Supervisory Board report

Major decisions of the Corporate Executive Board require the approval of the Supervisory Board, including:

• issuing shares and acquisitions, redemptions, repurchases of our shares and any reduction in our issued and outstanding share capital;
• allocating duties within the Corporate Executive Board and the adoption or amendment of the charter of the Corporate Executive Board;
• significant changes in the identity or the nature of the Company or its enterprise.

Further the Corporate Executive Board must submit for approval to the Supervisory Board:

• the operational and financial objectives of the Company;
• the strategy designed to achieve those objectives; and
• the parameters to be applied in relation to the strategy, for example in respect of financial ratios.

Activities of the Supervisory Board

The Supervisory Board meets at least six times a year. In practice six times a year two days are scheduled during which one or two Supervisory Board meetings and one Audit Committee meeting are held. At least at three of these occasions a Remuneration Committee meeting and a Selection and Appointment Committee meeting are scheduled. In addition the Supervisory Board meets once a year before the annual General Meeting of Shareholders and if necessary further meetings or conference calls are held. Twice a year the meetings are held in the United States at one of our U.S. companies. The intention is to also hold a meeting in at least one other arena each year.

Most Supervisory Board meetings are attended by the members of the Corporate Executive Board. The Supervisory Board may also hold meetings with the CEO only or private meetings with Supervisory Board members only. Once a year in a private meeting the Supervisory Board assesses its own performance, that of its committees and its individual members, as well as the performance of the Corporate Executive Board and its individual members. If appropriate, the outcome is discussed with the CEO and the other members of the Corporate Executive Board. When necessary, the Chairman and other members of the Supervisory Board have contact with the CEO and other members of the Corporate Executive Board outside the scheduled meetings of the Supervisory Board.

In 2005 the Supervisory Board held fourteen meetings, of which thirteen took place on six occasions of two subsequent days. Two Supervisory Board meetings were held in Charlotte, North Carolina during a two day visit in June, one of which was dedicated to an update and review of U.S. Foodservice. Two meetings were held at Stop & Shop in Quincy, Massachusetts in October, one of which was dedicated to an update and review of our U.S. retail companies. In another meeting there was a specific update on the repositioning program at Albert Heijn. The Supervisory Board is regularly updated and consulted on the general status of the affairs of the Company. In addition to the regular updates on strategy and related topics, one of the Supervisory Board meetings in August was dedicated to the Ahold group strategy.

The Supervisory Board focused on the execution and progress of the Road to Recovery strategy. Approval was given to the reorganization of U.S. Foodservice into two operating companies, each focused on a specific customer segment. One for the "broadline" business and one for the "multi-unit" business. (See "Management's discussion & analysis" in this annual report for a further description of the strategy.) Other topics discussed were IT strategy, IT outsourcing agreements and next generation sourcing.

The Supervisory Board focused on the execution and progress of the Road to Recovery strategy. Approval was given to the reorganization of U.S. Foodservice into two operating companies, each focused on a specific customer segment. One for the "broadline" business and one for the "multi-unit" business. (See "Management's discussion & analysis" in this annual report for a further description of the strategy.) Other topics discussed were IT strategy, IT outsourcing agreements and next generation sourcing.

The Supervisory Board was regularly updated on the major legal proceedings and held a special meeting to approvethe settlement in the securities class action. Mainly through the Audit Committee, regular updates were provided onthe operation of the internal control and risk management systems and corporate governance with a focus on compliance with the Dutch Corporate Governance Code and the project to comply with the requirements of Section 404 of the Sarbanes Oxley Act as of December 31, 2006. Reports from the whistleblower procedure and the necessary follow-up were addressed. The quarterly results and press releases were discussed and the budget 2006 was approved. The agenda for the annual General Meeting of Shareholders on May 18, 2005 as well as the annual report 2004 were approved.

The Supervisory Board discussed management development, succession and remuneration policy, as well as the individual compensation of Corporate Executive Board members. Nominations for new Supervisory Board members appointed on May 18, 2005 were approved. The nomination of the CFO and a new Supervisory Board member for appointment at the annual General Meeting of Shareholders on May 18, 2006 were approved.

One private meeting was dedicated to self-assessment and assessment of the performance of the Corporate Executive Board and its individual members. As part of the self- assessment the profile and composition of the Supervisory Board and its committees were discussed.

No Supervisory Board member was frequently absent from the meetings. The Supervisory Board confirms that as of March 28, 2006 all Supervisory Board members are independent within the meaning of provision III.2.2 of the Dutch Corporate Governance Code and the applicable U.S. securities regulations and NYSE listing standards.

Changes to the composition of the Supervisory Board

There were several changes to the composition of our Supervisory Board in 2005.

Dr. Cynthia Schneider and Lodewijk de Vink retired at the General Meeting of Shareholders on May 18, 2005, which marked the end of their respective terms.

As announced in August 2004, Karel Vuursteen retired as member of the Supervisory Board at the General Meeting of Shareholders on May 18, 2005 because of personal circumstances.

The Supervisory Board is grateful for the dedication and wisdom with which these members have fulfilled their tasks in the years they served in the Supervisory Board.

Derk Doijer was appointed to the Supervisory Board at the General Meeting of Shareholders on May 18, 2005. He is serving as Chairman of the Remuneration Committee and member of the Audit Committee.

Professor Myra Hart was appointed to the Supervisory Board as of May 18, 2005. She is a member of the Remuneration Committee and the Selection and Appointment Committee.Stephanie Shern was appointed to the Supervisory Board as of May 18, 2005. She is a member of the Audit Committee and the Remuneration Committee.

Benno Hoogendoorn was appointed to the Supervisory Board as of May 18, 2005. The Supervisory Board regrets that Benno Hoogendoorn, for medical reasons, resigned on September 29, 2005 as member of the Supervisory Board, member of the Selection and Appointment Committee and Chairman of the Remuneration Committee.

Induction

The members that joined the Supervisory Board in 2005 attended a full-day induction program at our offices in Zaandam or Amsterdam. Senior management briefed the members of the Supervisory Board on their responsibilities as members of the Supervisory Board and the financial, legal and reporting affairs of the Company and its businesses. Members of the Supervisory Board visited several arenas and other parts of the business during the year.

Remuneration

The remuneration of the members of the Supervisory Board is determined by the General Meeting of Shareholders and currently the annual remuneration is as follows:

In addition, for each meeting of the Supervisory Board and the Audit Committee, each member receives an attendance fee of EUR 1,250, or EUR 3,000 in case the meeting is held in a location that requires intercontinental travel from the residence of a member.

For detailed information on the individual remuneration of Supervisory Board members, see Note 8 to our consolidated financial statements included in this annual report.

Retirement and reappointment schedule

Committees of the Supervisory Board

The Supervisory Board has established three permanent committees, the composition of which is reflected in the following table.

Audit Committee

The Audit Committee assists the Supervisory Board in its responsibilities to oversee our financing, our consolidated financial statements, the financial reporting process and the system of internal business controls and risk management. The Audit Committee has six meetings per year. In addition, the Audit Committee has conference calls before the release of each quarterly trading statement. If necessary other Audit Committee meetings are called. The members of the Corporate Executive Board, the Chief Accounting Officer, the Chief Internal Audit Officer and the external auditor are invited to the Audit Committee meetings. Other members of senior staff are invited when the Audit Committee finds it necessary or appropriate.

In 2005 the Audit Committee had six meetings, one before each quarterly results release and two other meetings. In addition four conference calls were held prior to the release of each quarterly trading statement. Four other conference calls were held on matters relating to the closing of the 2004 accounts and one on the solicitations to sell notes announced on October 11, 2005. At the end of the regular meetings, the Audit Committee had several individual meetings with the CEO, CFO, interim CFO, the Chief Internal Audit Officer and the external auditor.

The Audit Committee considered the quarterly trading statements and results release. The Audit Committee reviewed the annual report 2004 and recommended it for approval to the Supervisory Board. The Audit Committee received regular updates on internal controls and the progress on the project to comply with the requirements of Section 404 of the Sarbanes Oxley Act as of December 31, 2006. The Audit Committee closely monitored the Company's efforts to improve and strengthen its internal controls, including with respect to the two material weaknesses and other internal control issues which were reported in the 2004 annual report. The 2004 material weaknesses related to accounting for income tax provisions and to U.S. GAAP financial statement reconciliation process and no longer exist as of the end of the period covered by this annual report. Every quarter a report from the whistleblower procedure was provided to the Audit Committee and discussed with the Corporate Executive Board in the meetings. Regularly the Audit Committee was informed on litigation and the related exposure. The Audit Committee was updated on IT whereby information strategy, information architecture, outsourcing, information management governance and information security were addressed. The Audit Committee assessed the independence and performance of the external auditor and for that purpose pre-approved the fees for audit and permitted non-audit services to be performed by the external auditors as negotiated by the Corporate Executive Board. It reviewed the internal audit plan. The Audit Committee approved the solicitations to sell notes announced on October 11, 2005. In December the Audit Committee considered the budget for 2006. The Audit Committee also reviewed the charter for the Audit Committee and concluded that it was adequate.

The composition of the Audit Committee changed during 2005, as Lodewijk de Vink and Rene Dahan resigned from the Audit Committee and Derk Doijer and Stephanie Shern were appointed to the Audit Committee in May 2005.

Remuneration Committee

The Remuneration Committee met nine times in 2005. The CEO was invited to all of these meetings. For a report on remuneration and the activities of the Remuneration Committee, see the "Remuneration" section of this annual report.

Selection and Appointment Committee

The Selection and Appointment Committee met seven times in 2005 and its main focus was the selection of a new CFO and replacements of the members of the Supervisory Board who retired in 2005. The Selection and Appointment Committee was further engaged in a search for an additional Supervisory Board member and in the 2006 Management Development Plan.

In May 2005, Dr. Cynthia Schneider retired from the Selection and Appointment Committee. Dr. Myra Hart and Benno Hoogendoorn were appointed to the Selection and Appointment Committee. Benno Hoogendoorn resigned from the Selection and Appointment Committee on September 29, 2005 due to medical reasons.

This annual report and the 2005 consolidated financial statements, audited by Deloitte Accountants B.V., have been presented to the Supervisory Board. The consolidated financial statements were discussed with the Audit Committee in the presence of the Corporate Executive Board and the external auditor. The Supervisory Board endorses this annual report. The Supervisory Board recommends that the General Meeting of Shareholders adopts the 2005 consolidated financial statements included in this annual report.

Supervisory Board

Amsterdam, the Netherlands, March 28, 2006