Unilever Annual Report & Accounts and Form 20-F 2000

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44 Unilever Annual Report & Accounts and Form 20-F 2000 Report of the Directors Remuneration report All share options are exercisable at a range of dates between 2001 and 2010 (see note 21 on page 65). No options lapsed unexercised during the year. The market price of the ordinary shares at the end of the year was for NV €67.40 and US$62.94 and for PLC 573p and US$34.56, and the range during the year was between €40.99 and €70.90 and US$39.88 and US$64.19, and between 335p and 584p and US$21.75 and US$34.81 respectively. Options outstanding above and below the market prices at 31 December 2000 are set out in the table on page 43. Notes: Number Market price of Exercise at date of Note shares price exercise (1) all On election as a director (2) all €42.83 (3) all €53.05 (4) all 347p (5) all 425p (6) 7 500 €42.83 (7) 10 143 €65.40 (8) 50 000 347p (9) 74 626 536p (10) all €22.82 €52.53 (11) all €50.87 €65.70 (12) all 268p 441p (13) all €25.69 €53.98 (14) all €26.55 €46.75 (15) all On date of retirement Advisory Directors The Advisory Directors are not formally members of the Boards of NV and PLC and are therefore excluded when reference is made to directors in this report. The remuneration of the Advisory Directors is decided by the Boards. Advisory Directors receive an annual fee and are reimbursed expenses incurred in attending meetings. They do not receive any performance related bonuses, pension provisions, share options or other forms of benefit. The annual fee paid in 2000 to each of B Collomb, O Fanjul, F H Fentener van Vlissingen, H Kopper and H O C R Ruding was €36 302 and to each of Lady Chalker of Wallasey, C X Gonzalez and Senator G J Mitchell was £27 500. The Rt Hon The Lord Brittan of Spennithorne QC and Lord Simon of Highbury CBE were appointed during the year and each received fees of £18 333. Sir Derek Birkin retired during the year and received fees of £9 393. As at 28 February 2001, the aggregate interests of the Advisory Directors in the share capital of NV and PLC were 14 188 (31 December 1999: 8 479) Ordinary Fl. 1.12 shares of NV and 6 384 (31 December 1999: 1 785) Ordinary 1.4p shares of PLC. The voting rights of the Advisory Directors are the same as for other holders of the class of share indicated.
Unilever Annual Report & Accounts and Form 20-F 2000 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 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 47. 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 46, 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 2001 and 2002, 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. 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 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 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 assessment 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 2000 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 2000, 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. Businesses acquired during 2000, such as Ben & Jerry’s Homemade Inc., Slim•Fast Foods and Cressida, are already subject to Unilever’s procedures and the application of these procedures to Bestfoods will be completed by the end of June 2001. 45
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