BOC Report and accounts 2005 - Alle jaarverslagen

70 The BOC Group plc Annual report and accounts 2005 Corporate governance
Internal controls in BOC The directors have delegated to executive management the establishment and
implementation of a system of internal controls appropriate to the various business environments in which it
operates.The Group operates under a system of controls that has been developed and refined over time to meet
its current and future needs and the risks and opportunities to which it is exposed.These controls, which are
communicated through various operating and procedural manuals and processes, include but are not limited to:
• The definition of the organisational structure and the appropriate delegation of authorities to operational
management;
• Procedures for the review and authorisation of capital investments through the investment committee
including post-acquisition reviews and appraisals;
• Strategic planning and the related annual planning process including the ongoing review by the board of the
Group’s strategies;
• The establishment of individual business unit annual performance targets and the quarterly business review of
actual performance;
• The monthly financial reporting and review of financial results and other operating statistics such as the health
and safety reports as well as the Group’s published quarterly financial statements, which are based on a
standardised reporting process;
• Accounting and financial reporting policies to ensure the consistency, integrity and accuracy of the Group’s
accounting records;
• Specific treasury policies and objectives and the ongoing reporting and review of all significant transactions and
financing operations.
The internal control system is monitored and supported by an internal audit function that operates on a global
basis and reports its results on the Group’s operations to management and the audit committee.The work of the
internal auditors is focused on the areas of greatest risk to the Group determined on the basis of a risk
management approach to audit.
There have been regular reviews by the audit committee of the board of the effectiveness of the Group’s
overall internal control processes throughout the year.
During 2005 the Group has developed and progressed its plan to meet the requirements of Section 404
of the US Sarbanes-Oxley Act 2002 which is a requirement for BOC with effect from 2006.The internal audit
function has played an important role in developing and implementing the plan to identify, document and test key
controls over financial reporting as required by Section 404 and will have a significant role in supporting
management’s evaluation of design effectiveness and operational effectiveness of these controls.
The directors therefore believe that the Group’s system of risk management and internal controls provides
reasonable but not absolute assurance that assets are safeguarded, transactions are authorised and recorded
properly and that material errors and irregularities are either prevented or would be detected within a
timely period.
Having reviewed its effectiveness, the directors are not aware of anything in the Group’s system of internal
controls during the period covered by this report and accounts which would render them ineffective.
There were no changes in the Group’s internal controls over financial reporting that occurred in the year
ended 30 September 2005 that have materially affected, or are reasonably likely to affect, the Group’s internal
control over financial reporting.
Disclosure controls and procedures
The chief executive and Group finance director, based on the evaluation of the effectiveness of the Group’s
disclosure controls and procedures as of the end of the period covered by this annual report and accounts,
have concluded that, as of such date, the Group’s disclosure controls and procedures were effective.
Going concern
The directors’ report on going concern is included in the financial review on page 63.
Communication with shareholders
The board considers communication with shareholders, whether institutional, private or employee shareholders,
to be extremely important.A variety of communication mechanisms are used by the company. Financial results are
published quarterly, and half year and annual reviews are sent to all shareholders. Copies of the full annual report
are available by election or on request.The company’s website (www.boc.com) provides financial and other
business information about The BOC Group. It contains an archive of past announcements and annual reports,
share price information and a calendar of events as well as BOC’s social responsibility policies, including the
company’s Code of Conduct.There are also facilities in place to enable shareholders to receive communications
from the company in electronic form rather than by mail and for shareholders to provide their proxy votes for the
Annual General Meeting by electronic means.
The Annual General Meeting provides an opportunity for shareholders to question directors about the
company’s activities and prospects.The chairmen of each of the principal board committees are normally present.
Members of the board meet informally with shareholders after the meeting. During the year responses are given
to letters received from shareholders on a variety of subjects.
Separate resolutions are proposed for each substantially separate item of business proposed at the Annual
General Meeting.All resolutions will be voted on by taking a poll, with an indicative result advised to the meeting
and the verified result announced as soon as practicable after the meeting.The proxy voting result will also be
available on the company’s website (www.boc.com).