BOC Report and accounts 2005 - Alle jaarverslagen

More documents

Recommendations

Info

68 The BOC Group plc Annual report and accounts 2005 Corporate governance Audit committee report In 2005 the audit committee discharged its responsibilities as set out in the terms of reference and the specific matters reviewed by the committee included: i) interim and full year financial results and announcement statements; ii) interim and full year report from the internal audit function of progress against the 2005 audit plan and iii) effectiveness of internal controls; the Group’s project to comply with the requirements of Section 404 of the US Sarbanes-Oxley Act. This review included the project plan, progress against the plan and matters arising in the implementation of the plan; iv) details of the Group’s project to transition to International Financial Reporting Standards from 2006; v) the external audit plan for 2005 presented by the Group’s auditors, PricewaterhouseCoopers LLP (PwC). This review included the audit objectives, auditor independence and objectivity policies managed by PwC, partner rotation, audit scope, team, timetable deliverables and fee proposal; vi) the annual report disclosure items relevant to the audit committee. Included in this review were the Group’s critical accounting policies, the going concern statement, the report on risk and internal controls and the risk factors statement.The audit committee also reviewed the disclosure control review procedures employed by the Group which enabled the chief executive and Group finance director to sign the Section 302 and 906 certificates pursuant to the US Sarbanes-Oxley Act; vii) the external auditors’ report to the committee for 2005; viii) the independence and objectivity of the external auditors, including a review of non-audit fees.The audit committee has reviewed and approved a policy for the provision of non-audit services by the external auditors.This policy has been in place since 2002 and defines services which can be provided by the auditors. The policy also specifies which services cannot be provided.The policy requires all non-audit services to be approved in advance by the audit committee, which has delegated this task to the chairman of the audit committee.The approval process requires full disclosure of the objectives and scope of the services to be performed and fee structure.The audit committee reviews all approved services at subsequent meetings. The auditors are permitted to perform non-audit services only if the scope of work is within the terms of the policy and there is a business benefit to the Group in these services being performed by the external auditors rather than an alternative supplier.The level of the fee spend is closely monitored to ensure independence and objectivity of the audit is maintained. Further details of actual fees paid to external auditors are given in note 2c) on page 97; ix) the procedures by which staff can report, in confidence, any matters of a financial or non-financial nature alleging breaches of the Group’s Code of Conduct.The audit committee also reviewed the procedures by which allegations are reported to senior management and the audit committee. During this period the audit committee met with the Group’s external auditors without the presence of management.The audit committee also met with the Group’s head of internal audit without the presence of management.The head of internal audit has access to the chairman of the audit committee, if necessary, outside of meetings. Regular attendees to audit committee meetings, at the invitation of the chairman of the committee, include: the chairman, chief executive, Group finance director, director of risk management, head of business assurance audit, director financial planning and control, and the external auditors. Other senior managers are invited to attend as required to participate in presentations or discussions to enable the committee to discharge its duties. The audit committee concludes that, based on the foregoing, it has discharged its responsibilities as set out in the terms of reference and is satisfied that auditor independence and objectivity have been maintained. Nomination committee Members:Andrew Bonfield, Guy Dawson,Tony Isaac, Rob Margetts (chairman), Rebecca McDonald, Matthew Miau, Sir Christopher O’Donnell and Anne Quinn.The majority of members are independent non-executive directors. Secretary: Nick Deeming. The nomination committee reviews its terms of reference on an annual basis. The nomination committee meets periodically as required but at least annually. During 2005 the committee met six times. Members’ attendance at meetings is detailed on page 66.The committee primarily monitors the composition and balance of the board and its committees, and identifies and recommends to the board the appointment of new directors.The committee also keeps under review the board committee structure and the composition of each committee and makes recommendations to the board of any changes considered necessary. Whilst the chairman of the board chairs this committee he is not permitted to chair meetings when the appointment of his successor is being considered or during discussions regarding his performance. The committee reviews annually the succession plans for the executive directors and the executive management board. During 2005 the vacant roles of chief executive, Industrial and Special Products and Group human resources director were both filled by internal candidates.The committee also considers the reappointment of non-executive directors upon expiry of their term of office and the proposals for re-election of directors retiring by rotation at the Annual General Meeting. Directors submit themselves for re-election at regular intervals and at least every three years in accordance with the company’s Articles of Association and the Combined Code on Corporate Governance. During these deliberations consideration is given to the results of the annual board evaluation.The evaluation process is explained in more detail above.The Notice of Annual General Meeting is contained in a separate circular and details the directors who will be standing for election and re-election at the meeting.
Corporate governance 69 During the year one new non-executive director and two executive directors were appointed to the board. When considering the appointment of new directors the committee reviews the current balance of skills and experience on the board.A detailed specification is drawn up to include any specific knowledge or expertise that is considered of future benefit to the board and having regard to the business throughout the Group and the overall business strategy. For executive vacancies internal candidates identified through the succession planning process are always considered in the first instance. External search consultants are used to identify suitable candidates for non-executive positions or where alternative candidates are required for executive vacancies.The consultant draws up a short list of candidates for consideration.The committee then reviews and evaluates the short listed candidates before submitting its recommendation to the board as a whole. Remuneration committee Members:Andrew Bonfield, Guy Dawson (chairman), Rebecca McDonald, Matthew Miau, Sir Christopher O’Donnell and Anne Quinn.All members are independent non-executive directors. Secretary: James Cullens. The remuneration committee reviews its terms of reference on an annual basis. The remuneration committee meets six times a year. Members’ attendance at meetings is detailed on page 66.The committee recommends to the board the policy on executive directors’ remuneration and the specific remuneration, benefits and terms of employment of each executive director.The committee’s full report on directors’ remuneration is set out on pages 72 to 83. Pensions committee Members: Guy Dawson (chairman),Alan Ferguson,Tony Isaac, Rob Margetts. Secretary: Stephen Pegg, Corporate pensions director. The pensions committee meets twice a year and oversees the review of governance and control procedures applying to all employee retirement benefit plans, and reviews and makes recommendations on the investment policies and strategies applied to the Group’s retirement benefit plans. Executive management board The members of the executive management board are detailed on pages 10 and 11 and are considered as the officers of the company.The executive management board is chaired by Tony Isaac.All members held office throughout the year ended 30 September 2005 except that John Walsh resigned on 31 March 2005, Rob Lourey resigned on 30 April 2005 and René Médori resigned on 31 May 2005. James Cullens, Group human resources director, became a member of the executive management board on 30 April 2005 and Alan Ferguson, Group finance director, did so on 15 September 2005.There have been no further changes up to the date of this report. The executive management board meets regularly having primary authority for the day-to-day management of the Group’s operations and policy implementation in line with the Group’s strategy agreed by the board. Investment committee Members: John Bevan,Alan Ferguson,Tony Isaac (chairman), Kent Masters, Mark Nichols, ’Raj’ Rajagopal, and representatives from the finance function. The investment committee meets regularly and reviews and approves Group commitments up to £25 million as delegated by the board. Group commitments over £25 million are presented to the board for approval on recommendation from the committee. Accountability and audit Statements of the respective responsibilities of the directors and auditors for these accounts are set out on pages 84 and 85. Risk management and internal controls This statement of compliance with the Combined Code on Corporate Governance in respect of risk management and internal controls is in line with the arrangements set out by the Financial Reporting Council. The board has overall responsibility for the Group’s system of risk management and internal controls. The schedule of matters reserved to the board ensures that the directors maintain full and effective control over all significant strategic, financial, organisational and compliance issues. Risk management in BOC The BOC risk management programme assists management throughout the Group to identify, assess and mitigate business risk on a continuous basis. The objective of risk management within BOC is to improve performance and decision making through identification, assessment and mitigation of key risks. A dedicated central team of risk management specialists is responsible for delivering the risk management programme. During 2005 approximately 86 risk workshops or reviews have been conducted covering a broad range of matters.These include risks in strategy, risks in meeting business unit targets, risks in acquisitions or ventures and risks in major projects. The risk management process operates on a global basis and covers the Group’s key risks, lines of business, business units and corporate functions. The output from each risk assessment is a set of prioritised risks with associated action plans. Line management retains responsibility for completion of action plans. Progress of action plans is monitored and reported. A report on the risk management process is provided to the board twice a year.These reports include reviews of key strategic risks to the Group as well as the individual lines of business and identifies the status of action plans against key risks.
Page 1 and 2:
BOC Report and accounts 2005
Page 3 and 4:
01 The BOC Group plc is a public li
Page 5 and 6:
Financial highlights 03 Dividends p
Page 7 and 8:
Chairman’s statement 05 Conduct a
Page 9 and 10:
Chief executive’s review 07 Indus
Page 11 and 12:
Board of directors 09 08 09 10 11 1
Page 13 and 14:
Executive management board 11 09 10
Page 15 and 16:
Group five year record 13 Capital e
Page 17 and 18:
Group profile 15 Analysis of result
Page 19 and 20: Group profile 17 Principal industri
Page 21 and 22: Group profile 19 In China, signific
Page 23 and 24: Group profile 21 Sales opportunitie
Page 25 and 26: Employees 23 At 30 September 2005 t
Page 27 and 28: Employees 25 Retirement benefit pla
Page 29 and 30: Social, environmental and ethical p
Page 39 and 40: Research, development and informati
Page 41 and 42: Risk factors 39 BOC relies on devel
Page 43 and 44: Operating review 41 Exceptional ite
Page 45 and 46: Operating review (comparing 2005 wi
Page 57 and 58: Financial review 55 Net debt/equity
Page 59 and 60: Financial review 57 The balance she
Page 61 and 62: Financial review 59 Manganese litig
Page 63 and 64: Financial review 61 Current asset p
Page 65 and 66: Financial review 63 Average exchang
Page 67 and 68: Corporate governance 65 During the
Page 69: Corporate governance 67 Performance
Page 73 and 74: Corporate governance 71 There is a
Page 75 and 76: Report on remuneration 73 Variable
Page 77 and 78: Report on remuneration 75 Current m
Page 79 and 80: Report on remuneration 77 Individua
Page 81 and 82: Report on remuneration 79 Executive
Page 83 and 84: Report on remuneration 81 Opening m
Page 85 and 86: Report on remuneration 83 Mr Médor
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 •
Page 95 and 96: Notes to the financial statements 9
Page 121 and 122:
Notes to the financial statements 1
Page 123 and 124:
Page 125 and 126:
Page 127 and 128:
Page 129 and 130:
Page 131 and 132:
Page 133 and 134:
Page 135 and 136:
Page 137 and 138:
Page 139 and 140:
Page 141 and 142:
Group undertakings 139 Principal Gr
Page 143 and 144:
Shareholder information 141 The tab
Page 145 and 146:
Shareholder information 143 Taxatio
Page 147 and 148:
Shareholder information 145 Payment
Page 149 and 150:
Glossary of terms 147 Terms used in
Page 151 and 152:
©The BOC Group plc 2005. Designed
show all

BOC Report and accounts 2005 - Alle jaarverslagen

Create successful ePaper yourself

Delete template?

Save as template?