Unilever 2015 Annual Report Download - page 68

satsfed that, taken as a whole, the 2015 Annual Report and
Accounts s far, balanced and understandable
RISK MANAEMENT AND INTERNAL ONTROL ARRANEMENTS
The ommttee revewed Unlever’s overall approach to rsk
management and control, and ts processes, outcomes and
dsclosure It revewed
• the ontroller’s Quarterly Rsk and ontrol Status Report,
ncludng ode of Busness Prncples cases relatng to frauds
and fnancal crmes and sgnfcant complants receved
through the Unlever ode Support Lne
• the 2015 corporate rsks for whch the Audt ommttee had
oversght and the proposed 2016 corporate rsks dentfed
by the ULE
• management’s mprovements to reportng and nternal
fnancal control arrangements
• processes related to cyber securty, nformaton management
and prvacy
• tax plannng, nsurance arrangements and related
rsk management
• treasury polces, ncludng debt ssuance and hedgng and
• ltgaton and regulatory nvestgatons
The ommttee revewed the applcaton of the requrements
under Secton 404 of the US Sarbanes-Oxley Act of 2002 wth
respect to nternal controls over fnancal reportng In addton,
the ommttee revewed the annual fnancal plan and Unlever’s
dvdend polcy and dvdend proposals
Durng 2015 the ommttee contnued ts oversght of the
ndependent assurance work that s performed on a number
of our Unlever Sustanable Lvng Plan (USLP) metrcs
(selected on the bass of ther materalty to the USLP)
In fulfllng ts oversght responsbltes n relaton to rsk
management, nternal control and the fnancal statements, the
ommttee met regularly wth senor members of management
and s fully satsfed wth the key udgements taken
INTERNAL AUDIT FUNTION
The ommttee revewed orporate Audt’s audt plan for the year and
agreed ts budget and resource requrements It revewed nterm and
year-end summary reports and management’s response The
ommttee carred out an evaluaton of the performance of the nternal
audt functon and was satsfed wth the effectveness of the functon
The ommttee met ndependently wth the hef Audtor durng the
year and dscussed the results of the audts performed durng the year
AUDIT OF THE ANNUAL AOUNTS
KPM, Unlever’s external audtors and ndependent regstered
publc accountng frm, reported n depth to the ommttee on the
scope and outcome of the annual audt, ncludng ther audt of
nternal controls over fnancal reportng as requred by Secton
404 of the US Sarbanes-Oxley Act of 2002 Ther reports ncluded
audt and accountng matters, governance and control, and
accountng developments
The ommttee held ndependent meetngs wth the external
audtors durng the year and revewed, agreed, dscussed and
challenged ther audt plan, ncludng ther assessment of the
fnancal reportng rsk profle of the roup The ommttee
dscussed the vews and conclusons of KPM regardng
management’s treatment of sgnfcant transactons and areas of
udgement durng the year and KPM confrmed they were satsfed
that these had been treated approprately n the fnancal statements
EXTERNAL AUDITORS
Shareholders approved the appontment of KPM as the roup’s
external audtors at the 2015 AMs n Aprl On the recommendaton
of the ommttee, the Drectors wll be proposng the
re-appontment of KPM at the AMs n Aprl 2016
Both Unlever and KPM have safeguards n place to avod the
possblty that the external audtors’ obectvty and ndependence
could be compromsed, such as audt partner rotaton and the
restrcton on non-audt servces that the external audtors can
perform as descrbed below The ommttee revewed the report
from KPM on the actons they take to comply wth the professonal
and regulatory requrements and best practce desgned to ensure
ther ndependence from Unlever
Each year, the ommttee assesses the effectveness of the
external audt process whch ncludes dscussng feedback
from the members of the ommttee and stakeholders at all
levels across Unlever Intervews are also held wth key senor
management wthn both Unlever and KPM
The ommttee also revewed the statutory audt, audt related and
non-audt related servces provded by KPM and complance wth
Unlever’s documented approach, whch prescrbes n detal the
types of engagements, lsted below, for whch the external audtors
can be used
• statutory audt servces, ncludng audt of subsdares
• audt related engagements – servces that nvolve attestaton,
assurance or certfcaton of factual nformaton that may be
requred by external partes
• non-audt related servces – work that our external audtors
are best placed to undertake, whch may nclude
– tax servces – all sgnfcant tax work s put to tender
– acquston and dsposal servces, ncludng related due
dlgence, audts and accountants’ reports and
– nternal control revews
Several types of engagements are prohbted, ncludng
• bookkeepng or smlar servces
• desgn and/or mplementaton of systems or processes related
to fnancal nformaton or rsk management
• valuaton, actuaral and legal servces
• nternal audt
• broker, dealer, nvestment advser or nvestment bank servces
• transfer prcng advsory servces and
• staff secondments of any knd
All audt related engagements over 250,000 and non-audt
related engagements over 100,000 requred specfc advance
approval by the Audt ommttee harman The ommttee
further approved all engagements below these levels whch have
been authorsed by the roup ontroller These authortes are
revewed regularly and, where necessary, updated n the lght of
nternal developments, external developments and best practce
The ommttee confrms that the roup s n complance wth The
Statutory Audt Servces for Large ompanes Market Investgaton
(Mandatory use of ompettve Tender Processes and Audt
ommttee Responsbltes) Order 2014 The last tender for the
audt of the annual accounts was performed n 2013
EVALUATION OF THE AUDIT OMMITTEE
As part of the nternal Board evaluaton carred out n 2015,
the Boards evaluated the performance of the ommttee
The ommttee also carred out an assessment of ts own
performance n 2015 Whlst overall the ommttee members
concluded that the ommttee s performng effectvely, the
ommttee agreed that to further enhance ts effectveness they
needed to ensure they contnued to develop ther knowledge of
busness operatons and how they were evolvng whch would
nvolve further knowledge sessons and ste vsts
John Rshton
har of the Audt ommttee
Judth Hartmann
Mary Ma
Hxona Nyasulu
61Unilever Annual Report and Accounts 2015 Governance