SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549


________________________________





FORM
10-KSB





x
                ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(D)OF
      THE SECURITIES ACT OF 1934For
      the fiscal year ended September 30,
2008





OR





o
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(D)OF
      THE SECURITIES ACT OF 1934




Commission
File Number: 000-53238





CEMTREX,INC.


(Exact
name of small business issuer as specified in its charter)





Delaware
            
            30-0399914(State
      or other jurisdiction of
            
            (IRS
      Employer Identification No.)Incorporation
      or organization)





19
Engineers Lane,


Farmingdale,
New York 11735


(Address,
including zip code, of principal executive offices)





631-756-9116


(Issuer’s
telephone number, including area code)





Securities
registered pursuant to Section 12(b) of the Act:




Title
      of Each Class
                  
                  Name
      of Each Exchange on Which RegisteredCommon
      Stock, $0.001 par value per share




Securities
registered pursuant to Section 12(g) of the Act: None





Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes xNo o




Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. x




Issuer's
revenues; for the fiscal year ended September 30, 2008 were
$6,670,052.00.










Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes
oNo x




As of
December 15, 2008, the aggregate market value of the registrant’s common stock
held by non-affiliates of the registrant was $88,978 based on the average bid
and asked price of $0.01 on December 15, 2008.




As of
December 15, 2008, the registrant had 34,327,862 shares of common stock
outstanding.




Documents
incorporated by reference: None.





Transitional
Small Business Disclosure Format (check one):





Yes oNo x









Index





Part ICautionary
      Statement Regarding Forward-Looking StatementsItem
      1
              BusinessItem
      1A
              Risk
      FactorsItem
      2
              PropertiesItem
      3
              Legal
      ProceedingsItem
      4
              Submission
      of Matters to a Vote of Security HoldersPart IIItem
      5
              Market
      for Registrant’s Common Equity, Related Shareholder Matters and Issuer
      Purchases of Equity SecuritiesItem
      6
              Management’s
      Discussion and Analysis of Financial Condition and Results of
      OperationsItem
      7
              Financial
      StatementsItem
      8
              Changes
      in and Disagreements with Accountants on Accounting and Financial
      DisclosureItem
      8A
              Controls
      and ProceduresItem
      8B
              Other
      InformationPart IIIItem
      9
              Directors,
      Executive Officers and Corporate GovernanceItem
      10
              Executive
      CompensationItem
      11
              Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder MattersItem
      12
              Certain
      Relationships and Related Transactions, and Director
      IndependenceItem
      13
              ExhibitsItem
      14
              Principal
      Accounting Fees and ServicesFinancial
      StatementsSignatures











FORWARD-LOOKING
STATEMENTS





Statements
in this report may be "forward-looking statements." Forward-looking statements
include, but are not limited to, statements that express our intentions,
beliefs, expectations, strategies, predictions or any other statements relating
to our future activities or other future events or conditions. These statements
are based on current expectations, estimates and projections about our business
based, in part, on assumptions made by management. These statements are not
guarantees of future performance and involve risks, uncertainties and
assumptions that are difficult to predict. Therefore, actual outcomes and
results may, and are likely to, differ materially from what is expressed or
forecasted in the forward-looking statements due to numerous factors, including
those described above and those risks discussed from time to time in this
report, including the risks described under "Risk Factors" and any risks
described in any other filings we make with the SEC. Any forward-looking
statements speak only as of the date on which they are made, and we do not
undertake any obligation to update any forward-looking statement to reflect
events or circumstances after the date of this report.





Our
discussion and analysis of our financial condition and results of operations are
based upon our financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States. The preparation
of these financial statements requires us to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenues and expenses. On an
on-going basis, we evaluate these estimates, including those related to useful
lives of real estate assets, cost reimbursement income, bad debts, impairment,
net lease intangibles, contingencies and litigation. We base our estimates on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. There can be no assurance that actual
results will not differ from those estimates.




PART I




ITEM 1.
            BUSINESS




Cemtrex
Inc. ("Cemtrex" or the "Company") is a Delaware corporation that
designs,  engineers, assembles and sells emission monitoring equipment
and instruments to the chemicals,  pulp and paper, steel,
power,  coal  and  petrochemical
industries,  as  well  as  to
municipalities,  hospitals,  and  state  and  federal
governments.  Cemtrex also markets technologies for controlling of
green house gases to generate carbon credits pursuant to Kyoto protocol. The
Company has also recently launched a new line of energy efficiency products
named Green DCV for commercial buildings.





The
Company's current products include the following:





(i)          
 Emission Monitors:


o    Opacity
monitor: Compliance & non-compliance types


o    Extractive
Continuous Emission Monitors


o    Ammonia
Analyzer


o    Mercury
Analyzer


o    Insitu
Process Analyzers





(ii)           Energy
Efficiency Products


Green Direct Controlled
Ventilation (DCV) systems





(iii)         Green
House gas Technologies


Control of Ventilation Air
methane


Control of Nitrous oxide


Control of carbon Dioxide





On April
27, 1998, the Company was incorporated in the state of Delaware under the name
“Diversified American Holdings, Inc.”  On November 13, 1998, the
Company’s name was changed to “Strateginet, Inc.”  The Company
subsequently changed its name to “Cemtrex Inc.” on December 16,
2004.





On
December 30, 2004, the Company purchased certain assets from Ducon Technologies,
Inc., which related to a business engaged in designing, assembling, selling and
maintaining emission monitors to utilities and industries.  Ducon
Technologies Inc. is owned Arun Govil, the Chairman, Chief Executive Officer,
Treasurer and President of the Company.  In consideration for the
asset purchase, the Company issued to Ducon Technologies, Inc. 1,950,000 shares
of its common stock.  The shares were issued under Section 4(2) of the
Securities Act of 1933, as amended, and/or Regulation D promulgated by the
Securities and Exchange Commission.











On April
30, 2007, the Company purchased all of the issued and outstanding membership
interests of Griffin Filters LLC, (“Griffin”) a company established since 1971
and engaged in the design, engineering & supplying of industrial air
filtration equipment from its President.  Arun Govil, the Chairman,
Chief Executive Officer, Treasurer and President of the Company, was the owner
of 100% of the issued and outstanding membership interests of
Griffin.  The Company purchased 100% ownership in Griffin for a
purchase price of $ 2,750,000.00. The Company completed the Griffin purchase by
(i) paying cash of $700,000.00, (ii) issuing 20,000,000 shares of common stock
valued at $750,000.00 and (iii) issuing a four year convertible debenture in the
amount of $1,300,000.00, paying interest of 8.0% per year and convertible into
30,000,000 shares of common stock. Griffin had sales and net income of
$3,297,409 and $145, 981 respectively for fiscal year ended September 30, 2006.
Griffin is now a wholly-owned subsidiary of the Company.





The
Company designs,  engineers, assembles and sells emission monitoring
equipment and instruments to the chemicals,  pulp and paper, steel,
power,  coal  and  petrochemical
industries,  as  well  as  to
municipalities,  hospitals,  and  state  and  federal
governments.  The Company’s emission monitoring systems are installed
at the exhaust stacks of industrial facilities and are used to measure the
outlet flue gas concentrations of regulated pollutants, such as sulfur dioxide,
hydrogen chloride, hydrogen sulfide, nitrous oxides, ammonia, nitrogen oxide,
carbon dioxide, carbon monoxide and other regulated pollutants. Through use of
our equipment and instrumentation, our clients can monitor the exhausts to the
atmosphere from their facilities and comply with Environmental Protection Agency
and state and local emission regulations on dust, particulate, fumes, acid gases
and other regulated pollutants into the atmosphere.




The
Company also markets technologies and services for carbon credit projects
through abatement of greenhouse gases such as Methane, Nitrous Oxide and carbon
Dioxide, pursuant to the Kyoto protocol and assists project owners in the
selling of carbon credits globally. Carbon Credits are emission offsets that are
generated from greenhouse gases abatement, renewable energy such as solar &
wind, and energy efficiency projects which displace carbon emissions from
traditional fossil fuel sources like coal, oil or gas with the subsequent
reduction in greenhouse gas emissions. Companies, agencies and governments buy,
sell, bank and trade Carbon Credits called Certified Emission Reductions or
CERs.  Cemtrex provides consulting services for such projects and
arranges for investment equity and the sales of CERs for its
customers.




The
Company has recently launched a line of energy efficiency products named Green
DCV (Direct Control Ventilation) from commercial buildings. The direct
ventilation control by Green DCV, achieves energy savings by precisely
controlling the flow of outside air into a building based upon occupancy levels.
This is done by continuous multiple parameter monitoring of carbon dioxide,
non-human generated pollutants, and other comfort related factors simultaneously
in several zones in a multiplexed commercial building. Green DCV incorporates
economizers into its design as well to provide efficient energy consumption
while reducing unnecessary expenses.




INDUSTRY
BACKGROUND





The
market for environmental control systems and technologies is directly dependent
upon governmental regulations and their enforcement. During the past three
decades, federal, state and local governments have realized the contaminated air
poses significant threats to public health and safety, and, in response, have
enacted legislation designed to curb emissions of a variety of air
pollutants.  Management believes that the existence of governmental
regulations creates demand for the Company’s emission monitoring equipment and
environmental control systems.





These
governmental regulations affect nearly every industrial activity. The principal
federal legislation that was created is the Clean Air Act of 1970, as amended
(Clean Air Act). This legislation requires compliance with ambient air quality
standards and empowers the Environmental Protection Agency (EPA) to establish
and enforce limits on the emissions of various pollutants from specific types of
facilities. The states have primary responsibility for implementing these
standards and, in some cases, have adopted standards more stringent than those
established by the EPA. In 1990, amendments to the Clean Air Act were adopted
which address, among  other things, the country acid rain problem by
imposing strict control on the emissions of sulfur dioxide from power
plants.  During 1997, EPA approved regulations for ozone related
emissions and in 1998 EPA issued regulations requiring utilities in 22 states to
significantly reduce Nitrogen oxides emissions.





According
to scientists, the Earth's surface has risen in temperature by about 1 degree
Fahrenheit in the past century. There is increasing evidence that certain human
activities are contributing to this change in temperature through activities
that increase the levels of greenhouse gases, primarily carbon dioxide, methane,
and nitrous oxide, in the atmosphere. Greenhouse gases trap heat that would
normally escape back into the atmosphere, thus increasing the Earth's natural
greenhouse effect and increasing temperature over time.











The
Earth's climate is predicted to change because human activities are altering the
chemical composition of the atmosphere through the buildup of greenhouse
gases—primarily carbon dioxide (CO2), methane
(CH4),
and nitrous oxide (NOx). The
heat-trapping property of these gases is undisputed. Although uncertainty exists
about exactly how Earth's climate responds to these gases, global temperatures
are rising.





EPA
Clean Air market Programs




EPA’s
Clean air market programs include various market-based regulatory programs
designed to improve air quality. Clean air markets include various market-based
regulatory programs designed to improve air quality by reducing outdoor
concentrations of fine particles, sulfur dioxide, nitrogen oxides, mercury,
ozone and other significant air emissions. The most well-known of these programs
are EPA’s Acid Rain
Program and the NOxTrading Programs,
which reduce emissions of sulfur dioxide (SO2) and
nitrogen oxides (NOx)–compounds
produced by fossil fuel combustion.




Acid
Rain Program




The goal
of the Acid Rain Program is to achieve significant environmental and public
health benefits through reductions in emissions of sulfur dioxide (SO2) and
nitrogen oxides (NOx), the
primary causes of acid rain. To achieve this goal at the lowest cost to society,
the program employs both traditional and innovative, market-based approaches for
controlling air pollution. In addition, the program encourages energy efficiency
and pollution prevention.




"Acid
rain" is a broad term referring to a mixture of wet and dry deposition
(deposited material) from the atmosphere containing higher than normal amounts
of nitric and sulfuric acids. The precursors, or chemical forerunners, of acid
rain formation result from both natural sources, such as volcanoes and decaying
vegetation, and man-made sources, primarily emissions of SO2
and NOxresulting from fossil fuel combustion. In the United States, roughly 2/3
of all SO2 and 1/4 of
all NOx come from
electric power generation that relies on burning fossil fuels, like coal. 
Acid rain occurs when these gases react in the atmosphere with water, oxygen,
and other chemicals to form various acidic compounds. The result is a mild
solution of sulfuric acid and nitric acid. When sulfur dioxide and nitrogen
oxides are released from power plants and other sources, prevailing winds blow
these compounds across state and national borders, sometimes over hundreds of
miles.




NOx
Trading Program




The goal
of the NOx Trading Program is to reduce the transport of ground-level ozone
across large distances. The Ozone Transport Commission
(OTC) NOxBudget Program was
implemented from 1999 to 2002 and was replaced by the NOxBudget Trading
Program—also known as the “NOx SIP
Call”—in 2003. The NOxSIP
Call  Program is a market-based cap and trade program created
to reduce emissions of nitrogen oxides (NOx) from
power plants and other large combustion sources in the eastern United States.
NOx is a prime ingredient in the formation of ground-level ozone (smog), a
pervasive air pollution problem in many areas of the eastern United States. The
NOx
Budget Trading Program was designed to reduce NOx emissions
during the warm summer months, referred to as the ozone season, when
ground-level ozone concentrations are highest.




Clean Air Interstate Rule
(CAIR)




On March
10, 2005, EPA issued the Clean Air Interstate Rule (CAIR). This rule provides
states with a solution to the problem of power plant pollution that drifts from
one state to another. CAIR covers 28 eastern states and the District of
Columbia. The rule uses a cap and trade system to reduce the target
pollutants—sulfur dioxide (SO2) and
nitrogen oxides (NOx)—by 70
percent.




The goal
of the Clean Air Interstate Rule (CAIR) is to permanently cap emissions of
SO2
and NOx in the
eastern U.S. States must achieve the required emission reductions using one of
two compliance options: (1) meet the state’s emission budget by requiring power
plants to participate in an EPA-administered interstate cap and trade system, or
(2) meet an individual state emissions budget through measures of the state’s
choosing.




Clean Air Mercury Rule
(CAMR)




On March
15, 2005, EPA issued the Clean Air Mercury Rule (CAMR) to permanently cap and
reduce mercury emissions from coal-fired power plants for the first time ever.
This rule makes the United States the first country in the world to regulate
mercury emissions from utilities.









The goal
of the Clean Air Mercury Rule (CAMR) is to reduce mercury emissions from
coal-fired power plants through “standards of performance” for new and existing
utilities and a market-based cap and trade program.




CAMR
establishes “standards of performance” limiting mercury emissions from new and
existing coal-fired power plants, and creates a market-based cap and trade
program that will reduce nationwide utility emissions of mercury in two distinct
phases. The first phase cap is 38 tons and emissions will be reduced by taking
advantage of “co-benefit” reductions—that is, mercury reductions achieved by
reducing sulfur dioxide (SO2) and
nitrogen oxides (NOx) emissions
under Clean Air
Interstate Rule (CAIR). In the second phase, due in 2018, coal-fired
power plants will be subject to a second cap, which will reduce emissions to 15
tons upon full implementation.




EPA
Emission Monitoring Requirements




EPA’s
emissions monitoring requirements are designed to ensure the compliance with its
current regulations pursuant to various programs. The emission monitoring
requirements ensure that the emissions data collected is of a known, consistent,
and high quality, and that the mass emissions data from source to source are
collected in an equitable manner. This is essential to support the Clean Air
Markets Program’s mission of promoting market-based trading programs as a means
for solving air quality problems




Continuous
emissions monitoring (CEM) is instrumental in ensuring that the mandated
reductions of SO2, NOxmercury
and other pollutants are achieved. While traditional emissions limitation
programs have required facilities to meet specific emissions rates, the current
Program requires an accounting of each ton of emissions from each regulated
unit. Compliance is then determined through a direct comparison of total
annual emissions reported by CEM and allowances held for the
unit.




CEM is
the continuous measurement of pollutants emitted into the atmosphere in exhaust
gases from combustion or industrial processes. EPA has established requirements
for the continuous monitoring of SO2,
volumetric flow, NOx, diluent
gas, and opacity for units regulated under the Acid Rain Program. In addition,
procedures for monitoring or estimating carbon dioxide (CO2) are
specified. The CEM rule also contains requirements for equipment performance
specifications, certification procedures, and recordkeeping and
reporting.




The Acid
Rain Program uses a market-based approach to reduce SO2 emissions
in a cost-effective manner. (One allowance is an authorization to emit 1 ton of
SO2
during or after a specified calendar year; a utility may buy, sell, or hold
allowances as part of its compliance strategy.) Complete and accurate emissions
data are key to implementing this market-based approach.




An
essential feature of smoothly operating markets is a method for measuring the
commodity being traded. The CEM data supplies the gold standard to back up the
paper currency of emissions allowances. The CEM requirements Management believes
instills confidence in the market-based approach by verifying the existence and
value of the traded allowance.




The owner
or operator of a unit regulated under the Acid Rain Program must install CEM
systems on the unit unless otherwise specified in the regulation. CEM systems
include:




·
            An
      SO2
      pollutant concentration monitor.




·
            A
      NOx
      pollutant concentration monitor.




·
            A
      volumetric flow monitor.




·
            An
      opacity monitor.




·
            A
      diluent gas (O2 or
      CO2)
      monitor.




·
            A
      computer-based data acquisition and handling system (DAHS) for recording
      and performing calculations with the
data.




All CEM
systems must be in continuous operation and must be able to sample, analyze, and
record data at least every 15 minutes. All emissions and flow data will be
reduced to 1-hour averages. The rule specifies procedures for converting the
hourly emissions data into the appropriate units of measure.




The
following is a summary of monitoring method requirements and
options:




·
            All
      existing coal-fired units serving a generator greater than 25 megawatts
      and all new coal units must use CEMs for SO2,
      NOx,
      flow, and opacity.









·
            Units
      burning natural gas may determine SO2 mass
      emissions by: (1) measuring heat input with a gas flowmeter and using a
      default emission rate; or (2) sampling and analyzing gas daily for sulfur
      and using the volume of gas combusted; or (3) using
  CEMs.




·
            Units
      burning oil may monitor SO2 mass
      emissions by one of the following
methods:




1.
            daily
      manual oil sampling and analysis plus oil flow meter (to continuously
      monitor oil usage)




2.
            sampling
      and analysis of diesel fuel oil as-delivered plus oil flow
      meter




3.
            automatic
      continuous oil sampling plus oil flow
meter




4.
            SO2 and
      flow CEMs.




·
            Gas-fired
      and oil-fired base-loaded units must use NOx
      CEMs.




·
            Gas-fired
      peaking units and oil-fired peaking units may either estimate NOx
      emissions by using site-specific emission correlations and periodic stack
      testing to verify continued representativeness of the correlations, or use
      NOx
      CEMS. The emission correlation method has been significantly streamlined
      in the revised rule.




·
            All
      gas-fired units using natural gas for at least 90 percent of their annual
      heat input and units burning diesel fuel oil are exempt from opacity
      monitoring.




·
            For
      CO2 all
      units can use either (1) a mass balance estimation, or (2) CO2
      CEMs, or (3) O2 CEMs
      in order to estimate CO2
      emissions.




PRODUCTS





The Company offers a range of products
and systems, incorporating diverse technologies, to address the needs of a wide
variety of industries and their environmental regulations. Management believes
that the Company provides a single source responsibility for design,
engineering, assembly, installation and maintenance of systems to its
customers. The Company’s
products are designed to operate so as to allow its users to determine their
compliance with the latest governmental emissions regulations. The Company’s
products measure the concentrations of various regulated pollutants in the flue
gases discharging the exhaust stacks at various utilities and
industries.





The
Company's current products include the following:





Opacity
monitor: Compliance & non-compliance types





Management
believes that the Company’s Laser Opacity monitor provides the highest accuracy
and long-term reliability available for stack opacity and dust
measurements.  An EPA-compliant monitoring system, the monitor is a
lightweight, efficient solution for determining opacity or dust concentration in
stack gases.  Proven in many installations worldwide, it advances the
state of opacity monitoring with higher levels of accuracy, flexible
installation and reduced long-term maintenance.





Extractive
Continuous Emission Monitors (CEMS)





Cemtrex
provides direct-extractive and dilution-extractive CEMS  equipment
& systems that are applicable for utilities, industrial boilers, FGD
systems, SCR-NOx control, furnaces, gas turbines, process heaters, incinerators,
and process controls.  In addition to traditional CEMS designed for
maximum reliability and minimal maintenance in monitoring criteria pollutants,
the Company can also accurately quantify other gaseous compounds through in-situ
or extractive FTIR systems. The Company’s Extractive CEMS can be configured to
monitor for one or all of the following: • NOx • SO2 • CO2 • O2 • CO • THC •
Mercury • H2S • HCl & HF Acid • NH3 • Particulate • Opacity • Volumetric
Flow and Moisture.





Ammonia
Analyzer





The flue
gas stream which contain ammonia, nitrogen oxides and in some cases sulfur
dioxide utilize Ultra Violet radiation techniques for measurements. All these
components absorb UV radiation, and therefore can be monitored by process
analyzers that utilize UV absorbance techniques for detection.










Mercury
Analyzer





The EPA
Clean Air Mercury rule requires that all coal fired power plants must provide
continuous mercury monitoring by 2009. Management believes that Cemtrex's SM4
mercury monitor, a result of 10 years experience in mercury monitoring business,
provides reliable online measurements at a much lower cost than any other
competing model in the market. Cemtrex SM4 is the first instrument working on a
thermo catalytic principle avoiding wet chemical sample treatment. As a
consequence, the Company has found that maintenance demand has been drastically
minimized. Management believes that it is the only monitor that required no
maintenance at a coal fired utility wet stack, no carrier gases, no water and
95% data availability SM4 uses straight extractive Teflon sheathed Hastelloy
probe with no plugging or corrosion.





Energy
Efficiency Products





Green
Direct Controlled Ventilation (DCV) systems




Green
House gas Technologies


Control of Ventilation Air
methane


Control of Nitrous oxide


Control of carbon Dioxide





PRODUCT
DEVELOPMENT





Company
is currently developing a technology to economically control carbon dioxide gas
from flue gases exhausting the stacks of power plants. Company has setup a pilot
plant to test and verify its own proprietary concept to control carbon dioxide
emissions from power plants.





The
Company is not dependent on, nor expects to become dependent on, any one or a
limited number of suppliers.  The Company buys parts and components to
assemble its equipment and products. The Company does not manufacture or
fabricate its own products or systems.  The Company relies on
sub-suppliers and third party vendors to procure from or fabricate its
components based on the Company’s design, engineering and specifications. The
Company also enters into subcontracts for field installation, which the Company
supervises; and Company manages all technical, physical and commercial aspects
of the performance of the Company contracts. To date, the Company has not
experienced difficulties either in obtaining fabricated components and other
materials and parts or in obtaining qualified subcontractors for installation
work.





PARTS,
REPAIR AND REFURBISHMENT SERVICES





The
Company also provides  replacement  and
spare  parts  and  repair  and  refurbishment
services for its emission monitoring systems following the expiration of its
warranties  which  generally range up to 12 months. The
Company has experienced only minimal costs from its warranties.





The
Company’s standard terms of sale disclaim any liability for consequential or
indirect losses or damages stemming from any failure of the Company’s products
or systems or any component thereof.  The Company seeks
indemnification from its subcontractors for any loss, damage or claim arising
from the subcontractors' failure to perform.





COMPETITION





The
Company faces substantial competition in each of its principal
markets.  Most of its competitors are larger and have greater
financial resources than the Company; several are divisions of multi-national
companies. The Company competes on the basis of price, engineering and
technological expertise, know-how and the quality of its products, systems and
services.  Additionally, the Company’s management believes that the
successful performance of the Company’s installed products and systems is a key
factor in gaining business as customers typically prefer to make significant
purchases from a company with a solid performance history.









We obtain
virtually all our contracts through competitive bidding. Although price is an
important factor and may in some cases be the governing factor, it is
not always determinative, and contracts are often awarded on the basis of the
efficiency or reliability of products and the engineering and technical
expertise of the bidder. Several companies market products that compete
directly with our products. Other companies offer products that potential
customers may consider to be acceptable alternatives to our products and
services. We face direct competition from companies with far greater
financial, technological, manufacturing and personnel resources, including
Thermo Fisher Scientific Inc., Tekran Instruments Corporation, Altech
Environment USA, Shaw Group, and Horiba Instruments Inc. in the emissions
monitoring business.




INTELLECTUAL
PROPERTY





Over the
years, the Company has developed proprietary technologies that give it an
edge in competing with its competitors. Thus, the Company relies on a
combination of trade secrets and know-how to protect its intellectual property.
The Company has not filed any patents.





MARKETING





The
Company relies on manufacturing representatives, distributors, direct
salespersons, magazine advertisements, internet advertising, trade shows, trade
directories and catalogue listings to market our products and services. The
Company uses more than eight manufacturing sales representatives in the United
States backed by its senior management and technical professionals. The
Company’s arrangements with independent sales representatives accord each a
defined territory within which to sell some or all of the Company’s
products  and  systems,  provide  for
the payment of  agreed-upon  sales
commissions  and
are  terminable  at  will.  The
Company’s sales representatives do not have authority to execute contracts on
the Company’s behalf.





The
Company’s sales representatives also serve as ongoing liaison function between
us and our customers during the installation phase of our products and systems
and address customers' questions or concerns arising thereafter. The Company
selects representatives based upon industry reputation, prior sales performance
including number of prospective leads generated and sales closure rates, and the
breadth of territorial coverage, among other criteria.





Technical
inquiries received from potential customers are referred to our engineering
personnel. Thereafter, the Company’s sales and engineering personnel jointly
prepare a budget for future planning, a proposal, or a final bid.The period between
initial customer contact and issuance of an order is generally between two and
twelve months.





CUSTOMERS





The
Company’s principal customers are engaged in refining, power, chemical, mining
and metallurgical
processing.  Historically,  most  of our
customers  have  purchased  individual  products  or  systems  which,  in  many
instances, operate in conjunction with products and systems supplied by others.
For several years, the Company has marketed its products as integrated custom
engineered emission monitoring systems and environmental management solutions.
No one single customer accounts for a large percentage of our annual
sales.





On most
projects, the Company is responsible to its customers for all phases of the
design, assembly, supply and, if included, field installation of its products
and systems. The successful completion of a project is generally determined by a
successful operational test of the supplied equipment conducted by our field
service technician in the presence of the customer.





TECHNOLOGY





The
Company has developed a broad range of emission monitoring technological
base.  The Company’s equipment and instruments are used: (i) to
measure particulate, carbon dioxide, nitrogen oxides, mercury and sulfur dioxide
from coal-fired power plants, (ii) to measure particulate from cement plants,
(iii) to measure hydrocarbons, particulate and sulfur dioxide from refineries,
(iv) to measure hydrogen sulfide, carbon monoxide, ammonia, hydrocarbons and
other regulated pollutants from chemical plants, steel plants, incinerators and
other industrial exhausts. Our emission monitors are capable of meeting all
current federal and local emission monitoring standards.  The Company
has not filed any patents with respect to its technology.










BONDING
AND INSURANCE





While
only a very few of our contracts require the Company to procure bid and
performance bonds, such requirements are prevalent for large projects or
projects  partially or fully funded by federal, state or local
governments. A bid bond guarantees that a bidder will execute a contract if it
is awarded the job and a performance bond guarantees performance of the
contract.  The Company does not presently have a bank credit line to
back bid or performance bonds. Thus, the Company cannot bid on certain
contracts.





In
certain cases, the Company is able to secure large contracts by accepting
progress payments with retention provisions in lieu of bonds.





The
Company currently maintains different types of insurance, including general
liability and property coverage.  The Company does not maintain
product liability insurance with respect to its products and
equipment.  Management believes that the insurance coverage that it is
adequate for our current business needs.





GOVERNMENT
REGULATION





Significant
environmental laws, particularly the Federal Clean Air Act, have been enacted in
response to public concern about the environment.  The Company believe
that compliance with and enforcement of these laws and  regulations
create the demand for our products and systems and largely
determine  the level
of  expenditures  that  customers  will  make  to  monitor
the  emissions  from  their facilities. The
Federal Clean Air Act, initially adopted in 1970 and extensively amended in
1990, requires compliance with ambient air quality standards and empowers the
EPA to establish and enforce limits on the emission of various pollutants from
specific types of industrial facilities.  States have primary
responsibility for implementing these standards, and, in some cases, have
adopted more stringent standards.




The
1990  amendments  to the  Federal  Clean
Air Act  require, among other matters, reductions in the emission of
sulfur oxides, believed to be the cause of "acid rain," in the emission of 189
identified  hazardous air pollutants and
toxic  substances  and
the  installation  of  equipment  and
systems  which will contain certain named toxic substances used in
industrial processes in the event
of  sudden,  accidental,  high-volume  releases.  Such  amendments  also  extend
regulatory coverage to many facilities previously exempt due to their small size
and  require  the EPA
to  identify  those  industries  which
will be required to install the mandated control  technology for the
industry to reduce the emission of hazardous air pollutants from
their  respective  plants
and  facilities.  The Montreal Protocol, adopted in 1987, as
well as EPA regulations issued in 1992, call for the phase-out of CFCs. In
addition,  regulations promulgated by the EPA in
1993  further  limit  the  concentration  of  pollutants,  such  as  hydrogen
chloride, sulfur dioxide,  chlorine, heavy metals and hazardous solid
substances in the form of extremely  fine dust,  from
sewage  sludge  incinerators.  Sewage sludge
facilities are required to comply with these regulations. Compliance with all
these regulations can only be achieved by first monitoring the pertinent
emission levels.





EMPLOYEES





The
Company employs 21 full time and three part time employees, consisting of one
executive officer, five managers, ten technical engineers, and five clerical and
administrative support persons.  None of our employees are represented
by a labor union. In addition, the Company utilizes commission sales personnel
and contract design engineers, on an as needed basis. There are no employment
agreements.





FACILITIES





The
Company does not own any real estate.





The
Company leases its principal office at Farmingdale, New York, 4000 square feet
of office and warehouse/shop space in a single story commercial structure on a
month to month lease from Ducon Technologies Inc., at a monthly rental of $
2,157.00. The Company’s subsidiary Griffin Filters LLC leases approx. 10,000 sq.
ft. of office and warehouse space in Liverpool, New York from a third party in a
five year lease at a monthly rent of $ 4,225.00 expiring on March 30,
2012.  The Company has no plans to acquire any property in the
immediate future. The Company believes that its current facilities are adequate
for its needs through the next six months, and that, should it be needed,
suitable additional space will be available to accommodate expansion of the
Company's operations on commercially reasonable terms, although there can be no
assurance in this regard. There are no written agreements.











ITEM 1 A.
            RISK
      FACTORS




Investing in our common stock
involves a high degree of risk. You should consider carefully the risks and
uncertainties described below, together with all of the other information in
this report, including the consolidated financial statements and the related
notes appearing at the end of this annual report on Form 10-KSB, with
respect to any investment in shares of our common stock. If any of the following
risks actually occurs, our business, financial condition, results of operations
and future prospects would likely be materially and adversely affected. In that
event, the market price of our common stock could decline and you could lose all
or part of your investment.




RISKS
RELATED TO OUR BUSINESS





o    We
are substantially dependent upon the success and market acceptance of our
technology. The failure of the emissions monitoring and controls market to
develop as we anticipate, would adversely affect our business.





The
Company's success is largely dependent on increased market acceptance of our
emission monitoring equipment and control systems. If acceptance of emissions
monitoring equipment does not continue to grow, then the Company’s revenues may
be significantly reduced.





oIf
we are unable to develop new products, our competitors may develop and market
products with better features that may reduce demand for our potential
products.





The
Company may not be able to introduce any new products or any enhancements to its
existing products on a timely basis, or at all.  In addition, the
introduction by the Company of any new products could adversely affect the sales
of certain of its existing products. If the Company's competitors develop
innovative emissions testing technology that are superior to the Company's
products or if the Company fails to accurately anticipate market trends and
respond on a timely basis with its own innovations, the Company may not achieve
sufficient growth in its revenues to attain profitability.





oWe
have incurred losses for the fiscal year ending September 30, 2007, and we may
incur losses for the foreseeable future.




We had
net loss of $123,565 for the fiscal year ended September 30, 2007. These losses
have resulted principally from expenses incurred in the extensive demonstration
testing of its new SM4 compliance mercury monitors at various utility sites and
the low gross margin product line of Griffin Filters. We may continue to incur
significant expenditures related to research and development, selling and
marketing and general and administrative activities as well as capital
expenditures and anticipate that our expenses and losses may increase in the
foreseeable future as we expand our business however, for the year ended
September 30, 2008, we generated a profit of $118,078.  Further, as a
public company we will also incur significant legal, accounting and other
expenses that we did not incur as a private company. To maintain profitability,
we will need to generate significant additional revenues with significantly
improved gross margins. It is uncertain when, if ever, we will return to
profitability. Even if we were to become profitable, we might not be able to
sustain or increase profitability on a quarterly or annual
basis.





oThe
Company faces constant changes in governmental standards by which our products
are evaluated.





The
Company believes that, due to the constant focus on the environment and clean
air standards throughout the world, a requirement in the future to adhere to new
and more stringent regulations both domestically and abroad is possible as
governmental agencies seek to improve standards required for certification of
products intended to promote clean air.  In the event our products
fail to meet these ever-changing standards, some or all of our products may
become obsolete.





oThe
future growth of our business depends, in part, on enforcement of existing
emissions-related environmental regulations and further tightening of emission
standards worldwide.





The
Company expects that the future business growth will be driven, in part, by the
enforcement of existing emissions-related environmental regulations and
tightening of emissions standards worldwide.  If such standards do not
continue to become stricter or are loosened or are not enforced by governmental
authorities, it could have a material adverse effect on our business, operating
results, financial condition and long-term prospects.





o We may incur
substantial costs enforcing our proprietary information, defending against
third-party patents, invalidating third-party patents or licensing third-party
intellectual property, as a result of litigation or other proceedings relating
to patent and other intellectual property rights.










The
Company considers its technology and procedures proprietary.  In
particular, the Company depends substantially on its flexibility to develop
custom engineered solutions for various applications and be responsive to
customer needs.  The Company has not filed for any patents for its
technologies.





The
Company may be notified of claims that it has infringed a third party's
intellectual property.  Even if such claims are not valid, they could
subject the Company to significant costs. In addition, it may be necessary in
the future to enforce the Company's intellectual property rights to determine
the validity and scope of the proprietary rights of others. Litigation may also
be necessary to defend against claims of infringement or invalidity by
others.  An adverse outcome in litigation or any similar proceedings
could force the Company to take actions that could harm its business. These
include: (i) ceasing to sell products that contain allegedly infringing
property; (ii) obtaining licenses to the relevant intellectual property which
the Company may not be able to obtain on terms that are acceptable, or at all;
(iii) indemnifying certain customers or strategic partners if it is determined
that the Company has infringed upon or misappropriated another party's
intellectual property; and (iv) redesigning products that embody allegedly
infringing intellectual property. Any of these results could adversely affect
the Company's business, financial condition and results of operations. In
addition, the cost of defending or asserting any intellectual property claim,
both in legal fees and expenses, and the diversion of management resources,
regardless of whether the claim is valid, could be significant.





o    Product
defects could cause the Company to incur significant product liability,
warranty, repair and support costs and damage its reputation which would have a
material adverse effect on its business.





Although
the Company rigorously tests its products, defects may be discovered in future
or existing products. These defects could cause the Company to incur significant
warranty, support and repair costs and divert the attention of its research and
development personnel. It could also significantly damage the Company's
reputation and relationship with its distributors and customers which would
adversely affect its business. In addition, such defects could result in
personal injury or financial or other damages to customers who may seek damages
with respect to such losses. A product liability claim against the Company, even
if unsuccessful, would likely be time consuming and costly to
defend.





o    The
markets in which we operate are highly competitive, and many of our competitors
have significantly greater resources than we do.





There is
significant competition among companies that provide emissions monitoring
systems.  Several companies market products that compete directly with
our products.  Other companies offer products that potential customers
may consider to be acceptable alternatives to our products and
services.  We face direct competition from companies with far greater
financial, technological, manufacturing and personnel resources, including
Thermo Fisher Scientific Inc., Tekran Instruments Corporation, Altech
Environment USA, Shaw Group, and Horiba Instruments Inc. in the emissions
monitoring business. Newly developed products could be more effective and cost
efficient than our current or future products.  Many of the current
and potential future competitors have substantially more engineering, sales and
marketing capabilities and broader product lines than we
have.





o    The
Company’s results may fluctuate due to certain regulatory, marketing and
competitive factors over which we have little or no control.





The
factors listed below, some of which we cannot control, may cause our revenue and
results of operations to fluctuate significantly:





·
            the
      existence and enforcement of government environmental regulations. If
      these regulations are not maintained or enforced then the market for
      Company’s products could
deteriorate;


·
            Retaining
      and keeping qualified employees and management
  personnel;


·
            Ability
      to upgrade our products to keep up with the changing market place
      requirements;


·
            Ability
      to keep up with our competitors who have much higher resources than
      us;


·
            Ability
      to find sub-suppliers and sub-contractors to assemble and install our
      products;


·
            General
      economic conditions of the industry and the ability of potential customers
      to spend money on setting up new industries that require our
      products;


·
            Ability
      to maintain or raise adequate working capital required for the operations
      and future growth; and


·
            Ability
      to retain our CEO and other senior key
  personnel.





o   The
loss of our senior management and failure to attract and retain qualified
personnel in a competitive labor market could limit our ability to execute our
growth strategy, resulting a slower rate of growth.











We depend
on the continued service of our senior management. Due to the nature of our
business, we may have difficulty locating and hiring qualified personnel and
retaining such personnel once hired. The loss of the services of any of our key
personnel, or our failure to attract and retain other qualified and experienced
personnel on acceptable terms, could limit our ability to execute our growth
strategy resulting in a slower rate of growth.





o    General
economic downturns in general would have a material adverse effect on the
Company's business, operating results and financial condition.





The
Company's operations may in the future experience substantial fluctuations from
period to period as a consequence of general economic conditions affecting
consumer spending. Therefore, any economic downturns in general would have a
material adverse effect on the Company's business, operating results and
financial condition.





o    A
demand for payment of the outstanding loan or the conversion into non-assessable
share of common stock of the Company may have an adverse effect on the
Company.





On April
30, 2007, the Company issued a $1,300,000 Convertible Debenture to Arun Govil,
the Company’s Chairman, CEO, President and Treasurer, in conjunction with the
purchase of Griffin Filters, Inc. pursuant to the Agreement and Assignment of
Membership Interests between Arun Govil and Cemtrex, Inc. The debenture carries
an 8% annual interest rate with interest payable semiannually in arrears on the
first business day of January and July each year. The debenture principle is due
and payable on April 30, 2011.





The
debenture has the right of conversion into 30,000,000 non-assessable shares of
common stock of the Company at $0.001 (par value) per share. Conversion is not
exercisable prior to December 31, 2007. Commencing December 31, 2007 and
continuing to April 30, 2011, the Debenture Holder shall have the right of
conversion subject o the terms and conditions of the debenture. In the event the
face amount of the debenture is not fully converted on or before April 30, 2011,
the conversion rights will lapse.





RISKS
RELATED TO INVESTMENT IN THE COMMON STOCK OF THE COMPANY





o We may
need additional funds in the future. We may be unable to obtain additional funds
or if we obtain financing it may not be on terms favorable to us. You may lose
your entire investment.





Based on
our current plans, we believe our existing cash and cash equivalents along with
cash generated from operations will be sufficient to fund our operating expenses
and capital requirements through June 30, 2009, although there is no assurance
of this result, we may need funds in the future. If our capital resources are
insufficient to meet future capital requirements, we will have to raise
additional funds. If we are unable to obtain additional funds on terms favorable
to us, we may be required to cease or reduce our operating
activities.





o If we
raise additional funds by selling additional shares of our capital stock, the
ownership interests of our stockholders will be diluted.





o Our
stock trades on the Pink Sheets electronic quotation system.





The
Company’s Common Stock currently trades on the Pink Sheets electronic quotation
system under the symbol “CTEI.PK”. The Pink Sheets is a decentralized market
regulated by the Financial Industry Regulatory Authority in which securities are
traded via an electronic quotation system.  There can be no assurance
that a trading market for the Company's shares will continue to exist in the
future, and there can be no assurance that an active trading market will develop
or be sustained. The market price of the shares of Common Stock is likely to be
highly volatile and may be significantly affected by factors such as actual or
anticipated fluctuations in the Company's operating results, announcements of
technological innovations, new products or new contracts by the Company or its
competitors, developments with respect to proprietary rights, adoption of new
government regulations affecting the environment, general market conditions and
other factors. In addition, the stock market has from time to time experienced
significant price and volume fluctuations that have particularly affected the
market price for the common stocks of technology companies. These types of broad
market fluctuations may adversely affect the market price of the Company's
common stock. SeeRisk
Factor “Our stock price may be highly volatile” below.





o  Our
shares of common stock are thinly traded, so stockholders may be unable to sell
at or near ask prices or at all if they need to sell shares to raise money or
otherwise desire to liquidate their shares.










Our
common stock has from time to time been “thinly-traded,” meaning that the number
of persons interested in purchasing our common stock at or near ask prices at
any given time may be relatively small or non-existent. This situation is
attributable to a number of factors, including the fact that we are a small
company that is relatively unknown to stock analysts, stock brokers,
institutional investors and others in the investment community that generate or
influence sales volume, and that even if we came to the attention of such
persons, they tend to be risk-averse and would be reluctant to follow an
unproven company such as ours or purchase or recommend the purchase of our
shares until such time as we become more seasoned and viable. As a consequence,
there may be periods of several days or more when trading activity in our shares
is minimal or non-existent, as compared to a seasoned issuer which has a large
and steady volume of trading activity that will generally support continuous
sales without an adverse effect on share price. We cannot give stockholders any
assurance that a broader or more active public trading market for our common
shares will develop or be sustained, or that current trading levels will be
sustained.




o Our
common stock will be subject to “penny stock” rules which may be detrimental to
investors.




If our
common stock is not listed on a national exchange or market, the trading market
for our common stock may become illiquid. Our common stock trades on the
over-the-counter electronic bulletin board and, therefore, is subject to the
requirements of certain rules promulgated under the Securities Exchange Act of
1934, which require additional disclosure by broker-dealers in connection with
any trades involving a stock defined as a "penny stock".  The
Securities and Exchange Commission has adopted regulations which generally
define "penny stock" to be any equity security that has a market price (as
defined) of less than $5.00 per share or an exercise price of less than $5.00
per share. The securities will become subject to rules that impose additional
sales practice requirements on broker-dealers who sell such securities. For
transactions covered by these rules, the broker-dealer must make a special
suitability determination for the purchaser of such securities and have received
the purchaser's written consent to the transaction prior to the purchase.
Additionally, for any transaction involving a penny stock, unless exempt, the
rules require the delivery, prior to the transaction, of a disclosure schedule
prepared by the Securities and Exchange Commission relating to the penny stock
market. The broker-dealer also must disclose the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and, if the broker-dealer is the sole market-maker, the broker-dealer
must disclose this fact and the broker-dealer's presumed control over the
market. Finally, among other requirements, monthly statements must be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks. Consequently, the "penny
stock" rules may restrict the ability of purchasers in this offering to sell the
Common Stock offered hereby in the secondary market.




o We do
not anticipate paying any dividends.




No dividends have been paid on the
common stock of the Company. The Company does not intend to pay cash dividends
on its common stock in the foreseeable future, and anticipates that profits, if
any, received from operations will be devoted to the Company's future
operations. Any decision to pay dividends will depend upon the Company's
profitability at the time, cash available and other relevant
factors.




o Our
stock price may be  highly volatile.





The
market price of our common stock, like that of many other technology companies,
has been highly volatile and may continue to be so in the future due to a wide
variety of factors, including:





·
            announcements
      of technological innovations by us, our collaborative partners or our
      present or potential competitors;


·
            our
      quarterly operating results and
performance;


·
            developments
      or disputes concerning patents or other proprietary
  rights;


·
            acquisitions;


·
            litigation
      and government proceedings;


·
            adverse
      legislation;


·
            changes
      in government regulations;


·
            economic
      and other external factors; and


·
            general
      market conditions.





In
addition, potential dilutive effects of future sales of shares of common stock
by shareholdersand
by the Company could have an adverse effect on the market price of our
shares.











o Our
principal shareholder has significant influence over our company which could
make it impossible for the public stockholders to influence the affairs of the
Company.





Approximately
74% of our outstanding voting capital stock is beneficially held by Arun Govil
the Company’s Chairman, Chief executive officer, President and Treasurer. In
addition, Mr. Govil holds a promissory note that may be convertible into
30,000,000 shares of common stock of the Company at his
option.  Consequently, Mr. Govil will be able to control substantially
all matters requiring approval by the stockholders of the Company, including the
election of all directors and approval of significant corporate transactions.
This could make it impossible for the public stockholders to influence the
affairs of the Company.




ITEM 2.
            PROPERTIES




The
Company does not own any real estate.





The
Company leases its principal office at Farmingdale, New York, 4000 square feet
of office and warehouse/shop space in a single story commercial structure on a
month to month lease from Ducon Technologies Inc., at a monthly rental of
$2,157.00. The Company’s subsidiary Griffin Filters LLC leases approx. 10,000
sq. ft. of office and warehouse space in Liverpool, New York from a third party
in a five year lease at a monthly rent of $ 4,225.00 expiring on March 30,
2012.  The Company has no plans to acquire any property in the
immediate future. The Company believes that its current facilities are adequate
for its needs through the next six months, and that, should it be needed,
suitable additional space will be available to accommodate expansion of the
Company's operations on commercially reasonable terms, although there can be no
assurance in this regard. There are no written agreements.




ITEM 3.
            LEGAL
      PROCEEDINGS





None.




ITEM 4.
            SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY
HOLDERS





No
matters were submitted to a vote of security holders during the year ended
September 30, 2008.




PART II





ITEM
      5.
                    MARKET
      FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER
      PURCHASES OF EQUITY
SECURITIES





The
Company’s Common Stock currently trades on the Pink Sheets electronic quotation
system under the symbol “CTEI.PK”.





As of
December 15, 2008, there were approximately 84 holders of record of the
Company's common stock as determined from the Company’s transfer agent’s
list.  Such list does not include beneficial owners of securities
whose shares are held in the names of various dealers and clearing
agencies.




On August
21, 2007 the Company completed a 1:25 reverse split of our common stock. The
Company is authorized to issue 60,000,000 shares of common stock, $0.001 par
value per share.   On December 15, 2008, there were 34,327,862
shares of common stock issued and outstanding and no shares of preferred stock
issued or outstanding.





The
Company's Common Stock trades on the over-the-counter Pink
Sheets.  The price ranges presented below represent the highest and
lowest quoted bid prices during the third and fourth quarter for 2006, 2007 and
the first, second and third quarters of 2008 reported by Pink Sheets. The quotes
represent prices between dealers and do not reflect mark-ups, markdowns or
commissions and therefore may not necessarily represent actual
transactions.









Common
Stock




Year
                                    
                                    Period
                                    
                                    Stock PriceHigh
                                    
                                    
                                    Low2006
                                    
                                    3rd
      Quarter
                                    
                                    $
                                    0.80
                                    
                                    
                                    $
                                    0.704th
      Quarter
                                    
                                    $
                                    0.75
                                    
                                    
                                    $
                                    0.192007
                                    
                                    1st
      Quarter
                                    
                                    $
                                    0.25
                                    
                                    
                                    $
                                    0.122nd
      Quarter
                                    
                                    $
                                    0.11
                                    
                                    
                                    $
                                    0.033rd
      Quarter
                                    
                                    $
                                    0.03
                                    
                                    
                                    $
                                    0.024th
      Quarter
                                    
                                    $
                                    0.01
                                    
                                    
                                    $
                                    0.0052008
                                    
                                    1st
      Quarter
                                    
                                    $
                                    0.014
                                    
                                    
                                    $
                                    0.0042nd
      Quarter
                                    
                                    $
                                    0.03
                                    
                                    
                                    $
                                    0.0063rd
      Quarter
                                    
                                    $
                                    0.032
                                    
                                    
                                    $
                                    0.0064th
      Quarter
                                    
                                    $
                                    0.31
                                    
                                    
                                    $
                                    0.015





As
reported by the over-the-counter Pink Sheets, on December 15, 2008 the closing
sales price of the Company’s Common Stock was $0.01 per share.




The
Company has not declared or paid any cash dividends on its common stock nor does
it anticipate paying any in the foreseeable future. Furthermore, the Company
expects to retain any future earnings to finance its operations and expansion.
The payment of cash dividends in the future will be at the discretion of its
Board of Directors and will depend upon its earnings levels, capital
requirements, any restrictive loan covenants and other factors the Board
considers relevant.





The
Company has no equity compensation plans.




ITEM 6.
                MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS




The
following discussion of our financial condition and plan of operations should be
read in conjunction with the consolidated financial statements and the notes to
those statements included elsewhere in this prospectus. This discussion includes
forward-looking statements that involve risks and uncertainties. As a result of
many factors, such as those set forth under "risk factors" and elsewhere in this
prospectus, our actual results may differ materially from those anticipated in
these forward-looking statements.




OVERVIEW




Cemtrex
is a full-range of emission monitoring and air filtration products company
engaged in designing, manufacturing and marketing emissions monitors and air
filtration products and providing certain services for green house gases carbon
credit generation projects. Our focus has evolved from expansion through
acquisition to increasing the market share of products more effectively in the
marketplace.





Financial
condition




The
following table sets forth selected historical consolidated financial data from
our consolidated financial statements and should be read in conjunction with our
consolidated financial statements including the related notes and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” which
are included below.











FISCAL
YEAR ENDED SEPTEMBER 30, 2008





Year Ended September 30,2008
                              
                              
                              2007Revenues
                              
                              $
                              6,670,052
                              
                              
                              $
                              5,847,663Operating
      Expenses
                              
                              $
                              2,384,843
                              
                              
                              $
                              2,009,795Net
      Income (Loss)
                              
                              $
                              245,400
                              
                              
                              $
                              ( 123,565
                              )Net
      Income (Loss) Per Common Share, Basic
      and Diluted
                              
                              $
                              0.00
                              
                              
                              $
                              ( 0.01
                              )Weighted
      Average Number of Shares
                              
                              
                              30,308,147
                              
                              
                              
                              30,308,147September 30,2008
                              
                              
                              2007Current
      Assets
                              
                              $
                              2,238,252
                              
                              
                              $
                              1,180,972Total
      Assets
                              
                              $
                              2,238,252
                              
                              
                              $
                              1,264,719Total Liabilities
                              
                              $
                              3,613,501
                              
                              
                              $
                              2,758,046Total
      Stockholders' Deficit
                              
                              $
                              (1,375,249
                              )
                              
                              $
                              (1,493,327
                              )




CRITICAL
ACCOUNTING POLICIES AND ESTIMATES




The
following discussion and analysis is based upon our consolidated financial
statements which have been prepared in accordance with accounting principles
generally accepted in the United States of America. The preparation of our
financial statements requires management to make estimates and assumptions that
affect the reported amounts of revenues and expenses, and assets and liabilities
during the periods reported. Estimates are used when accounting for certain
items such as revenues, allowances for returns, early payment discounts,
customer discounts, doubtful accounts, employee compensation programs,
depreciation and amortization periods, taxes, inventory values,  and
valuations of investments, goodwill, other intangible assets and long-lived
assets. We base our estimates on historical experience, where applicable and
other assumptions that we believe are reasonable under the circumstances. Actual
results may differ from our estimates under different assumptions or conditions.
We believe that the following critical accounting policies affect our more
significant judgments and estimates used in preparation of our consolidated
financial statements.




We
maintain allowances for doubtful accounts for estimated losses resulting from
the inability of our customers to make required payments. We base our estimates
on the aging of our accounts receivable balances and our historical write-off
experience, net of recoveries.




We value
our inventories at the lower of cost or market. We write down inventory balances
for estimated obsolescence or unmarketable inventory equal to the difference
between the cost of the inventory and the estimated market value based upon
assumptions about future demand and market conditions.




Goodwill
is reviewed for possible impairment at least annually or more frequently upon
the occurrence of an event or when circumstances indicate that the Company’s
carrying amount is greater than the fair value. In accordance with SFAS 142, the
Company examined goodwill for impairment and determined that the Company’s
carrying amount did not exceed the fair value, thus, there was no
impairment.




Generally,
sales are recognized when shipments are made to customers. Rebates, allowances
for damaged goods and other advertising and marketing program rebates are
accrued pursuant to contractual provisions and included in accrued expenses.
Certain amount of our revenues fall under the percentage-of-completion method of
accounting used for long-term contracts. Under this method, sales and gross
profit are recognized as work is performed based on the relationship between
actual costs incurred and total estimated costs at completion. Sales and gross
profit are adjusted prospectively for revisions in estimated total contract
costs and contract values. Estimated losses are recorded when
identified.









RESULTS
OF OPERATIONS




Net Sales:Net sales for 2008
      increased by $822,389.00 or 14.%, to $6,670,052., from $5,847,663 for
      2007. Sales growth increased during the year of 2008 primarily due to
      growth in overall sales as Company received new contracts for various
      product lines.  The overall market demand for our existing
      business increased during the last year.Gross Profit: Gross
      profit for 2008 increased $736,677 or 38.90%, to $2,630,243 which made up
      39.43% of net sales, from $1,893,566 for 2007, which made up 32.38% of net
      sales. The increased gross margin in 2008 was a direct result of the high
      gross margin on the ongoing big contracts by Cemtrex and Griffin Filters.
      The gross margin for 2008 period includes high margin sales of Cemtrex and
      Griffin Filters, whereas in 2007 the higher gross margin was a result of
      high margin field services for monitoring systems performed by the Company
      during that period.Operating Expenses:Operating expenses for 2008 increased $375,048, or 18.66%, to
      $2,384,843 from $2,009,795 in 2007. Operating expenses as a percentage of
      sales increased in 2008 to 35.75% from 34.36% in 2007. The increase in
      operating expenses was primarily due to higher expenses as result
      of larger sales volume in current year as compared to the previous
      year.Net Income/Loss:The
      Company had anet income of
      $118,078 for 2008 as compared to a net loss of ($123,565) for 2007.
      The net income in 2008 was a result of several factors including: (i)
      increase in sales, (ii) the new SM4 mercury product line, (ii)
      streamlining of griffin Filters operation.  The higher net
      income in 2008 period was due to higher gross margin on the products sold
      by each company.Provision
      for Income Taxes: No income tax provision due to Net operating loss from
      prior year 2007.




EFFECTS
OF INFLATION




The
Company’s business and operations have not been materially affected by inflation
during the periods for which financial information is presented.




LIQUIDITY AND CAPITAL RESOURCES




Working
capital was ($259,993) at September 30, 2008, compared to ($277,074) at
September 30, 2007. This included cash and cash equivalents of $60,610 and
$143,830 at September 30, 2008 and 2007, respectively.





Trade
receivables increased $747,757, or 95.80%, at September 30, 2008 to $1,528,231
at September 30, 2008 from $780,474 at September 30, 2007. The increase in
accounts receivable is attributable to progressive billings of big contracts in
Griffin and Cemtrex.





Inventories
increased $204,124 or 80.85% to $456,567 at September 30, 2008 from $252,443 at
September 30, 2007.  The increase inventory was due to the acquisition
of Griffin Filters.




Continuing operations used $389,469 of
cash for the fiscal year ended September 30, 2008, compared to using $802,925 of
cash for the fiscal year ended September 30, 2007. The decrease in cash flows
was primarily related to the increase in inventory combined with increase in
accounts payable.  Investing activities for continuing operations used
$151,939 of cash during 2008, compared to providing $713,923 during 2007. The
use of cash by investing activities was primarily attributable to the purchase
of griffin Filters in April, 2007. The financing activities in 2008 generated
$458,188.




We
believe that our cash on hand, cash generated by operations, is sufficient to
meet the capital demands of our current operations during the 2008 fiscal year.
Any major increases in sales, particularly in new products, may require
substantial capital investment. Failure to obtain sufficient capital could
materially adversely impact our growth potential.









Outlook




We
anticipate that the outlook for our products and services remains quite strong
and we are positioned well to take advantage of it.




We
believe there is currently a gradually increasing public awareness of the issues
surrounding air quality and that this trend will continue for the next several
years. We also believe there is an increase in public concern regarding the
effects of air quality on society and future generations, as well as an increase
in interest by standards-making bodies in creating specifications and techniques
for detecting, defining and solving air quality problems. As a result, we
believe there will be an increase in interest in our mercury monitors, opacity
monitors, carbon credits and air filtration products of subsidiary Griffin
Filters.




This
Outlook section, and other portions of this document, include certain
“forward-looking statements” within the meaning of that term in Section 27A of
the Securities Act of 1933, and Section 21E of the Securities Exchange Act of
1934, including, among others, those statements preceded by, following or
including the words “believe,” “expect,” “intend,” “anticipate” or similar
expressions. These forward-looking statements are based largely on the current
expectations of management and are subject to a number of assumptions, risks and
uncertainties. Our actual results could differ materially from these
forward-looking statements. Important factors to consider in evaluating such
forward-looking statements include those discussed in Item 1A. Risk Factors as
well as:




•
              the
      shortage of reliable market data regarding the emission monitoring &
      air filtration market,•
              changes
      in external competitive market factors or in our internal budgeting
      process which might impact trends in our results of
      operations,•
              anticipated
      working capital or other cash requirements,•
              changes
      in our business strategy or an inability to execute our strategy due to
      unanticipated changes in the market,•
              product
      obsolescence due to the development of new technologies,
    and•
              Various
      competitive factors that may prevent us from competing successfully in the
      marketplace.




In light
of these risks and uncertainties, there can be no assurance that the events
contemplated by the forward-looking statements contained in this Form 10-KSB
will in fact occur.




ITEM 7.
              FINANCIAL
      STATEMENTS AND SUPPLEMENTARY
DATA




The
financial statements required to be included in this report appear as indexed in
the appendix to this report beginning on page F-1.




ITEM 8.
              CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE





There
have been no changes in and/or disagreements withGruber
& Company, LLC, our independent registered public accountants, on accounting
and financial disclosure matters.










ITEM 8A.
            CONTROLS
      AND PROCEDURES





Evaluation
of disclosure controls and procedures.




Disclosure controls  are  procedures  that
are designed  with the objective of
ensuring that information required to be disclosed in our reports
filed under the Securities Exchange Act of 1934, as amended (the
"Exchange  Act"), such as this annual report, is recorded,
processed, summarized and reported within the
time  periods specified in the SEC's rules and
forms. Disclosure controls are also
designed  with  the  objective  of  ensuring  that  such   information  is
accumulated and  communicated  to our
management,  including the CEO and CFO, as appropriate to allow timely
decisions  regarding
required  disclosure.  Internal
controls  are  procedures  which
are  designed  with the  objective of providing
reasonable assurance that (1) our transactions are properly authorized, recorded
and  reported;  and (2)
our  assets  are  safeguarded  against  unauthorized  or
improper use, to permit the preparation of our consolidated financial statements
in conformity with United States generally accepted accounting
principles.





Management’s Report on Internal
Control over Financial Reporting





Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting (as such term is defined in Exchange Act
Rules 13a-15(f) and 15d-15(f)). Our internal control over financial
reporting is a process designed under the supervision of our Chief Executive
Officer and Vice President of Finance to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of our financial
statements for external purposes in accordance with accounting principles
generally accepted in the United States of America. Management evaluated the
effectiveness of our internal control over financial reporting using the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control—Integrated
Framework. Management, under the supervision and with the participation
of our Chief Executive Officer and Vice President of Finance, assessed the
effectiveness of our internal control over financial reporting as of September
30, 2008 and concluded that it is effective as of such date





Any
internal control system, no matter how well designed, will have inherent
limitations. Therefore, even those systems determined to be effective can
provide only reasonable assurance with respect to financial statement
preparation and presentation. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.





Auditor
Attestation





This  annual  report  does
not include an  attestation  report of
the  company's
registered  public  accounting  firm
regarding  internal  control over financial
reporting.  Management's  report was not subject to
attestation by the company's
registered  public  accounting  firm  pursuant  to
rules of the  Securities  and Exchange Commission that
permit the company to provide only management's report.





Changes in Internal Control Over
Financial Reporting




There
were no changes in our internal controls over financial reporting during the
year ended September 30, 2008 that have materially affected, or are reasonably
likely to materially affect, our internal controls over financial
reporting.




ITEM 8B.
            OTHER
      INFORMATION




Not
applicable.




PART
III




ITEM 9.
            DIRECTORS,
      EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE





The
following persons are our executive officers and directors. Directors are
elected to hold offices until the next annual meeting of Shareholders and until
their successors are elected or appointed and qualified. Officers are appointed
by the board of directors until a successor is elected and qualified or until
resignation, removal or death.











Name
      and Address
              
              Age
              
              Positions
      and OfficesArun
      Govil
                19
      Engineers Lane
                Farmingdale,
      New York 11735
              
              51
              
              President,
      Chief Executive Officer,
                Treasurer,
      and Chairman of the Board of DirectorsRenato
      Dela Rama
                19
      Engineers Lane
                Farmingdale,
      New York 11735
              
              58
              
              Vice
      President of FinanceVandana
      Govil
                19
      Engineers Lane
                Farmingdale,
      New York 11735
              
              46
              
              Secretary
      and Director




Arun
Govil has been our President since December 2004. Mr. Govil is also President
(and owner) of Ducon Technologies Inc., a privately held company engaged in air
pollution control systems business since 1996. Prior to 1996 Mr. Govil, Mr.
Govil worked at various management and technical   positions in
the environmental industry.  Mr. Govil holds a B.E. degree in Chemical
Engineering and a M.B.A. in Finance. He is also a licensed Professional Engineer
in New York State and New Jersey.





Renato
Dela Rama has been our Vice President of Finance since December 2004. Mr. Dela
Rama is also the Controller of Ducon Technologies Inc. since 2004. Prior to
that, he worked in various accounting and financial management positions. Mr.
Dela Rama holds a B.S. degree in accounting.





Vandana
Govil has served as secretary and Director of the Company since December 2004.
Ms. Govil earned her B.S. in accounting and economics from State University of
New York at Old Westbury in 2000.  From 1987 to 1995, Ms. Govil was a
realtor.  Arun Govil and Vandana Govil are husband and
wife.





Except
for Mr. and Mrs. Govil, there are no family relationships among our directors
and officers.  None of our directors or officers is a director in any
other reporting companies.  None of our directors or officers has been
affiliated with any company that has filed for bankruptcy within the last five
years.  The Company is not aware of any proceedings to which any of
the Company’s officers or directors, or any associate of any such officer or
director, is a party adverse to the Company or any of the Company’s subsidiaries
or has a material interest adverse to it or any of its
subsidiaries.





Each
director of the Company serves for a term of one year or until the successor is
elected at the Company's annual shareholders' meeting and is qualified, subject
to removal by the Company's shareholders.  Each officer serves, at the
pleasure of the board of directors, for a term of one year and until the
successor is elected at the annual meeting of the board of directors and is
qualified.





Audit
Committee Financial Expert





The
Securities and Exchange Commission has adopted rules implementing Section 407 of
the Sarbanes-Oxley Act of 2002 requiring public companies to disclose
information about "audit committee financial experts." As of the date of this
Annual report, we do not have a standing Audit Committee. The functions of the
Audit Committee are currently assumed by our full Board of Directors.
Additionally, we do not have a member of our Board of Directors that qualifies
as an "audit committee financial expert." For that reason, we do not have an
audit committee financial expert.





SECTION
16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE





To the
best of our knowledge, based solely on a review of the copies of such reports
furnished to us and written representation that no other reports are required,
Section 16(a) filing requirements applicable to our officers, directors, and
greater than ten percent beneficial owners were not filed timely during the most
recent fiscal year.





The
business address for each of our officers and directors is 19 Engineers Lane,
Farmingdale, NY 11735.










ITEM 10.
            EXECUTIVE
      COMPENSATION





BOARD
OF DIRECTORS





All of
our directors hold office until the next annual meeting of stockholders and the
election and qualification of their successors. Our executive officers are
elected annually by the board of directors to hold office until the first
meeting of the board following the next annual meeting of stockholders and until
their successors are chosen and qualified.





DIRECTORS'
COMPENSATION





We
reimburse our directors for expenses incurred in connection with attending board
meetings but we do not pay our directors fees or other cash compensation for
services rendered as a director.





EXECUTIVE
COMPENSATION





The
compensation discussion addresses all compensation awarded to, earned by, or
paid to the Cemtrex's named executive officers.  As of December 15,
2008, two of our executive officers are currently earning
compensation.   Set forth below is the aggregate compensation for
services rendered in all capacities to us during our fiscal years ended
September 30, 2006, 2007 and 2008 by our executive officers. Except as indicated
below, none of our executive officers were compensated in excess of
$100,000.




SUMMARY
COMPENSATION TABLE
 
 LONG-TERMCOMPENSATION
      AWARDSNAME
      AND PRINCIPAL
                                                                
                                                                
                                                                
                                                                ANNUAL
      COMPENSATION TABLE
                                                                
                                                                
                                                                SECURITIES
      UNDERLYINGPOSITION
                                                                
                                                                YEAR
                                                                
                                                                SALARY
                                                                
                                                                
                                                                BONUS
                                                                
                                                                
                                                                OTHER
                                                                
                                                                
                                                                OPTIONS/SARSArun
      Govil
                                                                
                                                                2006
                                                                
                                                                $
                                                                —
                                                                
                                                                
                                                                
                                                                —
                                                                
                                                                
                                                                
                                                                —
                                                                
                                                                
                                                                
                                                                —Chairman,
      Chief Executive
                                                                
                                                                2007
                                                                
                                                                $
                                                                125,000
                                                                
                                                                
                                                                $
                                                                0
                                                                
                                                                
                                                                $
                                                                0Officer
      and Treasurer and
                                                                
                                                                2008
                                                                
                                                                $
                                                                100,000
                                                                
                                                                
                                                                $
                                                                0
                                                                
                                                                
                                                                $
                                                                0PresidentVandana
      Govil
                                                                
                                                                2006
                                                                
                                                                $
                                                                —
                                                                
                                                                
                                                                
                                                                —
                                                                
                                                                
                                                                
                                                                —
                                                                
                                                                
                                                                
                                                                —Secretary,
      Director
                                                                
                                                                2007
                                                                
                                                                $
                                                                125,000
                                                                
                                                                
                                                                $
                                                                0
                                                                
                                                                
                                                                $
                                                                0
                                                                
                                                                
                                                                
                                                                —2008
                                                                
                                                                $
                                                                125,000
                                                                
                                                                
                                                                $
                                                                0
                                                                
                                                                
                                                                $
                                                                0
                                                                
                                                                
                                                                
                                                                —


OPTIONS/SAR
GRANTS IN THE LAST FISCAL YEAR





On April
30, 2007, the Company issued a $1,300,000 Convertible Debenture to Arun Govil
the Company’s Chairman, CEO, President and Treasurer in conjunction with the
purchase of Griffin Filters, Inc. pursuant to the Agreement and Assignment of
Membership Interests between Arun Govil and Cemtrex, Inc. The debenture carries
an 8% annual interest rate with interest payable semiannually in arrears on the
first business day of January and July each year. The debenture principle is due
and payable on April 30, 2011.





The
debenture has the right of conversion into 30,000,000 non-assessable shares of
common stock of the Company at $0.001 (par value) per share. Conversion is not
exercisable prior to December 31, 2007. Commencing December 31, 2007 and
continuing to April 30, 2011, the Debenture Holder shall have the right of
conversion subject to the terms and conditions of the debenture. In the event
the face amount of the debenture is not fully converted on or before April 30,
2011, the conversion rights will lapse.





AGGREGATED
OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION/SAR
VALUES





None.










ITEM 11.
                SECURITY OWNERSHIP OF CERTAIN
      BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
      MATTERS





The
following table sets forth certain information known to us with respect to the
beneficial ownership of our common stock as of December 15, 2008
by:





o all
persons who are beneficial owners of five percent (5%) or more of our common
stock;





o each of
our directors;





o each of
our executive officers; and





o all
current directors and executive officers as a group.





Except as
otherwise indicated, and subject to applicable community property laws, the
persons named in the table below have sole voting and investment power with
respect to all shares of common stock held by them.





As of
December 15, 2008, 34,327,862 shares of common stock are issued and
outstanding.  Applicable percentage ownership in the following table
is based on 64,327,862 shares of common stock outstanding as of December 15,
2008 which includes shares underlying a convertible debenture held by Mr. Govil,
the President, Chief Executive Officer and Chairman of the Board of the
Company.(1)





Beneficial
ownership is determined in accordance with the rules of the SEC. In computing
the number of shares beneficially owned by a person and the percentage ownership
of that person, shares of common stock subject to options held by that person
that are currently exercisable or exercisable within 60 days of December 15,
2008 are deemed outstanding. Such shares, however, are not deemed outstanding
for the purpose of computing the percentage ownership of any other
person.





Title of Class
                                            
                                            Name and Address of Owner
                                            
                                            Title
                                            
                                            Amount Owned Before
Offering
                                            
                                            Percentage of Issued Common Stock(1)Common
      Stock
                                            
                                            Arun
      Govil
                                              19
      Engineers Lane
                                              Farmingdale, New York
      11735
                                            
                                            President
      ,Chief Executive Officer and Chairman of the Board
                                            
                                            55,430,000
                                            (2)(3)
                                            86.2
                                            %Common
      Stock
                                            
                                            Renato
      Dela Rama
                                              19
      Engineers Lane
                                              Farmingdale,
      New York 11735
                                            
                                            Vice
      President
                                            
                                            0
                                            
                                            0Common
      Stock
                                            
                                            Vandana
      Govil
                                              19
      Engineers Lane
                                              Farmingdale,
      New York 11735
                                            
                                            Secretary,
      Director
                                            
                                            55,430,000
                                            (2)(3)(4)
                                            86.2
                                            %Common
      Stock
                                            
                                            All
      directors and executive officers as a group (3 persons)
                                            
                                            
                                            
                                            55,430,000
                                            
                                            86.2
                                            %




(1)
            Except
      as otherwise noted herein, the percentage is determined on the basis of
      64,327,862 shares of our common stock outstanding plus securities deemed
      outstanding pursuant to Rule 13d-3 promulgated under the Securities
      Exchange Act of 1934, as amended (the “Exchange Act”). Under
      Rule 13d-3, a person is deemed to be a beneficial owner of any
      security owned by certain family members and any security of which that
      person has the right to acquire beneficial ownership within 60 days,
      including, without limitation, shares of our common stock subject to
      currently exercisable options.









(2)
            Includes
      the shares underlying the Convertible Debenture issued by the Company to
      Arun Govil the Company’s Chairman, CEO, President and Treasurer in
      conjunction with the purchase of Griffin Filters, Inc. The debenture has
      the right of conversion into 30,000,000 non-assessable shares of common
      stock of the Company at $0.001 (par value) per share. The Debenture Holder
      has the right of conversion, subject to the terms and conditions of the
      debenture, commencing December 31, 2007 and continuing to April 30, 2011,
      thus Arun Govil has the right to convert the 30,000,000 non-assessable
      shares of common stock of the Company within 60 days. In the event
      the face amount of the debenture is not fully converted on or before April
      30, 2011, the conversion rights will
lapse.




(3)
            Includes
      the shares owned by Ducon Technologies Inc. is owned by Arun Govil the
      Chairman, Chief Executive Officer, Treasurer and President of the
      Company.




(4)
            Vanana
      Govil is the spouse of Arun Govil, the President, Chief Executive Officer
      and Chairman of the Board of the Company and his shares are attributed to
      Ms. Govil.




ITEM 12.
              CERTAIN RELATIONSHIPS AND
      RELATED TRANSACTIONS, AND DIRECTOR
  INDEPENDENCE





On
December 30, 2004, the Company purchased certain assets from Ducon Technologies,
Inc., which related to a business engaged in designing, assembling, selling and
maintaining emission monitors to utilities and industries.  Ducon
Technologies Inc. is owned by Arun Govil, the Chairman, Chief Executive Officer,
Treasurer and President of the Company.  In consideration for the
asset purchase, the Company issued to Ducon Technologies, Inc. 1,950,000 shares
of its common stock.  The shares were issued under Section 4(2) of the
Securities Act of 1933, as amended, and/or Regulation D promulgated by the
Securities and Exchange Commission.





On April
30, 2007, the Company purchased all of the issued and outstanding membership
interests of Griffin Filters LLC, (“Griffin”) a company established since 1971
and engaged in the design, engineering & supplying of industrial air
filtration equipment from its President.  Arun Govil, the Chairman,
Chief Executive Officer, Treasurer and President of the Company, was the owner
of 100% of the issued and outstanding membership interests of
Griffin.  The Company purchased 100% ownership in Griffin for a
purchase price of $ 2,750,000.00. The Company completed the Griffin purchase by
(i) paying cash of $700,000.00, (ii) issuing 20,000,000 shares of common stock
valued at $750,000.00 and (iii) issuing a four year convertible debenture in the
amount of $1,300,000.00, paying interest of 8.0% per year and convertible into
30,000,000 shares of common stock. Griffin had sales and net income of
$3,297,409 and $145, 981 respectively for fiscal year ended September 30, 2006.
Griffin is now a wholly-owned subsidiary of the Company.




Ducon
Technologies, Inc. is owned by by Arun Govil the Chairman, Chief Executive
Officer, Treasurer and President of the Company.




Renato
Dela Rama the Vice President of Finance of the Company is also the Controller of
Ducon Technologies Inc.




Mrs.
Vandana Govil, a director and the Secretary of the Company is the wife of Arun
Gonvil the Chairman, Chief Executive Officer, Treasurer and President of the
Company.









(a)
              Financial
      Statements




Report of Independent Registered Public Accounting
      Firm – September 2008Audited Consolidated Balance Sheets as of
      September 30, 2007 and September 30, 2008Audited Consolidated Statements of Operations for
      the Year Ended September, 2008 and 2007Audited Consolidated Statements of Stockholders’
      Equity (Deficit) for the Years Ended September 30, 2008, and
      2007Audited Consolidated Statements of Cash Flows for
      the Year Ended September 30, 2008 and 2007Notes to Audited Consolidated Financial
      Statements




(b)
            Exhibit
      Index




Exhibit Number
                    
                    Description
      of Exhibit3.1
                      3.2
                      3.3
                      3.4
                      3.5
                      3.6
                    
                    Certificate
      of Incorporation of the Company*
                      By
      Laws of the Company*
                      Certificate
      of Amendment of Certificate of Incorporation dated September 29,
      2006*
                      Certificate
      of Amendment of Certificate of Incorporation dated March 30,
      2007*
                      Certificate
      of Amendment of Certificate of Incorporation dated May 16,
      2007*
                      Certificate
      of Amendment of Certificate of Incorporation dated August 21,
      2007*10.1
                      10.2
                    
                    Cemtrex
      Lease Agreement-Ducon Technologies, Inc.*
                      Lease
      Agreement between Daniel L. Canino and Griffin Filters,
    LLC*10.3
                      10.4
                      10.5
                    
                    Asset
      Purchase Agreement between Ducon Technologies, Inc. and Cemtrex
      Inc.*
                      Agreement
      and Assignment of Membership Interests between Arun Govil and Cemtrex,
      Inc.*
                      8.0%
      Convertible Subordinated Debenture*21.1
                      23.1
                    
                    Subsidiaries*
                      Consent
      of Independent Registered Public Accounting Firm.31.1
                      31.2
                      32.1
                      32.2
                    
                    Certification
      by CEO pursuant to Sections 302 of the Sarbanes-Oxley Act of 2002
      **
                      Certification
      by Vice President of Finance pursuant to Sections 302 of the
      Sarbanes-Oxley Act of 2002**
                      Certification
      of CEO pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002**
                      Certification
      Vice President of Finance pursuant to Section 906 of the Sarbanes-Oxley
      Act of
2002**


______





*
Incorporated by reference from Form 10-12G filed on May 22, 2008


**
Filed Herewith





ITEM 14.
            PRINCIPAL ACCOUNTING FEES AND
      SERVICES




The
Company’s Board of Directors does not have an Audit Committee.





The
following table sets forth the aggregate fees billed to us for the years ended
September 30, 2008 and September 30, 2007 by Gruber & Company, LLP, our
independent auditors for the fiscal years ended September 30, 2008 and
2007:





2007
                  
                  
                  2008Audit
      Fees
                  
                  $
                  9,500
                  
                  
                  $
                  29,500Audit-Related
      Fees
                  
                  
                  
                  
                  
                  $Tax
      Fees
                  
                  
                  
                  
                  
                  $Other
      Fees
                  
                  
                  
                  
                  
                  $Totals
                  
                  $
                  9,500
                  
                  
                  $
                  29,500










Audit
fees represent amounts billed for professional services rendered for the audit
of our annual financial statements.  Audit-Related Fees include
amounts billed for professional services rendered in connection with our SEC
filings and discussions with the SEC that occurred during fiscal 2008 for us to
become a fully reporting public company.  Our Board of Directors is of
the opinion that the Audit-Related Fees charged by Gruber & Company, LLC
were consistent with Gruber & Company, LLC maintaining its independence from
us.





The Board
of Directors has considered whether provision of the non-audit services
described above is compatible with maintaining the independent accountant’s
independence and has determined that such services did not adversely affect
Gruber & Company, LLC independence.




SIGNATURES





Pursuant
to the requirements of the Securities and Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.





CEMTREX,
      INC.(Registrant)





Dated:
      January 13, 2009
                      
                      By
                      /s/
      Arun GovilArun
      Govil, Chairman of the Board, Chief Executive Officer and President
      (Principal Executive Officer)Dated:
      January 13, 2009
                      
                      By
                      /s/
      Renato Dela RamaRenato
      Dela Rama, Vice President of Finance  (Principal Financial
      Officer)Dated:
      January 13, 2009
                      
                      By
                      /s/
      Vandana GovilVandana
      Govil, Secretary and
Director









GRUBER
& COMPANY LLC
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 The Board
of Cemtrex Inc. and Subsidiary:
 
 We have
audited the accompanying balance sheet of Cemtrex Inc. and Subsidiary as of
September 30, 2008 and 2007 and the related statements of operations,
stockholders equity and cash flows for the years then ended.  These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform our audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of the Company  as at
September 30, 2008 and 2007  and the results of its’ operations and
its’ stockholders equity and cash flows for the years then ended  in
conformity with accounting principles generally accepted in the United States of
America.
 
 The
accompanying financial statements have been prepared assuming the Company will
continue as a going concern. As discussed in the notes to the financial
statements, the Company has a negative equity and negative working capital.
..These items among others, raises substantial doubt about its ability to
continue as a going concern.. These financial statements do not include any
adjustments that might result from the outcome of this uncertainty
 
 Gruber
& Company LLC
 /s/
 Dated
December 29, 2008




Cemtrex,
Inc. and Subsidiary
 Consolidated
Balance Sheets
  September
      30,2008
                                    
                                    
                                    2007(Restated)AssetsCurrent
      AssetsCash
      & Equivalents
                                    
                                    $
                                    60,610
                                    
                                    
                                    $
                                    143,830Accounts
      Receivable
                                    
                                    
                                    1,528,231
                                    
                                    
                                    
                                    780,474Inventory
                                    
                                    
                                    456,567
                                    
                                    
                                    
                                    252,443Prepaid
      Expenses & Other Assets
                                    
                                    
                                    8,100
                                    
                                    
                                    
                                    4,225Total
      Current Assets
                                    
                                    
                                    2,053,508
                                    
                                    
                                    
                                    1,180,972Property
      & Equipment, Net
                                    
                                    
                                    180,519
                                    
                                    
                                    
                                    61,723Other
                                    
                                    
                                    4,225
                                    
                                    
                                    
                                    22,024Total
      Assets
                                    
                                    $
                                    2,238,252
                                    
                                    
                                    $
                                    1,264,719Liabilities
      & Stockholders' Equity (Deficit)Current
      LiabilitiesAccounts
      Payable
                                    
                                    $
                                    940,071
                                    
                                    
                                    $
                                    914,907Accrued
      Expenses
                                    
                                    
                                    906,259
                                    
                                    
                                    
                                    448,640Customer
      Deposits
                                    
                                    
                                    -
                                    
                                    
                                    
                                    85,516Notes
      Payable-Shareholder
                                    
                                    
                                    467,171
                                    
                                    
                                    
                                    8,983Total
      Current Liabilities
                                    
                                    
                                    2,313,501
                                    
                                    
                                    
                                    1,458,046Convertible
      Debenture
                                    
                                    
                                    1,300,000
                                    
                                    
                                    
                                    1,300,000Total
      Liabilities
                                    
                                    
                                    3,613,501
                                    
                                    
                                    
                                    2,758,046Commitments
      & Contingencies
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Stockholders'
      Equity (Deficit)Preferred
      Stock, $0.001 par value, 10,000,000 shares authorized, no shares issued
      and outstanding
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    -Common
      Stock, $0.001 par value, 60,000,000 shares authorized; 34,327,862 and
      26,880,213 shares issued and outstanding, respectively.
                                    
                                    
                                    34,328
                                    
                                    
                                    
                                    34,328Additional
      Paid-in Capital
                                    
                                    
                                    (1,259,524
                                    )
                                    
                                    
                                    (1,259,524
                                    )Accumulated
      Deficit
                                    
                                    
                                    (150,053
                                    )
                                    
                                    
                                    (268,131
                                    )Total
      Stockholders' Equity (Deficit)
                                    
                                    
                                    (1,375,249
                                    )
                                    
                                    
                                    (1,493,327
                                    )Total
      Liabilities & Stockholders' Equity (Deficit)
                                    
                                    $
                                    2,238,252
                                    
                                    
                                    $
                                    1,264,719
 
 The
accompanying notes are an integral part of these financial
statements
  
  Cemtrex,
Inc. and Subsidiary
 Consolidated
Statements of Operations
  For the Year Ended September 30,2008
                          
                          
                          2007(restated)Revenues
                          
                          $
                          6,670,052
                          
                          
                          $
                          5,847,663Cost
      of Goods Sold
                          
                          
                          4,039,810
                          
                          
                          
                          3,954,097Gross
      Profit
                          
                          
                          2,630,243
                          
                          
                          
                          1,893,566Operating
      Expenses
                          
                          
                          2,384,843
                          
                          
                          
                          2,009,795Operating
      Income (Loss)
                          
                          
                          245,400
                          
                          
                          
                          (116,229
                          )Other
      Income (Expense)Other
      Income
                          
                          
                          36
                          
                          
                          
                          36,446Interest
      Expense
                          
                          
                          (127,358
                          )
                          
                          
                          (43,782
                          )Total
      Other  Income (Expense)
                          
                          
                          (127,322
                          )
                          
                          
                          (
      7,336
                          )Net
      Income (Loss) Before Income Taxes
                          
                          
                          118,078
                          
                          
                          
                          (123,565
                          )Provision
      for Income Taxes
                          
                          
                          (46,050
                          )
                          
                          
                          -Extraordinary
      Item: Carryback Provision
                          
                          
                          46,050Net
      Income (Loss)
                          
                          $
                          118,078
                          
                          
                          $
                          (123,565
                          )Income
      (Loss) Per Share-Basic
                          
                          $
                          (0.00
                          )
                          
                          $
                          (0.00
                          )Weighted
      Average Number of Shares
                          
                          
                          30,308,147
                          
                          
                          
                          30,308,147
 
 The
accompanying notes are an integral part of these financial
statements
  Page
2 of 11
  Cemtrex,
Inc. and Subsidiary
 Consolidated
Statements of Stockholders' Equity (Deficit)
 
 Preferred
      Stock
                                  
                                  
                                  Common
      StockNumber
      of
                                    Shares
                                  
                                  
                                  Par
      Value
                                    ($0.001)
                                    Amount
                                  
                                  
                                  Number
      of
                                    Shares
                                  
                                  
                                  Par
      Value
                                    ($0.001)
                                    Amount
                                  
                                  
                                  Additional
                                    Paid-In-
                                    Capital
                                  
                                  
                                  Accumulated
                                    Deficit
                                  
                                  
                                  Total
                                    Stockholders'
                                    Equity
                                    (Deficit)Balance
      at September 30, 2006
                                  
                                  
                                  -
                                  
                                  
                                  $
                                  -
                                  
                                  
                                  
                                  26,880,213
                                  
                                  
                                  $
                                  26,280
                                  
                                  
                                  $
                                  (1,679,976
                                  )
                                  
                                  $
                                  (319,456
                                  )
                                  
                                  $
                                  (1,973,152
                                  )Common
      Stock Issued to Investors for Cash
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  7,447,649
                                  
                                  
                                  
                                  7,448
                                  
                                  
                                  
                                  371,052
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  378,500Net
      Income (Loss)
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (123,565
                                  )
                                  
                                  
                                  (123,565
                                  )Balance
      at September 30, 2007
                                  
                                  
                                  -
                                  
                                  
                                  $
                                  -
                                  
                                  
                                  
                                  34,327,862
                                  
                                  
                                  
                                  34,328
                                  
                                  
                                  
                                  (1,259,524
                                  )
                                  
                                  
                                  (268,131
                                  )
                                  
                                  
                                  (1,493,327
                                  )Common
      Stock Issued to Investors for Cash
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  -Net
      Income (Loss)
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  118,078
                                  
                                  
                                  
                                  118,078Balance
      at September 30, 2008
                                  
                                  
                                  -
                                  
                                  
                                  $
                                  -
                                  
                                  
                                  
                                  34,327,862
                                  
                                  
                                  
                                  34,328
                                  
                                  
                                  $
                                  (1,259,524
                                  )
                                  
                                  $
                                  (150,053
                                  ))
                                  
                                  
                                  (1,375,249
                                  )
 
 The
accompanying notes are an integral part of these financial
statements
  Page
3 of 11
  Cemtrex,
Inc. and Subsidiary
 Consolidated
Statements of Cash Flows
  For the Year Ended September 30,2008
                                                
                                                
                                                2007(restated)Cash
      Flows from Operating ActivitiesNet
      Income (Loss)
                                                
                                                $
                                                118,078
                                                
                                                
                                                $
                                                (123,565
                                                )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
      & Amortization
                                                
                                                
                                                33,143
                                                
                                                
                                                
                                                12,708Changes
      in operating assets and liabilities:Accounts
      Receivable
                                                
                                                
                                                (747,757
                                                )
                                                
                                                
                                                (200,713
                                                )Inventory
                                                
                                                
                                                (204,124
                                                )
                                                
                                                
                                                (52,498
                                                )Prepaid
      Expenses & Other Assets
                                                
                                                
                                                (
      3,875
                                                )
                                                
                                                
                                                10,999Other
      Assets
                                                
                                                
                                                17,799
                                                
                                                
                                                
                                                (22,024
                                                )Accounts
      Payable
                                                
                                                
                                                25,164
                                                
                                                
                                                
                                                643,862Accrued
      Expenses
                                                
                                                
                                                457,619
                                                
                                                
                                                
                                                448,640Customer
      Deposits
                                                
                                                
                                                (85,516
                                                )
                                                
                                                
                                                85,516Net
      Cash Used in Operating Activities
                                                
                                                
                                                (389,469
                                                )
                                                
                                                
                                                802,925Cash
      Flows from Investing ActivitiesSale
      (Purchase) of Property and Equipment
                                                
                                                
                                                (151,939
                                                )
                                                
                                                
                                                (13,923
                                                )Cash
      Paid for Purchase of Griffin Filters
                                                
                                                
                                                -
                                                
                                                
                                                
                                                (700,000
                                                )Net
      Cash Used in Investing Activities
                                                
                                                
                                                (151,939
                                                )
                                                
                                                
                                                (713,923
                                                )Cash
      Flows from Financing ActivitiesNet
      Loans from Shareholders
                                                
                                                
                                                458,188
                                                
                                                
                                                
                                                (354,017
                                                )Common
      Stock Issued for Cash
                                                
                                                
                                                -
                                                
                                                
                                                
                                                378,500Net
      Cash Provided by Financing Activities
                                                
                                                
                                                458,188
                                                
                                                
                                                
                                                24,483Net
      Increase (Decrease) in Cash
                                                
                                                
                                                (83,220
                                                )
                                                
                                                
                                                113,485Cash
      Beginning of Period
                                                
                                                
                                                143,830
                                                
                                                
                                                
                                                30,345Cash
      End of Year
                                                
                                                $
                                                60,610
                                                
                                                
                                                $
                                                143,830Supplemental
      Disclosure of Cash Flow Information:Cash
      Paid during the period for interest
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                -Cash
      Paid during the period for income taxes
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
 
 The
accompanying notes are an integral part of these financial
statements
  Page
4 of 11
 CEMTREX,
INC. AND SUBSIDIARY
 NOTES
TO FINANCIAL STATEMENTS
 Note
1 – Organization, Business & Operations
  Cemtrex,
Inc. and its Subsidiary,  is engaged in manufacturing and selling the
most advanced instruments for emission monitoring of particulate, opacity,
mercury, sulfur dioxide, nitrogen oxides, etc. Cemtrex also provides turnkey
services for carbon creation projects from abatement of greenhouse gases
pursuant to Kyoto protocol and assists project owners in selling of carbon
credits globally. TheCompany's
products are sold to power plants, refineries, chemical plants, cement plants
& other industries including federal and state Governmental agencies.
Through its wholly-owned subsidiary Griffin Filters, the Company designs,
manufactures and sells air filtration equipment and systems to control
particulate emissions from a variety of industries.
  Cemtrex,
Inc. was incorporated as Diversified American Holding, Inc. on April 27, 1998.
On December 16, 2004 the Company changed its name to Cemtrex, Inc. On April 30,
2007, Cemtrex, Inc. purchased, though a business combination, Griffin Filters,
LLC (see Note 6 Business Combination and Related party
Transactions).
  Note
2 - Going Concern and Management's Plans
  The
Company's primary source of operating funds since inception has been provided
through note and equity financing. The company intends to raise additional
capital through private debt and equity investors. At September 30, 2008, the
Company had a stockholders' deficit of $1,375,249 and a working capital deficit
of $259,993.
  Management
has taken steps to improve the Company's liquidity by raising funds and seeking
revenue sources through the development of products through which the Company
may generate revenue. There can be no assurance that the Company will be
successful in these endeavors and therefore may have to consider other
alternatives.
  The
accompanying consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. However, the above matters raise
substantial doubt about the Company's ability to continue as a going concern.
These financial statements do not include any adjustments relating to the
recovery of the recorded assets or the classification of the liabilities that
might be necessary should the Company be unable to continue as a going
concern.
  Note
3 - Summary of Significant Accounting Policies
  Principles
of Consolidation
  The
accompanying consolidated financial statements include the accounts of Cemtrex,
Inc. and its wholly subsidiary Griffin Filters, LLC (collectively the
“Company”). All significant inter-company accounts and transactions have been
eliminated in consolidation.
  The
acquisition of Griffin Filters, LLC by Cemtrex, Inc. was treated as a business
combination due to the fact that the acquired entity and purchased entity were
owned by the same individual. Therefore, these consolidated financial statements
have been retrospectively adjusted for all periods presented.
  Use
of Estimates
  The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
expenses during the reporting period. Actual results could differ from those
estimates.
  Cash
and Cash Equivalents
  The
Company considers all highly liquid investments with a maturity of three months
or less when purchased to be cash equivalents.
  Page
5 of 11
  CEMTREX,
INC. AND SUBSIDIARY
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
  Concentrations
of Credit Risk - Cash
  The
Company maintains its cash with various financial institutions, which may exceed
federally insured limits throughout the period.
  Marketable
Securities Available for Sale
  The
Company evaluates its investment policies and the appropriate classification of
securities at the time of purchase consistent with Statement of Financial
Accounting Standards ("SFAS") No. 115, "Accounting for Certain investments in
Debt and Equity Securities," at each balance sheet date and determined that all
of its investment securities are to be classified as available-for-sale.
Available-for-sale securities are carried at fair value, with the unrealized
gains and losses, net of tax, reported in stockholders' deficiency under the
caption "Accumulated Other Comprehensive Loss". Realized gains and losses and
declines in value judged to be other than-temporary on available-for-sale
securities are included in net gain on sale of marketable securities. The cost
of securities sold is based on the specific identification method.
  Inventories
  Inventories
are comprised of replacement parts, system components and finished systems,
which are stated at lower of cost or market. Cost is determined on a first-in,
first-out (FIFO) basis.
  Property
and Equipment
  Property
and equipment are stated at cost and are depreciated using the straight-line
method over their estimated useful lives, generally five to seven years.
Leasehold improvements are amortized over the shorter of the useful life or the
remaining lease term. Upon retirement or other disposition of these assets, the
cost and related accumulated depreciation are removed from the accounts and the
resulting gains or losses are reflected in operations. Expenditures for
maintenance and repairs are charged to operations as incurred. Renewals and
betterments are capitalized.
  Impairment
of long-lived assets
  Effective
January 1, 2002, the Company adopted Statement of Financial Accounting Standards
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
144"), which addresses financial accounting and reporting for the impairment or
disposal of long-lived assets and supersedes SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,"
and the accounting and reporting provisions of APB Opinion No. 30, "Reporting
the Results of Operations for a Disposal of a Segment of a Business." The
Company periodically evaluates the carrying value of long-lived assets to be
held and used in accordance with SFAS 144. SFAS 144 requires impairment losses
to be recorded on long-lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows estimated to be generated
by those assets are less than the assets' carrying amounts. In that event, a
loss is recognized based on the amount by which the carrying amount exceeds the
fair market value of the long-lived assets. Loss on long-lived assets to be
disposed of is determined in a similar manner, except that fair market values
are reduced for the cost of disposal.
  Basic
and Diluted Net Income per Share
  Basic
earnings per share is calculated using the weighted-average number of common
shares outstanding during the period without consideration of the dilutive
effect of stock warrants and convertible notes. Diluted earnings per share is
calculated using the weighted-average number of common shares outstanding during
the period after consideration of the dilutive effect of stock warrants and
convertible notes.
  Page
6 of 11
 CEMTREX,
INC. AND SUBSIDIARY
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
  Revenue
recognition
  Sales of
products and related costs of products sold are recognized when (i) persuasive
evidence of an arrangement exists, (ii) delivery has occurred, (iii) the price
is fixed or determinable and (iv) collectability is reasonably assured. These
terms are typically met upon shipment of finished goods to the
customer.
  Allowance
for doubtful accounts
  We
provide an allowance for estimated uncollectible accounts receivable balances
based on historical experience and the aging of the related accounts receivable.
As of September 30, 2008 and September 30, 2007 the Company has reserved
$200,000 for doubtful accounts.
  Advertising
  The
Company expenses advertising costs as incurred. There were no advertising costs
for the periods ended September 30, 2008 and 2007, respectively.
  Income
Taxes
  The
Company accounts for income taxes in accordance with SFAS No. 109, “Accounting
for Income Taxes.” Deferred taxes are provided on the liability method whereby
deferred tax assets are recognized for deductible temporary differences, and
deferred tax liabilities are recognized for taxable temporary differences.
Temporary differences are the differences between the reported amounts of assets
and liabilities and their tax bases. Deferred tax assets are reduced by a
valuation allowance when, in the opinion of management, it is more likely than
not that some portion or all of the deferred tax assets will be realized.
Deferred tax assets and liabilities are adjusted for the effects of changes in
tax laws and rates on the date of enactment.
  Guarantee
Expense
  In
accordance with FASB Interpretation No. 45 ("Fin 45"), the Company recognizes,
at the inception of a guarantee, the cost of the fair value of the obligation
undertaken in issuing the guarantee.
  Research
and development costs
  Expenditures
for research & development are expensed as incurred. Such costs are required
to be expensed until the point that technological feasibility is established.
The Company incurred no research and development costs for the periods ended
September 30, 2008 and September 30, 2007.
  Fair
Value of Financial Instruments
  The
reported amounts of the Company's financial instruments, including accounts
payable and accrued liabilities, approximate their fair value due to their short
maturities. The carrying amounts of debt approximate fair value since the debt
agreements provide for interest rates that approximate market.
  Stock-based
compensation
  In
December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No.
123(R), Share-Based Payment. This pronouncement amends SFAS No. 123, Accounting
for Stock-Based Compensation , and supersedes APB Opinion No. 25, Accounting for
Stock Issued to Employees . SFAS No. 123(R) requires that companies account for
awards of equity instruments issued to employees under the fair value method of
accounting and recognize such amounts in their statements of operations. Under
SFAS No. 123(R), we are required to measure compensation cost for all
stock-based awards at fair value on the date of grant and recognize compensation
expense in our consolidated statements of operations over the service period
that the awards are expected to vest.
  The
Company accounts for stock-based compensation issued to non-employees and
consultants in accordance with the provisions of SFAS 123(R) and the Emerging
Issues Task Force consensus in Issue No. 96-18 ("EITF 96-18"), "Accounting for
Equity Instruments that are Issued to Other Than Employees for Acquiring or in
Conjunction with Selling, Goods or Services". Common stock issued to
non-employees in exchange for services is accounted for based on the fair value
of the services received.
  Page
7 of 11
 CEMTREX,
INC. AND SUBSIDIARY
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
  Reclassifications
  Certain
items in the prior year financial statements have been reclassified for
comparative purposes to conform to the presentation in the current period’s
presentation. These reclassifications have no effect on the previously reported
income (loss).
  Recently
Issued Accounting Pronouncements
  In
December 2007, the FASB issued SFAS No. 141(R), Business Combinations (FAS
141(R)). This statement provides greater consistency in the accounting and
financial reporting of business combinations. It requires the acquiring entity
in a business combination to recognize all assets acquired and liabilities
assumed in the transaction, establishes the acquisition-date fair value as the
measurement objective for all assets acquired and liabilities assumed, and
requires the acquirer to disclose the nature and financial effect of the
business combination. FAS 141(R) is effective for fiscal years beginning after
December 15, 2008. We will adopt FAS 141(R) no later than the first quarter of
fiscal 2010 and are currently assessing the impact the adoption will have on our
financial position and results of operations.
  In
December 2007, the FASB issued SFAS No. 160. Noncontrolling Interests in
Consolidated Financial Statements (FAS 160). This Statement amends Accounting
Research Bulletin No. 51, Consolidated Financial Statements, to establish
accounting and reporting standards for the noncontrolling interest in a
subsidiary and for the deconsolidation of a subsidiary. FAS 160 is effective for
fiscal years beginning after December 15, 2008. We will adopt FAS 160 no later
than the first quarter of fiscal 2010 and are currently assessing the impact the
adoption will have on our financial position and results of
operations.
  In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities , which permits entities to choose to measure
at fair value eligible financial instruments and certain other items that are
not currently required to be measured at fair value. This statement requires
that unrealized gains and losses on items for which the fair value option has
been elected be reported in earnings at each subsequent reporting date. SFAS No.
159 is effective for fiscal years beginning after November 15, 2007. We will
adopt SFAS No. 159 no later than the first quarter of fiscal 2009. We are
currently assessing the impact the adoption of SFAS No. 159 will have on our
financial position and results of operations.
  In
September 2006, the FASB issued SFAS No. 158, Employers’ Accounting for Defined
Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements
No. 87, 88, 106, and 132(R) . SFAS No. 158 requires company plan sponsors to
display the net over or under-funded position of a defined benefit
postretirement plan as an asset or liability, with any unrecognized prior
service costs, transition obligations or actuarial gains/losses reported as a
component of other comprehensive income in shareholders’ equity. SFAS No. 158 is
effective for fiscal years ending after December 15, 2006. We adopted the
recognition provisions of SFAS No. 158 as of the end of fiscal 2007. The
adoption of SFAS No. 158 did not have an effect on the Company’s financial
position or results of operations.
  In
September 2006, the FASB issued SFAS No. 157, Fair Value Measurements . SFAS No.
157 establishes a framework for measuring fair value in generally accepted
accounting principles, clarifies the definition of fair value and expands
disclosures about fair value measurements. SFAS No. 157 does not require any new
fair value measurements. However, the application of SFAS No. 157 may change
current practice for some entities. SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. We will adopt SFAS No. 157 in the
first quarter of fiscal 2009. We are currently assessing the impact that the
adoption of SFAS No. 157 will have on our financial position and results of
operations.
  Page
8 of 11
 CEMTREX,
INC. AND SUBSIDIARY
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 In July
2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in
Income Taxes — an interpretation of FASB Statement No. 109 (FIN 48). This
interpretation clarifies the application of SFAS No. 109, Accounting for Income
Taxes , by defining a criterion that an individual tax position must meet for
any part of the benefit of that position to be recognized in an enterprise’s
financial statements and also provides guidance on measurement, derecognition,
classification, interest and penalties, accounting in interim periods,
disclosure and transition. FIN 48 is effective for fiscal years beginning after
December 15, 2006, but earlier adoption is permitted. The Company is in the
process of evaluating the impact of the application of the Interpretation to its
financial statements.
  Note
4 - Inventory
  The
Company values its inventory under the FIFO method of costing under the lower of
cost or market pricing module. The Company reviews its product for old and or
obsolete items and adjusts accordingly. The Company’s inventory consists of
finished and raw material product.
  Note
5 - Property and Equipment
  At
September 30, 2008 and September 30, 2007, property and equipment are comprised
of the following:
  September
      30,2008
                    
                    
                    2007Furniture
      and Office Equipment
                    
                    $
                    96,513
                    
                    
                    $
                    96,513Computer
      Software
                    
                    
                    4,550
                    
                    
                    
                    4,550Machinery
      and Equipment
                    
                    
                    151,939Less:
      Accumulated Depreciation
                    
                    
                    (72,483
                    )
                    
                    
                    (39,340
                    )Net
      Property & Equipment
                    
                    $
                    180,519
                    
                    
                    $
                    60,508
  Depreciation
for the periods ended September 30, 2008 and 2007 was $33,143 and $12,708,
respectively.
  Note
6 – Business Combination and Related Party Transactions
  On April
30, 2007, the Company purchased, though a business combination, all of the
issued and outstanding membership interests of Griffin Filters LLC, (“Griffin”)
a company established since 1971 and engaged in the design, engineering &
supplying of industrial air filtration equipment from its President. Aron Govil,
the Chairman, Chief Executive Officer, Treasurer and President of the Company,
was the owner of 100% of the issued and outstanding membership interests of
Griffin. The Company purchased 100% ownership in Griffin for a purchase price of
$ 2,750,000.00. The Company completed the Griffin purchase by (i) paying cash of
$700,000.00, (ii) issuing 20,000,000 shares of common stock valued at
$750,000.00 and (iii) issuing a four year convertible debenture in the amount of
$1,300,000.00, paying interest of 8.0% per year and convertible into 30,000,000
shares of common stock. Griffin had sales and net income of $3,297,409 and $145,
981 respectively for fiscal year ended September 30, 2006. Griffin is now a
wholly-owned subsidiary of the Company.
  The
Company recorded the combination of Griffin Filters, LLC as a “As is Pooling”
because of the related party interest as follows:
  Accounts
      Receivable
                        
                        $
                        530,506Inventory
                        
                        
                        49,668Property
      & Equipment, Net
                        
                        
                        67,018Other
      Assets
                        
                        
                        4,225Accounts
      Payable
                        
                        
                        (600,348
                        )Additional
      Paid-in-Capital
                        
                        
                        2,698,931Total
                        
                        $
                        2,750,000
  Page
9 of 11
 CEMTREX,
INC. AND SUBSIDIARY
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 These
consolidated financial statements have been retrospectively adjusted for all
periods presented.
  In
addition the Company had the following related party transactions.
  A)
              Note
      payable to a shareholder at September 30, 2008 for $467,171. Includable in
      Accrued Expenses is Accrued Interest of
  $170,691.
  B)
              The
      Company, included in accounts receivable is an amount due from Ducon
      Technologies, for $225,263 representing also the sales for the year. Ducon
      is a enterprise owned by the majority stockholder of the
      Company.
  C)
              The
      Company leases space from Ducon Technologies a related party on a month to
      month basis.
  Note
7 – Customer Deposits
  The
Company accounts for payments received prior to shipment as a liability and
recognizes revenue when the products are shipped.
  Note
8 – Note Payable Shareholder
  A Note
Payable to a shareholder is due upon demand  and accrues interest at
5%. Total interest accrued at September 30, 2008 is  $23,358 and is
included in accrued expenses.
  Note
9 – Convertible Debenture-Related Party
  On April
30, 2007, the Company issued a $1,300,000 Convertible Debenture to an Officer of
the Company in conjunction with the Purchase of Griffin Filters, Inc. The
debenture caries an 8% annual interest rate with interest payable semiannually
in arrears on the first business day of January and July each year. The
debenture principle is due and payable on April 30, 2011. Total interest accrued
is  $147,333 at September 30, 2008 and is included in accrued
expenses.
  The
debenture has the right of conversion into non-assessable shares of common stock
of the Company at $0.001 (par value) per share. Conversion is not exercisable
prior to December 31, 2007. Commencing December 31, 2007 and continuing to April
30, 2011, the Debenture Holder shall have the right of conversion subject o the
terms and conditions of the debenture. In the event the face amount of the
debenture is not fully converted on or before April 30, 2011, the conversion
rights will lapse.
  Note
10 – Stockholders’ Equity
  Preferred
Stock
  The
Company is authorized to issue 10,000,000 shares of preferred stock, $0.001 par
value. As of September 30, 2008 and 2007, there were no shares issued and
outstanding.
  Common
Stock
  The
Company is authorized to issue 60,000,000 shares of common stock, $0.001 par
value. As of September 30, 2008 and September 30, 2007, there were 34,327,862
shares issued and outstanding.
  2008
  There
were no common stock transactions during the year ended September 30,
2008..
  Page
10 of 11
 CEMTREX,
INC. AND SUBSIDIARY
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
  2007
 For the
year ended September 30, 2007, the Company issued 7,447,649 shares of Common
Stock to investors for cash totaling $378,500.
  In
addition, the Company issued 20,000,000 shares of Common Stock to an Officer in
conjunction with the acquisition of Griffin Filters totaling $750,000.
..
  Note
11 – Commitments & Contingencies
  Lease
Obligations
  The
Company leases its principal office at Farmingdale, New York, 4000 square feet
of office and warehouse/shop space in a single story commercial structure on a
month to month lease from Ducon Technologies Inc., at a monthly rental of
2,157.
  The
Company’s subsidiary Griffin Filters LLC leases approx. 10,000 sq. ft. of office
and warehouse space in Liverpool, New York from a third party in a five year
lease at a monthly rent of $4,225 expiring on March 30, 2012.
  Legal
Proceedings
  The
Company is not currently involved in any lawsuits or litigation.
  Note
12 - Subsequent Events
  In
October to December 2008, the company paid $622,877 of the related party note
described in note 8 plus the accrued interest to September 30,
2008.
  Note
13 - Restatement
  The 2007
financial statements have been restated to reflect the combination with Griffin
Filters, LLC (see Note 6), as a “As is Pooling”. This was required as both
entities were under common ownership.
  Note
14- Income Taxes
  In
2008 the Company has a provision for income taxes equal to 39% which has been
reduced in full by net operating loss carry forwards resulting in a zero tax
provision.
  Page
11 of 11