AGM Statement

    23 JANUARY 2004

THE BOC GROUP plc - ANNUAL GENERAL MEETING

STATEMENTS MADE TO SHAREHOLDERS BY MR R MARGETTS, CHAIRMAN, AND MR A E ISAAC,
CHIEF EXECUTIVE

Mr R Margetts

Good morning, ladies and gentlemen, and welcome to the 118th Annual General
meeting of The BOC Group.

For the first time last year I showed you two graphs that I also include in my
statement in the Annual Report and Accounts. They show how your company has
performed in terms of total shareholder return, measured against both our key
industrial gases competitors and other companies in the FTSE 100. The first
graph shows that we outperformed the FTSE-100 by nearly 40 per cent, but our
major gases competitors did better against their local indices. Looking in more
detail at our performance compared with the FTSE-100 index, it is pleasing to
see that not only have we significantly outperformed the index by nearly forty
per cent, but BOC is one of only a very few companies to have remained in
positive territory. It has delivered a total return to you, its shareholders,
including both share price performance and the value of dividends paid, of some
ten per cent in the three years since the bid lapsed. Overall the FTSE-100, by
comparison, saw a reduction in value of nearly thirty per cent.

The strategy followed by your board is to deliver superior returns to our
shareholders consistent with a progressive dividend policy. Last year we paid a
total dividend of 39p per share, an increase of 2.6 per cent on the year
before. This year we again announced a first interim dividend of 15.5p per
share, which will be paid in February, and we will reflect any increase in the
second interim dividend payable in August.

Your company has again performed well in an economic environment where
industrial production, in both its principal home markets and globally, was
severely affected and one of its important components, BOC Edwards, continued
to work through the longest downturn ever experienced by the semiconductor
industry. Against this backdrop our gases businesses, and our specialist Gist
and Afrox hospitals businesses, all delivered improved turnover and operating
profit. Tony Isaac, your chief executive, will take you through these results
in more detail when I have finished.

This performance is, as I have said, very pleasing, yet you see we have not
matched the shareholder returns delivered by our overseas-based gases
competitors. There is one factor that has had a disproportionate effect on our
share price this year, and that is concern over litigation in the US.
Allegations have been made that manganese in welding fume causes symptoms
similar to Parkinson's disease. We strongly resist any such allegations. We are
not aware of any credible scientific evidence linking manganese in welding fume
to neurological damage under typical welding conditions. We have also explained
that we have significant insurance cover, the details of which are, and must
remain, confidential. For these reasons we believe these allegations will not
have a material effect on BOC's financial condition or profitability.

Throughout the last year we have continued to develop our portfolio. We made
successful acquisitions in Poland and Canada, which have strengthened our
businesses there, and in November we announced the intended sale of our stake
in Afrox hospitals. This is a very successful business that we have grown until
it is now the largest supplier of private healthcare in southern Africa. We
have benefited from its growth and we will now benefit from its sale to a
consortium of black empowerment investors in South Africa, particularly as the
strength of the rand makes this a very good time for BOC to receive the
proceeds from the sale of its interest in Afrox Healthcare.

We continue to invest for profitable growth. Each year we hold one board
meeting outside the UK and this year we chose to visit one of BOC's fastest
growing markets - China. In Shanghai and Suzhou we saw evidence of the rapid
pace of expansion, particularly in the chemicals, steel and electronics
industry. We met our major customer partners and visited the sites where we are
investing successfully to serve this growing market. And we were able to
announce during our visit a further $100 million of investment in China to meet
new growth opportunities. BOC has spent many years developing its leading
position in Asia and, if you take the Asia/Pacific region as a whole, you will
see from last year's results that it now delivers 31 per cent of the Group's
turnover and 36 per cent of our adjusted operating profit.

To grow BOC successfully we must keep a close eye on how we make our profit as
well as how much profit we make. These matters are often referred to today
under the general heading of corporate responsibility, which attempts to
measure and report the impact businesses have on a wider social and economic
front. I gave you some examples in my statement of the recognition BOC has
received for its efforts in this direction. We have recently received further
acknowledgement of our progress in Management Today magazine by being voted
Britain's most admired company for community and environmental responsibility.
It is a great credit to everyone in BOC that we are seen as being an
organisation that takes these issues seriously and have responded to them well.

In a similar vein, corporate governance issues have received considerable
prominence this year, following the Higgs and Smith reviews and the subsequent
revision of the Combined Code. I believe the changes that have been implemented
are sensible and BOC already substantially complies with the new Code, well in
advance of it being required.

In summary, I believe your company is well run and has processes and procedures
in place to ensure the highest standards of stewardship.

I introduced the board to you at the beginning. We have one new member at this
AGM, Andrew Bonfield, who joined us as a non-executive director in July last
year. Andrew is vice-president and chief financial officer of Bristol-Myers
Squibb Company and, in line with best practice, is considered to be the
financial expert on our audit committee.

When G�ran Lundberg resigned from the board in the Spring we made two other
internal changes. Sir Christopher O'Donnell replaced him as senior independent
director and Julie Baddeley became chairman of the remuneration committee. I
would like to thank G�ran for the contribution he made to BOC in his three
years with us.

I will shortly ask Tony Isaac to tell you more about the Group's performance
last year. Let me first thank everyone in BOC for their hard work and
endeavour. The markets we work in are sometimes difficult, often challenging
and always highly competitive. The quality of BOC's people around the world
always impresses me; they are the true strength of BOC.

Mr A E Isaac

Before discussing our performance last year in detail, let me set 2003 in
context. We have made a lot of changes in recent years and our portfolio of
businesses has evolved considerably.

In 2000 we took a detailed look at all our businesses. We have spent a lot of
effort since: investing where we saw opportunities for growth; working with the
local management teams where we believed improved performance was possible; and
taking other action where it was clear that hard work or investment would not
resolve structural problems.

The Polish and Canadian deals are part of our investment for growth. We have
bought good businesses in good markets - markets that reward our concentration
on product quality and customer service. The previous year, similarly, we
bought operations in Thailand and Malaysia and added to our carbon dioxide
assets in the US. We have also selectively added to BOC Edwards' capability,
such as with the turbomolecular pumps business of Seiko in Japan, as well as
smaller companies with technologies of particular interest to us. Earlier last
year we bought a water services business, EMC based in the US, because we saw
strong links between our customer base and theirs - I'm pleased to say early
indications from this market are positive. In total we have spent over half a
billion pounds on acquisitions since 2000.

Not every market or activity can deliver the profitable growth we seek. I
explained at last year's AGM why we had decided to combine our process plants
business with that of Linde in the US to form Linde BOC Process Plants and the
reasoning behind the Japan Air Gases joint venture with Air Liquide. Both these
amalgamations are performing well and, in addition to delivering the cost
savings we expected, Linde BOC Process Plants has given us access to
world-class hydrogen technology. Japan Air Gases has managed to deliver growth
in what remains a generally low growth environment.

Equally importantly, we have seen that we can generate growth even in the more
mature industrial economies by creative product and service development.
Industrial and Special Products has found a number of opportunities where our
distribution network, or our experience of working with products that require
careful handling, give us an advantage in new markets.

Let me now turn to our performance in 2003. I will first comment on safety. We
are giving safety more attention than ever and we are currently implementing a
behavioural safety programme that aims to improve further our safety
performance in all parts of the Group. We have focused in the past on managing
our lagging safety indicators that record the number of accidents and injuries
we suffer. This can result in looking more at the effect than at the cause of
accidents. We are starting to move towards measuring our performance against a
series of leading indicators - things that, if we get them right, will
inevitably improve our safety performance. I can assure you safety remains our
highest priority.

Moving to our financial results, the figures I use are at constant currency and
adjusted to exclude exceptional items.

We made good progress in top line growth, with all parts of the Group
contributing to an overall increase in turnover of nine per cent. Process Gas
Solutions, Afrox hospitals and Gist also delivered improved adjusted operating
profit, but BOC Edwards (still hampered by the semiconductor downturn) and
Industrial and Special Products (held back by computer system issues in the US)
saw reductions. The end result was a rise of one per cent in adjusted operating
profit for the Group as a whole.

As well as our emphasis on profitable growth we have made great efforts to
improve cash flow across the Group. We had record cash flow in the final
quarter of last year, but taking the year as a whole it was eight per cent
lower than 2002. Partly this is because of currency changes and partly because,
following the formation of Japan Air Gases, we no longer consolidate the cash
flow in Japan; from this year we will start to receive dividends instead. We
also contributed an additional �36 million to the UK pensions scheme last year
and in November we announced that, for the next two years, we will pay a
further �30 million a year into the UK scheme, making �66 million in total for
this year and next.

Looking around the world, you know how significant Asia is for the Group.
Traditional industries that still make up much of our customer base in the
industrialised western economies continue to move to lower cost environments in
Asia. Global companies establishing new sites know us well because we serve
them in many countries around the world. Our Process Systems team ensures we
meet the needs of these key customers wherever they decide to do business. In
other cases products that used to be produced in the UK, Europe and north
America are now produced more efficiently by local manufacturers in the likes
of Taiwan, Thailand, Korea and China. We have strong local businesses in these
countries that are natural partners for these new manufacturing enterprises.

In the first six months of this year our UK Process Gas Solutions business saw
companies that provided us with �10 million a year of revenue either move their
production to these lower cost economies or shut up shop completely. This
process was less marked later in the year and it is a credit to the
inventiveness of our UK-based business units that they all did well in less
than ideal conditions. Gist, our logistics business, for example won a major
contract extension from Carlsberg-Tetley that saw it not only storing beer for
this major brewer but also moving the bottles, kegs and cans from its national
depot in Northampton to local depots around the country.

Our business units in South Africa had a very good year although the stronger
rand led to slower economic growth later in the year. Similarly, a
strengthening Australian dollar and continued drought slowed business growth in
Australia compared with 2002.

Through all the temporary economic up and downs, the use of hydrogen has shown
steady growth over the last few years, particularly for the petrochemical
industry and often associated with the production of carbon monoxide from a
HyCO plant. This year we brought on stream two HyCO plants for Citgo in the US
and at Map Ta Phut in Thailand. We also benefited from the major syngas plant
we acquired early in the year from Celanese at Clear Lake in Texas, which gave
us our first major facility on the important US Gulf coast.

We have started this financial year strongly with favourable trends in most
parts of our business. Increased volumes and firm pricing are supporting growth
in Process Gas Solutions. We have also seen improvement in Industrial and
Special Products compared with a difficult first quarter last year. Gist
performed very well in the crucial Christmas quarter. The loss of Marks &
Spencer general merchandise business during 2003 is being offset by growth in
the food distribution sector and elsewhere.

BOC Edwards operating profits continue to improve. The signs are positive that
semiconductor manufacturers will invest in new production facilities, although
they naturally need to be confident of sustained demand from consumer markets
such as communications and computers. The recent weakness of the US dollar
will, if sustained, have some adverse effect on BOC Edwards' margins during the
rest of the year. This is because most of its production is in the UK while
most of its revenues are in dollars.

We continue to drive cost reductions across all our businesses which improves
our operating profit, and this year we expect to see further benefits following
the formation of Japan Air Gases.

You have heard something about the launch of our code of conduct and the
various forms of recognition we have received under the general heading of
corporate social responsibility. It is important for our future success that we
meet our legal and ethical responsibilities. But we do what we do because it
makes good business sense, not because we seek awards. That said, it is
pleasing when the hard work of everyone in the Group is recognised in this way.

Ladies and gentlemen, thank you for your support during 2003. BOC is well
placed to take advantage of any upturn in the world economy. We have a strong
business in BOC Edwards that will make the most of its opportunities as the
semiconductor industry returns to its growth path. The people in BOC are some
of the best you will find anywhere and your Group is well served at all levels
of the organisation. It is a combination that offers much promise for 2004.

For further information, please contact:

Christopher Marsay, Director - Investor Relations

Telephone: [phone] (International: [phone])



END