Ahold Annual Report 2003 17
Corporate Governance
The VAAC project team is designing and
implementing standardized forms, documentation
requirements, deal validation processes, roles
and responsibilities, measurements, controls
and contract administration in the merchandising
and accounting areas to ensure consistency and
increased accuracy across all U.S. retail
operating companies which we expect to have
in place by July 2004.
We have taken steps to compensate for existing internal
control weaknesses in preparing our 2003 financial
statements by, among other things, implementing the
following measures:
We conducted an extensive review of our
accounting documentation and processes. This
review involved the accounting department at our
parent company, our parent and regional task
forces and accounting personnel at the various
operating companies. This also involved visits from
parent company employees to our operating
companies to assist in the accounting process.
We reviewed areas where controls were found to
be weak and performed additional accounting or
review work where considered necessary, including
the spreadsheet based vendor allowance tracking
system initiated by USF as earlier mentioned.
We required the review by our corporate
accounting department of certain transactions.
We improved and extended the use of
standardized questionnaires, GAAP checklists and
management certifications.
Our Disclosure Committee also was extensively involved
in the preparation of this annual report. As discussed in
"Corporate Governance - Part II: Corporate Governance
Provisions" the Disclosure Committee, which was
formed in November 2002, oversees the gathering of
information in connection with the preparation of the
reports that we file under the Securities Exchange Act,
including this annual report, and works to ensure the
accuracy and completeness of such filings.
We have committed, and will continue to commit,
considerable resources to our efforts to improve and
strengthen our internal controls. We will need time to
implement all necessary changes and improvements.
We implemented compensating controls for the year-end
close of 2003 and we are implementing the remaining
changes in 2004.
Our Chief Executive Officer and our Chief Financial
Officer, pursuant to Rule 13a-15 promulgated under the
Securities Exchange Act, evaluated the effectiveness of
our disclosure controls and procedures as of December
28, 2003 (the end of the period covered by this annual
report). Disclosure controls and procedures are those
designed to ensure that information required to be
disclosed in our reports filed under the Securities
Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the SEC
rules and forms. Disclosure controls and procedures are
also designed to ensure that the information is
accumulated and communicated to our management,
including our Chief Executive Officer and our Chief
Financial Officer, as appropriate, to allow timely
decisions regarding required disclosure. Our disclosure
controls and procedures can provide only reasonable,
rather than absolute, assurance of achieving the desired
control objectives.
Based upon their evaluation, our Chief Executive
Officer and Chief Financial Officer concluded that our
disclosure controls and procedures, in particular our
internal controls, continue to need improvement.
Nevertheless, our Chief Executive Officer and Chief
Financial Officer believe that, as a result of all of the
actions described above that have been taken prior to
and in connection with the filing of this annual report,
subject to the limitations noted above, our disclosure
controls and procedures are effective to ensure that
material information relating to us and our consolidated
subsidiaries is made known to our management and
that the information required to be disclosed in this
annual report and our other reports to be filed under the
Securities Exchange Act is timely recorded, processed
and summarized.
