GOODWILL, INTANGIBLE AND OTHER ASSETS, NET

12 Months Ended

Jan. 31, 2012

Disclosure Text Block Supplement [Abstract]

Goodwill Disclosure [Text Block]

5. GOODWILL, INTANGIBLE AND OTHER ASSETS, NET

Intangible assets consist of:

	2012		2011
Trademarks and tradenames, resulting from
Qualytextil acquisition, per appraisal	$	4,282,100	$	4,450,221
Appraised value of customer contracts acquired in Qualytextil acquisition, amortized over estimated remaining life of 14 months from  January 31, 2012, net of accumulated amortization of $224,667 at 2012 and $220,816 at 2011		148,228		250,778
Bank fees net of accumulated amortization of $92,104 at 2012 and $142,639 at 2011		97,007		64,651
	$	4,527,335	$	4,765,650

Amortization expense included in general and administrative expense was $212,260 and $263,195 for FY12 and FY11, respectively.

Amortization expense for the next five years is as follows:

Bank fees: $32,326 for 2012 and $38,803 for 2013

Total amortization for intangibles and other assets is scheduled for approximately USD $116,000 for 2012 and 2013 and USD $19,000 for 2014, subject to exchange rate fluctuations.

The changes in the carrying amount of trademarks and tradenames during the fiscal years 2011 and 2012 are summarized in the following table:

	Balance Beginning of Year		Changes Resulting from Foreign Exchange Differences			Balance End of Year
Year ended January 31, 2011	$	3,972,157	$	478,064		$	4,450,221
Year ended January 31, 2012	$	4,450,221	$	(168,121	)	$	4,282,100

Goodwill:

On August 1, 2005, the Company purchased Mifflin Valley, Inc., a Pennsylvania manufacturer. This acquisition resulted in the recording of $0.9 million in goodwill as of January 31, 2006. Management has determined this did not meet “more likely than not” threshold for impairment at January 31, 2012. This goodwill is included in the U.S.A. segment for reporting purposes.

In May 2008, the Company acquired Qualytextil, a Brazilian manufacturer, as discussed in Note 4. In connection with the acquisition, the Company recorded $4.2 million of goodwill. Management has determined this did not meet “more likely than not” threshold for impairment at January 31, 2012. This goodwill is included in the Brazil segment for reporting purposes.

The changes in the carrying value of goodwill during the fiscal years 2012 and 2011 are summarized in the following table:

	U.S.A.		Brazil			Total
Balance as of January 31, 2010	$	871,296	$	4,957,847		$	5,829,143
During fiscal year 2011:
Effect of foreign currency translation	$	——	$	468,608		$	468,608
Balance as of January 31, 2011	$	871,296	$	5,426,455		$	6,297,751
During fiscal year 2012:
Effect of foreign currency translation	$	——	$	(164,797	)	$	(164,797	)
Balance as of January 31, 2012	$	871,296	$	5,261,658		$	6,132,954

For Brazilian tax purposes, the Company is deducting goodwill over a five-year period which commenced with the merger of its holding company into the operating company in Brazil, which took place in November 2008.