Unilever 2014 Annual Report Download - page 20
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Please find page 20 of the 2014 Unilever annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.RISK MANAEMENT AND INTERNAL ONTROL ARRANEMENTS
The ommttee revewed Unlever’s overall approach to rsk
management and control, and ts processes, outcomes and
dsclosure It revewed
• the ontroller’s Quarterly Rsk and ontrol Status Report,
ncludng ode of Busness Prncples cases relatng to frauds
and fnancal crmes and sgnfcant complants receved through
the Unlever ode Support Lne
• the 2014 corporate rsks for whch the Audt ommttee had
oversght and the proposed 2015 corporate rsks dentfed
by the ULE
• management’s mprovements to reportng and nternal fnancal
control arrangements
• processes related to cyber securty, nformaton management
and prvacy
• tax plannng, nsurance arrangements and related
rsk management
• treasury polces, ncludng debt ssuance and hedgng and
• ltgaton and regulatory nvestgatons
The ommttee revewed the applcaton of the requrements
under Secton 404 of the US Sarbanes-Oxley Act of 2002 wth
respect to nternal controls over fnancal reportng In addton,
the ommttee revewed the annual fnancal plan and Unlever’s
dvdend polcy and dvdend proposals
Durng 2014 the ommttee oversaw the ndependent assurance
work that s performed on a number of our Unlever Sustanable
Lvng Plan (USLP) metrcs (selected on the bass of ther
materalty to the USLP)
In fulfllng ts oversght responsbltes n relaton to rsk
management, nternal control and the fnancal statements, the
ommttee met regularly wth senor members of management
and s fully satsfed wth the key udgements taken
INTERNAL AUDIT FUNTION
The ommttee revewed orporate Audt’s audt plan for the year
and agreed ts budget and resource requrements It revewed
nterm and year-end summary reports and management’s
response The ommttee carred out an evaluaton of the
performance of the nternal audt functon and was satsfed wth
the effectveness of the functon The ommttee met
ndependently wth the hef Audtor durng the year and
dscussed the results of the audts performed durng the year
AUDIT OF THE ANNUAL AOUNTS
KPM, Unlever’s external audtors and ndependent regstered publc
accountng frm, reported n depth to the ommttee on the scope and
outcome of the annual audt, ncludng ther audt of nternal controls
over fnancal reportng as requred by Secton 404 of the US
Sarbanes-Oxley Act of 2002 Ther reports ncluded accountng
matters, governance and control, and accountng developments
The ommttee held ndependent meetngs wth the external
audtors durng the year and revewed, agreed, dscussed and
challenged ther audt plan, ncludng ther assessment of the
fnancal reportng rsk profle of the roup The ommttee
dscussed the vews and conclusons of KPM regardng
management’s treatment of sgnfcant transactons and areas
of udgement durng the year and KPM confrmed they were
satsfed that these had been treated approprately n the
fnancal statements
EXTERNAL AUDITORS
As a result of the tender performed n 2013, shareholders approved
the appontment of KPM as the roup’s external audtor at the
2014 AMs n May and throughout the year the ommttee oversaw
and helped facltate a smooth transton from the former audtors
The ommttee has approved the extenson of the current external
audt contract by one year, and recommended to the Boards the
re-appontment of the external audtors On the recommendaton
of the ommttee, the Drectors wll be proposng the re-
appontment of KPM at the AMs n Aprl 2015
Both Unlever and KPM have safeguards n place to avod the
possblty that the audtors’ obectvty and ndependence could be
compromsed, such as audt partner rotaton and the restrcton
on non-audt servces that the external audtors can perform as
descrbed below The ommttee revewed the report from KPM
on the actons they take to comply wth the professonal and
regulatory requrements and best practce desgned to ensure
ther ndependence from Unlever
Each year, the ommttee assesses the effectveness of the
external audt process whch ncludes ganng feedback from key
stakeholders at all levels across Unlever
The ommttee also revewed the statutory audt, audt related and
non-audt related servces provded by KPM and complance wth
Unlever’s documented approach, whch prescrbes n detal the
types of engagements, lsted below, for whch the external audtors
can be used
• statutory audt servces, ncludng audt of subsdares
• audt related engagements – servces that nvolve attestaton,
assurance or certfcaton of factual nformaton that may be
requred by external partes
• non-audt related servces – work that our audtors are best
placed to undertake, whch may nclude
– tax servces – all sgnfcant tax work s put to tender
– acquston and dsposal servces, ncludng related due
dlgence, audts and accountants’ reports and
– nternal control revews
Several types of engagements are prohbted, ncludng
• bookkeepng or smlar servces
• systems desgn and mplementaton related to fnancal
nformaton or rsk management
• valuaton servces
• actuaral servces
• nternal audt
• broker, dealer, nvestment advser or nvestment bank
servces
• legal servces
• desgn and/or mplementaton of rsk management processes
and systems and
• staff secondments to a management functon
All audt related engagements over 250,000 and non-audt
related engagements over 100,000 requred specfc advance
approval by the Audt ommttee harman The ommttee
further approved all engagements below these levels whch have
been authorsed by the roup ontroller These authortes are
revewed regularly and, where necessary, updated n the lght of
nternal developments, external developments and best practce
EVALUATION OF THE AUDIT OMMITTEE
As part of the external Board evaluaton carred out n 2014,
the Boards evaluated the performance of the ommttee The
ommttee also carred out an assessment of ts own
performance Each concluded that the ommttee s performng
effectvely Nevertheless, the ommttee agreed that to enhance
ts effectveness t would seek opportuntes for all ommttee
members to vst a key accountng and reportng centre
Byron rote
harman of the Audt ommttee
Mary Ma
Hxona Nyasulu
John Rshton
57Unilever Annual Report and Accounts 2014 Governance