STATEMENT OF INCOME AND RETAINED EARNINGS FOR THE YEAR ENDED

JUNE 30, 2002

UNAUDITED - See "Notice to Reader"

2002

REVENUE $1,104,786

COST OF SALES

Opening inventory 156,657

Delivery 1,607

Purchases 740,994

899,258

Closing inventory 159,144

740,114

GROSS PROFIT 364,672

OPERATING EXPENSES (schedule) 286,817

INCOME FROM OPERATIONS 77,855

OTHER INCOME (EXPENSES)

Loss on disposal of property, plant and equipment Gain on sale of investment

Miscellaneous -- 16,149

(1,101)

15,048

NET INCOME BEFORE TAX 92,903

INCOME TAX EXPENSE 14,387

NET INCOME 78,516

(DEFICIT) - Beginning of Year (61,350)

DIVIDENDS --

RETAINED EARNINGS (DEFICIT) - End of Year

$17,166

BALANCE SHEET

AS AT

JUNE 30, 2002

UNAUDITED - See "Notice to Reader"

2002

ASSETS

CURRENT

Cash $11,552

Accounts receivable 42,970

Deposits and prepaid expenses 2,942

Inventory 159,144

216,608

PROPERTY, PLANT AND EQUIPMENT (Note 2) 59,890

LIABILITIES

Bank overdraft $--

Bank loan --

Accounts payable and accrued liabilities 82,053

Long-term debt - current portion 25,200

--

Income tax payable 14,387

121,640

DUE TO SHAREHOLDER (Note 3)51,591

LONG-TERM DEBT (Note 4)86,100

259,331

RETAINED EARNINGS (DEFICIT) 17,166

17,167

$ 276,498

APPROVED

Complete cash flow statement with EXCEL