Toro 2015 Annual Report Download - page 50

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining an adequate system of 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, for The Toro Company and its subsidiaries. This
system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with U.S. generally accepted accounting principles.
The company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted
accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of manage-
ment and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements, and even when deter-
mined to be effective, can only provide reasonable assurance with respect to financial statement preparation and presentation. In addition,
projection of any evaluation of the effectiveness of internal control over financial reporting to future periods is subject to the risk that controls
may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate.
Management, with the participation of the company’s Chairman of the Board and Chief Executive Officer and Vice President, Treasurer and
Chief Financial Officer, evaluated the effectiveness of the company’s internal control over financial reporting as of October 31, 2015. In making
this evaluation, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal
Control – Integrated Framework (2013). Based on this assessment, management concluded that the company’s internal control over financial
reporting was effective as of October 31, 2015. Our internal control over financial reporting as of October 31, 2015, has been audited by
KPMG LLP, an independent registered public accounting firm, as stated in their report, which is included herein.
In the first quarter of 2015, the company acquired substantially all of the assets of the BOSS professional snow and ice management
business of privately held Northern Star Industries, Inc. BOSS represented approximately 19 percent of the company’s total consolidated assets
and 5 percent of the company’s consolidated net sales as of and for the fiscal year ended October 31, 2015. As the acquisition occurred in the
first quarter of 2015, the scope of management’s assessment of the effectiveness of internal control over financial reporting does not include
BOSS. This exclusion is in accordance with the SEC’s general guidance that an assessment of a recently acquired business may be omitted
from the company’s scope in the year of acquisition.
/s/ Michael J. Hoffman
Chairman of the Board and Chief Executive Officer
/s/ Renee J. Peterson
Vice President, Treasurer and Chief Financial Officer
Further discussion of the Company’s internal controls and procedures is included in Part II, Item 9A, ‘‘Controls and Procedures’’ of this report.
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