Unilever 2001 Annual Report Download - page 52

Unilever Annual Report & Accounts and Form 20-F 2001
>49
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 which 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 the most 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 followed, except as noted under
‘Accounting standards’ on page 51.
The directors have responsibility for ensuring that NV and
PLC keep accounting records which 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, which should be read in conjunction with
the ‘Report of independent auditors’ set out on page 50,
is made with a view to distinguishing for shareholders the
respective responsibilities of the directors and of the auditors
in relation to the accounts.
A copy of the financial statements of the Unilever Group
is placed on our website at www.unilever.com . The
maintenance and integrity of the website is the responsibility
of the directors, and the work carried out by the auditors
does not involve consideration of these matters. Accordingly,
the auditors accept no responsibility for any changes that
may have occurred to the financial statements since they
were initially placed on the website. Legislation in the United
Kingdom governing the preparation and dissemination of
financial statements may differ from legislation in other
jurisdictions.
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 2002 and 2003, 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 which are
designed to provide reasonable, but not absolute, assurance
that assets are safeguarded and the risks facing the business
are being controlled. Our procedures cover financial,
operational, social and environmental risks. 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 worldwide.
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 which has its own Risk Committee, 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, which 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 reassurance
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 2001 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 2001, 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 within
the Group’s governance procedures as soon as is practicable
and, in any event, by the end of the first full year of
operation.