[KPMG LETTERHEAD]
Office of the Chief Accountant
SECPS Letter Files
Securities and Exchange Commission
Mail Stop 9-5
450 Fifth Street, N.W.
Washington, DC 20549
USA
May 17, 2002
Dear Sir
SDC International, Inc.
KPMG Ceska republika, s.r.o was appointed principal accountants for SDC
International, Inc. (the "Company") on February 4, 2002. On April 16,
2002, that firm resigned as the company's auditors. KPMG Ceska
republika, s.r.o, has not completed an audit of the Company's
consolidated financial statements and has never reported thereon. We
have read SDC International, Inc.'s statements included under Item 4 of
its Form 8-K dated April 23, 2002, and we do not agree with such
statements because:
1. The second paragraph under Item 4 of the Form 8-K refers to
Tatra, a.s. ("TATRA"), a subsidiary of SDC International, Inc.
TATRA is not an SEC Registrant. That paragraph also refers to
the delivery of a report by KPMG Ceska republika, s.r.o.
relating to an audit of TATRA. The report referred to relates
to an audit of TATRA's financial statements as of and for the
year ended December 31, 2001. Although not stated by SDC
International, Inc. in the Form 8-K, the audit of TATRA's
financial statements referred to in the Form 8-K was performed
in accordance with generally accepted auditing standards in
the Czech Republic, and not in accordance with generally
accepted auditing standards in the United States of America.
Additionally, the financial statements of TATRA referred to in
the audit report were prepared in conformity with generally
accepted accounting principles in the Czech Republic, and not
in conformity with generally accepted accounting principles in
the United States of America. Accordingly, we believe that
reference in the Form 8-K to the financial statements of TATRA
and the audit report thereon issued by KPMG Ceska republika,
s.r.o. is not appropriate. Our engagement letter to SDC
International, Inc. was dated February 4, 2002 and formally
accepted by the Company on February 14, 2002.
Securities and Exchange Commission
SDC International, Inc.
May 17, 2002
2. The third paragraph under Item 4 of the Form 8-K states that
"Other than as specifically set forth in the foregoing
paragraphs with respect to the TATRA Group, KPMG issued no
reports with respect to the Company during KPMG's tenure as
the Company's independent public accountants." As noted
above, KPMG Ceska republika, s.r.o. has never completed an
audit of the financial statements of the Company and,
accordingly, we believe the words "Other than as specifically
set forth in the foregoing paragraphs with respect to the
TATRA Group" are inappropriate.
3. The fourth paragraph under Item 4 indicates that "During
KPMG's tenure as the Company's independent public accountants,
there were no disagreements at any time between the Company
and KPMG on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or
procedure, which disagreements, if not resolved to the
satisfaction of KPMG, would have caused them to make reference
to the subject matter of the disagreements in connection with
their report on the financial statements of the Company." We
disagree with this statement, as KPMG Ceska republika, s.r.o.
advised the Company that the reason for its resignation as the
Company's independent auditors was its inability to obtain the
information needed in order to complete an audit of the
Company's consolidated financial statements.
4. The fifth paragraph under Item 4 indicates that "None of the
"reportable events" described in Item 304(a)(1)(v) of
Regulation S-K under the Securities act of 1933 occurred
within the last two fiscal years and the subsequent interim
period to the date hereof." We disagree with this statement
because, as noted above, we advised the Company that the
reason for KPMG Ceska republika, s.r.o.'s resignation as the
Company's independent auditors was its inability to obtain the
information needed in order to complete an audit of the
Company's consolidated financial statements.
5. The sixth paragraph under Item 4 indicates that "The Company
requested today that KPMG furnish it as promptly as possible
with a letter addressed to the Securities and Exchange
Commission stating whether it agrees with the above statements
made by the Company in this Form 8-K." We disagree with this
statement, as KPMG Ceska republika, s.r.o. did not receive
this request, nor was it aware that the Form 8-K discussed
herein had been filed by the Company, until May 1, when it
discovered the Form 8-K had been filed on EDGAR.
Very truly yours,
/s/KPMG Ceska republika
KPMG Ceska republika, s.r.o.
C.c: SDC International, Inc.
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