ex10-30.htm


     

     

    Exhibit 10.30

     

    
      	 
      	 	 	 	 
      	 	 	 	 	 	 	 	
              FX
      rate =

            	 	 
      	 	 	 	 	 	 
	
              QUALYTEXTIL
      SA - Reconciliation of Brazilian GAAP to US GAAP

            	 	 	 	 	 	 	 	 	1.71288	 	
              (h)

            	 	 	 	 	 	 
	
              Statement
      of Profit and Loss for the three months ended April 30, 2008
      (unaudited)

            	 	 	 	 	 	 
      	 	 	 	 	 	 
	 
      	 	      
              Brazilian
      GAAP

            	
               

            	 	
              Reclass-

            	 	 	
              As

            	 	 	
              Translated

            	 	 
      	 	
              Adjustments

            	 	 	
              US
      GAAP

            	 
	 
      	 	
              per
      internal

            	 	
              Notes

            	 	
              ifications

            	 	 	
              reclassified

            	 	 	
              to
      USD

            	 	
              Notes

            	 	
              in
      USD

            	 	 	
              in
      USD

            	 
	 
      	 	
              report
      in BRL

            	 	 
      	 	 	 	 	
              in
      BRL

            	 	 	 	 	 	 
      	 	 	 	 	 	 
	 
      	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 
      	 	 	 	 	 	 
	
              Gross
      Income

            	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 
      	 	 	 	 	 	 
	 
      	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 
      	 	 	 	 	 	 
	
              Gross
      sales

            	 	 	4,796,174	 	 
      	 	 	 	 	 	4,796,174	 	 	 	 	 	 
      	 	 	 	 	 	 
	
              Cancellation
      and taxes on sales

            	 	 	(1,430,329	)	 
      	 	 	 	 	 	(1,430,329	)	 	 	 	 	 
      	 	 	 	 	 	 
	
              Net
      sales

            	 	 	3,365,845	 	 
      	 	 	0	 	 	 	3,365,845	 	 	$	1,965,020	 	 
      	 	$	0	 	 	$	1,965,020	 
	 
      	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 
      	 	 	 	 	 	 	 	 
	
              Cost
      of sales

            	 	 	1,664,812	 	 
      	 	 	 	 	 	 	1,664,812	 	 	 	971,159	 	
              (f)

            	 	 	(215,622	)	 	 	755,537	 
	 
      	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 
      	 	 	 	 	 	 	 	 
	
              Gross
      profit

            	 	 	1,701,033	 	 
      	 	 	0	 	 	 	1,701,033	 	 	 	993,861	 	 
      	 	 	215,622	 	 	 	1,209,483	 
	 
      	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 
      	 	 	 	 	 	 	 	 
	
              Operating
      expenses (income):

            	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 
      	 	 	 	 	 	 	 	 
	
              Expenses

            	 	 	1,609,666	 	 
      	 	 	 	 	 	 	1,609,666	 	 	 	935,733	 	
              (e)

            	 	 	(116,087	)	 	 	819,646	 
	
              Net
      financial

            	 	 	165,257	 	
               (a
      )

            	 	 	(327,154	)	 	 	(161,897	)	 	 	(94,149	)	
               (c
      )

            	 	 	94,149	 	 	 	0	 
	
              Depreciation

            	 	 	34,591	 	 
      	 	 	 	 	 	 	34,591	 	 	 	20,255	 	 
      	 	 	 	 	 	 	20,255	 
	
              Other
      (income) expense

            	 	 	 	 	 
      	 	 	(15,881	)	 	 	(15,881	)	 	 	(9,403	)	 
      	 	 	 	 	 	 	(9,403	)
	 
      	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 
      	 	 	 	 	 	 	 	 
	
              Operating
      result

            	 	 	(108,481	)	 
      	 	 	343,035	 	 	 	234,554	 	 	 	141,425	 	 
      	 	 	237,560	 	 	 	378,985	 
	 
      	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 
      	 	 	 	 	 	 	 	 
	
              Interest
      expense

            	 	 	 	 	
               (a
      )

            	 	 	(352,317	)	 	 	(352,317	)	 	 	(206,440	)	 
      	 	 	 	 	 	 	(206,440	)
	
              Interest
      income

            	 	 	 	 	
               (a
      )

            	 	 	25,163	 	 	 	25,163	 	 	 	14,744	 	 
      	 	 	 	 	 	 	14,744	 
	
              Non
      operating other income / expense

            	 	 	(6,301	)	 
      	 	 	 	 	 	 	(6,301	)	 	 	(3,710	)	
               (b)

            	 	 	47,944	 	 	 	44,234	 
	 
      	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 
      	 	 	 	 	 	 	 	 
	
              Profit
      (loss) for the period/year before income tax and social
      contribution

            	 	 	(114,782	)	 
      	 	 	15,881	 	 	 	(98,901	)	 	 	(53,981	)	 
      	 	 	285,504	 	 	 	231,523	 
	 
      	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 
      	 	 	 	 	 	 	 	 
	
              Provision
      for income tax and social contribution

            	 	 	(27,642	)	 
      	 	 	 	 	 	 	(27,642	)	 	 	(17,453	)	
              (g)

            	 	 	52,760	 	 	 	35,307	 
	 
      	 	 	 	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 
      	 	 	 	 	 	 	 	 
	
              Profit
      (loss) for the period

            	 	 	(87,140	)	 
      	 	 	15,881	 	 	 	(71,259	)	 	$	(36,528	)	 
      	 	$	232,744	 	 	$	196,216	 


    

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      Exhibit
10.30

      NOTES TO:
QUALYTEXTIL SA - Reconciliation
of Brazilian GAAP to US GAAP

      Three
months ended April 30, 2008

       

      
        
          
            
              	
                       (a)
      Reclassify interest expense and interest income out of "net
      financial"

                    	 
      	 	 	 
	
                       (b)
      Capital reserve reversal recognized as income

                    	
                      (b)

                    	 	 	47,944	 
	
                       (c)  Reclassify
      a government VAT tax incentive as a reduction of cost of goods
      sold

                    	
                      (c
      )

                    	 	 	94,149	 
	
                       (d)
      Not used

                    	 
      	 	 	 	 
	
                       (e)
      Net adjustment to administrative expenses

                    	 
      	 	 	 	 
	
                       
      Legal
      fees not accrued under Brazilian GAAP - difference in opening and ending
      accruals

                    	 
      	 	 	(1,348	)
	
                       
      Management
      compensation not accrued under Brazilian GAAP - charge to earlier
      period

                    	
                       
      

                    	 	 	(107,266	)
	
                       
      Outsourcing
      sales contractor invoices recorded one month in arrears - difference in
      opening and ending accruals

                    	
                       
      

                    	 	 	15,457	 
	
                       
      Outsourcing
      labor contractor invoices recorded one month in arrears - reverse
      beginning accrual

                    	
                       
      

                    	 	 	(22,930	)
	
                       (e)
      Net adjustment to administrative expenses

                    	
                      (e)

                    	 	 	(116,087	)
	
                       (f)  Net
      adjustment to cost of goods sold

                    	 
      	 	 	 	 
	
                       
      inventory
      reserve not recorded under Brazilian GAAP - charged to earlier
      periods

                    	 
      	 	 	(73,367	)
	
                       
      reclassify
      a government VAT tax incentive (ICMS) as a reduction of cost of goods
      sold

                    	
                      (c
      )

                    	 	 	(94,149	)
	
                       
      Outsourcing
      labor contractor invoices recorded one month in arrears - reverse
      beginning  accrual

                    	 
      	 	 	(48,106	)
	
                       (f)  Net
      adjustment to cost of goods sold

                    	
                      (f)

                    	 	 	(215,622	)
	
                       (g)  Income
      tax accrual to adjust to US GAAP income

                    	
                      (g)

                    	 	 	52,760	 
	
                       (h)  The
      three month 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 $1.71288 represents a weighted average of the monthly
      rates used.