Safeway 1997 Annual Report Download - page 42

Financial Statements Safeway Inc. is responsible for the prepa-
ration, integrity and fair presentation of its published financial
statements. The accompanying consolidated financial state-
ments have been prepared in accordance with generally accept-
ed accounting principles and necessarily include amounts that
are based on judgments and estimates made by management.
Safeway also prepared the other information included in the
annual report and is responsible for its accuracy and consisten-
cy with the financial statements.
The financial statements have been audited by Deloitte &
Touche LLP, independent auditors, which was given unrestricted
access to all financial records and related data, including min-
utes of all meetings of stockholders, the Board of Directors and
committees of the Board. Safeway believes that all representa-
tions made to the independent auditors during their audit were
valid and appropriate. The report of Deloitte & Touche LLP is pre-
sented below.
Internal Control System Safeway maintains a system of internal
control over financial reporting, which is designed to provide
reasonable assurance to management and the Board of
Directors regarding the preparation of reliable published finan-
cial statements. The system includes a documented organiza-
tional structure and division of responsibility; established policies
and procedures including a code of conduct to foster a strong
ethical climate, which are communicated throughout Safeway;
and the careful selection, training and development of employ-
ees. Internal auditors monitor the operation of the internal con-
trol system and report findings and recommendations to man-
agement and the Board, and corrective actions are taken to
address control deficiencies and other opportunities for improv-
ing the system as they are identified. The Board, operating
through its Audit Committee, which is composed entirely of out-
side directors, provides oversight to the financial reporting
process.
There are inherent limitations in the effectiveness of any sys-
tem of internal control, including the possibility of circumvention
or overriding of controls. Accordingly, even an effective internal
control system can provide only reasonable assurance with
respect to financial statement preparation. Furthermore, the
effectiveness of an internal control system can change with cir-
cumstances. As of January 3, 1998, Safeway believes its system
of internal controls over financial reporting was effective for pro-
viding reliable financial statements.
Steven A. Burd Julian C. Day
President and Executive Vice President and
Chief Executive Officer Chief Financial Officer
Management’s Report
39
Independent Auditors’ Report
The Board of Directors and Stockholders of Safeway Inc.:
We have audited the accompanying consolidated balance sheets
of Safeway Inc. and subsidiaries as of January 3, 1998 and
December 28, 1996, and the related consolidated statements of
income, stockholders’ equity and cash flows for each of the
three fiscal years in the period ended January 3, 1998. These
financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material mis-
statement. An audit includes examining, on a test basis, evi-
dence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting prin-
ciples used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present
fairly, in all material respects, the financial position of Safeway Inc.
and subsidiaries as of January 3, 1998 and December 28, 1996,
and the results of their operations and their cash flows for each of
the three fiscal years in the period ended January 3, 1998 in con-
formity with generally accepted accounting principles.
San Francisco, California
February 27, 1998