Unilever 1999 Annual Report Download - page 4

Statements 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 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 3.
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 the auditors’ set out on page 6, 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 2000 and 2001, 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 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. The Boards of NV and PLC have also
established a clear organisation 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 these
controls rests with the Group’s senior management at
individual operating company and Business Group level.
Business Groups, each of which have their own 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 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.
Unilever’s corporate internal audit function plays a key role
in providing an objective view and continuing assessment of
the effectiveness of the internal 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 internal control has been in place
throughout 1999 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.
4Unilever Annual Accounts 1999