Product Liability Risk
Risk of Environmental Liability
Risk Related to Internal Controls
Tax Audit Risk
Delhaize Group Annual Report 2014 69
For information on pending antitrust matters,
see Note 34 "Contingencies" in the Financial
Statements.
Delhaize Group actively strives to ensure com
pliance with all laws and regulations to which
it is subject. The Guide tor Ethical Business
Conduct that replaced the former Code of Con
duct was implemented in 2010 and revised
in January 2015. Policies have been adopted
to further support its compliance program.
In addition anti-fraud and other appropriate
training is being implemented throughout the
Group.
The packaging, marketing, distribution and
sale of food products entail an inherent risk
of exposure to claims for product liability and
product recall. Such products may contain
contaminants that may be inadvertently dis
tributed by Delhaize Group. These contami
nants may, in certain cases, result in illness,
injury or death. As a consequence, Delhaize
Group has an exposure to product liability
claims. The Group purchases insurance to
cover such risk. However, if a product liability
claim is successful, the Group's insurance may
not be adequate to cover all liabilities it may
incur, and it may not be able to continue to
maintain such insurance or obtain compara
ble insurance at a reasonable cost.
In addition, even if a product liability claim
is not successful or is not fully pursued, the
negative publicity surrounding any assertion
that the Group's products caused illness or
injury could affect the Group's reputation, its
business, financial condition and results of
operations.
Delhaize Group is committed to providing its
customers with safe food products. The Group
has food safety guidelines and policies in
place in each country where it operates, and
they are vigorously followed.
Delhaize Group is subject to laws and reg
ulations that govern activities that may have
adverse environmental effects. Delhaize Group
may be responsible for the remediation of
such environmental conditions and may be
subject to associated liabilities relating to its
stores and the land on which its stores, ware
houses and offices are located, regardless of
whether the Group leases, subleases or owns
the stores, warehouses or land in question
and regardless of whether such environmental
conditions were created by the Group or by
a prior owner or tenant. The Group has put
in place control procedures at its operating
companies to identify, prioritize and resolve
adverse environmental conditions.
Delhaize Group routinely assesses the quality
and effectiveness of its internal controls.
Because of its inherent limitations, internal
control over financial reporting may not
prevent or detect misstatements. Therefore,
even effective internal controls can provide
only reasonable assurance with respect to the
preparation and fair presentation of financial
statements. If the Group fails to maintain the
adequacy of its internal controls, including any
failure to implement required new or improved
controls, or if it experiences difficulties in
the implementation of internal controls, the
Group's business and operating results could
be harmed, and it could fail to meet its report
ing obligations.
As a company filing financial reports under
U.S. law, Delhaize Group is required to
meet the requirements of Section 404 of the
Sarbanes-Oxley Act of 2002, which requires
management and the Statutory Auditor to
report on their assessment of the effectiveness
of the Group's internal control over financial
reporting.
The Group's 2013 annual report filed on Form
20-F includes management's conclusion that
the Group's internal control over financial
reporting is effective as of December 31, 2013.
In the same Form 20-F, the Statutory Auditor
concluded that the Group maintained, in all
material respects, effective control over finan
cial reporting as of December 31, 2013.
Delhaize Group is regularly audited in the
various jurisdictions in which it does business,
which it considers to be part of its ongoing
business activity. While the ultimate outcome of
these audits is not certain, Delhaize Group has
considered the merits of its filing positions in its
overall evaluation of potential tax liabilities and
believes it has adequate liabilities recorded
in its consolidated financial statements for
potential exposures. Unexpected outcomes as
a result of these audits could adversely affect
Delhaize Group's financial statements. For
more information on tax audits in jurisdictions
where we conduct business, see Note 34
"Contingencies" in the Financial Statements.
