Unilever 2000 Annual Report Download - page 47

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Unilever Annual Report & Accounts and Form 20-F 2000 Financial Statements
Statement of directors’ responsibilities
Annual accounts
The directors are required by Book 2 of the Civil Code in the
Netherlands and the United Kingdom Companies Act 1985
to prepare accounts for each financial year w hich give a true
and fair view of the state of affairs of the Unilever Group,
NV and PLC as at the end of the financial year and of the
profit or loss for that year.
The directors consider that in preparing the accounts, the
Group, NV and PLC have used appropriate accounting
policies, consistently applied and supported by reasonable
and prudent judgements and estimates, and that all
accounting standards which they consider to be applicable
have been follow ed, except as noted under ‘Accounting
standards’ on page 47.
The directors have responsibility for ensuring that NV and
PLC keep accounting records w hich disclose with reasonable
accuracy their financial position and which enable the
directors to ensure that the accounts comply with the
relevant legislation. They also have a general responsibility
for taking such steps as are reasonably open to them to
safeguard the assets of the Group and to prevent and
detect fraud and other irregularities.
This statement, w hich should be read in conjunction with
the ‘Report of independent auditors’ set out on page 46,
is made with a view to distinguishing for shareholders the
respective responsibilities of the directors and of the auditors
in relation to the accounts.
Going concern
The directors continue to adopt the going concern basis
in preparing the accounts. This is because the directors,
after making enquiries and following a review of the
Group’s budget for 2001 and 2002, including cash flows
and borrowing facilities, consider that the Group has
adequate resources to continue in operation for the
foreseeable future.
Internal Control
Unilever has a well established control environment, which is
well documented and regularly reviewed. This incorporates
risk management and internal control procedures w hich are
designed to provide reasonable, but not absolute, assurance
that assets are safeguarded and the risks facing the business
are being controlled. The Boards of NV and PLC have also
established a clear organisational structure, including
delegation of appropriate authorities. The Group’s control
environment is supported through a Code of Business
Principles, which sets standards of professionalism and
integrity for its operations w orldw ide.
The Boards have overall responsibility for establishing key
procedures designed to achieve a system of internal control
and for reviewing its effectiveness. The day-to-day
responsibility for implementation of these procedures and
ongoing monitoring of risk and the effectiveness of controls
rests with the Group’s senior management at individual
operating company and Business Group level. Business
Groups, each of w hich have their ow n Risk Committees,
review, on an ongoing basis, the risks faced by their group
and the related internal control arrangements and provide
written reports to the Corporate Risk Committee. This is
comprised mainly of Board members and chaired by the
Financial Director. The Corporate Risk Committee is a
Committee of the Board and maintains oversight, on behalf
of the Boards, of the controls in place to identify, evaluate
and manage risk. It reports regularly to the Boards, w hich
retain ultimate responsibility, and to the Audit Committee.
Unilever’s corporate internal audit function plays a key role
in providing an objective view and continuous assessment
of the effectiveness of the risk management and related
control systems throughout Unilever to both operating
management and the Boards. The Group has an
independent Audit Committee, entirely comprised of
Advisory Directors. This Committee meets regularly with
corporate internal audit and the external auditors.
Unilever has a comprehensive budgeting system with an
annual budget approved by the Boards, which is regularly
reviewed and updated. Performance is monitored against
budget and the previous year through monthly and
quarterly reporting routines. The Group reports to
shareholders quarterly.
Unilever’s system of risk management has been in place
throughout 2000 and up to the date of this report, and
complies with the recommendations of ’Internal Control -
Guidance for Directors on the Combined Code’, published
by the Internal Control Working Party of the Institute of
Chartered Accountants in England & Wales in September
1999. The Boards have carried out an annual review of
the effectiveness of the systems of risk management
and internal control during 2000, and have ensured
that the necessary actions have been taken to address
any weaknesses or deficiencies arising out of that review.
It is Unilever’s policy to bring acquired companies w ithin the
Group’s governance procedures as soon as is practicable
and, in any event, by the end of the first full year of
operation. Businesses acquired during 2000, such as Ben &
Jerry’s Homemade Inc., Slim•Fast Foods and Cressida, are
already subject to Unilever’s procedures and the application
of these procedures to Bestfoods will be completed by the
end of June 2001.