UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)
[x]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
       For the quarterly period ended March 31, 1999

[ ]  TRANSITION REPORT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934
      For the Transition Period from _______________ TO _______________.

                                    333-44747
                            (Commission File Numbers)

                        ROSEDALE DECORATIVE PRODUCTS LTD.
             (Exact name of registrant as specified in its charter)

<TABLE>
<CAPTION>
<S>                                                                                                 <C> 
                  Ontario, Canada                                                                    5110
         (State or other jurisdiction of                                                            (Primary Standard Industrial
         incorporation or organization)                                                             Classification Code Number)
</TABLE>


                               731 Millway Avenue
                                Concord, Ontario
                                 Canada L4K 3S8
                    (Address of principal executive offices)

                                 (619) 794-2602
              (Registrants' telephone number, including area code)

                                 Not Applicable
              (Former name, former address and former fiscal year,
                         if changed since last report)

         Indicate  by check  mark  whether  the  Registrants  (1) have filed all
reports  required to be filed by Section 13 or 15(d) of the Securities  Exchange
Act of 1934 during the preceding 12 months (or for such shorter  period that the
Registrants  were required to file such  reports),  and (2) have been subject to
such filing requirements for the past 90 days. YES [ X ] NO[ ]

         As of March 31, 1999,  2,765,000  shares of Common Stock,  no par value
per share, of Rosedale Decorative Products Ltd. were issued and outstanding.



<PAGE>
                                     PART I
                              FINANCIAL INFORMATION

                        ROSEDALE DECORATIVE PRODUCTS LTD.

                    INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                                 MARCH 31, 1999

                                   (Unaudited)


                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
<S>                                                   <C> <C>               <C> <C>                                          <C> <C>
       Interim Consolidated Balance Sheet as of March 31, 1999 and December 31, 1998                                         4 - 5

       Interim Consolidated Statement of Income for the period ended March 31, 1999                                          6

       Interim Consolidated Statement of Cash Flows for the period ended March 31, 1999                                      7 - 8

       Interim Consolidated Statement of Stockholders' Equity for the period ended
              March 31, 1999                                                                                                 9

       Notes to Interim Consolidated Financial Statements                                                                    10 - 25

</TABLE>


















<PAGE>
ROSEDALE DECORATIVE PRODUCTS LTD.
Interim Consolidated Balance Sheet
As of March 31, 1999 and December 31, 1998
(Amounts expressed in US dollars)
(Unaudited)
<TABLE>
<CAPTION>
                                                                                      1999                1998

                                                                                        $                   $ 

                                                        ASSETS
       CURRENT ASSETS

<S>                                                                              <C>                 <C>      
           Cash                                                                  3,296,459           3,417,414
           Accounts receivable (note 3)                                          5,418,360           3,696,050
           Inventory (note 4)                                                    7,127,000           7,229,444
           Prepaid expenses and sundry assets                                      275,175             288,764
           Income taxes recoverable                                                 28,510              38,738


                                                                                16,145,503          14,670,410


       LOANS RECEIVABLE FROM AFFILIATED COMPANIES
           (note 5)                                                                 10,333               1,933

       DEFERRED PRODUCT COSTS (note 6)                                             817,877             851,202

       DEFERRED POLICY COSTS (note 7)                                              272,884             268,506

       MORTGAGES RECEIVABLE (note 8)                                               327,089             321,841

       PROPERTY, PLANT AND EQUIPMENT (note 9)                                    2,277,860           2,160,433


                                                                                19,851,546          18,274,325

</TABLE>







   The accompanying notes are an integral part of these financial statements.




<PAGE>
ROSEDALE DECORATIVE PRODUCTS LTD.
Interim Consolidated Balance Sheet
As of March 31, 1999 and December 31, 1998
(Amounts expressed in US dollars)
(Unaudited)
<TABLE>
<CAPTION>
                                                                                      1999                1998

                                                                                        $                   $ 

                                                      LIABILITIES
       CURRENT LIABILITIES

<S>                                <C>                                           <C>                 <C>      
           Bank indebtedness (note 10)                                           4,288,782           3,327,022
           Accounts payable and accrued expenses
                (note 11)                                                        4,740,991           4,581,034
           Income taxes payable                                                          -                   -
           Current portion of long-term debt (note 12)                                 -                77,076


                                                                                 9,029,773           7,985,132

       LONG-TERM DEBT (note 12)                                                    966,461             950,956

       ADVANCES FROM RELATED PARTIES (note 13)                                   1,171,857           1,174,987

       DEFERRED INCOME TAXES                                                       220,587             156,786


                                                                                11,388,679          10,267,861


                                                 STOCKHOLDERS' EQUITY

       CAPITAL STOCK (note 14)                                                   5,013,883           5,013,883

       ADDITIONAL PAID-IN CAPITAL (note 14)                                        142,314             142,314

       CUMULATIVE TRANSLATION ADJUSTMENT                                          (257,706)           (388,341)

       RETAINED EARNINGS                                                         3,564,376           3,238,608


                                                                                 8,462,867           8,006,464


                                                                                19,851,546          18,274,325
</TABLE>











   The accompanying notes are an integral part of these financial statements.





<PAGE>
ROSEDALE DECORATIVE PRODUCTS LTD.
Interim Consolidated Statement of Income
For the period ended March 31,
(Amounts expressed in US dollars)
(Unaudited)
<TABLE>
<CAPTION>
                                                                              Three-months        Three-months
                                                                                 March 31,           March 31,
                                                                                      1999                1998

                                                                                        $                   $ 

<S>                                                                              <C>                 <C>      
       SALES                                                                     5,047,457           6,506,589

       COST OF SALES                                                             2,924,443           4,078,108


       GROSS PROFIT                                                              2,123,014           2,428,481


       OPERATING EXPENSES

           General and administrative                                              596,588             522,362
           Selling                                                                 561,516             510,243
           Design studio                                                           192,749             173,860
           Book development costs                                                  123,252              50,892
           Amortization                                                            187,542             157,793


       TOTAL OPERATING EXPENSES                                                  1,661,647           1,415,150


       OPERATING INCOME                                                            461,367           1,013,331

           Interest expense                                                         27,587             131,181


       INCOME BEFORE INCOME TAXES                                                  433,780             882,150

           Income taxes (note 15)                                                  108,011             353,000


       NET INCOME                                                                  325,768             529,150


       Net Income Per Share (note 14)                                                 0.12                0.24


       Weighted average number of common shares
           Outstanding (note 14)                                                 2,765,000           2,160,753




</TABLE>
   The accompanying notes are an integral part of these financial statements.







<PAGE>
ROSEDALE DECORATIVE PRODUCTS LTD.
Interim Consolidated Statements of Cash Flows
(Amounts expressed in US dollars)
(Unaudited)
<TABLE>
<CAPTION>
                                                                              Three-months        Three-months
                                                                                  March 31           March 31,
                                                                                      1999                1998

                                                                                        $                   $ 

       Cash flows from operating activities:

<S>                                                                                <C>                 <C>    
           Net income                                                              325,768             529,150


           Adjustments to reconcile net income to net cash provided by operating
                activities:

           Amortization                                                            187,542             157,793
           (Increase) decrease in deferred product costs                            47,192             381,523
           (Increase) in accounts receivable                                    (1,661,604)         (2,266,687)
           (Increase) decrease in inventory                                        220,264           1,470,056
           (Increase) in prepaid expenses and sundry assets                         18,292            (244,725)
           Increase (decrease) in accounts payable and accrued expenses             85,239            (873,053)
           Increase (decrease) in income taxes payable/recoverable                  10,857             335,833
           Increase in deferred income taxes                                        61,229               1,436


                Total adjustments                                               (1,030,989)         (1,037,824)


           Net cash provided by (used in) operating activities                    (705,221)           (508,674)


       Cash flows from investing activities:

           Increase in deferred policy costs                                            1              (1,378)
           Purchases of property, plant and equipment                            (269,720)           (227,518)
           Increase in mortgages receivable                                             -             (14,684)


           Net cash used in investing activities                                 (269,719)           (243,580)



</TABLE>















   The accompanying notes are an integral part of these financial statements.




<PAGE>
ROSEDALE DECORATIVE PRODUCTS LTD.
Interim Consolidated Statements of Cash Flows
(Amounts expressed in US dollars)
(Unaudited)
<TABLE>
<CAPTION>
                                                                              Three-months        Three-months
                                                                                 March 31,           March 31,
                                                                                      1999                1998

                                                                                        $                   $ 

       Cash flows from financing activities:

<S>                                                                                            <C>            <C>    
            Proceeds from bank indebtedness                                                    907,271        514,337
            (Repayment of) proceeds from loans with affiliated companies                        (8,366)        (2,602)
            Proceeds from long-term debt                                                       (78,313)       (19,610)
            Repayment of stockholders' loans                                                   (22,283)        17,625
            Proceeds from loans with directors                                                       -          1,801


            Net cash provided by financing activities                                          798,309        511,551


       Effect of foreign currency exchange rate changes                                         55,676        (22,525)


       Net (decrease) increase in cash and cash equivalents                                   (120,955)      (263,228)

       Cash and cash equivalents, January 1                                                  3,417,414        442,655


       End of three month period ended March 31                                              3,296,459        179,427


       Income taxes paid                                                                        15,903         17,166


       Interest paid                                                                            66,662         83,169

</TABLE>







   The accompanying notes are an integral part of these financial statements.
<PAGE>
ROSEDALE DECORATIVE PRODUCTS LTD.
Interim Consolidated Statements of Stockholders' Equity
(Amounts expressed in US dollars)
(Unaudited)
<TABLE>
<CAPTION>
                                    Common
                                     Stock                            Cumulative
                                 Number of                Retained    Translation
                                    Shares    Amount      Earnings    Adjustments
                                   $              $              $         $

<S>                    <C> <C>    <C>                 <C> <C>          <C>      
Balance as of December 31, 1997   1,500,000           2   2,188,055    (226,990)

Foreign currency translation ..        --          --          --       (22,522)

Net income for the three-month
   period to March 31, 1998 ...        --       529,150        --   


Balance as of March 31, 1998 ..   1,500,000           2   2,717,205    (249,512)

Balance as of December 31,
 1998                             2,765,000   5,156,197   3,238,608    (388,341)

Foreign currency translation ..        --          --          --       130,635

Net income for the three-month
   period to March 31, 1999 ...        --          --       325,768        --   


Balance as of March 31,
                           1999   2,765,000   5,156,197   3,564,376    (257,706)

</TABLE>










   The accompanying notes are an integral part of these financial statements.






<PAGE>
ROSEDALE DECORATIVE PRODUCTS LTD.
Notes to Interim Consolidated Financial Statements
(Amounts expressed in US dollars)
(Unaudited)




       1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

           a)   Basis of Presentation

     These  consolidated  financial  statements include the accounts of Rosedale
Decorative  Products Ltd.  ("the  company")  and its wholly owned  subsidiaries,
521305 Ontario Inc. ("521305") and 1010037 Ontario Inc. ("1010037"),  the parent
companies of the operating  subsidiaries  Ontario  Paint and  Wallpaper  Limited
("Ontario") and Rosedale Wallcoverings and Fabrics Inc. ("Rosedale").

     On June 15,  1998,  the  company  acquired  all the issued and  outstanding
common  shares of 521305 and 1010037  from their  shareholders  in exchange  for
1,500,000 shares of the company. Since these companies were under common control
by a related  group,  this  transaction  has been recorded  using the pooling of
interest  method  whereby  the  assets,  liabilities  and  operations  have been
consolidated  as if the Company had owned the  wholly-owned  subsidiaries  since
incorporation.  The company was incorporated on May 14, 1997 by its shareholders
for the purpose of consolidating  their 100% ownership interests in anticipation
of an initial public offering.

     All material  inter-company accounts and transactions have been eliminated.
(see note 14)

           b)   Principal Activities

     The company.  Which was incorporated on May 14, 1997 is principally engaged
in the  designing,  manufacturing  and  marketing of wallpapers  and  decorative
fabrics in Canada,  U.S. and Europe through its operating  subsidiaries  Ontario
Paint and Wallpaper  Limited and Rosedale  Wallcoverings  and Fabrics Inc. These
subsidiaries  were incorporated in Canada on December 31, 1971 and April 7, 1981
respectively.

           c)   Deferred Product costs

     Expenditures  relating  to the design and  distribution  of  wallpaper  and
fabric sample books  consisting  book  development  and design costs relating to
collections  that have not been  launched  are  deferred  and  amortized  over a
three-year  period on a  straight-line  basis.  Proceeds from the sale of sample
books are offset against the book development costs when received.


           d)   Cash and Cash Equivalents (Bank Indebtedness)

     Cash  and  cash  equivalents  (bank  indebtedness)  includes  cash on hand,
amounts due from and to banks, and any other highly liquid investments purchased
with a maturity of three months or less. The carrying  amounts  approximate fair
values because of the short maturity of those instruments.

           e)   Other Current Financial Instruments

     The  carrying  amount of the  companies'  accounts  receivable  and payable
approximates fair value because of the short maturity of these instruments.










<PAGE>
ROSEDALE DECORATIVE PRODUCTS LTD.
Notes to Interim Consolidated Financial Statements
(Amounts expressed in US dollars)
(Unaudited)




       1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES   (cont'd)

           f)   Long-term Financial Instruments

     The fair value of each of the  companies'  long-term  financial  assets and
debt  instruments  is based on the amount of future cash flows  associated  with
each  instrument  discounted  using an estimate of what the  companies'  current
borrowing rate for similar instruments of comparable maturity would be.

           g)   Inventory

     Inventory  is valued at the lower of cost and fair  market  value.  Cost is
determined on the first-in, first-out basis.

           h)   Property, Plant and equipment

     Property, plant and equipment are recorded at cost and are amortized on the
basis of their estimated useful lives at the undernoted rates and methods:
<TABLE>
<CAPTION>

<S>                                                           <C>                              <C>
                Leasehold improvements                        10%                              Straight-line
                Cylinders and related design costs            5 years                          Straight-line
                Equipment furniture and fixtures              20%                              Declining balance
                Computer equipment                            30% and 20%                      Declining balance
                Automobile                                    30%                              Declining balance
</TABLE>

     Amortization for assets acquired during the year is recorded at one-half of
the indicated rates, which approximate when they were put into use.

           i)   Income taxes

     The company  accounts for income tax under the  provisions  of Statement of
Financial  Accounting  Standards No. 109, which requires recognition of deferred
tax assets and liabilities  for the expected  future tax  consequences of events
that have been  included in the financial  statements  or tax returns.  Deferred
income  taxes are  provided  using the  liability  method.  Under the  liability
method,  deferred  income taxes are  recognized  for all  significant  temporary
differences  between  the  tax and  financial  statement  bases  of  assets  and
liabilities.


















<PAGE>
ROSEDALE DECORATIVE PRODUCTS LTD.
Notes to Interim Consolidated Financial Statements
(Amounts expressed in US dollars)
(Unaudited)



       1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES   (cont'd)

           j)   Foreign Currency Translation

     The companies maintain their books and records in Canadian dollars. Foreign
currency  transactions  are  translated  using the temporal  method.  Under this
method,  all monetary  items are  translated  into Canadian funds at the rate of
exchange prevailing at balance sheet date.  Non-monetary items are translated at
historical  rates.  Income and expenses are  translated at the rate in effect on
the  transaction  dates.  Transaction  gains  and  losses  are  included  in the
determination of earnings for the year.

     The translation of the financial statements from Canadian dollars ("CDN $")
into United  States  dollars is  performed  for the  convenience  of the reader.
Balance sheet accounts are translated  using closing exchange rates in effect at
the balance sheet date and income and expense  accounts are translated  using an
average exchange rate prevailing during each reporting period. No representation
is made that the Canadian dollar amounts could have been, or could be, converted
into United  Sates  dollars at the rates on the  respective  dates and or at any
other certain rates.  Adjustments resulting from the translation are included in
the cumulative translation adjustments in stockholders' equity.

           k)   Sales

     Sales  represent the invoiced value of goods  supplied to customers.  Sales
are recognized upon delivery of goods and passage of title to customers.

           l)   Use of Estimates

     The  preparation  of  financial  statements  requires  management  to  make
estimates and  assumptions  that affect certain  reported  amounts of assets and
liabilities and disclosures of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting period. Actual results could differ from those estimates.

           m)   Accounting Changes

     On January 1, 1996,  the companies  adopted the provisions of SFAS No. 121,
Accounting for the Impairment of Long-Lived  Assets and for Long-Lived Assets to
be Disposed Of. SFAS No. 121 requires that long-lived assets to be held and used
by  an  entity  be  reviewed  for  impairment  whenever  events  or  changes  in
circumstances  indicate  that  the  carrying  amount  of an  asset  may  not  be
recoverable. SFAS No. 121 is effective for financial statements for fiscal years
beginning  after  December  15,  1995.  Adoption  of SFAS No. 121 did not have a
material impact on the companies' result of operations.











<PAGE>
ROSEDALE DECORATIVE PRODUCTS LTD.
Notes to Interim Consolidated Financial Statements
(Amounts expressed in US dollars)
(Unaudited)




       1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES   (cont'd)

           m)   Accounting Changes   (cont'd)

     In December 1995, SFAS No. 123,  Accounting for  Stock-Based  Compensation,
was issued. It introduced the use of a fair value-based method of accounting for
stock-based  compensation.  It  encourages,  but does not require,  companies to
recognize  compensation expense for stock-based  compensation to employees based
on the new fair value accounting  rules.  Companies that choose not to adopt the
new rules will  continue to apply the  existing  accounting  rules  contained in
Accounting  Principles  Board  Opinion No. 25,  Accounting  for Stock  Issued to
Employees. However, SFAS No. 123 requires companies that choose not to adopt the
new fair value  accounting  rules to disclose  pro forma net income and earnings
per  share  under  the new  method.  SFAS No.  123 is  effective  for  financial
statements  for fiscal years  beginning  after  December 15, 1995. The companies
have adopted the disclosure provisions of SFAS No. 123.


       COMPREHENSIVE INCOME

     The company has adopted Statement of Financial  Accounting Standard No. 130
"Reporting  Comprehensive  Income as of  December  1, 1998  which  requires  new
standards for reporting and display of  comprehensive  income and its components
in the  financial  statements.  However,  it does not affect net income or total
stockholders' equity. The components of comprehensive income are as follows:
<TABLE>
<CAPTION>


                                                                                       March 31,                   March 31,
                                                                                     1999                  1998

                                                                                            $                          $

<S>                                                                               <C>                  <C>    
           NET INCOME                                                             325,768              529,150

           OTHER COMPREHENSIVE INCOME (LOSS)

                Foreign currency translation                                      130,635             (22,522)
                                                                                  -------             --------

           COMPREHENSIVE INCOME                                                   456,403              506,628



       3.  ACCOUNTS RECEIVABLE                                                   March 31         December 31,
                                                                                     1999                       1998

                                                                                           $                $ 

           Accounts receivable                                                      5,580,345        3,842,820
           Less:  Allowance for doubtful accounts                                     161,985          146,770


           Accounts receivable, net                                                 5,418,360        3,696,050



</TABLE>
<PAGE>
ROSEDALE DECORATIVE PRODUCTS LTD.
Notes to Interim Consolidated Financial Statements
(Amounts expressed in US dollars)
(Unaudited)
<TABLE>
<CAPTION>



       4.  INVENTORY                                                                      March 31,December 31,
                                                                                         1999           1998

                                                                                           $                $ 
           Inventory comprised the following:

<S>                                                                                   <C>              <C>    
                Raw materials                                                         137,213          185,956
                Finished goods                                                      6,989,787        7,043,488


                                                                                    7,127,000        7,229,444


       LOANS RECEIVABLE FROM AFFILIATED COMPANIES

           The loans  receivable  from  affiliated  companies  which are related
through  common  ownership  bear  interest at prime plus 1.5%,  have no specific
repayment terms, and are not expected to be repaid prior to April 1, 2000.


       DEFERRED PRODUCT COSTS
                                                                                         March 31,      December 31
                                                                                         1999             1998
                                                                                           $                $ 

           Book development costs                                                   1,373,652       1,285,831
           Deferred software costs                                                     63,941          58,338


           Cost                                                                     1,437,593       1,344,169


           Less: Accumulated amortization

                  Book development costs                                              590,706          467,454
                  Deferred software costs                                              29,010           25,513


                                                                                      619,716         492,967 


           Net Deferred Product Costs                                                 817,877         851,202


</TABLE>

       7.  DEFERRED POLICY COSTS

           Deferred  policy costs  represents the prepaid portion of premiums on
the life insurance policies referred to in note 21.





<PAGE>
ROSEDALE DECORATIVE PRODUCTS LTD.
Notes to Interim Consolidated Financial Statements
(Amounts expressed in US dollars)
(Unaudited)




       8.  MORTGAGES RECEIVABLE

     Second mortgages from companies related through common  ownership,  secured
by land and  buildings,  bear  interest  at 9% and are  payable  on  demand.  No
repayments are expected prior to April 1, 2000.
<TABLE>
<CAPTION>

                                                                                         March 31,December31,
                                                                                         1999             1998
                                                                                           $                $ 

<S>        <C>                                                                        <C>             <C>    
           1216748 Ontario Inc.                                                       171,520         168,768
           1217576 Ontario Inc.                                                       155,569         153,073



                                                                                      327,089          321,841


           The  fair  value  of the  mortgages  receivable  is  estimated  to be
$350,000.


       PROPERTY, PLANT AND EQUIPMENT
                                                                                        March 31,       December31,
                                                                                         1999             1998
                                                                                           $                $ 

           Leasehold improvements                                                      29,707          29,230
           Automobile                                                                  19,017          18,711
           Equipment and furniture                                                    288,481         283,502
           Furniture and fixtures                                                     244,439         240,517
           Computer and equipment                                                     456,494         348,874
           Cylinders and related design costs                                       3,974,010       3,716,883


           Cost                                                                     5,012,148       4,637,717

          Less: Accumulated amortization

                  Leasehold improvements                                               13,619           12,671
                  Automobile                                                           16,895           16,380
                  Equipment and furniture                                             211,687          203,399
                  Furniture and fixtures                                              188,892          185,861
                  Computer and equipment                                              281,066          245,381
                  Cylinders and related design costs                                2,022,129        1,813,592


                                                                                    2,734,288        2,477,284


           Net Assets                                                               2,277,860       2,160,433


</TABLE>

<PAGE>
ROSEDALE DECORATIVE PRODUCTS LTD.
Notes to Interim Consolidated Financial Statements
(Amounts expressed in US dollars)
(Unaudited)


       10.   BANK INDEBTEDNESS

     The  companies  have  available  credit  facilities  up  to  a  maximum  of
$6,735,000 ($10,160,000 Canadian),  which bear interest at rates varying between
the bank's  prime  rate and prime plus  0.25%.  The  indebtedness  is secured by
general  assignments of book debts, pledge of inventory under Section 427 of the
Bank Act of Canada,  general  security  agreements  providing  a first  floating
charge over all assets,  guarantees and  postponement  of claims to a maximum of
$1,657,000  from  the  company,  guarantees  from  affiliated  companies  up  to
$563,000, assignment of life insurance of $1,000,000 on each of the lives of two
key officers and assignment of fire insurance.


       ACCOUNTS PAYABLE AND ACCRUED EXPENSES
<TABLE>
<CAPTION>
                                                                                        March 31,    December31,
                                                                                         1999             1998
                                                                                           $                $ 
           Accounts payable and accrued expenses is comprised of the following:

<S>                                                                                 <C>              <C>      
                Trade payables                                                      4,378,130        4,230,024
                Accrued expenses                                                      362,861          351,010


                                                                                    4,740,991        4,581,034



       LONG-TERM DEBT
                                                                                        March 31,    December31,
                                                                                         1999             1998
                                                                                           $                $ 
           a)   Settlement Payable

                Settlement of a claim initiated by a third party payable $7,242
                    monthly.  The fair value of the settlement payable is
                    estimated to be $138,000                                              -             77,076


           b)   Insurance Loan

                Amount in excess  of cash  surrender  values  of life  insurance
                    policies (note 21) which is payable on demand but is
                     expected  to become due for  payment in the year 2004.  The
                    loan  bears  interest  at prime  plus 1.5% and is secured by
                    letters of guarantee  from a major  Canadian  Chartered Bank
                    and a second collateral mortgage on the assets of the
                    companies                                                         966,461          950,956


                                                                                      966,461        1,028,032

                Less:  Current portion                                                      -         (77,076)


                Long-term portion                                                     966,461          950,956





</TABLE>


<PAGE>
ROSEDALE DECORATIVE PRODUCTS LTD.
Notes to Interim Consolidated Financial Statements
(Amounts expressed in US dollars)
(Unaudited)

       13.      DUE TO STOCKHOLDERS AND DIRECTORS

     Stockholders'  and  directors  advances  are  secured by  general  security
agreements,  bears  interest at the National  Bank of Canada prime  lending rate
plus 1.5%, are without  specific terms of repayment,  and are not expected to be
repaid prior to April 1, 2000.




       COMMON STOCK

a)         Authorized

     An unlimited number of common and preference shares

     The preference  shares are issuable upon approval by the directors with the
appropriate  designation,  rights,  privileges and conditions  attaching to each
share of such series.
<TABLE>
<CAPTION>

                Issued
                                                                                     1999               1998

                                                                                        $                          $

<S>             <C>                                                             <C>                  <C>      
                2,765,000 Common shares                                         5,013,883            5,013,883
                1,265,000 Warrants                                                142,314              142,314
                                                                                  -------              -------

                                                                                5,156,197            5,156,197
                                                                                ---------            ---------
</TABLE>

     b) During 1998,  the company issued  1,265,000  common shares and 1,265,000
warrants as follows:
<TABLE>
<CAPTION>

<S>                                                                                            <C>            
                Proceeds received from the issuance                                            $     6,158,857
                Issuance costs (net of income taxes)                                                (1,002,662)

                Net proceeds                                                                   $     5,156,195
                                                                                                     ---------
</TABLE>

                Net proceeds include the deferred income tax recoveries



c)           Weighted Average Number of Common Shares

     On June  15,  1998,  the  shareholders  transferred  their  100%  ownership
interests in 521305  Ontario  Inc. and 1010037  Ontario Inc. in exchange for the
issuance of 1,500,000 common shares of the company.









<PAGE>
ROSEDALE DECORATIVE PRODUCTS LTD.
Notes to Interim Consolidated Financial Statements
(Amounts expressed in US dollars)
(Unaudited)




       14.      COMMON STOCK   (cont'd)

     c) Weighted Average Number of Common Shares

     On June 18, 1998, the company issued 1,100,000 common shares to the public.

     On July 29, 1998, the company issued 165,000 common shares to the public.

     The weighted  average  number of shares for 1998 was based on the number of
days the shares were  outstanding  during the year under the assumption that the
share transfer referred to above occurred at the beginning of the year.

     The  weighted  average  number of shares  for 1999 was based on the  shares
outstanding as of January 1, 1999 as no further shares have been issued.

     d) The company has adopted a Stock Option Plan (the 1998 Plan), pursuant to
which 750,000 shares of Common Stock are reserved for issuance.

     The 1998 Plan is for a period  of ten  years.  Options  may be  granted  to
officers,  directors,  consultants, key employees,  advisors and similar parties
who provide their skills and expertise to the Company. Options granted under the
1998 Plan may be exercisable for up to ten years, may require vesting, and shall
be at an  exercise  price  all as  determined  by the  board.  Options  will  be
non-transferable  except  to an  option  holders  personal  holding  company  or
registered  retirement  savings plan and are exercisable only by the participant
during his or her lifetime.

     If a participant  ceases  affiliation  with the Company by reason of death,
permanent  disability  or  retirement  at or after age 70,  the  option  remains
exercisable  for three  months from such  occurrence  but not beyond the options
expiration  date.  Other  termination  gives  the  participant  three  months to
exercise,   except  for   termination  for  cause  which  results  in  immediate
termination of the option.

     Options  granted under the 1998 Plan, as the directors of the  compensation
committee or the board, may be exercised either with cash, Common Stock having a
fair market equal to the cash exercise price, the participants personal recourse
note, or with an assignment to the Company of sufficient  proceeds from the sale
of the Common Stock acquired upon exercise of the Options with an  authorisation
to the  broker  or  selling  agent to pay that  amount  to the  company,  or any
combination of the above.

     Options  under  the 1998  Plan must be  issued  within  ten years  from the
effective date of the 1998 Plan.

     Any  unexercised  options that expire or that  terminate  upon an employees
ceasing to be employed by the company become  available again for issuance under
the 1998 Plan.

     The 1998  Plan may be  terminated  or  amended  at any time by the board of
directors  , except  that the  number of shares  of Common  Stock  reserved  for
issuance  upon the  exercise of options  granted  under the 1998 Plan may not be
increased  without the consent of the  stockholders  of the Company.  No options
were granted during this period.







<PAGE>
ROSEDALE DECORATIVE PRODUCTS LTD.
Notes to Interim Consolidated Statements
(Amounts expressed in US dollars)
(Unaudited)


     e) Purchase Warrants

     During the year,  Purchase Warrants  ("Warrants") were issued pursuant to a
Warrant Agreement between the company and J.P. Turner and Company.  Each Warrant
entitles its holders to purchase, during the four year period commencing on June
18,  1999,  one share of common  stock at an exercise  price of $6.00 per share,
subject to adjustment in accordance with the  anti-dilution  and other provision
referred to below.

     The Warrants may be redeemed by the company at any time commencing one year
from June 18, 1998 (or earlier with the consent of the representative) and prior
to their  expiration,  at a redemption  price of $0.10 per Warrant,  on not less
than 30 days' prior  written  notice to the holders of such  Warrants,  provided
that the closing bid price of the common stock if traded on the Nasdaq  SmallCap
Market,  or the last sale  price of the  common  stock,  if listed on the Nasdaq
National  Market or on a national  exchange,  is at least 150% ($9.00 per share,
subject to  adjustment) of the exercise price of the Warrants for a period of 10
consecutive  business  days ending on the third day prior to the date the notice
of redemption is given. Holders of Warrants shall have exercise rights until the
close of the business day preceding the date fixed for redemption.

     The  exercise  price and the number of shares of common  stock  purchasable
upon the exercise of the Warrants are subject to adjustment  upon the occurrence
of certain events,  including  stock  dividends,  stock splits,  combinations or
classification  of the common stock. The Warrants do not confer upon holders any
voting or any other rights of shareholders of the company.

     No Warrant will be  exercisable  unless at the time of exercise the company
has filed with the  Commission  a current  prospectus  covering  the issuance of
common  stock  issuable  upon the  exercise of the  Warrant and the  issuance of
shares  has  been  registered  or  qualified  or is  deemed  to be  exempt  from
registration  or  qualification  under  the  securities  laws  of the  state  of
residence of the holder of the Warrant.  The company has  undertaken  to use its
best efforts to maintain a current prospectus relating to the issuance of shares
of common stock upon the exercise of the Warrants  until the  expiration  of the
Warrants,  subject  to the  terms  of the  Warrant  Agreement.  While  it is the
company's intention to maintain a current prospectus, there is no assurance that
it will be able to do so.






       15.      INCOME TAXES
<TABLE>
<CAPTION>
                                                                                       1999               1998
                                                                                       $                  $ 

           <S>                                                                      <C>                 <C>
            a)  Current                                                                   -                 -
                Deferred                                                            220,587            156,786


                                                                                    220,587            156,786

</TABLE>









<PAGE>
ROSEDALE DECORATIVE PRODUCTS LTD.
Notes to Interim Consolidated Statements
(Amounts expressed in US dollars)
(Unaudited)




       15.      INCOME TAXES   (cont'd)

     b) Deferred income taxes represented the tax charges derived from temporary
differences  between  amortization of property,  plant and equipment and amounts
deducted from taxable income.

     c)  Rosedale  has  operating  losses  of  approximately  $770,000  which is
expected to he used to reduce future taxable  income.  The potential tax benefit
relating to the losses have been  recognized  in the accounts to the extent that
they reduce  deferred  taxes.  The  deductibility  of these  losses if available
expires as follows:
<TABLE>
<CAPTION>

<S>             <C>                                                                              <C>          
                2001                                                                             $     127,000
                2002                                                                                   286,000
                2004                                                                                    21,000
                2005                                                                                   100,000



                                                                                                 $     534,000
</TABLE>

     Rosedale has been  reassessed by Revenue Canada and the Province of Ontario
for fiscal year ended  December  31, 1993 and December 31, 1994 in the amount of
approximately  $717,000 (see note 19).  Should the  assessments  be upheld,  the
benefits of these losses may not be realized.


16.    RELATED PARTY TRANSACTIONS

     Amounts  due from or paid to  companies  which are related  through  common
ownership.
<TABLE>
<CAPTION>

                                                                                      1999                1998

                                                                                        $                   $ 

<S>               <C>                                                                  <C>               <C>  
           Loan - 976168 Ontario Inc.                                                  10,333            1,933
           Mortgage receivable - 1216748 Ontario Inc.                                 171,520          168,768
           Mortgage receivable - 1217576 Ontario Inc.                                 155,569          153,073
           Rent paid - 966578 Ontario Inc.                                             3,97              4,236

</TABLE>


UNCERTAINTY DUE TO THE YEAR 2000 ISSUE

     The Year 2000 Issue arises because many computerized systems use two digits
rather than four to identify a year.  Date-sensitive  systems may  recognize the
year 2000 as 1900 or some other date, resulting in errors when information using
year 2000 dates is processed.  In addition,  similar  problems may arise in some
systems  which use certain  dates in 1999 to  represent  something  other than a
date. The effects of the year 2000 Issue may be experienced  before, on or after
January 1, 2000,  and, if not addressed,  the impact on operations and financial
reporting may range from minor errors to significant systems failure which could
affect a company's  ability to conduct  normal  business  operations.  It is not
possible  to be certain  that all aspects of the Year 2000 Issue  affecting  the
company,  including  those  related to the efforts of customers,  suppliers,  or
other third parties, will be fully resolved.







<PAGE>
ROSEDALE DECORATIVE PRODUCTS LTD.
Notes to Interim Consolidated Financial Statements
(Amounts expressed in US dollars)
(Unaudited)




       18.      SEGMENTED INFORMATION

     Rosedale is engaged primarily in the design, manufacturing,  marketing, and
distribution and Ontario is engaged  primarily in the marketing and distribution
of wallpaper and designer fabrics.

           a) The breakdown of sales by geographic area is as follows:

                Period ended March 31, 1999

<TABLE>
<CAPTION>
<S>                                                                                              <C>          
                United States of America                                                         $   2,785,862
                Canada                                                                               2,089,443
                Other                                                                                  172,152


                                                                                                 $   5,047,457


                Period ended March 31, 1998

                United States of America                                                         $   3,392,122
                Canada                                                                               2,375,704
                Other                                                                                  738,763


                                                                                                 $   6,506,589



     The companies' accounting records do not readily provide information on net
income by geographic  area.  Management is of the opinion that the proportion of
net income based principally on sales, presented below, would fairly present the
results of operations by geographic area.

                Period ended March 31, 1999

                United States of America                                                         $     179,802
                Canada                                                                                 134,855
                Other                                                                                   11,111


                                                                                                 $     325,768


                Period ended March 31, 1998

                United States of America                                                         $     275,865
                Canada                                                                                 193,205
                Other                                                                                   60,080


                                                                                                 $     529,150


</TABLE>



<PAGE>
ROSEDALE DECORATIVE PRODUCTS LTD.
Notes to Interim Consolidated Financial Statements
(Amounts expressed in US dollars)
(Unaudited)




       18.      SEGMENTED INFORMATION   (cont'd)


     b) The breakdown of identifiable assets by geographic area is as follows:

<TABLE>
<CAPTION>
                Period ended March 31, 1999

<S>                                                                                              <C>          
                United States of America                                                         $   3,570,561
                Canada                                                                              15,390,361
                Other                                                                                  890,624


                                                                                                 $  19,851,546


                Year ended December 1998

                United States of America                                                         $   1,744,862
                Canada                                                                              15,430,713
                Other                                                                                1,098,750


                                                                                                 $  18,274,325


</TABLE>

     c) Sales to major customers are as follows:
<TABLE>
<CAPTION>

                                                                                           1999           1998

<S>                                                                                   <C>            <C>      
                Sales                                                                 1,214,634      1,354,454


                % of total sales                                                             24%          21%


                Amounts included in accounts receivable                         $    1,578,585     $  907,146


           d) Purchases from major suppliers are as follows:

                                                                                           1999           1998

                Purchases                                                         $   1,166,282  $   1,273,878


                % of total purchases                                                        41%           45%


                Amounts included in accounts payable                               $  1,638,184  $   2,567,096


</TABLE>

<PAGE>
ROSEDALE DECORATIVE PRODUCTS LTD.
Notes to Interim Consolidated Financial Statements
(Amounts expressed in US dollars)
(Unaudited)

       19.      CONTINGENCIES


     Rosedale has been re-assessed by Revenue Canada and the Province of Ontario
for fiscal years ended  December  31, 1993 and December 31, 1994 for  additional
taxes estimated to be $717,000. The company has objected to these re-assessments
and has no  obligation  to pay the  portion  relating  to Revenue  Canada in the
amount of $450,000 until the objections  have been  processed.  No provision has
been made in the accounts for the additional taxes.

     The company has retained a firm of tax  specialists  to  represent  them in
presenting  their case to Revenue Canada and currently the Notices of Objections
are being considered by the Chief of Appeals.

     Since  the  company  considers  the  re-assessments  to  be  incorrect,  no
liability  has  been  set  up in  the  accounts.  Should  all  or  part  of  the
re-assessments  be  upheld,  the  additional  income  taxes  would be taken into
account in the year of occurrence.



       20.      COMMITMENTS

     Minimum   payments   under   operating   leases  for  premises   amount  to
approximately  $293,000 per annum,  exclusive of insurance  and other  occupancy
charges.  The leases  expire on October  31,  2004.  The  future  minimum  lease
payments over the next four years are as follows:
<TABLE>
<CAPTION>

           Payable during the following periods:

<S>                                                                                              <C>                 
               Within one year                                                                   $            293,287
               Over one year but not exceeding two years                                                      293,287
               Over two years but not exceeding three years                                                   293,287
               Over three years but not exceeding four years                                                  293,287
               Over four years but not exceeding five years                                                   293,287
               Thereafter                                                                                     171,080

                                                                                                           $1,637,515

</TABLE>


<PAGE>
ROSEDALE DECORATIVE PRODUCTS LTD.
Notes to Interim Consolidated Financial Statements
(Amounts expressed in US dollars)
(Unaudited)

       21.      LIFE INSURANCE POLICIES

     The companies are the  beneficiaries  of life  insurance  policies with The
Prudential of America Life Insurance  Company  (Canada)  ("PruCan") taken out on
the lives of two of the officers for a total insured  value of $6.6 million.  In
consideration  for this  benefit,  the  companies  agreed  to fund the  premiums
payable  on the  policies.  Funding  is  being  provided  by  advances  from the
Laurentian Bank of Canada ("Laurentian").

     The Laurentian has a legal right of set-off of the cash surrender values of
the life  insurance  policies  against  the debt  owing to it by the  companies.
Accordingly the related assets and liabilities have been offset in the financial
statements.


     The amounts offset were as follows:

Cash surrender value of life insurance policies                  $ 1,817,683
Advances                                                         $ (1,817,683)

     The  amount  in excess of the cash  surrender  value of the life  insurance
policies is included in long-term debt (see note 11).

     The  advances  from  Laurentian  are payable on demand but are  expected to
become  due for  payment  in the year  2004.  The  companies  are liable for the
interest on the advances. Security is provided by first charges on the insurance
policies,  letters of credit from a major  Canadian  chartered  bank and general
security agreements creating a second charge over all corporate assets.


<PAGE>
ROSEDALE DECORATIVE PRODUCTS LTD.
Notes to Interim Consolidated Financial Statements
(Amounts expressed in US dollars)
(Unaudited)

       21.      FOREIGN EXCHANGE CONTRACTS

     As at  March  31,  1999,  the  Company  had  outstanding  foreign  exchange
contracts to sell U.S.  dollars to the National  Bank of Canada to hedge against
fluctuations in foreign currency.  The purpose of the Company's foreign exchange
hedging  activities  is to protect the Company  from the risk that the  eventual
dollar net cash  inflows  resulting  from the sale and  purchase  of products in
foreign  currencies will not be adversely affected by changes in exchange rates.
It is the Company's  policy to use  derivative  financial  instruments to reduce
foreign risks. Fluctuations in the value of these hedging instruments are offset
by  fluctuations in the value of the underlying  exposures being hedged.  As the
contracts are settled,  the related gains or losses, if any, will be reported in
the  statements of financial  position and income.  There is a potential risk of
non-performance by the National Bank of Canada,  the financial  institution that
the Company has the Foreign Forward Exchange Contracts with. However,  given the
National Bank's  prominence and financial  condition,  the Company believes that
this risk is  insignificant.  The  Company  had no  contracts  outstanding  with
maturities  beyond one year.  The cash  requirements  arise as the contracts are
exercised  to the value of  $14,020,000  (in  varying  amounts  from  April 1999
through  June  2000).  The  following  table  presents  the  aggregate  notional
principal  amounts,  carrying  values and fair values of the  Company's  foreign
exchange contracts  outstanding as of March 31, 1999.  Deferred gains and losses
on  forward  exchange  contracts  are  recognized  in  earnings  when the future
purchases  and sales being hedged are  recognized.  The Company does not hold or
issue financial  instruments for trading purposes.  The estimated fair values of
the derivatives used to hedge the Company's risks will fluctuate over time.
<TABLE>
<CAPTION>

                       March 31, 1999                                        March 31, 1998 

           Forward       Notional                                  Forward       Notional
           Exchange      Principal      Carrying       Fair        Exchange      Principal       Carrying
           Contracts     Amounts        Value          Values      Contracts     Amounts         Values


           <S>          <C>                 <C>        <C>         <C>           <C>             <C>
           1998                   -          -              -      $6,970,000      -             ($363,600)
           1999          $11,920,000         -         ($641,582)
           2000          $ 2,100,000         -          ($36,578)

</TABLE>

<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results 
        of Operations

     The  statements  contained  in this  Report  that  are not  historical  are
forward-looking   statements,   including  statements  regarding  the  Company's
expectations,  intentions,  beliefs or strategies regarding the future. Forward-
looking  statements  include  the  Company's   statements  regarding  liquidity,
anticipated  cash needs and  availability  and anticipated  expense levels.  All
forward-looking  statements  included  in this  Report are based on  information
available  to the  Company  on the  date  hereof,  and the  Company  assumes  no
obligation to update any such forward-looking statement. It is important to note
that the Company's  actual  results could differ  materially  from those in such
forward-looking statements.  Additionally, the following discussion and analysis
should be read in  conjunction  with the Financial  Statements and notes thereto
appearing  elsewhere in this Report. The discussion is based upon such financial
statements which have been prepared in accordance with U.S.  Generally  Accepted
Accounting Principles and are presented in United States dollars ($).

Results of Operation

     Three months ended March 31, 1999  compared to three months ended March 31,
1998.

     Revenues  for the three  months  ended  March 31, 1999  decreased  22.4% to
$5,047,457,  as compared to revenues of $6,506,589  for the same period in 1998.
This decrease was attributable the weakening value of the Canadian dollar versus
the U.S. dollar, a 76.7% reduction in our export sales and the general weakening
of the market in which we operate,  as observed by the continuing  restructuring
of many companies within the wallpaper industry.  Additionally,  we launched one
less new  collection  during the first  quarter of 1999 as compared to the first
quarter of 1998.

     Gross profit,  as a percentage  of sales,  increased to 42.1% for the three
months  ended March 31, 1999 as compared to 37.3% the same period in 1998.  This
increase in gross profit is  attributable  to a change in our sales mix that was
made because of decreased  sales in our export  markets.  The strong U.S. dollar
also  contributed  to the  increase in gross profit as over 50% of our sales are
derived  from the United  States and the majority of our  purchases  are made in
Canadian dollars.  However,  the strong U.S. dollar, as compared to the Canadian
dollar, has a negative impact on our overall financial statements when converted
from  Canadian  to U.S.  dollars.  Additionally,  we have begun to source  other
manufacturing  facilities  in  Canada  which  will  reduce  our costs and have a
positive impact on gross profit.

     Selling expenses  increased by 10.0% to $561,516 for the three month period
ended March 31, 1999 as compared to $510,243  for the three month  period  ended
March 31, 1998.  This  increase is  attributable  to public  relations  expenses
incurred during the first quarter of 1999. We did not incur such expenses during
the same  period  in 1998.  Also,  selling  expenses  increased  as a result  of
increased promotion expense relating to two very successful trade shows, held in
Toronto and Quebec City, which we attended.

     General and  administrative  expenses for the Company increased by 14.2% to
$596,588 for the three months period ended March 31, 1999, from $522,362 for the
three  months  ended  March  31,  1998.   This  increase  is   attributable   to
approximately  $60,000 in expenditures  relating to consulting  services,  legal
services and  registration  expenses;  expenses we did not incur during the same
period in 1998.

     Rosedale  Decorative  Products  Ltd.  develops  wallpaper and fabric sample
books  which  are  created  for each of its  collections  and are  sold  through
distributors.  The majority of  expenditures  relating to the creation of sample
books are  incurred  during the fiscal  quarter that is prior to the date of the
introduction of a collection.  Some expenditures are incurred as early as six to
eight months in advance of the  introduction of a collection.  Because  revenues
generated  from the sale of sample books are  generally  received  during fiscal
quarters  that are  subsequent  to quarters  where the  expenses for such sample
books are recognized, our quarterly financial statements do not always reflect a
matching of revenues and expenses.  Before significant expenditures are incurred
to produce  sample  books,  we ensure that there are firm orders for such books.
Therefore, there is little speculative risk in the production of sample books.
<PAGE>
     Sample book  development  cost for the three month  period  ended March 31,
1999 was  $123,252  compared to $50,892  for the same period last year.  We have
increased  expenditures  on sample  book  production  as the  market  has become
increasingly competitive and our customers have become more demanding,  choosing
less books for their stores. As sample books serve as our silent salesperson, it
is imperative  that we design and produce high quality books to keep them in the
marketplace and on top of our customer's sales counters.

     Design studio expenses for the Company  increased by 10.86% to $192,749 for
the three  months  ended March 31,  1999 as  compared  to $173,860  for the same
period last year. This increase reflects increased  expenditures relating to our
anticipated  launch of an  additional  four  collections  in 1999. We expect the
launch of the additional collections to trigger additional sales in 1999.

     Operating  income for the three months ended March 31, 1999 decreased 54.5%
to $461,367  from $ 1,013,331  for the three months  ended March 31, 1998.  This
relates to the  decrease in sales and  additional  expenses  incurred  after our
public offering.

     Interest  expense for the Company for the three months ended March 31, 1999
decreased  to $27,587  from  $131,181 for the three months ended March 31, 1998.
This decrease in interest  expense is  attributable  to lower interest rates and
decreased  short term  investment  interest  generated  from funds raised in our
public offering.

     Net income for the three months ended March 31, 1999  decreased  38.4% from
the same period ended March 31, 1998. The decrease is due to decreased sales and
slightly higher operating expenses.

     Earnings per share, based on 2,765,000 total shares outstanding, were $0.12
for the three months ended March 31, 1999, compared to $0.19 for the same period
last year.

Liquidity and Capital Resources

     We had a negative net change in cash of $120,955 for the three months ended
March 31, 1999. The principal sources of cash were net income of $325,768 and an
increase in bank indebtedness.  These items were offset by cash used to increase
accounts receivable at the end of the period ended March 31, 1999.

     Cash flows used in investing  activities  for the three months ending March
31, 1999 were $269,719.  This reflects  planned capital  addition for cylinders,
designs  and  engravings  for new  collections.  We  received  net  proceeds  of
$5,156,195 from our initial public offering which was completed in June 1998. We
believe  that  the  proceeds  of the  offering,  coupled  with the  income  from
operations,  will  fulfill our  working  capital  needs for, at least,  the next
eighteen months.  It is our intention to utilize a significant  portion of these
funds to develop new product  lines of wallpaper  and fabric,  plus continue the
development of floor coverings and ceiling tiles.

Year 2000

     Our  review of our own  operating  systems  do not  indicate  any Year 2000
problems;  however, we are highly dependent on third party vendors. Failures and
interruptions, if any, resulting from the inability of certain computing systems
of third party  vendors,  including our clearing  broker,  to recognize the Year
2000 could have material adverse effect our results of operations.  There can be
no  assurance  that the Year 2000  issue can be  resolved  by any of such  third
parties  prior to the  upcoming  change in the  century.  Although  we may incur
substantial  costs,  particularly  costs resulting from increased charges by our
third party service providers, as a result of such third party service providers
correcting Year 2000 issues, such costs are not sufficiently certain to estimate
at this time.



<PAGE>
                                     PART II
                                OTHER INFORMATION


Item 1.  Legal Proceedings
         None

Item 2.  Changes in Securities and Use of Proceeds
         None

Item 3.  Defaults Upon Senior Securities
         None

Item 4.  Submission of Matters to a Vote of Security Holders
         None

Item 5.  Other Information
         None

Item 6.  Exhibits and Reports on Form 8-K

  (a)  Exhibits

         Exhibit 27:                 Financial Data Schedule

  (b)  Reports on Form 8-K

       The  Company  did not file any reports on Form 8-K during the three month
period ended March 31, 1999.






<PAGE>
SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                               ROSEDALE DECORATIVE PRODUCTS LTD.


Date: May 14, 1999                                   By:    /s/Alan Fine  
                                                               Alan Fine

Date: May 14, 1999                                   By:    /s/Norman G. Maxwell
                                                               Norman G. Maxwell



<PAGE>