Black & Decker 2011 Annual Report Download - page 50

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38
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company incorporates by reference the material captioned “Market Risk” in Item 7 and in Note I, Derivative Financial
Instruments, of the Notes to Consolidated Financial Statements in Item 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Item 15 for an index to Financial Statements and Financial Statement Schedules. Such Financial Statements and Financial
Statement Schedules are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
The management of Stanley Black & Decker (the “Company”) is responsible for establishing and maintaining adequate internal
control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance
with accounting principles generally accepted in the United States of America. Because of its inherent limitations, internal control
over financial reporting may not prevent or detect misstatements.
In September 2011, Stanley Black & Decker acquired Niscayah Group AB (“Niscayah”) for $984.5 million. Since Stanley Black &
Decker has not yet fully incorporated the internal controls and procedures of Niscayah into Stanley Black & Decker’s internal control
over financial reporting, management excluded this business from its assessment of the effectiveness of internal control over financial
reporting as of December 31, 2011. Niscayah accounted for $1,577 million and $978 million of Stanley Black & Decker’s total assets
and net assets, respectively, as of December 31, 2011 and $303 million and $6 million of revenue and net income, respectively, for the
year then ended.
Management has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2011, with
the exception of the previously mentioned Niscayah acquisition. In making its assessment, management has utilized the criteria set
forth by the Committee of Sponsoring Organizations (“COSO”) of the Treadway Commission in Internal Control — Integrated
Framework. Management concluded that based on its assessment, the Company’s internal control over financial reporting was
effective as of December 31, 2011. Ernst & Young LLP, the auditor of the financial statements included in this annual report, has
issued an attestation report on the registrant’s internal control over financial reporting, a copy of which appears on page 48.
Under the supervision and with the participation of management, including the Company’s President and Chief Executive Officer and
its Senior Vice President and Chief Financial Officer, the Company has, pursuant to Rule 13a-15(b) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), evaluated the effectiveness of the design and operation of its disclosure controls and
procedures (as defined under Rule 13a-15(e) of the Exchange Act). Based upon that evaluation, the Company’s President and Chief
Executive Officer and its Senior Vice President and Chief Financial Officer have concluded that, as of December 31, 2011, the
Company’s disclosure controls and procedures are effective. There has been no change in the Company’s internal control over
financial reporting that occurred during the fiscal year ended December 31, 2011 that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial reporting aside from the previously mentioned acquisition of
Niscayah. As part of its ongoing integration activities, the Company is continuing to incorporate its controls and procedures into
Niscayah.
ITEM 9B. OTHER INFORMATION
None