Unilever 2002 Annual Report Download - page 66

Unilever Annual Report & Accounts and Form 20-F 2002
Financial Statements
Annual accounts
The directors are required by Title 9, 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 United Kingdom accounting standards which they
consider to be applicable have been followed, except as
noted under ‘Accounting standards’ on page 66.
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 65,
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 and the Netherlands 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 2003 and 2004, including cash flows
and borrowing facilities, consider that the Group has
adequate resources to continue in operation for the
foreseeable future.
Internal and disclosure controls and procedures
Unilever has a well established control environment, which is
well documented and regularly reviewed. This incorporates
risk management, internal control procedures and disclosure
controls and procedures which are designed to provide
reasonable assurance that assets are safeguarded, the risks
facing the business are being controlled and all information
required to be disclosed is reported to the Group’s senior
management, including where appropriate the Chairmen
and Financial Director, within the required timeframe.
Our procedures cover financial, operational, social and
environmental risks and regulatory matters. 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
aCode 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 systems of internal
control and disclosure control and for reviewing and
evaluating their 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.
Statement of directors’ responsibilities 63