GOVERNANCE
Risk Management and
Internal Controls
Overview
Control Environment
fair view of its assets, financial situ
ation and results of operations. The
Audit Committee reviewed and dis
cussed the results of the Statutory
Auditor's audits of these accounts
with the Statutory Auditor.
Statutory Auditor's Fees for
Services Related to 2012
The following table sets forth the
fees of the Statutory Auditor and
its associated companies relating
to the services with respect to fiscal
year 2012 of Delhaize Group SA and
its subsidiaries.
(in 2012
a. Statutory audit of
460 000
Delhaize Group SA(I)
b. Legal audit of the consolidated
259 200
financial statements™
Subtotal a,b: Fees as approved
719 200
by the shareholders at the
Ordinary General Meeting of
May 26, 2011
c. Statutory audit of subsidiaries
I 934 299
of Delhaize Group
Subtotal a,b,c: Statutory audit
2 653 499
of the Group and subsidiaries
d. Audit of the 20-F (Annual Report
42 000
filed with U.S. Securities and
Exchange Commission!
e. Other legally required services
I85237
Subtotal d, e
227 237
f. Consultation and other
94 689
non-routine audit services
g. Tax services
I45 024
h. Other services
I6 3II
Subtotal f, g, h
256 024
Total
3 136 760
(1) Includes fees for limited reviews of quarterly and
half-yearly financial information.
As a company that has securities
registered with the U.S. Securities
and Exchange Commission (SEC),
the Company is required to pro
vide a management report to the
SEC regarding the effectiveness of
its internal controls, as described in
Section 404 of the U.S. Sarbanes-
Oxley Act of 2002 and the rules
implementing such act (see "Risk
Management and Internal Controls
- Financial Reporting" below). In
addition, the Statutory Auditor must
provide its assessment of the effec
tiveness of the Company's internal
controls. The fees related to this
work represent a part of the Statu
tory Auditor's fees for the "Statutory
audit of Delhaize Group SA", the
"Statutory audit of subsidiaries of
Delhaize Group" and the "Legal audit
of the consolidated financial state
ments" in 2012. The Audit Committee
has monitored the independence of
the Statutory Auditor under the Audit
Committee's pre-approval policy,
setting forth strict procedures for the
approval of non-audit services per
formed by the Statutory Auditor.
The Company's management is
responsible for establishing and main
taining adequate internal controls.
Internal control is broadly defined as
a process effected by the Board and
management, designed to provide
reasonable assurance regarding
achievement of objectives related to
(i) effectiveness and efficiency of oper
ations, (ii) reliability of financial report
ing, and (iii) compliance with applica
ble laws and regulations.
The Audit Committee ultimately
oversees major business and finan
cial risk management and discusses
the process by which management
of the Company assesses and man
ages the Company's exposure to
those risks and the steps taken to
monitor and control such exposures.
The Company has established and
operates its internal control and risk
management systems based on
guidelines issued by the Committee
of Sponsoring Organizations of the
Treadway Commission ("COSO"). The
internal control system is based upon
COSOs Internal Control - Integrated
Framework, and its risk management
system is based on COSOs Enterprise
Risk Management Framework.
Financial reporting
The Company's internal controls over
financial reporting are a subset of
internal control and include those poli
cies and procedures that (i) pertain to
the maintenance of records that, in
reasonable detail, accurately and fairly
reflect the transactions and disposi
tions of the assets of the Company, (ii)
provide reasonable assurance that
transactions are recorded as neces-
sary to permit preparation of financial
statements in accordance with IFRS as
adopted by the EU, and that receipts
and expenditures of the Company are
being made only in accordance with
authorizations of management and
directors of the Company, and (iii) pro
vide reasonable assurance regarding
prevention or timely detection of unau
thorized acquisition, use or disposition
of the Company's assets that could
have a material effect on the financial
statements.
As a company that has securities
registered with the SEC, the Company
must provide (i) a management report
on the effectiveness of the Company's
internal control over financial report
ing and (ii) the Statutory Auditor's
assessment of the effectiveness of
internal control over financial report
ing, as described in Section 404 of
the U.S. Sarbanes-Oxley Act of 2002
and the rules implementing such act.
The Statutory Auditor's related opin
ions regarding the Company's year
ended December 31, 2012 will be
included in the Company's Annual
Report on Form 20-F for such year,
which is required to be filed with the
U.S. Securities and Exchange Com
mission by April 30, 2013. The Group's
2011 annual report filed on Form 20-F
includes management's conclusion
that the Group's internal control over
financial reporting was effective as
of December 31, 2011. The Statutory
Auditor concluded that the Group
maintained, in all material respects,
effective internal control over financial
reporting as of December 31, 2011.
The Company operates in 10 countries
across three continents, and as such
operates in a decentralized way. The
management of the group is organized
around strong banner and regional
management teams with assignment
of responsibility to Executive Commit
tee members as appropriate.
The Company provides support
and coordination functions to all
members of the group and moni
tors selected activities group-wide.
Our operating companies have
acquired leading positions in food
retailing through a distinct go-to-
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