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 June 30, 2003
[ ] 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)
Ontario, Canada 5110
(State or other jurisdiction of (Primary Standard Industrial
incorporation or organization) Classification Code Number)
731 Millway Avenue
Concord, Ontario
Canada L4K 3S8
(Address of principal executive offices)
(905) 669-8909
(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 June 30, 2003, 2,755,214 shares of Common Stock, no par value per
share, of Rosedale Decorative Products Ltd. were issued and outstanding.
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
ROSEDALE DECORATIVE PRODUCTS LTD.
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2003
(Unaudited)
ROSEDALE DECORATIVE PRODUCTS LTD.
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2003
(Unaudited)
TABLE OF CONTENTS
Interim Consolidated Balance Sheets as of June 30, 2003
and December 31, 2002 (historical and pro-forma) 2 - 3
Interim Consolidated Statements of Operations for the three months ended
June 30, 2003 and June 30,2002 4
Interim Consolidated Statements of Operations for the six months ended
June 30, 2003 and June 30,2002 5
Interim Pro-forma Consolidated Statements of Operations for the six
months ended June 30, 2003 6
Interim Consolidated Statements of Cash Flows for the six months ended
June 30, 2003 and June 30, 2002 7 - 8
Interim Consolidated Statements of Stockholders' Equity for the six months
ended June 30, 2003 and December 31, 2002 9
Condensed Notes to Interim Consolidated Financial Statements 10
1
ROSEDALE DECORATIVE PRODUCTS LTD.
Interim Consolidated Balance Sheets
As of June 30, 2003 and December 31, 2002
(Amounts expressed in US dollars)
(Unaudited)
2003 2002 2002
Historical Pro-forma
$ $ $
ASSETS
CURRENT ASSETS
Cash 1,022,335 1,186,436 1,168,131
Accounts receivable 2,515,341 3,973,605 2,053,310
Inventory 3,890,423 5,886,464 3,553,392
Prepaid expenses and sundry assets 90,203 332,031 80,535
Income taxes recoverable 25,415 - 8,597
-------------- -------------- --------------
7,543,717 11,378,536 6,863,965
LOAN RECEIVABLE FROM AFFILIATED COMPANY 72,375 41,975 41,975
MORTGAGES RECEIVABLE 366,218 312,805 312,805
PROPERTY, PLANT AND EQUIPMENT 2,448,563 4,279,689 2,008,906
-------------- -------------- --------------
10,430,873 16,013,005 9,227,651
-------------- -------------- --------------
See condensed notes to the consolidated financial statements
2
ROSEDALE DECORATIVE PRODUCTS LTD.
Interim Consolidated Balance Sheets
As of June 30, 2003 and December 31, 2002
(Amounts expressed in US dollars)
(Unaudited)
2003 2002 2002
Historical Pro-forma
$ $ $
LIABILITIES
CURRENT LIABILITIES
Bank indebtedness 3,363,822 4,710,636 2,428,689
Accounts payable and accrued expenses 2,614,892 4,575,714 2,704,739
Income tax payable - 6,682 -
Due to stockholders and directors - 919,427 -
-------------- -------------- --------------
5,978,714 10,212,459 5,133,428
DEFERRED INCOME TAXES 2,078 410,624 1,775
-------------- -------------- --------------
5,980,792 10,623,083 5,135,203
-------------- -------------- --------------
STOCKHOLDERS' EQUITY
COMMON STOCK 5,171,627 5,029,355 5,029,355
ADDITIONAL PAID-IN CAPITAL - 142,314 142,314
ACCCUMULATED OTHER COMPREHENSIVE
INCOME (LOSS) 324,019 (459,997) (462,704)
RETAINED EARNINGS (DEFICIT) (1,045,565) 678,250 (616,517)
-------------- -------------- --------------
4,450,081 5,389,922 4,092,448
-------------- -------------- --------------
10,430,873 16,013,005 9,227,651
============== ============== ==============
See condensed notes to the consolidated financial statements
3
ROSEDALE DECORATIVE PRODUCTS LTD.
Interim Consolidated Statements of Operations
For the period ended June 30, 2003 and June 30, 2002
(Amounts expressed in US dollars)
(Unaudited)
Three-months Three-months
ended ended
June 30, June 30,
2003 2002
(restated)
$ $
SALES 2,674,444 6,015,427
COST OF SALES 1,597,620 3,447,791
------------- ------------
GROSS PROFIT 1,076,824 2,567,636
------------- ------------
OPERATING EXPENSES
General and administrative 528,906 713,593
Selling 526,176 805,382
Design studio 129,487 190,915
Book development costs (recovery) 53,482 (64,278)
Amortization 182,514 380,300
------------- ------------
TOTAL OPERATING EXPENSES 1,420,565 2,025,912
------------- ------------
OPERATING INCOME (LOSS) (343,741) 541,724
Interest expense (46,038) (57,906)
Exchange gain on foreign exchange contracts 18,240 95,001
------------- ------------
INCOME (LOSS) BEFORE INCOME TAXES (371,539) 578,819
Income taxes - 196,837
------------- ------------
NET INCOME (LOSS) (371,539) 381,982
============= ============
Basic and Diluted Net Income (Loss) Per Share (0.14) 0.14
============= ============
Weighted average number of common shares
outstanding 2,755,385 2,755,514
============= ============
See condensed notes to the consolidated financial statements
4
ROSEDALE DECORATIVE PRODUCTS LTD.
Interim Consolidated Statements of Operations
For the period ended June 30, 2003 and June 30, 2002
(Amounts expressed in US dollars)
(Unaudited)
Six-months Six-months
ended ended
June 30, June 30,
2003 2002
(restated)
$ $
SALES 7,658,194 11,253,827
COST OF SALES 4,651,247 6,788,919
GROSS PROFIT 3,006,947 4,464,908
------------ ------------
OPERATING EXPENSES
General and administrative 1,181,096 1,389,476
Selling 1,119,523 1,546,774
Design studio 307,392 322,123
Book development costs (recovery) 103,157 (73,688)
Amortization 538,917 667,279
------------ ------------
TOTAL OPERATING EXPENSES 3,250,085 3,851,964
------------ ------------
OPERATING INCOME (LOSS) (243,138) 612,944
Interest expense (105,103) (108,355)
Exchange gain on foreign exchange contracts 75,595 126,105
Loss on sale of subsidiary (1,451,169) -
------------ ------------
INCOME (LOSS) BEFORE INCOME TAXES (1,723,815) 630,694
Income taxes - 221,930
------------ ------------
NET INCOME (LOSS) (1,723,815) 408,764
============ ============
Basic and Diluted Net Income (Loss) Per Share (0.63) 0.15
============ ============
Weighted average number of common shares
outstanding 2,755,449 2,755,514
============ ============
See condensed notes to the consolidated financial statements
5
ROSEDALE DECORATIVE PRODUCTS LTD.
Pro-Forma Interim Consolidated Statements of Operations
For the period ended June 30, 2003 and June 30, 2003 Pro-forma
(Amounts Expressed in US Dollars)
(Unaudited)
Six-months Six-months
ended ended
June 30, Pro-forma June 30,
2003 Adjustments 2003
Unaudited (note 2) Pro-forma
------------ ------------ ------------
$ $ $
SALES 7,658,194 (2,015,691) 5,642,503
COST OF SALES 4,651,247 (1,302,844) 3,348,403
GROSS PROFIT 3,006,947 (712,847) 2,294,100
------------ ------------ ------------
OPERATING EXPENSES
General and administrative 1,181,096 (255,118) 925,978
Selling 1,119,523 (98,955) 1,020,568
Design studio 307,392 (90,171) 217,221
Book development costs 103,157 - 103,157
Amortization 538,917 (201,195) 337,722
------------ ------------ ------------
TOTAL OPERATING EXPENSES 3,250,085 (645,439) 2,604,646
------------ ------------ ------------
OPERATING LOSS (243,138) (67,408) (310,546)
Interest expense (105,103) 23,910 (81,193)
Exchange gain on foreign
exchange contracts 75,595 - 75,595
Loss on sale of subsidiary (1,451,169) 1,451,169 -
------------ ------------ ------------
LOSS BEFORE
INCOME TAXES (1,723,815) 1,407,671 (316,144)
Income taxes - - -
------------ ------------ ------------
NET LOSS (1,723,815) 1,407,671 (316,144)
============ ============ ============
Net loss per Common
share, basic and diluted (0.63) (0.11)
============ ============
Weighted average number
of Common shares
outstanding 2,755,449 2,755,449
============ ============
See condensed notes to the consolidated financial statements
6
ROSEDALE DECORATIVE PRODUCTS LTD.
Interim Consolidated Statements of Cash Flows
For the period ended June 30, 2003 and June 30, 2002
(Amounts expressed in US dollars)
(Unaudited)
Six-months Six-months
ended ended
June 30, June 30,
2003 2002
(restated)
$ $
Cash flows from operating activities:
Net income (Loss) (1,723,815) 408,764
------------ ------------
Adjustments to reconcile net income (loss) to net cash used in
operating activities:
Loss on sale of subsidiary 1,451,169 -
Amortization of property, plant and equipment 538,917 667,279
Exchange gain on foreign exchange contracts (50,356) (126,105)
Increase in accounts receivable (272,673) (1,179,938)
Decrease in inventory 774,472 104,243
(Increase) decrease in prepaid expenses and sundry assets 11,618 (9,916)
Increase (decrease) in accounts payable and accrued expenses (1,051,233) 800,783
Increase (decrease) in income taxes payable (14,224) 238,356
------------ ------------
Total adjustments 1,387,690 494,702
------------ ------------
Net cash provided by (used in) operating activities (336,125) 903,466
------------ ------------
Cash flows from investing activities:
Proceeds from sale of subsidiary 360,188 -
Purchase of property, plant and equipment (564,842) (758,527)
------------ ------------
Net cash used in investing activities (204,654) (758,527)
------------ ------------
See condensed notes to the consolidated financial statements
7
ROSEDALE DECORATIVE PRODUCTS LTD.
Interim Consolidated Statements of Cash Flows
For the period ended June 30, 2003 and June 30, 2002
(Amounts expressed in US dollars)
(Unaudited)
Six-months Six-months
ended ended
June 30, June 30,
2003 2002
(restated)
$ $
Cash flows from financing activities:
(Repayment of) proceeds from bank indebtedness 594,876 (461,993)
Loans to affiliated company (21,529) -
Purchase of Treasury Stock (42) -
Repayment of loans to stockholders & directors (372,345) (156,081)
------------ ------------
Net cash provided by (used in) financing activities 200,960 (618,074)
------------ ------------
Effect of foreign currency exchange rate changes 175,738 77,760
------------ ------------
Net decrease in cash and cash equivalents (164,081) (395,375)
Cash and cash equivalents, beginning of year 1,186,436 1,897,453
------------ ------------
End of six month period ended June 30 1,022,355 1,502,078
============ ============
Income taxes paid - -
============ ============
Interest paid 105,103 133,906
============ ============
See condensed notes to the consolidated financial statements
8
ROSEDALE DECORATIVE PRODUCTS LTD.
Interim Consolidated Statements of changes in Stockholders' Equity
For the period ended June 30, 2003 and December 31, 2002
(Amounts expressed in US dollars)
(Unaudited)
Common Accumulated
Stock Common Additional Other
Number of Stock Paid-in Retained Comprehensive Comprehensive
Shares Amount Capital Earnings(deficit) Income (loss)
-------------- -------------- -------------- --------------- ------------ --------------
$ $ $ $ $
Balance as of December 31,
2001 2,755,514 5,029,355 142,314 513,892 - (509,109)
Foreign currency translation - - - - 49,112 49,112
Net income for the year - - - 164,358 164,358 -
-------------- -------------- -------------- --------------- ------------ --------------
Balance as of December 31,
2002 2,755,514 5,029,355 142,314 678,250 213,470 (459,997)
Foreign currency translation - - - - 784,016 784,016
Purchase of Treasury Stock (300) (42) - - -
-
Expiration of Stock Warrants - 142,314 (142,314) - -
-
Net loss for the
six-month period to
June 30, 2003 - - - (1,723,815) (1,723,815) -
-------------- -------------- -------------- --------------- ------------ --------------
Balance as of June 30,
2003 2,755,214 5,171,627 - (1,045,565) (939,799) 324,019
-------------- -------------- -------------- --------------- ------------ --------------
See condensed notes to the consolidated financial statements
9
ROSEDALE DECORATIVE PRODUCTS LTD.
Condensed Notes to Consolidated Financial Statements
As of June 30, 2003
(Amounts expressed in US dollars)
(Unaudited)
1. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements have
been prepared in accordance with the instructions to Form 10-Q
and do not include all the information and footnotes required by
generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments
(consisting of all recurring accruals) considered necessary for
fair presentation have been included. Operating results for the
interim periods are not necessarily indicative of the results
that may be expected for the year ended December 31, 2003.
Interim financial statements should be read in conjunction with
the Company's annual audited financial statements.
The unaudited consolidated financial statements include the
accounts of Rosedale Decorative Products Ltd. ("the company") and
its wholly owned subsidiary, Ontario Paint and Wallpaper Limited
("Ontario").
All material inter-company accounts and transactions have been
eliminated.
2. SALE OF SUBSIDIARY
In July 2002, the Company filed a proxy statement with the
Securities and Exchange Commission for the approval by
shareholders of the sale of a wholly owned subsidiary, Rosedale
Wallcoverings & Fabrics Inc. ("Rosedale") to the Chariman of the
Board and Chief Executive Officer, Alan Fine. The sale received
shareholder approval on March 14, 2003 and was finalized on March
24, 2003. Consequently, these consolidated financial statements
include Rosedale's results of operations up to March 24, 2003. In
accordance with Section 210 of Regulation S-X, a pro-forma
balance sheet and statement of operations showing the impact of
this transaction have been included. In summary, the transaction
is as follows:
Selling price $ 841,759
Obligation assumed by Rosedale (756,654)
Forgiveness of loan (203,853)
Cost of investment (1,332,421)
-----------------
Loss on sale $ (1,451,169)
=================
3. CONTINGENCIES
a) The company has guaranteed the mortgages of 1217576 Ontario
Inc. and 966578 Ontario Inc. in the amount of $687,000
through general security agreements ranking behind the
National Bank of Canada. These affiliated companies are
rental properties owned by a director and stockholder. As at
June 30, 2003, the indebtedness of the affiliated companies
amounted to approximately $415,000.
b) The company has issued a guarantee secured by a general
security agreement for the loan made by the Laurentian Bank
of Canada to 1369597 Ontario Inc. As at year-end, the
indebtedness of this company amounted to $632,000. This loan
was made to purchase life insurance, a portion of which
represents the keyman life insurance policy for which the
company is beneficiency.
c) The company has issued standby letters of credit in favour
of the Laurentian Bank of Canada in the amount of $211,000
to guarantee the debt of a related party.
10
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements as
defined by the Private Securities Legislation Reform Act of 1995.
Forward-looking statements include statements concerning plans, objectives,
goals, strategies, future events or performance and underlying assumptions and
other statements, which are other than statements of historical facts. These
statements are subject to uncertainties and risks including, but not limited to,
product and service demand and acceptance, changes in technology, economic
conditions, the impact of competition and pricing, government regulation, and
other risks defined in this document and in statements filed from time to time
with the Securities and Exchange Commission. All such forward looking statements
are expressly qualified by these cautionary statements and any other cautionary
statements that may accompany the forward-looking statements. In addition,
Rosedale Decorative Products Limited disclaims any obligation to update any
forward-looking statements to reflect events or circumstances after the date
thereof.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
In July 2002, the Company filed a proxy statement with the Securities and
Exchange Commission for the approval by Shareholders of the sale of a wholly
owned subsidiary, Rosedale Wallcoverings & Fabrics Inc. ("Rosedale") to the
Chairman of the Board and Chief Executive Officer, Alan Fine. The sale received
shareholder approval on March 14, 2003 and was finalized on March 24, 2003.
Results of Operation
Three months ended June 30, 2003 as compared to three months ended June 30,
2002.
Revenues for the three months ended June 30, 2003 were $2,674,444, a 55.5%
decrease over prior year revenues of $6,015,427. This decrease resulted mainly
from the sale of the Rosedale subsidiary on March 24, 2003 and there were no
sales reported for the second quarter for this subsidiary. Also, the second
quarter showed a significant decline in wallpaper sales for the whole industry
in North America.
Gross profits as a percentage of revenue for the three months ended June 30,
2003 was 40.3%, as compared to the same period one-year ago of 42.7%. This
decrease in gross profit margins can be attributed to a change in the sales mix
relating to the sale of the Rosedale subsidiary as well as lower sales volume to
the U.S.
Selling expenses have decreased by 34.7% to $526,176 for the three-month period
ended June 30, 2003 as compared to $805,382 for the same period last year. This
decrease relates to reduced expenses due to the sale of the Rosedale subsidiary.
General and administrative expenses for the Company decreased by 25.9%, to
$528,906 for the three months period ended June 30, 2003 from $713,593 for the
three months ended June 30, 2002. Reductions were achieved due to the sale of
Rosedale.
11
The Company develops wallpaper sample books, which are created for each
collection and sold through distributors. The majority of expenditures for the
creation of sample books are incurred in the quarter before the introduction of
a collection. Some expenditures are incurred as early as six to eight months in
advance. Revenues generated from the sales of sample books are netted from the
costs incurred in the same period and the net amount is shown on the income
statement. Because expenditures are made in the quarter before the launch of a
collection, there is not always a matching of revenues and expenses e.g. costs
for a January launch would be recorded in the previous year. The Company ensures
that there are firm orders in place from customers before significant
expenditures are incurred to produce the sample books. Therefore, there is
little speculative risk in their production. Book development costs for the
three-month period ended June 30, 2003 was $53,482 compared to revenue of
$64,278 for the same period last year. This increase in expenses can be
attributed to the additional subsidy required to place our books in the
marketplace. The market is very competitive and retailers are looking for more
concessions, especially on books. As these sample books are our silent
salesperson, it is imperative that we keep our books in the marketplace and on
top of the counters.
Design studio expenses for the Company decreased by 32.2% to $129,487 for the
three months ended June 30, 2003 versus $190,915 for the same period last year.
This decrease relates to reduced expenses due to the sale of the Rosedale
subsidiary.
Operating loss for the three months ended June 30, 2003 was $343,741 as compared
to an operating income of $541,724 for the three months ended June 30, 2002.
This relates to the reduction in revenues for the quarter.
Interest expense for the Company for the three months ended June 30, 2003
decreased to $46,038 from $57,906 for the three months ended June 30, 2002. This
decrease in interest expense is attributable to the reduction in debt resulting
from the sale of the Rosedale subsidiary.
The net loss for the three months ended June 30, 2003 was $425,076 as compared
to net income of $578,819 for the three months ended June 30, 2002. This loss
for the period is attributable to the reduction in sales and lower margins.
Basic and diluted loss per share for the three months ended June 30, 2003 were
$0.14 compared to income of $0.14 for the same period last year. Earnings per
share were calculated based on the weighted average number of common shares as
of June 30, 2003 of 2,755,385 and June 30, 2002 of 2,755,514 and shares.
Six months ended June 30, 2003 as compared to six months ended June 30, 2002.
Revenues for the six months ended June 30, 2003 were $7,658,194, a 32% decrease
over prior year revenues of $11,253,827. This decrease resulted mainly from the
sale of the Rosedale subsidiary on March 24, 2003 and there were no sales
reported for the second quarter for this subsidiary. The whole industry in North
America has seen a significant decline in wallpaper sales over the past few
months.
12
Gross profits as a percentage of revenue for the six months ended June 30, 2003
was 39.3%, as compared to the same period one-year ago of 39.7%. This slight
decrease in gross profit margins can be attributed to lower sales volume to the
U.S.
Selling expenses have decreased by 27.6% to $1,119,523 for the six-month period
ended June 30, 2003 as compared to $1,546,774 for the same period last year.
This decrease relates to reduced expenses due to the sale of the Rosedale
subsidiary.
General and administrative expenses for the Company decreased by 15%, to
$1,181,096 for the six month period ended June 30, 2003 from $1,389,476 for the
six months ended June 30, 2002. Once again, reductions were achieved due to the
sale of Rosedale.
Book development costs for the six-month period ended June 30, 2003 was $103,157
compared to revenue of $73,688 for the same period last year. This increase in
expenses can be attributed to the additional subsidy required to place our books
in the marketplace. As the Ontario division is a distributor as well as a
converter of wallpaper, it is imperative that we keep our books in the
marketplace. The market is very competitive and retailers are looking for more
concessions, especially on the cost of books.
Design studio expenses for the Company decreased by 4.6% to $307,392 for the six
months ended June 30, 2003 versus $322,123 for the same period last year. This
decrease relates to reduced expenses due to the sale of the Rosedale subsidiary
offset by an increase in expenses in the Ontario studio.
Operating loss for the six months ended June 30, 2003 was $243,138 as compared
to an operating income of $612,944 for the six months ended June 30, 2002. This
relates to the reduction in revenues and increased book development costs.
Interest expense for the Company for the six months ended June 30, 2003
decreased to $105,103 from $108,355 for the six months ended June 30, 2002. This
small decrease in interest expense is attributable to the reduction in debt
resulting from the sale of the Rosedale subsidiary and increased borrowings
required for working capital.
A loss on the sale of Rosedale Wallcoverings & Fabrics Inc. was recorded in the
first quarter in the amount of $1,451,169. The transaction was approved by the
shareholders on March 14, 2003 and finalized on March 24, 2003. As part of the
transaction, the Company discharged its liability for Alan Fine's severance
package in the amount of $730,000 upon his subsequent resignation as disclosed
to the shareholders in the proxy statement.
The net loss for the six months ended June 30, 2003 was $1,723,815 as compared
to net income of $408,764 for the six months ended June 30, 2002. This loss for
the period is attributable to the reduction in sales, lower margins and the loss
on the sale of the Rosedale subsidiary.
Basic and diluted loss per share for the six months ended June 30, 2003 were
$0.63 (proforma $0.11 loss per share) compared to income of $0.15 for the same
period last year. Earnings per share were calculated based on the weighted
average number of common shares as of June 30, 2003 of 2,755,449 and June 30,
2002 of 2,755,514 and shares.
13
Liquidity and Capital Resources
The Company had a negative net change in cash of $164,081 for the six months
ended June 30, 2003, which was created by the agreement to sell the subsidiary.
However the proceeds from the sale were $360,188.
Cash flows used in investing activities for the six months ending June 30, 2003
were $204,654. This reflected proceeds from the sale of Rosedale as well as
planned capital addition for cylinders, designs and engravings for new
collections. The purchase of cylinders was partially offset by the proceeds from
the sale of the subsidiary. It is the Company's intention to continue to utilize
a good portion of these funds to develop new product lines of wallpaper.
Item 3. CONTROLS AND PROCEDURES.
(a) The Chief Executive Officer and the Chief Financial Officer
of the Company have evaluated the effectiveness of the design and operation of
the Company's system of disclosure controls and procedures (as defined in Rules
13a-14(c) and 15d-14(c) under the Exchange Act) as of a date within 90 days
prior to the filing of this Form 10-QSB. As a result of that evaluation, they
have concluded that the Company's disclosure controls and procedures are
effective to ensure that information required to be disclosed in the Company's
reports filed or submitted under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in Securities and
Exchange Commission rules and forms.
(b) There have been no significant changes in the Company's
system of internal controls or in other factors that could significantly affect
internal controls subsequent to the date of their evaluation. There were no
discoveries of any significant deficiencies or material weaknesses in such
controls that would require the Company to take corrective actions.
14
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
On March 14, 2003, the Company held its annual shareholders' meeting. The
following actions were taken:
o The shareholders elected Sidney Ackerman, Alan Fine, Norman Maxwell,
Ken Page and Janet Hendry to serve as directors until the next annual
meeting;
o The shareholders approved the sale of the Company's wholly-owned
subsidiary, Rosedale Wallcoverings & Fabrics Inc. to Alan Fine, the
Company's Chief Executive Officer and Chairman of the Board; and
o The shareholders ratified the Board of Directors' selection of
Schwartz Levitsky Feldman as the Company's independent auditors for
the fiscal year ending December 31, 2002.
Item 5. Other Information
None.
15
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 31.1 - Certification of CEO pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
Exhibit 31.2 - Certification of CFO pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
Exhibit 32.1 - Certification of CEO pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
Exhibit 32.2 - Certification of CFO pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K
The Company filed a Current Report on Form 8-K on June 6, 2003.
16
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: August 14, 2003 By: /s/Sidney Ackerman
-------------------
Sidney Ackerman
President
Date: August 14, 2003 By: /s/Norman G. Maxwell
-------------------
Norman G. Maxwell
Chief Financial Officer