UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 2002
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE EXCHANGE ACT
For the transition period from ____________ to ________________
Commission file number 001-14503
DECTRON INTERNATIONALE INC.
(Exact name of Small Business Issuer as Specified in Its Charter)
Quebec, Canada N\A
- ----------------------------------- ------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4300 Poirier Blvd.
Montreal, Quebec H4R 2C5
- ----------------------------------- -------
(Address of principal executive offices) (Zip Code)
(514) 334-9609 (Issuer's telephone number, including area code)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes |X| No |_|
The number of shares outstanding of the registrant's Common Stock, No Par
Value, on December 12, 2002 was 2,916,500 shares.
Transitional Small Business Disclosure Format (check one):
Yes |_| No |X|
DECTRON INTERNATIONALE INC.
QUARTERLY REPORT ON FORM 10-QSB
OCTOBER 31, 2002
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
PART I - FINANCIAL INFORMATION
Page Number
Item 1. Financial Statements
Interim Consolidated Balance Sheets as of October 31, 2002 and January 31, 2002...................3
Interim Consolidated Statements of Earnings
for the nine months ended October 31, 2002 and 2001..............................................5
Interim Consolidated Statements of Earnings
for the three months ended October 31, 2002 and 2001.............................................6
Interim Consolidated Statements of Cash Flows
for the nine months ended October 31, 2002 and 2001..............................................7
Interim Consolidated Statements of Stockholders' Equity
for the nine months ended October 31, 2002 and 2001.............................................10
Notes to Interim Consolidated Financial Statements...............................................11
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................................................13
Item 3. Controls and Procedures..........................................................................14
2
DECTRON INTERNATIONALE INC.
Interim Consolidated Balance Sheets
As at October 31, 2002 and January 31, 2002
(Amounts Expressed in United States Dollars)
- --------------------------------------------------------------------------------
October 31, January 31,
2002 2002
------------ ------------
Assets
Current
Cash $ 602,368 $ 86,727
Accounts receivable 9,626,126 8,056,304
Income taxes receivable -- 58,313
Inventory 8,935,798 9,186,114
Prepaid expenses and sundry assets 570,425 555,327
Deferred income taxes 46,546 46,546
------------ ------------
19,781,263 17,989,331
Loans receivable 522,904 517,164
Property, plant and equipment 10,153,186 9,804,587
Intangibles 193,827 139,048
Goodwill 1,326,729 1,298,942
Deferred income taxes 812,791 811,566
------------ ------------
$ 32,790,700 $ 30,560,638
============ ============
The accompanying notes are an integral part of these interim consolidated
financial statements.
3
DECTRON INTERNATIONALE INC.
Interim Consolidated Balance Sheets
As at October 31, 2002 and January 31, 2002
(Amounts Expressed in United States Dollars)
- --------------------------------------------------------------------------------
October 31, January 31,
2002 2002
------------ ------------
Liabilities
Current
Bank loans $ 8,634,752 $ 8,326,166
Accounts payable and accrued expenses 4,877,112 4,341,533
Current portion of long-term debt 929,380 1,336,058
Income tax payable 171,837 --
------------ ------------
14,613,081 14,003,757
Long-term debt 5,453,834 5,170,364
Loan payable 124,322 192,355
Deferred revenue 1,760,685 1,343,816
------------ ------------
21,951,922 20,710,292
------------ ------------
Stockholders' equity
Capital stock 6,962,836 6,752,933
Treasury stock (88,780) (88,780)
Accumulated other comprehensive loss (402,122) (591,822)
Retained earnings 4,366,844 3,778,015
------------ ------------
10,838,778 9,850,346
------------ ------------
Total liabilities and stockholders' equity $ 32,790,700 $ 30,560,638
============ ============
The accompanying notes are an integral part of these interim consolidated
financial statements.
4
DECTRON INTERNATIONALE INC.
Interim Consolidated Statements of Earnings
For the Nine Month Period Ended October 31, 2002 and 2001
(Amounts Expressed in United States Dollars)
- --------------------------------------------------------------------------------
Nine Nine
Months Months
Ended Ended
October 31, October 31,
2002 2001
------------ ------------
Net Sales $ 29,738,616 $ 28,299,060
Cost of sales 21,260,162 18,159,308
------------ ------------
Gross profit 8,478,454 10,139,752
------------ ------------
Operating expenses
Selling 3,806,318 3,886,551
General and administrative 2,010,008 2,418,703
Depreciation and amortization 1,028,214 1,148,136
Interest expense 816,096 1,170,819
------------ ------------
7,660,636 8,624,209
------------ ------------
Earnings before income taxes 817,818 1,515,543
Income taxes 228,989 189,443
------------ ------------
Net Earnings $ 588,829 $ 1,326,100
============ ============
Net earnings per common share, basic and diluted 0.21 0.47
============ ============
Weighted average number of common shares outstanding 2,814,444 2,795,000
============ ============
The accompanying notes are an integral part of these interim consolidated
financial statements.
5
DECTRON INTERNATIONALE INC.
Interim Consolidated Statements of Earnings
For the Three Month Period Ended October 31, 2002 and 2001
(Amounts Expressed in United States Dollars)
- --------------------------------------------------------------------------------
Three Three
Months Months
Ended Ended
October 31, October 31,
2002 2001
------------ ------------
Net Sales $ 10,193,297 $ 9,965,921
Cost of sales 7,170,524 6,366,345
------------ ------------
Gross profit 3,022,773 3,599,576
------------ ------------
Operating expenses
Selling 1,427,858 1,299,141
General and administrative 713,216 972,287
Depreciation and amortization 334,097 374,952
Interest expense 265,961 349,722
------------ ------------
2,741,132 2,996,102
------------ ------------
Earnings before income taxes 281,641 603,474
Income taxes 78,860 75,351
------------ ------------
Net earnings $ 202,781 $ 528,123
============ ============
Net earnings per common share, basic and diluted 0.07 0.19
============ ============
Weighted average number of common shares outstanding 2,814,444 2,795,000
============ ============
The accompanying notes are an integral part of these interim consolidated
financial statements.
6
DECTRON INTERNATIONALE INC.
Interim Consolidated Statements of Cash Flows
For the Nine Month Period Ending October 31, 2002 and 2001
(Amounts Expressed in United States Dollars)
- --------------------------------------------------------------------------------
Nine Nine
Months Months
Ended Ended
October 31, October 31,
2002 2001
------------ ------------
Operating activities:
Net earnings $ 588,829 $ 1,326,100
Adjustments to reconcile net earnings to net cash provided by operating
activities:
Depreciation and amortization 1,028,214 1,148,136
Increase in accounts receivable (1,569,822) (3,047,024)
Decrease in income taxes receivable 58,313 193,250
Decrease (increase) in inventory 250,316 (208,275)
Increase (decrease) in prepaid expenses and sundry assets (15,098) 15,102
Increase (decrease) in accounts payable and accrued expenses 535,579 47,608
Increase in income taxes payable 171,837 --
Increase in deferred revenue 416,869 909,558
Increase in deferred income taxes 1,225 171,161
------------ ------------
Net cash provided by operating activities 1,466,262 555,616
------------ ------------
The accompanying notes are an integral part of these interim consolidated
financial statements.
7
DECTRON INTERNATIONALE INC.
Interim Consolidated Statements of Cash Flows
For the Nine Month Period Ending October 31, 2002 and 2001
(Amounts Expressed in United States Dollars)
- --------------------------------------------------------------------------------
Nine Nine
Months Months
Ended Ended
October 31, October 31,
2002 2001
------------ ------------
Investing activities:
Acquisition of property, plant and equipment (1,174,107) (111,987)
Acquisition of patents and trademarks (63,658) (44,152)
------------ ------------
Net cash used in investing activities (1,237,765) (156,139)
------------ ------------
Financing activities
Issuance of capital stock 278,800 --
Advances from long-term debt 400,000 --
Repayments (Advances) from share purchase plan receivable (68,897) 106,394
Repayments from directors -- (14,020)
Advances from loans receivable (5,740) (113,975)
Advances from bank loans 308,586 1,320,525
Repayments of note payable -- (83,394)
Repayments of long-term debt (523,208) (976,894)
Advances from (repayments of) loan payable (68,033) 36,398
------------ ------------
Net cash provided by financing activities 321,508 275,034
------------ ------------
Effect of foreign currency exchange rate changes (34,364) (655,075)
------------ ------------
The accompanying notes are an integral part of these interim consolidated
financial statements.
8
DECTRON INTERNATIONALE INC.
Interim Consolidated Statements of Cash Flows
For the Nine Month Period Ending October 31, 2002 and 2001
(Amounts Expressed in United States Dollars)
- --------------------------------------------------------------------------------
Nine Nine
Months Months
Ended Ended
October 31, October 31,
2002 2001
------------ ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 515,641 19,436
Cash and cash equivalents, beginning of period 86,727 145,448
------------ ------------
CASH AND CASH EQuIVALENTS, END OF PERIOD $ 602,368 $ 164,884
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid $ 556,890 $ 901,751
============ ============
Income taxes paid $ 142,224 $ 413,829
============ ============
The accompanying notes are an integral part of these interim consolidated
financial statements.
9
DECTRON INTERNATIONALE INC.
Interim Consolidated Statements of Stockholders' Equity
For the Nine Month Period Ending October 31, 2002
(Amounts Expressed in United States Dollars)
- --------------------------------------------------------------------------------
Cumulative Other
Retained Comprehensive Treasury
Number Amount Earnings Income Stock
------------ ------------ ------------ ------------- ------------
Balance January 31, 1999 2,795,000 $ 6,867,529 $ 1,746,761 $ (67,667) $ --
============ ============ ============ ============ ============
Purchase of 20,000 common shares -- $ -- $ -- $ -- $ (88,780)
Share purchase plan receivable -- (499,946) -- -- --
Deferred tax benefit -- 482,026 -- -- --
Foreign currency translation -- -- -- 356,788 --
Net earnings for the year -- -- 1,126,763 -- --
------------ ------------ ------------ ------------ ------------
Balance January 31, 2000 2,795,000 $ 6,849,609 $ 2,873,524 $ 289,121 $ (88,780)
============ ============ ============ ============ ============
Share purchase plan receivable -- $ (131,099) $ -- $ -- $ --
Foreign currency translation -- -- -- (303,856) --
Net earnings for the year -- -- 857,426 -- --
------------ ------------ ------------ ------------ ------------
Balance January 31, 2001 2,795,000 $ 6,718,510 $ 3,730,950 $ (14,735) $ (88,780)
============ ============ ============ ============ ============
Share purchase plan receivable -- $ 34,423 $ -- $ -- $ --
Foreign currency translation -- -- -- (577,087) --
Net earnings for the year -- -- 47,065 -- --
------------ ------------ ------------ ------------ ------------
Balance January 31, 2002 2,795,000 $ 6,752,933 $ 3,778,015 $ (591,822) $ (88,780)
============ ============ ============ ============ ============
Issuance of 50,000 shares 50,000 $ 278,800 $ -- $ -- $ --
Share purchase plan receivable -- (68,897) -- -- --
Foreign currency translation -- -- -- 189,700 --
Net earnings for the period -- -- 588,829 -- --
------------ ------------ ------------ ------------ ------------
Balance October 31, 2002 2,845,000 $ 6,962,836 $ 4,366,844 $ (402,122) $ (88,780)
============ ============ ============ ============ ============
The accompanying notes are an integral part of these interim consolidated
financial statements.
10
DECTRON INTERNATIONALE INC.
Notes to Interim Consolidated Financial Statements
As at October 31, 2002 and January 31, 2002
(Amounts Expressed in United States Dollars)
- --------------------------------------------------------------------------------
1. Summary of significant accounting policies
a) Basis of Consolidated Financial Statements Presentation
These consolidated financial statements include the accounts of Dectron
Internationale Inc., Dectron Inc. Consolidated, Circul-aire Group and
International Water Maker's Inc..
Dectron Inc. Consolidated is comprised of Dectron Inc. and of its
wholly-owned subsidiaries, Refplus Inc., Thermoplus Air Inc., Dectron
U.S.A. Inc., and IPAC 2000 Inc. As of February 1st, 2002, Fiber Mobile
Ltd. and Le Groupe Prodapec (2000) Inc. were wound up in Dectron Inc.
Circul-aire Group is comprised of Cascade Technologies Inc., and of its
wholly-owned subsidiaries, Circul-Aire Inc. Purafil Canada Inc. As of
February 1st, 2002, 9048-3140 Quebec Inc. was wound up into Dectron
Internationale Inc. and 122248 Canada Inc. was wound up into Cascade
Technologies Inc.
All inter-company profits, transactions and account balances have been
eliminated.
b) Foreign Currency Translation
The company maintains its books and records in Canadian dollars. The
operation of the company's subsidiary in the United States is an
integrated corporation. As a result, monetary assets and liabilities in
foreign currency are translated into Canadian dollars at exchange rates in
effect at the balance sheet date, whereas non-monetary assets and
liabilities are translated at the average exchange rates in effect at
transaction dates. Income and expenses in foreign currency are translated
at the average rate effective during the year with the exception of
depreciation and amortization, which is translated at the historical rate.
Gains and losses resulting from the translation of foreign currency
transactions are included in earnings.
The translation of the financial statements from Canadian dollars 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 States dollars at the rates
on the respective dates and or at any other certain rates. Adjustments
resulting from the translation are included in the accumulated other
comprehensive income in stockholder's equity.
11
DECTRON INTERNATIONALE INC.
Notes to Interim Consolidated Financial Statements
As at October 31, 2002 and January 31,2002
(Amounts Expressed in United States Dollars)
- --------------------------------------------------------------------------------
2. Segmented information
October 31, October 31,
2002 2001
------------ ------------
a) The breakdown of sales by geographic area is as follows:
Canada $ 10,798,036 $ 8,215,669
United States of America 17,638,443 17,995,219
International 1,302,137 2,088,172
------------ ------------
$ 29,738,616 $ 28,299,060
============ ============
b) The breakdown of identifiable assets by geographic area is as follows:
Canada $ 24,703,745 $ 25,270,904
United States of America 8,086,955 8,424,120
------------ ------------
$ 32,790,700 $ 33,695,024
============ ============
3. Subsequent Event
Subsequent to October 31, 2002, Dectron Internationale sold a division for a
total consideration of $2,200,000 CDN.
12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
financial statements and notes thereto and the other historical financial
information of Dectron Internationale Inc. contained elsewhere in this Form
10-QSB. The statements contained in this Form 10-QSB that are not historical
and are forward looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Exchange Act of
1934, including statements regarding Dectron Internationale Inc.
expectations, intentions, beliefs or strategies regarding the future.
Forward-looking statements include Dectron Internationale Inc.'s statements
regarding liquidity, anticipated cash needs and availability and anticipated
expense levels. All forward-looking statements included in this Form 10-QSB
are based on information available to Dectron Internationale Inc. on the date
hereof, and Dectron Internationale Inc. assumes no obligation to update any
such forward-looking statement. It is important to note that Dectron
Internationale Inc's actual results could differ materially from those in
such forward-looking statements. All dollar amounts stated throughout this
Form-10QSB are in US dollars unless otherwise indicated.
Results of Operations
Nine-month period ended October 31, 2002 compared to Nine-month period ended
October 31, 2001.
Revenues for the nine-month period ended October 31, 2002 were $29,738,616 a
5.09% increase over the nine- month period ended October 31, 2001 of
$28,299,060.
Gross profit decreased for the nine-month period ended October 31, 2002 by
$1,661,298 to $8,478,454 over the same period in 2001. This represents a
decrease of 16.38%, expressed in relation to sales.
Selling expenses decreased by $80,233 for the nine-month period ended
October 31, 2002 from $3,886,551 to $3,806,318. As a percentage of revenues,
selling expenses decreased from 13.73% to 12.80% during the nine-month period
ended October 31, 2002.
General and administrative expenses decreased by $408,695 from $2,418,703 to
$2,010,008. As a percentage of revenues, general and administrative decreased
from 8.55% to 6.76%.
Depreciation and amortization expenses decreased by $119,922 from $1,148,136
to $1,028,214. As a percentage of revenues, depreciation and amortization
expenses decreased from 4.06% to 3.46%.
Financing expenses decreased by $354,723 from $1,170,819 to $816,096. As a
percentage of revenues, financing expenses decreased from 4.14% to 2.74%.
Earnings before income taxes were of $817,818, a decrease of $697,725
compared to the nine-month period ended October 31, 2001. Relative to sales,
earnings before income taxes decreased from 5.36% for the nine-month period
ended October 31, 2001 to 2.75% in the nine-month period ended October 31, 2002.
Provision for Income taxes as a percentage of taxable earnings increased from
12.50% for the nine-month period ended October 31, 2001 to 28% for 2002. Tax
expenses increased by $39,546 because of the increase in tax rate applicable.
As a result of the above factors, the Company's net earnings decreased from
$1,326,100 to $588,829 a decrease of $737,271 or 55.60%.
Three-month period ended October 31, 2002 compared to Three-month period ended
October 31, 2001.
Revenues for the three-month period ended October 31, 2002 were $10,193,297 a
2.28% increase over revenue for the three-month period ended October 31, 2001 of
$9,965,921.
Gross profit decreased by $576,803 to $3,022,773 over the same period. Gross
profit decreased by 16.02% compared to an increase in sales of 2.28%.
13
Selling expenses increased by $128,717 in the three-month period ended
October 31, 2002. As a percentage of revenues, selling expenses increased from
13.04% to 14.01%
General and administrative expenses decreased by $259,071 to $713,216. As a
percentage of revenues, general and administrative decreased from 9.76% to
7.00%.
Depreciation and amortization expenses decreased by $40,855 from $374,952 to
$334,097. As a percentage of revenues, depreciation and amortization expenses
decrease from 3.76% to 3.28%.
Financing expenses decreased by $83,761 from $349,722 to $265,961. As a
percentage of revenues, financing expenses decreased from 3.51% to 2.61%.
Earnings before income taxes were of $281,641, a decrease of $321,833
compared to the three-month period ended October 31, 2001. Relative to sales,
income before income taxes decreased from 6.06% for the three-month period ended
October 31, 2001 to 2.76% in the three-month period ended October 31, 2002.
Provision for income taxes as a percentage of taxable earnings increased from
12.49% for the three-month period ended October 31, 2001 to 28.00% for the
three-month period ended October 31, 2002.
As a result of the above factors, the Company's net earnings decreased from
$528,123 to $202,781, a decrease of 61.60%.
Liquidity and Capital Resources
The Company had a positive net change in cash of $515,641 for the nine-month
period ended October 31, 2002. The principal sources of cash were net earnings
in the amount of $588,829, and depreciation and amortization of $1,028,214.
Principal uses of cash were an increase in accounts receivable in the amount of
$1,569,822 and acquisition of equipment in the amount of $1,174,107.
As at October 31, 2002, the Company had an available line of credit of
$10,400,00 of which $7,920,010 was used bearing interest at the Canadian prime
lending rate plus 0.25% per annum.
ITEM 3. CONTROLS AND PROCEDURES
Immediately following the signature page of this report is the Certification
that is required under Section 302 of the Sarbanes-Oxley Act of 2002. This
section of the report contains information concerning the controls evaluation
referred to in the Section 302 Certifications and the information contained
herein should be read in conjunction with the Certification.
Internal controls are designed with the objective of ensuring that assets are
safeguarded, transactions are authorized, and financial reports are prepared on
a timely basis in accordance with generally accepted accounting principles in
the United States. The disclosure procedures are designed to comply with the
regulations established by the Securities and Exchange Commission.
Internal controls, no matter how designed, have limitations. It is the
Company's intent that the internal controls be conceived to provide adequate,
but not absolute, assurance that the objectives of the controls are met on a
consistent basis. Management plans to continue its review of internal controls
and disclosure procedures on an ongoing basis.
The Company's principal executive officer and principal financial officer,
after supervising and participating in an evaluation of the effectiveness of the
Company's internal and disclosure controls and procedures as of October 31, 2002
(the "Evaluation Date"), have concluded that as of the Evaluation Date, the
Company's internal and disclosure controls and procedures were effective.
There were no significant changes in the Company's internal and disclosure
controls or in other factors that could significantly affect such internal and
disclosure controls subsequent to the date of their evaluation.
14
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
DECTRON INTERNATIONALE INC.
Dated: December 13, 2002 By: /s/ Mauro Parissi
------------------------
Mauro Parissi
Chief Financial Officer
15
CERTIFICATION
I, Ness Lakdawala, Chairman of the Board, Chief Executive Officer and President,
of Dectron Internationale Inc., certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Dectron
Internationale Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report; and
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report.
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date.
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee
of registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls.
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
Date: December 13, 2002
By: /s/ Ness Lakdawala
------------------
Ness Lakdawala, Chairman of the Board,
Chief Executive Officer and President
16
CERTIFICATION
I, Mauro Parissi, Chief Financial Officer, of Dectron Internationale Inc.,
certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Dectron
Internationale Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report; and
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report.
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date.
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee
of registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls.
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
Date: December 13, 2002
By: /s/ Mauro Parissi
-----------------
Mauro Parissi
Chief Financial Officer
17