Notes to Consolidated Financial Statements (continued)
Notes to Consolidated Financial Statements
(continued)
34
(k) Foreign Currency Translation
The assets and liabilities of consolidated foreign entities are translated into U.S. dollars at the exchange rate as of the balance sheet date and revenues and expenses are translated at the average exchange rate during the period. Any resulting translation adjustment is recorded as a separate component of shareholder´s equity.
(l) Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying disclosures. Although these estimates are based on management´s best knowledge of current events and actions the Company may undertake in the future, actual results ultimately may differ from the estimates.
(m) Segment Information
The Company operates in two primary business segments which are (1) pesticides and (2) sustainable solutions.
(n) Recently Issued Accounting Standards
The FASB issued FASB Statement No. 160, Non-controlling interests in Consolidated Financial Statements (Statement 160) in December 2007. Statement 160 will require non-controlling interests (previously referred to as minority interests) to be treated as a separate component of equity. The Statement applies to the accounting for non-controlling interest holders in consolidated financial statements. Statement 160 is effective for periods beginning on or after December 15, 2008. Earlier application is prohibited. Statement 160 will be applied prospectively to all non-controlling interests, including any that arose before the effective date except that comparative period information must be recast to classify non-controlling interests to equity, attribute net income and other comprehensive income to non-controlling interests, and provide other disclosures required by Statement 160. This has no effect for 2008 but will impact the accounting for the Company´s new Joint Venture, named TyraChem which has been created in 2009.
(2) Liquidity and Capital Resources
A
s of December 31, 2008, the Company had US$9,175,712 (2007: US$27,521,625) in cash and no indebtedness.
The Company has had significant negative cash flows from operating activities since inception. The Company believes that with existing cash on hand, cash expected to be received through existing contracts and the ability to control costs as a result of the Company´s cost minimization program implemented in the second half of 2008 that the Company will have sufficient cash to meet its working capital needs through 2009.
(3) Accounts Receivable
A
ccounts receivable as of December 31, 2008 and 2007 consist of:
2008
2007
Trade receivables, net of allowance
of US$878,697 (2007: US$—)
$ 551,562
$ 393,340
Interest receivables
6,931
92,250
O
ther receivables
1,295
—
$ 559,788
$ 485,590
(4) Inventories
Inventories as of December 31, 2008 and 2007 consist of:
2008
2007
R
aw materials
$ 792,050
$ 380,405
Work in progress
544,940
298,351
Finished goods
359,262
86,351
$ 1,696,252
$ 765,107
