UNITED STATES SECURITIES AND EXCHANGE COMMISSION ~~Washington, DC 20549~~

~~Form~~Washington, ~~6-K~~DC 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of ~~May~~August, 2003

Commission File Number: 0-20055

Consolidated Envirowaste Industries Inc.

~~27715~~(Translation ~~Huntingdon~~of ~~Road,~~registrant’s ~~Abbotsford,~~name ~~B.C.,~~into ~~Canada V4X 1B6~~English)

27715 Huntingdon Road, Abbotsford, B.C., Canada V4X 1B6
(Address of principal executive office)

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

FORM 20-F þ X FORM 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): _____________

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): _____________

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 12g3-2(b) under the Securities Exchange Act of 1934.

YES þ X NO o

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-1399.

TABLE OF CONTENTS

SIGNATURES ~~EXHIBIT A EXHIBIT B~~

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.

	CONSOLIDATED ENVIROWASTE INDUSTRIES INC. (Registrant)
	CONSOLIDATED ENVIROWASTE INDUSTRIES INC.
Date June 5, 2003	By:	“Douglas R. Halward” (Signature)
	(Registrant)
	Douglas R. Halward, President (Name and Title of the Signing Officer)
Date September 4, 2003	By “Douglas R. Halward”
	(Signature)
	Douglas R. Halward, President
	(Name and Title of the Signing Officer)

The following attached documents are filed under this Form 6-K:

EXHIBIT A:		BC Form 51-901F together with schedules A (unaudited financial statements for the ~~six~~nine months ended ~~March~~June 3130, 2003), B (supplementary information) and C (management discussion and analysis)
EXHIBIT B:		News release dated ~~May~~August 3029, 2003

EXHIBIT A

British Columbia Securities Commission		QUARTERLY AND YEAR END REPORT ~~BC FORM 51-901F (previously Form 61)~~
ISSUER DETAILS
		BC FORM 51-901F
For Quarter Ended:	March 31, 2003
		(previously Form 61)
Date of Report:	May 30, 2003
ISSUER DETAILS
Name of Issuer:	Consolidated Envirowaste Industries Inc.
For Quarter Ended:	June 30, 2003
Issuer Address:	27715 Huntingdon Road, Abbotsford, B.C. V4X 1B6
Date of Report:	August 29, 2003
Issuer Fax Number:	(604) 856-5644
Name of Issuer:	Consolidated Envirowaste Industries Inc.
Issuer Telephone Number:	(604) 856-6836
Issuer Address:	27715 Huntingdon Road, Abbotsford, B.C. V4X 1B6
Contact Name:	Doug Halward
Issuer Fax Number:	(604) 856-5644
Contact Position:	President
Issuer Telephone Number:	(604) 856-6836
Contact Telephone Number:	(604) 856-6836
Contact Name:	Doug Halward
Contact Email Address:	wade@envirowaste.ca
Contact Position:	President
Web Site Address:	Not applicable
Contact Telephone Number:	(604) 856-6836
Contact Email Address:	wade@envirowaste.ca
Web Site Address:	Not applicable

CERTIFICATE

The one schedule required to complete this Report is attached and the disclosure contained therein has been approved by the Board of Directors. A copy of this Report will be provided to any shareholder who requests it.

Director’s Name: “Douglas Halward”		Date Signed: ~~May~~August 3029, 2003
Director’s Name: “James Darby”		Date Signed: ~~May~~August 3029, 2003

CONSOLIDATED ENVIROWASTE INDUSTRIES INC.

Consolidated Financial Statements

~~March~~June 3130, 2003 and 2002

Index

Consolidated Balance Sheet

Consolidated Statement of Operations and Deficit

Consolidated Statement of Cash Flows

Notes to Consolidated Financial Statements

Schedule of Consolidated Cost of Sales

Schedule of Consolidated Direct Selling Expenses

Schedule of Consolidated General and Administrative Expenses

Prepared by Management

CONSOLIDATED ENVIROWASTE INDUSTRIES INC.

~~CONSOLIDATED~~Consolidated ~~BALANCE~~Balance ~~SHEET~~Sheet ~~March~~June 3130, 2003 and 2002

			March 31				March 31				September 30
		June 30,				June 30,				September 30,
		2003	~~2003~~			2002	~~2002~~			2002	~~2002~~
ASSETS
Current
Cash and cash equivalents	~~Cash and cash equivalents~~	$	$1,666,743	~~2,137,092~~		$	$1,666,706	~~1,952,088~~		$	$2,559,153	~~2,559,153~~
Term deposit, restricted	~~Term deposit, restricted~~		—				—				805,840	~~805,840~~
Accounts receivable	~~Accounts receivable~~		3,496,145	~~3,062,147~~			3,457,034	~~3,218,115~~			2,349,973	~~2,349,973~~
Inventories (note 2)	~~Inventories (note 2)~~		916,577	~~1,376,462~~			959,933	~~1,466,577~~			1,084,342	~~1,084,342~~
Refundable income taxes	~~Refundable income taxes~~		—	—			11,516	~~12,103~~			75,586	~~75,586~~
Future income tax asset	~~Future income tax asset~~		296,776	~~323,294~~			—	—			349,758	~~349,758~~
Prepaid expenses and deposits	~~Prepaid expenses and deposits~~		371,931	~~251,512~~			215,893	~~199,813~~			281,538	~~281,538~~
				7,150,507				6,848,696				7,506,190
			6,748,172				6,311,082				7,506,190
Capital assets (note 3)			7,928,947	~~6,448,170~~			6,161,031	~~6,457,015~~			5,949,589	~~5,949,589~~
Assets under capital leases (note 4)			2,476,071	~~2,581,029~~			1,739,643	~~62,617~~			2,200,503	~~2,200,503~~
Future income tax asset			214,018	~~233,142~~			—	—			252,227	~~252,227~~
Other assets (note 5)			38,991	~~41,619~~			822,302	~~870,274~~			56,797	~~56,797~~
		$	$17,406,199	~~16,454,467~~		$	$15,034,058	~~14,238,602~~		$	$15,965,306	~~15,965,306~~
LIABILITIES
Current
Demand loans, secured (note 6)	~~Demand loans, secured (note 6)~~	$	$1,036,851	~~650,000~~		$	$120,000	~~368,167~~		$	$—	—
Accounts payable and accrued liabilities	~~Accounts payable and accrued liabilities~~		2,196,264	~~2,155,966~~			2,442,975	~~2,544,520~~			2,531,284	~~2,531,284~~
Income taxes payable	~~Income taxes payable~~		180,053	~~67,701~~			—	—			—	—
Deferred revenue	~~Deferred revenue~~		147,959	~~146,431~~			354,271	~~235,900~~			124,946	~~124,946~~
Principal of long-term debt due within one year	~~Principal of long-term debt due within one year~~		864,308	~~939,981~~			1,219,312	~~1,821,057~~			1,078,108	~~1,078,108~~
Principal of capital lease obligations, due within one year	~~Principal of capital lease obligations, due within one year~~		482,168	~~508,413~~			279,692	~~24,371~~			415,048	~~415,048~~
				4,468,492				4,994,015				4,149,386
			4,907,603				4,416,250				4,149,386
Long-term debt (note 7)			1,418,354	~~1,394,580~~			1,797,011	~~2,552,248~~			1,404,372	~~1,404,372~~
Obligations under capital leases (note 8)			1,695,475	~~1,951,040~~			1,243,088	~~48,264~~			1,762,919	~~1,762,919~~
Loans payable (note 9)			2,419,486	~~2,437,309~~			2,460,873	~~2,460,873~~			2,386,312	~~2,386,312~~
				10,251,421				10,055,400				9,702,989
			10,440,918				9,917,222				9,702,989
SHAREHOLDERS’ EQUITY
Share capital (note 10)			15,323,082	~~15,323,082~~			15,316,422	~~15,316,422~~			15,316,422	~~15,316,422~~
Unrealized foreign exchange gain			512,027	~~438,158~~			218,070	~~384,067~~			404,578	~~404,578~~
Deficit			(8,869,828	~~(9,558,194~~)	)		(10,417,656	~~(11,517,287~~)	)		(9,458,683	~~(9,458,683~~)	)
				6,203,046				4,183,202				6,262,317
			6,965,281				5,116,836				6,262,317
		$	$17,406,199	~~16,454,467~~		$	$15,034,058	~~14,238,602~~		$	$15,965,306	~~15,965,306~~
Commitments (note 13)

Approved by the Directors:

“[signed”] “[signed”] Douglas R. Halward James E.H. Darby

Prepared by Management

CONSOLIDATED ENVIROWASTE INDUSTRIES INC. ~~CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT For the six months ended March 31, 2003 and 2002~~

		3 months		3 months			6 months			6 months
		March 31, 2003		March 31, 2002			March 31, 2003			March 31, 2002
Revenue
	Bulk	$	518,339	$	494,783		$	977,455		$	934,268
	Packaged products		592,133		752,289			720,732			857,090
	Tipping fees (net)		4,498,395		4,225,217			9,221,668			10,478,113
			5,608,867		5,472,289			10,919,855			12,269,471
Cost of sales (schedule)			3,361,356		3,290,826			6,717,544			7,626,264
Gross margin			2,247,511		2,181,463			4,202,311			4,643,207
Direct selling expenses (schedule)			931,298		1,194,105			1,878,437			2,350,261
General and administrative expenses (schedule)			1,253,944		1,212,781			2,438,726			2,394,457
Operating earnings (loss)			62,269		(225,423	)		(114,852	)		(101,511	)
Other income
	Interest and sundry		86,437		24,689			98,698			38,841
	Provision for performance incentives		—		—			—			(100,000	)
	Gain on disposal of capital assets		55,832		248,673			56,710			252,423
Earnings before income taxes			204,538		47,939			40,556			89,753
Income taxes (note 14)			106,662		—			140,067			—
Net earnings (loss) for the period		$	97,876	$	47,939			(99,511	)		89,753
Deficit, beginning of year								(9,458,683	)		(11,607,040	)
Deficit, end of period							$	(9,558,194	)	$	(11,517,287	)
Earnings (loss) per share — basic		$	0	$	0		$	(0	)	$	0
Earnings (loss) per share — fully diluted		$	0	$	—		$	(0	)	$	0
Weighted average number of common shares outstanding — basic			9,986,299		9,930,466			9,981,244			9,922,041
Weighted average number of common shares outstanding — fully diluted			10,151,666		10,025,461			10,017,036			10,146,611

Consolidated Statement of Operations and Deficit
For the nine months ended June 30, 2003 and 2002


		3 months			3 months		9 months			9 months
		June 30, 2003			June 30, 2002		June 30, 2003			June 30, 2002

Revenue
	Bulk	$	617,844		$	742,854	$	1,595,299		$	1,677,122
	Packaged products		1,974,112			2,133,545		2,694,844			2,990,635
	Tipping fees (net)		5,458,644			6,090,548		14,680,312			16,568,661

			8,050,600			8,966,947		18,970,455			21,236,418
Cost of sales (schedule)			4,595,092			5,236,690		11,312,636			12,862,954

Gross margin			3,455,508			3,730,257		7,657,819			8,373,464
Direct selling expenses (schedule)			1,363,769			1,517,390		3,242,206			3,867,651
General and administrative expenses (schedule)			1,255,210			1,306,687		3,693,936			3,701,144

Operating earnings			836,529			906,180		721,677			804,669
Other income (expense)
	Interest and sundry		32,892			17,235		131,590			56,076
	Provision for performance incentives		(54,092	)		—		(54,092	)		(100,000	)
	Gain (loss) on disposal of capital assets		(1,587	)		177,507		55,123			429,930

Earnings before income taxes			813,742			1,100,922		854,298			1,190,675
Income taxes (note 14)			125,376			1,291		265,443			1,291

Net earnings for the period		$	688,366		$	1,099,631		588,855			1,189,384

Deficit, beginning of year								(9,458,683	)		(11,607,040	)

Deficit, end of period							$	(8,869,828	)	$	(10,417,656	)

Earnings per share — basic		$	0.07		$	0.11	$	0.06		$	0.12

Earnings per share — fully diluted		$	0.07		$	0.11	$	0.06		$	0.12

Weighted average number of common shares outstanding — basic			9,994,299			9,976,299		9,985,596			9,940,127

Weighted average number of common shares outstanding — fully diluted			10,133,484			10,137,173		10,124,781			10,101,001

Prepared by Management

CONSOLIDATED ENVIROWASTE INDUSTRIES INC.

~~CONSOLIDATED~~Consolidated ~~STATEMENT~~Statement OFof ~~CASH~~Cash ~~FLOWS~~Flows For the ~~six~~nine months ended ~~March~~June 3130, 2003 and 2002

			3 months			3 months			69 months			69 months
			March 31, 2003			March 31, 2002			March 31, 2003			March 31, 2002
			June 30, 2003			June 30, 2002			June 30, 2003			June 30, 2002
Cash flows from (used in) operating activities
	Net earnings (loss) for the period		$	97,876		$	47,939		$	(99,511	)	$	89,753
	Net earnings for the period		$	688,366		$	1,099,631		$	588,855		$	1,189,384
	Items not involving cash:
		Amortization		~~585~~554,~~904~~467			~~658~~628,~~135~~834			1,~~174~~728,~~164~~631			1,~~328~~957,~~706~~540
		Gain on disposal of capital assets		(55,832	)		(248,673	)		(56,710	)		(252,423	)
		(Gain) loss on disposal of capital assets		1,587			(177,507	)		(55,123	)		(429,930	)
		Unrealized foreign exchange gain		97,412			1,966			33,805			29,861
		Unrealized foreign exchange gain (loss)		73,869			(165,997	)		107,674			(136,136	)
		Future income taxes		3945,~~541~~642			—			4591,~~549~~191			—
				764,901			459,367			1,097,297			1,195,897
				1,363,931			1,384,961			2,461,228			2,580,858
Cash generated from (used in) operating working capital:
	Accounts receivable			(~~923~~433,~~919~~998	)		(~~811~~238,~~162~~919	)		(~~712~~1,~~174~~146,172	)		10(228,~~456~~463	)
	Inventories			~~(93~~459,~~420~~885	)		~~(225~~506,~~787~~644	)		~~(292~~167,~~120~~765	)		~~(371~~134,~~777~~867	)
	Refundable income taxes			~~41,840~~—			~~(5,732~~587	)		75,586			(1211,~~103~~516	)
	Prepaid expenses and deposits			34(120,~~934~~419	)		~~106~~(16,~~253~~080	)		30(90,~~026~~393	)		~~124~~108,~~806~~726
	Accounts payable and accrued liabilities			~~161~~40,~~547~~298			~~282~~(101,~~933~~545	)		(~~375~~335,~~318~~020	)		(~~143~~244,~~328~~873	)
	Income taxes payable			67112,~~701~~352			—			67180,~~701~~053			—
	Deferred revenue			881,~~916~~528			~~(95~~118,~~213~~371	)		2123,~~485~~013			(~~194~~75,~~236~~865	)
	Current portion of long-term debt			(~~222~~75,~~032~~673	)		(~~117~~601,~~984~~745	)		(~~138~~213,~~127~~800	)		(~~158~~760,~~592~~337	)
	Current portion of capital lease obligations			91(26,~~315~~245	)		~~655~~255,321			9367,~~365~~120			(8247,~~127~~194	)
				11,783			(406,670	)		(132,279	)		442,996
				1,321,659			1,307,595			1,189,380			1,750,591
Cash flows from (used in) financing activities
	Decrease in long-term debt, net			(312,136	)		(394,542	)		(9,792	)		(811,221	)
	Increase (decrease) in long-term debt, net			23,774			(755,237	)		13,982			(1,566,458	)
	Increase (decrease) in obligations under capital leases, net			~~302~~(255,~~139~~565	)		(61,~~417~~194,824	)		~~188~~(67,~~121~~444	)		~~(12~~1,~~472~~182,352	)
	Increase in loans payable			241,115			168,451			50,997			168,451
	Increase (decrease) in loans payable			(17,823	)		—			33,174			168,451
	Issuance of share capital			~~6,660~~—			~~24,375~~—			6,660			24,375
				237,778			(208,133	)		235,986			(630,867	)
				(249,614	)		439,587			(13,628	)		(191,280	)
Cash flows from (used in) investing activities
	Acquisition of capital assets			(~~609~~1,~~517~~898,950	)		(21438,~~990~~295	)		(13,~~474~~373,~~644~~594	)		(~~284~~722,~~697~~992	)
	Proceeds from the sale of capital assets			~~133~~4,~~396~~205			~~411~~412,~~442~~426			~~134~~138,~~331~~536			~~415~~827,~~192~~618
	Acquisition of assets under capital leases			(~~641~~34,~~295~~500	)		—(1,758,528	)		(~~641~~675,~~295~~795	)		—(1,758,528	)
	Acquisition of other assets, net			—			~~(1,209~~—	)		—			(797,609	)
				(1,117,416	)		388,243			(1,981,608	)		(667,114	)
				(1,929,245	)		(1,784,397	)		(3,910,853	)		(2,451,511	)
Decrease in cash and cash equivalents				(~~867~~857,~~855~~200	)		(~~226~~37,~~560~~215	)		(12,~~877~~735,~~901~~101	)		(~~854~~892,~~985~~200	)
Cash and cash equivalents, beginning of period				21,~~354~~487,~~947~~092			1,~~810~~583,~~481~~921			3,364,993			2,438,906
Cash and cash equivalents, end of period			$	1629,~~487,092~~892		$	1,~~583~~546,~~921~~706		$	1629,~~487,092~~892		$	1,~~583~~546,~~921~~706
Represented as:
	Cash and cash equivalents		$	21,~~137~~666,~~092~~743		$	1,~~952~~666,~~088~~706		$	21,~~137~~666,~~092~~743		$	1,~~952~~666,~~088~~706
	Demand loans, secured			(~~650~~1,~~000~~036,851	)		(~~368~~120,~~167~~000	)		(~~650~~1,~~000~~036,851	)		(~~368~~120,~~167~~000	)
			$	1629,~~487,092~~892		$	1,~~583~~546,~~921~~706		$	1629,~~487,092~~892		$	1,~~583~~546,~~921~~706

Prepared by Management

CONSOLIDATED ENVIROWASTE INDUSTRIES INC.

~~NOTES~~Notes TOto ~~CONSOLIDATED~~Consolidated ~~FINANCIAL~~Financial ~~STATEMENTS~~Statements ~~March~~June 3130, 2003 and 2002

Significant Accounting Policies

(a) Basis of Presentation The Company follows Canadian generally accepted accounting principles in the preparation of these financial statements. All dollar amounts are reported in Canadian funds. (b) Basis of Consolidation These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, The Answer Garden Products Ltd., and its 72.74% owned subsidiary Bio-Waste Industries Limited, Envirowaste International Inc. (“EII”), a U.S. company, and its U.S. subsidiaries, Consolidated Resource Recovery Inc. — Florida operations (“CRRI”), a Delaware corporation, and Consolidated Resource Recovery Inc. — Georgia operations (“Greencycle”), a Georgia corporation. (c) Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the period. Actual results may differ from those estimates. (d) Inventories Inventories of raw materials are valued at the lower of cost and net realizable value. Inventories of work-in-process and finished goods are valued at the lower of standard cost and net realizable value. (e) Capital Assets Capital assets are recorded at historical cost. Amortization is charged to earnings in amounts sufficient to allocate the costs over their estimated useful lives on a straight-line basis using the following annual rates prorated from initial utilization:


Plant		5% & 33%
Land improvements		8%
Equipment		10%, 15%, 20% & 33%
Office equipment		20%
Leasehold improvements		20%
Computer equipment		20%, 30%, & 33%
Bag plates and artwork		20% & 50%
Automotive equipment		20% & 30%

	(f)		Assets Under Capital Leases Assets acquired under capital leases and their related obligations are recorded at an amount equivalent to the present value of the minimum future lease payments discounted at the interest rate implicit in the agreement. Leased assets are amortized on the same basis as capital assets.

	(g)		Other Assets

Trademarks		Recorded at cost; amortized on a straight-line basis over 10 years.
Goodwill		Recorded at cost; amortized on a straight-line basis over 10 years.
Technology license		Recorded at cost; amortized on a straight-line basis over 20 years.
Deferred acquisition costs		Recorded at cost; amortized on a straight-line basis over 4 years.
Deferred aquisition costs		Recorded at cost; amortized on a straight-line basis over 4 years.

Prepared by Management

CONSOLIDATED ENVIROWASTE INDUSTRIES INC.

Notes to Consolidated Financial Statements
June 30, 2003 and 2002

Significant Accounting Policies (continued)

(h) Foreign Currency Translation The Company treats the operations of Envirowaste International Inc. as a self-sustaining foreign operation using the current rate method of currency translation. Unrealized translation gains are presented as a component of equity. (i) Cash equivalents Cash equivalents usually consist of highly liquid investments which are readily convertible into cash with maturities of three months or less when purchased. As at ~~March~~June 3130, 2003, cash equivalents were $~~755~~692,~~238~~880 (~~March~~June 3130, 2002 — $1538,~~400,546~~823; September 30, 2002 — $1,251,042). (j) Income Taxes Income taxes are accounted for using the asset and liability method pursuant to Section 3465, Income Taxes, of “The Handbook of the Canadian Institute of Chartered Accountants”. Future taxes are recognized for the tax consequences of “temporary differences” by applying enacted or substantively enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and tax basis of existing assets and liabilities. The effect on deferred taxes for a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment. In addition, Section 3465 requires the recognition of future tax benefits to the extent that realization of such benefits is more likely than not. (k) Stock-based Compensation Stock-based compensation is accounted for following the guidelines set out in the Canadian Institute of Chartered Accountants (“CICA”) Handbook, Section 3870. As permitted by the CICA Handbook, Section 3870, the Company has chosen not to recognize consideration paid by employees on exercise of stock options to its employees. Any consideration paid by employees on exercise of stock options is credited to capital stock. The Company is required to provide pro-forma information with regard to its net income as if the compensation cost for the Company’s stock option plan had been determined in accordance with the fair value based method prescribed in the CICA Handbook, Section 3870. (l) Earnings per Share Basic earnings per share is computed using the weighted average number of common shares outstanding during the year. Diluted earnings per share are calculated using the treasury stock method to determine the dilutive effect of stock options and other dilutive instruments which assumes that proceeds received from the exercise of stock options and warrants are used to repurchase common shares at the prevailing market rate.

Inventories

	March 31,		March 31,		September 30,
	June 30,		June 30,		September 30,
	2003		2002		2002
Raw materials and supplies	$	~~715~~607,~~717~~474	$	~~754~~624,~~819~~319	$	712,527
Work-in-process		5150,~~234~~178		5650,~~241~~933		55,697
Finished goods		~~609~~258,~~511~~925		~~655~~284,~~517~~681		316,118
		1,376,462		1,466,577		1,084,342
	$	916,577	$	959,933	$	1,084,342

Prepared by Management

CONSOLIDATED ENVIROWASTE INDUSTRIES INC.

Notes to Consolidated Financial Statements
June 30, 2003 and 2002

Capital Assets

March 31,

September 30,

June 30,

September 30,

2003

2002

Accumulated

Net Book

Cost

Amortization

Value

Land

1,~~603~~698,~~295~~133

—

1,~~603~~698,~~295~~133

~~745~~1,~~948~~490,483

1,603,295

Plant

1,~~432~~733,~~560~~324

~~715~~734,~~659~~004

~~716~~999,~~901~~320

~~618~~602,~~106~~439

751,438

Land improvements

608,016

~~394~~406,~~817~~976

~~213~~201,~~199~~040

~~166~~156,~~436~~085

145,734

Equipment

8,~~497~~781,~~157~~148

5,~~096~~420,~~732~~016

3,~~400~~361,~~425~~132

43,~~600~~635,~~735~~442

3,142,417

Office equipment

~~108~~110,~~881~~836

8991,~~272~~481

19,~~609~~355

119,~~832~~979

21,133

Leasehold improvements

~~193~~180,~~714~~731

~~153~~145,~~019~~919

4034,~~695~~812

6556,~~757~~145

52,103

Computer equipment

~~321~~347,~~215~~974

~~286~~313,~~234~~155

34,~~981~~819

5141,~~803~~576

36,512

Bag plates and artwork

~~380~~390,~~469~~512

~~333~~338,~~762~~392

4652,~~707~~120

5855,~~186~~194

49,070

Automotive equipment

~~592~~888,~~053~~639

~~451~~470,~~919~~694

~~140~~417,~~134~~945

~~138~~113,~~212~~688

147,887

Construction-in-progress

~~232~~1,~~224~~110,271

—

~~232~~1,~~224~~110,271

—

13,969,584

7,521,414

6,448,170

6,457,015

5,949,589

15,849,584

7,920,637

7,928,947

6,161,031

5,949,589

Assets Under Capital Leases

	March 31,						March 31,		September 30,
	June 30,						June 30,		September 30,
	2003						2002		2002
			Accumulated		Net Book		Net Book		Net Book
	Cost		Amortization		Value		Value		Value
Equipment	$	3,~~046~~081,~~528~~028	$	~~474~~611,~~047~~693	$	2,~~572~~469,~~481~~335	$	411,~~549~~721,705	$	2,185,695
Office equipment		4923,~~631~~775		4117,~~083~~039		86,~~548~~736		2117,~~068~~938		14,808
		3,096,159		515,130		2,581,029		62,617		2,200,503
	$	3,104,803	$	628,732	$	2,476,071	$	1,739,643	$	2,200,503

Other Assets

			March 31,			March 31,			September 30,
		June 30,			June 30,			September 30,
		2003	~~2003~~		2002	~~2002~~		2002	~~2002~~
Deferred costs, net of accumulated amortization of $228,496				—			21,902			9,926
Deferred costs, net of accumulated amortization of $228,496 (June 30, 2002 - $213,340; September 30, 2002 -218,570)		$	—		$	15,156		$	9,926
	(March 31, 2002 — $206,594; September 30, 2002 — 218,570)
Goodwill, net of accumulated amortization of $49,485 (June 30, 2002 - $42,154; September 30, 2002 - $43,986)			23,828			31,159			29,327
Goodwill, net of accumulated amortization of $47,651				25,662			32,992			29,327
Trademarks, net of accumulated amortization of $16,750 (June 30, 2002 - $13,654; September 30, 2002 - $14,428)			14,210			17,306			16,532
	(March 31, 2002 — $40,321; September 30, 2002 $43,986)
Technology license, net of accumulated amortization of $604 (June 30, 2002 - $526; September 30, 2002 - $545)			953			1,031			1,012
Trademarks, net of accumulated amortization of $15,976				14,984			18,079			16,532
Performance bond, at cost			—			757,650			—
	(March 31, 2002 — $12,881; September 30, 2002 — $14,428)
		$	38,991		$	822,302		$	56,797
Technology license, net of accumulated amortization of $584				973			1,051			1,012
	(March 31, 2002 — $506; September 30, 2002 — $545)
Performance bond, at cost				—			796,250			—
				41,619			870,274			56,797

Goodwill represents the excess of the purchase price paid over the underlying value of the assets at the time of acquisition.

Prepared by Management

CONSOLIDATED ENVIROWASTE INDUSTRIES INC.

Notes to Consolidated Financial Statements
June 30, 2003 and 2002

Demand Loans, Secured

	(a)		At ~~March~~June 3130, ~~2002~~2003, the Company’s subsidiary, The Answer Garden Products Ltd., had authorized credit facilities which included a revolving, demand operating loan of $500,000 bearing interest at the Royal Bank prime rate (“RBP”) plus 2% per annum, a peak period revolving demand loan of $250,000 bearing interest a RBP plus 2.5% per annum, and a standby demand instalment/reducing loan or lease line of $250,000 bearing interest a RBP plus 2.5% per annum or at scheduled lease rates at time of draw down. The lines of credit are secured by a first charge on all property, plant and equipment, assignment of inventory, a registered general assignment of book debts of related companies, and a postponement and assignment of claim provided by two of the Company’s directors (see Note 9). The loans are subject to certain financial covenants including a minimum debt service coverage ratio and a maximum ratio of debt to tangible net worth. At ~~March~~June 3130, 2003, borrowings outstanding on the revolving operating lines of credit were $650,000 (~~March~~June 3130, 2002 — $~~359~~120,000; September 30, 2002 — nil). The standby loan/lease has nonot been drawn on. ~~A demand mortgage which was repaid in full in April, 2002, had $9,167 outstanding as at March 31, 2002.~~
	(b)		AtThe ~~March 31, 2003, the~~ Company’s Florida subsidiary, CRRI, had lending facilities consisting of a revolving line of credit of US $300,000 (Cdn $~~440~~404,~~340~~220), ~~equipment~~and ~~lease~~a ~~facilities~~demand ~~totalling~~construction loan facility with a maximum value of US $1850,~~700,~~000 (Cdn $21,~~495~~174,~~260~~240). As at June 30, ~~and~~2003, athere ~~construction~~have ~~loan~~been ~~facility~~no ~~with~~borrowings aunder ~~maximum~~the ~~value~~revolving line of credit and US $~~850~~450,~~000~~387 (Cdn $1606,~~174,240~~851) has been drawn on the construction loan facility.
			Interest rates for each of the loan segments are as follows:
			The loans are secured and are subject to certain financial covenants including a minimum debt service coverage and a maximum ratio of debt to worth. The loans are guaranteed by the Company, EII and Greencycle. Interest rates for each of the loan segments are as follows:

Line of Credit:		floating at the 30-day London Interbank Offered Rate (“LIBOR”) plus 350 basis points;
Equipment leases:		6.6% and 5.3%
Construction loan:		floating at the 30-day LIBOR plus 325 basis points.

The ~~loans are secured and are subject to certain financial covenants including a minimum debt service coverage and a maximum ratio of debt to worth. The loans are guaranteed by the~~ Company, ~~EII and Greencycle. There have been no borrowings on the line of credit or construction loan, and, as at March 31, 2003, the lease facilities have been fully drawn down. The Company~~ was in compliance with all covenants at ~~March 31~~June 30, 2003.

Prepared by Management

CONSOLIDATED ENVIROWASTE INDUSTRIES INC.

Notes to Consolidated Financial Statements
June 30, 2003 and 2002

Long Term Debt

	March 31,		March 31,		September 30,
	June 30,		June 30,		September 30,
	2003		2002		2002
Notes Payable
Various notes bearing interest at 7.0% to 10.5% per annum and repayable in up to 60 monthly installments of principal and interest through 2007, collateralized by the related equipment		2,334,561		4,373,305		2,482,480
Various notes bearing interest at 7.0% to 10.5% per annum and repayable in up to 60 monthly installments of principal and interest through 2008, collateralized by the related equipment.	$	2,282,662	$	3,016,323	$	2,482,480
		2,334,561		4,373,305		2,482,480
Less: Principal due within one year		864,308		1,219,312		1,078,108
Less: Principal due within one year		939,981		1,821,057		1,078,108
Long-term portion	$	1,418,354	$	1,797,011	$	1,404,372
Long-term portion		1,394,580		2,552,248		1,404,372

Principal obligations due within the next five years are as follows:

2004	~~939,981~~$	864,308
2005	~~607,609~~	591,498
2006	~~495,070~~	478,987
2007	~~216,502~~	236,928
2008	~~75,399~~	110,941
	2,334,561
	$	2,282,662

8.		Obligations Under Capital Leases

		Capital lease obligations consist of leases on mobile equipment and office equipment repayable over varying terms from 36 to 62 months at interest rates ranging from 5.25% to 12.99% per annum. Future minimum lease payments are as follows:

	~~2004~~	2004	~~643,052~~	$	600,986
	~~2005~~	2005	~~649,912~~		604,824
	~~2006~~	2006	~~635,056~~		598,589
	~~2007~~	2007	~~623,886~~		520,146
	~~2008~~	2008	~~251,233~~		140,011
Minimum lease payments			~~2,803,139~~		2,464,556
Less: amounts representing interest			~~343,686~~		286,913
Present value of obligations under capital leases			~~2,459,453~~		2,177,643
Less: principal due within one year			~~508,413~~		482,168
Long term portion			~~1,951,040~~	$	1,695,475

Prepared by Management

9.		Loans Payable
		By loan agreements, and as amended, between the Company and two of its directors and officers, the Company has borrowed a total of $2,287,309 to meet the Company’s working capital requirements. The principal is repayable on demand and bears interest at the Royal Bank of Canada prime rate plus 3.5% per annum, payable monthly. In addition to the security listed below, the Company has agreed to provide one of the directors, if requested, a guarantee and postponement of claim supported by a registered charge over the accounts receivable of its Florida subsidiary, Consolidated Resource Recovery Inc.
		On April 1, 1999, the Company borrowed $300,000 from a shareholder of the Company to meet the Company’s short-term working capital requirements. Under the terms of the loan agreement, the principal is repayable on demand and the loan will bear interest at the prime rate of the Royal Bank of Canada plus 3.5 per annum, payable monthly. The company repaid $150,000 of the loan on October 22, 2002.
		The loans are secured by a charge on the assets of the Company, a guarantee by its subsidiary, The Answer Garden Products Ltd., supported by a charge on its assets, including a mortgage over its Abbotsford, B.C. property. The loans are subrogated to the Royal Bank of Canada debt (note 6(a)).
		While the terms of repayment for the loans are on a demand basis, it is the lenders intent not to call for repayment of the debts on or before March 31, 2004.
10.		Share Capital
		Authorized: 50,000,000 common shares, no par value
		Issued and fully paid:

CONSOLIDATED ENVIROWASTE INDUSTRIES INC.

		March 31, 2003					March 31, 2002					September 30, 2002
		Number		Stated			Number		Stated			Number		Stated
		of Shares		Capital			of Shares		Capital			of Shares		Capital
Balance, beginning of period			9,976,299		15,970,199			9,913,799		15,945,824			9,913,799		15,945,824
Issued during the period:
	Exercise of options for cash		18,000		6,660			62,500		24,375			62,500		24,375
Share issue expenses			—		(653,777	)		—		(653,777	)		—		(653,777	)
Balance, end of period			9,994,299		15,323,082			9,976,299		15,316,422			9,976,299		15,316,422

Notes to Consolidated Financial Statements
June 30, 2003 and 2002

9.		Loans Payable

		By loan agreements, and as amended, between the Company and two of its directors and officers, the Company has borrowed a total of $2,269,486 to meet the Company’s working capital requirements. The principal is repayable on demand and bears interest at the Royal Bank of Canada prime rate plus 3.5% per annum, payable monthly. In addition to the security listed below, the Company has agreed to provide one of the directors, if requested, a guarantee and postponement of claim supported by a registered charge over the accounts receivable of its Florida subsidiary, Consolidated Resource Recovery Inc.

		On April 1, 1999, the Company borrowed $300,000 from a shareholder of the Company to meet the Company’s short-term working capital requirements. Under the terms of the loan agreement, the principal is repayable on demand and the loan will bear interest at the prime rate of the Royal Bank of Canada plus 3.5 per annum, payable monthly. The company repaid $150,000 of the loan on October 22, 2002.

		The loans are secured by a charge on the assets of the Company, a guarantee by its subsidiary, The Answer Garden Products Ltd., supported by a charge on its assets, including a mortgage over its Abbotsford, B.C. property. The loans are subrogated to the Royal Bank of Canada debt (note 6(a)).

		While the terms of repayment for the loans are on a demand basis, it is the lenders intent not to call for repayment of the debts on or before June 30, 2004.

10.		Share Capital

		Authorized:

		50,000,000 common shares, no par value

		Issued and fully paid:


		June 30, 2003					June 30, 2002					September 30, 2002

		Number		Stated			Number		Stated			Number		Stated
		of Shares		Capital			of Shares		Capital			of Shares		Capital

Balance, beginning of period			9,976,299	$	15,970,199			9,913,799	$	15,945,824			9,913,799	$	15,945,824
Issued during the period:
	Exercise of options for cash		18,000		6,660			62,500		24,375			62,500		24,375
Share issue expenses			—		(653,777	)		—		(653,777	)		—		(653,777	)

Balance, end of period			9,994,299	$	15,323,082			9,976,299	$	15,316,422			9,976,299	$	15,316,422

Prepared by Management

CONSOLIDATED ENVIROWASTE INDUSTRIES INC.

Notes to Consolidated Financial Statements
June 30, 2003 and 2002

10.

Share Capital (continued)

(a)

The Company has directors’ and employees’ stock options outstanding as follows:

	Shares		Exercise Price		Expiry Date
Directors		115,000		0	December 18, 2003
Directors Directors Directors Employees Employees Employees Employees Employees*		115,000 402,500 15,000 27,900 34,500 105,000 156,000 30,000		0.39 0.60 0.60 0.39 0.27 0.27 0.60 0.60	December 18, 2003 March 14, 2007 March 20, 2007 December 18, 2003 February 15, 2005 February 15, 2005 March 14, 2007 March 14, 2007
Directors		402,500		1	March 14, 2007
		885,900
Directors		15,000		1	March 20, 2007
Employees		27,900		0	December 18, 2003
Employees		38,500		0	February 15, 2005
Employees		105,000		0	February 15, 2005
Employees		160,000		1	March 14, 2007
Employees *		30,000		1	March 14, 2007
		893,900

* This option is vested as to 20,000 shares on March 15, 2003 and will vest as to 10,000 additional shares on March 31, 2004, provided that the employee is employed by the Company on the vesting date. (b) As at ~~March~~June 3130, 2003, the Company had issued ~~883~~885,900 exercisable stock options with a weighted average exercise price of $0.51. The weighted average remaining contractual life of the options outstanding is 3.1 years.

				Weighted
				Average
				Exercise
	Shares			Price
Outstanding, October 1, 2002		911,900		$	10.51
Granted		—0			—0.00
Cancelled		—(8,000	)		—0.44
Exercised		(18,000	)		0.37
Outstanding, March 31, 2003		893,900			1
Outstanding, June 30, 2003		885,900		$	0.51

(c)

On March 4, 2003, the Company adopted a share option plan subject to the rules and policies of the TSX Venture Exchange. A maximum of 1,995,260 Common shares of the Company are issuable under the plan including 911,900 options outstanding on the date of adoption.

Prepared by Management

~~11.~~CONSOLIDATED ~~Related~~ENVIROWASTE ~~Party~~INDUSTRIES Transactions Included in accounts payable and accrued liabilities at March 31, 2003 were amounts aggregating $204,619 (March 31, 2002 — $506,084; (March 31, 2002 — $506,084; September 30, 2002 — $740,765) payable to directors of the Company for accrued management remuneration expense reimbursements, and accrued loan interestINC. ~~In addition to the loans, as detailed in Note 9, the Company entered into the following transactions with the directors of the Company:~~

	March 31,		March 31,		September 30,
	2003		2002		2002
Management remuneration		150,374		153,495		554,728
Interest and loan fees		83,950		81,107		168,555
		234,324		234,602		723,283

Notes to Consolidated Financial Statements
June 30, 2003 and 2002

11.		Related Party Transactions

		Included in accounts payable and accrued liabilities at June 30, 2003 were amounts aggregating $369,099 (June 30, 2002 - $549,468; September 30, 2002 - $740,765) payable to directors of the Company for accrued management remuneration, expenses reimbursements and accrued loan interest. In addition to the loans, as detailed in Note 9, the Company entered into the following transactions with the directors of the Company:


	June 30,		June 30,		September 30,
	2003		2002		2002

Management remuneration	$	260,750	$	231,805	$	554,728
Interest and loan fees		134,527		123,658		168,555

	$	395,277	$	355,463	$	723,283

12.

Geographically Segmented Information

Six months ended March 31, 2003:	Canada			United States			Consolidated
Nine months ended June 30, 2003:	Canada			United States			Consolidated
Sales to unaffiliated customers		~~958~~3,~~003~~243,570			915,~~961~~726,~~852~~885			1018,~~919~~970,~~855~~455
Inter-segment revenue (expense)		~~221~~513,~~497~~375			(~~221~~513,~~497~~375	)		—
Total revenue		13,~~179~~756,~~500~~945			915,~~740~~213,~~355~~510			1018,~~919~~970,~~855~~455
Net earnings (loss) before income taxes		(322,295	)		362,851			40,556
Net earnings before income taxes		17,445			836,853			854,298
Income taxes		—			~~140~~265,~~067~~443			~~140~~265,~~067~~443
Net earnings (loss) for the period		(322,295	)		222,784			(99,511	)
Net earnings for the period		17,445			571,410			588,855
Identifiable assets on March 31, 2003		3,820,688			12,633,779			16,454,467
Identifiable assets on June 30, 2003		4,136,065			13,270,134			17,406,199

Six months ended March 31, 2002:	Canada			United States			Consolidated
Nine months ended June 30, 2002:	Canada			United States			Consolidated
Sales to unaffiliated customers		13,~~024~~483,~~396~~176			1117,~~245~~753,~~075~~242			1221,~~269~~236,~~471~~418
Inter-segment revenue (expense)		~~262~~479,~~754~~213			(~~262~~479,~~754~~213	)		—
Total revenue		13,~~287~~962,~~150~~389			1017,~~982~~274,~~321~~029			1221,~~269~~236,~~471~~418
Net earnings (loss) before income taxes		(384,907	)		474,660			89,753
Net earnings before income taxes		112,893			1,077,782			1,190,675
Income taxes		—			—1,291			—1,291
Net earnings (loss) for the period		(384,907	)		474,660			89,753
Net earnings for the period		112,893			1,076,491			1,189,384
Identifiable assets on March 31, 2002		4,069,521			10,169,081			14,238,602
Identifiable assets on June 30, 2002		4,122,568			10,911,490			15,034,058


Year ended September 30, 2002:	Canada			United States			Consolidated

Sales to unaffiliated customers		3,917,963			23,839,760			27,757,723
Inter-segment revenue (expense)		791,781			(791,781	)		—

Total revenue		4,709,744			23,047,979			27,757,723

Net earnings (loss) before income taxes		(148,807	)		1,687,109			1,538,302
Income tax recovery		(13,967	)		(596,088	)		(610,055	)

Net earnings (loss) for the year		(134,840	)		2,283,197			2,148,357

Identifiable assets on September 30, 2002		3,295,707			12,669,599			15,965,306

Prepared by Management

13.		Commitments
		CRRI has entered into an employment agreement with a certain member of management through December 31, 2002. This agreement provides for a total monthly salary of approximately Cdn $14,600 (US $9,946) and participation in a bonus pool based on pre-tax net profit, as defined. The salary base increases annually based on the consumer price index. Negotiations are presently underway to renew the contract on substantially the same terms.
		The Company has entered into operating leases for certain machinery, equipment and office space. Rental expense under these leases was approximately Cdn $930,073 (including US $572,788) for the six months ended March 31, 2003. Minimum future rental payments under these leases are as follows:

CONSOLIDATED ENVIROWASTE INDUSTRIES INC.

2004			1,599,193
2005			1,354,771
2006			337,072
			3,291,036

Notes to Consolidated Financial Statements
June 30, 2003 and 2002

In February, 2003 the Company’s subsidiary, CRRI commenced construction of a yard waste processing facility and new operations/administrative facilities on the property acquired by it in 2002. The facilities are expected to be completed in late summer to mid-September, 2003 at a forecast cost of US $1,731,000 (Cdn $2,650,000) As at March 31, 2003, the CRRI estimates the remaining costs to complete the project to be US $1,067,000 (Cdn $1,566,000). At March 31, 2003, the company had entered into contracts totalling US $924,456 towards the construction costs of which US $904,846 remained outstanding (Cdn $1,356,917 and Cdn $1,328,133 respectively). 14. Income Taxes The consolidated group has non-capital losses available to reduce taxable income earned in Canada and the United States in this and future years. No future benefit for these losses has been recognized in these financial statements. Any income tax provision and liability relate to EII and its subsidiaries. Deferred income taxes result from timing differences in the recognition of various expenses for tax and financial reporting purposes. These differences primarily include amortization and various accruals and reserves recognized in different periods for tax and financial reporting purposes. 15. Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, demand loans, accounts payable and accrued liabilities, loans payable, and long-term debt. It is management’s opinion that the Company is not exposed to significant interest, currency, or credit risks arising from these financial instruments. The fair values of these financial instruments approximate their carrying values. 16. Comparative Amounts Certain 2002 comparative amounts have been reclassified to conform with the financial statement presentation adopted for 2003.

13.		Commitments

		CRRI has entered into an employment agreement with a certain member of management through December 31, 2002. This agreement provides for a total monthly salary of approximately Cdn $13,401 (US $9,946) and participation in a bonus pool based on pre-tax net profit, as defined. The salary base increases annually based on the consumer price index. Negotiations are presently underway to renew the contract on substantially the same terms.

		The Company has entered into operating leases for certain machinery, equipment and office space. Rental expense under these leases was approximately Cdn $1,361,574 (including US $865,867) for the nine months ended June 30, 2003. Minimum future rental payments under these leases are as follows:


2004	$	1,443,881
2005		1,143,781
2006		177,848

	$	2,765,510

		In February, 2003 the Company’s subsidiary, CRRI commenced construction of a yard waste processing facility and new operations/administrative facilities on the property acquired by it in 2002. The facilities are expected to be completed in late summer to mid-September, 2003 at a forecast cost of US $2,029,000 (Cdn $2,861,000) As at June 30, 2003, the CRRI estimates the remaining costs to complete the project to be US $658,000 (Cdn $887,000). At June 30, 2003, the company had entered into contracts totalling US $965,051 towards the construction costs of which US $451,560 remained outstanding (Cdn $1,300,310 and Cdn $608,432 respectively).

14.		Income Taxes

		The consolidated group has non-capital losses available to reduce taxable income earned in Canada and the United States this year. No future benefit for these losses has been recognized in these financial statements.

		Any income tax provision and liability relate to EII and its subsidiaries. Deferred income taxes result from timing differences in the recognition of various expenses for tax and financial reporting purposes. These differences primarily include amortization and various accruals and reserves recognized in different periods for tax and financial reporting purposes.

15.		Financial Instruments

		The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, demand loans, accounts payable and accrued liabilities, loans payable, and long-term debt. It is management’s opinion that the Company is not exposed to significant interest, currency, or credit risks arising from these financial instruments. The fair values of these financial instruments approximate their carrying values.

16.		Comparative Amounts

		Certain 2002 comparative amounts have been reclassified to conform with the financial statement presentation adopted for 2003.

Prepared by Management

CONSOLIDATED ENVIROWASTE INDUSTRIES INC. ~~SCHEDULE~~Schedule OFof ~~CONSOLIDATED~~Consolidated ~~COST~~Cost OFof ~~SALES~~Sales For the ~~six~~nine months ended ~~March~~June 3130, 2003 and 2002

3 months

69 months

March 31, 2003

March 31, 2002

March 31, 2003

March 31, 2002

June 30, 2003

June 30, 2002

June 30, 2003

June 30, 2002

Direct Materials

Inventory, beginning of period

~~737~~715,~~520~~717

~~799~~754,~~494~~819

712,527

825,951

Purchases of direct materials and subtrades

~~445~~963,~~884~~598

~~567~~1,~~245~~374,971

~~929~~1,~~800~~893,398

13,~~814~~189,~~064~~035

Testing

4,~~663~~156

37,~~283~~742

1115,~~357~~513

917,~~912~~654

Cost of direct materials available for use

1,~~188~~683,~~067~~471

12,~~370~~137,~~022~~532

12,~~653~~621,~~684~~438

24,~~649~~032,~~927~~640

Less: Inventory, end of period

(~~715~~607,~~717~~474

)

(~~754~~624,~~819~~319

)

(~~715~~607,~~717~~474

)

(~~754~~624,~~819~~319

)

Direct materials used

~~472~~1,~~350~~075,997

~~615~~1,~~203~~513,213

~~937~~2,~~967~~013,964

13,~~895~~408,~~108~~321

Direct labour

~~914~~997,~~244~~833

~~968~~1,~~918~~073,332

12,~~841~~839,~~746~~579

13,~~991~~064,~~100~~432

Manufacturing overhead

2,~~089~~169,~~985~~620

12,~~977~~274,~~167~~001

46,~~226~~396,~~761~~381

46,~~182~~456,~~965~~966

Manufacturing costs incurred for the period

34,~~476~~243,~~579~~450

34,~~561~~860,~~288~~546

711,~~006~~249,~~474~~924

812,~~069~~929,~~173~~719

Work-in-process, beginning of period

6551,~~898~~234

9156,~~474~~241

55,697

83,133

3,542,477

3,652,762

7,062,171

8,152,306

4,294,684

4,916,787

11,305,621

13,012,852

Less: Work-in-process, end of period

(5150,~~234~~178

)

(5650,~~241~~933

)

(5150,~~234~~178

)

(5650,~~241~~933

)

Cost of goods manufactured

34,~~491~~244,~~243~~506

34,~~596~~865,~~521~~854

711,~~010~~255,~~937~~443

812,~~096~~961,~~065~~919

Finished goods, beginning of period

~~479~~609,~~624~~511

~~349~~655,~~822~~517

316,118

185,716

3,970,867

3,946,343

7,327,055

8,281,781

4,854,017

5,521,371

11,571,561

13,147,635

Less: Finished goods, end of period

(~~609~~258,~~511~~925

)

(~~655~~284,~~517~~681

)

(~~609~~258,~~511~~925

)

(~~655~~284,~~517~~681

)

Cost of sales for the period

34,~~361~~595,~~356~~092

35,~~290~~236,~~826~~690

611,~~717~~312,~~544~~636

712,~~626~~862,~~264~~954

CONSOLIDATED ENVIROWASTE INDUSTRIES INC.

~~SCHEDULE~~Schedule OFof ~~CONSOLIDATED~~Consolidated ~~DIRECT~~Direct ~~SELLING~~Selling ~~EXPENSES~~Expenses For the ~~six~~nine months ended ~~March~~June 3130, 2003 and 2002

3 months

69 months

March 31, 2003

March 31, 2002

March 31, 2003

March 31, 2002

June 30, 2003

June 30, 2002

June 30, 2003

June 30, 2002

Advertising

2118,~~756~~323

2924,~~032~~725

2644,~~578~~901

3156,~~287~~012

Amortization — bag plates and artwork

4,~~059~~632

56,~~954~~124

913,~~179~~811

1218,~~020~~144

Automobile

990

12,~~980~~970

Bad debts (recovery)

16,544

15,184

28,398

31,797

Bad debts

22,062

27,721

50,460

59,518

Commissions

2,100

46,~~200~~300

Discounts and allowances

2582,~~025~~611

3773,~~636~~275

28110,~~023~~634

81154,~~438~~713

Entertainment and promotion

~~309~~444

~~557~~193

1,~~127~~571

~~670~~863

Freight out

~~752~~1,~~177~~120,268

1,~~006~~231,~~484~~930

12,~~581~~702,~~873~~141

23,~~002~~234,~~973~~903

Marketing consulting

76,~~045~~559

7,~~076~~075

1420,~~262~~821

1421,~~152~~227

Miscellaneous

716,~~052~~715

870,~~827~~851

1229,~~547~~262

1484,~~090~~941

Travel

9489,~~241~~065

8072,~~265~~406

~~170~~259,~~270~~335

~~155~~228,~~654~~060

Direct selling expenses

~~931~~1,~~298~~363,769

1,~~194~~517,~~105~~390

13,~~878~~242,~~437~~206

23,~~350~~867,~~261~~651

Prepared by Management

CONSOLIDATED ENVIROWASTE INDUSTRIES INC.

~~SCHEDULES~~Schedules OFof ~~CONSOLIDATED~~Consolidated ~~GENERAL AND~~General ~~ADMINISTRATIVE~~and ~~EXPENSES~~Administrative Expenses For the ~~six~~nine months ended ~~March~~June 3130, 2003 and 2002

3 months

69 months

March 31, 2003

March 31, 2002

March 31, 2003

March 31, 2002

June 30, 2003

June 30, 2002

June 30, 2003

June 30, 2002

Advertising

86,~~447~~025

56,~~179~~611

2834,~~325~~350

1420,~~171~~782

Amortization

7670,~~672~~646

9082,~~016~~639

~~149~~219,~~295~~941

~~180~~262,~~081~~720

Automobile

97,~~312~~615

56,~~355~~778

1725,~~743~~358

1117,~~148~~926

Bank charges and interest

5,~~416~~546

621,~~564~~747

1016,~~878~~424

1234,~~568~~315

Business taxes, licenses and fees

18,~~234~~054

1238,~~815~~775

3755,~~238~~292

2563,~~038~~813

Consulting fees

6450,~~529~~586

2731,~~726~~968

95145,~~216~~802

5688,~~250~~218

Education and training

610,~~988~~713

36,~~202~~521

1425,~~982~~695

916,~~699~~220

Entertainment and promotion

1317,~~109~~265

1514,~~904~~649

2845,~~053~~318

2843,~~836~~485

Foreign exchange loss (gain)

(15,~~811~~782

)

147,~~896~~713

(31,~~924~~858

)

(839,~~477~~236

)

Insurance

56,~~874~~858

45,~~875~~545

1118,~~748~~606

915,~~750~~295

Interest on long-term debt

~~139~~145,~~940~~627

~~153~~183,~~856~~978

~~286~~432,~~449~~076

~~323~~507,~~345~~323

Management fees and salaries

73,289

76,888

150,374

153,495

Management remuneration

110,376

78,310

260,750

231,805

Miscellaneous

6,~~692~~659

79,~~197~~143

1521,~~256~~915

1322,~~638~~781

Office and stationery

2031,~~723~~923

2523,~~551~~371

4476,~~788~~711

4871,~~185~~556

Professional fees

5787,~~736~~498

8765,~~158~~375

~~127~~215,~~900~~398

~~152~~218,~~667~~042

Rent and office services

3429,~~023~~490

4036,~~701~~514

6998,~~255~~745

80117,~~952~~466

Shareholder relations

136,~~124~~824

10,~~487~~007

2027,~~341~~165

1727,~~898~~905

Telephone

4245,~~109~~398

3949,~~531~~040

83128,~~332~~730

84133,~~233~~273

Transfer agent and filing fees

109,~~914~~165

53,~~046~~907

1221,~~165~~330

37,~~170~~077

Travel

1921,~~816~~615

2319,~~686~~306

4768,~~340~~955

4766,~~250~~556

Wages and benefits

~~628~~561,~~808~~545

~~569~~564,~~148~~790

1,~~191~~753,~~972~~517

1,~~130~~695,~~560~~350

General and administrative expenses

1,~~253~~255,~~944~~210

1,~~212~~306,~~781~~687

23,~~438~~693,~~726~~936

23,~~394~~701,~~457~~144

Prepared by Management

CONSOLIDATED ENVIROWASTE INDUSTRIES INC.

QUARTERLY REPORT FOR THE ~~SECOND~~THIRD QUARTER ENDED ~~MARCH~~JUNE 3130, 2003

SCHEDULE A:

FINANCIAL INFORMATION

See accompanying unaudited financial statements for the ~~six~~nine months ended ~~March 31~~June 30, 2003.

SCHEDULE B:

SUPPLEMENTARY INFORMATION

	1.		Analysis of expenses and deferred costs: See accompanying unaudited financial statements for the nine months ended June 30, 2003.
			See accompanying unaudited financial statements for the six months ended March 31, 2003.
	2.		Related party transactions: See Note 11 to the financial statements.
	2.		Related party transactions:
	3.(a)		Summary of securities issued: See Note 10 to the financial statements.
			See Note 11 to the financial statements.
	3.(b)		Summary of options granted: See Note 10(a) to the financial statements.
	3.(a)		Summary of securities issued:
	4.(a)		Summary of authorized share capital: See Note 10 to the financial statements.
			See Note 10 to the financial statements.
	4.(b)		Number and recorded value of shares issued: See Note 10 to the financial statements.
	3.(b)		Summary of options granted:
	4.(c)		Description of options, warrants and convertible securities: See Note 10(a) and 10(b) to the financial statements.
			See Note 10(a) to the financial statements.
	4.(a)		Summary of authorized share capital:
			See Note 10 to the financial statements.
	4.(b)		Number and recorded value of shares issued:
			See Note 10 to the financial statements.
	4.(c)		Description of options, warrants and convertible securities:
			See Note 10(a) and 10(b) to the financial statements.
	4.(d)		Shares subject to escrow or pooling agreements: None
	5.(a)		Directors: Douglas R. Halward Derrick M. J. Rolfe James E. H. Darby Richard J. M. Chase Howard S. Steinberg
	5.(b)		Officers: James E. H. Darby–Chairman, Chief Executive Officer and Secretary Douglas R. Halward–President

Douglas R. Halward James E. H. Darby Howard S. Steinberg Derrick M. J. Rolfe Richard J. M. Chase

5.(b) Officers: James E. H. Darby – Chairman, Chief Executive Officer and SecretaryDouglas R. Halward – President

SCHEDULE C:

MANAGEMENT DISCUSSION

See accompanying Management Discussion.

MANAGEMENT DISCUSSION AND ANALYSIS ~~March~~June 3130, 2003

Information About Industry Segments

Consolidated Envirowaste Industries Inc. (the “Company”) is a leading processor of wood and other organic wastes in Western Canada, Florida and Georgia. The Company markets and supplies biomass boiler fuel for electric generation facilities, charcoal manufacturers and pulp and paper mills in the U.S. as well as bulk landscaping products in each of these regions, and packaged soil products to major Western Canadian retailers.

The following information should be read in conjunction with Consolidated Envirowaste Industries Inc.’s unaudited consolidated financial statements for the ~~six~~nine months ended ~~March~~June 3130, 2003 and related notes, which are prepared in accordance with Canadian generally accepted accounting principles. Segmented information on the Canadian and US operating units are presented in note 12 of the unaudited consolidated financial statements and a discussion of the operating results is presented below according to these operating units.

Overall Results

The Company has reported ~~second~~third quarter net earnings for the three months ended ~~March~~June 3130, 2003 of $97688,~~876~~366 or $0.0107 per share ($0.0107 fully-diluted) compared to net earnings of $471,~~939~~099,631 or $0.0011 per share ($0.0011 fully-diluted) for the comparable quarter of 2002. For the ~~six~~nine months ended ~~March~~June 3130, 2003 the Company had anet ~~loss~~earnings of $99588,~~511~~855 or $0.0106 per share ($0.0106 fully-diluted) compared to net earnings of $891,~~753~~189,384 or $0.0112 per share ($0.0112 fully-diluted) for the same ~~six~~ nine months of 2002. ~~Second~~Third quarter revenues ~~increased~~declined ~~2.5~~10% ~~despite~~over the ~~negative~~third quarter of 2002 due to the effects of the strengthening Canadian dollar versus its US counterpart. Compared to last year’s ~~second~~third quarter, tipping fees and bulk sales ~~increased 6~~declined 10% and 517% respectively. Overall sales for the ~~six~~nine month period continue to show the effects of the first quarter $1.5 million drop in tipping revenue with total revenue declining by $12.3 million or 11% over the same ~~six~~nine month period of 2002. ~~Second~~Third quarter gross margins ~~remained~~improved ~~unchanged~~ slightly and strong cost controls served to ~~improve~~keep pre -tax earnings. ~~The~~reasonably ~~stronger~~in ~~second quarter of 2003 served to bring operating losses into~~ line with the ~~first~~previous ~~six months of 2002–despite the decline in revenues~~year. Income tax provisions of $~~107~~125,000 for the quarter and $~~140~~265,000 for the ~~first~~nine ~~six~~ months also impacted net earnings compared to the same periods in 2002 where earnings were sheltered from tax by the utilization of prior year losses. Cash flow from operations after changes in non-cash working capital items in the ~~second~~third quarter ~~improved~~were ~~by approximately~~comparable ~~$418,000~~to ~~over~~ the same quarter in 2002, but cash flow after changes in working capital declined by $~~575~~561,000 over the same ~~six~~nine month period in 2002 due largely from an increase in US receivables compared to last year at this time.

US Operations

Revenues for the quarter, at just over Cdn $45.98 million, ~~increased~~were ~~11%~~off less than 2% in terms of US Funds, ~~however,~~while unfavourable currency translation differences brought ~~reduced~~ the sales ~~increase~~reduction to 511% for the quarter. Revenues for the ~~six~~ nine months were approximately $~~1.3~~2 million lower than the first ~~six~~nine months of ~~2003 which~~2002 which included higher than usual storm related revenues and revenues from a ~~large~~ large private sector project which completed late in 2002. Our core business ~~from~~ from local municipal work improved over the comparable quarter of last year, ~~while~~ while margins increased and selling costs (freight) were reduced as a result of ~~the~~ the lower activity in the first quarter and strong cost controls in the second ~~quarter~~and third quarters. The Company’s Florida subsidiary commenced construction in February, 2003 of a yard waste facility and new operations/administrative facilities on the property acquired by it in 2002. The project is proceeding smoothly and on schedule for completion in late summer to mid-September, 2003. The Company has in ~~place~~utilized a US $~~850~~450,000 ~~financing~~of ~~facility~~its inUS ~~the~~$850,000 ~~event~~construction ~~that it is required~~financing facility.

Canadian Operations

Revenues in the ~~second~~third quarter declined by 137% and 7% for the ~~six~~nine months ended ~~March~~June 3130, 2003 over the comparable periods of 2002. Tipping fees ~~were~~increased 16%, ~~comparable~~bulk tosales ~~those~~declined of11%, ~~the previous year~~ and ~~bulk~~packaged sales ~~improved~~declined ~~126~~7% in the third quarter ~~second~~compared to the same quarter ~~and~~of ~~68%~~2002. ~~for~~For the ~~six~~nine months, ~~compared~~tipping tofees ~~last year. Packaged~~have ~~product~~increased ~~revenues~~9%, ~~however,~~bulk ~~declined~~sales 21rose by 12%, inand ~~the~~packaged ~~quarter~~sales ~~and~~declined 16by 10% ~~for~~ over the ~~six months~~comparable ~~compared~~period tofor last year. ~~Customers~~Customer ~~delayed~~reluctance ~~orders~~to ~~until~~place ~~later~~early ~~into the~~Spring ~~season~~orders ~~this~~and ~~year~~inclement ~~due to the poor spring~~ weather ~~conditions~~ in ~~2002.~~March, ~~Measures to~~which ~~control~~affected ~~costs~~packaged ~~and~~sales ~~adjust production to changes~~ in the ~~market served to keep~~ ~~operating~~first ~~losses~~two inquarters, ~~line~~were ~~with~~not ~~last~~fully ~~year.~~recouped ~~This year’s sales were also impacted~~ in ~~March~~the bythird ~~poor weather~~quarter. ~~We are happy to report the~~ The Abbotsford storm water diversion system, completed in the first quarter, is working as planned and we ~~are~~ ~~well~~continue to be within permit levels.

Liquidity and Capital Resources

Net earnings in the ~~second~~third quarter ~~helped~~continued ~~offset~~to ~~the~~provide ~~impact~~good ofcash ~~the~~flow ~~loss in the~~from ~~first~~operations ~~quarter~~after ofchanges ~~2003~~in ~~and~~working ~~are an improvement over the second quarter of 2002~~capital. As ~~the~~While ~~equity~~working ~~base~~capital has been depleted ~~rebuilt~~from ~~through~~September 30, ~~stronger~~2002 ~~earnings~~levels ~~over~~with the ~~past~~construction ~~two years~~of ~~during~~the ~~our~~new facilities ~~restructuring~~in Florida, the Company has ~~maintained its~~ cash resources ~~and~~ ~~has~~to ameet ~~much~~day-to-day operating ~~stronger~~requirements ~~balance~~with ~~sheet~~sufficient ~~than~~cash itand ~~had~~credit facilities in ~~March,~~place ~~2002. The Company~~to ~~has~~fund ~~cash~~the ~~resources~~remainder toof ~~meet~~the ~~day-to-day~~construction ~~operating~~costs. ~~requirements~~The ~~and~~rising ~~fund~~Canadian ~~capital~~dollar, ~~additions.~~while ~~The~~having ~~Company’s~~a ~~Florida~~detrimental ~~subsidiary~~effect on revenues, has ~~loan~~had ~~facilities~~a infavourable ~~place,~~impact on ~~should~~our ~~they~~debt beposition ~~required,~~relative to ~~meet~~our ~~it’s~~US ~~projected~~dollar ~~construction~~denominated ~~costs~~debt.

Outlook

As we reported to you in earlier management discussions, ~~the~~there ~~current~~is still a certain amount of anxiety in the American economy. The slower economy, competitive pressures, rising fuel costs, ~~municipal budget constraints,~~ and the resurgence of the Canadian dollar have all been major factors affecting our operations thus far in the fiscal year, and, could continue to be factors which will affect our ~~operations~~ operations in the remaining ~~quarters~~quarter of 2003. The effect of weather patterns, which have deviated from norms over the past three to five years, and deferrals, ~~if any,~~ in public and private investment are still challenges to be faced in this fiscal year. We look forward to completion of the Florida facilities by the end of the fiscal year.

[signed] [signed] James E. Darby ~~Douglas R. Halward~~ Chairman and Chief Executive Officer Douglas R. Halward President

EXHIBIT B Consolidated Envirowaste Industries Inc. 27715 HUNTINGDON ROAD, ABBOTSFORD, BC V4X 1B6 TELEPHONE: 604-856-6836 FACSIMILE: 604-856-5644

Consolidated Envirowaste Industries Inc. 27715 HUNTINGDON ROAD, ABBOTSFORD, BC V4X 1B6 TELEPHONE: 604-856-6836 FACSIMILE: 604-856-5644

NEWS RELEASE

Consolidated Envirowaste Reports ~~Second~~Third Quarter Earnings Abbotsford, British Columbia – ~~May~~August 3029, 2003

Consolidated Envirowaste Industries Inc. (TSX Venture Exchange–-CWD) announced today its results for the ~~six~~nine months ended ~~March~~June 3130, 2003. A complete copy of the Company’s ~~second~~third quarter report is available on the World Wide Web at www.sedar.com. Excerpts from the quarterly unaudited financial statements are as follows:

	Quarter Ended		Quarter Ended		~~Six~~Nine Months Ended			~~Six~~Nine Months Ended
	March 31, 2003		March 31, 2002		March 31, 2003			March 31, 2002
	June 30, 2003		June 30, 2002		June 30, 2003			June 30, 2002
Sales	$	58,~~608~~050,~~867~~600	$	58,~~472~~966,~~289~~947	$	1018,~~919~~970,~~855~~455		$	1221,~~269~~236,~~471~~418
Income (loss) before income taxes		204,538		47,939		40,556			89,753
Income before income taxes		813,742		1,100,922		854,298			1,190,675
Income tax expense		~~106~~125,~~662~~376		—1,291		~~140~~265,~~067~~443			—1,291
Net Earnings (Loss)		97,876		47,939		(99,511	)		89,753
Net Earnings		688,366		1,099,631		588,855			1,189,384
Basic earnings (loss) per common share		0.01		0.01		(0.01	)		0.01
Basic earnings per common share		0.07		0.11		0.06			0.12
Diluted earnings (loss) per common share		0.01		—		(0.01	)		0.01
Diluted earnings per common share		0.07		0.11		0.06			0.12
Weighted average common shares outstanding		9,~~986~~994,299		9,~~930~~976,~~466~~299		9,~~981~~985,~~244~~596			9,~~922~~940,~~041~~127

The Company has reported ~~second~~third quarter net earnings for the three months ended ~~March~~June 3130, 2003 of $97688,~~876~~366 or $0.0107 per share ($0.0107 fully-diluted) compared to net earnings of $471,~~939~~099,631 or $0.0011 per share ($0.0011 fully-diluted) for the comparable quarter of 2002. For the ~~six~~nine months ended ~~March~~June 3130, 2003 the Company had anet ~~loss~~earnings of $99588,~~511~~855 or $0.0106 per share ($0.0106 fully-diluted) compared to net earnings of $891,~~753~~189,384 or $0.0112 per share ($0.0112 fully-diluted) for the same ~~six~~ nine months of 2002. ~~Second~~Third quarter revenues ~~increased~~declined ~~2.5~~10% ~~despite~~over the ~~negative~~third quarter of 2002 due to the effects of the strengthening Canadian dollar versus its US counterpart. ~~Compared~~ ~~to last year’s second quarter, tipping fees and bulk sales increased 6% and 5% respectively.~~ Overall sales for the ~~six~~nine month period continue to ~~show~~ show the effects of the first quarter $1.5 million drop in tipping revenue with total revenue declining by $12.3 million or 11% over the same ~~six~~nine month period of 2002. ~~Second~~Third quarter gross margins ~~remained~~improved ~~unchanged~~slightly and strong cost controls served to ~~improve~~keep pre -tax earnings. ~~The~~reasonably ~~stronger~~in ~~second quarter of 2003 served to bring operating losses into~~ line with the ~~first six months of~~previous ~~2002–despite the decline in revenues~~year. Income tax provisions of $~~107~~125,000 for the quarter and $~~140~~265,000 for the nine ~~first six~~ months also impacted net earnings compared to the same periods in 2002 where earnings were sheltered from tax by the utilization of prior year losses. Cash flow from operations after changes in non-cash working capital items in the third quarter were comparable to the ~~second~~same quarter ~~improved~~in by2002, but cash flow ~~approximately~~after changes in working capital declined by $~~418~~561,000 over the same ~~quarter~~nine month period in 2002 due largely from an increase in US receivables compared to last year at this time. While working capital has

been depleted from September 30, 2002 levels with the construction of the new facilities in Florida, the Company has cash resources to meet day-to-day operating requirements with sufficient cash and credit facilities in place to fund the remainder of the construction costs and look forward to its completion towards the end of the fiscal year.

Consolidated Envirowaste Industries Inc. is a leading processor of wood and other organic wastes in Western Canada, Florida and Georgia. The Company markets and supplies biomass boiler fuel for electric generation facilities, charcoal manufacturers and pulp and paper mills in the U.S. as well as bulk landscaping products in each of these regions, and packaged soil products to major Western Canadian retailers.

Consolidated Envirowaste Industries Inc.

Per: “James E. Darby"”

James E. Darby
Chairman and Chief Executive Officer

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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Filing Compare · CONSOLIDATED ENVIROWASTE INDUSTRIES INC