BOC Report and accounts 2005 - Alle jaarverslagen

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126 The BOC Group plc Annual report and accounts 2005 Notes to the financial statements 24. Reserves continued b) Parent company Share Profit premium Other and loss Own account reserves account shares Total £ million £ million £ million £ million £ million At 1 October 2004 374.9 336.4 671.0 (45.8) 1,336.5 Profit for the financial year – – 298.4 – 298.4 Dividends – – (204.1) – (204.1) Premium on share issues (net) 31.7 – – – 31.7 Credit in respect of employee share schemes – – 4.3 – 4.3 Net increase in investment in own shares – – – (4.2) (4.2) At 30 September 2005 406.6 336.4 769.6 (50.0) 1,462.6 The premium on share issues represents amounts paid to The BOC Group plc for the issue of shares under the Group’s share option schemes. 25. Financial commitments a) Annual operating lease commitments 2005 2004 Other Other Property operating Property operating leases leases leases leases £ million £ million £ million £ million On leases expiring: Within one year 3.1 3.2 2.1 2.1 Between one and two years 2.1 7.8 2.2 5.6 Between two and five years 4.2 9.9 5.4 11.0 Over five years 6.5 3.8 14.9 3.2 15.9 24.7 24.6 21.9 Operating leases £ million Rentals are due under operating leases from 1 October 2005 to completion as follows: Year to 30 September 2006 40.6 Year to 30 September 2007 28.7 Year to 30 September 2008 20.4 Year to 30 September 2009 15.1 Year to 30 September 2010 10.8 Thereafter 59.9 b) Other commitments The Group is committed to make future purchases under take-or-pay contracts.The main commitments at 30 September 2005 relate to the purchase of raw materials, principally helium, where the price of the product is linked to the prevailing market prices of that product. Obligations under such contracts in effect at 30 September 2005 are as follows: Year ending 30 September 2006 71.4 2007 68.1 2008 68.9 2009 62.3 2010 54.6 Thereafter 371.2 For the year ended 30 September 2005 total purchases made relating to these contracts amounted to £54.3 million (2004: £55.0 million, 2003: £65.8 million). 175.5 £ million 696.5
Notes to the financial statements 127 26. Contingent liabilities and legal proceedings a) Contingent liabilities Group Parent 2005 2004 2005 2004 £ million £ million £ million £ million Guarantees of joint ventures’ borrowings 10.6 8.9 10.6 8.9 Guarantees of subsidiaries’ borrowings – – 245.6 289.5 Other guarantees 1 38.7 32.9 50.3 18.0 1. Other guarantees are mainly performance guarantees issued in the ordinary course of business. 49.3 41.8 306.5 316.4 b) Legal proceedings BOC Group companies are parties to various legal proceedings in the ordinary course of business, including some in which claims for damages in large amounts have been asserted. The outcome of litigation to which BOC Group companies are party cannot be readily foreseen, but the directors believe that such litigation should be disposed of without material adverse effect on the Group’s financial condition or profitability. Welding fumes litigation A US subsidiary of BOC,The BOC Group, Inc., currently is party to a number of lawsuits in the US for alleged injuries resulting from exposure to manganese, asbestos and/or toxic fumes in connection with the welding process. The BOC Group, Inc. has not manufactured welding rods in the US since 1986 when the welding electrodes business was sold.The BOC Group, Inc. ceased selling welding rods in the US manufactured by others when the sale of the US packaged gas business, including the operations that distributed packaged gases and welding equipment, was completed in July 2004. Manganese litigation At 30 September 2005, there were a total of approximately 8,574 claimants (‘Total Claimants’) in pending manganese related cases in both US federal and state courts that name The BOC Group, Inc. as a defendant, a net decrease of approximately 1,100 claimants from 30 September 2004.The BOC Group, Inc. is typically one of several defendants in these cases that claim compensatory and punitive damages, in most cases for unspecified amounts, for alleged neurological injury, including Parkinson’s disease, through exposure to manganese in welding fumes. Of the Total Claimants, approximately 4,607 claimants have filed in, or been transferred for pre-trial purposes to, the federal district court in the Northern District of Ohio, where a multi-district litigation (MDL) proceeding has been commenced, and approximately 50 claimants are in process to be transferred to or from the MDL. The MDL proceeding is a vehicle for coordinating pre-trial proceedings in cases pending in different federal district courts in the US. It is currently contemplated that the MDL court will try three cases during the MDL proceeding.The first such case is currently scheduled for February 2006. In addition to the cases in federal court,The BOC Group, Inc. is a defendant in a number of similar cases pending in state courts, which are in different stages of procedural development, and certain cases are scheduled for trial from time to time.The BOC Group, Inc. has been a co-defendant in other manganese related claims that have been resolved as follows. From 1 January 1997 to 30 September 2005, 3,965 claims were dismissed.Through 30 September 2005, seven cases were tried to final jury verdicts in favour of the defendants, including The BOC Group, Inc., and one case was tried to a final jury verdict in favour of the plaintiffs, which is being appealed. Asbestos litigation At 30 September 2005, there were a total of approximately 15,966 claimants in pending asbestos related cases that name The BOC Group, Inc. as a defendant, a net decrease of approximately 600 from 30 September 2004.The BOC Group, Inc. is typically one of a large number of defendants in these cases that claim compensatory and punitive damages, in most cases for unspecified amounts, for alleged injuries, including cancer, through exposure to asbestos in welding fumes or from welding consumables.A very small number of these claimants allege injuries from exposure to asbestos in non-welding rod products and premises.The BOC Group, Inc. has been a co-defendant in other asbestos related claims that have been resolved as follows. From 1 January 1997 to 30 September 2005, 11,776 claims were dismissed and 75 claims were dismissed on summary judgments. Through 30 September 2005, nine cases were tried to final jury verdicts in favour of the defendants, including The BOC Group, Inc., and one case was tried to a final jury verdict in favour of the plaintiffs, which is being appealed. The BOC Group, Inc. believes that it has strong defences to the claims asserted in all of the various manganese and asbestos related cases and intends to defend vigorously such claims. In the manganese related claims,The BOC Group, Inc. believes that recent relevant scientific literature, based on epidemiological studies, strongly supports its defence of such claims. Based on its experience to date, together with its current assessment of the merits of the claims being asserted and applicable insurance, BOC believes that continued defence and resolution of the welding fumes litigation will not have a material adverse effect on its financial condition or profitability and no provision has been made. Nonetheless, it is not possible to predict either the number of future claims or the number of claimants that any future claims may present. In addition, the outcome of welding fume cases, either involving BOC or other defendants, is inherently uncertain and always difficult to predict, and BOC cannot provide any assurances that any future resolutions of these types of claims will necessarily be consistent with its experience to date. In the event of an adverse outcome to any of the proceedings, a liability would be recognised if it was considered likely that it would give rise to an outflow of future economic benefits.Where there is applicable insurance, this would be recognised when its recoverability was virtually certain. Fluorogas litigation The Fluorogas litigation is now settled and is no longer the subject of any legal proceedings. More details are given on page 59.
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BOC Report and accounts 2005
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01 The BOC Group plc is a public li
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Financial highlights 03 Dividends p
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Chairman’s statement 05 Conduct a
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Chief executive’s review 07 Indus
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Board of directors 09 08 09 10 11 1
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Executive management board 11 09 10
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Group five year record 13 Capital e
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Group profile 15 Analysis of result
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Group profile 17 Principal industri
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Group profile 19 In China, signific
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Group profile 21 Sales opportunitie
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Employees 23 At 30 September 2005 t
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Employees 25 Retirement benefit pla
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Research, development and informati
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Risk factors 39 BOC relies on devel
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Operating review 41 Exceptional ite
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Operating review (comparing 2005 wi
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Financial review 55 Net debt/equity
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Financial review 57 The balance she
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Financial review 59 Manganese litig
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Financial review 61 Current asset p
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Financial review 63 Average exchang
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Corporate governance 65 During the
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Corporate governance 67 Performance
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Corporate governance 69 During the
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Corporate governance 71 There is a
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Report on remuneration 73 Variable
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Page 87 and 88: Report by the independent auditors
Page 89 and 90: Group balance sheet At 30 September
Page 91 and 92: Total recognised gains and losses Y
Page 93 and 94: Accounting policies 91 General •
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Page 145 and 146: Shareholder information 143 Taxatio
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Page 149 and 150: Glossary of terms 147 Terms used in
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