SEC Company Response from IGC Pharma, Inc. (IGC) (CIK 0001326205) (IGC) — Jun 9, 2011
IGC Pharma, Inc. (IGC) (CIK 0001326205)
Date: June 9, 2011 · CIK: 0001326205 · Accession: 0001185185-11-000867
AI Filing Summary & Sentiment
Reasoning
Letter
VIA EDGAR Securities and Exchange Commission Forms 10-Q for the Periods Ended June 30, 2010, September 30, 2010 and December 31, 2010 Definitive Proxy Statement on Schedule 14A filed on July 23, 2010 File No. 1-32830
Dear Mr. Decker:
This is our response to the SEC Staff’s follow-up comments in your letter of May 9, 2011 to India Globalization Capital, Inc. (“IGC”) in regard to the above-referenced filings.
For your convenience, we have included each of the Staff’s comments in italics before each of IGC’s responses. References in this letter to “we,” “our” or “us” mean IGC or its advisors, as the context may dictate.
ss:
India Globalization Capital, Inc.
John Selvaraj,
Treasurer, Principal Accounting
and Financial Officer
FORM 10-K/A FOR THE YEAR ENDED MARCH 31, 2010
General
1. Where a comment below requests additional disclosures or other revisions to be made, please show us in your supplemental response what the revisions will look like. These revisions should be included in your future filings.
IGC response:
Where relevant, we have provided proposed revised draft disclosures in our responses below. We have indicated which comments we propose to address by amending IGC’s existing SEC filings and which comments we propose to address in subsequent filings. Unless we are directed otherwise by the SEC, we will wait for the SEC’s comments on this response before amending our current filings.
Risk Factors, page 7
General
2. We have read your response to prior comment seven.
·
You indicate that the individual responsible for consolidation and preparation of your financial statements is located in India. He is a trained accountant with twenty years of accounting experience. He has studied U.S. GAAP accounting over the last three years primarily by working with the outside experts and continues to work closely with our outside U.S. GAAP consultants. He and his team took over the conversion activity from the outside consultants in 2010. Please more fully explain the nature of the time and extent of his involvement with the U.S. GAAP consultants.
IGC response:
The individual responsible for consolidation and preparation of our financial statements is employed full-time by IGC, is a qualified accountant by education and experience, and is located in India. He is in charge of our U.S. GAAP financial statement preparation. Specifically, he undertakes technical accounting analysis for various routine and non-routine transactions, manages all of the accounting staff in India, manages and coordinates the day-to-day financial reporting process, and manages the monthly and quarterly closings of the books of account.
Additionally, for any matters that may require outside consultation, our accountant calls upon qualified consultants with special expertise in U.S. GAAP accounting, U.S. tax, legal, and other matters. For the purpose of preparation of IGC’s financial statements, he records appropriate entries, is responsible for currency conversion, prepares the consolidated statements, co-ordinates with the outside auditors for the completion of the audit process, and drafts footnotes and other disclosures. As noted above, he also consults with outside U.S. GAAP experts whenever is required.
In general, our accountant is a key member of the financial reporting team and spends more than 70% of his time in financial reporting matters and considerable time (approximately 30%) in co-ordination with U.S. GAAP accounting consultants and outside auditors in the preparation of IGC’s U.S. GAAP financial statements.
During Fiscal 2010, our accountant was also responsible for transitioning from an external bookkeeping and U.S. GAAP conversion service to an in-house operation. Our accountant worked with both our former U.S. GAAP accounting consultants and our new U.S. GAAP accounting advisor, which we hired in January 2010. Our accountant was provided with help from the new outside U.S. GAAP advisor on the preparation of Form 10-Qs and Form 10-Ks, cash flow statements, footnotes, disclosures, among others, and other technical accounting interpretations for key transactions.
•
You mentioned that your CFO previously worked for a public company. Please explain his role at this public company. Please tell us how long he worked at this public company. Please tell us whether that company's financial statements were prepared in U.S. GAAP. Please provide us with similar information for the other members of your core finance group.
IGC Response:
Our CFO previously worked for a Maryland-based corporation, Startec Global Communications, Inc. (Startec). After its initial public offering in 1997, he worked at Startec until 2007. He held the Vice President of Finance position for over six years at Startec. His responsibilities included, the set-up and management of Startec’s overseas operations, (UK, France, Germany, Netherlands, India, and certain Asian countries), management of accounting operations, banking, and financial reporting including consolidated financial statements, statement conversions to U.S. GAAP, and filings with the SEC. As a U.S. publicly held company, Startec’s financial statements were prepared in accordance with U.S. GAAP.
In each of IGC’s operations, there are accounting personnel responsible for carrying out the day-to-day accounting processes. Our accountant in India and our CFO are the core of our finance team and directly supervise our financial reporting process.
•
You indicate that you have recently engaged a large accounting firm on a retainer basis as your accounting advisor. You consult them to seek relevant guidance and technical accounting assistance and when in need of a review of certain disclosures and other related issues. Please provide us with a more robust discussion of the credentials of this large accounting firm and the specifics surrounding your consults subsequent to retaining them.
IGC Response:
We engaged our current U.S. GAAP advisor in January 2010. Our U.S. GAAP advisor is the Indian branch of a global network of professional firms providing audit, tax and advisory services. They provide U.S. GAAP audit and advisory services in the area of financial reporting to a range of international and national clients. The firm employs accounting professionals and advises us on important accounting matters. The firm employs individuals that are trained and experienced in U.S. GAAP.
Based on our needs, the advisor provides the following services:
·
Review of Form 10-Q and Form 10-K prior to filing with the SEC and assisting IGC in identifying potential disclosures and improved compliance with U.S. GAAP; and
·
Assistance under U.S. GAAP on accounting issues identified by the IGC’s management.
Subsequent to retaining our current U.S. GAAP advisor, we have consulted them practically on all accounting matters both as a way to familiarize them with our procedures and as a way to provide our staff with a deeper understanding of U.S. GAAP and SEC reporting. Specifically, we have consulted them about: accounting entries to be recorded in financial statement for consolidation, assistance in the simplification of consolidation worksheets, additional desirable financial statement disclosures, the accounting for de-consolidation, treatment of stock, options and warrants, repayment/exchange of debt, depreciation, equity table, notes, new reporting and disclosure rules, and U.S.GAAP rules for revenue recognition, among others.
•
In addition, for each accounting firm/consultant, please provide the following:
§
Tell us the specific role of the accounting firm/consultant with regards to the preparation of the financial statements;
IGC Response:
We use three accounting firms/consultants/advisors, as follows:
The first is the U.S.GAAP advisor that we hired in January 2010, as mentioned before. Apart from the specifics described above, they also review our Form 10-Qs and Form 10-Ks to ensure that they comply with requirements including any new accounting literature. They also check Form 10-Qs and Form 10-Ks against a check-list to ensure compliance.
The second accounting firm is KPK faServ India Pvt Ltd (“KPK”). They are based in Bangalore India, and are responsible for all record keeping for IGC USA and IGC Mauritius. They are involved in the day-to-day recording of transactions. They prepare the stand-alone financials for the IGC holding company. They have ready access to the U.S. GAAP advisor.
The third accounting firm we use is T.D. Emory and Associates a U.S. based tax consultant. They prepare the calculations and disclosures related to tax.
§
Tell us whether the accounting firms/consultants are involved in the daily recording of transactions;
IGC Response:
KPK does the day-to-day recording of transactions of the USA and Mauritius holding companies. None of the other firms mentioned are involved in the day-to-day recording of transactions.
§
Tell us whether these accounting firms/consultants are on-site and are essentially performing a record keeping role;
IGC Response:
None of the outside firms or consultants are located on-site. KPK is off-site and they perform a record-keeping role for parts of IGC as noted above. We provide them all the necessary source documents for the purpose of book-keeping and our IGC personnel co-ordinates this activity and exercises review and control on an ongoing basis.
In all our operating companies, there are in-house accounting teams that carry out day-to-day accounting and record-keeping processes that comprise most of our business.
§
Specifically identify the types of procedures that your accounting firms/consultants are providing; and
IGC Response:
The procedures performed by each of our consultants and accounting firms are described above.
§
For each accounting firm/consultant identified, please provide us with a robust discussion of the background of the specific employees of the accounting firms/consultants that provide services to the Company. Please tell us specifically about the employees' U.S. GAAP experience including whether they worked at a public company or audited public companies. Please also discuss the employees’ role and how long they worked in a U.S. GAAP environment.
IGC Response:
Our U.S. GAAP advisor employs professionally qualified chartered accountants trained and having practical working experience in U.S. GAAP audits and advisory engagements for their clients. The team members have gone through the internal U.S. GAAP training and have relevant experience. A number of advisor’s employees have worked on audits and advisory projects in public companies. They have experience ranging from three to ten years on audit and accounting requiring U.S. GAAP and related reporting matters. They are able to utilize their own team of internal experts on an as needed basis for any highly technical matters that may arise. The U.S. GAAP advisor has a client service team (comprising Engagement Director, Engagement Manager, Engagement In-charge and other team members) based out of Bangalore in India that is led by an Engagement Director. The Engagement Director is a qualified chartered accountant with over 10 years of post-qualification experience in the area of accounting and audit under U.S. GAAP, IFRS and Indian GAAP. The Engagement Director has been involved in audits of SEC registrants in the past and has extensive experience in U.S, GAAP engagements. The Engagement Manager is also a qualified chartered accountant with over 7 years of post-qualification experience in the areas of accounting and audit under U.S. GAAP, IFRS and Indian GAAP. The Engagement Manager has been involved in U.S. GAAP audits of other companies in the past. The Engagement In-charge is also a qualified chartered accountant with over 3 years of post-qualification experience in the areas of accounting and audit under U.S. GAAP, IFRS and Indian GAAP. The Engagement In-Charge has been involved in U.S. GAAP audit of SEC registrants in the past. Initial discussions between the company and the U.S. GAAP advisor are initiated with the Engagement In-charge and are then escalated to others.
KPK is an accounting firm directed and staffed by qualified Chartered Accountants from India. Their primary business focus is providing back-office accounting support services for clients spread across the world, but mostly for their Indian business clients and also for some business enterprises located in the USA and UK. Our primary contact at the firm is the Managing Partner. KPK’s expertise in U.S. GAAP has been largely gained from their hands-on experience rendering support services to their clients both for direct accounting and also group reporting. KPK’s professionals have not worked in public companies nor audited public companies. Their role is to provide bookkeeping for business transactions. KPK has been working with U.S. GAAP clients for the last four years.
Our U.S. based tax consultant, TD Emory, CPA & Associates, prepares our income tax returns and advises us on tax strategies and disclosures for the financial statements. The individual that we work with is the Managing Partner at the firm, Mr. Emory, a CPA with experience in U.S. taxation. His experience includes assisting U.S. based filers, including Fannie Mae, with the preparation of Form 10-Qs, Form 10-Ks and restatements. He started his accounting career and training at the public accounting firm of Ernst & Young and worked there from 1998 to 2007.
Management's Discussion and Analysis, page 17
General
3. We have read your response to prior comment nine. You have provided a sensitivity analysis showing the impact on revenues and expense of a 5% change in the exchange rate. As previously requested, please expand MD&A to address how the actual changes in your exchange rate impacted your revenues and expenses for the periods presented.
IGC Response:
For Fiscal 2009 and 2010, IGC had revenues only from operations in India. IGC’s non-USD revenues and expenses are converted into USD amounts based on the average rate of exchange. The average rate of exchange used is as follows:
Fiscal 2009 – 1 USD = INR 45.35
Fiscal 2010 – 1 USD = INR 47.91
In the analysis below, we have compared the reported revenue and expense numbers for Fiscal 2010 with the Fiscal 2010 based on the average exchange rate used for Fiscal 2009 to highlight the impact of exchange rate changes on IGC’s revenues and expenses.
Particulars
2009-10
(actual exchange rate)
2009-10
(using the exchange rate which was used in 08-09)
Total Variation
Variation in percentage
Total Revenue
$ 17,897,826
18,908,155
$ 1,010,329
5.65 %
Total expenses before taxes
$ 17,166,255
18,135,287
$ 969,032
5.65 %
Average exchange rate for 1 USD
INR 47.91
INR 45.35
In future, we will provide similar discussions in our MD&A.
4. We have read your response to prior comment 10 and have the following additional comments:
•
Under your critical accounting policy for revenue, you simply reiterate your revenue recognition policy as discussed on page F-10 of your financial statements. You disclose that revenue from sales of goods is recognized when substantial risk and rewards of ownership are transferred to the buyer under the terms of the contract. Please revise your disclosure to further clarify when substantial risk and rewards of ownership are transferred to the buyer. Please expand your disclosure to indicate what consideration you gave to SAB 104 in determining when revenue from sales of g
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CORRESP
1
filename1.htm
indiaglobal-corresp060811.htm
India Globalization Capital, Inc.
4336 Montgomery Avenue
Bethesda, Maryland 20814
Phone: 301-983-0998
Fax: 240-465-0273
June 9, 2011
VIA EDGAR
Securities and Exchange Commission
100 F. Street, N.E.
Washington, D.C. 20549
Attn: Rufus Decker
Accounting Branch Chief
Re:
India Globalization Capital, Inc.
Forms 10-K & 10-K/A for the Year Ended March 31, 2010
Forms 10-Q for the Periods Ended June 30, 2010, September 30, 2010 and
December 31, 2010
Definitive Proxy Statement on Schedule 14A filed on July 23, 2010
File No. 1-32830
Dear Mr. Decker:
This is our response to the SEC Staff’s follow-up comments in your letter of May 9, 2011 to India Globalization Capital, Inc. (“IGC”) in regard to the above-referenced filings.
For your convenience, we have included each of the Staff’s comments in italics before each of IGC’s responses. References in this letter to “we,” “our” or “us” mean IGC or its advisors, as the context may dictate.
ss:
India Globalization Capital, Inc.
John Selvaraj,
Treasurer, Principal Accounting
and Financial Officer
1
FORM 10-K/A FOR THE YEAR ENDED MARCH 31, 2010
General
1. Where a comment below requests additional disclosures or other revisions to be made, please show us in your supplemental response what the revisions will look like. These revisions should be included in your future filings.
IGC response:
Where relevant, we have provided proposed revised draft disclosures in our responses below. We have indicated which comments we propose to address by amending IGC’s existing SEC filings and which comments we propose to address in subsequent filings. Unless we are directed otherwise by the SEC, we will wait for the SEC’s comments on this response before amending our current filings.
Risk Factors, page 7
General
2. We have read your response to prior comment seven.
·
You indicate that the individual responsible for consolidation and preparation of your financial statements is located in India. He is a trained accountant with twenty years of accounting experience. He has studied U.S. GAAP accounting over the last three years primarily by working with the outside experts and continues to work closely with our outside U.S. GAAP consultants. He and his team took over the conversion activity from the outside consultants in 2010. Please more fully explain the nature of the time and extent of his involvement with the U.S. GAAP consultants.
IGC response:
The individual responsible for consolidation and preparation of our financial statements is employed full-time by IGC, is a qualified accountant by education and experience, and is located in India. He is in charge of our U.S. GAAP financial statement preparation. Specifically, he undertakes technical accounting analysis for various routine and non-routine transactions, manages all of the accounting staff in India, manages and coordinates the day-to-day financial reporting process, and manages the monthly and quarterly closings of the books of account.
Additionally, for any matters that may require outside consultation, our accountant calls upon qualified consultants with special expertise in U.S. GAAP accounting, U.S. tax, legal, and other matters. For the purpose of preparation of IGC’s financial statements, he records appropriate entries, is responsible for currency conversion, prepares the consolidated statements, co-ordinates with the outside auditors for the completion of the audit process, and drafts footnotes and other disclosures. As noted above, he also consults with outside U.S. GAAP experts whenever is required.
In general, our accountant is a key member of the financial reporting team and spends more than 70% of his time in financial reporting matters and considerable time (approximately 30%) in co-ordination with U.S. GAAP accounting consultants and outside auditors in the preparation of IGC’s U.S. GAAP financial statements.
2
During Fiscal 2010, our accountant was also responsible for transitioning from an external bookkeeping and U.S. GAAP conversion service to an in-house operation. Our accountant worked with both our former U.S. GAAP accounting consultants and our new U.S. GAAP accounting advisor, which we hired in January 2010. Our accountant was provided with help from the new outside U.S. GAAP advisor on the preparation of Form 10-Qs and Form 10-Ks, cash flow statements, footnotes, disclosures, among others, and other technical accounting interpretations for key transactions.
•
You mentioned that your CFO previously worked for a public company. Please explain his role at this public company. Please tell us how long he worked at this public company. Please tell us whether that company's financial statements were prepared in U.S. GAAP. Please provide us with similar information for the other members of your core finance group.
IGC Response:
Our CFO previously worked for a Maryland-based corporation, Startec Global Communications, Inc. (Startec). After its initial public offering in 1997, he worked at Startec until 2007. He held the Vice President of Finance position for over six years at Startec. His responsibilities included, the set-up and management of Startec’s overseas operations, (UK, France, Germany, Netherlands, India, and certain Asian countries), management of accounting operations, banking, and financial reporting including consolidated financial statements, statement conversions to U.S. GAAP, and filings with the SEC. As a U.S. publicly held company, Startec’s financial statements were prepared in accordance with U.S. GAAP.
In each of IGC’s operations, there are accounting personnel responsible for carrying out the day-to-day accounting processes. Our accountant in India and our CFO are the core of our finance team and directly supervise our financial reporting process.
•
You indicate that you have recently engaged a large accounting firm on a retainer basis as your accounting advisor. You consult them to seek relevant guidance and technical accounting assistance and when in need of a review of certain disclosures and other related issues. Please provide us with a more robust discussion of the credentials of this large accounting firm and the specifics surrounding your consults subsequent to retaining them.
IGC Response:
We engaged our current U.S. GAAP advisor in January 2010. Our U.S. GAAP advisor is the Indian branch of a global network of professional firms providing audit, tax and advisory services. They provide U.S. GAAP audit and advisory services in the area of financial reporting to a range of international and national clients. The firm employs accounting professionals and advises us on important accounting matters. The firm employs individuals that are trained and experienced in U.S. GAAP.
3
Based on our needs, the advisor provides the following services:
·
Review of Form 10-Q and Form 10-K prior to filing with the SEC and assisting IGC in identifying potential disclosures and improved compliance with U.S. GAAP; and
·
Assistance under U.S. GAAP on accounting issues identified by the IGC’s management.
Subsequent to retaining our current U.S. GAAP advisor, we have consulted them practically on all accounting matters both as a way to familiarize them with our procedures and as a way to provide our staff with a deeper understanding of U.S. GAAP and SEC reporting. Specifically, we have consulted them about: accounting entries to be recorded in financial statement for consolidation, assistance in the simplification of consolidation worksheets, additional desirable financial statement disclosures, the accounting for de-consolidation, treatment of stock, options and warrants, repayment/exchange of debt, depreciation, equity table, notes, new reporting and disclosure rules, and U.S.GAAP rules for revenue recognition, among others.
•
In addition, for each accounting firm/consultant, please provide the following:
§
Tell us the specific role of the accounting firm/consultant with regards to the preparation of the financial statements;
IGC Response:
We use three accounting firms/consultants/advisors, as follows:
The first is the U.S.GAAP advisor that we hired in January 2010, as mentioned before. Apart from the specifics described above, they also review our Form 10-Qs and Form 10-Ks to ensure that they comply with requirements including any new accounting literature. They also check Form 10-Qs and Form 10-Ks against a check-list to ensure compliance.
The second accounting firm is KPK faServ India Pvt Ltd (“KPK”). They are based in Bangalore India, and are responsible for all record keeping for IGC USA and IGC Mauritius. They are involved in the day-to-day recording of transactions. They prepare the stand-alone financials for the IGC holding company. They have ready access to the U.S. GAAP advisor.
The third accounting firm we use is T.D. Emory and Associates a U.S. based tax consultant. They prepare the calculations and disclosures related to tax.
§
Tell us whether the accounting firms/consultants are involved in the daily recording of transactions;
4
IGC Response:
KPK does the day-to-day recording of transactions of the USA and Mauritius holding companies. None of the other firms mentioned are involved in the day-to-day recording of transactions.
§
Tell us whether these accounting firms/consultants are on-site and are essentially performing a record keeping role;
IGC Response:
None of the outside firms or consultants are located on-site. KPK is off-site and they perform a record-keeping role for parts of IGC as noted above. We provide them all the necessary source documents for the purpose of book-keeping and our IGC personnel co-ordinates this activity and exercises review and control on an ongoing basis.
In all our operating companies, there are in-house accounting teams that carry out day-to-day accounting and record-keeping processes that comprise most of our business.
§
Specifically identify the types of procedures that your accounting firms/consultants are providing; and
IGC Response:
The procedures performed by each of our consultants and accounting firms are described above.
§
For each accounting firm/consultant identified, please provide us with a robust discussion of the background of the specific employees of the accounting firms/consultants that provide services to the Company. Please tell us specifically about the employees' U.S. GAAP experience including whether they worked at a public company or audited public companies. Please also discuss the employees’ role and how long they worked in a U.S. GAAP environment.
IGC Response:
Our U.S. GAAP advisor employs professionally qualified chartered accountants trained and having practical working experience in U.S. GAAP audits and advisory engagements for their clients. The team members have gone through the internal U.S. GAAP training and have relevant experience. A number of advisor’s employees have worked on audits and advisory projects in public companies. They have experience ranging from three to ten years on audit and accounting requiring U.S. GAAP and related reporting matters. They are able to utilize their own team of internal experts on an as needed basis for any highly technical matters that may arise. The U.S. GAAP advisor has a client service team (comprising Engagement Director, Engagement Manager, Engagement In-charge and other team members) based out of Bangalore in India that is led by an Engagement Director. The Engagement Director is a qualified chartered accountant with over 10 years of post-qualification experience in the area of accounting and audit under U.S. GAAP, IFRS and Indian GAAP. The Engagement Director has been involved in audits of SEC registrants in the past and has extensive experience in U.S, GAAP engagements. The Engagement Manager is also a qualified chartered accountant with over 7 years of post-qualification experience in the areas of accounting and audit under U.S. GAAP, IFRS and Indian GAAP. The Engagement Manager has been involved in U.S. GAAP audits of other companies in the past. The Engagement In-charge is also a qualified chartered accountant with over 3 years of post-qualification experience in the areas of accounting and audit under U.S. GAAP, IFRS and Indian GAAP. The Engagement In-Charge has been involved in U.S. GAAP audit of SEC registrants in the past. Initial discussions between the company and the U.S. GAAP advisor are initiated with the Engagement In-charge and are then escalated to others.
5
KPK is an accounting firm directed and staffed by qualified Chartered Accountants from India. Their primary business focus is providing back-office accounting support services for clients spread across the world, but mostly for their Indian business clients and also for some business enterprises located in the USA and UK. Our primary contact at the firm is the Managing Partner. KPK’s expertise in U.S. GAAP has been largely gained from their hands-on experience rendering support services to their clients both for direct accounting and also group reporting. KPK’s professionals have not worked in public companies nor audited public companies. Their role is to provide bookkeeping for business transactions. KPK has been working with U.S. GAAP clients for the last four years.
Our U.S. based tax consultant, TD Emory, CPA & Associates, prepares our income tax returns and advises us on tax strategies and disclosures for the financial statements. The individual that we work with is the Managing Partner at the firm, Mr. Emory, a CPA with experience in U.S. taxation. His experience includes assisting U.S. based filers, including Fannie Mae, with the preparation of Form 10-Qs, Form 10-Ks and restatements. He started his accounting career and training at the public accounting firm of Ernst & Young and worked there from 1998 to 2007.
Management's Discussion and Analysis, page 17
General
3. We have read your response to prior comment nine. You have provided a sensitivity analysis showing the impact on revenues and expense of a 5% change in the exchange rate. As previously requested, please expand MD&A to address how the actual changes in your exchange rate impacted your revenues and expenses for the periods presented.
IGC Response:
For Fiscal 2009 and 2010, IGC had revenues only from operations in India. IGC’s non-USD revenues and expenses are converted into USD amounts based on the average rate of exchange. The average rate of exchange used is as follows:
Fiscal 2009 – 1 USD = INR 45.35
Fiscal 2010 – 1 USD = INR 47.91
6
In the analysis below, we have compared the reported revenue and expense numbers for Fiscal 2010 with the Fiscal 2010 based on the average exchange rate used for Fiscal 2009 to highlight the impact of exchange rate changes on IGC’s revenues and expenses.
Particulars
2009-10
(actual exchange rate)
2009-10
(using the exchange rate which was used in 08-09)
Total Variation
Variation in percentage
Total Revenue
$
17,897,826
18,908,155
$
1,010,329
5.65
%
Total expenses before taxes
$
17,166,255
18,135,287
$
969,032
5.65
%
Average exchange rate for 1 USD
INR 47.91
INR 45.35
In future, we will provide similar discussions in our MD&A.
4. We have read your response to prior comment 10 and have the following additional comments:
•
Under your critical accounting policy for revenue, you simply reiterate your revenue recognition policy as discussed on page F-10 of your financial statements. You disclose that revenue from sales of goods is recognized when substantial risk and rewards of ownership are transferred to the buyer under the terms of the contract. Please revise your disclosure to further clarify when substantial risk and rewards of ownership are transferred to the buyer. Please expand your disclosure to indicate what consideration you gave to SAB 104 in determining when revenue from sales of g