Report of the Audit Committee
The Audit Committee of the Board of Directors of Bio-Technology General Corp. currently consists of Messrs. Tendler (Chairman), Conrad and
Weissbach and Ms. Faye Wattleton. The Audit Committee serves as the representative of the Board of Directors for general oversight of the Company's financial accounting and reporting process,
system of internal controls, audit process and process for monitoring compliance with laws and regulations. Each member of the Audit Committee is independent, as defined under the listing standards of
the Nasdaq National Market. The Audit Committee operates under a written charter adopted by the Board of Directors.
set forth in more detail in the charter, the Audit Committee's primary responsibilities fall into three broad categories:
the Committee is charged with monitoring the preparation of quarterly and annual financial reports by the Company's management, including discussions
with management and the Company's outside auditors about draft annual financial statements and key accounting and reporting matters;
the Committee is responsible for matters concerning the relationship between the Company and its outside auditors, including recommending their
appointment or removal; reviewing the scope of their audit services and related fees, as well as any other services being provided to the Company; and determining whether the outside auditors are
Committee has implemented procedures to ensure that during the course of each fiscal year it devotes the attention that it deems necessary or appropriate to each of the matters
assigned to it under the Committee's charter. To carry out its responsibilities, the Committee met five times during 2001.
overseeing the preparation of the Company's financial statements, the Committee met with both management and the Company's outside auditors to review and discuss all financial
statements prior to their issuance and to discuss significant accounting issues. Management advised the Committee that all financial statements were prepared in accordance with generally accepted
accounting principles, and the Committee discussed the statements with both management and the outside auditors. The Committee's review included discussion with the outside auditors of matters
required to be discussed pursuant to
Statement on Auditing Standards No. 61 (Communication with Audit Committees).
respect to the Company's outside auditors, the Committee, among other things, discussed with Arthur Andersen LLP matters relating to its independence and received from Arthur
Andersen LLP the written disclosures and the letter as required by the
Independence Standards Board Standard No. 1 (Independence Discussions with Audit
the Committee continued to monitor the scope and adequacy of the Company's internal controls, including proposals to strengthen internal procedures and controls where
the basis of these reviews and discussion, the Committee recommended to the Board of Directors that the Board approve the inclusion of the Company's audited financial statements in
the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001, for filing with the Securities and Exchange Commission.