Alcoa 1999 Annual Report Download - page 41

Management’s Report to
Alcoa Shareholders
The accompanying financial statements of
Alcoa and consolidated subsidiaries were
prepared by management, which is respon-
sible for their integrity and objectivity. The
statements were prepared in accordance with
generally accepted accounting principles and
include amounts that are based on manage-
ment’s best judgments and estimates. The
other financial information included in this
annual report is consistent with that in the
financial statements.
The company maintains a system of inter-
nal controls, including accounting controls,
and a strong program of internal auditing.
The system of controls provides for appro-
priate procedures that are consistent with
high standards of accounting and adminis-
tration. The company believes that its system
of internal controls provides reasonable
assurance that assets are safeguarded against
losses from unauthorized use or disposition
and that financial records are reliable for use
in preparing financial statements.
Management also recognizes its
responsibility for conducting the company’s
affairs according to the highest standards
of personal and corporate conduct. This
responsibility is characterized and reflected
in key policy statements issued from time to
time regarding, among other things, conduct
of its business activities within the laws of
thehostcountriesinwhichthecompany
operates and potentially conflicting outside
business interests of its employees. The
company maintains a systematic program
to assess compliance with these policies.
Alain J.P. Belda
President and
Chief Executive Officer
Richard B. Kelson
Executive Vice President and
Chief Financial Officer
Audit Committee Report
The Audit Committee of the Board of
Directors, which is composed of five
independent directors, met four times in
1999.Inaddition,thechairmanofthis
committee met with management and
the independent accountants prior to the
announcement of quarterly earnings in
April, July and October.
The Audit Committee oversees Alcoa’s
financial reporting process on behalf
of the Board of Directors. In fulfilling its
responsibility, the committee recommended
to the Board the reappointment of
PricewaterhouseCoopers LLP as the
company’s independent public accountants.
The Audit Committee reviewed with the
Vice President–Environment, Health and
Safety, Audit and Compliance and the
independent accountants the overall scope
and specific plans for their respective audits.
The committee reviewed with management
Alcoa’s annual and quarterly reporting
process, and the adequacy of the company’s
internal controls. Without management
present,thecommitteemetseparately
with the Vice President–Environment,
Health and Safety, Audit and Compliance
and the independent accountants to review
the results of their examinations, their
evaluations of the company’s internal
controls, and the overall quality of Alcoa’s
financial reporting.
Henry B. Schacht
Chairman, Audit Committee
Independent Accountant’s
Report
To the Shareholders
and Board of Directors
Alcoa Inc. (Alcoa)
In our opinion, the accompanying consoli-
dated balance sheet and the related consoli-
dated statements of income and shareholders’
equity and of cash flows present fairly, in
all material respects, the financial position
of Alcoa at December 31, 1999 and 1998,
and the results of its operations and its cash
flows for each of the three years in the period
ended December 31, 1999, in conformity with
accounting principles generally accepted in
the United States. These financial statements
are the responsibility of Alcoa’s management;
our responsibility is to express an opinion
on these financial statements based on our
audits. We conducted our audits of these
statements in accordance with auditing stan-
dards generally accepted in the United States
which require that we plan and perform the
audits to obtain reasonable assurance about
whether the financial statements are free
of material misstatement. An audit includes
examining, on a test basis, evidence support-
ing the amounts and disclosures in the finan-
cial statements, assessing the accounting
principles used and significant estimates
made by management, and evaluating the
overall financial statement presentation. We
believe that our audits provide a reasonable
basis for the opinion expressed above.
600 Grant St., Pittsburgh, Pa.
January 10, 2000, except for Note V,
forwhichthedateisFebruary11,2000.