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GREENLAM AMERICA, INC. Financial Statements. March 31, PDF

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Financial Statements March 31, 2011 TABLE OF CONTENTS Page Independent Accountant s Audit Report 1 Financial Statements: Balance Sheet 2 Statement of Income 3 Statement of Retained Earnings 4 Statement
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Financial Statements March 31, 2011 TABLE OF CONTENTS Page Independent Accountant s Audit Report 1 Financial Statements: Balance Sheet 2 Statement of Income 3 Statement of Retained Earnings 4 Statement of Cash Flows 5 Notes to Financial Statements 6-11 BALANCE SHEET MARCH 31, 2011 ASSETS CURRENT ASSETS NOTE IN US$ IN INR Cash Accounts Receivable Net of Allowance for Doubtful Debts of $ Employee Advances Vendor Deposits Inventory Total Current Assets FIXED ASSETS Net of Accumulated Depreciation of $ TOTAL ASSETS LIABILITIES & STOCKHOLDER'S EQUITY Accounts Payable Accrued Expenses Customer Deposits Payroll Liabilities Total Current Liabilities LONG TERM DEBT - STOCKHOLDER'S EQUITY Capital Stock Retained Earnings (Losses) ( ) ( ) TOTAL LIABILITIES & STOCKHOLDER'S EQUITY Page STATEMENT OF INCOME FOR THE YEAR ENDED MARCH 31, 2011 Income IN US$ IN INR Gross Sales Costs of Goods Sold Gross Profit General and Administrative Expenses Accounting Advertising Bad Debt Bank Charges Consultants Depreciation Insurance Legal and Professional Meals and Entertainment Office Expense Postage and Delivery Rents Repairs and Maintenance Salary and Wages Selling Expenses Taxes and Licenses Telephone Travel Utilities Warehouse Expenses Total General and Administrative Expenses Other Expenses Loss from Operations (577835) ( ) Interest Expense Net Loss (590336) ( ) 3 Page STATEMENT OF RETAINED EARNINGS FOR THE YEAR ENDED MARCH 31, 2011 IN US$ IN INR Balance at April 1, 2010 ( ) ( ) Net Loss for the period (590336) ( ) Collections from Prior Bad Debts Balance at March 31, 2011 ( ) ( ) 4 Page STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MARCH 31, 2011 IN US$ IN INR Cash Flows From Operating Activities Net Loss (590336) ( ) Adjustments to reconcile net income to net cash provided by operating activities: Changes in assets and liabilities: Depreciation Decrease in accounts receivable Decrease in allowance for doubtful accounts (47879) ( ) Decrease in employee advances Increase in vendor deposits (59147) ( ) Increase in inventory (91406) ( ) Increase in accounts payable Increase in accrued expenses Decrease in accrued interest (14584) (650155) Increase in customer deposits Decrease in payroll liabilities (19298) (860305) Net cash used by operating activities (79863) ( ) Cash Flows From Investing Activities Acquisition of fixed assets (56790) ( ) Cash Flows From Financing Activities Common stock issue proceeds Increase in long-term loan ( ) ( ) Net cash provided for financing activities 0 0 Net increase in cash (136653) ( ) Cash at the beginning of the period Cash at the end of the period Page NOTE 1 SIGNIFICANT ACCOUNTING POLICIES 1.01 Disclosure of Accounting Policies: Nature of Operations Greenlam, the flagship decorative laminate brand from Greenply, its one of India s fastest selling brands and currently is being exported to more than 50 countries including Thailand, Indonesia, Taiwan, Canada, Bahrain, Hong Kong, Malaysia, Singapore, Kenya, Dubai, Russia, Syria, USA, Australia, Mexico, Saudi Arabia, China and Israel. Revenue and Cost Recognition The financial statements are prepared using US Generally Accepted Accounting Principles (GAAP), using the accrual method, which requires income to be recognized when earned and expenses when incurred. Use of Estimates GREENLAM AMERICA, INC. SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS As of and for the Year Ended March 31, 2011 The Company was incorporated under the laws of the State of Florida and New Jersey for the purpose of distributing decorative laminates of the highest quality for the office and home improvement, as well as the construction industry. The company is a wholly-owned subsidiary of Greenply Industries Limited (GIL), a $ 250 Million company, with headquarters in Kolkata, India, where is established as India s premier Interior Infrastructure Company. Greenply manufactures plywood, and allied products, laminates, particle boards and other wood products through its factories and distributes to an extensive dealer network spread all over India. In addition, it owns this company (Greenlam America, Inc.) and a Singapore subsidiary (Greenlam Asia Pacific PTE, Ltd). Management uses estimates and assumptions in preparing these financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities and the reported revenues and expenses. Although these estimates are based upon management s best knowledge of current events and actions, actual results could differ from these estimates. 6 Page NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 1.02 Valuation of Inventory: Inventory on hand GREENLAM AMERICA, INC. SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS As of and for the Year Ended March 31, 2011 The company purchases most of its inventory from its parent company (Greenply). Inventory values are maintained using the weighted average method, under a perpetual system, where the cost is adjusted by item, as new units with different pricing are added to the inventory, and old units are sold, the weighted cost changes. Inventory as of March 31, 2011 was distributed by location as follows: Location Amount US$ INR Miami New Jersey Chicago Canada Cash Flow Statement: Cash flows are reported using indirect method, whereby profit before tax is adjusted for the effects transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, financing and investing activities of the Company are segregated. Cash and cash equivalents in the balance sheet typically comprise cash at bank Contingencies and Subsequent Events: Disclosure of contingencies as required by the accounting standard is furnished in the Notes on each account, where disclosure is needed. 7 Page SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS As of and for the Year Ended March 31, 2011 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 1.05 Fixed Assets and Depreciation: Fixed Assets are shown on the balance sheet net of accumulated depreciation at Original Cost minus Depreciation (Book Value). Depreciation is provided for on Straight Line Method as used for Federal Income Tax Purposes. Original cost, accumulated depreciation and other pertinent fixed asset information were as follows: Asset Years Dep Method Original Cost Acc Dep Carrying Value US$ INR US$ INR US$ INR Office Equipment 5 SL Furniture and Fixtures 7 SL Vehicles 5 SL Warehouse Equip & Fixtures 7 SL Revenue Recognition Revenue Recognition is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Greenlam America sold laminates worth $ 46,800 to Greenlam Asia Pacific, a fellow subsidiary company wholly owned by Greenply Industries Ltd Related Party Disclosures: Disclosure of related parties as required by the accounting standard is furnished in the Notes on accounts. 8 Page SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS As of and for the Year Ended March 31, 2011 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 1.08 Accounting for Taxes on Income: The Company is responsible for federal and state income tax as a C Corporation. Due to Net Operating Losses for the year ended March, , the company does not have any tax liability. NOTE 2 NOTES ON ACCOUNT 2.01 Accounts Receivable and Allowance for Doubtful Accounts: Accounts Receivable The Company s credit policy with its customers typically varies from advance payments at the beginning of the commercial relationship, to 60 day terms based on the creditworthiness and payment experience Employee Advances Due to the nature of the industry and the emphasis on increasing market share and sales, the company extends short-term advances to its key employees, to cover travel expenses and some other business expenses which are submitted as part of the expense report system for reconciliation and control. As of March 31, 2011, $ 7,513 was outstanding. This amount is expected to be recognized within this upcoming fiscal year. 9 Page NOTE 2 NOTES ON ACCOUNTS (continued) 2.03 Vendor Deposits US$ INR Aces Global Logistics Alpha Business Communications Blue Montain Natural NJ (Dep.) D P Investments Llc Fedex National Innovative Pre-Press & Print Monmouth Telecom Royal Palms Doral UHC Accounts Payable 2.05 Accrued Expenses GREENLAM AMERICA, INC. SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS As of and for the Year Ended March 31, 2011 The Company has deposits outstanding with landlords, vendors for advance rents, utilities and other service companies such as delivery and freight as follows: The Company purchases most of its products from its parent Greenply as needed, as such. The majority of amounts under Accounts Payable, besides freight and other charges, at the end of this fiscal year were owed to Greenply Industries Limited, with an outstanding payable to Greenply of $2,817,734 (INR lacs). Total Accounts Payable amounted to $2,833,056 (INR lacs). The Company accrues for utility bills, as well as other General and Admin expenses as invoices are received from these vendors. The company enters these bills as received from Vendors. 10 Page NOTE 2 NOTES ON ACCOUNTS (continued) GREENLAM AMERICA, INC. SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS As of and for the Year Ended March 31, Long-term commitments: The company has two agreements with landlords as follows: Monthly Annual Type Location Date Length US$ INR US$ INR Office Miami 06/10/08 3 months,10 days Office and Warehouse New Jersey 01/27/10 3 months Page
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