Registration document 2007 - Total.com

establishes and maintains procedures designed to ensure the
quality and accuracy of external communications intended for the
public and financial markets.
At the profit center and subsidiary level, daily control operations
are organized around the principal operational processes:
exploration and reserves, capital expenditures, production and
sales, oil trading, purchasing, inventories, payroll, and cash
management. These processes are adapted to the petroleum
industry in which the Group operates, while respecting the COSO
framework.
Documentation and communication of internal control
procedures
Internal control procedures are defined at each of the three
operating levels: general rules at the Group level; sector specific
procedures at the business segment level; and more specific
procedures at the profit center and subsidiary level. These
procedures are circulated in memorandum, and are also available
on the intranet sites of the Group and, where applicable, the
business segments.
The principal procedures established at the Group level cover
acquisitions and disposals, capital expenditures, financing and
cash management, budget management and financial reporting.
The procedures for the business segments primarily concern
management supervision specific to each sector. At the profit
center and subsidiary level, the principles of the Group’s overall
framework are implemented through the creation of specific
procedures adapted to the size and context of operations.
TOTAL has established documented disclosure controls and
procedures.
In 2006, the Group continued its efforts to document, establish
and evaluate internal control over financial reporting to comply
with the requirements of Section 404 of the Sarbanes-Oxley act
(which applies to the Company for the first time as of the end of
the financial year 2006).
Internal control supervision
Together, the holding company, each business segment and the
profit centers and subsidiaries are responsible for supervising
internal control by monitoring the elements assigned to each of
them.
Internal control audits are primarily conducted by the Group audit
department, which reports to the Executive Committee through
the president of the Strategy & Risk Management department.
An audit work schedule is set annually in cooperation with the
independent auditors, who also perform internal control audits
integrated, as they deem appropriate, with their audit of the
annual financial statements.
The reports from these audits are periodically summarized and
presented to the Audit Committee and the Board of Directors.
Corporate Governance
Report of the Chairman of the Board of Directors (Article L 225-37 of the French Commercial Code)
The independent auditors also report their observations to the
Audit Committee as part of their duties.
5
In 2006, the Group audit department employed 75 professionals
and conducted 207 audits. A representative of this department
also attended all meetings of the Audit Committee.
The Group’s management is responsible for maintaining and
evaluating internal control over financial reporting. In this context,
the Group conducted an evaluation of the levels of awareness
and the quality of execution of the Group’s internal control
procedures, based on the COSO framework, covering the
principal entities of the Group. The Group, with the assistance of
its principal entities and the Group audit department as
coordinated by the Internal Control Compliance Officer, also
examined and evaluated the design and effectiveness of the key
operational, information systems and financial controls related to
internal control over financial reporting. On the basis of this
internal evaluation, the Group’s management concluded that they
had reasonable assurance that internal control over financial
reporting was effective.
For the year 2006, the independent auditors evaluated the
implementation of the Group’s internal control framework and the
design and execution at its principal entities of the Group’s key
internal controls over financial reporting. Based on the work
performed, the independent auditors declared that they had no
comments on the information and conclusions related to this
subject presented in this report.
This report, which has been prepared with the assistance of the
relevant administrative department of the Company, has been
presented to the Board of Directors.
Paris, La Défense, February 14, 2007
Thierry Desmarest
Chairman of the Board of Directors
TOTAL – Registration Document 2006 111