BOC Report and accounts 2005 - Alle jaarverslagen
BOC Report and accounts 2005 - Alle jaarverslagen
BOC Report and accounts 2005 - Alle jaarverslagen
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04 The <strong>BOC</strong> Group plc Annual report <strong>and</strong> <strong>accounts</strong> <strong>2005</strong><br />
Implementing our<br />
strategy effectively<br />
Chairman’s statement<br />
Your board has again fully reviewed <strong>and</strong><br />
approved <strong>BOC</strong>’s strategy, which is being<br />
effectively implemented by Tony Isaac <strong>and</strong> his<br />
management team.The strategy has seen<br />
<strong>BOC</strong> confirm its leading position in Asia,<br />
develop a strong base in China <strong>and</strong> invest<br />
strongly in other growth markets. It has seen<br />
a continuing commitment to safety <strong>and</strong> to<br />
improve the efficiency <strong>and</strong> environmental<br />
performance of our operations. It has<br />
seen the divestment of underperforming<br />
businesses allied to a well implemented<br />
acquisition strategy.<br />
Rewarding our shareholders<br />
In <strong>2005</strong> <strong>BOC</strong> raised its first interim dividend to 15.9p. Combined<br />
with the second interim dividend of 25.3p, this represents an increase<br />
of three per cent on the previous year as we continue to build<br />
our dividend cover towards two-times over the medium term.<br />
Your board has decided to raise the first interim dividend to be<br />
paid on 1 February 2006 by 2.5 per cent to 16.3p.<br />
I have updated the graphs I have shown here every year since 2001.<br />
They show <strong>BOC</strong>’s total shareholder return since October 2000<br />
compared with the FTSE100 <strong>and</strong> our major gases competitors.<br />
We have continued to outperform the FTSE100. Industrial gases<br />
companies have proved to be a rewarding investment over recent<br />
years <strong>and</strong> in the last year or so we have matched our competitors’<br />
performance, although a gap remains from earlier years. In his<br />
review,Tony Isaac will explain in more detail how we have<br />
progressed this year.<br />
Corporate Governance<br />
This year your company has completed its work to comply with<br />
one new set of requirements, the Combined Code on Corporate<br />
Governance, <strong>and</strong> has made good progress on two others, namely<br />
changing over to International Financial <strong>Report</strong>ing St<strong>and</strong>ards (IFRS)<br />
<strong>and</strong> meeting the provisions of the US Sarbanes-Oxley Act.<br />
The quarterly results to be announced in February 2006 will be<br />
the first in accordance with IFRS.We estimate that meeting the<br />
requirements of Sarbanes-Oxley cost your company some<br />
£10 million this year.We are likely to spend the same next year<br />
before the costs reduce somewhat. <strong>BOC</strong> has to comply with these<br />
provisions because we are registered in the US, but being a complex<br />
<strong>and</strong> diverse business working globally means that the cost of such<br />
compliance is very high.<br />
Next year we will, in common with all UK companies, publish an<br />
operating <strong>and</strong> financial review (OFR) as part of our annual report.<br />
The intention of the OFR is to help you, our shareholders, assess our<br />
strategies <strong>and</strong> the likelihood of their success.<br />
External checks <strong>and</strong> reporting requirements may help but I believe<br />
the best assurance for shareholders is to ensure high st<strong>and</strong>ards of<br />
integrity <strong>and</strong> transparency throughout the organisation, overseen by<br />
a strong <strong>and</strong> independent group of non-executive directors. <strong>BOC</strong><br />
has both of these. It has a strong <strong>and</strong> well-implemented Code of