2 www.ahold.com/reports2008
How we manage risk
Disclosure and Compliance Committee
Ahold's Disclosure and Compliance Committee oversees
the collection and analysis of financial and non-financial
information to be publicly disclosed by Ahold. It also monitors
Ahold's compliance with applicable laws, regulations and
internal governance and control standards. The Committee
ensures that information to be publicly disclosed is accurate,
complete and disclosed in a timely manner. It reviews all such
information prior to its publication in annual reports and before
it is disclosed to the public or financial community. Four sub
committees assist the Disclosure and Compliance Committee:
one coordinates the preparation of the Annual Report and
Corporate Responsibility Report, a second oversees Ahold's
internal and external websites, a third monitors Ahold's
information security practices, and a fourth operates the
management certification process. The Committee also
assists the Corporate Executive Board in ensuring that
Ahold has effective governance and control policies and
procedures in place.
Annual declaration on risk management and
control systems
Risks
Risk factors
Governance
AHOLD ANNUAL REPORT 2008 25
Our Internal Audit function helps to ensure that we continuously
maintain and improve the integrity and effectiveness of our
system of risk management and internal control by regular risk-
based, objective and critical evaluations. It monitors Ahold's
risk management and control systems to provide the Corporate
Executive Board, and the Supervisory Board through its Audit
Committee, with reasonable assurance on the reliability of
financial reporting, compliance with relevant laws and
regulations, safeguarding of assets, and efficiency and
effectiveness of operations. Internal Audit also monitors the
effectiveness of corrective actions undertaken by management
with specific follow-up procedures to significant audit findings.
Ahold supports the Dutch Corporate Governance Code and
makes the following declaration in accordance with the
Code's best practice provision II.1.5:
The Corporate Executive Board is responsible for establishing
and maintaining adequate internal risk management and control
systems. These systems are designed to manage the risk of
failure to achieve objectives. They are intended to provide
reasonable, but not absolute, assurance against material
misstatement or loss.
With regard to financial reporting, management has assessed
whether Ahold's risk management and control systems provide
reasonable assurance that the 2008 financial statements do not
contain any material misstatements. This assessment was based
on the criteria set out in COSO: Internal Control - Integrated
Framework. It included tests of the design and operating
effectiveness of company-level controls, transactional controls
at significant locations, and relevant general computer controls.
Any control weaknesses not fully remediated at year end were
evaluated. Based on this assessment, management determined
that Ahold's financial reporting systems were adequately
designed and operated effectively in 2008.
The risk factors that may impede Ahold achieving its objectives
relating to strategy, operations and compliance are described
below. The enterprise risk management program, the ABC
Framework and ongoing monitoring activities are the principal
means by which Ahold manages these risks. Management is not
aware of any important failings in these systems in 2008.
The following discussion of risks relating to Ahold should
be read carefully when evaluating the Company's business,
prospects and the forward-looking statements in this Annual
Report. Any of the following risks could have a material adverse
effect on Ahold's financial position, results of operations and
liquidity or could cause actual results to differ materially from
the results contemplated in the forward-looking statements in
this Annual Report.
Taking risks is an inherent part of entrepreneurial behavior.
Ahold recognizes various strategic, operational, financial,
compliance and regulatory-level risk categories. The risks
described below are not the only risks Ahold faces. There may
be additional risks that Ahold is currently unaware of or risks
that management believes are immaterial or common to most
companies, but which may in the future have a material adverse
effect on Ahold's financial position, results of operations,
liquidity and the actual outcome of matters referred to in the
forward-looking statements contained in this Annual Report.
For additional information regarding forward-looking statements,
see "Cautionary notice".
