Safeway 1998 Annual Report Download - page 42

Independent Auditors’ Report
Management’s 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 2, 1999
and January 3, 1998, and the related consolidated statements
of income, stockholders’ equity and comprehensive income
and of cash flows for each of the three fiscal years in the
period ended January 2, 1999. 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 perf o rm the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles 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 2, 1999 and
J a n u a ry 3, 1998, and the results of their operations and their
cash flows for each of the three fiscal years in the period
ended January 2, 1999 in conformity with generally accepted
accounting principles.
San Francisco, California
February 23, 1999
Financial Statements Safeway Inc. is responsible for the
preparation, integrity and fair presentation of its published
financial statements. The accompanying consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles and necessarily include amounts
that are based on judgments and estimates made by manage-
ment. Safeway also prepared the other information included
in the annual report and is responsible for its accuracy and
consistency with the financial statements.
The financial statements have been audited by Deloitte &
Touche L L P, independent auditors, which was given unre s t r i c t e d
access to all financial re c o rds and related data, including
minutes of all meetings of stockholders, the Board of Dire c t o r s ,
and committees of the Board. Safeway believes that all repre-
sentations made to the independent auditors during their
audit were valid and appropriate. The re p o rt of Deloitte &
Touche LLP is presented 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 financial statements. The system includes a
documented organizational stru c t u re and division of
re s p o n s i b i l i t y, established policies and pro c e d u res including
a code of conduct to foster a strong ethical climate, which are
communicated throughout Safeway, and the careful selection,
training and development of employees. Internal auditors
monitor the operation of the internal control system and report
findings and recommendations to management and the Board,
and corrective actions are taken to address control deficiencies
and other opportunities for improving the system as they are
identified. The Board, operating through its Audit Committee,
which is composed entirely of outside directors, provides
oversight to the financial reporting process.
T h e r e are inherent limitations in the effectiveness of
any system of internal control, including the possibility of
c i rcumvention or overriding of controls. Accord i n g l y, even an
effective internal control system can provide only reasonable
assurance with respect to financial statement pre p a r a t i o n .
Furthermore, the effectiveness of an internal control system
can change with circumstances. As of January 2, 1999, Safeway
believes its system of internal controls over financial re p o rt i n g
was effective for providing reliable financial statements.
Steven A. Burd David G. Weed
Chairman, President and Executive Vice President and
Chief Executive Officer Chief Financial Officer