
Armin Kessler
Education: degree in physics and chemistry from Pretoria University in South Africa, degree in chemical engineering from the University of Cape Town, South Africa and a juris doctorate from Seton Hall University; registered Patent Attorney at the U.S. Patent Office.
Professional background: Chief Operating officer of F. Hoffmann-La Roche Ltd, Basel, Switzerland, from 1990 to 1995. Prior to appointment as COO, senior management positions at Roche, including Head of the Diagnotics and Pharmaceutical divisions. Earlier positions included Director of Pharmaceutical Marketing Worldwide at Sandoz (now Novartis) and President of Sandoz KK in Tokyo.
Other activities and functions: Member of the Board of Directors of the following listed companies: The Medines Co., Gen-Probe and PRA International and the following unlisted company: Medgenisis. Formerly on the Board of Syntex Chemicals, Genentech and F. Hoffmann-La Roche.
Education: degree in physics and chemistry from Pretoria University in South Africa, degree in chemical engineering from the University of Cape Town, South Africa and a juris doctorate from Seton Hall University; registered Patent Attorney at the U.S. Patent Office.
Professional background: Chief Operating officer of F. Hoffmann-La Roche Ltd, Basel, Switzerland, from 1990 to 1995. Prior to appointment as COO, senior management positions at Roche, including Head of the Diagnotics and Pharmaceutical divisions. Earlier positions included Director of Pharmaceutical Marketing Worldwide at Sandoz (now Novartis) and President of Sandoz KK in Tokyo.
Other activities and functions: Member of the Board of Directors of the following listed companies: The Medines Co., Gen-Probe and PRA International and the following unlisted company: Medgenisis. Formerly on the Board of Syntex Chemicals, Genentech and F. Hoffmann-La Roche.
Jean Malo
Education: M.B.A. from ESSEC Business School in Paris in 1977.
Professional background: Chartered Financial Analyst and a member of the Association for Investment Management and Research and the Houston Society of Financial Analysts. Chief Investment Officer for Vaughan Nelson Scarborough and McCullough, including managing several equity portfolios between 1997 and 2000. From 1989 to 1997, managed both equity and fixed income portfolios for Daniel Breen and Company in Houston. From 1978 to 1989, Corporate Banker for Banque Indosuez in Saudi Arabia, Houston, and New York. Between 1977 and 1978, Financial Analyst at the French Embassy in Singapore.
Other activities and functions: As of 2000, Senior Partner and Chief Investment Officer at Breeco Management L.P., a registered investment advisor.
Education: M.B.A. from ESSEC Business School in Paris in 1977.
Professional background: Chartered Financial Analyst and a member of the Association for Investment Management and Research and the Houston Society of Financial Analysts. Chief Investment Officer for Vaughan Nelson Scarborough and McCullough, including managing several equity portfolios between 1997 and 2000. From 1989 to 1997, managed both equity and fixed income portfolios for Daniel Breen and Company in Houston. From 1978 to 1989, Corporate Banker for Banque Indosuez in Saudi Arabia, Houston, and New York. Between 1977 and 1978, Financial Analyst at the French Embassy in Singapore.
Other activities and functions: As of 2000, Senior Partner and Chief Investment Officer at Breeco Management L.P., a registered investment advisor.
André J. Mueller
Education: Chartered Chemical Engineer, Superior Technical College, Geneva (1964); Lincenciate in Business Economics, University of Geneva (1970), MBA, INSEAD Fontainbleau (1971).
Professional background: Process Engineer with CIBA Ltd.; management positions in planning and finance at Sandoz (now Novartis) in Switzerland and the US; five years as the first Chief Financial Officer of Biogen; Co-Founder of Genevest venture capital group; member of the management consulting practice of Deloitte and Touche from 1993 to 1997; member of founding team of Actelion and Chief Financial Officer until 2003.
Other activities and functions: Member of the Board of Directors of the listed company Synthes Inc. and of the following unlisted companies: Addex Pharmaceuticals (Chairman), an R&D company focusing on the treatment of central nervous system disorders, Cerenis Therapeutics, an R&D company focusing on the prevention and treatment of atherosclerosis and Apoxis SA, an R&D company focusing on oncology and immunology.
Education: Chartered Chemical Engineer, Superior Technical College, Geneva (1964); Lincenciate in Business Economics, University of Geneva (1970), MBA, INSEAD Fontainbleau (1971).
Professional background: Process Engineer with CIBA Ltd.; management positions in planning and finance at Sandoz (now Novartis) in Switzerland and the US; five years as the first Chief Financial Officer of Biogen; Co-Founder of Genevest venture capital group; member of the management consulting practice of Deloitte and Touche from 1993 to 1997; member of founding team of Actelion and Chief Financial Officer until 2003.
Other activities and functions: Member of the Board of Directors of the listed company Synthes Inc. and of the following unlisted companies: Addex Pharmaceuticals (Chairman), an R&D company focusing on the treatment of central nervous system disorders, Cerenis Therapeutics, an R&D company focusing on the prevention and treatment of atherosclerosis and Apoxis SA, an R&D company focusing on oncology and immunology.
3.3 Cross-involvement
None
None
3.4 Elections and terms of office
3.4.1 Principles of the election procedure and limits of the terms of office
According to article 16 of the Articles of Incorporation, the 5 to 11 members of the Board of Directors are elected by the meeting of the shareholders for a term of office of three years. One year of office is understood to be the period from one ordinary meeting of shareholders to the next ordinary meeting of shareholders. In principle, the Board of Directors is renewed each year by one third. The term of office of newly elected members shall be fixed at the time of election under due consideration of the renewal cycle. In addition, the by-laws currently foresee that members, who have completed their seventy-fourth year of age, shall retire per the next ordinary meeting of shareholders.
3.4.1 Principles of the election procedure and limits of the terms of office
According to article 16 of the Articles of Incorporation, the 5 to 11 members of the Board of Directors are elected by the meeting of the shareholders for a term of office of three years. One year of office is understood to be the period from one ordinary meeting of shareholders to the next ordinary meeting of shareholders. In principle, the Board of Directors is renewed each year by one third. The term of office of newly elected members shall be fixed at the time of election under due consideration of the renewal cycle. In addition, the by-laws currently foresee that members, who have completed their seventy-fourth year of age, shall retire per the next ordinary meeting of shareholders.
3.4.2 Time of first election and remaining term of office for each member of the Board of Directors
| Name of Board member | Executive member | Nationality | Birthdate | Date of AGM of first election | Date of AGM of renewal | AGM of end of term of office |
| Robert E. Cawthorn | No | British | 28.09.1935 | 2000 | 2005 | 2008 |
| Juhanni Anttila | No | Finnish | 20.04.1954 | 2005 | N/a | 2008 |
| Jean-Paul Clozel | Yes | French | 03.04.1955 | 2000 | 2005 | 2008 |
| Carl Feldbaum | No | USA | 01.02.1944 | 2005 | N/a | 2008 |
| Werner Henrich | No | French | 03.11.1943 | 2000 | 2004 | 2007 |
| Armin Kessler | No | Swiss | 31.03.1938 | 2004 | N/a | 2007 |
| Jean Malo | No | French | 16.07.1954 | 2004 | N/a | 2007 |
| André J. Mueller | No | Swiss | 05.02.1944 | 2001 | 2003 | 2006 |
3.5 Internal organizational structure
3.5.1 Allocation of tasks within the Board of Directors| Name of Board member | Chairman | Vice-Chairman | Delegate |
| Robert E. Cawthorn | x | ||
| Juhanni Anttila | |||
| Jean-Paul Clozel | x | ||
| Carl Feldbaum | |||
| Werner Henrich | |||
| Armin Kessler | |||
| Jean Malo | |||
| André J. Mueller | x | ||
3.5.2 Members list, tasks and area of responsibility of each committee of the board of directors
| Name of Board member | Compensation Committee | Finance and Audit Committee | Nominating and Governance Committee |
| Robert E. Cawthorn | x | x (Chairman) | |
| Juhanni Anttila | x | ||
| Jean-Paul Clozel | |||
| Carl Feldbaum | x | ||
| Werner Henrich | x | ||
| Armin Kessler | x (Chairman) | x | |
| Jean Malo | x | ||
| André J. Mueller | x (Chairman) | x | |
The Compensation Committee reviews and approves the Company compensation philosophy and components and reviews general employee compensation, benefit policies and HR practices of the Company. This Committee also reviews global incentive plans and annual objectives and evaluates performance against these. It determines the compensation of the CEO and approves that of senior managers who report directly to the CEO. The management keeps the Compensation Committee informed of other global HR projects and policies, which are being implemented or considered. The Committee presents the Compensation Committee report to the Board. In 2005, the Compensation Committee met 4 times.
The Finance and Audit Committee reviews the internal controls and finances of the Group in accordance with the "Charter of the Finance and Audit Committee" adopted on 30th November 2005. The Committee has the following tasks and duties: (i) Evaluation of management's proposals and formulation of recommendations to the full Board in regards to financial planning; (ii) Review of the proposed concepts of financial objectives; (iii) Review of finance policy, operations and risk management framework in the areas of Treasury, Controlling, Taxes, Insurances, Investments and acquisitions; (iv) Review the US GAAP and statutory financial statements prior to release and submission of annual financial statements to the Board of Directors; (v) Supervise the composition and activity of the Internal Audit (IA) function, assure implementation of IA recommendations, approve annual mission plans and review IA's cooperation with External Auditors; (vi) Evaluate, and propose to the Board, the External Auditors (EA) to be nominated for shareholder approval, evaluate the terms of engagement, compensation, performance and independence of the EA and review the audit process, discussing audit results with the EA; (vii) Oversee, in all material respects, the company's compliance with applicable financial and securities laws. The Finance and Audit Committee reports to the full Board of Directors at regular intervals and submits proposals for board resolutions, if necessary. In 2005, the Finance and Audit Committee met 4 times and in addition had various telephone conferences.
The Nominating and Governance Committee reviews considerations relating to Board composition, including size of the Board and criteria for membership on the Board of Directors, identifies, reviews, considers, recommends to the Board qualified candidates to serve as Board members and members of the various committees of the Board. It further reviews directorships and consulting agreements of Board members for conflicts of interest, reviews and recommends corporate governance policies and principles for the company, annually oversees an evaluation of the Board of Directors, maintains an orientation program for new Board members and an ongoing education program for existing Board membersand makes related recommendations to the Board. In 2005, the Nominating and Governance Committee met 4 times.
The Finance and Audit Committee reviews the internal controls and finances of the Group in accordance with the "Charter of the Finance and Audit Committee" adopted on 30th November 2005. The Committee has the following tasks and duties: (i) Evaluation of management's proposals and formulation of recommendations to the full Board in regards to financial planning; (ii) Review of the proposed concepts of financial objectives; (iii) Review of finance policy, operations and risk management framework in the areas of Treasury, Controlling, Taxes, Insurances, Investments and acquisitions; (iv) Review the US GAAP and statutory financial statements prior to release and submission of annual financial statements to the Board of Directors; (v) Supervise the composition and activity of the Internal Audit (IA) function, assure implementation of IA recommendations, approve annual mission plans and review IA's cooperation with External Auditors; (vi) Evaluate, and propose to the Board, the External Auditors (EA) to be nominated for shareholder approval, evaluate the terms of engagement, compensation, performance and independence of the EA and review the audit process, discussing audit results with the EA; (vii) Oversee, in all material respects, the company's compliance with applicable financial and securities laws. The Finance and Audit Committee reports to the full Board of Directors at regular intervals and submits proposals for board resolutions, if necessary. In 2005, the Finance and Audit Committee met 4 times and in addition had various telephone conferences.
The Nominating and Governance Committee reviews considerations relating to Board composition, including size of the Board and criteria for membership on the Board of Directors, identifies, reviews, considers, recommends to the Board qualified candidates to serve as Board members and members of the various committees of the Board. It further reviews directorships and consulting agreements of Board members for conflicts of interest, reviews and recommends corporate governance policies and principles for the company, annually oversees an evaluation of the Board of Directors, maintains an orientation program for new Board members and an ongoing education program for existing Board membersand makes related recommendations to the Board. In 2005, the Nominating and Governance Committee met 4 times.
3.5.3 Work methods of the board of directors and its committees
In 2005, the Board of Directors met 4 times and a majority (if not all) members were present at each board meeting. When the situation so warrants, the Board of Directors holds additional ad hoc meetings or telephone conferences to discuss specific issues. Any member can request a meeting.
The management presents a status report and then the majority of the board takes the decisions on the relevant issues.
In the case of committees, after the presentation of the issue by the management, the committee takes a preliminary decision for approval to the full Board, which will be reported along with the details of the issue, to the entire board, who will take the final decision.
An orientation program is being provided for new members of the Board of Directors and an ongoing education program will be provided for existing members of the Board of Directors. Furthermore, the members of the Board of Directors are required to fill in a self-assessment form after a term of office of one year.
In 2005, the Board of Directors met 4 times and a majority (if not all) members were present at each board meeting. When the situation so warrants, the Board of Directors holds additional ad hoc meetings or telephone conferences to discuss specific issues. Any member can request a meeting.
The management presents a status report and then the majority of the board takes the decisions on the relevant issues.
In the case of committees, after the presentation of the issue by the management, the committee takes a preliminary decision for approval to the full Board, which will be reported along with the details of the issue, to the entire board, who will take the final decision.
An orientation program is being provided for new members of the Board of Directors and an ongoing education program will be provided for existing members of the Board of Directors. Furthermore, the members of the Board of Directors are required to fill in a self-assessment form after a term of office of one year.
3.6 Definition of area of responsibility
The Board of Directors has delegated the management of the Company’s business to the CEO of the Company and to the Actelion Executive Committee and has granted the CEO the power to appoint the members of the Actelion Executive Committee.
The Board of Directors carries out the tasks reserved to it by law. The Actelion Executive Committee takes all other management decisions.
Management has set up a Scientific Advisory Board, with the task of reviewing the Company’s progress in research and clinical development and evaluating new scientific perspectives alongside the Company’s management. On 31st December 2005, the Scientific Advisory Board was composed of the following external experts of worldwide reputation: Professors Joël Ménard, Craig Pratt, Richard Tsien, David Shlaes, Hugo Kubinyi, Graeme Stewart.
The Board of Directors has delegated the management of the Company’s business to the CEO of the Company and to the Actelion Executive Committee and has granted the CEO the power to appoint the members of the Actelion Executive Committee.
The Board of Directors carries out the tasks reserved to it by law. The Actelion Executive Committee takes all other management decisions.
Management has set up a Scientific Advisory Board, with the task of reviewing the Company’s progress in research and clinical development and evaluating new scientific perspectives alongside the Company’s management. On 31st December 2005, the Scientific Advisory Board was composed of the following external experts of worldwide reputation: Professors Joël Ménard, Craig Pratt, Richard Tsien, David Shlaes, Hugo Kubinyi, Graeme Stewart.
3.7 Information and control instruments vis-à-vis the senior management
Currently, the Board of Directors receives monthly reports regarding the financial and business situation of the Company and quarterly reports presented by the CEO. Additionally, the Board of Directors receives, quarterly financial results before they are released to the public.
The risk management systems address the areas of production and development, business operations and finance. In the production and development arena, quality control ensures that the products achieve the required quality to be marketed, the internal review of clinical development ensures the safe development of the product and an extensive post marketing surveillance ensures the continuing safety of the marketed products. Additionally, during 2005, the Finance and Audit Committee has established an Internal Audit Department. A program of internal audit reviews will provide a systematic and disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes within the Group. The Board of Directors has access to Internal Audit Reports on request from the Finance and Audit Committee. These reports detail risks arising in the areas of operations, compliance and internal control over financial reporting. The company has formally adopted a " Company Compliance Framework" during 2005. This framework as assessed both internally and externally has been presented to the FAC. In the financial arena the Board is informed regularly of financial risks and the proposed actions to be taken.
The risk management systems consist of a global quality management system including but not limited to quality control of products to be released to the market, quality audits ensuring good clinical practices within clinical development and therefore safe development of the investigational medicinal product and extensive post marketing surveillance continuously monitoring the safety profile of the marketed product.
Currently, the Board of Directors receives monthly reports regarding the financial and business situation of the Company and quarterly reports presented by the CEO. Additionally, the Board of Directors receives, quarterly financial results before they are released to the public.
The risk management systems address the areas of production and development, business operations and finance. In the production and development arena, quality control ensures that the products achieve the required quality to be marketed, the internal review of clinical development ensures the safe development of the product and an extensive post marketing surveillance ensures the continuing safety of the marketed products. Additionally, during 2005, the Finance and Audit Committee has established an Internal Audit Department. A program of internal audit reviews will provide a systematic and disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes within the Group. The Board of Directors has access to Internal Audit Reports on request from the Finance and Audit Committee. These reports detail risks arising in the areas of operations, compliance and internal control over financial reporting. The company has formally adopted a " Company Compliance Framework" during 2005. This framework as assessed both internally and externally has been presented to the FAC. In the financial arena the Board is informed regularly of financial risks and the proposed actions to be taken.
The risk management systems consist of a global quality management system including but not limited to quality control of products to be released to the market, quality audits ensuring good clinical practices within clinical development and therefore safe development of the investigational medicinal product and extensive post marketing surveillance continuously monitoring the safety profile of the marketed product.
4. Senior Management
4.1 Members of the senior managementOn December 31, 2005, the Actelion Executive Committee ("AEC") was composed of:
Simon Buckingham
Title and Function: President Corporate and Business Development
Nationality: Australian
Education: Bachelor of Veterinary Science (Honours), University of Sydney, Australia; Doctor of Philosophy, University of Melbourne, Australia, Graduate Management Qualification, Australian Graduate School of Management, University of New South Wales, Australia.
Professional background: Sales and Marketing Director, Parke-Davis US (a division of Warner Lambert); Global Project Director, F. Hoffmann-La Roche, Switzerland; Product Marketing Manager and Territory Manager, F. Hoffmann-La Roche, Australia
Title and Function: President Corporate and Business Development
Nationality: Australian
Education: Bachelor of Veterinary Science (Honours), University of Sydney, Australia; Doctor of Philosophy, University of Melbourne, Australia, Graduate Management Qualification, Australian Graduate School of Management, University of New South Wales, Australia.
Professional background: Sales and Marketing Director, Parke-Davis US (a division of Warner Lambert); Global Project Director, F. Hoffmann-La Roche, Switzerland; Product Marketing Manager and Territory Manager, F. Hoffmann-La Roche, Australia
Christian Chavy
Title and Function: President Business Operations
Nationality: French
Education: ESSEC Business School (Ecole Supérieure des Sciences Economiques et Commerciales) in Paris; Master’s Degree of Business Management from ICG (Institut de contrôle de Gestion) in Paris.
Professional background: Vice-President and Head of Global Therapeutic Area Reproductive Health at Serono International in Geneva; Managing Director of Serono France; President of Rhone-Poulenc Rorer Canada Inc.; Managing Director of Rorer France; Marketing Manager at Bristol-Myers France, Smith-Kline and Merck Sharp & Dohme.
Title and Function: President Business Operations
Nationality: French
Education: ESSEC Business School (Ecole Supérieure des Sciences Economiques et Commerciales) in Paris; Master’s Degree of Business Management from ICG (Institut de contrôle de Gestion) in Paris.
Professional background: Vice-President and Head of Global Therapeutic Area Reproductive Health at Serono International in Geneva; Managing Director of Serono France; President of Rhone-Poulenc Rorer Canada Inc.; Managing Director of Rorer France; Marketing Manager at Bristol-Myers France, Smith-Kline and Merck Sharp & Dohme.
Roland Haefeli
Title and Function: Vice President, Head of Investor Relations and Public Affairs
Nationality: Swiss
Education: Advanced degrees in contemporary history from the University of Bern (Switzerland) and University of North Carolina, Chapel Hill (USA) in Political Science.
Professional background: stock market training program in a Swiss Private Bank; several years as a news writer, presenter and editor for several print and electronic media operations; two years as a Delegate for the International Committee of the Red Cross (ICRC) in Bosnia and Rwanda; corporate spokesperson for F. Hoffmann-La Roche, head of media relations for other companies, including Serono.
Title and Function: Vice President, Head of Investor Relations and Public Affairs
Nationality: Swiss
Education: Advanced degrees in contemporary history from the University of Bern (Switzerland) and University of North Carolina, Chapel Hill (USA) in Political Science.
Professional background: stock market training program in a Swiss Private Bank; several years as a news writer, presenter and editor for several print and electronic media operations; two years as a Delegate for the International Committee of the Red Cross (ICRC) in Bosnia and Rwanda; corporate spokesperson for F. Hoffmann-La Roche, head of media relations for other companies, including Serono.
Isaac Kobrin
Title and Function: Senior Vice President, Head of Clinical Development
Nationality: Israeli
Education: Internist educated in Israel with further training (Fullbright Fellowship) at Ochsner Medical Foundation in New Orleans, LA in the cardiovascular field.
Professional background: Senior physician and senior lecturer in Internal Medicine at Hadassah hospital in Jerusalem, Israel. Group Leader of the cardiovascular clinical development group, F. Hoffmann-La Roche.
Title and Function: Senior Vice President, Head of Clinical Development
Nationality: Israeli
Education: Internist educated in Israel with further training (Fullbright Fellowship) at Ochsner Medical Foundation in New Orleans, LA in the cardiovascular field.
Professional background: Senior physician and senior lecturer in Internal Medicine at Hadassah hospital in Jerusalem, Israel. Group Leader of the cardiovascular clinical development group, F. Hoffmann-La Roche.
Louis de Lassence
Title and Function: Vice President, Head of Corporate Services
Nationality: French
Education: Business School in Paris in 1976 and degrees in accounting.
Professional background: External auditor. From 1982 to 2000 worked for Roche Group, mainly in Finance and Administration; Internal auditor; Finance Manager of Roche, Brussels; Assistant of the vice-chairman of the Roche Group; Finance Manager of Pharma International
Title and Function: Vice President, Head of Corporate Services
Nationality: French
Education: Business School in Paris in 1976 and degrees in accounting.
Professional background: External auditor. From 1982 to 2000 worked for Roche Group, mainly in Finance and Administration; Internal auditor; Finance Manager of Roche, Brussels; Assistant of the vice-chairman of the Roche Group; Finance Manager of Pharma International
Andrew J. Oakley
Title and Function: Vice President, Chief Financial Officer
Nationality: Australian
Education: MBA from London Business School
Professional background: Member of the Australian Institute of Chartered Accountants, since 1987, following several years working for a major accounting firm. In his last position before joining Actelion, served in a senior finance capacity for the global holding companies of Accenture. Previously held executive positions in major multinational building material companies and spent several years as an equity analyst with banks in Australia, the United Kingdom and the United States.
Title and Function: Vice President, Chief Financial Officer
Nationality: Australian
Education: MBA from London Business School
Professional background: Member of the Australian Institute of Chartered Accountants, since 1987, following several years working for a major accounting firm. In his last position before joining Actelion, served in a senior finance capacity for the global holding companies of Accenture. Previously held executive positions in major multinational building material companies and spent several years as an equity analyst with banks in Australia, the United Kingdom and the United States.
In addition to the above-named persons of the AEC, the Senior Management comprised the following individuals:
Martine Clozel
Title and Function: Senior Vice President, Head of Drug Discovery, Pharmacology & Pre-clinical Development, member of founding team of Actelion
Nationality: French
Education: Pediatrician specialized in neonatal intensive care, educated at the University of Nancy, France; Training in physiology and pharmacology at McGill University, Montreal, and at the University of California, San Francisco;
Professional background: Scientific expert, Leader drug discovery projects, F. Hoffmann-La Roche
Title and Function: Senior Vice President, Head of Drug Discovery, Pharmacology & Pre-clinical Development, member of founding team of Actelion
Nationality: French
Education: Pediatrician specialized in neonatal intensive care, educated at the University of Nancy, France; Training in physiology and pharmacology at McGill University, Montreal, and at the University of California, San Francisco;
Professional background: Scientific expert, Leader drug discovery projects, F. Hoffmann-La Roche
Walter Fischli
Title and Function: Senior Vice President, Head of Drug Discovery, Molecular Biology & Biochemistry, Founder
Nationality: Swiss
Education: Biochemist educated at the Swiss Institute of Technology (ETH) Zurich with further training in molecular biology and organic chemistry; Research fellowship at the Addiction Research Foundation, Stanford University
Professional background: Leader drug discovery projects at F. Hoffmann-La Roche, including development of new screening systems; Co-Founder of Actelion, including establishment of new Discovery units.
Title and Function: Senior Vice President, Head of Drug Discovery, Molecular Biology & Biochemistry, Founder
Nationality: Swiss
Education: Biochemist educated at the Swiss Institute of Technology (ETH) Zurich with further training in molecular biology and organic chemistry; Research fellowship at the Addiction Research Foundation, Stanford University
Professional background: Leader drug discovery projects at F. Hoffmann-La Roche, including development of new screening systems; Co-Founder of Actelion, including establishment of new Discovery units.
Thomas Weller
Title and Function: Vice President, Head of Drug Discovery, Chemistry
Nationality: Swiss
Education: Chemist educated at the Swiss Federal Institute of Technology (ETH) in Zurich with postdoctoral training in organic chemistry at Columbia University, New York, USA.
Professional Background: Scientific expert, Leader drug discovery projects at F. Hoffmann-La Roche
Title and Function: Vice President, Head of Drug Discovery, Chemistry
Nationality: Swiss
Education: Chemist educated at the Swiss Federal Institute of Technology (ETH) in Zurich with postdoctoral training in organic chemistry at Columbia University, New York, USA.
Professional Background: Scientific expert, Leader drug discovery projects at F. Hoffmann-La Roche
4.2 Other activities and functions
None
None
4.3 Management contracts
None
None
5. COMPENSATION, SHAREHOLDINGS AND LOANS
5.1 Content and method of determining the compensations and of the shareholding programsNon-executive members of the Board of Directors receive a yearly fixed compensation (retainer) and meeting fees according to their individual attendance at Board and committee meetings as well as an allotment of shares and stock options.
Generally, the executive directors receive an allotment of shares and/or options from their directorship, and a cash compensation under their employment agreement.
Management members receive (i) a fixed pay, determined according to the labour market following a survey, (ii) a yearly bonus, which is determined by the Board of Directors, upon recommendation of the Compensation Committee according to certain criteria that include the Company’s, unit’s and individual’s personal performance, as determined by the Board of Directors from time to time, and (iii) under the ESOP (Employee Stock Option Plan), stock options, the number of which is determined according to a grid agreed by the Board of Directors and which takes into account the functions of the management member in question.
5.2 Compensations for acting members of governing bodies
In 2005, in aggregate, the executive members of the Board of Directors and the members of the senior management have received a cash compensation of CHF 6,355,217.65 and a total of 44,324 (ESOP), 15,000 (DSOP) and 119,400 (Challenge Award) options (see 5.6 for details).
In aggregate, the 7 non-executive members of the Board of Directors received in 2005 a cash compensation of CHF 397,900 and options and shares for a value of CHF 752,667. Each director will decide in which this compensation will be paid (options or shares). Non-Executive members of the Board of Directors also received a total of 20,000 Challenge Award options.
In 2005, in aggregate, the executive members of the Board of Directors and the members of the senior management have received a cash compensation of CHF 6,355,217.65 and a total of 44,324 (ESOP), 15,000 (DSOP) and 119,400 (Challenge Award) options (see 5.6 for details).
In aggregate, the 7 non-executive members of the Board of Directors received in 2005 a cash compensation of CHF 397,900 and options and shares for a value of CHF 752,667. Each director will decide in which this compensation will be paid (options or shares). Non-Executive members of the Board of Directors also received a total of 20,000 Challenge Award options.
5.3 Compensations for former members of governing bodies
One non-executive member of the Board of Directors, who gave up his function prior to 2005, received a cash compensation of CHF 3,000 and shares for a value of CHF 21,667.
One non-executive member of the Board of Directors, who gave up his function prior to 2005, received a cash compensation of CHF 3,000 and shares for a value of CHF 21,667.
5.4 Share allotment
See section 5.2 hereabove for the share allotment.
See section 5.2 hereabove for the share allotment.
5.5 Share ownership
As of 31st December 2005, the executive members of the Board of Directors and the members of the senior management held an aggregate of 2,072,654 shares.
As of 31st December 2005, the non-executive members of the Board of Directors held a total of 354,785 shares.
As of 31st December 2005, the executive members of the Board of Directors and the members of the senior management held an aggregate of 2,072,654 shares.
As of 31st December 2005, the non-executive members of the Board of Directors held a total of 354,785 shares.
5.6 Options
As of 31st December 2005, the executive members of the Board of Directors and the members of the senior management held a total of 253,446 (ESOP), 45,000 (DSOP) and 119,000 Challenge Award options. The allotment year and exercise price were as follows:
As of 31st December 2005, the executive members of the Board of Directors and the members of the senior management held a total of 253,446 (ESOP), 45,000 (DSOP) and 119,000 Challenge Award options. The allotment year and exercise price were as follows:
| Number of options | Allotment year | Exercise price |
| 34,560 | 1999 | 7.5 |
| 40,000 | 2000 | 137.5 |
| 13,568 | 2000 | 187.5 |
| 9,564 | 2001 | 42 |
| 12,902 | 2001 | 58.75 |
| 671 | 2002 | 42 |
| 16,829 | 2002 | 50 |
| 18,000 | 2002 | 62 |
| 3,828 | 2002 | 67 |
| 31,200 | 2003 | 62 |
| 6,800 | 2003 | 93 |
| 3,600 | 2003 | 122 |
| 6,800 | 2004 | 139 |
| 10,800 | 2004 | 148 |
| 30,000 (DSOP) | 2004 | 142 |
| 15,800 | 2005 | 117 |
| 3,600 | 2005 | 129 |
| 24,924 | 2005 | 133 |
| 15,000 (DSOP) | 2005 | 128 |
| 119,000 (Challenge Award) | 2005 | 286 |
As of 31st December 2005, the non-executive members of the Board of Directors held a total of 29,795 (ESOP), 11,537 (DSOP) and 20,000 (Challenge Award) options. The allotment year, duration, and exercise price were as follows:
| Number of options | Allotment year | Exercise price |
| 2,920 | 1998 | 0.15 |
| 10,625 | 2001 | 42 |
| 15,000 | 2002 | 62 |
| 1,250 | 2002 | 66 |
| 3,000 (DSOP) | 2003 | 62 |
| 8,537 (DSOP) | 2005 | 128 |
| 20,000 (Challenge Award) | 2005 | 286 |
The subscription ratio for all options is 1/1 and the duration is generally 10 years as of the approval of the plan.
5.7 Additional fees and remunerations
No honorarium or other remuneration exceeding half his ordinary remuneration has been billed to the Company by any other member of the Board of Directors or the management.
No honorarium or other remuneration exceeding half his ordinary remuneration has been billed to the Company by any other member of the Board of Directors or the management.
5.8 Loans granted by governing bodies
None
None
5.9 Highest total compensation
The member of the Board of Directors receiving the highest total compensation in 2005 has received:
Cash compensations: 1,285,735.40 CHF
Option allotment: 15,000 options (DSOP, value 42.50 CHF) and 30,000 Challenge Award options
Share allotment: none
The member of the Board of Directors receiving the highest total compensation in 2005 has received:
Cash compensations: 1,285,735.40 CHF
Option allotment: 15,000 options (DSOP, value 42.50 CHF) and 30,000 Challenge Award options
Share allotment: none
6. SHAREHOLDERS’ PARTICIPATION RIGHTS
6.1 Voting rights restrictions and representationSee article 5 + 11 of the articles of incorporation
6.2 Statutory quorums
See article 15 of the articles of incorporation and the law
See article 15 of the articles of incorporation and the law
6.3 Convening of general meetings of shareholders
See article 9 + 13 of the articles of incorporation and the law
See article 9 + 13 of the articles of incorporation and the law
6.4 Agenda
Shareholders holding more than CHF 1 million worth of shares are entitled to add items to the agenda of the general meeting of shareholders. Proposals for the annual general meeting of shareholders must be sent to the Company to arrive approximately 40 days prior to the date of the annual general meeting of shareholders. The exact deadline for sending in proposals is made public approximately 2 months prior to the date of the annual general meeting of shareholders.
Shareholders holding more than CHF 1 million worth of shares are entitled to add items to the agenda of the general meeting of shareholders. Proposals for the annual general meeting of shareholders must be sent to the Company to arrive approximately 40 days prior to the date of the annual general meeting of shareholders. The exact deadline for sending in proposals is made public approximately 2 months prior to the date of the annual general meeting of shareholders.
6.5 Registration in share register
Only shareholders who are registered in the shareholders register of the company on the date falling 20 to 30 days prior to the annual general meeting of shareholders are entitled to vote at the annual general meeting of shareholders. The exact deadline for being registered in the shareholders register is made public with the press release following the presentation of the financials to the public for the year-end December 31.
Only shareholders who are registered in the shareholders register of the company on the date falling 20 to 30 days prior to the annual general meeting of shareholders are entitled to vote at the annual general meeting of shareholders. The exact deadline for being registered in the shareholders register is made public with the press release following the presentation of the financials to the public for the year-end December 31.
7. CHANGES OF CONTROL AND DEFENCE MEASURES
7.1 Duty to make an offerThere are no opting-out or opting-up provisions in the articles of incorporation
7.2 Clauses of change of control
There are addendums to the employee agreements of a certain number of employees in key positions providing for compensation in case of loss of position due to a change of control.
Overall, 68 members of the senior management (including executive members of the Board of Directors) and of the other management as well as other key employees of the Actelion group worldwide have employment agreements with change of control clauses. Managerial positions are not necessarily congruent with key functions; therefore, it is unclear where to draw the line between other management and non-management functions.
They may receive a severance payment for 24 months of salary. However, this severance payment would only be due if, within six (6) months prior to or two (2) years after the effective date of a change in control, the employing Actelion company terminates the employee's employment without Cause or the employee terminates his employment with Good Reason (Good Reason being either (a) a reduction in the Key Employee's salary, or (b) a material reduction or adverse or substantive change in the Key Employee's duties or responsibilities, or (c) the requirement that the Key Employee relocate to a worksite more than fifty (50) kilometres from the employing company’s current principal office).
The ESOP provides that in case of change of control all options vest immediately.
There are addendums to the employee agreements of a certain number of employees in key positions providing for compensation in case of loss of position due to a change of control.
Overall, 68 members of the senior management (including executive members of the Board of Directors) and of the other management as well as other key employees of the Actelion group worldwide have employment agreements with change of control clauses. Managerial positions are not necessarily congruent with key functions; therefore, it is unclear where to draw the line between other management and non-management functions.
They may receive a severance payment for 24 months of salary. However, this severance payment would only be due if, within six (6) months prior to or two (2) years after the effective date of a change in control, the employing Actelion company terminates the employee's employment without Cause or the employee terminates his employment with Good Reason (Good Reason being either (a) a reduction in the Key Employee's salary, or (b) a material reduction or adverse or substantive change in the Key Employee's duties or responsibilities, or (c) the requirement that the Key Employee relocate to a worksite more than fifty (50) kilometres from the employing company’s current principal office).
The ESOP provides that in case of change of control all options vest immediately.
8. AUDITORS
8.1 Duration of the mandate and term of office of head auditorPricewaterhouseCoopers AG, Basel has been the Head Auditor of the Company since its incorporation. Their mandate as Head Auditor was renewed for the financial year 2005 by resolution of the shareholders of 14th April 2005.
Mr. Clive Bellingham was appointed as head auditor in 2005.
8.2 Auditing honorarium
On an accruals basis, the auditing fees for the year under review are as follows:
Audit fees
PricewaterhouseCoopers: 914,558 CHF
Other auditors 0 CHF
Audit related fees
PricewaterhouseCoopers 830,125 CHF
Other auditors 63,871 CHF
On an accruals basis, the auditing fees for the year under review are as follows:
Audit fees
PricewaterhouseCoopers: 914,558 CHF
Other auditors 0 CHF
Audit related fees
PricewaterhouseCoopers 830,125 CHF
Other auditors 63,871 CHF
8.3 Additional honorarium
In addition to the fees described above, aggregate fees of 258,606 CHF were billed by PricewaterhouseCoopers during the year ending 31st December 2005, primarily for income tax compliance and related tax services.
In addition to the fees described above, aggregate fees of 258,606 CHF were billed by PricewaterhouseCoopers during the year ending 31st December 2005, primarily for income tax compliance and related tax services.
8.4 Supervisory and control instruments vis-à-vis the auditors
The Finance and Audit Committee deals with the review of the internal control of the accounts and finances of the Company via its supervisory activities over both external and internal audit functions (see 3.5.2). During 2005, this process has been facilitated by increased information relating to the internal controls over financial reporting, steered by Internal Audit, the Internal Audit reports and the external auditor's assessment of the effectiveness of Actelion's internal control design framework. The external auditors meet with the Finance and Audit Committee to present their plan, scope, audit approach, compensation and audit results. The Finance and Audit Committee reviews these and evaluates the independence of the external auditors, from a risk analysis perspective. The auditors present, in addition to their opinion, a report and a management letter. The Company has ensured that the Auditor’s partner in charge has unrestricted access to the Chairman of the Finance and Audit Committee.
The Finance and Audit Committee deals with the review of the internal control of the accounts and finances of the Company via its supervisory activities over both external and internal audit functions (see 3.5.2). During 2005, this process has been facilitated by increased information relating to the internal controls over financial reporting, steered by Internal Audit, the Internal Audit reports and the external auditor's assessment of the effectiveness of Actelion's internal control design framework. The external auditors meet with the Finance and Audit Committee to present their plan, scope, audit approach, compensation and audit results. The Finance and Audit Committee reviews these and evaluates the independence of the external auditors, from a risk analysis perspective. The auditors present, in addition to their opinion, a report and a management letter. The Company has ensured that the Auditor’s partner in charge has unrestricted access to the Chairman of the Finance and Audit Committee.
9. INFORMATION POLICY
The management comments publicly the company's progress on a quarterly basis, at the same time as the financials are made public.The shareholders are regularly informed of Actelion’s business via ad-hoc releases, internet announcements, road shows, major news agencies and the Swiss Official Commercial Gazette.
The Investor Relations & Public Affairs department is available to respond to shareholders’ or potential investors’ queries.
The Company’s website can be accessed at www.actelion.com. The site contains information useful to investors, including media releases, financial statements and background information on marketed products as well as clinical and pre-clinical projects.
