Form 20-F 2005

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During its preliminary meeting with the Board to review financial statements, the Committee members had the opportunity to hold discussions with the auditor and the Group’s Financial Director. Compensation and Selection Committee The Board of Directors also has a Compensation and Selection Committee comprised of three independent Directors: Mr. de Fabiani (chair), Mr. Cardoso and Mr. Legrain. The Compensation and Selection Committee was created in May 1998 and is responsible for proposing to the Board the compensation to be granted to the Chairman and the Chief Executive Officer, employee stock option plans, the policy that governs salaries and bonuses of our officers and key personnel, capital increases reserved to employees and succession plans, as well as nominees for top management posts. It meets at least twice a year and as often as required in the best interests of the Company. It is also responsible for presenting nominees for Board membership, evaluating their independence and selecting members for committees. The Compensation and Selection Committee met nine times in 2005 (with an average attendance rate of 100%). The Committee’s work and recommendations dealt primarily with reviewing Director’s fixed and variable compensation and attendance fees based on market practice; future developments in the Directors’ remuneration policy; and review of the variable fees for General Management Committee and Executive Committee members. It also made adjustments to the stock option program, as a result of the capital increase. It reviewed the indemnity policy and retirement plans for high managers, the composition of the Board of Directors and Committees and began researching potential corporate members. Strategic Committee The Strategic Committee, created in September 2000, is comprised of three independent permanent Directors: Mr. Mer (chair), Mr. Lévi and Mr. Colombani. The Strategic Committee is responsible for advising the Board of Directors with regard to portfolio transactions, contemplated external growth opportunities, asset disposals or major alliances. The Strategic Committee must meet at least twice a year, with one annual meeting to review and analyze our operations and strategy, and as often as required by our best interests. Meetings are open to attendance by other members of the Board of Directors owing to the importance of the matters covered. The Strategic Committee met three times in 2005 with an average attendance rate of 88.8%. Over the course of its meetings, the Committee reviewed strategic prospects and divestment programs, as well as specific strategies targeting certain business activities and an analysis of the Group’s portfolio of activities. Board of Directors’ Internal Regulation Since June 2000, our Board of Directors has operated according to internal rules (règlement intérieur). Neither a replacement of French law nor our by-laws, the Board’s internal rules are an internal document that defines the composition, role and powers of the Board of Directors and its committees. These rules are aimed at optimizing the efficiency of meetings and discussions and at taking precautionary measures and maintaining confidentiality. The rules provide for our Board to be informed either directly or through its Committees of all significant events affecting our markets and us. The internal rules provide that the Board must perform an annual self-evaluation to examine, in particular, its own functioning and consideration of important questions. General Management Committee The table below sets forth, as of the date hereof, the names, current position and ages of the members of our General Management Committee (Comité de direction générale), which is our principal management body. The six members of the General Management Committee are our executive officers. At regular meetings, the General Management Committee implements our global orientations that are established with the Board of Directors, and makes key decisions with respect to strategy, human resources, legal matters, finance, international development, environment and safety, as well as corporate communications. Form 20 - F 2005 - Rhodia 67
Name (Age) Jean-Pierre Clamadieu (47) Gilles Auffret (59) Yves Boisdron (61) Pascal Bouchiat (45) Bernard Chambon (58) Jean-Pierre Labroue (43) Principal position with Rhodia Chief Executive Officer Group Executive Vice President, Operations (Directeur général adjoint opérations) Group Executive Vice President, Strategy Group Executive Vice President, and Chief Financial Officer Group Executive Vice President, Human Resources Communications and Sustainable Development Group Executive Vice President, General Counsel and Corporate Secretary The six members of the General Management Committee are supported and assisted by 14 members representing the enterprises, zones and support functions of the Group. Altogether, they constitute the “Executive Committee”. Biographies Gilles Auffret is Group Executive Vice President Operations. He also served as Designated Executive Officer (Directeur général délégué) from October 2003 through June 2005. He served as our President and Chief Operating Officer from 2001 until 2003, after joining us on September 1, 1999 as Deputy President responsible for the Polyamide Division. Prior, he worked at Pechiney, which he joined in September 1982, and where he held a series of senior management posts, including President of Pechiney’s aluminum division. In January 1982 he was appointed public auditor (conseiller référendaire) at the Cour des comptes (the equivalent of the U.S. General Accounting Office). He also worked at the French Ministry of Industry, where he served as chargé de mission reporting to the General Director for Industry. Mr. Auffret started his professional career in 1975 as an auditor at the French Cour des comptes. Yves Boisdron has been Group Executive Vice President, Strategy since November 2003. Prior to holding his current position, he was President of the Asia Pacific Zone from 1998 through October 2003. Mr. Boisdron served as Senior Vice President of Rhône- Poulenc Chimie from 1994 to 1996, Senior Vice President of Rhône-Poulenc IOM from 1990 to 1994, Vice President of Rhône- Poulenc Inc. from 1987 to 1990 and Vice President of Rhodia Brasil from 1981 to 1987. Mr. Boisdron has also served as General Manager of the enzyme division of Gist Brocades and as a project engineer at Badger. Pascal Bouchiat has been Group Executive Vice President, and Chief Financial Officer since December 2005. In 2004 he was appointed Vice President, Corporate Finance and Treasury. He became Group Financial Controller in 2001 prior to which he was Vice President, Finance, of the Consumer Specialties Division. He was appointed Rhodia Group Management Controller in 1998, when Rhodia was first created. He had first joined the Finance Department in 1994 where he held several positions of increasing responsibility. He began his professional career in 1985 as an R&D engineer in Rhône-Poulenc before assuming industrial responsibilities, notably, as a production manager in the Saint-Fons Silicones factory. He holds a masters in chemical engineering, an MBA from Cesma/EM Lyon and an Executive MBA from Trium (New York University – London School of Economics – HEC Paris). Bernard Chambon has been Group Executive Vice President of Human Resources, Communications and Sustainable Development since November 2003. Prior to holding his current position, Mr. Chambon was Group Executive Vice President of Human Resources and Internal Communications (April 2002) and Executive Vice President in charge of Human Resources and Communication (January 1998). Mr. Chambon has also served as President of Human Resources and Communication for the Chemicals segment’s European operations, Senior Vice President of Rhône-Poulenc’s Organic and Inorganic Intermediates segment and Director of Development of Human Resources for the Rhône-Poulenc group. Prior to joining the Rhône-Poulenc group in 1989, Mr. Chambon held senior human resources positions at Bouygues, Aerospatiale and Fiat. 68 Form 20 - F 2005 - Rhodia
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Form 20-F 2005
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As filed with the Securities and Ex
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- We calculate the impact of “cha
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(in millions, except for per share
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Exchange Rate Information Fluctuati
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decrease in demand in certain secto
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We cannot assure you that we will n
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Our public debt ratings can affect
Page 17 and 18: Changes in these laws and regulatio
Page 19 and 20: subscription rights cannot be exerc
Page 21 and 22: Main Businesses This section gives
Page 23 and 24: Products Markets Brand names Compet
Page 25 and 26: Polyamide Polyamide recorded sales
Page 27 and 28: Engineering plastics are used for t
Page 29 and 30: It is expected that Eco Services’
Page 31 and 32: Furthermore, the synthesis business
Page 33 and 34: Any significant change in raw mater
Page 35 and 36: We remain dedicated to our zero-acc
Page 37 and 38: Property, Plant and Equipment The t
Page 39 and 40: The table below sets forth average
Page 41 and 42: The following paragraphs list the c
Page 43 and 44: The table below sets forth an analy
Page 45 and 46: Coatis Coatis net sales totaled €
Page 47 and 48: Abroad: closure of unprofitable pr
Page 49 and 50: Acetow Operating profit totaled €
Page 51 and 52: Profit/(loss) from discontinued ope
Page 53 and 54: High yield notes In order to extend
Page 55 and 56: Consolidated Balance Sheet Working
Page 57 and 58: The table below sets forth the matu
Page 59 and 60: Net loss: A reconciliation of the n
Page 61 and 62: Item 6. Directors, Senior Managemen
Page 63 and 64: Michel de Fabiani was named a Direc
Page 65 and 66: agreement to be authorized by the B
Page 67: our Company and the related compens
Page 71 and 72: Compensation According to French la
Page 73 and 74: The table below sets forth the tota
Page 75 and 76: Employee and Director share ownersh
Page 77 and 78: Options The table below sets forth
Page 79 and 80: On December 22, 2005, Sanofi-Aventi
Page 81 and 82: Item 8. Financial Information Finan
Page 83 and 84: Commercial Litigation Adisséo Arbi
Page 85 and 86: Protection Agency regarding future
Page 87 and 88: Item 9. The Offer and Listing Tradi
Page 89 and 90: Euronext Paris may temporarily rese
Page 91 and 92: However, these requirements do not
Page 93 and 94: In addition to rights to certain in
Page 95 and 96: Financial Statements and Other Comm
Page 97 and 98: Decreases in Share Capital Accordin
Page 99 and 100: Identification of shareholders Our
Page 101 and 102: French Insolvency Laws Rhodia S.A.
Page 103 and 104: period, creditors may not pursue an
Page 105 and 106: The following countries, French ove
Page 107 and 108: For purposes of the U.S.-France tax
Page 109 and 110: If you are an accrual method taxpay
Page 111 and 112: transactions), or at least 50% of t
Page 113 and 114: Interest Interest on 2003 Notes The
Page 115 and 116: Market Discount and Bond Premium If
Page 117 and 118: acquired the Euro Note. In addition
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Even aside from the effect of compe
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PART II Item 13. Defaults, Dividend
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Item 16D. Exemptions from the Listi
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Signature The registrant hereby cer
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RHODIA AND SUBSIDIARIES REPORT OF I
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RHODIA GROUP CONSOLIDATED BALANCE S
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RHODIA GROUP CONSOLIDATED STATEMENT
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RHODIA GROUP CONSOLIDATED STATEMENT
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RHODIA GROUP NOTES TO THE CONSOLIDA
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Associates The companies over which
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Dismantling costs Dismantling and r
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subsequent recognition: The allowan
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For quoted securities, fair value r
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3.13. Borrowings All borrowings are
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The fair value of the options is me
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Notes to the consolidated income st
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Depreciation, amortization and impa
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7. Depreciation, amortization and i
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Restructuring costs by business seg
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The effective tax rate for 2005 ref
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12.4 Assets held for sale and assoc
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The impairment losses accounted for
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price corresponds to the market pri
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Available-for-sale assets are inves
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23. Other current financial assets
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on June 17, 2005, signature of a ne
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Asset securitization programs Rhodi
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In addition, as from June 1, 2007,
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27. Risk management and derivative
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At December 31, 2005 At December 31
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27.3. Management of risk related to
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Actuarial assumptions These calcula
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The actual rate of return on plan a
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The cumulative effect on ordinary c
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Evolution in 2004 Charges for new m
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Estimated contingent liabilities be
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sought to exercise its call option,
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In 2004, in accordance with the aut
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Stock Option Plan 1998 Plan 1999/1
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36. Use of estimates In order to pr
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Subsidiaries Country % RHODIA PPMC
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38. Note on transition to IFRS 2004
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At January 1, 2004 At December 31,
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) Operating profit/(loss) The follo
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Financial instruments Rhodia choose
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Cash flow provided from investing a
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Recognition of past service costs r
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Primester, a 50%-owned cellulose ac
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(xv) Recent accounting pronouncemen
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(ii) Shareholders’ deficit A reco
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(v) Discontinued operations—FAS 1
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(viii) Pension and retirement plans
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(in millions of euros) 2004 Restruc
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Printed on environmentally friendly
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Financial Communication Department
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Form 20-F 2005

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