Statement of Profit and Loss for the year ended December 31, 2007
EX-10.29 8 ex10-29.htm EXHIBIT 10.29 ex10-29.htm
Exhibit 10.29
FX rate = | ||||||||||||||||||||||||||
QUALYTEXTIL SA - reconciliation of Brazilian GAAP to US GAAP | 1.94720 | (g) | ||||||||||||||||||||||||
Statement of Profit and Loss for the year ended December 31, 2007 | ||||||||||||||||||||||||||
Brazilian GAAP | | Reclass- | As | Translated | Adjustments | US GAAP | ||||||||||||||||||||
per Audit | Notes | ifications | reclassified | to USD | Notes | in USD | in USD | |||||||||||||||||||
report in BRL | in BRL | |||||||||||||||||||||||||
Gross Income | ||||||||||||||||||||||||||
Gross sales | 22,104,656 | 22,104,656 | ||||||||||||||||||||||||
Cancellation and taxes on sales | (5,517,669 | ) | (5,517,669 | ) | ||||||||||||||||||||||
Net sales | 16,586,987 | 0 | 16,586,987 | 8,518,379 | 0 | 8,518,379 | ||||||||||||||||||||
Cost of sales | 8,750,612 | 8,750,612 | 4,493,946 | (f) | (169,642 | ) | 4,324,304 | |||||||||||||||||||
Gross profit | 7,836,375 | 0 | 7,836,375 | 4,024,433 | 169,642 | 4,194,075 | ||||||||||||||||||||
Operating expenses (income): | ||||||||||||||||||||||||||
General and administrative expenses | 2,193,850 | (a) | 27,344 | 2,221,194 | 1,140,712 | (e) | 215,174 | 1,355,886 | ||||||||||||||||||
Selling expenses | 2,785,569 | 2,785,569 | 1,430,551 | 1,430,551 | ||||||||||||||||||||||
Net financial | 667,297 | (b) | (1,320,714 | ) | (653,417 | ) | (335,567 | ) | (c ) | 335,567 | 0 | |||||||||||||||
Depreciation | 117,405 | 117,405 | 60,294 | 60,294 | ||||||||||||||||||||||
Other (income) expense | 27,344 | (a) | (27,344 | ) | 0 | 0 | ||||||||||||||||||||
Operating result | 2,044,910 | 1,320,714 | 3,365,624 | 1,728,443 | (381,099 | ) | 1,347,344 | |||||||||||||||||||
Interest expense | (b) | (1,325,238 | ) | (1,325,238 | ) | (680,586 | ) | (680,586 | ) | |||||||||||||||||
Interest income | (b) | 4,524 | 4,524 | 2,323 | 2,323 | |||||||||||||||||||||
Non operating other income / expense | 27,564 | 27,564 | 14,155 | 14,155 | ||||||||||||||||||||||
Profit (loss) for the year before income tax and social contribution | 2,072,474 | 0 | 2,072,474 | 1,064,335 | (381,099 | ) | 683,236 | |||||||||||||||||||
Provision for income tax and social contribution | 470,417 | 470,417 | 241,586 | (d) | (137,393 | ) | 104,193 | |||||||||||||||||||
Profit (loss) for the year | 1,602,057 | 0 | 1,602,057 | $ | 822,749 | $ | (243,706 | ) | $ | 579,043 |
Exhibit 10.29
NOTES TO: QUALYTEXTIL SA - Reconciliation of Brazilian GAAP to US GAAP
Year ended December 31, 2007
(a) Reclassify provison for bad debt allowance to administrative expense | ||||
(b) Reclassify interest expense and interest income out of "net financial" Under Brazilian GAAP, the category "net financial" includes interest expense and interest income and government incentives on VAT taxes. | ||||
(c) Not used | ||||
(d) Government income tax incentives classified as capital contribution for Brazilian GAAP | (176,037) | |||
Adjust tax accrual to 15.25% of final US GAAP pretax income | 38,644 | |||
net tax adjustment | (d) | (137,393) | ||
(e) Net adjustment to administrative expenses | ||||
Legal fees not accrued under Brazilian GAAP | 58,933 | |||
Management compensation not accrued under brazilian GAAP | 107,266 | |||
Misc. labor accrual | 5,646 | |||
Installment plan taxes not accrued - outsourcing sales contractor | 4,623 | |||
Installment plan taxes not accrued - outsourcing labor contractor | 15,776 | |||
Outsourcing labor contractor invoices recorded one month in arrears - accrue December 2007 | 22,930 | |||
(e) Net adjustment to administrative expenses | (e) | 215,174 | ||
(f) Net adjustment to cost of goods sold | ||||
inventory reserve not recorded under Brazilian GAAP - slow moving raw material | 73,367 | |||
inventory reserve not recorded under Brazilian GAAP - reserve for rework returned finished goods | 29,295 | |||
reclassify a government VAT tax incentive (ICMS) as a reduction of cost of goods sold | (335,567) | |||
Outsourcing labor contractor invoices recorded one month in arrears - accrue December 2007 | 48,106 | |||
Installment plan taxes not accrued - outsourcing labor contractor | 15,157 | |||
(f) Net translation of the adjustment to cost of goods sold from BRL into USD | (f) | (169,642) | ||
(g) The 2007 statement of profit and loss has been derived from the internally generated monthly financial statements. These financial statements have been translated using the rate applicable to each month. The exchange rate of $1.94720 represents a weighted average of the monthly rates used. |