9.1Duration of the mandate and term of office of the lead auditor

Our external auditor’s term of office is one year. It ends with the approval of the annual financial accounts by the general meeting. Re-election and revocation for cause (aus wichtigen Gründen) by the general meeting are possible at any time. The lead auditor is rotated every seven years in accordance with Swiss law.

For the period between the AGM 2023 held on 12 April 2023 and the next general meeting, BDO AG (“BDO”), Schiffbaustrasse 2, 8005 Zurich, Switzerland, has been elected our independent external auditors. BDO has been our independent auditor since our incorporation on 6 April 2021. BDO is supervised and regulated by the Federal Audit Oversight Authority. Since 6 April 2021, René Füglister has been the lead auditor.

9.2Auditing fees

Total auditing fees charged by BDO for the audit of the consolidated financial statements, the audit of the statutory financial statements as well as the audit of selected sections of the Remuneration Report 2023 of the Company (i.e., PolyPeptide Group AG) for the financial year 2023 amounted to CHF 703,790.

9.3Additional fees

For additional services performed by BDO (or its affiliates) in the year ended 31 December 2023, PolyPeptide was charged total non-auditing fees as follows:

9.4Information instruments pertaining to the external audit

The Board of Directors monitors compliance and proposes the annual election of the external auditor to the general meeting as recommended by the Audit and Risk Committee. In accordance with the Organizational Regulations and the Audit and Risk Committee Charter, the Audit and Risk Committee oversees the integrity of PolyPeptide’s financial statements, the effectiveness of the internal control over financial reporting, the compliance with legal and regulatory requirements and the effectiveness of PolyPeptide’s risk management, compliance and quality assurance systems and processes.

In addition, the Audit and Risk Committee annually (or more often as required) assesses the performance, qualifications and independence of the external auditor as well as evaluates the audit fees. The Audit and Risk Committee’s assessment of the external auditor is based on the independency and objectivity of the external auditors, the professional competence, the presented reports, the demonstrated technical and operational competences, the quality and sufficiency of resources, the ability to provide effective and practical recommendations as well as the external auditor’s open and effective communication and coordination with PolyPeptide’s finance team and other employees. With respect to non-audit services, the Audit and Risk Committee is focused on ensuring that BDO is not awarded any contracts that could lead to a conflict of interest with the audit mandate or impair its independence. The results of the assessment are reported to the Board of Directors. Based on its assessment, the Audit and Risk Committee makes a recommendation to the Board of Directors concerning the choice of the external auditor. The budget for audit fees (and any additional non-audit services) is reviewed and negotiated by the Audit and Risk Committee, with the final audit and non-audit fees subject to approval by the Board of Directors.

Since 1 January 2023, the Audit and Risk Committee held four (4) meetings with representatives of BDO. The Head of Internal Audit participated in all meetings of the Audit and Risk Committee held in 2023 (i.e., in six (6) meetings). During these meetings various accounting and reporting topics were discussed, including the audit report for 2022, the 2023 half-year consolidated financial statements, key accounting topics, ongoing year-to-date financial performance, oversight of the work of the Internal Audit function, review of the Enterprise Risk Management framework, evaluation of the Group’s key financial risks and mitigating strategies, audit plan and requirements for the 2023 audit of the consolidated financial statements, compliance and (cyber)security matters and internal control system. On an annual basis, the external auditor also presents a comprehensive report on the results of the audit of the consolidated financial statements, the findings on significant accounting and reporting matters and findings on the internal control system. For the year ended 31 December 2023, this presentation was held at the Audit and Risk Committee meeting on 1 March 2024 (in relation to the approval of the 2023 full-year financial statements). The results and findings of this report are also discussed in detail with the CFO and other members of the PolyPeptide finance team. The chair of the Audit and Risk Committee presented a summary of the external auditor’s presentation (including accompanying materials submitted) to the Board of Directors at its next scheduled meeting, which occurred on 8 March 2024.

For more information regarding the Audit and Risk Committee and their meetings which included the external auditors, please refer to section 3.5.3.2 “Audit and Risk Committee” of this Corporate Governance Report.

For information regarding PolyPeptide’s Internal Audit function, please refer to section 3.7.5 “Internal Audit” of this Corporate Governance Report.