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**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 20-F**

 

(Mark One) 

 

**Koninklijke AholdN.V.**

**(Exact name of Registrant as specified in its charter)**

 

**Royal Ahold**

**(Translation of Registrant’s name into English)**

 

**The Netherlands**

 

**(Jurisdiction ofincorporation or organization)**

*Albert Heijnweg 1, 1507 EH Zaandam, The Netherlands*

**(Address of principal executive offices)**

 

Securities registered or to be registered pursuant to Section 12(b) of the Act: 

 

 

Indicate by check mark whether theregistrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has beensubject to such filing requirements for the past 90 days. 

 

Yes[ü] No [    ] 

 

Indicateby check mark which financial statement item the registrant has elected to follow. 

 

Item 17 [    ] Item 18 [ü] 

Table of Contents
**TABLE OF CONTENTS**

 

**INTRODUCTION**
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**PART I**
      ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS  5ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE  5ITEM 3.  KEY INFORMATION  5ITEM 4.  INFORMATION ON THE COMPANY  33ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS  64ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES  162ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS  177ITEM 8.  FINANCIAL INFORMATION  181ITEM 9.  THE OFFER AND LISTING  193ITEM 10.  ADDITIONAL INFORMATION  195ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  223ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES  227
**PART II**
      ITEM 13.  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES  228ITEM 14.  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS  228ITEM 15.  CONTROLS AND PROCEDURES  228ITEM 16.  [RESERVED]  231
**PART III**
      ITEM 17.  FINANCIAL STATEMENTS  232ITEM 18.  FINANCIAL STATEMENTS  232ITEM 19.  EXHIBITS  232
 

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**INTRODUCTION**

 

In this annual report on Form 20-F for the fiscal year ended December 29, 2002, we are restating our consolidated financial statements for fiscal 2001 and fiscal 2000 toreflect certain accounting adjustments. We have also recorded correcting accounting adjustments that are reflected in our fiscal 2002 consolidated financial statements. Although these accounting adjustments primarily relate to fiscal 2002, fiscal2001 and fiscal 2000, certain adjustments relate back to fiscal 1999, fiscal 1998 and prior periods. As a result, the figures for fiscal 1999 and fiscal 1998 included in the five-year summary data contained herein have been restated to reflect theapplicable adjustments discussed herein. These accounting adjustments were primarily made to address accounting irregularities and other accounting errors made by us and our subsidiaries in the application of accounting principles generally acceptedin The Netherlands (“Dutch GAAP”) and accounting principles generally accepted in the United States (“US GAAP”) and to address other issues identified or confirmed through investigations performed by outside law firms andforensic accountants and during the fiscal 2002 year-end audit of our financial statements. Upon review of the aggregate impact of all of these adjustments, we concluded that restating our consolidated financial statements for fiscal 2001 and fiscal2000 was required. Unless otherwise indicated, all financial data included in this annual report gives effect to these restatements. For additional information, please see Item 5 “Operating and Financial Review and Prospects—Restatements,Adjustments and Remedial Actions” and Note 3 to our consolidated financial statements included in Item 18 of this annual report.****

 

As indicated in Item 18 to this annual report, separate financial statements and notes thereto for one current joint venture and one former joint venture have not beenincluded in this annual report and may be required to be included in accordance with Rule 3-09 of Regulation S-X. If such financial statements are required to be so included, they will be included in an amendment to this annual report uponcompletion of such financial statements in appropriate form for the filing with the U.S. Securities and Exchange Commission (the “SEC”). 

 

**General Information**

 

The consolidated financial statements of Koninklijke Ahold N.V., also referred to (together with its consolidated subsidiaries, when the context so requires) as “we,” “us,” “our,” the“Company,” or “Ahold,” appear in Item 18 of this annual report. Our consolidated financial statements are prepared in accordance with Dutch GAAP. Dutch GAAP differs in certain material respects from US GAAP. The differencesbetween Dutch GAAP and US GAAP relevant to us are explained in Note 32 to our consolidated financial statements included in Item 18 of this annual report. 

 

Koninklijke Ahold N.V. is domiciled in The Netherlands, which is one of the member states of the European Union (the “European Union” or the “EU”)that has adopted the Euro (“Euro” or “EUR”) as its currency. Prior to fiscal 1999, the reporting currency of our financial statements was the Dutch guilder (“NLG”). Effective from fiscal 1999, we have adopted the Euroas our reporting currency. Effective January 1, 1999, the Council of the European Union fixed the official exchange rate between the Euro and the Dutch guilder at EUR 1 = NLG 2.20371 (the “fixed rate”). Our financial data for fiscal 1998included in this annual report was originally stated in Dutch guilders, but we have converted the financial data to Euros using the fixed rate. 

 

As a significant portion of our business is based in the United States, exchange rate fluctuations between the Euro, or the Dutch guilder for fiscal years prior to 1999,and the United States dollar (“dollar,” “US dollar” or “USD”) are among the factors that have influenced year-to-year comparability of our consolidated results of operations and financial position. For additionalinformation, please see Item 3 “Key Information—Exchange Rates.” 

 

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Unless otherwise indicated, references to currencies of countries other than The Netherlands or the United States are asfollows: 

 
**Country** **Currency** **Symbol**Brazil Brazilian Real BRLJapan Japanese Yen JPYCzech Republic Czech Koruna CZKGreat Britain British Pound GBPSweden Swedish Krona SEKArgentina Argentine Peso ARS
 

**Forward-Looking Statements**

 

Certain statements contained in this annual report are“forward-looking statements” within the meaning of the U.S. federal securities laws. Those statements include, but are not limited to: 

 
 ·expectations as to increases in net sales, operating income, market shares, share in income (loss) of joint ventures and certain expenses, including interest expense, in respect ofcertain of our operations; 
 
 ·expectations as to the impact of operational improvements on productivity levels, operating income and profitability in our stores; 
 
 ·expectations as to the savings from new projects and programs and from increased cooperation between our subsidiaries, particularly in the United States and Europe;
 
 ·statements as to the timing, effects, limits and effectiveness of proposed improvements and changes to our accounting policies and internal control systems;
 
 ·expectations as to our financial condition and prospects, our access to liquidity, the sufficiency of our working capital and the sufficiency of our existing credit facility, aswell as to the timing and amounts of certain repayments thereunder and the sources of funds available for such payments; 
 
 ·statements as to our expected return on capital investment commitments; 
 
 ·statements as to the timing, scope and impact of certain divestments and acquisitions, and our intentions with regard to U.S. Foodservice (“USF”);
 
 ·statements as to the expected impact of changes in accounting standards, including International Financial Reporting Standards (“IFRS”) (previously known as InternationalAccounting Standards or “IAS”); 
 
 ·statements as to the expected timing, strategy, outcome and impact of certain litigation proceedings and investigations and the sufficiency of our available defenses and responses;
 
 ·statements as to the extent of our obligations under certain contingent liabilities; 
 
 ·expectations as to the sufficiency of our directors’ and officers’ liability insurance; 
 
 ·expectations as to the sufficiency of our product liability insurance; 
 
 ·expectations as to the cost of contributions to certain pension plans and other employee benefit plans; 
 
 ·expectations as to the risks and liabilities of hedging transactions entered into; 
 
 ·statements as to the timing of future dividend payments, if any; 
 
 ·expectations as to our competitive position and the impact of the weakened economy on our business; 
 

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Table of Contents ·statements as to our compliance with various environmental laws and regulations and estimations as to the materiality of any related costs; 
 
 ·expectations as to relations between our operating companies and their employees, including relationships with labor unions; 
 
 ·expectations regarding our growth and capital expenditures; and 
 
 ·expectations as to the impact of the announced accounting irregularities on our operations, liquidity and business. 
 

These forward-looking statements are subject to risks, uncertainties and other factors thatcould cause actual results to differ materially from future results expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from the information set forth in any forward-lookingstatements include, but are not limited to: 

 
 ·our liquidity needs exceeding expected levels and amounts available under our credit facilities; 
 
 ·our ability to maintain normal terms with vendors and customers; 
 
 ·our ability to successfully implement our cash flow and debt reduction plan, as well as our divestment program, in particular our ability to refinance our debt obligations maturingin fiscal 2004 and fiscal 2005; 
 
 ·the effect of general economic conditions and changes in interest rates in the countries in which we operate; 
 
 ·difficulties encountered in the cooperation efforts among our subsidiaries and the implementation of new operational improvements; 
 
 ·diversion of management’s attention, the loss of key personnel, the integration of new members of management, and our ability to attract and retain key executives andassociates; 
 
 ·increases in competition in the markets in which our subsidiaries and joint ventures operate and changes in marketing methods utilized by competitors; 
 
 ·our ability to maintain satisfactory labor relations; 
 
 ·the potential adverse impact of certain joint venture options, if exercised, on our liquidity and cash flow; 
 
 ·fluctuations in exchange rates between the Euro and the other currencies in which our assets, liabilities and operating income are denominated, in particular, the US dollar, theArgentine Peso and the Brazilian Real; 
 
 ·our ability to maintain our market share; 
 
 ·the results of pending or future legal proceedings to which we and certain of our current and former directors, officers and employees are, or may be, a party;
 
 ·the actions of government regulators and law enforcement agencies; 
 
 ·any further downgrading of our credit ratings; 
 
 ·the potential adverse impact of the disclosure in this annual report on our results of operations and liquidity; and 
 
 ·other factors discussed elsewhere in this annual report. 
 

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Many of these factors are beyond our ability to control or predict. Given these uncertainties, readers are cautioned notto place undue reliance on the forward-looking statements, which only speak as of the date of this annual report. We do not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events orcircumstances after the date of this annual report or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws. 

 

Neither our independent auditors, nor any other independent accountants, have compiled, examined, or performed any procedures with respectto the prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, theprospective financial information. 

 

For additional information on theseforward-looking statements and the factors that could cause actual results to differ materially from future results expressed or implied by these forward-looking statements, please see Item 3 “Key Information—Risk Factors.”

 

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**PART I**

 
**ITEM 1.** **IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS**
 

Not applicable. 

 
**ITEM 2.** **OFFER STATISTICS AND EXPECTED TIMETABLE**
 

Not applicable. 

 
**ITEM 3.** **KEY INFORMATION**
 

**Selected Financial Data**

 

The selectedconsolidated financial data set forth below should be read in conjunction with our consolidated financial statements contained in Item 18 of this annual report. As a result of certain accounting irregularities and errors, the data set forth belowunder Dutch GAAP and US GAAP have been restated, as discussed in the “Introduction” above. For a description of the adjustments resulting from the restatement of our fiscal 2001 and fiscal 2000 consolidated financial statements, andcertain correcting adjustments reflected in our fiscal 2002 consolidated financial statements, please see Item 5 “Operating and Financial Review and Prospects—Restatements, Adjustments and Remedial Actions” and Notes 3 and 32 to ourconsolidated financial statements included in Item 18 of this annual report. 

 

***Consolidated Statements of Operations Data***

 
   **Fiscal**