Rayovac 2010 Annual Report Download - page 95

As of September 30, 2010, the potential change in fair value of outstanding foreign exchange derivative
instruments, assuming a 10% unfavorable change in the underlying exchange rates would be a loss of $63.4
million. The net impact on reported earnings, after also including the effect of the change in the underlying
foreign currency-denominated exposures, would be a net gain of $8.9 million. The same hypothetical shift in
exchange rates as of September 30, 2009, would have resulted in a loss of $10.8 million. The net impact on
reported earnings, after also including the effect of the change in the underlying foreign currency-denominated
exposures, would be a net gain of $10.8 million.
As of September 30, 2010, the potential change in fair value of outstanding commodity price derivative
instruments, assuming a 10% unfavorable change in the underlying commodity prices would be a loss of $3.3
million. The net impact on reported earnings, after also including the reduction in cost of one year’s purchases of
the related commodities due to the same change in commodity prices, would be a net loss of $0.3 million. The
same hypothetical shift in commodity prices as of September 30, 2009 would have resulted in a loss of $1.5
million. The net impact on reported earnings, after also including the reduction in cost of one year’s purchases of
the related commodities due to the same change in commodity prices, would be a net gain of $0.8 million.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required for this Item is included in this Annual Report on Form 10-K on pages 70 through
133, inclusive and is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our principal
executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and
procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) pursuant to Rule
13a-15(b) under the Exchange Act as of the end of the period covered by this Annual Report on Form 10-K.
Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such
date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by
us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in applicable SEC rules and forms, and is accumulated and communicated to
the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as
appropriate to allow timely decisions regarding required disclosure.
Management’s Annual Report on Internal Control over Financial Reporting. The Company’s management
is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act). The Company’s management assessed the effectiveness
of its internal control over financial reporting as of September 30, 2010. In making this assessment, the
Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission (“COSO”) in Internal Control-Integrated Framework. The Company’s management has
concluded that, as of September 30, 2010, its internal control over financial reporting is effective based on these
criteria. The Company’s management excluded Russell Hobbs from its assessment of the effectiveness of
internal control over financial reporting, as the Company may omit an assessment of an acquired business’s
internal control over financial reporting from its assessment of the registrant’s internal control; however, it may
not extend beyond one year from the date of acquisition, nor may such assessment be omitted from more than
one annual management report on internal control over financial reporting. The total assets of $863 million and
total net sales of $238 million associated with Russell Hobbs are included in the consolidated financial
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