Avnet 2013 Annual Report Download - page 35

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Table of Contents
Many of the Company’
s subsidiaries, on occasion, purchase and sell products in currencies other than their functional currencies. This
subjects the Company to the risks associated with fluctuations in foreign currency exchange rates. The Company reduces this risk by utilizing
natural hedging (offsetting receivables and payables) as well as by creating offsetting positions through the use of derivative financial
instruments, primarily forward foreign exchange contracts with maturities of less than sixty days. The Company continues to have exposure to
foreign currency risks to the extent they are not hedged. The Company adjusts all foreign denominated balances and any outstanding foreign
exchange contracts to fair market value through the consolidated statements of operations. Therefore, the market risk related to foreign exchange
contracts is offset by changes in valuation of the underlying items being hedged. The asset or liability representing the fair value of foreign
exchange contracts is classified in the captions “other current assets” or “accrued expenses and other,”
as applicable, in the accompanying
consolidated balance sheets. A hypothetical 10% change in currency exchange rates under the contracts outstanding at June 29, 2013
would
result in an increase or decrease of approximately $20.6 million
to the fair value of the forward foreign exchange contracts, which would
generally be offset by an opposite effect on the related hedged positions.
Item 8. Financial Statements and Supplementary Data
The financial statements and supplementary data are listed under Item 15 of this Report.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
The Company’
s management, including its Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the
Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-
15(e) under the Securities Exchange Act of
1934 (the “Exchange Act”)) as of the end of the reporting period covered by this report on Form 10-
K. Based on such evaluation, the Chief
Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report on Form 10-
K, the
Company’
s disclosure controls and procedures are effective such that material information required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified by the
Securities and Exchange Commission’s rules and forms and is accumulated and communicated to management, including the Company’
s
principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
During the fourth quarter of fiscal 2013 , there were no changes to the Company’
s internal control over financial reporting (as defined in
Rule 13a-15(f) of the Exchange Act) that have materially affected, or are reasonably likely to materially affect, the Company’
s internal control
over financial reporting.
Management’s Report on Internal Control Over Financial Reporting
The Company’
s management, including its Chief Executive Officer and Chief Financial Officer, is responsible for establishing and
maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15(d)-
15(f) under the Exchange Act. The
Company’
s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States
of America. Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, controls
may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.
Management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of June 29, 2013
. In
making this assessment, management used the 1992 framework established in Internal Control — Integrated Framework
issued by the
Committee of Sponsoring Organizations of the Treadway Commission and concluded that the Company maintained effective internal control
over financial reporting as of June 29, 2013 .
The Company’s independent registered public accounting firm, KPMG LLP, has audited the effectiveness of the Company’
s internal
controls over financial reporting as of June 29, 2013 , as stated in its audit report which is included herein.
Item 9B. Other Information
Not applicable.
33