IMKTA » Topics » Item 4. CONTROLS AND PROCEDURES

This excerpt taken from the IMKTA 10-K filed Dec 1, 2008.

Item 9A. CONTROLS AND PROCEDURES

 

Conclusion Regarding Disclosure Controls and Procedures

 

The Company maintains disclosure controls and procedures designed to provide reasonable assurance to achieve the objective that information in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified and pursuant to the regulations of the Securities and Exchange Commission. Disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act, include controls and procedures designed to ensure the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. It should be noted that the Company’s system of controls and procedures, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met.

 

As required by Rule 13a-15(b) under the Exchange Act, the Company carried out an evaluation, under the supervision and with participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures as of September 27, 2008, the end of the period covered by this report.

 

Based on this evaluation, management concluded that the Company’s disclosure controls and procedures were effective as of September 27, 2008.

 

Management’s Annual Report on Internal Control Over Financial Reporting

 

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that:

 

  (i) pertain to the maintenance of records that, in a reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets;

 

  (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of the Company’s management and directors; and

 

  (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or disposition of the Company’s assets that could have a material adverse effect on the financial statements.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

The Company has assessed the effectiveness of its internal control over financial reporting as of September 27, 2008 using the criteria described in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

 

Based on its assessment of the design and related testing of the Company’s internal control over financial reporting, management has concluded that, as of September 27, 2008, the Company maintained effective internal control over financial reporting based on the criteria set forth in the COSO framework.

 

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The Company’s independent auditors, Ernst & Young LLP, a registered public accounting firm, are appointed by the Audit Committee of the Company’s Board of Directors, subject to ratification by our Company’s shareowners. Ernst & Young LLP has audited and reported on the consolidated financial statements of the Company and the Company’s internal control over financial reporting. The reports of the independent auditors are contained in this annual report.

 

The effectiveness of the Company’s internal control over financial reporting has been audited by the Company’s independent auditor, Ernst & Young LLP, a registered public accounting firm, as stated in their report at page 42 herein.

 

Changes in Internal Control Over Financial Reporting

 

There has been no change during the Company’s fiscal year ended September 27, 2008 of the Company’s internal control over financial reporting that was identified in connection with the evaluation required by Exchange Act Rule 13a-15(d) which has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

As noted above, management has concluded that the Company’s disclosure controls and procedures were effective as of September 27, 2008.

 

This excerpt taken from the IMKTA 10-K filed Nov 28, 2007.

Item 9A. CONTROLS AND PROCEDURES

 

Conclusion Regarding Disclosure Controls and Procedures

 

The Company maintains disclosure controls and procedures designed to provide reasonable assurance of achieving the objective that information in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified and pursuant to the regulations of the Securities and Exchange Commission. Disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act, include controls and procedures designed to ensure the information required to be disclosed by the

 

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Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. It should be noted that the Company’s system of controls and procedures, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met.

 

As required by Rule 13a-15(b) under the Exchange Act, the Company carried out an evaluation, under the supervision and with participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures as of September 29, 2007, the end of the period covered by this report.

 

Based on this evaluation, management concluded that the Company’s disclosure controls and procedures were effective as of September 29, 2007.

 

Management’s Annual Report on Internal Control Over Financial Reporting

 

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Securities Exchange Act Rule 13a-15(f). Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that:

 

  (i) pertain to the maintenance of records that, in a reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets;

 

  (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of the Company’s management and directors; and

 

  (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or disposition of the Company’s assets that could have a material adverse effect on the financial statements.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

The Company has assessed the effectiveness of its internal control over financial reporting as of September 29, 2007 using the criteria described in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

 

Based on its assessment of the design and related testing of the Company’s internal control over financial reporting, management has concluded that, as of September 29, 2007, the Company maintained effective internal control over financial reporting based on the criteria set forth in the COSO framework.

 

Changes in Internal Control Over Financial Reporting

 

During the fourth quarter of fiscal 2007 management completed its testing of internal controls over financial reporting. Significant changes to the Company’s internal controls over financial reporting were made during fiscal 2007, including:

 

   

Performing the majority of ongoing tests of internal controls in accordance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 using the Company’s internal audit department that was established during fiscal 2006. Testing by outside consultants was limited to information technology.

 

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Reducing the number of control deficiencies identified in fiscal 2005 and fiscal 2006 through remediation efforts in various departments.

 

   

Revising the Company’s Audit Committee charter to incorporate “best practices” recommended by government and industry organizations involved with internal control oversight.

 

   

Establishing quarterly meetings between the Company’s internal audit department and each functional area of the Company to review internal control testing results and monitor the remediation of previously identified control deficiencies.

 

As noted above, management has concluded that the Company’s disclosure controls and procedures were effective as of September 29, 2007.

 

This excerpt taken from the IMKTA 10-Q filed Feb 2, 2007.

Item 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures designed to provide reasonable assurance of achieving the objective that information in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified and pursuant to the regulations of the Securities and Exchange Commission. Disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act, include controls and procedures designed to ensure the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. It should be noted that the Company’s system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met.

As required by SEC Rule 13a-15(b), the Company carried out an evaluation, under the supervision and with participation of its management including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures as of December 30, 2006, the end of the period covered by this report. In making this evaluation, it considered matters previously identified and disclosed in connection with the filing of its Form 10-K for fiscal 2006. After consideration of the matters discussed above, the Company has concluded that its controls and procedures were effective as of December 30, 2006.

(b) Changes in Internal Control over Financial Reporting

During the quarter ended December 30, 2006, the Company hired a new Director of Internal Audit to oversee ongoing tests of internal controls over financial reporting, supervise and review work of internal audit staff and conduct remediation efforts.

The Company has begun its fiscal year 2007 testing of internal controls over financial reporting.

No other change in internal control over financial reporting occurred during the Company’s last fiscal quarter that materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting.

Part II. OTHER INFORMATION

This excerpt taken from the IMKTA 10-K filed Dec 1, 2006.

Item 9A. CONTROLS AND PROCEDURES

 

  (a) Evaluation of Disclosure Controls and Procedures

 

The Company maintains disclosure controls and procedures designed to provide reasonable assurance of achieving the objective that information in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified and pursuant to the regulations of the Securities and Exchange Commission. Disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act, include controls and procedures designed to ensure the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. It should be noted that the Company’s system of controls and procedures, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met.

 

As required by Rule 13a-15(b) under the Exchange Act, the Company carried out an evaluation, under the supervision and with participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures as of September 30, 2006, the end of the period covered by this report.

 

Based on our evaluation, management concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2006.

 

  (b) Management’s Annual Report on Internal Control Over Financial Reporting

 

Management’s annual report on internal control over financial reporting is included with the financial statements set forth in Item 8 of this annual report on Form 10-K and is incorporated herein by reference.

 

  (c) Changes in Internal Control Over Financial Reporting

 

During the fourth quarter of fiscal 2006 management completed its testing of internal controls over financial reporting and finalized the remediation of all material weaknesses identified as of the end of fiscal 2005.

 

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Significant changes to internal controls over financial reporting were made during fiscal 2006, including during the fourth quarter of fiscal 2006, to address previously identified material weaknesses, including:

 

    Established an internal audit department to coordinate the remediation of identified control deficiencies and perform ongoing tests of internal controls in accordance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002.

 

    Improved computer access controls by removing access that is not necessary for an associate’s primary job function and documenting proper change control procedures.

 

    Implemented new policies and procedures surrounding the negotiation, approval or processing of vendor income transactions. Mandatory training was conducted for all Company Vice Presidents, buyers and accounting staff whose duties involve vendor income transactions.

 

    Established journal entry approval controls and limited access to the Company’s chart of accounts and journal entry processing to achieve appropriate segregation of duties.

 

    Segregated vendor master file access from those employees responsible for processing vendor payments. New procedures have been implemented surrounding the documentation and approval of vendor master file changes by originating purchasing departments and the processing of approved master file changes by employees with no payment processing responsibilities.

 

    Implemented enhanced controls in the Company’s Information Technology area surrounding the documentation, testing and approval of changes to major application systems. Processes have been developed to better control access to major computer system functions.

 

As noted above, management has concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2006.

 

This excerpt taken from the IMKTA 10-Q filed Jul 31, 2006.

Item 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures designed to provide reasonable assurance of achieving the objective that information in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified and pursuant to the regulations of the Securities and Exchange Commission. Disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act, include controls and procedures designed to ensure the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. It should be noted that the Company’s system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met.

As required by SEC Rule 13a-15(b), the Company carried out an evaluation, under the supervision and with participation of its management including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures as of June 24, 2006, the end of the period covered by this report. In making this evaluation, it considered matters previously identified and disclosed in connection with the filing of its Form 10-K for fiscal 2005. After consideration of the matters discussed above, the Company has concluded that its controls and procedures were not effective in all respects as of the end of the period covered by this report.

The Company disclosed in its Form 10-K for fiscal 2005 the following material weaknesses identified by management.

Segregation of Duties

Management identified two different areas where the lack of appropriate segregation of duties constituted a material weakness.

 

    Associates in the Company’s accounts payable departments, whose job duties involved processing vendor payments, also had access to vendor master file records. In some instances these associates could also process general ledger entries. As a result, associates could record erroneous journal entries or process fraudulent payments without the Company being assured of detecting such activity.

 

    Turnover among senior financial management during fiscal 2005 resulted in the temporary performance of duties by some employees that conflicted with their ongoing responsibilities. The ability to change the Company’s chart of accounts was not properly segregated from journal entry processing and proper journal entry review controls were not in place for much of fiscal 2005.

 

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Information Technology General Controls

 

    An excessive number of user and system profiles in major computer systems permit access to processes not needed for the performance of the user’s primary job functions.

 

    Proper controls and approval of changes to software applications were not present. Additionally, change control testing was not sufficiently comprehensive to consider the potential effect of system changes on other major application systems and data.

Vendor Income

During previous fiscal years, the Company attempted to implement additional controls and procedures designed to ensure vendor income was recorded completely, accurately and timely. The changes were not sufficient to correct all weaknesses in the design of such controls. As such, the controls and procedures for vendor income are not sufficient to ensure that all vendor income is properly recorded. In addition, there has been a lack of compliance with these procedures by certain Company associates.

(b) Changes in Internal Control over Financial Reporting

During prior periods as has been disclosed, the Company has engaged in a number of changes to remediate the above described material weaknesses. Further, subsequent to the filing of the Company’s Form 10-K for fiscal 2005, including the quarter ended June 24, 2006, management has undertaken the following remediation efforts:

 

    Conducted ongoing tests of internal controls over financial reporting by outside consultants and by its Internal Audit department that was established earlier this fiscal year.

 

    Completed initial training for all Company Vice Presidents and purchasing employees on required controls and documentation for the approval and processing of vendor income transactions. These enhanced controls are currently being tested by the Company’s internal auditors.

 

    Established journal entry approval controls and limited access to the Company’s chart of accounts and journal entry processing to achieve appropriate segregation of duties.

 

    Segregated vendor master file access from those employees responsible for processing vendor payments. New procedures have been implemented surrounding the documentation and approval of vendor master file changes by originating purchasing departments and the processing of approved master file changes by employees with no payment processing responsibilities. These controls will be tested for effectiveness prior to the end of fiscal 2006.

 

    Implemented enhanced controls in the Company’s Information Technology area surrounding the documentation, testing and approval of changes to major application systems. Processes have been developed to better control access to major computer system functions. Initial testing of these control enhancements has taken place, with additional testing to be performed prior to the end of fiscal 2006.

The results of testing conducted thus far in fiscal 2006 have been encouraging and reflect an improved internal control environment when compared to prior years.

Part II. OTHER INFORMATION

This excerpt taken from the IMKTA 10-Q filed May 2, 2006.

Item 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures designed to provide reasonable assurance of achieving the objective that information in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified and pursuant to the regulations of the Securities and Exchange Commission. Disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act, include controls and procedures designed to ensure the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. It should be noted that the Company’s system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met.

 

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Table of Contents

As required by SEC Rule 13a-15(b), the Company carried out an evaluation, under the supervision and with participation of its management including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures as of March 25, 2006, the end of the period covered by this report. In making this evaluation, it considered matters previously identified and disclosed in connection with the filing of its Form 10-K for fiscal 2005. After consideration of the matters discussed above, the Company has concluded that its controls and procedures were not effective in all respects as of the end of the period covered by this report.

The Company disclosed in its Form 10-K for fiscal 2005 the following material weaknesses identified by management.

Segregation of Duties

Management identified two different areas where the lack of appropriate segregation of duties constituted a material weakness.

 

    Associates in the Company’s accounts payable departments, whose job duties involved processing vendor payments, also had access to vendor master file records. In some instances these associates could also process general ledger entries. As a result, associates could record erroneous journal entries or process fraudulent payments without the Company being assured of detecting such activity.

 

    Turnover among senior financial management during fiscal 2005 resulted in the temporary performance of duties by some employees that conflicted with their ongoing responsibilities. The ability to change the Company’s chart of accounts was not properly segregated from journal entry processing and proper journal entry review controls were not in place for much of fiscal 2005.

Information Technology General Controls

 

    An excessive number of user and system profiles in major computer systems permit access to processes not needed for the performance of the user’s primary job functions.

 

    Proper controls and approval of changes to software applications were not present. Additionally, change control testing was not sufficiently comprehensive to consider the potential effect of system changes on other major application systems and data.

Vendor Income

During previous fiscal years, the Company attempted to implement additional controls and procedures designed to ensure vendor income was recorded completely, accurately and timely. The changes were not sufficient to correct all weaknesses in the design of such controls. As such, the controls and procedures for vendor income are not sufficient to ensure that all vendor income is properly recorded. In addition, there has been a lack of compliance with these procedures by certain Company associates.

 

(b) Changes in Internal Control over Financial Reporting

Subsequent to the filing of the Company’s Form 10-Q for the first quarter of fiscal 2006, management has undertaken the following remediation efforts:

 

    Conducted ongoing tests of internal controls over financial reporting by its Internal Audit department that was established earlier this fiscal year.

 

    Completed initial training for all Company Vice Presidents and purchasing employees on required controls and documentation for the approval and processing of vendor income transactions. These enhanced controls are currently being tested by the Company’s internal auditors.

 

    Established journal entry approval controls and limited access to the Company’s chart of accounts and journal entry processing to achieve appropriate segregation of duties.

 

    Segregated vendor master file access from those employees responsible for processing vendor payments. New procedures have been implemented surrounding the documentation and approval of vendor master file changes by originating purchasing departments and the processing of approved master file changes by employees with no payment processing responsibilities. These controls will be tested for effectiveness later in fiscal 2006.

 

    Implemented enhanced controls in the Company’s Information Technology area surrounding the documentation, testing and approval of changes to major application systems. Processes have been developed to better control access to major computer system functions. These control enhancements will be tested during the Company’s third fiscal quarter.

 

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Part II. Other Information

This excerpt taken from the IMKTA 10-Q filed Feb 2, 2006.

Item 4. CONTROLS AND PROCEDURES

 

(a) Evaluation of Disclosure Controls and Procedures

 

The Company maintains disclosure controls and procedures designed to provide reasonable assurance of achieving the objective that information in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified and pursuant to the regulations of the Securities and Exchange Commission. Disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act, include controls and procedures designed to ensure the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. It should be noted that the Company’s system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met.

 

As required by SEC Rule 13a-15(b), the Company carried out an evaluation, under the supervision and with participation of its management including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures as of December 24, 2005, the end of the period covered by this report. In making this evaluation, it considered matters previously identified and disclosed in connection with the filing of its Form 10-K for fiscal 2005. After consideration of the matters discussed above, the Company has concluded that its controls and procedures were not effective in all respects as of the end of the period covered by this report.

 

The Company disclosed in its Form 10-K for fiscal 2005 the following material weaknesses identified by management.

 

Segregation of Duties

 

Management identified two different areas where the lack of appropriate segregation of duties constituted a material weakness.

 

    Associates in the Company’s accounts payable departments, whose job duties involved processing vendor payments, also had access to vendor master file records. In some instances these associates could also process general ledger entries. As a result, associates could record erroneous journal entries or process fraudulent payments without the Company being assured of detecting such activity.

 

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    Turnover among senior financial management during fiscal 2005 resulted in the temporary performance of duties by some employees that conflicted with their ongoing responsibilities. The ability to change the Company’s chart of accounts was not properly segregated from journal entry processing and proper journal entry review controls were not in place for much of fiscal 2005.

 

Information Technology General Controls

 

    An excessive number of user and system profiles in major computer systems permit access to processes not needed for the performance of the user’s primary job functions.

 

    Proper controls and approval of changes to software applications were not present. Additionally, change control testing was not sufficiently comprehensive to consider the potential effect of system changes on other major application systems and data.

 

Vendor Income

 

During previous fiscal years, the Company attempted to implement additional controls and procedures designed to ensure vendor income was recorded completely, accurately and timely. The changes were not sufficient to correct all weaknesses in the design of such controls. As such, the controls and procedures for vendor income are not sufficient to ensure that all vendor income is properly recorded. In addition, there has been a lack of compliance with these procedures by certain Company associates.

 

(b) Changes in Internal Control over Financial Reporting

 

Subsequent to the filing of the Company’s Form 10-K for fiscal 2005, management has undertaken the following remediation efforts:

 

    Hired a Director of Internal Audit to oversee remediation efforts, conduct ongoing tests of internal controls over financial reporting, and hire internal audit personnel.

 

    Conducted training for all Company Vice Presidents on required controls and documentation for the approval and processing of vendor income transactions. This training session has been followed by meetings between individual purchasing departments and the accounting staff responsible for processing vendor income transactions.

 

    Established journal entry approval controls and limited access to the Company’s chart of accounts and journal entry processing to achieve appropriate segregation of duties.

 

Part II. Other Information

 

This excerpt taken from the IMKTA 10-K filed Dec 8, 2005.

Item 9A. CONTROLS AND PROCEDURES

 

(a) Evaluation of Disclosure Controls and Procedures

 

The Company maintains disclosure controls and procedures designed to provide reasonable assurance of achieving the objective that information in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified and pursuant to the regulations of the Securities and Exchange Commission. Disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act, include controls and procedures designed to ensure the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. It should be noted that the Company’s system of controls and procedures, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met.

 

As required by Rule 13a-15(b) under the Exchange Act, the Company carried out an evaluation, under the supervision and with participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures as of September 24, 2005, the end of the period covered by this report.

 

Based on our evaluation, management concluded that the Company’s disclosure controls and procedures were not effective as of September 24, 2005 because of the material weaknesses described in Management’s Annual Report on Internal Control Over Financial Reporting.

 

(b) Management’s Annual Report on Internal Control Over Financial Reporting

 

Management’s annual report on internal control over financial reporting is included with the financial statements set forth in Item 8 of this annual report on Form 10-K and is incorporated herein by reference.

 

In light of the material weaknesses described above, management performed additional analyses and other procedures to ensure that the Company’s consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles. Accordingly, management believes that the consolidated financial statements included in this report fairly present in all material respects the Company’s financial position, results of operations and cash flows for the periods presented.

 

Remediation Efforts

 

Because of the delayed filing of the Company’s fiscal year 2004 annual report on Form 10-K and of the first quarter fiscal year 2005 quarterly report on Form 10-Q, and because of turnover among senior financial management, management was delayed in beginning its assessment of internal controls for financial reporting until late in the third quarter of this fiscal year. Remediation efforts to date for internal control weaknesses have accordingly been limited. Remediation efforts currently in progress include:

 

    Hiring experienced personnel to establish an internal audit department. The internal audit department will coordinate the remediation of identified control deficiencies and perform ongoing tests of internal controls in accordance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002.

 

    Improving computer access controls by removing access that is not necessary for an associate’s primary job function and documenting proper change control procedures.

 

    Scheduling training for all Company Vice Presidents, buyers and accounting staff whose duties involve the negotiation, approval or processing of vendor income transactions. In addition, the Company is implementing new procedures to correct weaknesses in the design of certain controls surrounding vendor income transactions.

 

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(c) Changes in Internal Control Over Financial Reporting.

 

Certain control and procedures matters were previously identified and disclosed in connection with the Company’s filing of its Form 10-K for fiscal 2004, including material weaknesses in its internal control over financial reporting identified during the prior years’ internal investigation of certain vendor allowances and related accounting. Another material weakness was disclosed related to the financial statement period closing process regarding the recognition of tenant reimbursement of expenses paid by the Company. Finally, a material weakness was disclosed related to accounting for leasehold improvements and incomplete review of certain leasing transactions. The Company made control changes for these matters during the fourth quarter of the 2005 fiscal year as follows:

 

    Tenant reimbursements were analyzed to determine such expenses were properly recognized in fiscal year 2005 and procedures were implemented to improve the billing and collection of such expenses.

 

    The Company examined all of its lease agreements for proper revenue recognition and treatment of leasehold improvements. Procedures were established to monitor new lease agreements and changes made to existing lease agreements.

 

This excerpt taken from the IMKTA 10-Q filed Aug 4, 2005.

Item 4. CONTROLS AND PROCEDURES

 

The Company maintains disclosure controls and procedures designed to provide reasonable assurance of achieving the objective that information in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified and pursuant to the regulations of the Securities and Exchange Commission. Disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act, include controls and procedures designed to ensure the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. It should be noted that the Company’s system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met.

 

As required by SEC Rule 13a-15(b), the Company carried out an evaluation, under the supervision and with participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures as of June 25, 2005, the end of the period covered by this report. In making this evaluation, it considered matters previously identified and disclosed in connection with the filing of its Form 10-K for fiscal 2004, including the related weaknesses in its internal control over financial reporting identified during the recently completed internal investigation of certain vendor allowances and related accounting. After consideration of the matters discussed above, the Company has concluded that its controls and procedures were not effective in all respects as of the end of the period covered by this report.

 

As was discussed in the Company’s Form 10-K for fiscal 2004, the Company delayed the filing of its Form 10-K for the fiscal year ended September 25, 2004 due to its internal investigation of certain vendor allowances and related accounting in prior periods. In February 2005, the Company filed its fiscal 2004 Form 10-K containing certain restated financial statements and related information for the years ended September 27, 2003 and September 28, 2002 to reflect the proper recognition of vendor allowances in the appropriate accounting periods and to correct the improper accounting for certain revenue and expense items and correcting certain accounting errors related to certain lease transactions in these periods. The Company also filed Forms 10-Q/A for the fiscal quarters ended December 27, 2003, March 27, 2004 and June 26, 2004 to reflect the restatement of its consolidated financial statements included therein, the notes thereto, and related disclosures for such fiscal periods. As a result of the delays created by the internal investigation and restatement, the Company was delayed in the filing of its Form 10-Q for the fiscal quarter ended December 25, 2004.

 

As was disclosed by the Company in its Form 10-K for fiscal 2004, the errors giving rise to the restatements related to the recognition of certain vendor allowances in the Company’s financial statements, the recording of certain other revenue and expense items in the improper accounting period principally due to errors in the financial statement closing process, and errors in the accounting for certain lease transactions.

 

The errors related to the recognition of vendor allowances occurred because of a variety of factors including incomplete or inaccurate information concerning vendor allowances provided internally by certain Company associates dealing with vendors, due in certain instances to inappropriate actions of certain former officers of the Company, and the complexity of guidance relating to the accounting for vendor allowances. Prior to and at the beginning of fiscal 2004, the Company implemented additional controls and procedures designed to ensure that information regarding vendor allowances provided internally was complete and accurate, including new requirements regarding the signing of vendor invoices and new approvals for vendor invoices and contracts with vendors, however such controls did not address the reporting or disclosure of previously recorded transactions. The Company believes that these additional controls and procedures substantially corrected any material weakness in existence in prior years relating to the recognition of vendor allowances.

 

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In reviewing its controls following the internal investigation, the Company determined that additional training regarding controls over the accounting for vendor allowances is necessary for its accounting and other staff dealing with vendor allowances. Further, the Company has concluded that there were material weaknesses in its internal controls for financial reporting relating to its period closing process and particularly related to its systems and processes between the Company’s accounting department and its real estate department regarding the recognition of tenant reimbursements of expenses paid by the Company. In addition, in a review of its lease transactions, the Company identified accounting errors related to certain lease transactions. These errors resulted from a lack of understanding and communication of the Company’s accounting policies related to accounting for leasehold improvements, incomplete reviews of such transactions and the complexity of guidance for lease accounting.

 

In order to remediate the remaining weaknesses in internal controls, the Company has reviewed the staffing functions in its accounting and real estate departments, including monitoring of compliance with accounting policies and procedures. The Company is hiring additional staff to supplement existing resources. Further, the Company is providing additional training to its associates. These changes, among others, will allow the accounting department to more closely monitor vendor allowance transactions, its real estate billing processes and lease transactions, and to achieve a more accurate financial statement close and reconciliation process.

 

In connection with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, the Company will document and test its systems of internal controls for financial reporting in order to provide the basis for evaluation and report on these systems as of the end of its 2005 fiscal year. This documentation and testing is in process and will be affected as to scope and timing by the additional controls described above.

 

At this time the Company has determined that it is probable that management’s future assessment of internal controls will conclude that the Company will continue to have a material weakness or weaknesses, although the complete extent of any such material weakness or weaknesses has not been fully determined. If material weaknesses exist, management will be required to conclude, and report in its fiscal 2005 Form 10-K, that its internal control over financial reporting was not effective at September 24, 2005. Likewise, in this event, the Company’s independent registered public accounting firm would be required to issue an adverse opinion on the effectiveness of its internal control over financial reporting.

 

Part II. OTHER INFORMATION

 

This excerpt taken from the IMKTA 10-Q filed May 5, 2005.

Item 4. CONTROLS AND PROCEDURES

 

The Company maintains disclosure controls and procedures designed to provide reasonable assurance of achieving the objective that information in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified and pursuant to the regulations of the Securities and Exchange Commission. Disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act, include controls and procedures designed to ensure the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. It should be noted that the Company’s system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met.

 

As required by SEC Rule 13a-15(b), the Company carried out an evaluation, under the supervision and with participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures as of March 26, 2005, the end of the period covered by this report. In making this evaluation, it considered matters previously identified and disclosed in connection with the filing of its Form 10-K for fiscal 2004, including the

 

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related weaknesses in its internal control over financial reporting identified during the recently completed internal investigation of certain vendor allowances and related accounting. After consideration of the matters discussed above, the Company has concluded that its controls and procedures were not effective in all respects as of the end of the period covered by this report.

 

As was discussed in the Company’s Form 10-K for fiscal 2004, the Company delayed the filing of its Form 10-K for the fiscal year ended September 25, 2004 due to its internal investigation of certain vendor allowances and related accounting in prior periods. In February 2005, the Company filed its fiscal 2004 Form 10-K containing certain restated financial statements and related information for the years ended September 27, 2003 and September 28, 2002 to reflect the proper recognition of vendor allowances in the appropriate accounting periods and to correct the improper accounting for certain revenue and expense items and correcting certain accounting errors related to certain lease transactions in these periods. The Company also filed Forms 10-Q/A for the fiscal quarters ended December 27, 2003, March 27, 2004 and June 26, 2004 to reflect the restatement of its consolidated financial statements included therein, the notes thereto, and related disclosures for such fiscal periods. As a result of the delays created by the internal investigation and restatement, the Company was delayed in the filing of its Form 10-Q for the fiscal quarter ended December 25, 2004.

 

As was disclosed by the Company in its Form 10-K for fiscal 2004, the errors giving rise to the restatements related to the recognition of certain vendor allowances in the Company’s financial statements, the recording of certain other revenue and expense items in the improper accounting period principally due to errors in the financial statement closing process, and errors in the accounting for certain lease transactions.

 

The errors related to the recognition of vendor allowances occurred because of a variety of factors including incomplete or inaccurate information concerning vendor allowances provided internally by certain company associates dealing with vendors, due in certain instances to inappropriate actions of certain former officers of the Company, and the complexity of guidance relating to the accounting for vendor allowances. Prior to and at the beginning of fiscal 2004, the Company implemented additional controls and procedures designed to ensure that information regarding vendor allowances provided internally was complete and accurate, including new requirements regarding the signing of vendor invoices and new approvals for vendor invoices and contracts with vendors, however such controls did not address the reporting or disclosure of previously recorded transactions. The Company believes that these additional controls and procedures substantially corrected any material weakness in existence in prior years relating to the recognition of vendor allowances.

 

In reviewing its controls following the internal investigation, the Company determined that additional training regarding controls over the accounting for vendor allowances is necessary for its accounting and other staff dealing with vendor allowances. Further, the Company has concluded that there were material weaknesses in its internal controls for financial reporting relating to its period closing process and particularly related to its systems and processes between the Company’s accounting department and its real estate department regarding the recognition of tenant reimbursements of expenses paid by the Company. In addition, in a review of its lease transactions, the Company identified accounting errors related to certain lease transactions. These errors resulted from a lack of understanding and communication of the Company’s accounting policies related to accounting for leasehold improvements, incomplete reviews of such transactions and the complexity of guidance for lease accounting.

 

In order to remediate the remaining weaknesses in internal controls, the Company has reviewed the staffing functions in its accounting and real estate departments, including monitoring of compliance with accounting policies and procedures. The Company is considering the hiring of additional staff to supplement existing resources. Further, the Company is providing additional training to its associates. These changes, among others, will allow the accounting department to more closely monitor vendor allowance transactions, its real estate billing processes and lease transactions, and to achieve a more accurate financial statement close and reconciliation process.

 

In connection with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, the Company will document and test its systems of internal controls for financial reporting in order to provide the basis for evaluation and report on these systems as of the end of its 2005 fiscal year. This documentation is in its early stages and will be affected as to scope and timing by the additional controls described above.

 

At this time the Company has determined that it is probable that management’s assessment of internal controls will conclude that the Company will continue to have a material weakness or weaknesses, although the complete extent of any such material weakness or weaknesses has not been fully determined. If material weaknesses exist, management will be required to conclude, and report in its fiscal 2005 Form 10-K, that its internal control over financial reporting was not effective at September 24, 2005. Likewise, in this event, the Company’s independent registered public accounting firm would be required to issue an adverse opinion on the effectiveness of its internal control over financial reporting.

 

 

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Part II. Other Information.

 

This excerpt taken from the IMKTA 10-Q filed Mar 18, 2005.

Item 4. CONTROLS AND PROCEDURES

 

The Company maintains disclosure controls and procedures designed to provide reasonable assurance of achieving the objective that information in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified and pursuant to the regulations of the Securities and Exchange Commission. Disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act, include controls and procedures designed to ensure the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. It should be noted that the Company’s system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met.

 

As required by SEC Rule 13a-15(b), the Company carried out an evaluation, under the supervision and with participation of its management including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures as of December 25, 2004, the end of the period covered by this report. In making this evaluation, it considered matters previously identified and disclosed in connection with the filing of its Form 10-K for fiscal 2004, including the related weaknesses in its internal control over financial reporting identified during the recently completed internal investigation of certain vendor allowances and related accounting. After consideration of the matters discussed above, the Company has concluded that its controls and procedures were not effective in all respects as of the end of the period covered by this report.

 

As was discussed in the Company’s Form 10-K for fiscal 2004, the Company delayed the filing of its Form 10-K for the fiscal year ended September 25, 2004 due to its internal investigation of certain vendor allowances and related accounting in prior periods. In February 2005, the Company filed its fiscal 2004 Form 10-K containing certain restated financial statements and related information for the years ended September 27, 2003 and September 28, 2002 to reflect the proper recognition of vendor allowances in the appropriate accounting periods and to correct the improper accounting for certain revenue and expense items and correcting certain accounting errors related to certain lease transactions in these periods. The Company also filed Forms 10-Q/A for the fiscal quarters ended December 27, 2003, March 27, 2004 and June 26, 2004 to reflect the restatement of its consolidated financial statements included therein, the notes thereto, and related disclosures for such fiscal periods. As a result of the delays created by the internal investigation and restatement, the Company was delayed in preparing this report of Form 10-Q.

 

As was disclosed by the Company in its Form 10-K for fiscal 2004, the errors giving rise to the restatements related to the recognition of certain vendor allowances in the Company’s financial statements, the recording of certain other revenue and expense items in the improper accounting period principally due to errors in the financial statement closing process, and errors in the accounting for certain lease transactions.

 

The errors related to the recognition of vendor allowances occurred because of a variety of factors including incomplete or inaccurate information concerning vendor allowances provided internally by certain company associates dealing with vendors, due in certain instances to inappropriate actions of certain former officers of the Company, and the complexity of guidance relating to the accounting for vendor allowances. Prior to and at the beginning of fiscal 2004, the Company implemented additional controls and procedures designed to ensure that information regarding vendor allowances provided internally was complete and accurate, including new requirements regarding the signing of vendor invoices and new approvals for vendor invoices and contracts with vendors, however such controls did not address the reporting or disclosure of previously recorded transactions. The Company believes that these additional controls and procedures substantially corrected any material weakness in existence in prior years relating to the recognition of vendor allowances.

 

In reviewing its controls following the internal investigation, the Company determined that additional training regarding controls over the accounting for vendor allowances is necessary for its accounting and other staff dealing with vendor allowances. Further, the Company has concluded that there were material weaknesses in its internal controls for financial reporting relating to its period closing process and particularly related to its systems and processes between the Company’s accounting department and its real estate department regarding the recognition of tenant reimbursements of expenses paid by the Company. In addition, in a review of its lease transactions, the Company identified accounting errors related to certain lease transactions. These errors resulted from a lack of understanding and communication of the Company’s accounting policies related to accounting for leasehold improvements, incomplete reviews of such transactions and the complexity of guidance for lease accounting.

 

In order to remediate the remaining weaknesses in internal controls, the Company has reviewed the staffing functions in its accounting and real estate departments, including monitoring of compliance with accounting policies and procedures. The Company is considering the hiring of additional staff to supplement existing resources. Further, the Company is providing additional training to its associates. These changes, among others, will allow the accounting department to more closely monitor vendor allowance transactions, its real estate billing processes and lease transactions, and to achieve a more accurate financial statement close and reconciliation process.

 

In connection with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, the Company will document and test its systems of internal controls for financial reporting in order to provide the basis for evaluation and report on these systems as of the end of its 2005 fiscal year. This documentation is in its early stages and will be affected as to scope and timing by the additional controls described above.

 

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Part II. Other Information.

 

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