FORM 6-K/A

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.  20549


                        REPORT OF FOREIGN PRIVATE ISSUER
                        PURSUANT TO RULE 13A-16 OR 15D-16
                                     OF THE
                         SECURITIES EXCHANGE ACT OF 1934


For  the  month  of  November,  2002


                            ENERGY POWER SYSTEMS LIMITED
                  (FORMERLY: ENGINEERING POWER SYSTEMS LIMITED)
                  ---------------------------------------------
                    (Address of Principal executive offices)


          Suite 301, 2 Adelaide Street West, Toronto, Ontario, M5H 1L6
          ------------------------------------------------------------
                    (Address of principal executive offices)


Indicate  by check mark whether the registrant files or will file annual reports
under  cover  form  20-F  or  Form  40-F:

     Form  20-F    X          Form  40-F
               -----


Indicate  by  check  mark  whether  the registrant by furnishing the information
contained  in  this  Form  is  also  thereby  furnishing  the information to the
Commission  pursuant  to Rule 12g3-2b under the Securities Exchange Act of 1934:

               Yes                     No     X
                                          -----

If  "Yes"  is  marked, indicate below the file number assigned to the registrant
in  connection  with  Rule  12g3-  2(b):  82

                                   SIGNATURES

Pursuant  to  the  requirements  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.

     ENERGY  POWER  SYSTEMS  LIMITED
                              (formerly:  Engineering  Power  Systems  Limited)


Date:  November  27,  2002               By:____"Sandra  J.  Hall"____  ______
     ---------------------                  ----------------------------------
     Sandra  J.  Hall,  President,  Secretary  &  Director
















                               [GRAPHIC  OMITED]



                               [GRAPHIC  OMITED]

Energy  Power  Systems  Limited

          Management's  Discussion  And  Analysis  of  Financial  Condition
          and  Operating  Results
          For  the  Period  Ending  June  30,  2002













    Suite 301, 2 Adelaide Street West, Toronto, Ontario, M5H 1L6 Telephone: 416
                  861-1484 Facsimile: 416 861-9623 www.epsx.com


 MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND OPERATING RESULTS



     The  following  discussion  and  analysis  of  Energy Power Systems Limited
("Energy  Power"  or  the  "Company")  should  be  read  in conjunction with the
Company's  Audited  Consolidated Financial Statements for the fiscal years ended
June 30, 2002, 2001 and 2000 and notes thereto.  Unless otherwise indicated, the
following  discussion  is  based on Canadian dollars and presented in accordance
with  Canadian  Generally Accepted Accounting Principles ("GAAP"). For reference
to  differences between Canadian and US Generally Accepted Accounting Principles
see  note  17  of  the  Audited  Consolidated  Financial  Statements.
Certain  statements  contained  herein  constitute  "forward-looking statements"
within  the meaning of the Private Securities Litigation Reform Act of 1995 (the
"Reform  Act"),  which  reflect the Company's current expectations regarding the
future  results of operations, performance and achievements of the Company.  The
Company  has  tried,  wherever  possible,  to  identify  these  forward-looking
statements  by, among other things, using words such as "anticipate," "believe,"
"estimate,"  "expect"  and  similar  expressions.  These  statements reflect the
current beliefs of management of the Company, and are based on current available
information.  Accordingly,  these  statements  are  subject to known and unknown
risks,  uncertainties  and  other  factors which could cause the actual results,
performance  or  achievements  of  the  Company  to differ materially from those
expressed  in,  or  implied  by,  these  statements.  (See  the Company's Annual
Information  Form  and  Annual  Form 20 F for Risk Factors.)  The Company is not
obligated  to update or revise these "forward-looking" statements to reflect new
events  or  circumstances.

OVERVIEW
     The  Company is a corporation amalgamated under the laws of the Province of
Ontario and Provincially registered in the Provinces of Alberta and Newfoundland
and  is  an  energy  source  and  service  company that operates an Industrial &
Offshore Division, and an Oil & Gas Division. The audited consolidated financial
results  for  the fiscal periods ending June 30, 2002, 2001 and 2000 include the
accounts  of the Company and its wholly owned subsidiary M&M Engineering Limited
("M&M"),  a Newfoundland and Labrador company, and M&M's wholly-owned subsidiary
M&M  Offshore Limited ("MMO"), a Newfoundland and Labrador company (reference to
M&M may include MMO). M&M and MMO together operate from their 47,500 square foot
fabrication  facility  and  15  acre  property. M&M is an industrial, mechanical
contractor. MMO (i) produces steel components for structures and heavy industry;
(ii)  manufactures  pressurized  vessels  and tanks; and (iii) provides in-plant
fabrication, welding and assembly services for the offshore oil sector and heavy
industry.

During  fiscal  2001  the  Company  commenced  its  oil  and gas operations. The
activities  of the Company's Oil & Gas Division include exploration, development
and  production of oil and natural gas. The Company's oil and gas properties are
located  in the Canadian Provinces of Alberta, Ontario and Prince Edward Island.
During  fiscal  2001 the Company adopted a plan to discontinue the operations of
its  Power  Division.  This division has been treated as discontinued operations
for  accounting  purposes (see Note 20). As such the operations of the Company's
Power  Division  have  been excluded from  the audited consolidated statement of
loss  and  deficit  from  continuing  operations  in  prior periods. The Company
intends  to  monetize  its  investment  in  the  Andhra  Pradesh Project, India.
     During  fiscal  2000  the  Company  disposed  of  its  interests  in Merlin
Engineering  A.S.  ("Merlin")  and  divested ASI Holdings, Inc. ("ASIH").  These
operations  have been treated as discontinued operations for accounting purposes
(see  Note  20).  As  such, the operations of Merlin and ASIH have been excluded
from  the  audited  consolidated  statement  of loss and deficit from continuing
operations  in  current  and  prior  periods.


     CRITICAL ACCOUNTING POLICIES: The Company's significant accounting policies
are  described in the notes to the audited consolidated financial statements. It
is  increasingly  important  to  understand  that  the  application of generally
accepted  accounting  principles  involve  certain  assumptions,  judgments  and
estimates  that  affect  reported  amounts  of assets, liabilities, revenues and
expenses.  The  application of principles can cause varying results from company
to  company.

The  most  significant  policies  that  impact  the Company and its subsidiaries
relate  to  revenue  recognition  policies,  oil  and gas accounting and reserve
estimates,  impairment  of  capital  assets,  accounting for joint ventures, the
future  income tax assets and liabilities, contingent liabilities and assets and
valuation  of  the  Company's  investment in Konaseema EPS Oakwell Power Limited
("KEOPL").  During  the 2002 fiscal year  the Company adopted the new accounting
policies  for  Goodwill  and  Other  intangibles.

     Revenue  recognition:  Revenue  for M&M & MMO is generated principally from
contracts  or  purchase  orders  awarded  through a competitive bidding process.
Revenue  from  construction  and  fabrication  contracts  is  recognized  on the
percentage  of  completion  basis,  pursuant  to  which  contract  revenues  are
recognized by assessing the value of the work performed in relation to the total
estimated  cost  of  the  contract  based  upon  the  contract  value.

     Oil and gas revenue is recognized on actual production volumes and delivery
of  the  product  to  the  market,  based  on  the  operator's  reports.

Oil  and gas accounting and reserve estimates: The Company follows the full cost
method  of  accounting for oil and gas operations whereby all costs of exploring
for  and  developing  oil and gas reserves are initially capitalized. Such costs
include  land  acquisition  costs, geological and geophysical expenses, carrying
charges  on  non-producing  properties,  costs  of drilling and overhead charges
directly  related  to  acquisition  and  exploration  activities.

Costs capitalized, together with the costs of production equipment, are depleted
on  the  unit-of-production method based on the estimated gross proved reserves.
Petroleum  products  and  reserves  are  converted to equivalent units of oil by
converting  natural  gas  at  6,000  cubic  feet  of  gas  to  1  barrel of oil.
Costs  acquiring  and evaluating unproved properties are initially excluded from
depletion  calculations.  These unevaluated properties are assessed periodically
to  ascertain whether impairment has occurred. When proved reserves are assigned
or  the  property  is considered to be impaired, the cost of the property or the
amount  of  the  impairment is added to costs subject to depletion calculations.
Proceeds from a sale of petroleum and natural gas properties are applied against
capitalized  costs,  with  no  gain or loss recognized, unless such a sale would
significantly  alter  the  rate  of  depletion.


In  applying  the  full cost method, under Canadian GAAP, the Company performs a
ceiling  test  which  restricts the capitalized costs less accumulated depletion
and  amortization  from  exceeding an amount equal to the estimated undiscounted
value  of future net revenues from proved oil and gas reserves, as determined by
independent engineers, based on sales prices achievable under existing contracts
and posted average reference prices in effect at the end of the Company's fiscal
year  and  current  costs,  and  after  deducting  estimated  future general and
administrative  expenses,  production  related expenses, financing costs, future
site  restoration  costs  and  income  taxes.

In  applying  the full cost method under US GAAP, the Company performs a ceiling
test based on the same calculations used for Canadian GAAP except the Company is
required  to  discount  future net revenue at 10% and there is no deduction from
the  US  GAAP  ceiling  test  for  estimated  future  general and administrative
expenses  and  interest.

Impairment  of  Capital Assets: The Company has written down $0.3 million of the
carrying  value of its Port aux Basques property to its estimated net realizable
amount  of  $0.1  million  in  2002  ($1.5  million  was  charged  2001).

Joint  Ventures:  The Company's Industrial & Offshore Division  carries out part
of  its  business  in  four  joint  ventures. The Company's audited consolidated
financial  statements  include  the Company's proportionate share of these joint
ventures  assets,  liabilities,  revenues  and  expenses.

Future  Income  Assets and Liabilities: The Company uses the asset and liability
method  of  accounting  for  income  taxes. Under this method, future income tax
assets and liabilities are determined based on differences between the financial
statement  carrying  amounts  and  their  respective income tax bases (temporary
differences). Management regularly reviews its tax assets for recoverability and
establishes  a valuation allowance based on historical taxable income, projected
future  taxable  income  and  the  expected  timing of the reversals of existing
temporary  differences. The Company has $10.2 million of non-capital losses. The
Company carries an income tax asset of $0.6 million related to those non-capital
losses.  Additionally,  the  Company  fully  utilized  all  of its available net
operating  carry-forwards  attributable  to  continuing operations for financial
statement  purposes.  In  2002  the Company took a valuation allowance charge of
$0.5  million  which  reduced  the  future  tax  asset  by  $0.5  million.

Contingent  liabilities  and assets: On August 28, 2002 the Company was served a
Writ  of  Summons  from  Oakwell Engineering Limited ("Oakwell") of Singapore, a
former  joint  venturer in a power project in Andhra Pradesh, India. On November
8,  2002  the  Company  counter  claimed  against Oakwell for damages, costs and
interest  as  referred  to  in  Note  21  of  the audited consolidated financial
statements.  No  provision  has  been made in the audited consolidated financial
statements for this claim.  The Company estimates the range of liability related
to pending litigation where the amount and range of loss can be estimated. Where
there  is  a  range of loss, the Company records the minimum estimated liability
related  to those claims. As additional information becomes available, we assess
the  potential  liability  related  to  our  pending  litigation  and revise our
estimates  accordingly.  Revisions  of  our estimates of the potential liability
could  materially  impact our results of future operations. If the final outcome
of  such  litigation  and  contingencies  differs  adversely from that currently
expected,  it  would  result  in  a  charge  to  earnings  when  determined.

There  are  deficiencies in the State Government providing lender guarantees for
the  Karnataka,  India  power  project.  The Company is pursuing legal recourses
against  the  Government  of  Karnataka  and  the  Karnataka  Power Transmission
Corporation Limited. At the current time no assessment can be made of the actual
recoverable  amount.  Accordingly  no  amount has been recorded in these audited
consolidated  financial  statements.

Valuation  of  the  Company's  Investment  in KEOPL: The Company owns 11,348,200
ordinary  equity shares of Rs. 10 each, of KEOPL (the "KEOPL Shares"), a company
incorporated  in  India,  which is developing a Power project in Andhra Pradesh,
India.  Pursuant  to the Revised VBC Agreement dated August 10, 2000 between the
Company,  VBC  Group  ("VBC"),  KEOPL's  parent  company,  and  KEOPL, VBC shall
purchase  the  Company's  investment in KEOPL for INR 113,482,000 (approximately
Cdn.  $3,500,000)  on  or  before  June 30, 2002 if the Company offers its KEOPL
Shares  to  VBC  prior  to  June  30,  2002.


On  May 3, 2002, the Company, pursuant to the Revised VBC Agreement, offered and
tendered  the  KEOPL  Shares  to VBC for purchase on or before June 30, 2002. On
July 1, 2002, VBC  raised a dispute regarding the purchase and sale of the KEOPL
Shares.  The  Company  is  pursuing  legal  remedies  against  VBC  and Oakwell.
 The  investment in KEOPL is recorded at expected net recoverable amount of $3.5
million. The actual recoverable amount is dependant upon future events and could
differ  materially  from  the  expected  net  recoverable  amount.

Goodwill:  The  Company  has  adopted  new  accounting  policies for Goodwill as
required  under  the  recommendations  of  the  new  CICA Handbook Section 1581,
Business  Combinations,  and  Section  3062, Goodwill and Other Intangibles. The
newly  adopted accounting policy is also consistent with FASB No. 141, "Business
Combinations"  (SFAS  141),  and No. 142, "Goodwill and Other Intangible Assets"
(SFAS 142). As a result of applying the new standards, management has determined
that  the  value of goodwill was impaired, accordingly a transitional impairment
loss  of  $2,056,832  has  been  charged  to  opening  deficit.

RESULTS  OF  OPERATIONS

The  following  discussion  of  the  results  of  operations of the Company is a
comparison  of  the  Company's  two fiscal periods ended June 30, 2002 and 2001.
Revenue:  The  Company's  consolidated  revenues  of  $22.0 million for the year
ending  June  30,  2002  increased by 15% from $19.1 million reported during the
same  period the previous year. Revenue growth was driven by both a 15% increase
in  revenues  to  $21.6  million from $18.8 million during 2001 derived from the
Company's  Industrial  & Offshore Division as well as a 33% increase in revenues
to  $0.4  million  from  $0.3  million  during 2001 from the Company's Oil & Gas
Division,  which  commenced  February  1,  2001.

Gross  Profit:  Consolidated  gross profit for the fiscal period ending June 30,
2002  increased  20% to $3.0 million from $2.5 million in 2001. The increase was
primarily  due  to  increased  gross  profits  from  the  Company's Industrial &
Offshore  Division.  This  increase  in  gross  profit  was  primarily driven by
increased  revenue during the year as the Company's consolidated gross margin as
a  percent of sales has remained reasonably consistent at 13.5% versus 13.2% for
the  previous year. During the year gross profits from the Industrial & Offshore
Division  increased  33%  to  $3.2  million  from $2.4 million during 2001. This
increase  was  due  to  increased  revenues  during  2002. Gross margins for the
Company's  Oil  &  Gas  Division  decreased  to ($0.2) million from $0.2 million
during  2001.  This  decrease  was  primarily  due to increased depletion of the
Company's  reserves.

Administrative  expenses: Administrative expenses of $4.2 million for the twelve
month period ending June 30, 2002 was 62% higher than administrative expenses of
$2.6  million the previous year. For the fiscal year 2002 the Company incurred a
foreign  exchange  loss  of $0.2 million and in the fiscal year 2001 the Company
had  a  foreign  exchange  gain  of  $0.2  million.  For  the  fiscal  year 2002
professional  fees increased to $0.3 million. In addition during the 2002 fiscal
year  the  Company  wrote  down  its  marketable securities by $0.1 million. The
Company  also  had  increases  in  its  general and administrative expenditures.
Other  income:  Included  in  other  income  is  a litigation settlement of $0.7
million  related  to a claim against a company with respect to an asset purchase
agreement.  Also  included is an overprovision for costs related to the Port aux
Basques  property  settled  for  $0.2  million less than accrued. The balance of
other  income  relates  mainly  to  credits  received  for  workers compensation
adjustments  of  prior  years.

Loss  from  Continuing  Operations  before  Income Taxes: Losses from Continuing
Operations  before  Income  Taxes  decreased 77% by $1.7 million to $0.5 million
during  fiscal  2002  from  $2.2  million the previous year. The majority of the
decrease  in  losses was due to a non-cash write down of inactive capital assets
of  $1.5  million  during  the previous fiscal period. In the current period the
Company  wrote  down  an  additional  $0.3  million.

Current and Future Income Taxes: During the fiscal period ending June 30, 2002 a
net  future  income  tax  charge  of $0.6 million was incurred compared to a net
future income tax credit realization of $1.2 million during fiscal 2001. The tax
credit  during  fiscal 2001 was primarily due to a valuation allowance charge of
$1.1  million  for  expected  future  income  from  the  Company's  oil  and gas
properties.  During  fiscal  2002 the effective tax rate for the Company was 39%
and  fiscal  2001  43%.

Net  losses  from  Continuing  Operations:  Consolidated  loss  from  continuing
operations  for  the  twelve month period ending June 30, 2002 was $1.1 million,
10%  more than the $1.0 million loss from continuing operations reported for the
previous  twelve  month  period.

Net  losses  from Continuing Operations Per Share: As a result of the foregoing,
net  losses  from  continuing  operations  per share for the twelve month period
ending  June  30, 2002 decreased 22% to $0.17 per share from $0.23 per share for
fiscal  2001.

Discontinued  Operations:  Losses  incurred  from discontinued operations result
from  the  Company's  discontinued  Power  Division  in  fiscal 2001. During the
current  year the Company did not incur any losses from discontinued operations.
Losses  from  discontinued  operations  were  $2.7  million for the twelve month
period  ending  June  30,  2001.

Net  losses  and  Net  losses  per share: As a result of the foregoing, net loss
decreased 69% to $1.1 million as compared to a net loss incurred of $3.6 million
during the previous fiscal period. Net loss per share decreased 80% to $0.17 per
share  for  the  fiscal period ending June 30, 2002 from $0.85 per share for the
previous  twelve  month  period.

Goodwill:  During  the  year  the  Company  adopted  new accounting policies for
Goodwill  as required under the recommendations of the new CICA Handbook Section
1581,  Business  Combinations,  and Section 3062, Goodwill and Other Intangibles
(see Critical Accounting Policies above). The new accounting policy has not been
adapted  retroactively.  The  adjusted net loss and basic loss per share for the
comparative  fiscal year ending June 30, 2001 if no amortization was recorded in
those years is a loss of $3.4 million versus the recorded amount of $3.6 million
in  2001  and a net loss per share of $(0.79) versus a loss per share of $(0.85)
reported  in  the  financial  statements.

The  following  discussion  of  the  results  of  operations of the Company is a
comparison  of  the  Company's  two fiscal periods ended June 30, 2001 and 2000.
Revenue:  The  Company's  consolidated  revenues  of  $19.1 million for the year
ending June 30, 2001 increased by 1% from $18.9 million reported during the same
period  the  previous  year. New sources of revenue from the Company's Oil & Gas
Division,  which commenced February 1, 2001, contributed to this revenue growth.
Gross  Profit:  Consolidated gross margins for the fiscal period ending June 30,
2001 decreased 34% to $2.5 million from $3.8 million in 2000. The difference was
primarily  due  to  decreased  profit  margins  from  the Company's Industrial &
Offshore Division. During fiscal 2001 gross profit margins from the Industrial &
Offshore  Division were 13% compared to 20% the previous year. The difference is
attributable  to  both a high volume low margin contract included in revenues in
2001  and  a  high  volume  high  margin  contract included in revenues in 2000.
Consolidated  gross  profit  includes a 43% gross profit margin derived from the
Company's  Oil  &  Gas  Division.

Administrative  expenses: Administrative expenses of $2.6 million for the twelve
month  period  ending  June 30, 2001 was substantially lower than administrative
expenses  of  $4.3  million  for  the  previous  twelve  month  period.  In 2001
administrative  expenses  was  reduced  by  previous  years  overprovision  of
administrative  expenses  of  approximately  $1.0  million.

Loss  from  Continuing  Operations  before  Income Taxes: Losses from Continuing
Operations before Income taxes increased 100% to $2.2 million during fiscal 2001
from  $1.1  million the previous year. The majority of the increase was due to a
non-cash  write  down  of  inactive  capital assets of $1.5 million. Before this
write down, the losses from continuing operations before income taxes would have
been  reduced  by  35%  to  $0.7 million. This reduction is due primarily to the
corporate  restructuring  which  commenced  during  fiscal  2000.

Current and Future Income Taxes: Effective July 1, 2000, the Company changed its
method  of accounting for income taxes from the deferral method to the liability
method.  The liability method requires that accumulated tax balances be adjusted
to  reflect  changes in the tax rates.  This standard was applied retroactively;
however, as permitted under the new rules, comparative financial information has
not been restated, as the difference was insignificant. During the fiscal period
ending June 30, 2001 a net future income tax credit of $1.2 million was realized
compared  to  a net future income tax charge of $0.3 million during fiscal 2000.
The  tax  credit  during  fiscal 2001 was primarily due to a valuation allowance
charge of $1.1 million for expected future income from the Company's oil and gas
properties.  During  fiscal  2001 the effective tax rate for the Company was 43%
and  fiscal  2000  45%.

Net  losses  from  Continuing  Operations:  Consolidated  loss  from  continuing
operations  for  the  twelve month period ending June 30, 2001 was $1.0 million,
32%  less  than  the  loss  from continuing operations reported for the previous
twelve  month  period.

Net  losses  from Continuing Operations Per Share: As a result of the foregoing,
net  losses  from  continuing  operations  per share for the twelve month period
ending  June  30, 2001 decreased 50% to $0.23 per share from $0.46 per share for
fiscal  2000.

Discontinued  Operations:  Losses  incurred  from discontinued operations result
from  the  Company's  discontinued  Power  Division  and  the disposition of ASI
Holdings Limited and Merlin Engineering A.S. Losses from discontinued operations
increased  108% to $2.7 million for the twelve month period ending June 30, 2001
compared  to  $1.3 million in the previous fiscal period. The loss was primarily
due  to  the write down of the Karnataka Project and other charges taken against
the  Company's  Independent  Power  Projects.

Net  losses  and  Net  losses  per share: As a result of the foregoing, net loss
increased 33% to $3.6 million as compared to a net loss incurred of $2.7 million
during  the previous fiscal period. Net loss per share decreased 1% to $0.85 per
share  for  the  fiscal period ending June 30, 2001 from $0.86 per share for the
previous  twelve  month  period.

Goodwill:  In  fiscal  2002  the  Company  adopted  new  accounting policies for
Goodwill  as required under the recommendations of the new CICA Handbook Section
1581,  Business  Combinations,  and Section 3062, Goodwill and Other Intangibles
(see Critical Accounting Policies above). The new accounting policy has not been
adapted  retroactively.  The  adjusted  net  loss,  basic  loss  per  share from
continuing  operations  and  basic  loss  per share for comparative fiscal years
ending June 30, 2001 and 2000 if no amortization was recorded in those years are
in a loss of $3.4 million versus the recorded amount of $3.6 million in 2001 and
a  net  loss per share of $(0.79) versus a loss per share of $(0.85) reported in
the  financial  statements.

     LIQUIDITY  AND  CAPITAL  RESOURCES
     Cash  and  cash equivalents at June 30, 2002 were $5.6 million, compared to
$1.2  million  at  the end of the previous year. During the 2002 fiscal year the
Company  issued  common  shares  for  cash  of  $9.4 million (see note 10 of the
audited consolidated financial statements). The primary use of funds was applied
to  the  exploration  and development of oil and gas properties. During the year
the  Company expended $2.8 million on the exploration and development of new oil
and  gas  reserves.  In  addition the Company repaid $0.4 million of shareholder
loans  for  cash and utilized $0.6 million from its line of credit. Cash of $2.0
million  was  used  to  fund  the  Company's  operating  activities.

Cash  resources  at June 30, 2001 were $1.2 million, compared to $1.7 million at
the  end  of  the  previous  year.  During  fiscal  2001  the  Company recovered
approximately  $3.4  million  from  its  investment in KEOPL (the Andhra Pradesh
Project)  and  issued common and preference shares for a gross proceeds of  $1.6
million.  The  available  cash  was  used to acquire $1.7 million of oil and gas
properties  and  to  repay $1.9 million in prior advances from shareholders. The
remainder  of  cash  resources of approximately $1.3 million was applied to fund
operating  activities.

 The  Company's  primary sources of liquidity and capital resources historically
have  been cash flows from the operations of the Industrial & Offshore Division,
issuance of share capital and advances from shareholders. During fiscal 2001 and
2000 the Company recovered part of its investment in KEOPL.  During fiscal 2003,
it  is  expected that primary sources of liquidity and capital resources will be
derived from the operations of the Industrial & Offshore Division, revenues from
the  Oil  &  Gas  Division  and  further recovery of the Company's investment in
KEOPL.

The  Company's  Industrial  & Offshore Division maintains their own bank line of
credit facility. The Company's M&M and MMO subsidiaries credit facility, through
Canadian  Imperial Bank of Commerce ("CIBC") was initially entered into December
1994  and  was  amended  on  March  9, 2000.  The CIBC credit facility currently
allows  M&M  to  borrow  up  to the lesser of (i)  $1.75 million, or (ii) 75% of
receivables  from government or large institutions/corporations and 60% of other
receivables  to  finance working capital requirements on a revolving basis.  The
CIBC credit facility is payable upon demand.  As of June 30, 2002, the principal
balance  outstanding  under  the  credit facility was  $1.5 million, compared to
$0.8  million  as  at  June  30,  2001.  As security for repayment of the credit
facility,  M&M  granted  to  CIBC  a first priority lien on pledged receivables,
inventory  and specific equipment; a second priority lien on land, buildings and
immovable  equipment;  and an assignment of insurance.  MMO  also guarantees the
CIBC  credit  facility.  The  credit  agreement requires M&M  to satisfy certain
financial  tests, limits the amount of indebtedness M&M  may incur and restricts
the  payment  of  dividends.

M&M  is indebted to RoyNat, Inc. ("RoyNat") in the amount of  $0.5 million as of
June  30,  2002  (compared to $0.6 million in 2001).  This indebtedness arose in
connection  with  a  mortgage  loan,  which  was  renewed  August  2000.

The  original  credit was offered on May 18, 1990 by RoyNat to M&M in connection
with  the purchase of its fabrication facility in St. John's, Newfoundland.  The
mortgage  bears interest at RoyNat's cost of funds plus 3.25%, and is payable in
monthly  principal payments of  $7,000, plus interest.  As security, M&M granted
a  first  priority  lien on land and building, and a secondary lien on all other
assets  of M&M, subject to a first priority lien in favor of CIBC.  M&M Offshore
has  also  guaranteed  this  mortgage.

     OUTLOOK  AND  PROSPECTIVE  CAPITAL REQUIREMENTS:  The Industrial & Offshore
Division  is currently working on a backlog of contracts. Further development of
Atlantic  Canada's  offshore  infrastructure  could  feed further growth for the
Industrial  &  Offshore  Division.  In addition the Oil & Gas Division is adding
positive  cash  flow  to  fund  corporate  operations and future development and
growth  strategies.  At  present  the  Company intends to expand its oil and gas
interests.

As  part  of  the  Company's oil and gas exploration and development program the
Company  expects  to expend significant capital resources to expand its existing
portfolio  of  proved and probable oil and gas reserves.  These expenditures can
be  funded through existing cash held by the Company. Any excess expenditure may
be  funded  by  additional share capital issued by the Company, debt or by other
means.

     Subsequent to year-end, one of M&M's joint ventures required an increase in
its  credit  facility  to the amount of $2,450,000. The facility is repayable on
demand  on  or  before  December 31, 2002 and bears interest at the bank's prime
lending  rate  plus  2.00%  per  annum.  As  security for this facility, M&M was
required to confirm that they would not claim repayment of $300,000 owed to them
by the joint venture until December 31, 2002. M&M was also required to provide a
guarantee  of  $500,000  until  December  31,  2002.  Along  with  the  existing
postponement  of  $50,000 and permanent guarantee of $75,000 (see Note 7), M&M's
commitment  is  now  at  $350,000  postponement  and  $575,000  guarantee.

With  respect  to  anticipated capital expenditures over the next twelve months,
M&M  is  expected  to  expend  approximately  $0.5  million  for  new  and  used
manufacturing  and  office-related  equipment.  Such  equipment,  which could be
utilized to generate additional construction revenues, could be financed through
capital  leases  with  equipment manufacturers or credit arrangements with M&M's
existing  lenders,  cash  from  its  parent  company  or  other  means.

The  Company's  future  profitability  over the longer term will depend upon its
ability  to  successfully  implement  its  business  plan. M&M has, in the past,
focused  on  manufacturing and fabricating process piping, production equipment,
steel  tanks  and  other  metal  products  requiring  specialized  welding  and
fabrication  abilities.  Management  believes  that  several  opportunities  are
developing in the Atlantic provinces of Canada which will enable M&M to maintain
and increase this business. These include proposed offshore oil and gas projects
for  the  White Rose Oilfield, the Sable Island Offshore Energy Project, and the
Hebron  Oilfield, in addition to development of the Voisey's Bay nickel mine. It
is  also  our belief that M&M will be afforded opportunities with respect to the
upgrade  and  maintenance of existing area infrastructure including the Hibernia
and  Terra Nova oil fields, mechanical fabrication and maintenance of production
equipment  for  refineries,  pulp  and  paper  mills  (including  environmental
equipment)  and  private  sector power generation projects (primarily for mining
and  natural  resources).

RECENTLY  ISSUED  UNITED  STATES  ACCOUNTING STANDARDS: In August 2001, the FASB
issued  SFAS No. 143 "Accounting for Asset Retirement Obligations". SFAS No. 143
requires  the fair value of a liability for an asset retirement obligation to be
recognized  in  the  period  in which it is incurred if a reasonable estimate of
fair  value can be made. The associated retirement costs are capitalized as part
of  the  carrying  amount of the long-lived asset. SFAS No. 143 is effective for
the  fiscal  year ending June 30, 2003. Management believes the adoption of this
statement  will  have  no  material  impact  on  the  financial  statements.

In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal  of  Long-lived  Assets".  SFAS  No. 144 requires that those long-lived
assets  be  measured  at the lower of carrying amount or fair value less cost to
sell,  whether  reported in continuous operations or in discontinued operations.
Therefore,  discontinued operations will no longer be measured at net realizable
value  or  include amounts for operating losses that have not yet occurred. SFAS
No.  144 is effective for financial statements issued for fiscal years beginning
after  December  15,  2001  and,  generally,  is  to  be  applied prospectively.
Currently, the Company is assessing, but has not yet determined how the adoption
of  SFAS  144  will  impact  its  financial  position  and results of operation.
In  April  2002, the FASB issued SFAS No. 145 "Rescission of FASB Statements No.
4,  44  and  64, Amendment of FASB Statement No. 13, and Technical Corrections".
SFAS No. 145 rescinds FASB No. 4 "Reporting Gains and Losses from Extinguishment
of  Debt",  and  an amendment of that statement, FASB No. 64 "Extinguishments of
Debt  made  to  Satisfy Sinking-Fund Requirements". This statement also rescinds
FASB  No.  44,  "Accounting  for  Intangible  Assets  of  Motor  Carriers". This
statement  amends  FASB  No.  13,  "Accounting  for  Leases",  to  eliminate  an
inconsistency  between  required  accounting for sale-leaseback transactions and
the  required  accounting  for  certain  lease  modifications that have economic
effects  that  are similar to sale-leaseback transactions. This statement amends
other  existing  authoritative  pronouncements  to  make  various  technical

corrections,  clarify  meanings,  or  describe their applicability under changed
conditions.  The  provisions  for debt extinguishments are applicable for fiscal
years beginning after May 15, 2002 and the provisions regarding lease accounting
are  for  transactions  occurring  after  May  15, 2002. Management believes the
adoption  of  this  statement  will  not have a material effect on the financial
position  and  results  of  operations.

In June 2002, the FASB issued SFAS No. 146 "Accounting for Costs Associated with
Exit  or Disposal Activities". SFAS No. 146 requires that a liability for a cost
associated  with  an  exit  or  disposal  activity be recognized at the date the
liability  is  incurred  and  is  measured  and  recorded at fair value. This is
effective  for  exits  or disposal activities initiated after December 31, 2002.
Management  is  of the opinion that the adoption of SFAS No. 146 will not impact
its  financial  position  and  results  of  operation.

TREND  INFORMATION
     SEASONALITY:  The  Company's  Industrial  & Offshore Division operates in a
cyclical  and  seasonal  industry.  Fabrication  industry  activity  levels  are
generally dependent on the level of capital spending in heavy industries such as
mining,  forestry,  oil  and gas and petrochemicals.  In addition the Company is
subject  to  seasonal levels of activity whereby business activities tends to be
lower  during  the  winter  months.  The  level  of  industry  profits,
capacity-utilization  in  the  industry  and interest rates often affect capital
spending  in  these industries.  Success in fabrication will be dependent on the
Industrial  &  Offshore  Division's  ability  to  secure  and profitably perform
fabrication  contracts.   Fixed  price fabrication contracts contain the risk of
bid error or significant cost escalation with regard to either labor or material
costs, combined with a limited ability to recover such costs from the applicable
client.

The  Company's  Oil  &  Gas  Division  is not a seasonal business, but increased
consumer demand or changes in supply in certain months of the year can influence
the  price  of produced hydrocarbons, depending on the circumstances. Production
from  the  Company's  oil  and gas properties is the primary determinant for the
volume  of  sales  during  the  year.