Message from the Corporate Executive Board
Dear Shareholders,
Acting quickly to address the issues
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I would like to start this report by expressing our thanks to all of those who have supported Ahold through
this very difficult time. Many of you have gone through the same feelings of shock, disappointment and anger
that we in the company felt as accounting irregularities and errors were announced. For this, I apologize to
you unreservedly, on behalf of the Corporate Executive Board. We are enormously grateful to our shareholders,
customers and suppliers who have stood by us as we worked painstakingly through the necessary investigations
and audits, and to our associates who have worked above and beyond the call of duty to start the process of
getting our company back on track.
We are also installing new and more effective IT systems for the control of vendor allowances. The first stage of the
implementation at U.S. Foodservice was completed in July 2003 to allow testing of the system. This testing is expected
to be completed by the end of 2003. With the exception of a few vendors, the system should allow us to track all of our
vendor allowances by mid-2004.
Although I’ve only recently joined Ahold - in May 2003 - I can understand your fundamental pride in this company and
recognize that we have much work to do to restore your confidence and to rebuild our reputation. Allow me to give you a
brief overview of the year’s events and to explain what we have done, and are doing, to create a company in which you can
once again be proud.
On February 24, 2003, we announced that our net earnings and earnings per share would be significantly lower than
previously indicated for fiscal 2002 and that we would be restating our financial statements for fiscal 2001 and 2000.
We indicated that these restatements were primarily related to overstatements of vendor allowance income at our
subsidiary U.S. Foodservice and the deconsolidation of five current or former joint ventures. We also announced forensic
investigations into accounting irregularities at U.S. Foodservice and the legality and accounting treatment of certain
questionable transactions uncovered at our Argentine subsidiary, Disco.
Ahold underwent significant management changes in response to the issues uncovered in the company, beginning with the
announcement on February 24 that Ahold’s former President and Chief Executive Officer and its former Chief Financial
Officer would resign. The Chief Executive Officer of U.S. Foodservice resigned on May 13, 2003. Numerous other personnel
changes have also been made, in particular at U.S. Foodservice, Disco, Tops and the Ahold parent company.
A new task force, reporting to the Audit Committee, has been created to implement changes to address the accounting
issues and internal control weaknesses identified in the internal investigations. I am pleased to report that we intend to
have many of the most critical changes implemented by the end of 2003. You can read more about the details of these
investigations and findings in the Supervisory Board message on page 10.
As shareholders, you should be assured that our company acted quickly to adress the problems it faced. I believe that we
have taken, and continue to take, prompt action in cleaning up the irregularities and practices that led to the drastic erosion
in our company’s value and reputation. Our priority now is to restore Ahold to financial health and to rebuild its value.
In addition to the U.S. Foodservice and Disco investigations, we commenced investigations into the facts and circumstances
surrounding certain letters that were the basis for the historical consolidation of four of the Ahold joint ventures referred to
above, and certain previously undisclosed related side letters that nullified the effect of these letters and resulted in the
decision to deconsolidate those joint ventures. On February 24, 2003, our independent auditor, Deloitte Touche,
indicated that its opinion on our audited financial statements for the fiscal years ended December 30, 2001, and
December 31, 2000 should no longer be relied upon.
Deloitte Touche suspended its audit of our fiscal 2002 financial statements until the completion of necessary investigations.
On March 24, 2003, the Audit Committee of our Supervisory Board ordered the commencement of a series of additional
investigations at 17 Ahold operating companies and real estate companies and at the Ahold parent company to assess whether
accounting irregularities, errors and/or issues existed, the integrity of management, and the adequacy of internal controls.
