UNITED STATES
                                             SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934

                                      For the fiscal year ended March 31, 2002

                                                Commission File Number 1-7375

                              COMMERCE GROUP CORP.

                         (Exact name of registrant as specified in its charter)

       WISCONSIN                                                  39-1942961
(State or other jurisdiction of
 incorporation or organization)            (I.R.S. Employer Identification No.)

                             6001 North 91st Street
                                                Milwaukee, Wisconsin 53225-1795
                            (Address of principal executive offices) (Zip Code)

             Registrant's telephone number, including area code: (414) 462-5310

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

                              Name of each exchange
 Title of each class                                       on which registered
 Common Shares $0.10 par value                            Boston Stock Exchange
                                       Over The Counter Bulletin Board (OTC BB)


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     No  __

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not 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-K or any amendment to this Form 10-K.  [   ]

The  aggregate  market value of the voting  stock held by  nonaffiliates  of the
 registrant based on the closing price of the OTC BB on
May 13, 2002, was approximately $1,908,035.

Common shares outstanding as of March 31, 2002, were 17,468,008.

DOCUMENTS INCORPORATED BY REFERENCE

Part III  incorporated  by  reference  from the  registrant's  definitive  Proxy
 Statement for its 2002 Annual Meeting of Shareholders to be
filed, pursuant to Regulation 14A, no later than 120 days after the close of the
registrant's fiscal year.


<PAGE>



                              COMMERCE GROUP CORP.
                                                  2002 FORM 10-K ANNUAL REPORT
                                       For the Fiscal Year Ended March 31, 2002

                                TABLE OF CONTENTS

                                                                          Page


                                     PART I

Item 1.       Business.....................................................  3
Item 2.       Properties.....................................................13
Item 3.       Legal Proceedings..............................................21
Item 4.       Submission of Matters to a Vote of Security Holders............21
Item 4(a).    Executive Officers and Managers of the Company.................22

                                     PART II

Item 5.       Market for the Company's Common Stock and Related Stockholders'
 Matters..............................24
Item 6.       Selected Financial Data........................................25
Item 7.       Management's Discussion and Analysis of Financial Condition
              and Results of  Operations......................................26
Item 8.       Financial Statements and Supplementary Data.....................37
Item 9.       Changes in and Disagreements on Accounting and Financial
Disclosure..................................60

                                    PART III

Item 10.      Directors and Executive Officers of the Registrant.............60
Item 11.      Executive Compensation.........................................60
Item 12.      Security Ownership of Certain Beneficial Owners and Management.60
Item 13.      Certain Relationships and Related Transactions.................60

                                     PART IV

Item 14.      Exhibits, Financial Statement Schedules and Reports on Form 8-K.
......................................61

Safe Harbor Statement

This annual report  contains  forward-looking  statements  within the meaning of
Section 21E of the United  States  Securities  Exchange Act of 1934, as amended,
which are made pursuant to the safe harbor provisions of the Private  Securities
Litigation Reform Act of 1995. One can generally identify these  forward-looking
statements because they contain "expect," "believe," and other words that convey
a similar meaning. One can also identify these statements, as they do not relate
strictly to  historical or current  facts.  Examples of factors  affecting  both
Commerce Group Corp.'s wholly-owned  operations and its joint venture that could
cause actual  results to differ  materially  from current  expectations  are the
following:  supply and demand  conditions  affecting  prices and  volumes in the
markets, world economic conditions;  competition;  seasonality;  energy supplies
and pricing;  the  predictability  of joint venture operating  results;  and the
environmental  report.  One should understand that it is not possible to predict
or identify  all  factors  that could  cause  actual  results to differ from the
Company's  forward-looking  statements.  Consequently,  the  reader  should  not
consider  any such list to be a complete  statement  of all  potential  risks or
uncertainties.



<PAGE>


                                     PART I


Item 1.  Business

General

Commerce Group Corp. ("Commerce," the "Company," and/or the "Registrant") is the
only precious  metals company that has produced gold in the past twenty years in
the Republic of El Salvador, Central America. Furthermore,  since 1968, Commerce
has been operative in the exploration,  exploitation and development of precious
metals in El Salvador. Its gold ore reserves exceed 1.5 million ounces. Combined
with its objectives, Commerce is determined to acquire a business combination to
assist it in achieving its goals. It continues to seek compatible acquisition or
merger candidates, preferably in the precious metals field and/or an endeavor in
which synergism will prevail.  The Company's goal is to make certain that it can
increase shareholder value by converting its gold ore reserves into a profitable
position and maintain a categorical cash flow.

Commerce  has been a  Wisconsin-chartered  corporation  since its merger  from a
State of Delaware  corporation on April 1, 1999, and its corporate  headquarters
are based in  Milwaukee,  Wisconsin.  It was  organized  in 1962 and its  common
shares have been  publicly  traded since 1968.  The  Company's  shares have been
trading on the Over the Counter  Bulletin  Board  (OTCBB)  under the Symbol CGCO
since May 5, 1999. The Company  presently is in the business of precious  metals
mining.

Precious Metal Mining

Commerce  continues  to  be  engaged  in  the  exploration,   exploitation,  and
development  of gold and silver mines in the  Republic of El  Salvador,  Central
America,  through its Commerce/Sanseb Joint Venture ("Joint Venture").  Commerce
holds a nearly 100%  interest  in the Joint  Venture  which owns the  concession
rights to extract gold from the San Sebastian Gold Mine ("SSGM").

Commerce's  objective  is to enhance  the value of its shares by  profits,  cash
flow, and by increasing its gold ore reserves.  This also can be achieved by its
continuing  to be a low-cost gold  producer,  by  increasing  production  and by
expanding its gold ore reserves.

Commerce's  current  goal  is to  secure  sufficient  capital  to  increase  its
production  of gold to  113,000  ounces per year and to  simultaneously  develop
additional  gold ore  reserves.  The Company  expects to increase  production by
developing  an  open-pit,  heap-leach  operation  on  site  at the  SSGM  and by
acquiring  additional mining equipment which will increase the processing of its
higher  grade  virgin  ore at the San  Cristobal  Mill and Plant  ("SCMP").  The
heap-leach operation will have the capability of producing (through processing a
higher volume of gold ore) significantly more gold than could be produced at the
SCMP,  which has a present  capacity of processing 200 tons of gold ore per day.
Commerce will also continue to explore areas contiguous to the SSGM site, and it
also is planning drill programs at its other potential mining prospects.

Operations

On December 31,  1999,  the Joint  Venture  decided to  temporarily  suspend its
processing  of gold ore at its SCMP until such time as it has adequate  funds to
retrofit,  restore,  rehabilitate,  and  expand  its  mill  and  plant.  A major
overhauling  is needed to preserve the integrity of the  equipment.  The initial
resumption of producing  gold was with the SCMP used equipment the Joint Venture
purchased  on February 23, 1993.  Even though the Joint  Venture has  maintained
this mill and plant on a continuous basis,  certain basic structural  components
are worn out and need to be replaced, retrofitted or overhauled. Another concern
is the substantial  decline in the world market price of gold after it peaked in
October 1999. Concurrent with the decision to suspend processing gold ore is the
need to increase  efficiency by expanding the SCMP  facilities from the existing
200-ton-per-day  capacity to a  500-ton-per-day  operation.  From March 31, 1995
through  December  31, 1999 when  production  was  suspended,  22,710  ounces of
bullion  containing  13,305  ounces  of gold and 4,667  ounces  of  silver  were
produced at the SSGM and then sold at the respective current world market price.

There are  approximately  1.5 million  ounces of proven and  estimated  gold ore
reserves  at the  SSGM.  Currently,  and for  all  financial  statement  periods
presented  herein,  the SSGM is the only one of the Company's mining  properties
which has generated  revenues,  although there are strong initial indications of
commercial gold ore present at the other gold mine sites.

At  the  current  stage  of  the  exploration  and  development,  the  Company's
geologists have defined the following gold reserves:
<TABLE>

<CAPTION>
                                                                                            Ounces ----------------------------
                                                         Tons           Average Grade       Contained     Probable
San Sebastian Gold Mine
<S>                                                      <C>            <C>                 <C>
(a) Virgin ore, dump waste material and tailings         14,404,096     0.081               1,166,732
(b) Stope fill (estimated)                                 1,000,000    0.340               ________      340,000
                                                         ---------------                            -------------
                                                         15,404,096                         1,166,732     340,000
</TABLE>

The anticipated  recovery for processing via the SCMP will range from 85% to 95%
and for heap leaching from 65% to 70%.

As of March 31,  2002,  the total  investment,  including  interest  and holding
costs,  in the El Salvador  mining  projects by  Commerce,  three of  Commerce's
subsidiaries, Sanseb, and the Joint Venture amounted to $76,325,606.

SSGM Joint Venture Arrangements

Commerce  acquired 82 1/2% of the  authorized  and issued  common  shares of San
Sebastian Gold Mines, Inc. ("Sanseb"),  a Nevada corporation formed on September
4, 1968. The balance of Sanseb's shares are held by approximately  200 unrelated
shareholders.  From 1969 forward, Commerce has provided substantially all of the
capital required to develop a mining operation at the SSGM, to fund exploration,
and to acquire and refurbish the SCMP.

On  September  22,  1987,  Commerce  and  Sanseb  entered  into a joint  venture
agreement (named the  "Commerce/Sanseb  Joint Venture" and sometimes referred to
herein as the "Joint Venture" or "Comseb") to formalize the relationship between
Commerce  and Sanseb with respect to the mining  venture and to divide  profits.
The terms of this agreement  authorize  Commerce to supervise and control all of
the business  affairs of the Joint Venture.  Under this agreement 90% of the net
pre-tax  profits of the Joint  Venture will be  distributed  to Commerce and ten
percent to Sanseb,  and  because  Commerce  owns 82 1/2% of the  authorized  and
issued  shares of Sanseb,  Commerce  in effect has an over 98%  interest  in the
activities of the Joint Venture. In order to maintain current accounting between
Commerce and Sanseb, the interest charges to Sanseb on advances made by Commerce
are kept separately.  Therefore,  when profits are earned, the interest recorded
will be paid from the cash distributions made to Sanseb.

The Joint  Venture  leases  the SSGM from the  Company's  52%-owned  subsidiary,
Mineral San Sebastian,  S.A. de C.V. ("Misanse"),  an El Salvadoran corporation.
Although Misanse owns the real estate comprising the site of the SSGM, the lease
agreement  grants  Comseb the right to all gold  produced in exchange for a five
percent  royalty  over a term of 25 years  beginning  on the  first  day gold is
produced,  which Comseb may, at its option,  extend for an  additional 25 years.
Because Commerce owns 52% of Misanse, Comseb in effect pays to its shareholders,
excluding  Commerce,  a net  royalty  amounting  to less  than two and  one-half
percent of the SSGM gold production.

The Joint  Venture is  registered  as an operating  entity to do business in the
State of Wisconsin,  U.S.A. and in the Republic of El Salvador, Central America.
The Joint Venture Agreement  authorizes Commerce to sign agreements on behalf of
the Joint Venture.

Organizational Structure

The percentage of ownership of the Joint Venture and the Company's  subsidiaries
are shown below and are included in the consolidated financial statements of the
Company.  All  significant  intercompany  balances  and  transactions  have been
eliminated.

                                                                   % Ownership
Homespan Realty Co., Inc. ("Homespan")                                  100.0
Mineral San Sebastian, S.A. de C.V.  ("Misanse")                         52.0
Ecomm Group Inc. ("Ecomm")                                              100.0
San Luis Estates, Inc. ("SLE")                                          100.0
San Sebastian Gold Mines, Inc. ("Sanseb")                               82.5
Universal Developers, Inc.  ("UDI")                                     100.0
Commerce/Sanseb Joint Venture ("Joint Venture")                         90.0

Commerce was originally formed as a Wisconsin corporation  (September 14, 1962).
It then merged into a Delaware corporation on July 26, 1971 and on April 1, 1999
it merged  back into a  Wisconsin  corporation.  It owns 52% of  Misanse,  an El
Salvadoran corporation that was formed on May 8, 1960, reinstated on January 25,
1975 and  reincorporated on October 22, 1993.  Commerce also owns 82 1/2% of the
San  Sebastian  Gold  Mines,  Inc.  (SSGM)  which  was  chartered  as  a  Nevada
corporation  on  September  4, 1968.  Misanse has a mining  concession  with the
government of El Salvador and is the owner of the SSGM real estate.  Misanse has
assigned the mining  concession to Commerce  Group Corp.  and San Sebastian Gold
Mines,  Inc., the mining  operator formed on September 22, 1987 and known as the
Commerce/Sanseb  Joint  Venture  (Comseb).  Comseb  operates  the SCMP (the gold
processing  plant  acquired on February 23, 1993) and has conducted  exploration
and  exploitation  at the following El Salvador gold mines:  SSGM (since October
1968),  San Felipe-El Potosi (from September 1993 through November 1999) and its
extension  Capulin (from May 1995 through  November 1999);  Modesto (from August
1993 through  July 1997);  Hormiguero  (from  September  1993 through  1998) and
Montemayor (from March 1995 through July 1997).

The  Government  of El  Salvador  has issued the  Modesto,  Montemayor,  and San
Felipe-El  Potosi  mining  concessions  to  others.  Commerce's  attorneys  have
challenged  the legality of the  issuance of these  concessions.  Commerce  owns
properties believed to be crucial to the Modesto Mine and it holds leases to the
key  property of the  Montemayor  Mine.  It is in the  process of  applying  for
concessions on the property it owns (Modesto) and on the property that it leases
(Montemayor). It also has a lease agreement with the owners of the San Felipe-El
Potosi Mine.

All of the mines  mentioned  were  formerly in  production  and did produce gold
and/or  silver.  In  addition  to the  channel  trenching,  test pit holes,  and
underground  adit  openings,  the Joint  Venture  has  acquired  its own diamond
drilling  rig  and  has  contracted  with  others  to  explore  in  depth,   the
above-described  potential targets.  All of the mining properties have promising
geologic prospects, alternations, and historical records that bear evidence that
all have been mined and produced gold on a commercial basis in the past.

World Gold Market Price, Customers and Competition

Since the Joint Venture was in operation and produced gold on a curbed  start-up
basis, its revenues,  profitability and cash flow were greatly influenced by the
world market price of gold. The gold world market price is generally  influenced
by basic supply and demand  fundamentals.  It is  unpredictable,  volatile,  can
fluctuate  widely and is  affected  by  numerous  factors  beyond the  Company's
control, including, but not limited to, expectations for inflation, the relative
strength of the United  States'  dollar in  relation to other major  currencies,
political and economic conditions,  central bank sales or purchases,  inflation,
production costs in major gold-producing  regions, and other factors. The supply
and demand for gold can also greatly  affect the price of gold.  The Company has
not and does not expect in the foreseeable  future to engage in hedging or other
transactions  to minimize the risk of fluctuations in gold prices or currencies.
Gold and silver can be sold on numerous  markets  throughout the world,  and the
market price is readily  ascertainable for such precious metals.  There are many
worldwide  refiners and smelters  available  to refine  these  precious  metals.
Refined  gold and silver can also be sold to a large  number of  precious  metal
dealers  on a  competitive  basis.  The Joint  Venture's  SCMP  operation  which
produces dore is refined by and sold to a refinery located in the United States.

At this time the Joint  Venture  believes  that,  due to its  current  financial
capacity,  it may not be a major  gold  producer  based  on the  size of  larger
existing gold mining  companies.  The Company believes no single  gold-producing
company has a large  impact to offset  either the price or supply of gold in the
world market.  There are many mining  entities in the world producing gold. Many
of these companies have substantially  greater technical and financial resources
and larger gold ore reserves  than the Company.  The Company  believes  that the
expertise of the Joint Venture's experienced key personnel, its ability to train
its employees,  its low overhead,  its gold ore resources,  its accessibility to
the mine, its infrastructure, and its projected low cost of production may allow
it to compete  effectively  and to produce  reasonable  profits.  The  Company's
present  and past  practice  has been to sell its gold and  silver  at the world
market prices.

The profitability and viability of the Joint Venture is dependent upon, not only
the price of gold in the world market (which can be unstable), but also upon the
political  stability of El Salvador and the availability of adequate funding for
either the SCMP operation or the SSGM open-pit,  heap-leaching  operation or for
the other exploration projects.

As of this date, inflation, currency and interest rate fluctuations have not had
a material impact on the Company or its results of operations.

Seasonality

Seasonality does not have a material  impact,  but the rainy season (May through
November) can curtail production.

Environmental Matters

Since the  Government of El Salvador has  established a new Mining Law effective
February 1996, its exploration, development, and production programs are subject
to environmental  protection.  The Government of El Salvador has established its
own Department of Environment.

Environmental  regulations  add to the cost and time  needed  to bring new mines
into  production  and add to operating  and closure  costs for mines  already in
operation.  As  the  Company  places  more  mines  into  production,  the  costs
associated  with regulatory  compliance can be expected to increase.  Such costs
are a normal  cost of doing  business  in the mining  industry,  and may require
significant  capital and  operating  expenditures  in the future.  The Company's
policy is to adhere to the El  Salvador  environmental  standards.  The  Company
cannot  accurately  predict  or  estimate  the  impact  of any  future  laws  or
regulations developed in El Salvador that would affect the Company's operations.

All  operations by the Company  involving the  exploration  or the production of
minerals are subject to existing laws and  regulations  relating to  exploration
procedures,  safety  precautions,   employee  health  and  safety,  air  quality
standards,  pollution of water sources,  waste materials,  odor, noise, dust and
other  environmental   protection   requirements  adopted  by  the  El  Salvador
governmental authorities.  The Company may be required to prepare and present to
such  authorities  data  pertaining  to the effect or impact  that any  proposed
exploration  or  production  of  minerals  may have  upon the  environment.  The
requirements  imposed by any such authorities may be costly,  time consuming and
may delay operations. Future legislation and regulations designed to protect the
environment, as well as future interpretations of existing laws and regulations,
may require  substantial  increases  in  equipment  and  operating  costs to the
Company and delays,  interruptions,  or a termination of operations. The Company
cannot  accurately  predict or  estimate  the impact of any such  future laws or
regulations,  or future interpretations of existing laws and regulations, on its
operations.

The Company has submitted its environmental impact study with the appropriate El
Salvador  agency.  The  study  was  prepared  by an  independent  El  Salvadoran
consultant.

El Salvador, Central America Information Sources

The  most  current  information  about  El  Salvador  can be  obtained  from the
following sources:

1.       The latest Economic and Commercial Section,  Embassy of the United
 States of America in El Salvador,  Country Commercial Guide
         can be obtained through the Internet from the following website:
 http://www.usinfo.org.sv/econcommguide.htm

2.       General     information    can    also    be    obtained    through
    the    Internet    from    the    following    website:
         http://www.dirla.com/elsalvador2.html.

3.       The U.S.  Embassy can also be  contacted  at  Boulevard  Santa Elena
 Final,  Antiguo  Cuscatlan,  La  Libertad,  El Salvador,
         telephone (011) 503-278-4444 and fax (011) 503-278-6011.

4.       Background Notes on El Salvador can also be obtained from the U.S.
Department of State's  database at the following  website:
         http://www.state.gov.

Excerpts  from the website  mentioned in number 2 above,  provide the  following
information about El Salvador, Central America:

"About the size of Massachusetts, El Salvador is the smallest country in Central
America and most densely populated of the Central American countries.  Now, only
four years after a U.N.  sponsored peace treaty ended the country's  eleven year
bloody war, El Salvador is  considered  to have the most dynamic  economy in the
region.

"Thought  to be the most  industrialized  nation in Central  America,  the
  country's  hard  working  people,  and  improving  economic
indicators provide the investor with some of the building blocks for a
 successful venture. . . .

"A high volcanic mountain range serves as El Salvador's  rugged backbone,  along
which many of the most  important  urban centers are located.  The slopes of the
country's many volcanoes became the first agricultural  centers due to the rich,
volcanic  soils.  These  agricultural  centers,  Santa Ana,  San  Salvador,  San
Vicente,  etc.  have become the  country's  major cities and towns today,  which
share the names of their corresponding volcanoes.

"While the country  coastal areas and lowlands are  typically  hot, San Salvador
enjoys  an  average,  almost  unvarying,  temperature  of 82  degrees  ferenheit
[Fahrenheit],  28 degrees Celsius. The rainy season last[s] from May to October.
The best months for traveling are usually November through January.

"El Salvador,  the smallest  Central American  nation,  is bordered to the west
 by Guatemala,  to the north and east by Honduras and to
the south by the Pacific  ocean.  Its Pacific  coastline is 320 km long.  Aside
 from Belize,  El Salvador is the only Central  American
nation that does not have both Pacific and Caribbean ports. . . .

"The government of El Salvador is divided into Executive,  Legislative  branches
and the Supreme Court.  The president is freely elected to a five year term. The
Legislative branch,  called the `National Assembly',  is comprised of 60 members
who serve three year terms,  and the 13 member Supreme Court is appointed by the
National Assembly.

"The country is divided into 14 districts, called `departments'. Major political
parties  include the  right-wing  ARENA party,  the  left-wing  Farabundo  Marti
National Liberation Front (FMLN), the Christian Democratic Convergence Party and
the National Conciliation Party."

Operations, Other Than Mining

Commerce  independently and through its partially and wholly-owned  subsidiaries
conducts  other business  activities,  which at present are  substantially  less
significant than its mining exploration and development in El Salvador: (1) land
acquisition and real estate development  through its wholly-owned  subsidiaries,
San Luis Estates, Inc. ("SLE") and Universal Developers,  Inc. ("UDI"); (2) real
estate sales,  through its  wholly-owned  subsidiary,  Homespan Realty Co., Inc.
("Homespan");   and  (3)   advertising   and   various   businesses,   including
Internet-related businesses, through its subsidiary, Ecomm Group Inc. ("Ecomm").

Land Acquisition, Development, Ownership and Real Estate Sales

During the past years, the Company has  substantially  reduced its activities in
the business of real estate development which was conducted  principally through
its subsidiaries San Luis Estates,  Inc. ("SLE"),  a Colorado  corporation,  and
Universal Developers, Inc. ("UDI"), a Wisconsin corporation.

SLE had been the developer of a large tract of land for  recreation,  retirement
and for other individual  purposes.  This land consists of  approximately  7,000
acres.  It was subdivided in the San Luis North Estates  Subdivision  located in
Costilla  County,  Colorado,  abuts  the Town of San  Luis,  Colorado,  and lies
between the San Juan and Sangre de Cristo mountain ranges in southern  Colorado.
This tract of land had been  subdivided  into 1,205 five-acre or larger parcels,
unimproved  except for gravel roads now maintained by Costilla County,  however,
drainage, survey, staking, and water rights adjudication have been completed.

Misanse, the Company's majority-owned subsidiary (52%) owns the SSGM real estate
consisting  of   approximately   1,470  acres.   This  real  estate  is  located
approximately  two and  one-half  miles  northwest  of the city of Santa Rosa de
Lima, off of the Pan American Highway (a four-lane newly  constructed  highway),
and about 108 miles southeast of the capital city of San Salvador,  El Salvador,
and it is about 11 miles west from the border of the Country of Honduras.  It is
also  about 26 miles  from the city of La  Union  which  has  railroad  and port
facilities.

The Company owns  approximately  63 acres of land on the Modesto Mine site which
is located due north of the city of Paisnal and  approximately 19 miles north of
San  Salvador,  the capital city of El Salvador.  This real estate is pledged as
collateral for funds advanced to the Company.  It also leases  approximately 175
acres of land  considered  to be the  main  part of the  Montemayor  Mine in the
Department of Morazan.

The Joint Venture entered into a lease  agreement with the San Felipe-El  Potosi
Cooperative  ("Cooperative") of the city of Potosi, El Salvador on July 6, 1993,
to lease the real estate encompassing the San Felipe-El Potosi Mine for a period
of 30 years and with an option  to renew the lease for an  additional  25 years,
for the purpose of mining and extracting minerals.

Reference is made to "Item 2.  Properties," for additional information.

Homespan, the local real estate marketing subsidiary of the Company is presently
inactive.  It has no  significant  activity and is not material to the Company's
operation.

Internet Business and Advertising

The  Company  owns 100% of the  outstanding  common  stock of Ecomm  Group  Inc.
("Ecomm"),  a Wisconsin  corporation.  The Company,  in order to  diversify  its
business  activities,  on  January  29,  1999,  announced  its plans to have its
wholly-owned  subsidiary,  Ecomm,  enter into the web portal  business.  Ecomm's
strategy  is to  attempt  to  acquire  or to "roll  up"  Internet  websites  and
businesses and consolidate them into a web portal.

There can be no assurance  that Ecomm's  current  strategy  will be  successful.
Ecomm has not entered into any agreements  for the  acquisition of any websites,
web services or other technology in connection with the web portal.  There is no
assurance  that it will be able to enter into  contracts for the  acquisition of
such sites,  services and technology on terms  acceptable to Commerce and Ecomm.
The Internet business is highly speculative and competitive.

Patents and License Agreements

On July 23,  1987,  the  Government  of El  Salvador  delivered  and  granted to
Misanse, possession of a mining concession (license). On September 25, 1996, the
SSGM  concession was  reconfirmed  to comply with the 1996 El Salvadoran  Mining
Law. The Joint Venture  believes that its SSGM  concession is effective from the
time it was issued in July 1987.  The  concession  provides the right to extract
and  export  minerals  for a term of 25 years  (plus a 25-year  renewal  option)
beginning on the first day of  production  from the real estate owned by Misanse
and  encompassing  the  SSGM.  Misanse  assigned  this  concession  to the Joint
Venture. (Reference is made to "Item 2." for additional information.)

The Joint Venture has applications  pending or will apply for applications  with
the El Salvador Department of Energy, Mines and Hydrocarbons for the exploration
rights  under the  February  1996  Mining Law on the real  estate it owns at the
Modesto  Mine,  and the real  estate  it  leases  at the  Montemayor  Mine,  the
Hormiguero  Mine,  and  the San  Felipe-El  Potosi  Mine.  The  Company  and its
subsidiaries hold no patents or trademarks.

Significant Customers

The Company presently has no individual  significant customers in which the loss
of one or more would have an adverse  effect on any segment of its operations or
from whom the Company  has  received  more than ten percent of its  consolidated
revenues,  except for the sale of gold when the Joint Venture is in  production.
The gold in dore form is refined  and then sold at the world  market  price to a
refinery located in the United States.

Miscellaneous

Backlog  orders at this time are not  significant to either the Company's or its
majority-owned subsidiaries' areas of operations, or at this time is any portion
of their  operations  subject to  renegotiation  of profits  or  termination  of
contracts at the election of the United States' Government.

At this time,  neither the Company nor its majority-owned  subsidiaries  conduct
any material  research and development  activities,  except as indicated in this
report  with  respect  to  the  Joint   Venture  and  its  mining   exploration,
exploitation,  and development programs in the Republic of El Salvador,  Central
America.

The Company believes that the federal, state and local provisions regulating the
discharge of materials into the environment should not have a substantial effect
on the capital expenditures,  earnings or competitive position of the Company or
any of its  majority-owned  subsidiaries as the Company does not have any mining
activity in the United States.

Financial Information About Industry Segments Lines of Business

Operation

Campground:  For the years  ended March 31,  2001 and 2000,  revenues  have been
generated from the campground  business.  Although Homespan owned the campground
real estate,  the Company was the operator of the Standing Rock Campground (SRC)
until March 31, 2001.
The SRC was sold during the fiscal period ended March 31, 2001.

Land Sales

The  Company and its  subsidiaries  have sold their  remaining  lots in Colorado
during the fiscal year ended March 31, 2001.

Mining

The Company's  primary strategy,  through its Joint Venture,  is to use its SCMP
facilities to process gold ore transported from SSGM and from other  exploration
opportunities  located in the  Republic of El  Salvador.  The Joint  Venture has
produced gold at its SCMP  operations  from March 31, 1995 through  December 31,
1999. In addition to producing gold at the SCMP,  when funds are available,  the
Company  intends to  process  its SSGM gold ore via an  open-pit,  heap-leaching
system.  The Joint Venture announced the suspension of its SCMP facilities as of
December 31, 1999, in order to overhaul, repair, retrofit and expand the SCMP.

The Company  anticipates that the capital required for the purchase of equipment
and working  capital can be  obtained  from the sale of its common or  preferred
shares,  bonds,  equity  offerings,  loans,  leases,  partial  sale of its  gold
reserves,  sale of gold,  or from a  combination  of these  and  other  creative
funding  possibilities.  However,  the  Company  recognizes  that it may be more
difficult  to  obtain  financing  under  reasonable  terms and  conditions  when
considering the overall lack of interest in gold, the substantial decline in its
price,  and the low public market value of the Company's  common  shares.  These
circumstances  may change as the price of gold has begun to  increase in January
2002, and worldwide  investors have been  significantly  more  interested in the
ownership of gold.

Internet Business

As of March 31,  2002,  the  Company's  subsidiary,  Ecomm,  has not  earned any
revenue and has not  incurred  any  significant  expenses or capital  investment
other than that disclosed in this report.

Competition

The Company believes that neither it, nor any other competitor,  have a material
effect on the precious metal markets,  and that the price that the Joint Venture
will receive for its sale of gold is dependent upon world market conditions over
which neither it nor any other single  competitor have control.  The competition
is more intense in the Internet business.

Employees

As of March 31, 2002,  the Joint  Venture  employed  between 34 and 40 full-time
persons in El Salvador to perform its  limited  exploration,  exploitation,  and
development  programs;  to erect the cone crushing  system,  to provide  24-hour
seven-day-a-week  security at three  different  sites;  to provide  engineering,
geology,   drafting,   and   computer-related   services;   and  to  handle  the
administration  of its  activities.  None of these  employees are covered by any
collective  bargaining  agreements.  It has developed a harmonious  relationship
with  its   employees,   and  it  believes  that  it  was  the  largest   single
non-agricultural  employer in the El Salvador  Eastern Zone.  Also,  the Company
employs up to four persons,  including  part-time  help,  in the United  States.
Since the Joint  Venture has laid off most of its  employees,  the Joint Venture
had to pay the  severance  pay to its employees and therefore it had to sell and
continues to sell the Company's  common shares which were issued to the Commerce
Group Corp.  Employee  Benefit  Account.  El Salvador  employees are entitled to
receive  severance  pay,  which  is based on one  month's  pay for each  year of
employment.

<TABLE>
<CAPTION>
                                Industry Segments


1.      Unaffiliated Sales                                   Year Ended March 31,


<S>                                                          <C>                 <C>                             <C>
Industry                        Location                     2002                2001                            2000
-----------------------------------------------------------------------------------------------------            ----

Mining                          El Salvador                  $               0   $               0   $     413,713(*a)
Campground                      Missouri, USA                $               0   $    238,520        $       66,902

2.      There Were No Intersegment Sales

3.      Total Revenues                                       Year Ended March 31,

Industry                        Location                     2002                2001                            2000
-----------------------------------------------------------------------------------------------------            ----

Mining                          El Salvador                  $                0  $                0  $     500,124(*b)
Campground                      Missouri, USA                0                   238,520                      66,902
Other                           Delaware/Wis., USA                           38             3,662                  134
                                                             ---------------------------------------------------------
                                Total:                       $              38   $     242,182       $     567,160

4.      Operating Profit   (Loss)                            Year Ended March 31,

Industry                        Location                      2002               2001                           2000
-----------------------------------------------------------------------------------------------------           ----

Mining                          El Salvador                   $                0 $                0  $   (384,759)(*a)
Campground                      Missouri, USA                 0                  185,391                      (8,175)
Other Income                    Wisconsin, USA                38                 3,662                                 0
Corp. Hdqtrs.                   Wisconsin, USA                      (43,209)           (59,263)               (3,298)
                                                              -------------------------------------------------------
                                Total:                        $    (43,171)      $     129,790       $   (396,232)

5.      Identifiable Assets                                  Year Ended March 31,

Industry                        Location                      2002               2001                            2000
-----------------------------------------------------------------------------------------------------            ----

Mining                          El Salvador                   $31,677,285        $30,046,855         $27,831,734(*a)
Campground                      Missouri, USA                 0                  0                       1,135,500
Real Estate                     Colorado, USA                 0                  0                            21,000
Corporate Assets                                                     268,149            255,830             867,967
                                                              -----------------------------------------------------
                                Total:                        $31,945,434        $30,302,685         $29,856,201
</TABLE>

(*a)    The proceeds from the sale of gold and the gold inventory  received from
        the Joint Venture were used to reduce the advances due to the Company.

(*b)    Includes an added tax value refund from the Government of El Salvador
of $86,411 for 2000.

Item 2.  Properties

Mining Properties

The table below provides a summary of the most significant  mining properties in
which the Company has an interest.  More detailed information  regarding each of
these properties is provided in the text that follows:

   Commerce Group Corp./San Sebastian Gold Mines, Inc. Joint Venture Properties
 all located in the Republic of El Salvador, Central
                                     America

       Property  Description  Nature of Interest Date Interest was Acquired Cost
of  Interest  Amount  of Funds to Make  Property  Operational  Date Mine will be
Operational 1. San Sebastian Gold Mine located two and one-half miles  northwest
of the  city of  Santa  Rosa de Lima  and  the  Pan  American  Highway.  Mineral
concession  consisting of 100% ownership of the precious  metals  extracted from
this  mine.  1968  5% of the  gross  precious  metal  proceeds  or  $206 a month
whichever  is  higher.  This  is  dependent  on the  scale  of  production  that
management decides to perform. The amount of investment could be from $5 million
to $100 million. It was in operation on a curbed production basis until December
31, 1999 when  operations  were  suspended due to the need to overhaul,  repair,
restore and expand the SCMP facilities.

2.    San Felipe-El Potosi/Capulin Mine located near the city of Potosi, 18
 miles northwest of the city of San Miguel.
El Salvador legal counsel is in the process of reviewing alternatives to obtain
 the mineral concession.          07/06/93
5% of the gross precious metal proceeds.
Undetermined until a preliminary drilling program is
completed; estimated cost of drilling is $2 million.
Undetermined.

3.    Hormiguero Mine located five miles southeast of the San Cristobal Mill
 and Plant near the city of Comacaron.
Ownership of the tailings.            09/93                             The
 surface use of land (rent) is to be negotiated.
Undetermined until a preliminary drilling program is completed; estimated cost
 of drilling is $2 million.  Mine surface channel
trenching and adit cleaning should be completed to determine drilling  cost.
           Undetermined.

4.    Modesto Mine located near the city of Paisnal and about 19 miles north of
 San Salvador, the capital city.  Application is to be
submitted for a  mineral concession on the real estate owned by the Company to
 own 100% of the precious metals extracted from the
real estate owned by the Company.     09/93                             It
 appears as if this will be an underground operation except
in the Company-owned land.  Therefore, no cost for interest.
Undetermined until a preliminary drilling program is
completed; estimated cost of drilling is $2 million.
Undetermined.

5.    Montemayor Mine located about 14 miles northeast of SCMP and about six
 miles northwest of SSGM.            Application is to be
submitted for a mineral concession on the land leased by the Company to own
 100% of the precious metals extracted from the areas the
Company leases.                       07/95                             It
 appears that this will be an underground mine, therefore
current leases will have to be renegotiated and extended.
Undetermined until a preliminary drilling program is
completed; estimated cost of drilling is $2 million.              Undetermined.

6. San Cristobal Mill and Plant located off the Pan American Highway west of the
city of El Divisadero. Mill and Plant owned by Joint Venture. The real estate is
owned by an agency of the  Government  of El  Salvador.  Equipment  02/23/93 and
thereafter Lease 11/12/93 Equipment purchased and extensive retrofitting was and
continues to be performed.  Through  03/31/02,  a total of  $6,377,868  has been
invested in this plant and equipment. Depreciated value is $4,125,726. To expand
the plant,  including  a crushing  system to a capacity  of 500 tons per day; an
estimated sum of up to $3 million may be required,  all dependent whether new or
used  equipment  will be  purchased.  Curbed  production  commenced  March 1995;
expansion program in progress.  Operations suspended in the last quarter of 1999
until the existing equipment is overhauled,  repaired, restored and expansion of
the SCMP facilities are completed.

The San Sebastian Gold Mine

General Location and Accessibility

The SSGM is situated on a mountainous  tract of land consisting of approximately
1,470 acres of explored and  unexplored  mining  prospects.  The SSGM is located
approximately two and one-half miles off of the Pan American Highway,  northwest
of the city of Santa Rosa de Lima in the  Department  of La Union,  El Salvador.
The tract is typical of the  numerous  volcanic  mountains of the coast range of
southeastern El Salvador.  The topography is mountainous with elevations ranging
from 300 to 1,500 feet  above sea  level.  The  mountain  slopes are steep,  the
gulches are well defined, and the drainage is excellent.

There is good roadway access to the SSGM site. Most of the reconstruction of the
Pan American Highway from two lanes to four lanes (from the city of San Salvador
to the  Honduran  border)  has been  completed.  The city of Santa  Rosa de Lima
(approximately  three  miles from the SSGM) is one of the  larger  cities in the
Eastern Zone.  The SSGM is  approximately  30 miles from the city of San Miguel,
which  is El  Salvador's  second  largest  city,  and  approximately  108  miles
southeast  of  El  Salvador's   capital  city,   San  Salvador.   SSGM  is  also
approximately  26 miles  from the city of La Union  which has port and  railroad
facilities.  Major United States'  commercial  airlines  provide daily scheduled
flights to the Comalapa Airport which is located on the outskirts of the city of
San Salvador.

SSGM Reserves and Operation

GOLD ORE RESERVES (03/31/02)
<TABLE>
<CAPTION>
                                                             Tons      Average Grade      Contained Gold Ounces(1)
<S>                                                  <C>              <C>                 <C>
Ore - virgin                                         14,404,096       0.081               1,166,732
Stope fill (estimated)                                 1,000,000      0.340                  340,000
                                                     -----------                          ----------
   Totals                                            15,404,096                           1,506,732
</TABLE>

(1)      The estimated recoverable ounces of gold by processing: SCMP, 85% to
95%; heap leach, 65% to 70%.

The tailings,  dump material,  and stope fill at the SSGM are the by-products of
past mining  operations.  The  tailings are the residue of higher grade ore once
milled and processed to recover the then economically  feasible fraction of gold
present in the material. Most of the tailings, except the lower grade, have been
processed.  The dump  material is actually  gold ore which has been mined in the
search for higher  grades of gold ore and piled to the side of past  excavations
as it was  considered  at that  time to be too low of a grade of ore to  process
economically;  however,  it was reserved for future  processing.  The stope fill
that is available was in the past  considered to be too low of a grade of ore to
process  economically,  therefore it was primarily used to fill the voids in the
underground  workings to accommodate  the extraction of the higher grade of gold
ore in the past SSGM mining activities.  Virgin gold ore, as the term is used in
this  report,  is gold ore which is on the  surface and  readily  available  for
processing; it also includes the undeveloped underground gold ore.




Virgin  gold ore at the SSGM  represents  the  majority  of the  material  (14.4
million tons, including the dump waste material) in the Company's reserves.  The
Company  plans to use an open-pit  mining  method and will truck the lower grade
gold ore to one or more  heap-leaching  pads developed at the SSGM site. The use
of  open-pit  mining and  heap-leaching  techniques  will  enable the Company to
process a higher volume of gold ore than can be processed at the SCMP or through
underground  operations  used by the Company and others in the past. The Company
plans to continue to operate the SCMP after developing a leach-pad  operation at
the SSGM,  using the facility to process the higher grade ore it  encounters  in
the course of mining at the SSGM. The milling  operation at the SCMP is expected
to return a higher rate of gold recovery than can be expected from heap-leaching
techniques.

Approximately  960,000  tons of dump  material  present at the SSGM  site,  with
grades  ranging from 0.082 to 0.178 ounces of gold per ton,  have been  combined
with the virgin ore. An analysis of the underground stope fill material was made
by the Company's consulting geologist who has confirmed that about seven percent
of the stope fill had been removed and processed  during the  1973-1978  period.
The  grade of the  stope  fill  averages  0.34  ounces  of gold  per ton.  It is
estimated  that there are about one million tons  available  for SCMP  treatment
from the  underground  operations.  It is necessary to remove the material which
has caved in the adits to reach the stope fill areas,  or it will be encountered
in the open-pit operations.

All residue from the  contemplated  operations  will be stockpiled for potential
future processing dependent upon the price of gold,  improvements in technology,
and the depletion of higher grade material.

Misanse Mining Lease

The Company  (through the Comseb Joint Venture) leases the SSGM from Mineral San
Sebastian, S.A. de C.V. ("Misanse"),  an El Salvadoran corporation.  The Company
owns 52% of the total of Misanse's issued and outstanding shares. The balance of
the  shares  are owned by about 100 El  Salvador,  Central  American  and United
States' citizens.  (Reference is made to Note 7 of the financial  statements for
related party interests.)

On July 28,  1975,  an amended  lease  agreement  between  Misanse as lessor and
Sanseb  as  tenant  was  executed  by the  parties  giving  the  tenant  all the
possessions  and mining  rights that pertain to the SSGM as well as other claims
that may  already  have or could be claimed in the future  within the 1,470 acre
plat of land  encompassing  the  SSGM.  The  lease was  further  amended  to run
concurrently with the concession described herein and may be extended for one or
more equal periods by the tenant as long as the tenant has paid the rent and has
complied with other  obligations  under the lease and the concession.  The lease
further  provides  that the tenant  will pay rent to equal  five  percent of the
gross gold production revenues obtained from the leased SSGM and further commits
itself to maintain production taking into consideration market,  political,  and
other conditions.  In no case will the rent be less than 1,800 colones per month
(approximately  $206 per  month at the  current  rate of  exchange).  The  lease
further  provides that, in the event the lessor wishes to sell the property,  it
must first give preference to the Company;  the lease further  provides that the
tenant must give  preference to employ its former  mining  employees and Misanse
shareholders.

The lease is freely  assignable by the Joint Venture  without notice to Misanse.
The lease may also be cancelled  by the Joint  Venture on thirty days' notice to
Misanse and thereafter all legal obligations thereunder shall cease.

Misanse Mineral Concession-Government of El Salvador

In El Salvador,  the rights to minerals are vested with the government.  Mineral
rights are granted by the government through concessions or licenses.

On  January  27,  1987,  the  Government  granted  a right  to the  SSGM  mining
concession ("concession") to Misanse which was subject to the performance of the
El Salvador Mining Law requirements.  These rights were simultaneously  assigned
to the Joint Venture.

On July 23,  1987,  the  Government  of El  Salvador  delivered  and  granted to
Misanse,  possession of the mining concession.  This is the right to extract and
export minerals for a term of 25 years (plus a 25-year renewal option) beginning
on the first day of production  from the real estate which  encompasses the SSGM
owned by Misanse. Misanse assigned this concession to the Joint Venture.

Effective  February  1996,  the  Government  of El  Salvador  passed a law which
requires  mining  companies  to pay to it three  percent  of its gross gold sale
receipts  and an  additional  one  percent  is to be  paid  to  the El  Salvador
municipality  which has jurisdiction of the mine site. As of July 2001, a series
of  revisions  to the El  Salvador  Mining  Law offer to make  exploration  more
economical.  The  principal  change is that the charge  has been  reduced to two
percent of the gross gold receipts. The Company, in compliance with the new law,
has, or will file its applications for all of the mining concessions in which it
has an interest.

SSGM Current Status

The Company,  through its Joint Venture is conducting the following  activities:
It is in the  exploration,  development  and  pre-production  mining stage which
consists of completing its survey,  mapping,  site preparation,  infrastructure,
construction,  planning,  and the  performance  of the auxiliary  work needed to
resume  gold  production  at the SSGM site.  Presently,  the  Company is seeking
funding to purchase  equipment,  to purchase  inventory,  and to use for working
capital for its on-site proposed open-pit, heap-leaching operation. In addition,
the Company was engaged in the  exploration  and  development  of the peripheral
area (including diamond core drilling)  surrounding the main body of gold ore in
order to increase its gold ore reserves.

The Company's main objective and plan, through the Joint Venture,  is to operate
a moderate tonnage, low-grade, open-pit, heap-leaching operation to produce gold
on its SSGM site.  Dependent on the  funding,  the grade of ore, and the tonnage
processed,  it  anticipates  producing  more than 40,000 ounces of gold from its
open-pit,  heap-leaching operation during the first twelve full operating months
and then gradually increasing the annual production of gold to 113,000 ounces.

Proposed SSGM Open-Pit, Heap-Leaching Operation

The Joint Venture has placed the SCMP into a curbed production operation. It now
intends  to  obtain  a sum of $8  million  or  more  to  commence  an  open-pit,
heap-leaching  operation at the SSGM site.  An  additional $8 million or more is
estimated to be required for the crushing system,  plant, and mining  equipment,
if the Joint Venture were unable to lease this equipment.  After these funds are
obtained,  the Joint Venture intends to start  processing gold ore from its open
pit at a production  level of 2,000 tons per day.  During the second  year,  the
production level plans are to expand production to 3,000 tons per day (the funds
for this  expansion  could be generated  from  profits).  An increase to process
4,000  tons of gold ore per day would  take  place  during  the  third  year and
another  expansion  to  process  6,000  tons  per day  would  take  place at the
beginning of the fifth year;  all funds for this  expansion  should be available
through a combination  of earned  profits,  borrowings,  equity sales,  or other
creative sources.  With the anticipated  production volume, there is more than a
nine-year supply of gold ore as it is believed that a substantial amount of gold
ore  can be  proven.  The  Company's  geologists  have  defined  a  body  of ore
consisting  of 138 million  tons of gold ore at a grade of 0.025  ounces of gold
per ton.  This  reflects a  potential  of 3.4  million  ounces of gold and about
400,000 ounces of silver from this planned open-pit, heap-leaching operation. It
would  take  about 64 years to  process  this  body of gold ore at a  production
capacity of 6,000 tons per day.

SSGM Ownership of the Property

The San Sebastian Gold Mine real estate consisting of approximately 1,470 acres,
is owned by Misanse, a Salvadoran  corporation.  The Company owns 52% of Misanse
common shares that are issued and outstanding.

Environmental Matters

Since the  Government of El Salvador has  established a new Mining Law effective
February 1996, its exploration, development, and production programs are subject
to  environmental  protection.  The El  Salvador  Ministry  of  Environment  has
jurisdiction over environmental control.

Environmental  regulations add to the cost and time needed to bring new mines or
mills into  production  and add to operating and closure costs for mines already
in  operation.  As the  Company  places  more mines into  production,  the costs
associated  with regulatory  compliance can be expected to increase.  Such costs
are a normal  cost of doing  business  in the mining  industry,  and may require
significant capital and operating expenditures in the future. The Company cannot
accurately  predict or  estimate  the impact of any future  laws or  regulations
developed in El Salvador that would affect the Company's operations.

All  operations by the Company  involving the  exploration  or the production of
minerals are subject to existing laws and  regulations  relating to  exploration
procedures,  safety  precautions,   employee  health  and  safety,  air  quality
standards,  pollution of water sources,  waste materials,  odor, noise, dust and
other  environmental   protection   requirements  adopted  by  the  El  Salvador
governmental authorities. The Company is required to prepare and present to such
authorities   data  pertaining  to  the  effect  or  impact  that  any  proposed
exploration  or  production  of  minerals  may have  upon the  environment.  The
requirements  imposed by any such authorities may be costly,  time consuming and
may delay operations. Future legislation and regulations designed to protect the
environment, as well as future interpretations of existing laws and regulations,
may require  substantial  increases  in  equipment  and  operating  costs to the
Company and delays,  interruptions,  or a termination of operations. The Company
cannot  accurately  predict or  estimate  the impact of any such  future laws or
regulations,  or future interpretations of existing laws and regulations, on its
operations.

The  Company  has  submitted  an  environmental  impact  study  prepared  by  an
independent El Salvadoran consultant to the El Salvador Minister of Environment.





San Felipe-El Potosi Mine ("Potosi") and its extension the El Capulin Mine ("El
 Capulin")

Potosi Location

The Joint Venture has commenced an  exploration  program on the Potosi  property
which is located approximately 18 miles northwest of the city of San Miguel, the
second largest city in the Republic of El Salvador,  Central America, on a paved
road 15 miles to the city of  Chapalteque  and then west three miles on a gravel
road to the city of Potosi.  The  historical  records and the  exploration  work
performed by the Company  indicate  that the potential of developing a gold mine
is above average.

Potosi Lease Agreement

The Joint  Venture  entered into a lease  agreement  with the San Felipe  Potosi
Cooperative  ("Cooperative") of the city of Potosi, El Salvador on July 6, 1993,
to lease the real  estate for a period of 30 years,  with an option to renew the
lease for an  additional  25 years,  for the  purpose of mining  and  extracting
minerals.  Although the Company did not receive a concession/license from the El
Salvador  Department of Energy,  Mines and  Hydrocarbons,  it is preserving  its
rights under the lease agreement.

Hormiguero Mine ("Hormiguero")

Hormiguero Location

The Hormiguero is located  approximately  five miles southeast from the SCMP off
of the Pan  American  Highway in the  Departments  of San  Miguel  and  Morazan,
Comacaran  Jurisdiction,  in the Republic of El Salvador,  Central America.  The
Joint  Venture  plans to survey,  map,  plat,  plan and  develop an  exploration
program.

Hormiguero Current Status

The Joint  Venture is  planning to develop an  exploration  program on the 5,000
acre site. An application  for  exploration  has been filed on September 6, 1993
with the  Department  of Energy,  Mines and  Hydrocarbons,  a division of the El
Salvador Minister of Economy's office. In order to comply with the El Salvadoran
Mining Law adopted during February 1996, an exploration application was filed on
April  21,  1997.  The  Joint  Venture  has  temporarily  suspended  all  of its
activities  until  such time as the  question  of a  concession/license  will be
resolved.

Modesto Mine

Modesto Mine Location

The Modesto  Mine is located due north of the town of El Paisnal,  approximately
19 miles  north  of the  capital  city,  San  Salvador,  in the  Republic  of El
Salvador, Central America.

Modesto Mine Present Status

On or about  September 2, 1993, the Joint Venture  through one of its employees,
filed an  application  with the El Salvador  Minister of Economy,  Department of
Energy,  Mines and  Hydrocarbons  to explore the 4,000 hectares (9,800 acres) of
property known as the Modesto Mine. The  application,  together with the consent
to explore  this area from the  property  owners  owning  more than 25% of total
area,  has been  submitted  to the El  Salvador  Director  of Energy,  Mines and
Hydrocarbons.  Also,  the Joint  Venture had submitted its original plan to this
governmental agency on January 24, 1994,  outlining its exploration  program. In
order to comply with the current mining regulations adopted by the Government of
El  Salvador  during  February  1996,  the Joint  Venture  filed an  exploration
concession application on April 21, 1997.

After  completing  the  necessary  surveying,  mapping and  planning,  the Joint
Venture proceeded to clean and trench the surface and adit vein exposure.  Since
August 1993,  3,084 metric feet of surface channel  trenching  (10,177 feet) and
866 meters  (2,858 feet) of adit  cleaning  were  completed.  In addition,  four
inclines have been excavated for entry. A total of 4,027 fire assay samples were
performed  revealing an average grade of 0.035 ounces per ton. The Joint Venture
suspended  its  exploration  during July 1997 as the  Government  of El Salvador
awarded the  concession of the property to another mining  company.  The Company
believes that it owns the key property,  therefore  permission  from the Company
will be required  before entry can be made by others.  The Joint  Venture,  upon
advice  of  legal  counsel,  intends  to file an  application  for a  concession
(license) on the property it owns.

Montemayor Mine ("Montemayor")

Montemayor Location/Ownership

The Joint  Venture  has  obtained  leases for more than 175 acres of the surface
rights from a number of property  owners which permit the Joint Venture to enter
their  property for the purpose of  exploring,  exploiting  and  developing  the
property and then, if feasible, to mine and extract minerals from this property.
The term of this permission is for an infinite period. The Company believes that
this real estate  contains the "heart" of the mine.  Montemayor is located about
14 miles  northeast of the SCMP,  six miles  northwest of the SSGM and about two
and one-half miles east of the city of San Francisco Gotera in the Department of
Morazan, Republic of El Salvador. Historical records evidence that the potential
for the  Montemayor  to become an  exploration  and  development  gold-producing
prospect is good.

On April  22,  1997,  a current  exploration  concession  was filed  with the El
Salvador  Minister of Economy's office in order to comply with the El Salvadoran
Mining Law adopted in February  1996.  During July 1997, the Minister of Economy
awarded  the  concession  to others.  Since the Joint  Venture has leases on the
surface  of key real  estate,  it cannot be forced to allow  others to operate a
mine on this key part of the  property.  The Joint  Venture,  upon advice of its
legal counsel,  intends to file an application for a concession (license) on the
property it leases.

San Cristobal Mill and Plant ("SCMP") Recovery and Processing System

SCMP Location

SCMP is  located  near the city of El  Divisadero  (bordering  the Pan  American
Highway),  and is  approximately  13 miles east of the city of San  Miguel,  the
second largest city in the Republic of El Salvador, Central America.






SCMP Lease Agreement

Although the Joint Venture owns the mill, plant and related  equipment,  it does
not own the land and certain buildings.  On November 12, 1993, the Joint Venture
entered into an agreement with Corsain to lease  approximately 166 acres of land
and the buildings  for a period of ten years.  The annual rental charge was U.S.
$11,500,  payable in advance,  and was subject to annual  increases based on the
United  States'  percentage  rate of  inflation.  The annual  rental,  including
inflation  charges,  increased to $16,331 beginning on November 1, 2000. Also as
agreed,  an $11,500 security deposit was required and this deposit is subject to
an  annual  increase  based  on  the  U.S.  inflation  rate.  The  premises  are
strategically  located to process gold ore from the other mining  prospects that
are in the exploration stage near the SCMP.

SCMP Mill and Plant Process Description

Current Status

The SCMP (a precious metal cyanidation carbon-in-leach system) has a capacity of
processing  up to 200  tons of  virgin  ore per  day.  The  following  units  of
operations are required: crushing, grinding,  thickening,  agitated leaching and
recovery of precious metals via a carbon-in-leach (CIL) system.

The SCMP has been  designed to process up to 500 tons of virgin ore per day. The
SCMP operations were suspended as of December 31, 1999, as the plant, equipment,
and facilities have been place on a care and maintenance  status until such time
as the Company  has  sufficient  funds to complete a major  overhaul in order to
place it into operating condition.

SCMP Project Operating Plan

Current and Anticipated Production Schedule

Preproduction  development,  consisting  primarily  of  expansive  road and site
improvements to the mine and mill sites,  mill equipment  modifications  and the
development  and  hauling of virgin ore has taken  place  during the past years.
Initial  production  was from the SSGM  tailings.  Since  the  SSGM's  tailings'
resource is nearly exhausted, virgin gold ore is excavated from the SSGM surface
and hauled to the SCMP site.

The  other  sources  of gold ore from the SSGM to be used at the SCMP  operation
will be obtained  from the stope fill or higher  grade gold ore after  obtaining
access via the  underground  workings  or from the surface of the main ore body.
This gold ore will have to be crushed and pulverized,  which increases the cost,
but is expected to yield a 90% or higher recovery. The income,  dependent on the
market price of gold from the higher grade and recovery of gold ore, is expected
to be substantially  more than the cost involved,  providing that the world gold
market price does not decline to a level of unprofitability.

The virgin ore and/or  tailings  are  referred to herein as "gold ore." The gold
ore from the SSGM open-pit is loaded onto 20-25 ton dump trucks for transport to
the  SCMP.   Trucks  then  haul  the  gold  ore  on  the  Pan  American  Highway
approximately  15 miles from the SSGM.  Mine employees are  responsible  for the
mining activities including the determination of areas to be excavated, trucking
and loading operations, head sampling and sample analysis.

The gold ore is received at the SCMP where it is weighed,  logged,  and sampled.
Weighing  is  performed  utilizing  a conveyor  belt scale  and/or a truck scale
located on the SCMP site.  The excess gold ore is then unloaded at the SCMP site
and  stockpiled  in an area which was  developed  to allow  storage of more than
50,000 tons.

Environmental Matters

Reference is made to San Sebastian Gold Mine  "Environmental  Matters." The same
information applies.

Comseb Laboratories (Lab)

The Joint Venture has two  laboratories:  one located at the SCMP facilities and
the other on real  estate  owned by the Company  near the SSGM site.  A total of
78,441 samples of exploration fire assays have been completed  through March 31,
2002.  This total does not include the assays that were performed for production
purposes.

Corporate Headquarters

The Company  leases  approximately  4,032  square  feet of office  space for its
corporate  headquarters on the second floor of the building known as the General
Building located at 6001 North 91st Street,  Milwaukee,  Wisconsin, at a monthly
rental charge of $2,789 on a month-to-month  basis. The lessor is General Lumber
& Supply Co., Inc. ("General Lumber"),  a Wisconsin  corporation.  The Company's
President,  Edward L. Machulak  owns 55% of the common stock of General  Lumber.
Edward L.  Machulak  disclaims  any  interest in the  balance of General  Lumber
common stock which is owned by two of Mr. Machulak's  brothers,  his wife, and a
trust  for  the  benefit  of his  children.  In  addition,  the  Company  shares
proportionately  any increase in real property taxes and any increase in general
fire and extended coverage  insurance on the property.  In lieu of cash payment,
the Lessor has agreed to apply the monthly  rental  payments owed to the secured
open-ended, on-demand promissory note(s) due to it.

Item 3.  Legal Proceedings

The Company is not a party to any material legal proceedings.

Item 4.  Submission of Matters to a Vote of Security Holders

None.

Item 4(a).  Executive Officers and Managers of the Company

Listed below are the names,  ages and  positions of the  executive  officers and
managers of the Company and their  business  experience  during the past five or
more years.  All  officers are elected at the annual  meeting of the  directors,
which is normally held after the annual shareholders' meeting.

 Name    Age as of March 31, 2002        Executive Offices Held With Company (1)
Period Served  In Office (2)
Edward L. Machulak           75  President, Chief Executive, Operating and
Financial Officer Treasurer      9/14/62
to present 06/78  to present
Edward A. Machulak (Son of the President)  50  Executive Vice President
Secretary Assistant
Secretary             10/16/92 to present 1/12/87 to present 4/15/86 to 1/12/87
Luis A. Limay    60  Project and Mine Manager Manager of El Salvador Operations
  10/86 to 1995  03/95 to present

(1)  Neither have there been nor are there any arrangements  nor  understandings
     between any  Executive  Officer and any other person  pursuant to which any
     Executive Officer was elected as an Executive Officer.

(2)  Executive  Officers are elected by the Directors for a term expiring at the
     Directors' Annual Meeting and/or hold such positions until their successors
     have been elected and have qualified.

Family Relationships

Edward A. Machulak,  presently a Director,  Member of the  Directors'  Executive
Committee,  Director-Emeritus,  Executive Vice President,  and Secretary, is the
son of Edward L. Machulak,  the Company's Chairman of the Board of Directors who
is also a Member of the Directors' Executive Committee, and is the President and
Treasurer of the Company.  Attorney John E. Machulak (son of Edward L. Machulak)
of the law firm of Machulak,  Robertson & O'Dess,  S.C. is the legal counsel for
the Company.

Officers' and Key Management's Experience

The business experience of each of the Directors,  Officers,  and Key Management
is as follows:

Edward L. Machulak has been employed by the Company since  September  1962.  Mr.
Machulak  has served as the  President,  Director,  and Chairman of the Board of
Directors  of the Company  since 1962,  Treasurer  since 1978,  and on March 11,
1991, he was elected as a Member of the Directors' Executive  Committee.  He has
been a member of the Audit  Committee  since February 9, 1998, the date that the
Audit Committee was formed, and has been a  Director-Emeritus  since December 5,
1979.

He is a Director and the President or Officer of:  Homespan Realty Co., Inc.;
 San Luis Estates,  Inc.; San Sebastian Gold Mines,  Inc.;
and  Universal  Developers,  Inc. He is the  Secretary and  Treasurer of Ecomm
 Group Inc. He is the  authorized  representative  of the
Commerce/Sanseb  Joint  Venture.  He is a Director and Treasurer of Mineral San
  Sebastian  S.A. de C.V. Also he is involved in various
capacities  with the following  companies:  General Lumber & Supply Co.,  Inc.,
  Director;  Edjo,  Ltd.,  Director and  Secretary;  and
Landpak, Inc., Director and Secretary.

Edward A.  Machulak is a Director  and holds the  following  Company  positions:
Director as of October 28, 1985; a member of the Directors'  Executive Committee
as of March 11, 1991;  Director-Emeritus  since October 28, 2000; Executive Vice
President as of October 16, 1992;  Secretary as of January 12, 1987;  and he was
the Assistant Secretary from April 15, 1986 through January 12, 1987.

He is also a Director,  Vice President and Secretary of:  Homespan  Realty Co.,
 Inc. and San Luis Estates,  Inc.; and is a Director and
Secretary  of San  Sebastian  Gold Mines,  Inc. He has been a Director and
  Secretary of Ecomm Group Inc. and was elected  President on
May 17, 2000.

His  business  experience  is as follows:  Director and  Corporate  Secretary of
General  Lumber & Supply Co.,  Inc., a building  material  wholesale  and retail
distribution  center from April 1, 1970 to November 1983; Director and President
of Gamco,  Inc., a marketing  and  advertising  company,  from  November 1983 to
present; Director and President of Circular Marketing,  Inc., an advertising and
marketing  business,  from March 1986 to  present;  Director  and  President  of
MacPak,  a developer  of an Internet  City Guide,  since  September  26, 1996 to
present;  Director  and  President  of Edjo,  Ltd.,  a company  involved  in the
development,  subdividing  and sale of land and real estate from June 7, 1973 to
present;  Director and  President of Landpak,  Inc., a  corporation  which owns,
operates,  manages and sells real estate from September 1985 to present;  and he
was involved in other corporate real estate ventures and business activities.

Luis Alfonso  Limay was appointed to the position of Project and Mine Manager in
October 1986 and is  responsible  for  managing  the daily  affairs of the Joint
Venture.  During March 1995,  Mr. Limay was appointed to the position of Manager
of El Salvador  operations  which  supersedes  his  position as Project and Mine
Manager.  Mr. Limay was  employed by Sanseb from 1977 through  March 1978 as its
chief  geologist.  He  obtained  degrees in  geology  and  engineering  from the
National University of San Marlos, Lima, Peru, and the University of Toronto. He
was employed as chief geologist by Rosario  Resources in a Honduran  underground
mining operation and he held the same position with Canadian  Javelin,  a silver
mining company that formerly operated in El Salvador.

                                     PART II


Item 5.  Market for the Company's Common Stock and Related Stockholders' Matters

(a)  Principal Market and Common Stock Price

The Company's common shares were fully listed on the Boston Stock Exchange under
the symbol  "CMG" or  "CMG.BN,"  from  February  10, 1976 to January  29,  1999.
Trading was halted on January 29, 1999,  pending the  decision of the  Company's
appeal of Nasdaq's  delisting  of the trading of the  Company's  common  shares.
Currently the shares remain listed.

Since May 5, 1999, the Company's  common shares are being traded on the Over the
Counter Bulletin Board (OTCBB) under the symbol CGCO.

The  following  table  reflects  the range of high and low  trade  prices of the
common  shares as reported by Nasdaq or the OTCBB for the period ended March 31,
2002 and the highest  and lowest  trade price  during each  quarter  through the
period ended March 31, 2001.

<TABLE>
<CAPTION>
For the period ended                              March 31, 2002               March 31, 2001
                                                  High           Low           High             Low
<S>                       <C>                     <C>            <C>           <C>              <C>
First quarter ending June 30                      $0.16          $0.06         $0.4375          $0.1562
Second quarter ending September 30                $0.20          $0.08         $0.2969          $0.1250
Third quarter ending December 31                  $0.11          $0.07         $0.1719          $0.0469
Fourth quarter ending March 31                    $0.10          $0.06         $0.1250          $0.0625
</TABLE>

(b)  Approximate Number of Holders of Common Shares

As of March 31, 2002,  the common  shares were held by  approximately  4,002
  shareholders;  it is  estimated  that over 95% are United
States' residents.

As of March 31, 2002,  there were  approximately  1,660 holders of record of the
Company's  common  shares.  The  number  of  shareholders  of  the  Company  who
beneficially  own  shares  in  nominee  or  "street  name"  or  through  similar
arrangements are estimated by the Company to be approximately 2,342.

As of March 31, 2002,  there were issued and  outstanding:  (a)  17,468,008
shares of common  stock;  and (b) 670,000 stock options to
purchase common stock.

(c)  Dividend History

Subject to the rights of holders of any outstanding  series of preferred  shares
to receive  preferential  dividends,  and to other  applicable  restrictions and
limitations,  holders  of  shares of  common  shares  are  entitled  to  receive
dividends if and when  declared by the Board of Directors  out of funds  legally
available. No dividends were payable during the last fiscal year ended March 31,
2002.  The  declaration  of future  dividends will be determined by the Board of
Directors  in light of the  Company's  earnings,  cash  requirements  and  other
relevant considerations.

Item 6.  Selected Financial Data

The following table sets forth certain financial information with respect to the
Company  and is  qualified  in  its  entirety  by  reference  to the  historical
financial  statements  and notes  thereto of the  Company  included  in "Item 8.
Financial  Statements and  Supplementary  Data." The statement of operations and
balance  sheet  data  included  in this  table for each of the five years in the
fiscal  period  ended March 31,  2002 were  derived  from the audited  financial
statements and the accompanying notes to those financial statements.

<TABLE>
<CAPTION>
        Year Ended March 31 -------------------------------------------------------------------------------------------
<S>                                      <C>             <C>            <C>            <C>             <C>
                                         2002            2001           2000           1999            1998
Income statement data
Total revenue                            $              38              $     242,182  $     480,615   $    847,702    $ 1,295,908
                                         =========================================================================================
Income (loss) from continuing operations                  $    (43,171)  $     129,790  $  (396,232)    $    (90,266)   $    118,603
                                                         ===========================================================================
Income (loss) from continuing operations per share:
  Basic                                  $     (.0026)   $        .0092 $     (.0326)  $      (.0081)  $        .0115
                                         ============================================================================
  Diluted                                $     (.0025)   $        .0086 $     (.0282)  $     ( .0070)  $        .0100
                                         ============================================================================
  Weighted average shares - basic         16,349,170      14,174,662     12,172,867      11,165,127      10,358,132
                                         ==========================================================================
  Weighted average shares - diluted       17,019,170      15,094,662     14,053,002      12,813,368      11,783,532
                                         ==========================================================================
  Cash dividends per common share        $               0              $               0              $               0
                                         ===============================================================================
$                0                       $                0
===========================================================

Balance sheet data
  Working capital*1                      $     199,573   $     152,906  $     420,963  $     430,833   $     614,554
                                         ===========================================================================
  Total assets                           $31,945,434     $30,302,685    $29,856,201    $27,586,801     $25,799,651
                                         =========================================================================
  Short-term obligations*1               $11,486,216     $  9,998,955   $10,231,272    $  8,911,087    $  7,270,772
                                         ==========================================================================
  Long-term obligations                  $                0             $                0             $                0
                                         ================================================================================
$                0                       $     135,000
======================================================
  Shareholders' equity                   $20,459,218     $20,303,730    $19,624,929    $18,675,714     $18,393,879
                                         =========================================================================
</TABLE>

*1   Although  the  majority of the  short-term  obligations  are due on demand,
     these obligations have the affect of being long-term as most of the debt is
     due to  related  parties  who have not called  for the  payment  except for
     nominal  amounts  of their  short-term  loans  during the past five or more
     years.
Item 7.  Management's Discussion and Analysis of Financial Condition and
 Results of Operations

Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private
Securities Litigation Reform Act of 1995

The matters discussed in this report on Form 10-K, when not historical  matters,
are forward-looking  statements that involve a number of risks and uncertainties
that could cause actual results to differ  materially  from  projected  results.
Such  factors  include,   among  others,   the  speculative  nature  of  mineral
exploration,   gold  and  silver  prices,   production  and  reserve  estimates,
litigation,   environmental   and  government   regulations,   general  economic
conditions,  conditions in the  financial  markets,  political  and  competitive
developments  in  domestic  and  foreign  areas in which the  Company  operates,
availability of financing,  force majeure events,  technological and operational
difficulties  encountered in connection  with the Company's  mining  activities,
labor  relations,  other  risk  factors  as  described  from time to time in the
Company's filings with the Securities and Exchange  Commission and other matters
discussed  under this reporting  category.  Many of these factors are beyond the
Company's  ability to control or predict.  The Company  disclaims  any intent or
obligation  to update  its  forward-looking  statements,  whether as a result of
receiving new information, the occurrence of future events, or otherwise. Should
one or  more  of  those  risks  or  uncertainties  materialize,  or  should  any
underlying  assumption  prove  incorrect,  actual  results or outcomes  may vary
materially from those  described  herein as  anticipated,  believed,  estimated,
expected or intended.

Management's  discussion  and analysis  ("MD&A") of the financial  condition and
results of  operations  of the Company  should be read in  conjunction  with the
audited  consolidated  financial  statements and the notes thereto.  The Company
prepares  and files its  consolidated  financial  statements  and MD&A in United
States  ("U.S.")  dollars  and  in  accordance  with  U.S.   generally  accepted
accounting principles ("GAAP").

The following  discussion provides  information on the results of operations for
the three years ended March 31, 2002, 2001 and 2000 and the financial condition,
liquidity  and  capital  resources  for March 31, 2002 and 2001.  The  financial
statements of the Company and the notes  thereto  contain  detailed  information
that should be referred to in conjunction with this discussion.

Restatement of Prior Period Financial Statements

Accounting Overview

A redefined  structure of the  financial  statements  for the fiscal years ended
March 31, 2002,  2001 and prior years  reflects and includes the Commerce  Group
Corp./Sanseb  Joint Venture (Joint  Venture) on a consolidated  basis.  Prior to
this  change,  the  Company  reported  the  investment  in the Joint  Venture as
advances to the Joint Venture and the Company's  advances  included the interest
earned on these advances in anticipation of the interest being reimbursed. These
advances are restated and combined  with the  Company's  Consolidated  Financial
Statements.  Although the  elimination  of interest  income reduces the retained
earnings,  it does not  eliminate  the  interest  charged  by and  earned by the
Company which is due and payable to it and which is maintained additionally with
a separate accounting. In effect, this restructuring modifies only the financial
reporting  and at the time that the profits for the gold  mining  operation  are
distributed,  the interest  earned on these  advances  will be paid first to the
Company prior to any profit  distribution  and pursuant to an agreement  entered
into by the joint venture parties.

For the fiscal year ended March 31, 2002,  the Company was able to segregate the
disbursements  to the Joint  Venture to  identify  the  category  to be charged.
Reference is made to Note 2 in the financial statements for additional details.

The Company's Current Status

Precious Metal Mining

The Joint  Venture  has  produced  gold from March 31,  1995  through its fiscal
period  ended  December  31,  1999.  Its San  Cristobal  Mill and  Plant  (SCMP)
consisted primarily of used equipment that had been installed at its leased site
by a previous mining company.  The used processing equipment was acquired by the
Joint Venture on February 23, 1993.

Although  the Company  has on a  continuous  basis  retrofitted,  modified,  and
restored the equipment,  it presently lacks  sufficient funds to perform a major
overhaul and to expand the SCMP  facilities.  There is also much  uncertainty at
this time  relative  to the price of gold which in the past  months  reflected a
wide range of price fluctuations.

The Company's  management has temporarily  suspended its gold  processing  until
such  time  as it has  adequate  funds  for  the  retrofitting,  rehabilitation,
restoration,  overhauling,  and most  importantly  for the expansion of the SCMP
facilities.

The Company has a number of non-exclusive  independent consulting agreements for
the purpose of raising the sum of up to U.S.  $20  million.  The funds are to be
used to purchase  and  install  equipment,  perform  site  development,  working
capital for the SSGM open-pit, heap-leaching operation, and for the expansion of
the Joint Venture's SCMP.

Through  December  1999,  the  Joint  Venture  produced  gold on a curbed  basis
primarily  from the gold ore it is  excavating  from its SSGM open pit. The gold
was processed at its SCMP facility which is located  approximately 15 miles from
the  SSGM  site.  It is  contemplating  the  installation  of a pilot  open-pit,
heap-leaching  gold-processing system on the SSGM site. The cone crushing system
is being erected at this site. It also is continuing its SSGM site  preparation,
the expansion of its exploration and exploitation  targets,  and the enlargement
and  development  of its gold  ore  reserves.  It has  suspended  exploring  the
potential  of one  of the  other  gold  mine  prospects  identified  as the  San
Felipe-El  Potosi Mine and its extension  the El Capulin Mine.  The Company's El
Salvadoran  legal counsel is in the process of researching  legal  alternatives.
The  Montemayor  Mine and the Modesto  Mine have been placed on a standby  basis
pending the advice from its legal counsel relative to the filing of applications
for  concessions  (licenses)  on the  properties  it owns or on  which  it holds
leases. All of the mining properties are located in the Republic of El Salvador,
Central America.

The Joint Venture will continue its attempts to commence its production of gold.
Its objectives are to have an expanded complementary  operation while continuing
its  endeavor  to  obtain  sufficient  funds for the SSGM  open-pit,  heap-leach
operation.  The Company's main objective and plan, through the Joint Venture, is
to  operate  at  the  SSGM  site,  a  moderate  tonnage,  low-grade,   open-pit,
heap-leaching,  gold-producing  mine.  It intends to commence  this  gold-mining
operation as soon as adequate  funding is in place and the gold price stabilizes
at a higher level. Dependent on the grade of gold ore processed and the funds it
is able to obtain, it then anticipates  producing annually  approximately 10,000
ounces of gold from the SCMP  operation and  eventually up to 113,000  ounces of
gold  from  its  SSGM  open-pit,  heap-leaching  operation.  The  Joint  Venture
continues  on a limited  basis to  conduct  an  exploration  program  to develop
additional gold ore reserves at the SSGM.

The Joint  Venture  produced  gold from March 1995 through  December 1999 at the
SCMP through a start-up or preliminary operation,  which was a forerunner of its
greater goals. The Company's  revenues,  profitability and cash flow are greatly
influenced by the price of gold. Gold prices  fluctuate  widely and are affected
by  numerous  factors  which  will be beyond  the  Company's  control,  such as,
expectations for inflation,  the strength of the U.S. dollar,  overproduction of
gold, global and regional demand,  acts of terrorism,  or political and economic
conditions, or for that matter, many other reasons. The combined effect of these
and other factors is difficult; perhaps impossible to predict. Should the market
price of gold fall below the Company's production costs and remain at such level
for any sustained period, the Company could experience losses.

The Company believes that neither it, nor any other  competitor,  has a material
effect on the precious  metal markets and that the price it will receive for its
production  is  dependent  upon  world  market  conditions  over which it has no
control.

The Internet and Related Businesses

Historical Synopsis

The  Company on January  29,  1999,  announced  its plans to have its  51%-owned
subsidiary,  Ecomm  Group Inc.  (Ecomm),  enter  into the web  portal  business.
Ecomm's  objective  was and still is to become a  recognized  web  portal on the
world wide web by acquiring or "rolling-up" Internet websites.

The Company  intends to remain in the Internet and related  businesses and is in
the  process of  formulating  its future  plans.  The  Company  believes  that a
significant opportunity exists to develop and consolidate the many niches of the
Internet  community  into a web  portal.  With  experienced  management  it will
evaluate,   structure   and   attempt  to  combine   Internet-related   business
combinations, mergers and acquisitions. This is an ideal time for the Company to
pursue its  objectives as the Internet  industry has gone through a "shake-down"
process  which  could  mean  more   realistic   valuations  and  more  favorable
negotiations.

There can be no assurance  that Ecomm's  current  strategy will be successful as
the current  depressed  market price of the Company's  common  shares  presently
compels  it from  using  its  shares in an  exchange  for an  acquisition  of an
Internet company because of the substantial dilutive effect it would have. Ecomm
has not yet entered into any agreements for the acquisition of any websites, web
services or other technological services.  There is no assurance that it will be
able to enter into  contracts for the  acquisition  of such sites,  services and
technology on terms acceptable to the Company and Ecomm.  The Internet  business
is highly  competitive  and there is no  assurance  that Ecomm  will  generate a
profit,  even if Ecomm  acquires the  websites,  web services and  technology on
acceptable terms.

Results of Operation for the Fiscal Year Ended March  31, 2002 Compared to
 March 31, 2001 on a Restated Basis
------------------------------------------------------------------------------

The  Company  recorded  a net loss of  ($43,171)  or  ($.0026)  per  share on no
revenues in 2002.  This compares to a net income of $129,790 or $.0092 per share
on revenues  of  $238,520  in 2001.  There were no revenues in 2002 as the Joint
Venture   suspended  its  gold  mining  and   processing  due  to  its  need  to
rehabilitate,  overhaul and expand its SCMP.  Also,  the  unusually low price of
gold contributed to the decision of "moth balling" the operations.  The price of
gold has increased since January 2002 because of more worldwide  interest in the
ownership of gold.

The Joint Venture on December 31, 1999  suspended its gold mining and processing
due to its need to rehabilitate,  overhaul,  and expand the SCMP, and due to the
continuous decline and instability in the price of gold.

There was no current or deferred  provision  for income  taxes during the fiscal
period ended March 31, 2002 or 2001.  Additionally,  even though the Company has
an operating tax loss  carryforward,  the Company has previously  recorded a net
deferred  tax  asset  due  to an  assessment  of  the  "more  likely  than  not"
realization criteria required by the Statement of Financial Accounting Standards
No. 109, Accounting for Taxes.

Inflation did not have a material impact on operations in the fiscal years ended
March 31, 2002 or 2001.  The Company  anticipates  that  inflation  will have an
impact on continuing operations.

Interest  expense in the sum of $1,026,940 was  capitalized  by the Joint
 Venture during this fiscal period  compared to $1,063,469 for
the same period in 2001.

Almost all of the costs and expenses  incurred by the Company are  allocated and
charged to the Joint  Venture.  The Joint Venture  capitalizes or expenses these
costs and expenses and will continue to do so until such time when it is in full
production.  At the time production  commences,  these capitalized costs will be
charged  as an  expense  based  on a per unit  basis.  If the  prospect  of gold
production becomes unlikely,  all of these costs will be written off in the year
that this occurs.

Results of Operation for the Fiscal Year Ended March  31, 2001 Compared to
 March 31, 2000 on a Restated Basis
-------------------------------------------------------------------------------

The Company, on a consolidated basis,  including the Joint Venture and excluding
the interest income due from the Joint Venture,  had a net profit of $129,790 or
$.0092 per share for this fiscal year  compared to a net loss of  ($396,232)  or
($.0326) per basic share for its fiscal year ended March 31,  2000.  This profit
for the fiscal year was  primarily  from the sale of real estate.  The Directors
decided  that it would be in the best  interest of the Company to reduce debt by
selling the encumbered  non-income producing assets.  Without this net profit of
$163,050,  there would have been a loss of ($33,260).  Depreciation  of $320,491
contributed  substantially to the 2000 year loss. In fiscal 2001 there was no El
Salvador added value tax refund recorded as income whereas in 2000,  $86,411 was
refunded.

The Joint Venture on December 31, 1999  suspended its gold mining and processing
due to its need to rehabilitate,  overhaul,  and expand the SCMP, and due to the
continuous decline and instability in the price of gold.

There was no current or deferred  provision  for income  taxes during the fiscal
period  ended March 31,  2001 or 2000.  Additionally,  although  the Company has
operating tax loss carryforwards,  the Company has not previously recorded a net
deferred  tax  asset  due  to an  assessment  of  the  "more  likely  than  not"
realization criteria required by Statement of Financial Accounting Standards No.
109, Accounting for Income Taxes.

The  Company  adopted  Statement  of  Financial  Accounting  Standards  No.  128
(SFAS128), Earnings per Share in prior years. SFAS128's objective is to simplify
the  computation of earnings per share (EPS) and to make the U.S.  standard more
compatible  with  that  of  other  countries  and the  International  Accounting
Standards   Committee.   SFAS128   supersedes  APB  Opinion  15,  replacing  the
presentation  of "primary"  and "fully  diluted" EPS with "basic" and  "diluted"
EPS. Basic EPS is computed by dividing income  available to common  shareholders
(net income less any  dividends  declared on preferred  stock and any  dividends
accumulated  on cumulative  preferred  stock) by the weighted  average number of
common shares outstanding. Diluted EPS requires an adjustment to the denominator
to  include  the  number  of  additional  common  shares  that  would  have been
outstanding if dilutive  potential common shares had been issued.  The numerator
is adjusted to add back any  convertible  preferred  dividends and the after-tax
amount of interest recognized with any convertible debt.

Inflation did not have a material impact on operations in the fiscal years ended
March 31, 2001 or 2000.  Management of the Company  anticipates  that  inflation
will have an impact on continuing operations.

Interest  expense in the sum of $1,063,468 was  capitalized by the Joint
Venture during this fiscal period compared to $923,726 for the
same period in 2000.

Almost all of the costs and expenses  incurred by the Company are  allocated and
charged to the Joint  Venture.  The Joint Venture  capitalizes or expenses these
costs and expenses and will continue to do so until such time when it is in full
production on each of its mining  projects.  At the time  production  commences,
these capitalized costs will be charged as an expense based on a per unit basis.
If the prospect of gold production becomes unlikely,  all of these costs will be
written off in the year that this occurs.

Financing Activities, Liquidity and Capital Resources

As of December 31, 1999, the Joint Venture  suspended its SCMP operations  until
such time as it has adequate funding to repair,  retrofit and expand the mill to
process its gold ore. After almost five years of operation with used  equipment,
the facilities  require a major overhaul.  The low price of gold did not provide
an  adequate  cash  reserve  for these  needs.  Additional  equipment  has to be
purchased, delivered and installed.

The Company will  endeavor to commence an open-pit,  heap-leaching  operation at
the SSGM as there is a substantial amount of gold ore that grades less than 0.04
ounces per ton. The Company's  engineers had determined that a 2,000 ton-per-day
open-pit,  heap-leach,  start-up  operation may produce 1,280 ounces of gold per
month.  It is necessary to raise  adequate  funds from outside  sources for this
operation;  the amount  required is dependent  on the  targeted  daily volume of
production. A sum of U.S. $16 million would start the open-pit,  heap-leach at a
rate of 2,000 tons per day and the anticipated  profits and cash flow then could
be used to expand the operation to 6,000 tons per day.

The Company  continues to be cognizant of its cash liquidity until it is able to
produce  adequate  profits  from its SSGM gold  production.  It will  attempt to
obtain  sufficient  funds to assist the Joint  Venture in placing  the SSGM into
production as the anticipated  profits from the existing SCMP operation  (unless
accumulated over a period of time) appear  insufficient to meet the SSGM capital
and the other mining  exploration  requirements.  In order to continue obtaining
funds to conduct the Joint  Venture's  exploration,  exploitation,  development,
expansion  programs,  and  the  production  of  gold  from  the  SSGM  open-pit,
heap-leaching  operation,  it is necessary  for the Company to obtain funds from
other  sources.  The  Company  may  be  required  to  borrow  funds  by  issuing
open-ended,  secured,  on-demand or unsecured promissory notes or by selling its
shares to its directors,  officers and other interested investors or by entering
into a joint venture, merging, or developing an acceptable form of a combination
with other companies.

During the past, the Joint Venture was engaged in exploration,  exploitation and
development  programs designed to increase its gold ore reserves.  The prospects
of expanding the gold reserves are positive.  The Company believes that the past
invested  funds  significantly  contributed  to the value of the SSGM and to the
value of its other mining  prospects as the results of the  exploratory  efforts
evidence the  potential for a  substantial  increase of gold ore  reserves.  The
Company  was  unable to obtain  sufficient  funds  during  this  fiscal  year to
complete  the  modification  and  expansion  of the  SCMP or for  its  open-pit,
heap-leach  operation.  However, the Company did invest a sum of $531,541 during
this fiscal period, which was used to partially erect the cone crushing system.

The Company  estimates that it will need up to U.S. $16 million to start a 2,000
ton-per-day  open-pit,   heap-leaching  operation.   Eventually  the  production
capacity  would be  increased  in  stages to 6,000  tons per day so that  annual
production  could  be  113,000  ounces  of  gold  at the  SSGM.  The  use of the
$16,000,000  proceeds is as follows:  $8,000,000  for mining  equipment  and the
completion  of  erecting  a  crushing  system;  $3,033,548  for  the  processing
equipment and site and  infrastructure  costs;  and a sum of $4,966,452 is to be
used for working  capital.  The depressed  price of gold over the past years and
the Company's  incredibly low common share market price are major  deterrents in
raising cash for the Company's programs.  During the last quarter of this period
there was more interest in gold, as the price of gold continued to move upward.

Therefore,  the Company  continues to rely on its directors,  officers,  related
parties and others for its funding  needs.  The Company  believes that it may be
able to obtain such short-term  and/or equity funds as are required from similar
sources as it has in the past. It further  believes  that the funding  needed to
proceed with the continued  exploration of the other exploration targets for the
purpose of  increasing  its gold ore  reserves  will be greatly  enhanced if the
price of gold  continues  to increase.  These  programs  will  involve  airborne
geophysics, stream chemistry,  geological mapping, trenching, drilling, etc. The
Joint Venture  believes that it may be able to joint venture or enter into other
business arrangements to share these exploration costs with other entities.

From  September 1987 through March 31, 2002, the Company has advanced the sum of
$36,729,923 to the Joint Venture (which includes interest charges payable to the
Company),  and three of the  Company's  subsidiaries  have  advanced  the sum of
$590,265,  for a total of  $37,320,189.  The  investment  includes the charge of
$20,448,289 for interest  expense during this period of time. The funds invested
in the Joint Venture were used primarily for the exploration,  exploitation, and
development of the SSGM, for the  construction  of the Joint Venture  laboratory
facilities  on real  estate  owned by the  Company  near the SSGM site,  for the
operation  of the  laboratory,  for the  purchase of a 200-ton per day used SCMP
precious metals' cyanide leaching mill and plant, for the initial  retrofitting,
repair,  modernization  and  expansion of its SCMP  facilities,  for  consumable
inventory,  for working  capital,  for  exploration and holding costs of the San
Felipe-El Potosi Mine, the Modesto Mine, the Hormiguero Mine, and the Montemayor
Mine, for SSGM infrastructure, including rewiring, repairing and installation of
about two miles of the  Company's  electric  power  lines to provide  electrical
service, for the purchase of equipment,  laboratory chemicals, and supplies, for
parts and supply  inventory,  for the maintenance of the  Company-owned  dam and
reservoir, for extensive road extension and preservation,  for its participation
in the construction of a community bridge, for community  telephone building and
facilities,  for a  community  place of  worship,  for the  purchase of the real
estate on the Modesto  Mine,  for leasing the  Montemayor  real estate,  for the
purchase and erection of a cone  crushing  system,  for diamond  drilling at the
SSGM, for the purchase of a rod mill and a carbon  regeneration  system and many
other related needs.

Employees

As of March 31, 2002,  the Joint  Venture  employed  between 34 and 40 full-time
persons in El Salvador to perform its  limited  exploration,  exploitation,  and
development  programs;  to erect the cone crushing  system,  to provide  24-hour
seven-day-a-week  security at three  different  sites;  to provide  engineering,
geology,   drafting,   and   computer-related   services;   and  to  handle  the
administration  of its  activities.  None of these  employees are covered by any
collective  bargaining  agreements.  It has developed a harmonious  relationship
with its employees,  and it believes that in the past, it was one of the largest
single  non-agricultural  employers in the El Salvador  Eastern Zone.  Also, the
Company  employs up to four  persons,  including  part-time  help, in the United
States.  Since the Joint Venture has laid off most of its  employees,  the Joint
Venture had to pay the  severance  pay and other  benefits to its  employees and
therefore it had to sell and continues to sell the Company's common shares which
were issued to the Commerce Group Corp.  Employee Benefit  Account.  El Salvador
employees are entitled to receive  severance  pay, which is based on one month's
pay for each year of employment.

Related Party Loans, Obligations and Transactions

The  related  party  transactions  are  included  in  detail in the Notes to the
Consolidated Financial Statements.

Company Advances to the Joint Venture

Since  September  1987  through  March 31, 2002,  the Company,  and three of its
subsidiaries,  have advanced to the Joint Venture  $36,729,923.  Included in the
total advances is the interest charged to the Joint Venture by the Company which
amounts to $20,448,289  through March 31, 2002. The Company furnishes all of the
funds required by the Joint Venture.  This interest  charge has been  eliminated
from these financial statements.

Efforts to Obtain Capital

Since the  concession  was granted,  and through the present  time,  substantial
effort is exercised in attempting to secure funding through various sources, all
with the purpose to expand the  operations of the SCMP, to construct an open-pit
heap-leach  operation at the SSGM site,  and to continue the  exploration of its
other mining prospects.

The Company, Sanseb, and the Joint Venture consider the past political situation
in the Republic of El Salvador to have been unstable, and believe that the final
peace  declaration on December 16, 1992, has put an end to war.  Presently,  the
stigma of the past  unfavorable  political status in the Republic of El Salvador
exists and therefore certain investors continue to be apprehensive to invest the
funds required.  However,  as explained in this report,  the Company was able to
obtain a sum of funds to invest in the  expansion and  retrofitting  of its SCMP
and for the exploration of its other mining prospects.  The decline in the price
of gold to a 20-year low  depressed  the public  interest,  which  affected  the
market  price  of the  Company's  shares  as well as the  shares  of most of the
world-wide  mining  companies.  This decline in the Company's stock market price
places the Company in a situation of substantially diluting its common shares in
order to raise  capital.  The  Company  believes  that it will be able to obtain
adequate  financing  to conduct its  operations  from the same sources as in the
past. There are no assurances that funds will be available, except at this time,
there is a world-wide  interest in owning gold.  The price of gold has increased
substantially in the past few months.

Environmental Regulations

The  Company's  operations  are subject to  environmental  laws and  regulations
adopted by various  governmental  authorities in the  jurisdictions in which the
Company operates.  Accordingly,  the Company has adopted policies, practices and
procedures  in the areas of  pollution  control,  product  safety,  occupational
health and the  production,  handling,  storage,  use and  disposal of hazardous
materials to prevent material  environmental  or other damage,  and to limit the
financial liability which could result from such events.  However,  some risk of
environmental or other damage is inherent in the business of the Company,  as it
is with other companies engaged in similar businesses.

Dividends

For the foreseeable  future,  it is anticipated that the Company will use all of
its earnings to finance its growth and expansion,  therefore, dividends will not
be paid to shareholders.

Impact of Inflation

The impact of inflation on the Company has not been  significant in recent years
because  of the  relatively  low rates of  inflation  experienced  in the United
States.

Recent Accounting Developments

In July 2001, the Financial  Accounting  Standards  Board (FASB) issued SFAS No.
141,  "Business  Combinations,"  which  supersedes  Accounting  Principles Board
Opinion (APB) No. 16, "Business  Combinations." This Statement requires that all
business  combinations  be  accounted  for by the purchase  method,  establishes
specific  criteria for the  recognition  of intangible  assets  separately  from
goodwill  and  requires   unallocated   negative  goodwill  to  be  written  off
immediately as an  extraordinary  gain. The provisions of the Statement apply to
business  combinations  initiated after June 30, 2001. For business combinations
accounted for using the purchase  method before July 1, 2001,  the provisions of
this  Statement  will be  effective  in the first  quarter of 2002.  The Company
anticipates that the impact of this new standard will have an immaterial  impact
on the financial statements taken as a whole.

In July 2001, the Financial Accounting Standard Board (FASB) issued Statement of
Financial  Accounting  Standards (SFAS) No. 142,  "Goodwill and Other Intangible
Assets," which supersedes the Accounting  Principles Board (APB) Opinion No. 17,
"Intangible  Assets." This  Statement  addresses the accounting and reporting of
goodwill  and other  intangible  assets  subsequent  to their  acquisition.  The
Statement  also provides  specific  guidance on testing  goodwill and intangible
assets  for   impairment.   SFAS  No.  142   provides   that  (i)  goodwill  and
indefinite-lived  intangible assets will no longer be amortized, (ii) impairment
will be measured using various  valuation  techniques  based on discounted  cash
flows,  (iii)  goodwill will be tested for  impairment at least  annually at the
reporting unit level,  (iv) intangible  assets deemed to have an indefinite life
will be tested for impairment at least  annually and (v) intangible  assets with
finite lives will be amortized  over their useful lives.  All provisions of this
Statement  will  be  effective  in  the  first  quarter  of  2003.  The  Company
anticipates that the impact of this new standard will have no material impact on
the financial statements taken as a whole.

In August 2001, the FASB issued SFAS No. 143,  "Accounting for Asset  Retirement
Obligations," which addresses financial accounting and reporting for obligations
associated with the retirement of tangible  long-lived assets and the associated
asset  retirement  costs.  This  Statement  requires  that the  fair  value of a
liability  for an asset  retirement  obligation  be  recognized in the period in
which it is incurred  if a  reasonable  estimate of fair value can be made.  The
associated asset retirement costs are capitalized as part of the carrying amount
of the long-lived  asset.  All provisions of this Statement will be effective at
the beginning of fiscal 2004. The Company is in the process of  determining  the
impact of this standard on the Company's financial results when effective.

In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal  of  Long-Lived  Assets."  This  Statement  supersedes  SFAS  No.  121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of" and amends APB No. 30,  "Reporting  the Effects of Disposal of a
Segment of a Business,  and  Extraordinary,  Unusual and Infrequently  Occurring
Events and  Transactions."  This Statement  requires that long-lived assets that
are to be  disposed  of by sale be  measured  at the lower of book value or fair
value less costs to sell. SFAS No. 144 retains the fundamental provision of SFAS
121 for (a) recognition  and measurement of the impairment of long-lived  assets
to be held and used and (b)  measurement of long-lived  assets to be disposed of
by sale.  This  statement also retains APB No. 30's  requirement  that companies
report  discontinued  operations  separately  from  continuing  operations.  All
provisions of this Statement will be effective in the first quarter of 2003. The
Company  anticipates  that the impact of this new standard will have no material
impact on the financial statements taken as a whole.

Critical Accounting Policies

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires the Company to make estimates and assumptions for
the reporting period and as of the financial statement date. These estimates and
assumptions  affect  the  reported  amounts  of  assets  and  liabilities,   the
disclosure of contingent  liabilities  and the reported  amounts of revenues and
expenses. Actual results could differ from those amounts.

A critical  accounting  policy is one that is important to the  portrayal of the
Company's  financial  condition  and  results,  and requires the Company to make
difficult  subjective and/or complex  judgments.  Critical  accounting  policies
cover  accounting  matters  that are  inherently  uncertain  because  the future
resolution  of such  matters is unknown.  The  Company  believes  the  following
accounting policies are critical policies; accounting for its gold ore reserves,
environmental liabilities, income taxes and asset retirement obligations.

Gold ore reserves include proved reserves that represent estimated quantities of
gold in which  geological  and  engineering  data  demonstrate  with  reasonable
certainty to be  recoverable  in future years from known reserves under existing
economic and operating conditions.  The gold ore reserves are based on estimates
prepared  by  geology  consultants  and  are  used  to  calculate  depreciation,
depletion and  amortization  (DD&A) and  determine if any  potential  impairment
exists related to the recorded value of the Company's gold ore reserves.

The Company reviews, on an as needed basis, its estimates of costs of compliance
with  environmental  laws and the cleanup of various sites,  including  sites in
which  governmental  agencies  have  designated  the  Company  as a  potentially
responsible  party.  When it is probable that obligations have been incurred and
where a minimum  cost or a  reasonable  estimate  of the cost of  compliance  or
remediation can be determined, the applicable amount is accrued.

The Company  makes  certain  estimates,  which may include  various tax planning
strategies,  in  determining  taxable  income,  the timing of deductions and the
utilization of tax attributes.

Management  is required to make  judgments  based on historical  experience  and
future expectations on the future abandonment cost, net of salvage value, of its
mining properties and equipment.  The Company reviews its estimate of the future
obligation  periodically and accrues the estimated obligation based on the units
of production method.

Business and Market Risks

The  Company  continuously  reviews  the  mining  risks  it  encounters  in  its
day-to-day  operations.  It mitigates the likelihood  and potential  severity of
these risks through the  application of high operating  standards.  In addition,
there is great  emphasis on safety,  training and loss  control  programs at the
various sites.

The Company's operations have been and in the future may be, affected to various
degrees by changes in environmental regulations, including those for future site
restoration and reclamation  costs. The overall effect of these changes upon the
Company varies by jurisdiction, and are not predictable but, given the Company's
environmental  policies  and  programs,  the effect of any such  changes are not
expected to be material.

Gold Price

The Company's revenues, when it is in production, are derived primarily from the
sale of gold. The Company's net income can vary  significantly with fluctuations
in the market price of gold.

Foreign Currency Exchange Risk

The Company  conducts  the  majority  of its  operations  in the  Republic of El
Salvador, Central America.  Currently, El Salvador is on the U.S. dollar system,
and therefore there is no foreign currency exchange rate.

Cautionary Statement For Purposes of the "Safe Harbor" Provisions of the
 Private Securities Litigation Reform Act of 1995

Some of the statements contained in this report are forward-looking  statements,
such as estimates  and  statements  that  describe the  Company's  future plans,
objectives  or  goals,  including  words  to the  effect  that  the  Company  or
management expects a stated condition or result to occur. Since  forward-looking
statements  address  future events and  conditions,  by their very nature,  they
involve  inherent  risks and  uncertainties.  Actual  results in each case could
differ materially from those currently  anticipated in such statements by reason
of factors  such as  production  at the  Company's  mines,  changes in operating
costs,  changes in general  economic  conditions and conditions in the financial
markets,  changes in demand and prices for the  products  the Company  produces,
litigation, legislative, environmental and other judicial, regulatory, political
and  competitive  developments  in areas  in  which  the  Company  operates  and
technological and operational difficulties encountered in connection with mining
or Internet  activities.  Many of these factors are beyond the Company's ability
to control or predict.  The Company disclaims any intent or obligation to update
its   forward-looking   statements,   whether  as  a  result  of  receiving  new
information, the occurrence of future events, or otherwise.

Item 8.  Financial Statements and Supplementary Data

                   Index to Consolidated Financial Statements
                        And Supplementary Financial Data

                                                                         Page

Report of Independent Public Accountant.......................................38

Financial Statements:

Consolidated Balance Sheets, Years Ended March 31, 2002 and 2001..............39
Consolidated Statements of Operations, Years Ended March 31, 2002, 2001 and
2000...............................40
Consolidated Statements of Changes in Shareholders' Equity
  Years Ended March 31, 2002, 2001 and 2000...................................41
Consolidated Statements of Cash Flows, Years Ended March 31, 2002, 2001 and
2000...............................42
Notes to Consolidated Financial Statements....................................44

Supplementary Financial Data:

Report of Independent Accountant on the Financial Statement Schedules.........67

Schedules  of  financial  statements  other than those  listed  herein have been
omitted since they are either not required, are not applicable,  or the required
information is included in the financial statements and related notes.

                     REPORT OF INDEPENDENT PUBLIC ACCOUNTANT

To the Shareholders and Board of Directors of Commerce Group Corp.:

I have audited the  accompanying  consolidated  balance sheets of Commerce Group
Corp. ("Company"),  a Wisconsin Corporation,  and its subsidiaries,  as of March
31,  2002 and 2001,  and the  related  consolidated  statements  of  operations,
changes in  shareholders'  equity and cash flows,  for each of the three  fiscal
years in the  periods  ended  March 31,  2002,  2001 and 2000.  These  financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audits.

I conducted my audits in accordance with auditing  standards  generally accepted
in the United States.  Those standards require that I plan and perform the 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 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.  I  believe  that my  audits  provide  a  reasonable  basis for my
opinion.

In my opinion,  the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
Commerce Group Corp., its subsidiaries,  and the Joint Venture,  as of March 31,
2002 and 2001, and the  consolidated  results of their operations and their cash
flows for each of the three  fiscal  years in the periods  ended March 31, 2002,
2001 and 2000 in conformity with accounting principles generally accepted in the
United States.

Bruce Michael Redlin, CPA, LLC
Certified Public Accountant



Milwaukee, Wisconsin
May 10, 2002


<PAGE>


          COMMERCE GROUP CORP., ITS SUBSIDIARIES, AND THE JOINT VENTURE
                      Consolidated Balance Sheets--March 31
<TABLE>
<CAPTION>

                                                                                       2002               2001
                                                                           -----------------------------------
ASSETS
Current assets
<S>                                                                        <C>               <C>
  Cash                                                                     $       39,081    $       24,401
  Investments                                                              230,068           232,068
  Accounts receivable                                                      275,785           275,465
  Inventories                                                              39,562            39,562
  Prepaid items and deposits                                                         25,047            33,981
                                                                           ----------------------------------
    Total current assets                                                          609,543           605,477

Real estate (Note 5)                                                           23,336            23,336
Property, plant and equipment, net                                         4,125,726         3,376,422
Mining resources investment                                                  27,186,829        26,297,450
                                                                           ------------------------------
  Total assets                                                             $31,945,434       $30,302,685
                                                                           =============================
LIABILITIES
Current liabilities
  Accounts payable                                                         $     409,970     $     452,571
  Notes and accrued interest payable to related parties  (Notes 6 & 7)     6,923,874         5,610,380
  Notes and accrued interest payable to others (Note 6)                    754,251           720,572
  Accrued salaries                                                         2,475,765         2,288,015
  Accrued legal fees                                                       314,804           308,286
  Other accrued expenses                                                          607,552           619,131
                                                                           --------------------------------
      Total liabilities                                                    11,486,216        9,998,955

Commitments and contingencies (Notes 2, 4, 5, 6, 7, 8, 10 & 12)

SHAREHOLDERS' EQUITY
Preferred Stock
  Preferred stock, $0.10 par value:
  Authorized 250,000 shares;
  Issued and outstanding
  2002-none; 2001-none (Note 10)                                           0                 0

Common stock, $0.10 par value:
  Authorized 50,000,000 shares; (Note 10)
  Issued and outstanding:
  2002-17,468,008 (Note 10)                                                1,746,801         1,579,401
  2001-15,794,008 (Note 10)
Capital in excess of par value                                             18,792,109        18,760,849
Retained earnings (deficit)                                                       (79,692)          (36,520)
                                                                           ---------------------------------
  Total shareholders' equity                                                 20,459,218       20,303,730
                                                                           -----------------------------
  Total liabilities and shareholders' equity                               $31,945,434      $30,302,685
                                                                           ============================
</TABLE>

                        The  accompanying  notes are an  integral  part of these
consolidated financial statements.


<PAGE>


          COMMERCE GROUP CORP., ITS SUBSIDIARIES, AND THE JOINT VENTURE
                      Consolidated Statements of Operations
                           For the Year Ended March 31


<TABLE>
<CAPTION>
                                                             2002              2001             2000
                                                             ---------------------------------------
Revenues:
<S>                                                          <C>                                <C>                <C>
  Gold sales                                                 $                0                 $                0 $     413,713
  Campground income                                          0                 75,470                    66,902
  Real estate sales - net profit                                              0                       163,050                      0
                                                             ----------------------------------------------------------------------
    Total revenues                                           0                 238,520          480,615

Expenses:
  Cost of gold sales                                         0                 0                376,007
  Depreciation                                               0                 0                320,491
  General and administrative                                         43,209                           112,392           266,894
                                                             ------------------------------------------------------------------
    Total expenses                                           43,209            112,392          963,392

Other income:
  Interest income                                            0                 3,662            134
  El Salvador added value tax refund                                        38                 0       86,411
                                    -------------------------------------------------------------------------
    Other income                                                            38          3,662          86,545
                                                             ------------------------------------------------

Net profit (loss)                                            $   (43,171)      $   129,790      $ (396,232)
  Credit (charges) for income taxes                                          0                 0                0
                                                             ----------------------------------------------------
Net income (loss) after income tax credit (charge)           $   (43,171)      $   129,790      $ (396,232)
                                                             ==============================================

Net income (loss) per share (Note 2) basic                   $     (.0026)     $       .0092    $     (.0326)
                                                             ================================================

Net income (loss) per share (Note 2) diluted                 $     (.0025)     $       .0086    $     (.0282)
                                                             ================================================

Weighted av. common shares outstanding (Note 2)              16,349,170        14,174,662       12,172,867
                                                             =============================================

Weighted av. diluted common shares (Note 2)                  17,019,170        15,094,662       14,053,002
                                                             =============================================
</TABLE>


                        The  accompanying  notes are an  integral  part of these
consolidated financial statements.



<PAGE>


          COMMERCE GROUP CORP., ITS SUBSIDIARIES, AND THE JOINT VENTURE
           Consolidated Statements of Changes in Shareholders' Equity
                For the Years Ended March 31, 2002, 2001 and 2000


<TABLE>
<CAPTION>
                                                 Common Stock -----------------------------------------------------
                                                      Number of        Shares               Par Value          Capital in Excess
of Par Value                                      Retained Earnings (Deficit)

<S>            <C> <C>                            <C>             <C>               <C>             <C>
Balances March 31, 1999                           11,577,527      $1,157,753        $17,288,039     $   229,922

Net income (loss) for FY March 31, 2000                                                             (396,232)

  Dir./off./employee/services comp.               1,014,445       101,445           471,373
  Payment of debt                                 796,957         79,695            404,484
  Investments                                          500,000           50,000            238,450  ________
                                                  ------------====-------------=====--------------==
Balances March 31, 2000                           13,888,929      1,388,893         18,402,346      (166,310)

Net income (loss) for FY March 31, 2001                                                             129,790

  Dir./off./employee/services comp.               618,500         61,850            8,000
  Payment of debt                                 1,586,579       158,658           588,953
  Cash                                            200,000         20,000            0
  Common shares cancelled                           (500,000)         (50,000)          (238,450)   ________
                                                  -----------=====------------======-------------===
Balances March 31, 2001                           15,794,008      1,579,401         18,760,849       (36,520)

Net income (loss) for FY March 31, 2002                                                              (43,171)

  Dir./off./employee/services comp.               1,154,000       115,400           5,260
  Payment of debt                                 250,000         25,000            12,500
  Cash                                                 270,000           27,000              13,500
                                                  -------------------------------------------------
Balances March 31, 2002                           17,468,008      $1,746,801        $18,792,109     $ (79,691)
                                                  ============================================================
</TABLE>



                        The  accompanying  notes are an  integral  part of these
consolidated financial statements.


<PAGE>


          COMMERCE GROUP CORP., ITS SUBSIDIARIES, AND THE JOINT VENTURE
                      Consolidated Statements of Cash Flows
                          For the Years Ended March 31


<TABLE>
<CAPTION>
                                                                                  2002           2001           2000
--------------------------------------------------------------------------------------------------------------------
Operating activities:
<S>                                                                      <C>            <C>             <C>
  Net income (loss)                                                      $  (43,171)    $ 129,790       $ (396,232)
                                                                         ------------------------------------------
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation                                                             0              0               320,491
Changes in assets and liabilities
  Decrease (increase) in account  receivables and investments            1,680          (303)           83,607
  Decrease (increase) in inventories                                     0              28,000          88,860
  Decrease (increase) in prepaid items and deposits                      8,934          24,698          (9,003)
  Decrease (increase) in real estate                                     0              1,156,500       0
  Increase (decrease) in accounts payable and accrued liabilities        (54,183)       137,243         73,659
  Increase (decrease) in accrued salaries                                187,750        449,000         165,000
  Increase (decrease) in accrued legal fees                                      6,518         47,359          63,787
                                                                         --------------------------------------------
  Total adjustments                                                          150,699      1,842,497          786,401
                                                                         -------------------------------------------
  Net cash provided by (used in) operating activity                      107,528        1,972,287       390,169

Investing activities:
  Investment in mining resources                                         (1,638,682)    (2,233,369)     (2,166,900)
  Investments - other                                                                    0                   288,450    (334,336)
                                                                         --------------------------------------------------------
  Total                                                                  (1,638,682)    (1,944,919)     (2,501,236)

Financing activities:
  Net borrowings                                                         1,347,174      (865,919)       1,017,739
  Common stock issued                                                        198,660        549,011     1,345,447
                                                                         ----------------------------------------
Net cash provided by (used in) financing activities                      1,545,834      (316,908)       2,363,186

Net increase (decrease) in cash and cash equivalents                     14,680         (289,540)       252,119
Cash - beg. of year                                                            24,401        313,940           61,821
                                                                         --------------------------------------------
Cash - end of year                                                       $    39,081    $     24,400    $   313,940
                                                                         ==========================================
</TABLE>

                        The  accompanying  notes are an  integral  part of these
consolidated financial statements.



<PAGE>


          COMMERCE GROUP CORP., ITS SUBSIDIARIES, AND THE JOINT VENTURE
                Consolidated Statements of Cash Flows, continued

Supplemental disclosures of cash information:

1.       The  following  amounts of interest  expense  paid or accrued  were
  capitalized:  $1,026,940  (2002),  $1,063,468  (2001) and
         $923,726 (2000).

2.       There was no interest expense paid in cash for the periods ended March
 31, 2002, 2001 or 2000.

3.       The Company paid no income taxes during its fiscal periods ended March
 31, 2002, 2001, and 2000.

4.       The  investment  consists of securities  held for the Employee  Benefit
         Account  stated at cost and  precious  stones,  which are stated at the
         lower of cost or market value.

5.       Accounts  receivable  consist  of an  amount  advanced  to  Misanse,  a
         52%-owned  Corporation,  which  will be an offset  for  rental  charges
         included in the accounts payable due to the Joint Venture.

6.       Inventory consists of mining consumable items which are stated at the
 lower of average cost or market.

Supplemental  schedule of non-cash investing and financing activities during the
fiscal years ended March 31:

1.       The Company issued the following common shares for the values shown for
         employee  severance  pay  and  benefits,  for  director  fees,  officer
         compensation and for other services rendered:

                                    Shares         Value
2002                                1,154,000      $120,660
2001                                618,500        $  69,850
2000                                1,014,445      $572,818

2.       Other  non-cash  items were for the unpaid  salary and director,
  officer and legal fees;  this amounted to $194,268 for 2002,
         $449,360 for 2001, and $228,787 for 2000.

3.       There were no non-cash equipment financing activities in 2002, 2001,
 or 2000.




                        The  accompanying  notes are an  integral  part of these
consolidated financial statements.
(1)  The Company and Basis of Presentation of Financial Statements

(a)   Commerce Group Corp. ("Commerce," the "Company" and/or "Registrant") and
 its 82 1/2%-owned subsidiary,  San Sebastian Gold Mines,
      Inc.  ("Sanseb") both corporations based in the United States,  have
 formed the  Commerce/Sanseb  Joint Venture ("Joint Venture")
      for the purpose of performing  gold mining and related  activities,
  including,  but not limited to,  exploration,  exploitation,
      development,  extraction  and  processing  of precious  metals in the
 Republic of El Salvador,  Central  America.  Gold  bullion,
      currently the Joint Venture's  principal  product,  was produced (but not
 on a full production  basis) in El Salvador and refined
      and sold in the United  States.  Expansion of exploration is a goal at
 the San Sebastian Gold Mine ("SSGM") which is located near
      the city of Santa Rosa de Lima.  Exploration  is being  curtailed at
 other mining  projects  until  adequate  funding and license
      permits are obtained.  All of the mining projects are located in the
 Republic of El Salvador, Central America.

      As of April 1, 2000 the Joint Venture  decided to temporarily  suspend the
      San Cristobal Mill and Plant  ("SCMP")  operations  (operations  ceased on
      December 31,  1999) until such time as it has adequate  funds to retrofit,
      rehabilitate,  restore  and expand  these  facilities  and until  there is
      certainty  that the price of gold will be stabilized  at a higher  selling
      price.

      Currently  the Joint Venture is in the  pre-production  phase at the SSGM.
      Simultaneously,  it is performing  diverse programs relative to its mining
      projects. Prior to December 31, 1999, gold was produced on a start-up (not
      full production) basis.  Operations were temporarily ceased when the price
      of gold fell out of favor with  worldwide  investors who were reluctant to
      invest in gold or gold mining projects.

      The Joint Venture plans to begin its  open-pit,  heap-leaching  process on
      the SSGM site when adequate  funding becomes  available.  It also plans to
      continue its SSGM site  preparation,  the expansion of its exploration and
      exploitation  targets, and the enlargement and development of its gold ore
      reserves.  Furthermore,  it plans to explore the  potential  of other gold
      mine  exploration  prospects  in El Salvador.  Concurrently,  it is in the
      process of obtaining necessary funding for each of these separate programs
      while its Joint  Venture is erecting its crushing  system at the SSGM site
      and performing minor retrofit and rehabilitation work at the SCMP.

      The Company on January  29,  1999,  announced  its plans to  diversify  by
      having  (at that  time) its  wholly-owned  subsidiary,  Ecomm  Group  Inc.
      ("Ecomm"),  enter into the web portal business.  Ecomm's objective was and
      still is to  become a  recognized  web  portal  on the  world  wide web by
      acquiring or "rolling-up" Internet websites. Ecomm's principal business is
      to   evaluate,    structure   and   complete   Internet-related   business
      combinations,  mergers,  and  acquisitions.  It  plans to  concentrate  in
      specialized or niche portals which are being developed as hubs or gateways
      to the Internet for groups of individuals with specific interests.


(b)   Use of estimates

      The preparation of the financial statements, in accordance with accounting
      principles generally accepted in the United States, requires management to
      make estimates and assumptions  that affect the reported amounts of assets
      and liabilities and disclosure of contingent assets and liabilities at the
      date of the financial  statements and the reported amounts of revenues and
      expenses during the reporting period. Significant areas requesting the use
      of management  estimates relate to the  determination of mineral reserves,
      reclamation and environmental obligations, impairment of assets and useful
      lives to compute depreciation,  inflation and amortization. Actual results
      could differ from those estimates.

(2)  Significant Accounting Policies

Restatement of Prior Period Financial Statements

The Company changed its consolidation  policy as of April 1, 1998 retroactive to
September  1987, to include the income and expenses and the assets,  liabilities
and equity of its Joint  Venture  rather  than show it as an  investment  on the
balance  sheet.  As of March 31, 2002,  the  consolidated  balance  sheets,  the
consolidated statements of operations, the consolidated statements of changes in
shareholders'  equity,  and the consolidated  statements of cash flows were also
restated to reflect these changes.

The balance sheet effect of the change in policy was to reduce the Joint Venture
advances  by the  amount of  interest  charged  to the Joint  Venture.  Retained
earnings  were reduced by the same  offsetting  amount for the same period.  The
consolidated statements of changes in shareholders' equity were also restated to
reflect these changes.

The consolidated  statements of operations  through March 31, 2002 were restated
to  eliminate  the net  interest  income  earned by the  Company  from the Joint
Venture.

The  consolidated  statements  of cash flows were also  restated  to reflect the
changes in operating profits or losses.

Principles of Consolidation

The Joint Venture and the following  subsidiaries are all  majority-owned by the
Company  and  are  included  in the  consolidated  financial  statements  of the
Company.  All  significant  intercompany  balances  and  transactions  have been
eliminated.
                                                                  % Ownership
Homespan Realty Co., Inc. ("Homespan")                                  100.0
Mineral San Sebastian, S.A. de C.V.  ("Misanse")                         52.0
Ecomm Group Inc. ("Ecomm")                                              100.0
San Luis Estates, Inc. ("SLE")                                          100.0
San Sebastian Gold Mines, Inc. ("Sanseb")                               82.5
Universal Developers, Inc.  ("UDI")                                     100.0
Commerce/Sanseb Joint Venture ("Joint Venture")                         90.0




Investments

The  investments  consist of securities  held for the Employee  Benefit  Account
stated at cost and of precious  stones  which are stated at the lower of cost or
market value.

Accounts Receivable

The  accounts  receivable  primarily  consists of the  advances  to  Misanse,  a
52%-owned  subsidiary,  which  will be offset  for the  Misanse  rental  charges
included in the accounts payable.

Intercompany Balances

All intercompany balances and transactions have been eliminated.

Inventory

Inventory consists of consumable supplies.

Deferred Mining Costs

The Company,  in order to avoid expense and revenue  unbalance,  capitalizes all
costs directly  associated  with  acquisition,  exploration  and  development of
specific properties,  until these properties are put into operation, sold or are
abandoned.  Gains or losses  resulting  from the sale or  abandonment  of mining
properties  will be included in operations.  The Joint Venture  capitalizes  its
costs and  expenses  and will  write off  these  cumulative  costs on a units of
production  method at such time as it begins  producing  gold  derived  from the
virgin gold ore on a full production  basis. If the prospect of gold production,
due to different  conditions and circumstances  becomes  unlikely,  all of these
costs may be written off in the year that this occurs.

The Company regularly evaluates its carrying value of exploration  properties in
light of their  potential  for economic  mineralization  and the  likelihood  of
continued  work by either the Company or a joint  venture  partner.  The Company
may, from time to time, reduce its carrying value to an amount that approximates
fair market value based upon an assessment of such criteria.

Revenue Recognition

Revenue from the sale of gold and industrial  minerals is recognized  when title
passes to the buyer.

Property, Plant and Equipment

Property,  plant,  and equipment is stated at the lower of cost or estimated net
realizable value.  Mining properties,  development costs and plant and equipment
will be  depreciated  when  full  production  takes  place  using  the  units of
production  method  based upon proven and probable  reserves.  Until the Company
suspended  its  mining  operations,   the  assets  were  depreciated  using  the
straight-line  method over  estimated  useful  lives  ranging  from three to ten
years. Depreciation and amortization expenses include the amortization of assets
acquired, if any, under capital leases.  Replacements and major improvements are
capitalized.  Maintenance  and repairs  are charged to expense  based on average
estimated  equipment  usage.  Interest  costs  incurred in the  construction  or
acquisition of property, plant, and equipment are capitalized and amortized over
the useful lives of the related  assets.  Since the Company  suspended  its gold
processing operations it also ceased to depreciate its fixed assets.

Mineral Exploration and Development Costs

Significant property acquisition payments for active exploration  properties are
capitalized. If no minable ore body is discovered,  previously capitalized costs
are  expensed in the period the  property  is  abandoned.  Expenditures  for the
development of new mines,  to define further  mineralization  at and adjacent to
existing  ore  bodies,  and to expand  the  capacity  of  operating  mines,  are
capitalized  and  amortized  on the units of  production  basis over  proven and
probable reserves.

Statement of Financial Accounting Standards

The Company  evaluates the carrying value of producing  properties and equipment
by applying the  provisions of Statement of Financial  Accounting  Standards No.
121 (SFAS 121),  Accounting  for the  Impairment  of  Long-Lived  Assets and for
Long-Lived  Assets to be Disposed.  SFAS 121 requires that an impairment loss be
recognized  when the  estimated  future  cash flows  (undiscounted  and  without
interest) expected to result from the use of an asset are less than the carrying
amount of the asset. Measurement of an impairment loss is based on fair value of
the asset if the asset is expected to be held and used,  which would be computed
using discounted cash flows. Measurement of an impairment loss for an asset held
for sale would be based on fair market value less estimated costs to sell.

In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal  of  Long-Lived  Assets."  This  Statement  supersedes  SFAS  No.  121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of" and amends APB No. 30,  "Reporting  the Effects of Disposal of a
Segment of a Business,  and  Extraordinary,  Unusual and Infrequently  Occurring
Events and  Transactions."  This Statement  requires that long-lived assets that
are to be  disposed  of by sale be  measured  at the lower of book value or fair
value less costs to sell. SFAS No. 144 retains the fundamental provision of SFAS
121 for (a) recognition  and measurement of the impairment of long-lived  assets
to be held and used and (b)  measurement of long-lived  assets to be disposed of
by sale.  This  statement also retains APB No. 30's  requirement  that companies
report  discontinued  operations  separately  from  continuing  operations.  All
provisions of this Statement will be effective in the first quarter of 2003. The
Company  anticipates  that the impact of this new standard will have no material
impact on the financial statements taken as a whole.

Management's  estimates of gold and other metal prices,  recoverable  proven and
probable  reserves,  operating,  capital,  and reclamation  costs are subject to
certain  risks and  uncertainties  which may  affect the  recoverability  of the
Company's investment in property, plant, and equipment.  Although management has
made its best  estimate  of these  factors  based on current  conditions,  it is
reasonably  possible  that  changes  could  occur in the  near-term  which could
adversely  affect  management's  estimate  of the net cash flows  expected to be
generated from its mining properties.

Estimates  of future  cash flows are subject to risks and  uncertainties.  It is
possible  that  changes  could  occur  which may  affect the  recoverability  of
property, plant and equipment.

Deferred Financing Costs

Costs incurred to obtain debt financing are  capitalized  and amortized over the
life of the debt facilities using the effective interest method.



Interest Capitalization

Interest costs are  capitalized as part of the historical cost of facilities and
equipment, if material.

Income Taxes

The Company files a consolidated federal income tax return with its subsidiaries
(See Note 9). The Joint Venture files a U.S. partnership return.

Comprehensive Income

Effective April 1, 1999, the Company adopted  Statement of Financial  Accounting
Standards  No.  130 (SFAS  130),  Reporting  Comprehensive  Income.  SFAS 130 is
designed  to report a measure  of all  changes in equity of an  enterprise  that
result from  recognized  transactions  and other economic  events of the period.
Besides net income,  other comprehensive income includes foreign currency items,
minimum  pension  liability  adjustments,  and  unrealized  gains and  losses on
certain investments in debt and equity securities.  The Company believes that it
has no material items or other  comprehensive  income in any period presented in
the accompanying financial statements.

Earnings  (Loss) Per Common Share

The  Company  has in the past years  reported  its  "Earnings  per Share"  which
presently complies with SFAS No. 128. As required by this standard,  the Company
reports two earnings per share amounts,  basic net income and diluted net income
per share.  Basic net income per share is computed  by  dividing  income or loss
reportable to common shareholders (the numerator) by the weighted average number
of common shares outstanding (the  denominator).  The computation of diluted net
income or loss per share is similar to the  computation  of basic net income per
share except that the denominator is increased to include the dilutive effect of
the additional common shares that would have been outstanding if all convertible
securities,  stock  options,  rights,  share loans,  etc. had been  converted to
common shares at the last day of the fiscal year.

If on March 31, 2002, 670,000 option shares were added to the weighted number of
shares which amount to  16,349,170  common shares  issued and  outstanding,  the
total number of fully diluted  shares would amount to  17,019,170.  The loss per
share for this period ended March 31, 2002 is $.0025  cents per share.  The same
assumptions were used for the same 2001 fiscal period.

Foreign Currency

The Company is involved in foreign  currency  transactions  as it deposits  U.S.
funds  primarily  through bank wire transfer of funds from its U.S. bank account
into the Joint  Venture's  El  Salvador  bank  accounts.  The Joint  Venture  is
obligated to repay the Company for funds advanced in U.S.  dollars.  El Salvador
has a freely  convertible  currency  that  traded in this past fiscal year about
8.75 colones per U.S.  dollar.  This  exchange rate has been fairly stable since
1994. In this environment,  based on the free convertibility of colones, foreign
businesses have no problem making remittances of profits,  repatriating  capital
or bringing in capital for  additional  investments.  There is no  hindrance  in
exchanging dollars for colones or vice versa. As of January 1, 2001, El Salvador
has adopted the U.S.  dollar system and pegged the exchange rate at 8.75 colones
to one U.S.  dollar.  Almost all of the business in El Salvador is now conducted
in U.S. dollars.


Major Customer

In the past, the Joint Venture produced gold and silver. It sold its gold at the
world market price to a refinery located in the United States.  Given the nature
of the precious  metals that are sold, and because many potential  purchasers of
gold and silver exist,  it is not believed  that the loss of any customer  would
adversely affect either the Company or the Joint Venture.

(3) Investment in Property, Plant, Equipment  and Mining Resources

The  following is a summary of the  investment  in property,  plant,  equipment,
mining resources and development costs:
<TABLE>
<CAPTION>

                           March 31, 2002 ---------------------------------------------------------                         March
                                                                                                   ----------------------------
31, 2001 ----------------------------------------------------------
                            Cost           Accumulated  Amortization          Net            Cost              Accumulated
Amortization                Net
<S>                                                           <C>                            <C>                <C>
Mineral Properties and Deferred Development                   $27,186,826                    $27,186,826        $26,297,450
$26,297,450

Property, Plant and Equipment                   6,377,869       2,252,143         4,125,726      5,822,021        2,445,599
                                           --------------------------------------------------------------------------------
3,376,422
                           $33,564,695     $2,252,143        $31,312,552     $32,119,471    $2,445,599         $29,673,872
==========================================================================================================================
</TABLE>

Production  facilities and equipment are stated at cost and are amortized  based
on the lease arrangement, if any, and salvage value. Vehicles, office equipment,
laboratory equipment, and buildings are stated at cost and are depreciated using
the  straight-line  method over  estimated  useful  lives of three to ten years.
Maintenance  and  repairs are  charged to expense as  incurred.  Since the Joint
Venture  suspended  operations in view of the weak price of gold and the need to
expand these  facilities,  no depreciation  has been recorded during this fiscal
year.

Impairments

The Company  evaluates  the carrying  value of its  properties  and equipment by
applying the provisions of Statement of Financial  Accounting  Standards No. 121
(SFAS  121),  Accounting  for  the  Impairment  of  Long-Lived  Assets  and  for
Long-Lived  Assets to be Disposed  of.  Estimated  future net cash flows,  on an
undiscounted   basis,   from  each  property  are  calculated   using  estimated
recoverable ounces of gold (considering current proven and probable reserves and
mineral resources expected to be converted into mineral reserves.  The inclusion
of  mineral  resources  is based on  various  circumstances,  including  but not
limited to, the  existence and nature of known  mineralization,  location of the
property,  results of recent  drilling;  and analysis to demonstrate  the ore is
commercially recoverable),  estimated future gold price realization (considering
historical and current prices, price trends and related factors); and operating,
capital and site restoration costs. Reduction in the carrying value of property,
plant and equipment,  with a corresponding charge to income, are recorded to the
extent  that the  estimated  future  net cash  flows are less than the  carrying
value.

(4) Commerce/Sanseb Joint Venture ("Joint Venture")

The  Company  is in a joint  venture  with and owns 82 1/2% of the total  common
stock  (2,002,037  shares) of Sanseb,  a U.S. State of Nevada  chartered  (1968)
corporation.  The  balance  of  Sanseb's  stock  is  held by  approximately  180
non-related shareholders,  including the President of the Company who owns 2,073
common  shares.  Sanseb was formed to explore,  exploit,  research,  and develop
adequate  gold  reserves.  Sanseb  produced gold from the SSGM from 1972 through
February 1978.

On September  22,  1987,  the Company and Sanseb  entered  into a joint  venture
agreement to formalize their relationship with respect to the mining venture and
to account for the Company's  substantial  investment in Sanseb. Under the terms
of the agreement,  the Company is authorized to supervise and control all of the
business  affairs of the Joint  Venture and has the  authority to do all that is
necessary  to  resume  mining  operations  at the SSGM on  behalf  of the  Joint
Venture.  The net pre-tax  profits of the Joint Venture will be  distributed  as
follows:  Company  90%;  and Sanseb 10%.  Since the Company  owns 82 1/2% of the
authorized  and issued  shares of Sanseb,  the  Company in effect has over a 98%
interest in the Joint Venture activities.

The joint venture  agreement  further provides that the Company has the right to
be compensated  for its general and  administrative  expenses in connection with
managing the Joint Venture.

Under the joint  venture  agreement,  agreements  signed by the  Company for the
benefit of the Joint Venture create obligations binding upon the Joint Venture.

The Joint  Venture is registered to do business in the State of Wisconsin and in
the Republic of El Salvador, Central America.

Investments in Joint Venture

As of March 31, 2002, the Company's investments,  including charges for interest
expense  to the Joint  Venture,  were  $36,729,923  and  three of the  Company's
subsidiaries' advances were $590,265 for a total of $37,320,188.

Investment in El Salvador Mining Projects

During the fiscal year, the Company has advanced funds,  performed services, and
allocated its general and administrative costs to the Joint Venture.

As of March 31, 2002 and 2001,  the Company,  Sanseb and three of the  Company's
subsidiaries have invested (including carrying costs) the following in its Joint
Venture:

<TABLE>
<CAPTION>
                                                                                    2002            2001
                                                                                    -------------   ----
<S>                                                      <C>   <C>               <C>             <C>
The Company's advances (net of gold sale proceeds) since 09/22/87                $36,729,923     $32,519,136
The Company's initial investment in the Joint Venture                            3,508,180       3,508,180
Sanseb's investment in the Joint Venture                                         3,508,180       3,508,180
Sanseb's investment in the mining projects and amount due to the Company            31,989,058      29,505,884
                                                                        --------------------------------------
Total:                                                                           75,735,341      69,041,380
Advances by the Company's three subsidiaries                                            590,265         590,265
                                            ---------------------------------------------------  --------------
Combined total investment                                                        $76,325,606     $69,631,645
                         ===================================================================================
</TABLE>

SSGM Activity

The Company had no  significant  activity  at the SSGM site from  February  1978
through  January 1987. The present  status is that,  the Company,  since January
1987, and  thereafter,  the Joint Venture,  since September 1987, have completed
certain of the required mining pre-production  preliminary stages in the minable
and proven gold ore reserve  area,  and the Company is active in  attempting  to
obtain adequate financing for the proposed open-pit, heap-leaching operations on
this site.  The Joint  Venture  plans to resume its  exploration  and  expansion
program to develop  additional  gold ore  reserves in the area  surrounding  the
minable gold ore reserves.  Presently,  it is erecting its cone crushing  system
and performing minor rehabilitation repairs to its San Cristobal Mill and Plant.

Mineral San Sebastian S.A. de C.V. ("Misanse")

(a)  Misanse Corporate Structure

The SSGM real estate is owned by and leased to the Joint  Venture by Misanse,  a
Salvadoran-chartered corporation. The Company owns 52% of the total of Misanse's
issued and  outstanding  shares.  The balance is owned by  approximately  100 El
Salvador, Central American, and United States' citizens.

(b)  SSGM Mining Lease

On July 28,  1975,  an amended  lease  agreement  between  Misanse as lessor and
Sanseb as tenant was signed by the parties giving the tenant all the possessions
and mining  rights that  pertain to the SSGM as well as other  claims to mineral
rights  that may already  have or could be claimed in the future  within the 595
hectares  (1,470 acres) plat of land  encompassing  the SSGM. The 25-year lease,
which  begins on the date gold  production  begins,  was further  amended to run
concurrently  with the  concession  described  herein and may be extended for an
additional  25 years by the  tenant as long as the  tenant has paid the rent and
has complied  with other  obligations  under the lease and the  concession.  The
lease also provides that the tenant will pay rent  equivalent to five percent of
the gross gold  production  revenue  obtained  from the leased  SSGM and further
commits itself to maintain production taking into consideration market and other
conditions.  In no case will the rent be less  than  1,800  "colones"  per month
(approximately  $206 per month at the current rate of exchange).  The lease also
provides  that,  in the event the lessor  wishes to sell the  property,  it must
first give preference to the tenant;  the lease further provides that the tenant
must give preference to employ former mining employees and Misanse shareholders,
providing  they qualify for the  available  position.  The lease  agreement  was
assigned on January 29, 1987 to the Company and Sanseb  together with the mining
concession application and subsequently was pledged as collateral for loans made
by related parties. (Note 7)

The lease is freely  assignable by the Joint Venture  without notice to Misanse.
The lease may also be cancelled  by the Joint  Venture on thirty days' notice to
Misanse, and thereafter, all legal responsibilities thereunder shall cease.

(c)  Mineral Concession

On July 23, 1987,  the  Government  of El Salvador  granted and delivered to the
Company's 52%-owned  subsidiary,  Misanse,  possession of the mining concession.
This is the right to extract and export  minerals for a term of 25 years (plus a
25-year renewal  option)  beginning on the first day of production from the real
estate  which  encompasses  the SSGM owned by  Misanse.  Misanse  assigned  this
concession to the Joint  Venture.  The  concession was pledged as collateral for
loans made by related parties. (Note 7)

Effective  February  1996,  the  Government  of El  Salvador  passed a law which
requires  mining  companies  to pay to it three  percent  of its gross gold sale
receipts  and an  additional  one  percent  is to be  paid  to  the El  Salvador
municipality  which has jurisdiction of the mine site. As of July 2001, a series
of  revisions  to the El  Salvador  Mining  Law offer to make  exploration  more
economical.  The  principal  change is that the charge  has been  reduced to two
percent of the gross gold receipts. The Company, in compliance with the new law,
has, or will file its applications for all of the mining concessions in which it
has an interest.

SCMP Land and Building Lease

On  November  12,  1993,  the  Joint  Venture  entered  into an  agreement  with
Corporacion   Salvadorena   de   Inversiones   ("Corsain"),   an  El  Salvadoran
governmental agency, to lease for a period of ten years, approximately 166 acres
of land and  buildings  on which its gold  processing  mill,  plant and  related
equipment (the SCMP) are located,  and which is  approximately  15 miles east of
the SSGM site.  The basic annual lease  payment is U.S.  $11,500  (payable in El
Salvador  colones at the then current  rate of  exchange),  payable  annually in
advance,  unless otherwise  amended,  and subject to an annual increase based on
the annual United States'  inflation rate. As agreed, a security deposit of U.S.
$11,500 was paid on the same date and this deposit is subject to increases based
on any United States' inflationary rate adjustments.

Modesto Mine

Real Estate

The Company  owns 63 acres of land which are a key part of the Modesto Mine that
is located near the city of El Paisnal, El Salvador. This real estate is subject
to a  mortgage  and  promissory  note and is pledged  as  collateral  to certain
parties described in Note 7.

San Felipe-El Potosi Mine ("Potosi")

Real Estate Lease Agreement

The Joint Venture entered into a lease  agreement with the San Felipe-El  Potosi
Cooperative  ("Cooperative") of the city of Potosi, El Salvador on July 6, 1993,
to lease the real estate encompassing the San Felipe-El Potosi Mine for a period
of 30 years and with an option  to renew the lease for an  additional  25 years,
for the purpose of mining and extracting minerals.

Montemayor Mine

The Joint Venture has leased  approximately  175 acres of land that it considers
to be the key mining property. The terms of the various leases are one year with
automatic  renewal  rights.  This property is located 14 miles  northwest of the
SCMP,  six miles  northwest of the SSGM, and about two miles east of the city of
San Francisco Gotera in the Department of Morazan, El Salvador.

(5)  Synopsis of Real Estate Ownership and Leases

The  Company's  52%-owned  subsidiary,  Misanse,  owns the 1,470  acre SSGM site
located near the city of Santa Rosa de Lima in the  Department  of La Union,  El
Salvador.  Other real estate  ownership or leases in El Salvador are as follows:
the  Company  owns  approximately  63 acres at the Modesto  Mine;  and the Joint
Venture  leases  the SCMP  land and  buildings  on which  its  mill,  plant  and
equipment are located.  In addition,  the Joint Venture has entered into a lease
agreement  to lease  approximately  675 acres  based on the  production  of gold
payable in the form of royalties with a mining prospect in the Department of San
Miguel and it leases approximately 175 acres in the Department of Morazan in the
Republic of El Salvador. The Company also leases approximately 4,032 square feet
of office space in Milwaukee, Wisconsin. (6) Notes Payable and Accrued Interest

                                               03/31/02               03/31/01
Related  Parties  Mortgage and  promissory  notes to related  parties,  interest
ranging from one percent to four percent over prime rate, but not less than 16%,
payable monthly,  due on demand, using the undeveloped land, real estate and all
other assets owned by the Company,  its  subsidiaries  and the Joint  Venture as
collateral.  (Note 7) $6,923,874  $5,610,380  Other Short-term notes and accrued
interest  (March 31,  2002,  $416,305 and March 31,  2001,  $382,625)  issued to
creditors and other non related parties,  interest rates of varying amounts,  in
lieu of actual cash payments and includes a mortgage on a certain parcel of land
pledged as collateral located in El Salvador. 754,252 720,572

Total:                                       $7,678,126             $6,330,952
                                              =================================

(7)  Related Party Transactions

The Company,  in an attempt to preserve  cash,  had  prevailed on its
  President to accrue his salary for the past 21 years,  including
vacation pay, for a total of $2,457,765.

In addition,  with the consent and approval of the  Directors,  the President of
the Company,  as an individual  and not as a Director or Officer of the Company,
entered into the following financial  transactions with the Company,  the status
of which is reflected as of March 31, 2002:

The amount of cash funds which the Company has borrowed from its President  from
time to time, together with accrued interest, amounts to $4,643,856. To evidence
this debt,  the  Company  has issued to its  President  a series of  open-ended,
secured,  on-demand promissory notes, with interest payable monthly at the prime
rate plus two percent, but not less than 16% per annum.

The Company had  borrowed,  as of March 31,  2002,  an  aggregate  of  $703,647,
including accrued interest,  from the Company's  President's Rollover Individual
Retirement  Account  (ELM RIRA).  These  loans are  evidenced  by the  Company's
open-ended, secured, on-demand promissory note, with interest payable monthly at
the prime rate plus four percent per annum, but not less than 16% per annum.

In order to satisfy  the  Company's  cash  requirements  from time to time,  the
Company's  President has sold or pledged as collateral for loans,  shares of the
Company's  common stock owned by him. In order to  compensate  its President for
selling or pledging his shares on behalf of the Company,  the Company has made a
practice  of  issuing  him the  number of  restricted  shares  of  common  stock
equivalent to the number of shares sold or pledged, plus an additional number of
shares equivalent to the amount of accrued interest calculated at the prime rate
plus three percent per annum and payable  monthly.  The Company  receives all of
the net cash  proceeds  from the sale or from the  pledge of these  shares.  The
Company did not borrow any common  shares  during this  fiscal  year.  The share
loans,  if  any,  are  all in  accordance  with  the  terms  and  conditions  of
Director-approved,  open-ended loan agreements dated June 20, 1988,  October 14,
1988, May 17, 1989, and April 1, 1990.

On February 16, 1987, the Company granted its President, by unanimous consent of
the Board of Directors, compensation in the form of a bonus in the amount of two
percent of the pre-tax  profits  realized  by the  Company  from its gold mining
operations  in El  Salvador,  payable  annually  over a period of  twenty  years
commencing  on the  first  day of the month  following  the month in which  gold
production commences.

The  President,  as an  individual,  and not as a  Director  or  Officer  of the
Company,  presently owns a total of 467 Misanse common shares. There are a total
of 2,600 Misanse shares issued and outstanding.

Also with the consent  and  approval  of the  Directors,  a company in which the
President  has a 55%  ownership,  General  Lumber & Supply  Co.,  Inc.  (GLSCO),
entered into the following  agreements,  and the status is reflected as of March
31, 2002:

The Company leased approximately 4,032 square feet on a month-to-month basis for
its corporate  headquarters'  office;  the monthly rental charge was $2,789. The
same related company provides administrative  services, use of its vehicles, and
other property, as required by the Company.

In lieu of cash  payments for the office  space  rental and for the  consulting,
administrative  services,  etc.,  these amounts due are added each month to this
related company's open-ended,  secured,  on-demand promissory note issued by the
Company.

In  addition,  this  related  company  does  from  time to time  use its  credit
facilities to purchase items needed for itself or for the Joint Venture's mining
needs.

This  related  company  has  been  issued  an  open-ended,   secured,  on-demand
promissory  note which amounts to $1,098,193;  the annual  interest rate is four
percent plus the prime rate, but not less than 16%, and it is payable monthly.

On July 12, 1999,  two-year stock options were issued to the related  company to
purchase  500,000 of the Company's  restricted  common shares at a price of $.50
per share.  These stock  options were not  exercised.  On June 30,  2001,  GLSCO
purchased  250,000  restricted common shares at a price of $.15 per share and it
received  two-year  options to purchase 250,000 common shares at a price of $.25
per  share.  The terms of this  transaction  are no less  favorable  than  those
obtained from unrelated third parties.

On August 14, 2000, the Directors, in order to reduce corporate debt, authorized
the Officers of the Company to negotiate  the sale of its  low-income  producing
asset, the Standing Rock Campground  (SRC), to GLSCO in exchange for a reduction
of $1,249,050 of the debt owed to GLSCO.  The agreement has a condition  that if
SRC were sold by GLSCO to an  unrelated  third party during a period of one year
for a sum exceeding  GLSCO's purchase price,  the difference,  after taking into
account all selling expenses,  would be applied to reduce the balance of GLSCO's
promissory  note.  In the event the selling price to a third party would be less
than  GLSCO's  purchase  price,  then an addition  would be made to the existing
balance of GLSCO's  promissory  note.  Also,  adjustments  would be made for the
interest  due to  GLSCO  during  this  period  of  time.  This  transaction  was
consummated during the fiscal year ended March 31, 2001.



The Company's  Directors have consented and approved the following  transactions
of which the status of each are reflected as of March 31, 2002:

The President's wife's Rollover Individual  Retirement Account (SM RIRA) has the
Company's open-ended,  secured, on-demand promissory note in the sum of $366,289
which bears interest at an annual rate of prime plus three percent, but not less
than 16% and the interest is payable monthly.

The Directors  also have  acknowledged  that Mrs.  Sylvia  Machulak (wife of the
President) is to be compensated for her consulting fees due to her from October,
1,  1994  through  September  30,  2000 or 72  months  at  $2,800 a  month,  and
thereafter at $3,000 per month.  The Company owes her as an individual  and as a
consultant, the sum of $255,600 for services rendered from October 1994.

The Law Firm which  represents  the Company in which a son of the President is a
principal  is owed the sum of  $314,804  for  1,907.9  hours  of legal  services
rendered from July 1980 through March 31, 2002. By agreement,  these fees are to
be adjusted to commensurate  with the hourly fees charged by the Law Firm on the
date of payment.

The son of the  President  and his  son's  wife have the  Company's  open-ended,
on-demand  promissory  note in the sum of $111,889  which  bears  interest at an
annual rate of 16% payable monthly.

The Directors, by their agreement,  have deferred cash payment of their Director
fees beginning on January 1, 1981,  until such time as the Company's  operations
are profitable. Effective from October 1, 1996, the Director fees are $1,200 for
each quarterly meeting and $400 for attendance at any other Directors'  meeting.
The Executive  Committee Director fees are $400 for each meeting.  The Directors
and  Officers  have an option to receive  cash at such time as the  Company  has
profits and an adequate cash flow, or to exchange the amount due to them for the
Company's  common  shares.  The Directors and Officers of the Company  exercised
their  option to  receive a total of 278,000  common  shares in lieu of any cash
compensation   for  all  amounts  due  to  them  as  of  March  31,  2002.   The
Chairman/President does not participate in the payment of Director fees.

The Company  advances  funds,  allocates  and charges its  expenses to the Joint
Venture. The Joint Venture in turn capitalizes all of these advances,  costs and
expenses on a full  production  basis.  When full  production  commences,  these
capitalized  costs will be charged as an expense  based on a per ton  production
basis.  The Company also charges  interest for its advances to the Joint Venture
which  interest rate is established to be the prime rate quoted on the first day
of each month plus four  percent  and said  interest  is payable  monthly.  This
interest is eliminated from the consolidated statement of operations. However, a
separate  accounting is maintained  for the purpose of recording the amount that
is due to the Company from the Joint Venture.

Company Net Advances to the Joint Venture
<TABLE>
<CAPTION>
                                            2002                                   2001
---------------------------------------------------------------------------------------
                                             Total Advances      Interest Charges   Total Advances      Interest Charges
<S>                                         <C>                  <C>               <C>                  <C>
Beginning                                   $32,519,136          $16,973,241       $27,346,328          $13,049,585
March 31 fourth quarter                         4,210,787           3,475,048          5,172,808           3,923,656
                                            ------------------------------------------------------------------------
Total Company advances                      36,729,923           20,448,289        32,519,136           16,973,241
Advances by three of the Company's subsidiaries                          590,265                     0         590,265
                                                                 -----------------------------------------------------
                 0
March 31 total net advances                 $37,320,188          $20,448,286       $33,109,401          $16,973,241
                                            =======================================================================

</TABLE>

(8)  Commitments

Reference is made to Notes 2, 4, 5, 6, 7, 10 and 12.

(9)  Income Taxes

At March  31,  2001,  the  Company  and its  subsidiaries,  excluding  the Joint
Venture, have estimated net operating losses remaining in a sum of approximately
$3,872,513 which may be carried forward to offset future taxable income; the net
operating losses expire at various times to the year of 2016.

(10)  Description of Securities

a.  Common Stock

The Company's  Wisconsin  Certificate of Incorporation  effective as of April 1,
1999  authorizes  the issuance of 50,000,000  shares of common stock,  $0.10 par
value per share of which  17,468,008  shares were issued and  outstanding  as of
March 31,  2002.  Holders of shares of common stock are entitled to one vote for
each share on all matters to be voted on by the shareholders.  Holders of common
stock have no cumulative  voting  rights.  Holders of shares of common stock are
entitled to share ratably in dividends, if any, as may be declared, from time to
time by the Board of Directors in its discretion,  from funds legally  available
therefore.  In the event of a  liquidation,  dissolution  or  winding  up of the
Company,  the holders of shares of common  stock are  entitled to share pro rata
all assets remaining after payment in full of all liabilities. Holders of common
stock have no preemptive  rights to purchase the Company's  common stock.  There
are no conversion  rights or redemption or sinking fund  provisions with respect
to the common stock.  All of the issued and  outstanding  shares of common stock
are validly issued, fully paid and non-assessable.

b.  Preferred Stock

There were no preferred  shares issued and  outstanding  for the periods  ending
March 31, 2002 or 2001.

The Company's Wisconsin Certificate of Incorporation  authorizes the issuance of
250,000 shares of preferred stock, $0.10 par value.

The preferred shares are issuable in one or more series. If issued, the Board of
Directors is authorized to fix or alter the dividend rate, conversion rights (if
any), voting rights,  rights and terms of redemption (including any sinking fund
provisions),  redemption price or prices,  liquidation preferences and number of
shares constituting any wholly unissued series of preferred shares.












c.  Stock option activity during 2002, 2001 and 2000 was as follows:

<TABLE>
<CAPTION>
                             03/31/02 ----------------------------                  03/31/01 ----------------------------  03/31/00
-----------------------------
                              Option SharesWeighted Average Price       Option Shares              Weighted Average Price   Option
Shares                       Weighted Average Price
<S>                          <C>           <C>           <C>           <C>          <C>            <C>
Outstanding, beg. yr.        920,000       $1.27         1,254,900     $2.19        977,400        $3.28
Granted                      520,000       $0.25         150,000       $0.12        660,000        $0.50
Exercised                    0             N/A           0             N/A          (160,000)      N/A
Forfeited                    (500,000)     N/A           0             N/A          0              N/A
Expired                      (270,000)     N/A           (484,900)     N/A          (222,500)      N/A
                             -------------------------------------------------------------------------
Outstanding, end of yr.         670,000    $0.22            920,000    $1.27        1,254,900      $2.19
                             ===========================================================================

A summary of the outstanding stock options as of March 31, 2002, follows:

 Range of Exercise Prices                 Amount Outstanding      Weighted Average Remaining Contractual Life    Weighted Average
          ---------------                        -----------                                 ----------------
Exercise Price
Up  to  $2.99            670,000         1.454 years              $0.22
</TABLE>

d.  Stock Rights - To The President

Reference  is made  to Note 7,  Related  Party  Transactions,  of the  Company's
financial  statements which disclose the terms and conditions of the share loans
to the Company by the President and the interest  which is payable to him by the
Company's issuance of its restricted common shares.

Any share interest  payable to the President is for shares loaned to the Company
and/or for such shares loaned or pledged for collateral purposes,  or for unpaid
interest,  all in accordance with the terms and conditions of Director-approved,
open-ended loan agreements  dated June 20, 1988,  October 14, 1988, May 17, 1989
and April 1, 1990.

e.  Share Loans - Others

A series of  borrowings  of the  Company's  common  shares  were made  under the
provision that the owners would sell said shares as the Company's designee, with
the proceeds  payable to the Company.  In  exchange,  the Company  agreed to pay
these  shares  loaned  within 31 days or less by issuing its  restricted  common
shares,  together with interest payable in restricted common shares payable at a
negotiated  rate of  interest  normally  payable in advance  for a period of one
year. As of March 31, 2002, there were no shares due to other parties for shares
borrowed or for interest payment.

f.  S.E.C. Form S-8 Registration

On January 26, 2000, the Company filed its  Securities  and Exchange  Commission
Form S-8 Registration  Statement No. 333-95397 under the Securities Act of 1933,
to register  1,000,000  of the  Company's  $0.10 par value  common stock for the
purpose of distribution  of the shares  pursuant to the prospectus  submitted to
the Securities and Exchange Commission.  All of the 1,000,000 shares were issued
as of March 31, 2002.

On May 25, 2001, the Company filed its fourth Securities and Exchange Commission
Form S-8 Registration  Statement No. 333-61650 under the Securities Act of 1933,
and it registered  1,500,000 of the Company's  $0.10 par value common shares for
the  purpose of  distributing  shares  pursuant  to the plan  contained  in such
registration.  From the 1,500,000  shares  registered  858,376 were issued,  and
641,624 shares remain to be issued as of March 31, 2002.

g.  Commerce Group Corp. Employee Benefit Account (CGCEBA)

This account was established  for the purpose of compensating  the employees for
benefits such as retirement,  severance pay, and all other related  compensation
that is mandatory under El Salvadoran labor regulations, and/or as determined by
the  Officers of the  Corporation.  The  Directors  provide the  Officers of the
Company  with the  authority  to issue its common  shares to the CGCEBA on an as
needed  basis.  Under  this plan,  payment  can be made to any  employee  of the
Company or the  Company's  subsidiaries.  The CGCEBA has sold some of the shares
issued  to this  account  from  time to time to meet its  obligations  to its El
Salvadoran  employees.  As of March 31,  2001,  150,000  shares  remained in the
account. On January 24, 2002, an additional 500,000 common shares were issued to
the CGCEBA. During this fiscal period, 130,000 common shares were sold on behalf
of the CGCEBA,  leaving a balance of 520,000  shares in the CGCEBA account as of
March 31, 2002.

(11)  Litigation

There is no known pending litigation.

(12) Commitments and Contingencies

Based upon current knowledge, the Company believes that it is in compliance with
environmental laws and regulations as currently promulgated.  However, the exact
nature  of  environmental  control  problems,  if any,  which  the  Company  may
encounter in the future cannot be predicted, primarily because of the increasing
number, complexity and changing character of environmental requirements that may
be enacted or of the standards being promulgated by governmental authorities.

(13) Business Segments

The Statement of Financial Accounting Standards No. 131 (SFAS 131),  Disclosures
about Segments of an Enterprise  and Related  Information  became  effective for
fiscal years beginning  after December 15, 1997. SFAS 131 establishes  standards
for the way that public business  enterprises  determine  operating segments and
report information about those segments in annual financial statements. SFAS 131
also requires those  enterprises to report selected  information about operating
segments in interim financial  reports issued to shareholders.  SFAS 131 further
establishes  standards  for related  disclosure  about  products  and  services,
geographic areas, and major customers.

The  Company  presently  has  three  reportable  segments:   mining,  campground
operation,  and other. The mining segment was engaged in the processing of gold.
The mining operations are temporarily suspended.  The campground operation is to
lease space on an annual, monthly, or daily basis. The campground has been sold.
The  other  segments  are  those  activities  that are  combined  for  reporting
purposes.  There were no  reportable  activities  in the Internet  business;  no
income and no expenses were recorded.



<TABLE>
<CAPTION>
                                      Mining *1  El Salvador,  Central America      Campground Missouri, U.S.A.      Corporate
Headquarters
Year ended March 31, 2002
<S>                                   <C>                                          <C>
  Sales and revenues                  $                 0                          $               0
$          38
  Depreciation & amortization         0                     0                                  0
  Operating income (loss)             0                     0                        (43,171)
  Total assets                        31,676,285            0                        269,149
  Capital expenditures                1,638,682             0                                   0

Year ended March 31, 2001
  Sales and revenues                  $                0    $    189,020           $   53,162
  Depreciation & amortization         0                     0                                   0
  Operating income (loss)             0                     146,349                   (16,559)
  Total assets                        30,046,855            0                       255,830
  Capital expenditures                2,233,369             0                                  0

Year ended March 31, 2000
  Sales and revenues                  $     413,713         $     66,902                        $            0
  Depreciation & amortization         320,491               0                                   0
  Operating income (loss)             (384,759)             (11,473)                            0
  Total assets                        27,831,734            1,135,500                888,967
  Capital expenditures                    2,166,900         0                                   0

</TABLE>

*1   Its major  customer  for the  refining  and  purchase of gold is a refinery
     located in the United  States.  The price of gold is dependent on the world
     market  price over which the  Company,  the  refinery  or any other  single
     competitor do not have control.



Item 9.  Changes in and Disagreements on Accounting and Financial Disclosure

None.

                                    PART III

Item 10.  Directors and Executive Officers of the Registrant

The  information  called  for by  Item  10 is  incorporated  by  reference  from
information  under  the  caption  "Election  of a  Director"  in  the  Company's
definitive  proxy statement to be filed pursuant to Regulation 14A no later than
120 days  after the close of its  fiscal  year.  The  information  on  Executive
Officers is contained in Part I of this Form 10-K.

Item 11.  Executive Compensation

The  information  called  for by  Item  11 is  incorporated  by  reference  from
information  under  the  caption  "Executive   Compensation"  in  the  Company's
definitive  proxy statement to be filed pursuant to Regulation 14A no later than
120 days after the close of its fiscal year.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

The  information  called  for by  Item  12 is  incorporated  by  reference  from
information  under the caption "Voting  Securities" and "Principal  Shareholders
and Ownership by Management" in the Company's  definitive  proxy statement to be
filed  pursuant to Regulation  14A no later than 120 days after the close of its
fiscal year.

Compliance with Section 16(a) of the Securities Exchange Act of 1934.

Section 16(a) of the Securities  Exchange Act of 1934 and related Securities and
Exchange Commission rules require the Company's executive officers and directors
and persons  beneficially  owning  greater  than ten percent of the  outstanding
shares to file  reports of ownership  and changes in ownership of the  Company's
shares with the  Securities  and  Exchange  Commission  and to disclose any late
filings.  Based solely on a review of the copies of such forms  furnished to the
Company or  representations  that no Form 5 was required,  the Company  believes
that all Section 16(a) filing requirements were complied with as required.

Item 13.  Certain Relationships and Related Transactions

The information  called for by Item 13 is incorporated by reference in Note 7 of
the  financial  statements  and under the  caption  "Certain  Relationships  and
Related  Transactions"  in the Company's  definitive proxy statement to be filed
pursuant to Regulation  14A no later than 120 days after the close of its fiscal
year.



<PAGE>


                                     PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)  Financial Statements and Schedules

See index to Consolidated  Financial Statements and Supplementary Data in Item 8
of this report.

Report of Independent Accountant on the Financial Statement Schedules........67

Schedule IV (1) Indebtedness of Related Parties..............................69

Schedule IV (2) Indebtedness to Related Parties..............................71

(b)  Reports on Form 8-K

None.

(c)  Exhibits

The exhibit numbers in the following list correspond to the numbers  assigned to
such  exhibits in Item 601 of  Regulation  S-K. The exhibit  numbers noted by an
asterisk (*) indicate  exhibits  actually  filed with this Annual Report on Form
10-K. All other exhibits are  incorporated  by reference into this Annual Report
on Form 10-K.

Exhibit No.       Description of Exhibit

3.1               Articles of Incorporation of the Company.   (Incorporated by
reference to Exhibit 3.(i) of the Company's S.E.C. Form
8-K filed on April 13, 1999.)
3.2               By-laws of the Company.  (Incorporated by reference to
 Exhibit 3.(ii) of the  Company's S.E.C. Form 8-K filed on
April 13, 1999.)
3.3               The Articles of Amendment of the Wisconsin corporation
 increasing the authorized shares to 50,000,000 common
shares.  (Incorporated by reference to Exhibit 3.(iii) of the Company's S.E.C.
 Form 8-K filed on April 13, 1999.)
3.4               The Articles of Merger from a Delaware corporation to a
Wisconsin corporation effective April 1, 1999 at 12:01 a.m.
(Central Time).  (Incorporated by reference to Exhibit 2.(i) of the Company's
 S.E.C. Form 8-K filed on April 13, 1999.)
3.5               A Certificate of Merger filed with the Office of the
Secretary of State of Delaware merging into a Wisconsin
corporation.  (Incorporated by reference to Exhibit 2.(ii) of the Company's
 S.E.C. Form 8-K filed on April 13, 1999.)

Exhibit No.       Description of Exhibit
4                 Instruments defining the rights of security holders,
including indentures.
4.1 Three-Year  Stock Option  Agreement dated March 13, 2001 to purchase 100,000
common  shares at $.10 per share.  (Incorporated  by reference to Exhibit 4.9 of
the Company's Form 10-K for the year ended March 31, 2001.) 4.2 Three-Year Stock
Option  Agreement  dated March 13, 2001 to purchase 50,000 common shares at $.15
per share. (Incorporated by reference to Exhibit 4.10 of the Company's Form 10-K
for the year ended March 31, 2001.) 4.3* Two-Year Stock Option  Agreement  dated
July 2, 2001 to purchase  80,000 common shares at $.25 per share.  4.4* Two-Year
Stock Option  Agreement dated July 2, 2001 to purchase  100,000 common shares at
$.25 per share.  4.5*  Two-Year  Stock  Option  Agreement  dated July 2, 2001 to
purchase  250,000  common shares at $.25 per share.  4.6* Two-Year  Stock Option
Agreement dated July 2, 2001 to purchase 70,000 common shares at $.25 per share.
4.7*  Two-Year  Stock  Option  Agreement  dated July 2, 2001 to purchase  20,000
common shares at $.25 per share.
                  Subsequent Options Issued:
4.8*              Two-Year Stock Option Agreement dated April 19, 2002 to
 purchase 80,000 common shares at $.15 per share.
4.9*              Two-Year Stock Option Agreement dated April 30, 2002 to
 purchase 40,000 common shares at $.25 per share.
9                 Voting Trust Agreement--not applicable.
10                Material contracts regarding sale of assets and deferred
 compensation.
10.1              Bonus compensation, Edward L. Machulak, February 16, 1987.
(Incorporated by reference to Exhibit 7 of the Company's
Form 10-K for the year ended March 31, 1987.)
10.2              Loan Agreement and Promissory Note, Edward L. Machulak, June
 20, 1988. (Incorporated by reference to Exhibit 10.2 of
the Company's Form 10-K for the year ended March 31, 1993.)


Exhibit No.       Description of Exhibit

10.3              Loan Agreement and Promissory Note, Edward L. Machulak,
 October 14, 1988. (Incorporated by reference to Exhibit 10.3
of the Company's Form 10-K for the year ended March 31, 1993.)
10.4              Loan Agreement and Promissory Note, Edward L. Machulak, May
 17, 1989. (Incorporated by reference to Exhibit 10.4 of
the Company's Form 10-K for the year ended March 31, 1993.)
10.5              Loan Agreement and Promissory Note, Edward L. Machulak, April
 1, 1990. (Incorporated by reference to Exhibit 10.5 of
the Company's Form 10-K for the year ended March 31, 1993.)
10.6              Letter Agreement, Edward L. Machulak, October 10, 1989.
 (Incorporated by reference to Exhibit 10.6 of the
Company's Form 10-K for the year ended March 31, 1993.)
10.7              Loan Agreement and Promissory Note dated January 19, 1994.
  (Incorporated by reference to Exhibit 10.10 of the
Company's Form 10-K for the year ended March 31, 1995.)
10.8              John E. Machulak and Susan R. Robertson, Loan Agreement and
Promissory Note dated June 3, 1994.  (Incorporated by
reference to Exhibit 10.14 of the Company's Form 10-K for the year ended March
 31, 1995.)
10.9              Lillian M. Skeen, Loan Agreement and Open Ended On Demand
Promissory Note dated June 26, 1997. (Incorporated by
reference to Exhibit 10.9 of the Company's Form 10-K for the year ended March
 31, 1998.)
10.10             Robert C. Skeen, Loan Agreement and Open Ended On Demand
 Promissory Note dated June 26, 1997. (Incorporated by
reference to Exhibit 10.10 of the Company's Form 10-K for the year ended March
31, 1998.)
10.11             Robert C. Skeen, Loan Agreement and Open Ended On Demand
Promissory Note dated January 20, 1998. (Incorporated by
reference to Exhibit 10.11 of the Company's Form 10-K for the year ended March
 31, 1998.)
10.12             John E. Machulak and Susan R. Robertson, Loan Agreement and
 Open Ended On Demand Promissory Note dated March 6,
1998. (Incorporated by reference to Exhibit 10.12 of the Company's Form 10-K
for the year ended March 31, 1998.)
10.13             Lillian M. Skeen, Loan Agreement and Open Ended On Demand
Promissory Note dated May 21, 1998. (Incorporated by
reference to Exhibit 10.13 of the Company's Form 10-K for the year ended March
31, 1998.)

Exhibit No.       Description of Exhibit

10.14 Edward A.  Machulak,  Loan  Agreement and Open Ended On Demand  Promissory
Note dated March 6, 1998.  (Incorporated  by reference  to Exhibit  10.14 of the
Company's  Form 10-K for the year ended March 31, 1999.) 10.15 Contract for Sale
of Real Estate dated August 14, 2000 by and between the Company, its subsidiary,
and a related  company.  (Incorporated  by  reference  to  Exhibit  10.17 of the
Company's  Form  10-K for the year  ended  March  31,  2001.)  11*  Schedule  of
Computation of Net Income Per Share 13 Annual Report to security  holders,  Form
10-Q or Quarterly Report to security holders:
                  Annual  Report  for the  period  ended  March 31,  2002,  will
include the Form 10-K and will be submitted within 120 days
after the fiscal year end.
21*               Subsidiaries and Joint Venture of the Company
23.1*             Consent of Independent Certified Public Accountant
99.0              Additional Exhibits
99.1*             Confirmation agreement, General Lumber & Supply Co., Inc.,
 May 13, 2002.
99.2*             Confirmation Agreement, Edward L. Machulak, May 13, 2002.
99.3*             Confirmation Agreement, Edward L. Machulak Rollover
Individual Retirement Account, May 13, 2002.
99.4*             Confirmation Agreement, Sylvia Machulak as an individual and
 for her Rollover Individual Retirement Account, May 13,
2002.
99.5              Concession Agreement Assignment to the Company by Misanse
(Incorporated by reference to Exhibit 1 of the Company's
Form 10-K for the year ended March 31, 1988.)
99.6              Other Material Information:  Restatement of prior period
 financial statements.   (Incorporated by reference to Item
8 of the Company's Form 10-K for the year ended March 31, 1998.)
99.7              S.E.C. Form S-8 Registration Statement No. 333-95397 filed
 under the Securities Act of 1933 as amended and declared
effective January 26, 2000, registering one million of its common shares, ten
 cents par value.  (Incorporated by reference as this
S.E.C. Form S-8 Registration Statement had been filed on January 26, 2000.)
All of these shares have been issued as of March 31,
2002.


Exhibit No.       Description of Exhibit

99.8  S.E.C.  Form S-8  Registration  Statement  No.  333-61650  filed under the
Securities  Act of  1933  as  amended  and  declared  effective  May  25,  2001,
registering one and one-half million of its common shares,  ten cents par value.
(Incorporated by reference as this S.E.C.  Form S-8  Registration  Statement had
been filed on May 25, 2001.)  641,624 shares remain to be issued as of March 31,
2002. 99.8(a)* Consent of Independent Certified Public Accountant to incorporate
by reference in the S.E.C.  Form S-8 Registration  Statement No. 333-61650 filed
under the Securities Act of 1933 as amended and declared  effective May 25, 2001
the  Certified  Public  Accountant's  report dated May 10, 2002  relating to the
financial statements of the Company for the years ended March 31, 2002 and 2001.
99.9  Individual  financial  statements of  majority-owned  companies  have been
omitted  because these  companies do not  constitute a  significant  or material
contribution to the Company.

<PAGE>
                              COMMERCE GROUP CORP.
                           FORM 10-K - MARCH 31, 2002

                                     PART IV

                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the Company has duly caused this Annual Report to be signed on its
behalf by the undersigned, thereunto duly authorized on May 13, 2002.

                              COMMERCE GROUP CORP.
                                                          (Company)



                                                   By: /s/ Edward L. Machulak
                                                         Edward L. Machulak
                                            Chairman of the Board of Directors,
                                                Member of Executive Committee,
                                                      Member of Audit Committee
                                    Director-Emeritus, President, Treasurer,
                               Chief Executive, Operating and Financial Officer


Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following persons,  on behalf of the Company and in
the capacities and on the dates indicated:

Name                               Office                                  Date

/s/ Edward L. Machulak Edward L. Machulak Chairman of the Board of Directors,
Member
of Executive Committee, Member of Audit Committee, Director-Emeritus, President,
 Treasurer, Chief Executive, Operating and Financial
Officer                            May 13, 2002

/s/ Edward A. Machulak Edward A. Machulak   Director, Member of Executive
Committee,
Director-Emeritus, Executive Vice President and Secretary          May 13, 2002

/s/ Sidney Sodos Sidney Sodos      Director and Member of Audit Committee
                 May 13, 2002
   ------                                                       ------------

/s/ Clayton H. Tebo Clayton H. Tebo      Director and Member of Audit Committee
May 13, 2002



<PAGE>


         REPORT OF INDEPENDENT ACCOUNTANT ON THE FINANCIAL STATEMENT SCHEDULES


My report on the consolidated  financial  statements of Commerce Group Corp. for
its fiscal years ended March 31, 2002, 2001, 2000, 1999 and 1998, is included in
this Form 10-K. In connection  with my audits of such  financial  statements,  I
have also audited the following:  supplementary  income  statement  information,
selected  financial data report, and the related financial  statement  schedules
listed in Item 14(a) of this Form 10-K.

In my opinion,  the consolidated  financial statement  information and schedules
referred to above, when considered in relation to the basic financial statements
taken as a whole,  present  fairly,  in all material  respects,  the information
required to be included  therein,  all in accordance with accounting  principles
generally accepted in the United States.

Bruce Michael Redlin, CPA, LLC
Certified Public Accountant



Milwaukee, Wisconsin
May 10, 2002





<PAGE>

















                       This Page Left Blank Intentionally.


<PAGE>


               COMMERCE GROUP CORP. AND CONSOLIDATED SUBSIDIARIES

                                 SCHEDULE IV (1)
                  INDEBTEDNESS OF RELATED PARTIES - NON CURRENT
                   YEARS ENDED MARCH 31, 2002, 2001, AND 2000


<TABLE>
<CAPTION>
Name of Person (1)  Balance at Beginning of  Period (3)     Additions to Indebtedness (2)           Deletions to
--------------------                                             ----------                  ----------------
Indebtedness                             Balance at End of Period (3)
------------                                            -------------

<S>              <C> <C>                 <C>               <C>                  <C>                  <C>
Year ended March 31, 2002 Joint Venture  $33,109,401       $4,210,787           $0                   $37,320,188

Year ended March 31, 2001 Joint Venture  $27,936,503       $5,172,898           $0                   $33,109,401

Year ended March 31, 2000 Joint Venture  $23,744,254       $4,192,249           $0                   $27,936,503
</TABLE>

(1)     Commerce Group Corp.  (90% ownership) and San Sebastian Gold Mines,
 Inc. (10%  ownership),  Joint Venture  ("Joint  Venture");
        includes the advances from three of the Company's subsidiaries.

(2)     The purpose of the advances is to continue the exploration, exploitation
        and  development  of  the  SSGM  and  the  other  mining  prospects  and
        activities  managed  by the  Joint  Venture  which  are  located  in the
        Republic  of El  Salvador,  Central  America.  Also,  funds were used to
        retrofit,  rehabilitate,  repair and to renovate the San Cristobal  Mill
        and Plant  acquired by the Joint  Venture  for the purpose of  producing
        gold.  The  construction  and  erection of the cone  crushing  system is
        taking place.
        Also included are the holding costs.

(3)     Beginning  with  September  30, 1987,  the total  indebtedness
includes the advances of $590,265  from three of the  Company's
        subsidiaries.

<TABLE>
<CAPTION>
  Name of Person (1)                    Balance at Beginning of  Period         Additions to Indebtedness (2)          Deletions to
--------------------                                             ------                      ----------------
Indebtedness                             Balance at  End of Period

<S>              <C> <C>                 <C>               <C>                  <C>                  <C>
Year ended March 31, 2002 SSGM           $29,505,884       $2,483,174           $0                   $31,989,058

Year ended March 31, 2001 SSGM           $26,368,951       $3,136,933           $0                   $29,505,884

Year ended March 31, 2000 SSGM           $23,823,518       $2,545,433           $0                   $26,368,951
</TABLE>

(1)      San Sebastian Gold Mines, Inc. (SSGM) in which Commerce Group Corp.
 owns 82 1/2% of its issued and outstanding common shares.

(2)      The advances to SSGM primarily consist of the interest due to the
 Company on SSGM's outstanding indebtedness.

<PAGE>











                       This Page Left Blank Intentionally.


<PAGE>



               COMMERCE GROUP CORP. AND CONSOLIDATED SUBSIDIARIES

                                 SCHEDULE IV(2)
                         INDEBTEDNESS TO RELATED PARTIES
               CURRENT YEARS ENDED MARCH 31, 2002, 2001, AND 2000

<TABLE>
<CAPTION>
  Identity of Debtor               Balance at Beginning of  Period        Additions to Indebtedness (1)          Deletions to
---------------------                                                ------                                  ---
Indebtedness         (2)                     Balance at End of Period
                     ---                                -------------

Year ended March 31, 2002
<S>                                         <C>              <C>                  <C>                  <C>
President of the Company                    $3,676,503       $967,353(a)          $               0    $4,643,856
President's RIRA                            599,768          103,879(b)                            0   703,647
President's Affiliated Company              926,205          171,988(c)                            0   1,098,193
President's Wife's RIRA                     312,459          53,830(d)                             0   366,289
Others                                             95,445           16,444(d)                      0        111,889
                                            ------------------------------   -----------------------   ------------
 Total, notes payable                       $5,610,380           $1,313,494       $               0    $6,923,874
                                            =================    ================================================

President's Accrued Salary                  $2,279,015       $    178,750(e)      $               0    $2,451,765
                                            =============================         ===============================

President's Wife's Consulting Fees          $   219,600          $     36,000(f)  $               0    $   255,606
                                            =================    =================================================

Legal fees (President's son is a principal)  $   308,286          $      6,518(g)  $               0    $   314,804
                                             =================    ============     =================    ===========

Year ended March 31, 2001
President of the Company                    $3,072,268       $   604,235(a)       $                0   $3,676,503
President's RIRA                            646,141          103,627(b)           (150,000)(a)         599,768
President's Affiliated Company              1,808,514        366,741(c)           (1,249,050)(b)       926,205
President's Wife's RIRA                     384,290          61,169(d)            (133,000)(c)         312,459
President's Son/Daughter-in-Law                    81,420          14,025(d)                        0         95,445
                                            -----------------------------           --------------------------------
 Total, notes payable                       $5,992,633            $1,149,797      $ (1,532,050)        $5,610,380
                                            =================     ===============================================

President's Accrued Salary                  $1,839,015       $   440,000(e)       $                0   $2,279,015
                                            ============================          ===============================

President's Wife's Consulting Fees          $              0 $    219,600(f)      $                0   $   219,600
                                            =============================         ================================

Legal fees (President's son is a principal)  $   260,926      $     47,360(g)      $                0   $   308,286
                                            ==============================        =================================

Year ended March 31, 2000
President of the Company                    $2,568,600       $503,668(a)          $                0   $3,072,268
                        --------------------
President's RIRA                            550,951          95,190(b)                              0  646,141
                ----------------------------
President's Affiliated Company              1,493,026        315,488(c)                             0  1,808,514

Others                                           397,102         68,608(d)                          0       465,710
                                            ---------------------------   -----------------------------------------
 Total, notes payable                       $5,009,679              $982,954      $                0   $5,992,633
                                            =================       =============================================

President's Accrued Salary                  $1,674,015       $  165,000(e)        $                0   $1,839,015
                                            ===========================   =======================================

Legal fees (President's son is a principal)  $   197,139      $    63,787(g)       $                0   $   260,926
                                           -=============================   =======================================

</TABLE>

(1)(a)(b)The additions to the open-ended,  secured,  on-demand  promissory notes
         issued to the President of the Company, as an individual,  and not as a
         Director  or  Officer  of the  Company,  and his RIRA are from net cash
         advances and/or accrued interest.

(1)(c)   The President owns 55% of an Affiliated  Company's  common shares.  The
         additions to the open-ended,  secured, on-demand promissory note issued
         to an Affiliated  Company result from cash advances,  accrued interest,
         accrued office rent,  vehicle  rental,  computer use and other expenses
         incurred on behalf of the Company.

         The President's  Affiliated Company had been issued the following stock
options:

         On July 2, 2001,  two-year stock options to purchase 250,000 of the
Company's  restricted  common shares at a price of $0.25 a
         share.

(1)(d) The  additions  resulted from accrued  interest  earned during the fiscal
year.

(1)(e)   The  President's  salary of $165,000 was accrued for the entire  fiscal
         year. In addition, the Directors, pursuant to a resolution, compensated
         the  President  for vacation  pay from April 1, 2001 through  March 31,
         2002 (one year at $13,750).

(1)(f)   Twelve months of consulting fees at $3,000 per month for a total of
 $36,000.

(1)(g)  The  addition  of the  amounts  due to the Law Firm  results  for  legal
services rendered.

(2)      Deletions to Indebtedness are reflected as a net to the additions.