Registration Document 2005 - Total.com

The hydrocarbon reserves are reviewed by a committee of experts
(the Reserves Committee), who have been approved by the
Exploration & Production managing committee and vetted by
the Group’s Management.
Finally, the Disclosure Committee, composed of the major
administrative managers within the Group, ensures compliance with
the procedures developed to ensure the quality and accuracy of the
publications intended for the financial and stock markets.
At the level of the profit centers and subsidiaries, daily control
operations are organized around the principal operational cycles:
exploration and reserves, capital expenditures, production and
sales, oil trading, purchasing, inventories, payroll, and cash
management. These cycles are adapted to the petroleum context
in which the Group operates, while complying with the COSO
guidelines.
Documentation and disclosure of control rules
The internal control rules are defined at the three levels of the
operational structure: Group for general rules; business segments
for the rules inherent in each business; and profit centers and
subsidiaries for all the others. These rules are transmitted in written
procedural memos, which are also available on the intranet sites of
the Group and the business segments when they apply to both.
The principal procedures in force at Group level cover acquisitionsdisposals,
capital expenditures, financing and cash management,
budget control and financial reporting.
The procedures for the business segments primarily cover the
management control rules specific to each business. The profit
centers or subsidiaries are responsible for transposing the Group
rules into detailed procedures adapted to their size or local context.
TOTAL has completed the documentation covering disclosure
controls and procedures.
In 2005, the Group continued its efforts to comply with the
requirements of Section 404 (applicable to the Company as of
financial year 2006) of the Sarbanes-Oxley Act. A general review of
the process to evaluate internal control of the financial information
published was continued in 2005, with the collaboration of:
•
•
the principal entities of the Group, to test the effectiveness of their
key controls;
the Group Audit Department, to conduct audits in all of these
entities, under the supervision of a compliance officer, to assess
the reliability of their evaluation and to recommend any corrective
actions necessary.
Corporate Governance
Report of the Chairman of the Board of Directors
(Article L. 225-37 of the French Commercial Code)
Supervision of the internal control system
TOTAL - Registration Document 2005
5
Supervision of the internal control system is the joint responsibility of
the holding company, each business sector, and the profit centers
or subsidiaries, each of which is responsible for the segments
delegated to them.
Auditing the internal control system is primarily the responsibility
of a central unit, the Group Audit Department, which reports to
the Executive Committee through the Director of strategy and risk
management. The schedule of reviews is defined annually with the
auditors, who conduct the audits of the internal control system
which they believe are necessary as part of their mission to certify
the financial statements.
The finding of these audit missions are recorded in regular
summaries, which are reported to the Audit Committee and the
Board of Directors. The Auditors also transmit their comments to
the Audit Committee as part of their legal mission.
In 2005, the Group Audit Department employed 75 professionals
and conducted 240 audits. A representative of this department also
attended all meetings of the Audit Committee.
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.
Thierry Desmarest
111