UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(X)	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
			 EXCHANGE ACT OF 1934

For the fiscal year ended March 31,2004
OR
( )	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
		SECURITIES EXCHANGE ACT OF 1934

Commission File Number         0-119698
COSMO COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
FLORIDA                              59-2268005
(State or other jurisdiction of		(I.R.S. Employer
 	incorporation or organization)	   		Identification No.)

Unit 2 - 55 Travail Road, Markham Ontario, Canada
(Address of principal executive offices)

Registrant's telephone number including area code:    (905) 209-0488

Securities registered pursuant to Section 12 (b) of the Exchange Act:
	Common Stock,  $0.05 par value

Check whether the registrant (1) 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) and has been subject to such filing
requirements
 for the past 90 days.
Yes X        	No 	.

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

The registrant's revenues for the fiscal period ended March 31, 2004
were $32,159,000.

As of March 31, 2004, the market value of the registrant's Common Stock
held by non-affiliates of the registrant was not able to be determined
as there were no quotes on the bid and ask price of the Company's
common stock.

The number of shares outstanding of the registrant's common stock is
29,104,066 as of March 31, 2004.

DOCUMENTS INCORPORATED BY REFERENCE		None






PART 1
Forward-Looking Statements and Associated Risk

This annual report of Cosmo Communications Corporation (the "Company")
Contains forward-looking statements within the meaning of Section 21E of
The Securities Exchange Act of 1934, including statements regarding,
among other items, (i) the Company's growth strategies, (ii) anticipated
trends in the consumer electronics industry, and (iii) the Company's
ability to obtain and maintain adequate financing for its operations.
These forward -looking statements are based largely on the Company's
expectations and are subject to a number of risks and uncertainties,
certain of which are beyond the Company's control.  Actual results could
differ materially from these forward-looking statements as a result of
such uncontrollable factors, and, more specifically, interest rate
levels, availability of financing, consumer confidence and preferences,
the effectiveness of the Company's competitors, and costs of materials
and labor.  In light of these risks and uncertainties, there can be
no assurance that the forward-looking information contained in this
annual report will not materially differ from actual results.

Item I.  Description of Business

Since its inception in March 1983, the Company, through its subsidiaries, has
imported, marketed and distributed in the United States and Canada consumer
electronic
products, including televisions, DVD players, video cassette recorders, audio
equipment, digital alarm clocks, quartz alarm clocks, quartz wall clocks,
clock radios and combination products such as clock radio telephones.
The audio equipment includes a full line of audio products, including personal
cassette players, portable stereos and music centers with and without compact
disc players.  During the year ended March 31, 2004, substantially all of the
Company's sales activity related to customers located in Canada, with new
business opened up in United Kingdom with some successes.
The Company's products are marketed under various labels to mass merchandisers,
drug store chains, specialty chain stores and other high-volume retailers.
The Company's
products are generally manufactured by its parent company and subcontractors
in China.
The Company's principal executive offices are located at 55 Travail Road,
Markham, Ontario,  Canada and its telephone number at such location is
(905) 209-0488.

Transaction History
During 2001, a change in control of the Company occurred.  In April 2000,
the Company and certain controlling shareholders of the Company at that time
entered into a Stock Purchase  Agreement pursuant to which the Company agreed
to sell shares of common stock representing 84.89% of the outstanding common
stock to Master Light Enterprises Ltd. ("Master Light"),
a subsidiary of Starlight International Limited ("Starlight"), a publicly held
company traded on the Hong Kong Stock Exchange, for $1 million.  Pursuant to an
amendment to the Stock Purchase Agreement, in January 2001, Master Light
acquired 1,347,420 shares of the Company's Common Stock, representing 49.11%
of the Company's Common Stock outstanding at that time, and representatives
of Starlight were appointed to the Board of Directors of the Company
replacing the incumbent directors.
In August 2001, the transactions contemplated by the Stock Purchase
Agreement, as amended, were consummated and, after rescinding the
purchase of 1,347,420 shares, Master Light acquired from the Company
26,585,008 shares of the Company's Common Stock, representing 91.3%
of the Company's currently issued and outstanding Common Stock.
In September 2001, additional capital contributions from Starlight
allowed the Company to discharge all the Company's obligations to its
lending institutions and provided further capital to allow the
Company to meet its ongoing operational needs.
Starlight owns and operates a number of subsidiaries throughout
the world engaged in the manufacture, sale and distribution of consumer
electronic products. Management believes Starlight will provide enhanced
resources for the Company to operate more competitively.
Management believes that new products and new product designs drive sales
growth. With the capital that is now available through Starlight, the
Company's products have improved in quality and with more updated designs.
This has allowed the Company to improve sales and continued strong sales
growth, barring no significant deterioration in the economic conditions
and more particularly, in consumer spending.
Since controlled by Starlight International Limited in August 2001, the
Company has adopted a new fiscal year to coincide with its parent
company's fiscal year for ease of consolidating accounts in the parent's
annual report.

Products
Clocks - The Company manufactures and markets a wide range of clocks,
including electronic digital alarm clocks, quartz alarm clocks and quartz
wall clocks.
The Company introduced its first electronic digital clock in 1977 and
currently offers approximately 20 models which retail at various prices
ranging from approximately $5 to $20.  The Company's electronic digital
clocks contain microprocessors, printed circuit boards, light emitting
diodes and ceramic buzzers. Subcontractors in the People's Republic of
China manufacture all the Company's wall clocks and battery operated
quartz alarm clocks.
Radios - The Company introduced its first
electronic digital clock radio in 1982 and currently offers 8 models,
with retail prices ranging from approximately $9 to $20.
The Company's electronic digital clock radios contain audio components
as well as components similar to those in its electronic digital clocks.
Subcontractors in the People's Republic of China manufacture all of the
units.
Compact Disc Players - The Company currently offered approximately 25
models of compact disc player and recorder products with retail prices
ranging from $20 to $120.  Some of the products are manufactured by
our parent company and some are by subcontractors in the People's
Republic of China under the Company's specifications.  Telephone
and wireless phone accessories - With growth in use of wireless
phones in North America, the Company began to offer wireless
phone accessories that include phone cases and chargers.  These
products are manufactured by subcontractors.
Television and DVD players - the Company marketed 5 models of
television including the popular flat screen models. This product
line contributed to the sales growth and accounted for over 30% of
the total sales in 2004. Licensed Products - The Company is a party
to a sub-distribution agreement to market in Canada audio products
utilizing the brand- name "Memorex".  During the year, the Company
added a new brand name to its products, "Audiovox" is distributed by
the Company on some of its audio products in Canada.

Marketing
The Company's marketing strategy is targeted at high volume retailers
with broad distribution networks such as mass merchandisers, drug and
other specialty chain stores, and other retailers.  The Company did
not make any sales in the US during 2004 but has made steady progress
in establishing a wholesale distribution network
in Canada.  The Company sells the "Audiovox" brand-name products along
with its own brands, "Audiologic", "Diamond Vision", "Randix", "Cosmo
Telecom" and "Cosmo Time". It also offers products made under the
private label of its customers.
The Company continues to look for opportunity to add licensed brand
names to its products line.
The Company's current strategy for re-entering the US market is to
locate niche markets.
So far it has not been able to sell in the US market, which is highly
competitive. The following customers illustrate the Company's primary
marketing channels and customers in 2004.

Wal-Mart Canada Inc.- Mass Merchandiser
Western Grocers - Supermarket
Future Shop/Best Buy - Electronic Distributor
Home Hardware - Distributor
Sears Stores - General Department Stores


The Company believes that its sales to high volume retailers depends
upon its ability to deliver a large volume of attractive and reliable
items at prices generally at or below those of its competitors.
Substantially all of the Company's Canadian sales are generated by
either the Company's full-time sales staff or sales representatives.
All of the Company's sales in 2004 were to customers within Canada.
See Note 10 "Notes to Consolidated
Financial Statements" for financial information about foreign and
domestic operations. Sales to the Company's largest customer,
Wal-Mart Canada Inc., accounted for approximately 80% of sales in 2004
(90% in 2003).  The loss of Wal-Mart of Canada Inc. as a customer
would have a significantly negative impact on the Company.
The Company's products are generally sold with a one year limited
warranty on labor and parts.

Manufacturing and Supply
Since being a member of the Starlight group in Hong Kong, the Company
has been able to tap in the manufacturing expertise of the parent
company in providing product research and new product design.
Substantially all of the CD players are manufactured by Starlight.
Subcontractors in the People's Republic of China make other products
in accordance with the Company's specifications.  The Company
performs quality control inspections on the premises of its
subcontractors, and also inspects its products upon their arrival in
its warehouse in Canada.
All of the components and raw materials used by the Company are
available from several sources of supply and the Company does not
anticipate that the loss of any single supplier would have a
material adverse effect on its business, operations or financial
condition.

Product Development
During 2004, the Company introduced a new line of flat screen
television.  Sales Generated from this category accounted for 21% of
total sales.  New products were developed in conjunction with the
support of the parent company. During the year ended March 31, 2004,
the Company did not spend any significant amount in product development.

Competition
The consumer products industry in which the Company operates is
characterized by intense price competition, ease of entry and
changing patterns of consumer demand. Sales volume and profitability
of particular consumer products can change significantly within
a relatively short period.  Accordingly, the Company is highly dependent
on the ability of its management to anticipate and respond quickly to
changes in trends for its products.
The Company believes that important factors necessary to compete include
name recognition, price, quality reliability, attractive packaging,
speed of delivery to customers and new or additional product features.
The Company believes that its future success will depend upon its ability
to develop and manufacture reliable products, which incorporate
developments in technology and satisfy consumer tastes with respect to
style and design.  Further, the Company's ability to market such products
at competitive prices is necessary in order to compensate for the lack of
strong consumer name recognition.  In 2004, the Company has been able to
compete better in the market place, principally owing to the support of
its parent company.  The Company believes that, through its parent
support, it is a significant manufacturer of compact disc players
products and competes with several companies, including Citizen, Philips
and Venturer.

Foreign Operations
The Company's sales, warehousing and administration are headquartered in
Toronto, Canada.
Sourcing, supply and quality inspection operations are based in Hong Kong.
Foreign currency exposure is limited to Canadian and Hong Kong exchange
rate fluctuation.
The Company's cost structure is affected by import duties, loss of
favorable tariff rates for products produced in the countries in which
the Company subcontracts the manufacture of goods, imposition of import
quotas, interruptions in sea or air transportation and political or
economic changes in countries from which components or products are
exported or into which they are imported. The Company will continue to
subcontract its manufacturing needs to subcontractors in Hong Kong and the
People's Republic of China.

Product Liability
The Company maintains product liability coverage for the Company's operations
in the aggregate amount of $3,000,000.  The Company has not been the subject
of any product liability litigation.

Government Regulation
The Company's operation is not regulated by the Federal Government nor any
State authorities.  Import tariffs are payable on some products in accordance
with the prevailing tariff rates.

Employees
As of March, 2004, the Company had 35 full-time employees, including 3 in
Hong Kong and 32 in Canada.  In Hong Kong, one employee is engaged in
sales and sourcing support duties.  In Canada, 9 employees were engaged
in warehouse distribution and service operations and 23 were sales,
administrative and executive personnel.  The Company believes that its
relations with its employees are satisfactory.

Where You Can Find More Information
The Company files annual, quarterly and special reports, proxy statements
and other information with the SEC.  The Company's SEC filings are
available to the public over the Internet at the SEC's web site at
http://www.sec.gov. the Company's documents which are filed may be read or
copied at the SEC's public reference room in Washington, D.C.,
at 450 Fifth Street, N.W., Washington, D.C. 20549.  Please call the SEC
at 1-800-SEC-0330 for further information on the public reference room.

Item 2.	Description of Property.
The Company's executive offices and principal domestic manufacturing
warehouse facilities are located in a 26,865 square foot building at
55 Travail Road, Markham, Ontario, Canada.
Both the land and building are leased by the Company under the terms
of a lease expiring in October 31, 2008.  Monthly rental is $19,700.
The Company also made a contribution of $3,000 a month to share
facilities for its Hong Kong based operation.  The Company believes
that its current facilities are satisfactory for its present needs
and that insurance coverage is adequate for the premises.
Minimum rental commitment is $206,000 in 2005 under the existing lease.

Item 3.	Legal Proceedings.
The Company is from time to time involved in routine litigation
incidental to its business most of which is adequately covered by
insurance and none of which, in the opinion of management, is expected
to have a material adverse effect on the Company.


Item 4.	Submission of Matters to a Vote of Security Holders.
During fiscal 2004, the Company did not submit any matter to a vote
of security holders.






PART II

Item 5.	Market for Common Equity and Related Stockholder Matters
Since March 6, 1996, the Company's Common Stock has been listed for
trading on the OTC Bulletin Board under the symbol "CSMO."
There were 166 record holders of the Common Stock on July 30, 2004.
However those shares being held at various clearing houses, including
Cede & Company have not been broken down.  Accordingly, the Company
believes there are many more beneficial owners of the Company's
Common Stock whose shares are held in "street name", not in the name
of the individual shareholder. The following table sets forth the
high and low prices for the Common Stock as reported for the periods
indicated.  During 2001, the Company's Common Stock was removed from
the OTC Bulletin Board and there were no quotes of high and low
since then and none in fiscal period 2004.

Fiscal Period			High			Low

2004	First Quarter		No quote   		No quote
	Second Quarter		No quote  		No quote
	Third Quarter		No quote 		No quote
	Fourth Quarter		No quote		No quote

2003	First Quarter		No quote 		No quote
	Second Quarter		No quote  		No quote
	Third Quarter		No quote 		No quote
	Fourth Quarter		No quote		No quote

On March 22, 2001, the last reported sales price for the Common Stock
on the OTC Bulletin Board was $0.003 per share.
It is the present policy of the Company's Board of Directors to
retain earnings. The Company has not declared any dividends in the past.
Any payment of cash Dividends in the future will be dependent upon the
financial condition, Capital requirements and earnings of the Company
and other factors, which the Board of Directors may deem relevant.

Item 6.  Management's Discussion and Analysis
Results of Operations
The following table sets forth, for the periods indicated, the relative
percentages that certain items in the Company's Consolidated Statements
of Operations bear to sales and the percentage of change in those items
from period to period:




As a Percent of Sales
			Quarter Ended	  Year Ended    Year Ended
			March 31,           March 31,	March 31,
			   2002			2003	   2004
			(audited)            (audited)	(audited)
Sales			  100%			100%	 100%

Cost of Sales		  86.8%			90.2%	    91.6%

Gross Margin		  13.2%			9.8%	    8.4%

Commission Income	    5.0%		3.1%	       4.0%

Selling, General and
 Administrative expenses  17.0%			9.3%	       9.4%

Income(loss)from
operations	 	(3.8%)			2.4%	       2.2%

Other expense		  5.0%			1.9%	       0.1%

Net Income		  1.2%			3.0%	       2.1%


Comparison of the year ended March 31, 2004 to the year ended March 31, 2003.

Net income for 2004 was $719,000 compared to net income of $590,000 for the
same twelve months period ended March 31.  Overall sales were stronger in
2004, due to the introduction of the highly popular flat screen television
in the Company's product line.

The Company also earned higher income in commissions in brokering sales and
in handling defective returns for certain major television manufacturers.

Improved income from sales and commissions were offset by higher expenditure
in general and administrative and selling expenses.  The Company reported
exchange loss of $80,000 in 2004 due to an improved US dollar against the
Canadian dollar.

Sales increased by 64% or $12,406,000 for the year ended March 31, 2004.
Approximately half of this increase ($6,746,000) came from new sales from
television.
The remaining increase came from new business with our major customers
under a new licensed brand name. The Company began marketing its
products in UK with some success in 2004.

Cost of sales was comparable to 2003.  As discussed earlier, due to
the highly competitive nature in the consumer electronic market, the
Company sacrificed high gross profit margin in order to gain growth
in sales. Sourcing of products continued to rely on the expertise
knowledge of our parent company, which is a major manufacturer
of consumer electronics products in the People's Republic of China.

Selling, general and administrative expenses were comparable to 2003.

Revenue earned from commission to 4% of sales and was comparable to 2003.

Net result in 2004 was a profit of $719,000 and represents a 13%
improvement as compared with a net income of $590,000 in the same
period in 2003.

Liquidity and Capital Resources

The Company's working capital continued to improve from $141,000 in
2003 to $950,000 in 2004. The ratio of current assets to current assets
to current liabilities at March 31, 2004 was 1.15 to 1, as compared
to 1.03 to 1 at March 31, 2003.  The improvement in liquidity was
attributable to internal funds generated from profits and capital
financing provided by the parent company.  Financing in the form of a
loan was advanced to the Company in 2001 at an interest rate of
prime plus 1% (6.125%).  So far interest and principal has not been
repaid.  Currently the parent company has no plan to recall
the repayment of this loan in the near future.  Interest accrued on the
loan was $363,000.
In addition, parent company provided working capital to the Company
through trades.
Balance of trade payable to the parent company at March 31, 2004
was $4,228,000.

The Company is subject to risk from exchange rate fluctuations.  While
the Company's product purchases are transacted in United States dollars,
most transactions among the suppliers and subcontractors are effected
in HK dollars.  Accordingly, fluctuations in Hong Kong monetary rates
may have an impact on the Company's cost of goods.  Furthermore,
appreciation of Chinese currency values relative to the Hong Kong
dollar could increase the cost to the Company of the products
manufactured in the People's Republic of China, and thereby have a
negative impact on the Company.  As well since a portion of the
Company's sales are in Canadian dollars, the Company is at risk with
regards to the conversion of Canadian dollars to US dollars to pay its
suppliers.  Therefore, fluctuations in the conversion rate may have an
impact on the Company.
Based on the Company's evaluation of anticipated changes in exchange
rates, the Company may from time to time purchase forward exchange
contracts to hedge against these risks.  However, the Hong Kong dollar
remains the functional currency of the Company's Hong Kong subsidiaries,
and the Company does not hedge against risks of foreign currency
transaction or translation loss.

Item 7.	Financial Statements.
See the Company's Consolidated Financial Statements following page 17
of this Annual Report on Form 10-KSB. Item 8.	Changes in and
Disagreements With Accountants on Accounting and Financial Disclosure.
The Company has reported no disagreements







PART III

Item 9.	Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
Directors and Executive Officers
Pursuant to the Bylaws of the Company, the number of directors constituting
the full Board of Directors has been fixed by the Board at three (3).
At the Annual Meeting of Shareholders,  three (3) individuals will be
elected to serve as directors until the next annual meeting and until
their successors are duly elected, appointed and qualified.

Set forth below is the name, age, principal occupation during the past
five years and other information concerning each director and executive
officer.

Name			Age		Position
Philip Lau		56		Chairman of the Board of Directors,
					and President
Peter Horak		63		Chief Executive Officer, Canada
Yu Wing Kin		52		Vice President, Administration,
					Hong Kong
Carol Atkinson		55		Director
Jacky Lau		45		Director

Mr. Philip Lau, Chairman of the Board of Directors, was appointed in
January 2001 after Starlight International Limited acquired 49% of the voting
shares of the Company.
Since 1987, Mr. Lau has been the Chairman of Starlight International, an
electronics company the shares of which are listed on the Hong Kong Stock
Exchange, and has extensive experience in the consumer electronics business.
Mr. Peter Horak, President of Cosmo Canada, was appointed as the Chief
Executive Officer in January 2001.  Mr. Horak was the co-founder of Cosmo's
Canadian subsidiary and has been its chief executive officer since 1988.
Mr. Horak is the Company's chief sales, marketing, and sourcing executive.
Mr. Kin has served as Vice President of Administration of Cosmo Hong Kong
since joining the Company in August 1978.
Ms. Atkinson has served as a director of the Company since January 2001
after Starlight International Limited acquired its shares.   Ms Atkinson is
a licensed public accountant. Mr. Jacky Lau has served as a director of the
Company since January 2001 after Starlight International Limited acquired
its shares.  He joined Starlight International in 1987 as the Director of
Material Sourcing. Mr. Philip Lau, Mr. Jacky Lau and Ms. Atkinson are
siblings.
Directors are elected annually by the shareholders and hold office until
the next annual meeting and until their respective successors are elected
and qualified. There are no other family relationships among any of the
Company's directors and executive officers.



Section 16(a) Beneficial Ownership and Reporting Compliance
The directors and executive officers of the Company, and the owners of
more than ten (10%) percent of the Company's outstanding Common Stock, are
required to file reports with the Securities and Exchange Commission, reporting
changes in the number of shares of the Company's Common Stock beneficially
owned by them and provide the Company with copies of all such reports.
Based solely on its review of the copies of such reports furnished  to the
Company and written representations from the executive officers and directors,
the Company believes that all reports were timely made for the quarter ended
March 31, 2004


Item 10.		Executive Compensation Summary Compensation Table.
The following table sets forth, for the 2004 and 2003 fiscal periods,
respectively, compensation paid or accrued by the Company to or on behalf
of the Company's Chief Executive Officer and each other executive officer
whose total annual salary and bonus for the 2004 fiscal year totaled $100,000
or more (collectively, the
"Named Executive Officers").

Annual Compensation(1)
        		2004	2003	2004	2003	All Other
			(12 months	(12 months
	   		ended		ended
			March 31,)         March 31,)
Name and Principal Position	Salary ($)	Bonus ($)	Compensation
___________________________________________________________________________
Starlight International
5/F, Shing Dao Industrial Building
232 Aberdeen Main Road
Hong Kong
Philip Lau      	none	none	 none	none 	      (1)
Peter Horak
CEO, Canada		133,000	 109,000 none	none	      (1)

Carol Atkinson          none	 none	 none	none	      (1)

Jacky Lau	        none	none	 none	 none	      (1)


 (1)  The column for "Other Annual Compensation" has been omitted because
there is no compensation required to be reported in such column.
The aggregate amount of perquisites and other personal benefits provided to
each Named Executive Officer is less than 10% of the total of annual salary
and bonus of such officer.

Option Grants Table.  No options were granted or exercised during 2004.
Aggregated Fiscal Year-End Option Value Table.   No Named Executive
Officers held any options as of the fiscal quarter ended March 31, 2004.
Long-Term Incentive and Pension Plans.  The Company does not have any
long-term incentive or pension plans.
Compensation of Directors.  Directors who are not officers of the Company
generally receive meeting attendance fees of $300. However, each such director
waived his right to receive such fees during fiscal 2004.  Annual retainers
are not currently provided to directors; however, such retainers may be
re-instituted in the future.  Directors are eligible to receive grants of
options under the Company's stock option plan.  No stock options were granted
to any directors of the Company during fiscal 2004.

Item 11.	Security Ownership of Certain Beneficial Owners and
Management. The information contained in the table was furnished
by the persons listed therein.  The calculations of the percent of shares
beneficially owned are based on 29,104,066 shares of common stock
outstanding on July 31, 2004.  None of the persons named below own
any options or warrants to purchase shares of the Corporation's common stock




Name and Address			Beneficial			Current
					Owner of Common Stock 	Percent of Class
Starlight International 		26,508,008(1)		91.3%
5/F, Shing Dao Industrial
Building 232 Aberdeen Main Road,
5th Floor, Hong Kong
Philip Lau					26,585,008(1)		91.3%
Carol Atkinson				NONE

Jacky Lau					NONE

Peter Horak					257,500			0.9%


All Directors and Executive Officers as a
Group (4 persons)				26,842,508(1)		92.2%

(1)	Includes 26,585,008 shares owned by Master Light Enterprises, Ltd., of
 which Mr. Lau is the controlling stockholder.

Item 12. 	Certain Relationships and Related Transactions.

As of March 31, 2004, the Company owed approximately $5,753,000 to its parent
group of companies, principal shareholders of the Company. $4,228,000 was
owed in the form of trades payable.  The balance was in the form of a loan.
During fiscal 2004, the Company purchased $19,392,000 ($11,007,000) of products
from its parent group of companies and received $ 243,000,($283,000) as
commissions in the sales brokerage activities.
..

Item 13.	Exhibits, Lists and Reports on Form 8-K.

(a)	1.	Financial Statements:

Reference is made to the index to the Company's Consolidated Financial
Statements following page 17 of this Annual Report on Form 10-KSB.

2.	Financial Statement Schedules:
These schedules are otherwise contained within the Company's Consolidated
Financial Statements following page 17 of this Annual Report on Form
10-KSB.

3.	Exhibits:

Exhibit No.	 Description
3.1.1	Registrant's Articles of Incorporation, as amended
3.2	Registrant's Bylaws (1)
10.1	Amended and Restated 1990 Stock Option Plan (Compensatory Plan)(2)
10.2	Stock Purchase Agreement dated April 28, 2000 by and among Company,
Amancio Victor Suarez, Carlos Ortega, Amancio J. Suarez and Master Light
Enterprises Ltd., as assignee of Starlight Marketing Development Ltd. and
the related letter agreements supplementing and modifying the terms of the
Stock Purchase Agreement April 19, 2000, July 13, 2000, July 27,
2000, November 20, 2000 and August 20, 2001.

22.1		List of Registrant's Subsidiaries (3)


(1)  Incorporated by reference to the exhibit with the same number filed
with the Registrant's Registration Statement No. 2-83088.
(2)  Incorporated by reference to  exhibit 10.2 filed with the
Registrant's Annual Report on Form 10-K for fiscal 1990.
(3)  Filed in part herewith, and incorporated by reference to (i)
exhibits 10.8, 10.9, 10.10, 10.11, 10.12 and 10.13 filed with the
Registrant's Annual Report on Form 10-K for fiscal 1989, and (ii)
exhibits 10.4 filed with the Registrant's Annual Reports on Form 10-K
for fiscal 1990, 1991 and 1992, respectively.
(b) 	Reports on Form 8-K
No reports on Form 8-K were filed during the last quarter of the period
covered by this report.
Signatures
In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
COSMO COMMUNICATIONS CORPORATION
DATED: July 31, 2004
/s/ Peter Horak
PETER HORAK
Chief Executive Officer,Canadian operation

In accordance with the Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.

DATED: July 31, 2004
/s/ Philip Lau
PHILIP LAU,
Chairman of the Board
President

/s/ Peter Horak
PETER HORAK
Chief Executive Officer


Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Philip Lau, certify that:
1.	I have reviewed this annual report on Form 10-KSB of Cosmo
Communications Corporation;
2.	Based on my knowledge, this annual report does not contain any
untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;
3.	Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present in
all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented
in this annual reports;
4.	The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
	a)	designed such disclosure controls and procedures to
ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report is
being prepared;
	b)	evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date within 90 days prior to
the filing date of this annual report (the "Evaluation Date"); and
	c)	presented in this annual report our conclusions about
the effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5.	The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons performing
the equivalent function):
	a)	all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified
for the registrant's auditors any material weaknesses in internal controls;
and
	b)	any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal
controls; and
6.	The registrant's other certifying officers and I have indicated in
this annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.


/s/  Philip Lau
Philip Lau
Chairman and President
Date:	July 31, 2004



Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Peter Horak, certify that:
I have reviewed this annual report on Form 10-KSB of Cosmo Communications
Corporation;
Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered
by this annual report; Based on my knowledge, the financial statements, and
other financial information included in this annual report, fairly present in
all material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in this
annual reports;
The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
	a)	designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being prepared;
	b)	evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date
of this annual report (the "Evaluation Date"); and
	c)	presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5.	The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (or persons performing
the equivalent function):
a)	all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
	b)	any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal
controls; and
6.	The registrant's other certifying officers and I have indicated in
this annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


/s/  Peter Horak
Peter Horak
Chief Executive Officer
Date:	July 31, 2004


COSMO COMMUNICATIONS CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2004 AND 2003
CONTENTS
Independent Auditors' Report							1
Consolidated Balance Sheets							2
Consolidated Statements of Changes in Stockholders' Equity		3
Consolidated Statements of Earnings						4
Consolidated Statements of Cash Flows					5
Notes to Consolidated Financial Statements				6-15







INDEPENDENT AUDITORS' REPORT
To the Stockholders of
Cosmo Communications Corporation
We have audited the accompanying consolidated balance sheets of Cosmo
Communications Corporation,  as at March 31, 2004 and 2003 and the
consolidated statements of changes in stockholders' equity, operations
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 consolidated financial statements based
on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America.  Those standards require that
we plan and perform an audit to obtain reasonable assurance whether the
financial statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the consolidated 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 our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Cosmo Communications Corporation, as at March 31, 2004 and 2003 and the
results of its operations, changes in its stockholders' equity and its
cash flows for the years then ended in accordance with accounting principles
generally accepted in the United States of America.
Toronto, Canada	CHARTERED ACCOUNTANTS
June 22, 2004




COSMO COMMUNICATIONS CORPORATION
Consolidated Balance Sheets
March 31, 2004 and 2003
($ in 000's)
					2004			2003

(note 16)
ASSETS
Current

Cash				$	  770		$	  815
Accounts receivable, 	(note 4) 	4,128			2,730
Inventories				2,534			2,017
Prepaid and sundry assets		    3			   39
					-----			-----
					7,435			5,601

Equipment (note 5)			   91			   17
Deferred Charges, net of amortization	   20			   27
Deferred Taxes 				  126			    -
					------			-----
				$	7,672		$	5,645

							LIABILITIES
Current

Accounts payable and accrued charges $	  685		$	  790
Income taxes payable			   47			    -
Accounts payable to parent company (note 6)
					4,228			3,232
Loan from parent company (note 7)	1,525			1,438
					------			------
					6,485			5,460

STOCKHOLDERS' EQUITY

Capital Stock (note 8 and 10)	         1,455			1,455
Additional Paid In Capital		26,273			26,27
Accumulated Other Comprehensive Loss	(1,035)	    	       (1,318)
Accumulated Deficit 		       (25,506)	    	      (26,225)
					------			------
					1,187			  185
					------			------
				$	7,672		$	5,645


APPROVED ON BEHALF OF THE BOARD

	Director	Director

COSMO COMMUNICATIONS CORPORATION
Consolidated Statements of Changes in Stockholders' Equity
Years Ended March 31, 2004 and 2003
($ in 000's)

			Number          Capital Stock		Paid in
			Of Shares	Capital in excess
					Of Par Value

Balance 4/1/02		29,104,000	    $ 1,455		$ 26,273

Foreign exchange
On translation		     -			-			-

Net income		     -			-			-
			----------	    -------		--------
Balance 3/31/03		29,104,000	    $ 1,455		$ 26,273

			Accumulated	     Accumulated   Total Shareholders'
			Other		     Deficit		Equity
			Comprehensive
			Loss

Balance 4/1/02		(1,700)	    	$ (26,815)		$ (787)

Foreign exchange
On translation		   382		     -			   382

Net income		    -		      590		   590
			----------	    -------		--------
Balance 3/31/03		(1,318)	    	$ (26,225)		$ 185

			Number          Capital Stock		Paid in
			Of Shares	Capital in excess
					Of Par Value

Balance 4/1/03		29,104,000	    $ 1,455		$ 26,273

Foreign exchange
On translation		      -			-			-

Net income		       -		-			-
			----------	    -------		--------
Balance 3/31/04		29,104,000	    $ 1,455		$ 26,273

			Accumulated	     Accumulated	Total Shareholders'
			Other		     Deficit		Equity
			Comprehensive
			Loss

Balance 4/1/03		(1,318)	    	$ (26,225)		$ 185

Foreign exchange
On translation		    283		       -	    	  283

Net income		     -		       719		  719
			----------	    -------		--------
Balance 3/31/04		(1,035)	    	$ (25,506)		$ 1,187



COSMO COMMUNICATIONS CORPORATION
Consolidated Statements of Earnings
Years Ended March 31, 2004 and 2003
($ in 000's)
(except per share data)

	 						2004		2003
(note 16)
Sales						$	32,159	$	19,753
Cost of Sales				 		29,440		17,686
Gross Profit						 2,719	  	 2,067

Commission and Other Income				 1,283		   460

Expenses

General and administrative				1,382		   876
Selling and delivery					1,652		   937
Financial						  177		   145
Exchange loss (gain)					   80		  (66)
Amortization						   21		    12

							3,312		 1,904

Earnings Before Income Taxes				  690		   623
Income taxes - current					   97		    33
             - deferred					 (126)		     -

Net Earnings 					$	  719	$	   590

Earnings per weighted average number of
shares outstanding - basic and diluted		$	0.02	$	  0.02

Weighted average number of shares
outstanding - basic and diluted			29,104,000		29,104,000


COSMO COMMUNICATIONS CORPORATION
Consolidated Statements of Cash Flows
Years Ended March 31, 2004 and 2003
($ in 000's)
							2004			2003
(note 16)
Cash Flows from Operating Activities
Net earnings					$	719		$	590
Adjustment for:
Amortization						 21			 12
							----			-----
							740			602
Change in non-cash working capital
Accounts receivable				     (1,398)		     (1,402)
Inventories					       (517)		       (532)
Prepaid and sundry assets				36			(32)
Accounts payable and accrued charges		       (104)		       (493)
Accounts payable to parent company			996		      1,918
Deferred taxes					       (126)			-
Income taxes payable					  47			-
Foreign currency translation adjustment		         283			382
							----			-----
							(43)			443

Cash Flows from Investing Activities
Additions to equipment					(89)			(7)

Cash Flows from Financing Activities
Proceeds of advances from parent company		87			84

Net (Decrease) Increase in Cash				(45)			520
Cash - beginning of  year				815			295

Cash - end of year				$	770		$	815


1.	Nature of Operations
Cosmo Communications Corporation and subsidiaries (the "Company") market and
distribute consumer electronic products.  The Company has operations in Hong
Kong and Canada.
2.	Accounting Change
During the year, the Company retroactively adopted the accounting policy of
amortizing it's equipment, furniture, fixtures and computer equipment on the
declining balance basis.  Previously, amortization was recorded using the
straight-line method.  This change was made to conform with the methods used
by the parent company.
The effect of this change on prior years is considered trivial and
accordingly the retained earnings for the year ended March 31, 2003 has not
been adjusted.
3.	Summary of Significant Accounting Policies
a)	Principles of Consolidation
The Company includes, in consolidation, its wholly owned subsidiaries, Cosmo
Communications Canada Corporation and Cosmo Communications (H.K.) Limited.
All significant intercompany transactions and balances have been eliminated
upon consolidation.
b)	Inventories
Inventories are stated at the lower of cost (first-in, first-out) or market.
c)	Equipment
Equipment is stated at cost less accumulated amortization.  Amortization,
based on the estimated useful lives of the assets, is provided using the
undernoted annual rates and methods:
Furniture and fixtures			20%			Declining balance
Office equipment				20%		Declining balance
Computer equipment			25%			Declining balance
Warehouse equipment			20%			Declining balance
Leasehold improvements			5 years			Straight-line

3.	Summary of Significant Accounting Policies (cont'd)
d)	Deferred Charges
Deferred charges consist of costs of the financing and reorganization of
the company and are amortized over 5 years.
e)	Foreign Translation Adjustment
The accounts of the foreign subsidiaries were translated into U.S. dollars
in accordance with the provisions of Financial Accounting Standards Board
Statement No. 52 ("SFAS 52").  Management has determined that the Hong Kong
dollar is the functional currency of the Hong Kong subsidiaries and the
Canadian dollar is the functional currency of the Canadian subsidiary.
Certain current assets and liabilities of these foreign entities are
denominated in U.S. dollars.  In accordance with the provisions of SFAS 52,
transaction gains and losses on these assets and liabilities are included
in the determination of income for the relevant periods.  Adjustments
resulting from the translation of the financial statements from their
functional currencies to United States dollars are accumulated as a separate
component of accumulated other comprehensive income and have not been included
in the determination of income for the relevant periods.
f)	Revenue Recognition
Sales are recognized upon shipment of goods as that is the point at which title.
passes to the customer, net of estimated sales returns.  Revenue is recognized
if persuasive evidence of an agreement exists, the sales price is fixed or
determinable, and collectibility is reasonably assured.
g)	Concentration of Credit Risks
The Company is exposed to credit risk on accounts receivable from its
customers. In order to reduce its credit risk, the Company has adopted credit
policies which includes the analysis of the financial position of its
customers and the regular review of their credit terms.
h)	Fair Value of Financial Instruments
The Company's financial instruments include cash and cash equivalents,
receivables, payables, debt and credit facilities.
The estimated fair value of financial instruments has been determined by the
Company using available market information and valuation methodologies.
Considerable judgment is required in estimating fair value.  Accordingly,
the estimates may not be indicative of the amounts the Company could realize
in a current market exchange.  At March 31, 2004 and 2003, the carrying
amounts of cash, accounts receivable, accounts payable and accrued
charges, and loans payable approximate their fair values due to the
short-term maturities of these instruments.

3.	Summary of Significant Accounting Policies (cont'd)
i)	Use of Estimates
The preparation of consolidated financial statements in conformity with
generally accepted accounting principles 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 consolidated financial statements and the reported amounts of revenues
and expenses during the reporting period.  Actual results could differ from
those estimate
j)	Income Taxes
The Company accounts for income taxes pursuant to SFAS No. 109,
"Accounting for Income Taxes". Deferred tax assets and liabilities
are recorded for differences between the financial statement and tax basis
of the assets and liabilities that will result in taxable or deductible amounts
in the future based on enacted tax laws and rates applicable to the periods in
which the differences are expected to affect taxable income. Valuation
allowances are established when necessary to reduce deferred tax assets to the
amount expected to be realized. Income tax expense is recorded for the amount
of income tax payable or refundable for the period increased or decreased by
the change in deferred tax assets and liabilities during the period.
k)	Earnings Per Share
Basic earnings per share is computed based on the average number of common
shares outstanding and diluted gain per share is computed based on the
average number of common and potential common shares outstanding.  As of each
period ended there were no dilutive common equivalent shares. The stock
options discussed in Note 10 could potentially dilute earnings per share in
the future but were not included in diluted loss per share since they
would be anti-dilutive
for the periods presented.
l)	Stock-Based Compensation Plans
Stock-based compensation plans include all arrangements by which employees
and non-employee members of the Board of Directors receive shares of stock
or other equity instruments of the Company or the Company incurs
liabilities to employees in amounts based on the price of the Company's
stock.  The Company has chosen to continue to account for stock-based plans
using the intrinsic value method prescribed by Accounting Principles Board
Opinion ("APB") No.25, Accounting for Stock issued to Employees and
related interpretations. Accordingly, compensation cost of stock based
compensation is measured as the excess, if any, of the fair value of the
Company's stock at the date of the grant over the amount an employee or
non-employee member of the Board of Directors must pay for the stock.
The Company did not enter into any stock based compensation arrangement
in 2004 or 2003.


3.	Summary of Significant Accounting Policies (cont'd)
m)	Comprehensive Income
The Company adopted SFAS No. 130, "Reporting Comprehensive Income."
SFAS No. 130 establishes standards for reporting and presentation
of comprehensive income and its components in a full set of financial
statements.  Comprehensive income is presented in the statements of
changes in stockholders' equity, and consists of net loss and unrealized
gains (losses) on available for sale marketable securities; foreign
currency translation adjustments and changes in market value of future
contracts that qualify as a hedge; and negative equity adjustments
recognized in accordance with SFAS 87.
SFAS No. 130 requires only additional disclosures in the financial
statements and does not affect the Company's financial position or
results of operations.
4.	Accounts Receivable (In Thousands)
The activity for the allowance for doubtful accounts is as follows for
the year ended March 31, 2004 and 2003:
The Company carries accounts receivable at the amounts it deems to be
collectible.  Accordingly, the Company provides allowances for accounts
receivable it deems to be uncollectible based on management's best
estimates. Recoveries are recognized in the period they are received.
The ultimate amount of accounts receivable that become uncollectible
could differ from those estimated.
5.	Equipment (In Thousands)
					2004			2003
					($ in 000's)		($ in 000's)
					Accumulated		Accumulated
				Cost	Amortization	Cost	Amortisztion

Furniture and fixtures		$ 43		$ 35		$ 33		$ 30
Office equipment		  33		  25	   	  23	  	  21
Computer equipment		  31		  19		  24		  14
Leasehold improvements		  13		  13		  12		  10
Warehouse equipment		  70		   7		   -		   -

				$ 190	 	$ 99		$ 92		$ 75
				  -----------------		-----------------
Net carrying amount			$19				$ 17

6.	Accounts Payable to Parent Company
As of March 31, 2004, the Company owed approximately $5,753,000 ($4,670,000 in
March 31, 2003) to the parent company ("Starlight"), the principal shareholders
of the Company.  Of this amount $4,228,000 was owed in the form of trade
payable ($3,232,000 in March 31, 2003) and the remainder was in the form of a
loan (note 7).
7.	Loan From Parent Company
The loan from Starlight bears interest at Hong Kong prime rate plus 1% and is
payable on demand.  Interest accrued as of March 31, 2004 was $363,000
($276,000 in March 2003)
8.	Common Stock and Treasury Stock (In Thousands)
Authorised
	30,000	preferred shares, cumulative, convertible at $0.01 par value
	9,970,000	preferred shares, at $0.01 par value
	50,000,000	common shares at $0.05 par value, voting, participating

2004			2003
Issued
	29,104,000	common shares		$	1,571	$	1,571
	2,314,567	treasury stock			(116)		(116)
							------		------
						$	1,455	$	1,455

In August 2001, the transactions contemplated by the Stock Purchase Agreement,
as amended, were consummated and, after the purchase of the 1,347,420 shares
by Master Light were rescinded, Master Light acquired from the Company
26,585,000 shares of the Company's Common Stock, representing 91.3% of the
Company's currently issued and outstanding Common Stock.  As part of the
Stock Purchase Agreement, the stock of two of the Company's subsidiaries,
Cosmo Telecom Corp. and Cosmo World Wide Corp., were transferred to the
former controlling shareholders of the Company.

8.	Common Stock and Treasury Stock (In Thousands) (cont'd)
Under the terms of the above Agreement, the Company issued to two executive
officers of the Company's Canadian operating subsidiary an aggregate of
535,000 shares of newly issued common stock in consideration of their
agreement to release the Company from its obligation to repay $79,425 owed
to them and from any other claims which they might have against the Company
and its subsidiaries and thereof respective directors, officers or
stockholders.
They agreed to surrender an aggregate of 20,000 shares as treasury stock
In 2001, The Company's outstanding bridge loan of $400,000 with an accrued
interest of $76,300 was discharged by a credit against the purchase price
Starlight paid for the shares of the Company that it purchased.
In September 2001, the two loans with outstanding balances as of
December 31, 2000 at $997,994 and $749,528 were repaid in full.
Further, the loan balance due to major shareholders of $1,181,147 was
discharged by the Company through the issuance of 1,555,000 shares of
common stock. These principal shareholders also agreed to surrender
an aggregate of 2,294,567 shares as treasury stock.
9.	Related Party Transactions
Apart from those as disclosed in note 7, the Company's transactions
with related parties were, in the opinion of the directors, carried
out on normal commercial terms and in the ordinary course of the
Company's business.
During the year ended March 31, 2004, the Company purchased
$19,392,000 ($11,007,000 in March 31, 2003) of goods from Starlight
and received $243,000 ($283,000 in March 31, 2003) in commissions.

10.	Stock Option Plan
The Board of Directors of the Company (the "Board") adopted the 1990
Stock Option Plan (the "Plan) effective December 15, 1990.  Effective
December 23, 1994, the 1990 Stock Option Plan was amended and restated.
The Plan reserved 270,000 shares of common stock for issuance thereunder.
Under the Plan, the Company may grant incentive stock options, nonqualified
stock options, and stock appreciation rights.  The purpose of the Plan is
to further the best interests of the Company and its subsidiaries by
encouraging employees and consultants of the Company and its
subsidiaries to continue association with the Company.  The employees
eligible to participate in the Plan as recipients of stock options or
stock appreciation rights are such officers and employees of the Company
and such other key employees of the Company and its subsidiaries, as the
Board shall from time to time determine, subject to the limitations of
the Plan.
The Plan is administered by the Board or by a committee of the Board
designated by the Board.  The Board, or such committee, determines, among
other things, which officers, employees and directors of the Company
receive options or stock appreciation rights under the Plan, the number
of shares to be covered by the options, and the date of grant of such
options.
The options granted under the Plan terminate at the earlier of (i) a date
set by the Board at the time of grant, or (ii) ten years from their
respective dates of grant, except in the case of incentive stock options
granted to a shareholder owning ten percent (10%) or more of the Company's
common stock, with respect to whom options granted are exercisable over a
period no longer than five years.  The exercise price for stock options
granted under the Plan is determined by the Board and is required to be at
least the par value per share of the common stock, except in the case of
incentive stock options (which must have a price which is not less than
market price of the shares on the date of the options granted) to a
shareholder owning ten percent (10%) or more of the Company's common
stock, with respect to whom the exercise price is required to be at least
one hundred ten percent (110%) of such market price.  The exercise price
must be paid in full by an employee in cash, common stock of the Company
or any other form of payment permitted by the Board.
As of March 31, 2004 and March 31, 2003, 252,000 stock options were
outstanding of which 230,000 were exercisable.  No stock options were
granted, exercised, forfeited or expired for the last four years.
The exercise price of the stock options range from $.45 - $1.55
per option.

11.	Income Taxes (In Thousands)
Future income tax assets and liabilities are recognized on temporary
differences between the financial and tax bases of the equipment in note 5
as well as unused tax loss carryforwards.
The provision for income taxes has been computed as follows:
						   2004		     2003
Expected income tax recovery at the statutory
rate of 33.12% (2003 - 36.60%) in Canada,
17.5% (2003 - 16%) in Hong Kong and 15.5%
(2003 - 20.5%) in USA
						$  150		$    123
Tax effect of expenses that are not deductible
 for income tax purposes (net of other amounts
deductible for tax purposes)		            12		      9
Tax effect of differences in the timing of
deductibility of items for income tax purposes:
Differences between amortization and capital
cost allowance					(30)			(4)
Recognition of non-capital tax losses		(100)			-
Unrealised exchange gains			(11)			-
					   -------		  ---------
						 21			128
Utilization of non-capital tax losses to offset
 current taxable income																			(63)			(95)
Non-capital tax losses available to offset
future taxable income, as described below														 13			-
						----			----
Provision for income taxes		$	(29)		$	33


11.	Income Taxes (In Thousands) (cont'd)
						   2004			2003
The components of future income taxes are as follows:
Deferred income tax liabilities:
Deferred income tax assets:
Equipment				$	    26		$	  -
Non-capital tax loss carry-forward		   100			  -
						----			----
Deferred income taxes				126		$      	-

The Company has unused tax loss carryforwards of approximately $300,000 which
would be available to offset future taxable income. Such carryforwards relate
in part to domestic and in part to foreign jurisdictions and expire from in
2011. In the prior year, the Company had reduced the deferred tax assets
resulting from its domestic and foreign tax loss carryforwards by a 100%
valuation allowance as it was determined that the Company did not meet
the criteria that it was 'more likely than not'that the deferred tax
assets would be realized.  Due to the improved financial position of the
Company as at March 31, 2004 the criteria has now been met and accordingly,
the deferred tax asset has been recorded.
12.	Contingencies
The Company is not in compliance with the periodic reporting requirements
of the Securities Exchange Act of 1934.  Management is unable to determine
what effect, if any, this non-compliance will have on its operations.
13.	 Economic Dependence (In Thousands)
A Canadian mass-market merchandiser and chain store is the Company largest
customer, which accounted for an approximately 90% of sales in 2004 and in
2003. Economic dependence exists with this identified customer.  Loss of
the customer may have significant adverse results to the financial position
of the Company.As of March 31, 2004, the accounts receivable from this
customer is $95,000 ($267,000 in March 31, 2003)

14.	Operating Segment Information
	The Company operated in one business segment and all of its sales are
consumer electronic products.  The Company's customers are principally in
Canada. Borrowings are principally in the United States.
The breakdown of relevant financial information is as follows:
				Domestic		Foreign	  Other		Total
2004

Assets	 	 	$	20		   $	 7,652	   $	-   $	7,672
Sales, net		  	-		   	32,159		-      32,159
Gross Margin 	  		-			 2,719		-	2,719
Net income (loss)	       (65)			   734		-	  669

2003

Assets			  $	27		   $	5,618	   $	-   $ 	 5,645
Sales, net			-			19,753		-       19,753
Gross Margin			-			2,067		-	 2,067
Net income (loss)		(64)			  654		-	  590

15.	Commitments (In Thousands)
The Company leases premises under an operating lease with a five year term in
Canada and shares the facilities for its Hong Kong operation.  Minimum lease
commitments under the leases at March 31, 2004 were:
2005		$  	206
2006			211
2007			215
2008 			224
2009 			137

16.	Comparative Figures
Certain figures in the 2003 financial statements have been reclassified to
conform with the basis of presentation used in 2004.





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