Rayovac 2015 Annual Report Download - page 87

Treadway Commission (“COSO”) in the Internal Control- Integrated Framework (2013). SB/RH Holdings’
management has concluded that, as of September 30, 2015, its internal control over financial reporting is
effective based on these criteria. Under guidelines established by the SEC, companies are allowed to exclude
acquisitions from their first assessment of internal control over financial reporting following the date of the
acquisition. The Company’s management excluded the auto care business acquired in the acquisition of Armored
AutoGroup Parent, Inc. (“AAG”), which was completed on May 21, 2015, from its assessment of the
effectiveness of internal control over financial reporting. The total assets of $1,543.1 million and the total net
sales of $160.5 million associated with AAG are included in the consolidated financial statements of the
Company as of and for the year ended September 30, 2015.
Changes in Internal Control Over Financial Reporting. There was no change in our internal control over
financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as
amended) that occurred during our fourth fiscal quarter that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
AAG Acquisition. On May 21, 2015, we completed our acquisition of AAG. As permitted by the guidelines
established by the staff of the SEC for newly acquired businesses, management has excluded AAG and its
subsidiaries from its assessment of the effectiveness of our internal control over financial reporting. As
previously reported, in connection with the preparation of the financial statements of Armored AutoGroup In.
(“AAG Sub”), a subsidiary of AAG, for the year ended December 31, 2014, certain significant deficiencies in
AAG Sub’s internal controls became evident to its management that, in the aggregate, represent a material
weakness. None of the deficiencies individually represented a material weakness, and all resulting adjustments,
none of which were material, were reflected in AAG’s consolidated financial statements for the year ended
December 31, 2014. In connection with the AAG acquisition, we were aware of and reviewed these deficiencies
as part of our due diligence process and determined that they were not material to us at the time. We will
continue to evaluate and monitor these deficiencies as we integrate AAG into our control environment following
the acquisition and have taken steps to mitigate and address the deficiencies.
Limitations on the Effectiveness of Controls. SB/RH Holdings’ management, including our Chief Executive
Officer and Chief Financial Officer, does not expect that SB/RH Holdings disclosure controls and procedures or
SB/RH Holdings’ internal controls over financial reporting will prevent all errors and all fraud. A control system,
no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a control system must reflect the fact that there
are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the
inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, within SB/RH Holdings have been detected.
ITEM 9B. OTHER INFORMATION
None.
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