##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 20-F



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| ̈ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or 12(g) OF THESECURITIES EXCHANGE ACT OF 1934
|- | -----------------------------------------------------------------------------------------------



OR



|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934
|- | -----------------------------------------------------------------------------------



For the fiscal year ended June 30, 2005



OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------



For the transition period from
 to



OR



| ̈ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------------



Date of event requiring this shell company report



Commission file number 0-18760



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UNILENS VISION INC.

(Exact name of Registrant specified in its charter)



UNILENS VISION INC.

(Translation of
Registrants name into English)



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BRITISH COLUMBIA, CANADA

(Jurisdiction of incorporation or organization)



1910-400 Burrard Street

Vancouver, British Columbia, Canada, V6C 3A6

(Address of principal executive offices)



COMMON SHARES WITHOUT PAR VALUE

(Title of Class)



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



|                    |  |                                          
|------------------- |  | -----------------------------------------
|Title of Each Class |  | Name of Each Exchange on Which Registered
|None                |  | Not applicable                           



Securities
registered or to be registered pursuant to Section 12(g) of the Act:



Common Shares without Par Value

(Title of Class)



Securities for which there is a reporting obligation pursuant to
Section 15(d) of the Act. None



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Number of outstanding shares of Unilens Vision Inc.s capital stock as on June 30, 2005: 4,193,815 Common Shares, Without Par
Value



Indicate by check mark if the Registrant is a well-know seasoned issuer,
as defined in Rule 405 of the Securities Act    YES ̈NO  x



If this report is an annual or transition
report, indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    YES  x    NO ̈



Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by to 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  x    NO ̈



Indicate by check mark which financial statement item Registrant has elected to
follow:    Item 17  x    Item 18 ̈



If this is an annual report, indicate by check mark whether the registrant is
a shell company (as defined by Rule 12b-2 of the Securities Exchange Act of 1934.    YES ̈NO  x



(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)



Indicate by check mark whether Registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act subsequent to the distribution of securities under a plan confirmed by
a court.



NOT APPLICABLE



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INTRODUCTION AND USE OF CERTAIN TERMS



As used in this Annual Report for the fiscal year ending June 30, 2005, unless the context otherwise requires, we,
us, our, or Unilens refers to Unilens Vision Inc. and its subsidiaries. In this Form 20-F, references to Cdn$ are to Canadian dollars; and references to U.S. dollars, U.S.$ or
$ are to United States dollars.



FORWARD LOOKING
STATEMENTS



IN ADDITION TO HISTORICAL INFORMATION, THIS ANNUAL REPORT
CONTAINS STATEMENTS THAT ARE, OR MAY BE DEEMED TO BE, FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933 AND SECTION 21E OF THE EXCHANGE ACT, AND ARE MADE IN RELIANCE UPON THE PROTECTIONS PROVIDED BY
SUCH ACTS FOR FORWARD-LOOKING STATEMENTS. THE FORWARD-LOOKING STATEMENTS IN THIS ANNUAL REPORT REFLECT OUR CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND FINANCIAL PERFORMANCE. THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND
UNCERTAINTIES, INCLUDING THOSE DISCUSSED IN THIS ANNUAL REPORT, THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM HISTORICAL RESULTS OR THOSE ANTICIPATED. IN THIS ANNUAL REPORT, THE WORDS ANTICIPATES, BELIEVES,
EXPECTS, INTENDS, FUTURE,. MAY, WILL, WOULD, COULD, SHOULD, EXPECTS, INTENDS, PLAN, ESTIMATES,
PREDICTS, PROJECTS, SEEKS, POTENTIAL, LIKELY, CONTINUE, AND SIMILAR EXPRESSIONS IDENTIFY FORWARD-LOOKING STATEMENTS. READERS ARE CAUTIONED TO CONSIDER THE SPECIFIC RISK FACTORS
DESCRIBED BELOW AND NOT TO PLACE UNDUE RELIANCE ON THE FORWARD-LOOKING STATEMENTS CONTAINED IN THIS ANNUAL REPORT. ALL FORWARD-LOOKING STATEMENTS INCLUDED IN THIS ANNUAL REPORT ARE MADE ONLY AS OF THE DATE OF THIS ANNUAL REPORT, AND WE DO NOT
UNDERTAKE ANY OBLIGATION TO PUBLICLY UPDATE OR CORRECT ANY FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES THAT SUBSEQUENTLY OCCUR OR WHICH WE, AFTER THE DATE OF THIS ANNUAL REPORT, BECOME AWARE OF. YOU SHOULD READ THIS DOCUMENT AND
THE DOCUMENTS THAT WE INCORPORATE BY REFERENCE INTO THIS ANNUAL REPORT COMPLETELY AND WITH THE UNDERSTANDING THAT OUR ACTUAL FUTURE RESULTS MAY BE MATERIALLY DIFFERENT FROM WHAT WE EXPECT. WE MAY NOT UPDATE THESE FORWARD-LOOKING STATEMENTS, EVEN IF
OUR SITUATION CHANGES IN THE FUTURE. ALL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO US ARE EXPRESSLY QUALIFIED BY THESE CAUTIONARY STATEMENTS.



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##### Table of Contents

TABLE OF CONTENTS



|          |  |                                                                              |  |     
|--------- |  | ---------------------------------------------------------------------------- |  | ----
|          |  |                                                                              |  | Page
|ITEM 1.   |  | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS                        |  | 1   
|          |  |                                                                             
|ITEM 2.   |  | OFFER STATISTICS AND EXPECTED TIMETABLE                                      |  | 1   
|          |  |                                                                             
|ITEM 3.   |  | KEY INFORMATION                                                              |  | 1   
|          |  |                                                                             
|ITEM 4.   |  | INFORMATION ON THE COMPANY                                                   |  | 7   
|          |  |                                                                             
|ITEM 5.   |  | OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                 |  | 11  
|          |  |                                                                             
|ITEM 6.   |  | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                   |  | 15  
|          |  |                                                                             
|ITEM 7.   |  | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                            |  | 19  
|          |  |                                                                             
|ITEM 8.   |  | FINANCIAL INFORMATION                                                        |  | 20  
|          |  |                                                                             
|ITEM 9.   |  | THE OFFER AND LISTING                                                        |  | 21  
|          |  |                                                                             
|ITEM 10.  |  | ADDITIONAL INFORMATION                                                       |  | 22  
|          |  |                                                                             
|ITEM 11.  |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                   |  | 32  
|          |  |                                                                             
|ITEM 12.  |  | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                       |  | 32  
|          |  |                                                                             
|ITEM 13.  |  | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                              |  | 32  
|          |  |                                                                             
|ITEM 14.  |  | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |  | 32  
|          |  |                                                                             
|ITEM 15.  |  | CONTROLS AND PROCEDURES                                                      |  | 33  
|          |  |                                                                             
|ITEM 16A. |  | AUDIT COMMITTEE FINANCIAL EXPERT                                             |  | 33  
|          |  |                                                                             
|ITEM 16B. |  | CODE OF ETHICS                                                               |  | 33  
|          |  |                                                                             
|ITEM 16C. |  | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                       |  | 33  
|          |  |                                                                             
|ITEM 16D. |  | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                   |  | 34  
|          |  |                                                                             
|ITEM 16E. |  | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS       |  | 34  
|          |  |                                                                             
|ITEM 17.  |  | FINANCIAL STATEMENTS                                                         |  | 34  
|          |  |                                                                             
|ITEM 18.  |  | FINANCIAL STATEMENTS                                                         |  | 70  
|          |  |                                                                             
|ITEM 19.  |  | EXHIBITS                                                                     |  | 70  



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##### Table of Contents

PART 1



ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS



Not applicable.



ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE



Not applicable.



ITEM 3. KEY INFORMATION



A. Selected
Financial Data



The following constitutes our selected consolidated
financial data for the fiscal years ended June 30, 2005, 2004, 2003, 2002, and 2001 in U.S. dollars, presented in accordance with United States generally accepted accounting principles. The selected consolidated financial data is derived from
our financial statements for such periods. Certain of the prior years comparative figures have been reclassified to conform to the presentation adopted for the current year. The following is qualified by, and should be read in conjunction
with, the financial statements included in Item 17. All amounts are stated in U.S. dollars.



|                                                                                  |      |               |            |  |   |            |   |  |      |            |   |      |   |            |   |  |   |            |  
|--------------------------------------------------------------------------------- | ---- | ------------- | ---------- |  | - | ---------- | - |  | ---- | ---------- | - | ---- | - | ---------- | - |  | - | ---------- | -
|(U.S. dollars except share amounts)                                               |      | As at June 30 |           
|                                                                                  | 2005 |               | 2004       |  |   | 2003       |   |  | 2002 |            |   | 2001 |  
|Balance Sheet Data                                                                |      |               |            |  |   |            |   |  |      |            |   |      |   |            |   |  |   |            |  
|Total assets                                                                      |      | $             | 7,316,946  |  | $ | 6,095,950  |   |  | $    | 3,466,586  |   |      | $ | 1,760,879  |   |  | $ | 1,845,188  |  
|Working capital (deficiency)                                                      |      |               | 2,540,624  |  |   | 1,381,148  |   |  |      | 1,969,314  |   |      |   | (2,843,009 | ) |  |   | (2,452,318 | )
|Long-term liabilities                                                             |      |               |           |  |   | 688,139    |   |  |      | 4,474,576  |   |      |   | 1,185,081  |   |  |   | 1,482,166  |  
|Total Liabilities                                                                 |      |               | 1,082,242  |  |   | 2,085,117  |   |  |      | 5,604,564  |   |      |   | 5,447,655  |   |  |   | 5,301,701  |  
|Shareholders equity (deficiency)                                                 |      |               | 6,234,704  |  |   | 4,010,833  |   |  |      | (2,137,978 | ) |      |   | (3,686,776 | ) |  |   | (3,456,513 | )
|Share Capital                                                                     |      |               | 27,434,950 |  |   | 27,432,100 |   |  |      | 27,367,615 |   |      |   | 27,367,615 |   |  |   | 27,367,615 |  
|                                                                                  |      |               |            |  |  
|Statement of Operations Data (fiscal year ended)                                  |      |               |            |  |   |            |   |  |      |            |   |      |   |            |   |  |   |            |  
|Revenues                                                                          |      |               | 4,971,577  |  |   | 4,074,577  |   |  |      | 3,129,101  |   |      |   | 3,363,349  |   |  |   | 3,608,797  |  
|Income (loss) from operations(1)                                                  |      |               | 91,580     |  |   | (42,387    | ) |  |      | (272,578   | ) |      |   | (56,414    | ) |  |   | 36,531     |  
|Income (loss) before tax benefit, discontinued operations and extraordinary items |      |               | 1,710,687  |  |   | 863,121    |   |  |      | (140,730   | ) |      |   | (228,673   | ) |  |   | (166,361   | )
|Income (loss) before discontinued operations and extraordinary items              |      |               | 2,237,787  |  |   | 4,124,171  |   |  |      | 1,558,270  |   |      |   | (228,673   | ) |  |   | (166,361   | )
|Income (loss) for the year                                                        |      |               | 2,237,787  |  |   | 6,076,734  |   |  |      | 1,558,270  |   |      |   | (228,673   | ) |  |   | (166,361   | )
|Weighted Average Number of common shares                                          |      |               | 4,458,266  |  |   | 4,114,722  |   |  |      | 3,838,815  |   |      |   | 3,838,815  |   |  |   | 3,968,065  |  
|Income (loss) per common share outstanding - basic and diluted:                   |      |               |            |  |   |            |   |  |      |            |   |      |   |            |   |  |   |            |  
|Income (loss) before discontinued operations and extraordinary item               |      |               |            |  |   |            |   |  |      |            |   |      |   |            |   |  |   |            |  
|Basic                                                                             |      |               | 0.53       |  |   | 1.01       |   |  |      | 0.41       |   |      |   | (0.06      | ) |  |   | (0.04      | )
|Diluted                                                                           |      |               | 0.50       |  |   | 1.00       |   |  |      | 0.41       |   |      |   | (0.06      | ) |  |   | (0.04      | )
|Income (loss) for the year                                                        |      |               |            |  |   |            |   |  |      |            |   |      |   |            |   |  |   |            |  
|Basic                                                                             |      |               | 0.53       |  |   | 1.49       |   |  |      | 0.41       |   |      |   | (0.06      | ) |  |   | (0.04      | )
|Diluted                                                                           |      |               | 0.50       |  |   | 1.48       |   |  |      | 0.41       |   |      |   | (0.06      | ) |  |   | (0.04      | )

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Notes:



|(1) | There were no discontinued operations during the periods presented above.
|--- | -------------------------------------------------------------------------



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Dividend Policy



We have not declared or paid any dividends since our inception.



B. Capitalization and Indebtedness



Not applicable.



C. Reasons for the Offer and Use of Proceeds



Not applicable.



D. Risk Factors



We rely primarily on royalty income from one source.



In October of 2001, we entered into an exclusive worldwide license of one of our patented multi-focal design technologies to Bausch & Lomb Incorporated (Bausch & Lomb), which generates a
significant portion of our net income. We collect royalties based on Bausch & Lombs worldwide net sales of products utilizing the design technology. There can be no assurance, however, that Bausch & Lomb will continue to sell
products using our technology at the same levels as it currently does or at all.



We rely on one supplier for our molded contact lenses and on one supplier for the raw materials used in the production of most of our soft lathe-cut contact lenses.



In June 2002, we entered into a supply agreement with one of our suppliers for the
manufacture of our Molded C-Vue multifocal lens, which accounts for a significant portion of our sales (approximately 46% of sales during the 2005 fiscal year). Although to date the supplier has met our requirements, there can be no assurance that
it will continue to meet its obligations under our agreement or any renewal of the agreement with it. The supplier is not under any obligation to supply products utilizing other materials or manufacturing processes, or to meet our possible future
requirements for design or material changes and enhancements. While alternate suppliers for the manufacture of specialty molded or partially molded contact lenses have been identified, should the need arise, there can be no assurance that an
alternate supplier can successfully manufacture lenses to our specifications or material requirements or on acceptable terms.



The raw materials used for the production of most of our lathe-cut soft contact lenses are purchased from Benz Research Corporation. Over the past three years we have not
experienced any interruption in the supply of our raw materials. While alternate vendors have been identified, should the need arise, there can be no assurance that an alternate supplier can provide the raw materials in accordance to our
specifications or on acceptable terms.



We face intense competition, and
our failure to compete effectively could have a material adverse effect on our profitability and results of operations.



The market for soft contact lenses is intensely competitive and many competing products have lower prices than do ours. Our ability to increase U.S. market penetration is
dependent on persuading eye care professionals to recommend our products to consumers, as well as persuading consumers of competing products to switch to our products, on the basis of quality, features and value. Our products compete with similar
products offered by a number of larger companies, including Johnson & Johnson, a unit of Vistakon, Ciba Vision Corporation, a division of Novartis AG, Bausch & Lomb, and Cooper Vision. Many of our competitors have substantially
greater financial, marketing and technical resources, greater market penetration and larger manufacturing capacities and volumes. Among other things, these advantages may afford our competitors greater ability to manufacture large volumes of lenses,
reduce product prices and influence customer buying decisions. We believe that certain of our competitors are expanding, or are planning to expand their manufacturing capacity, and are implementing automated manufacturing processes, in order to
support anticipated increases in volume. Because many of the costs incurred in producing contact lenses are relatively fixed, a manufacturer that can increase its volume can generally reduce its



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per unit costs and thereby increase its flexibility to reduce prices. Our competitors could also reduce prices to increase sales volumes, so as to utilize
their production capacity, or for other reasons. Price reductions by competitors could make our products less competitive, and we cannot assure you that we would be able to either match a competitors pricing plan or reduce our prices in
response. Our ability to respond to competitive pressures by decreasing our prices without adversely affecting our gross margins and operating results will depend on our ability to decrease our costs per lens. Any significant decrease in our costs
per lens will depend, in part, on our ability to increase sales volume and production capacity, of which there can be no assurance. Our failure to respond to competitive pressures and particularly price competition in a timely manner could have a
material adverse effect on our business, financial condition and results of operations.



Many of our competitors have access to higher oxygen permeable silicone hydrogel materials, which we currently do not have. Competition from products manufactured from silicone hydrogel materials may have a material adverse effect on our
business, financial condition and results of operations.



We also encounter
competition from manufacturers of eyeglasses and from alternative technologies, such as surgical refractive procedures (including new refractive laser procedures such as PRK, or photo refractive keratectomy, and LASIK, or laser in situ
keratomileusis). If surgical refractive procedures become increasingly accepted as an effective and safe technique for permanent vision correction, they could substantially reduce the demand for contact lenses by enabling patients to avoid the
ongoing cost and inconvenience of contact lenses. Accordingly, we cannot assure you that these procedures, or other alternative technologies that may be developed in the future, will not cause a substantial decline in the number of contact lens
wearers and thus have a material adverse effect on our business, financial condition and results of operations.



We depend upon certain key management and technical personnel.



Our future success will depend in part upon our ability to attract and retain highly qualified personnel. We compete for such personnel with other companies, academic
institutions, government entities and other organizations. We cannot assure you that we will be successful in retaining or hiring qualified personnel. The loss of any of our senior management or other key research, clinical, regulatory, or sales and
marketing personnel, particularly to competitors, could have a material adverse effect on our business, financial condition and results of operations.



Unilens Vision Inc. is a holding company. Unilens Vision Inc.s only source of cash, other than from debt or equity financings, is from distributions from its
subsidiaries and interest earnings of cash invested.



Unilens Vision
Inc. is a holding company with essentially no operations of its own and conducts substantially all of its business operations through one of its subsidiaries, Unilens Corp. USA. Unilens Vision Inc.s only significant asset is the outstanding
capital stock of such subsidiary. Unilens Vision Inc. is wholly dependent, other than from debt or equity financings, on the cash flow of such subsidiary and dividends and distributions to it from such subsidiary in order to service any current and
future indebtedness obligations it may have.



With our common shares
being traded only on the OTC Bulletin Board or on the pink sheets in the U.S., the liquidity of our common shares in the U.S. may be limited.



Our common shares trade in Canada on the TSX Venture Exchange and in the United States on the OTC Bulletin Board. Stocks in the OTC Bulletin
Board market ordinarily have much lower trading volume than in other markets, such as the Nasdaq SmallCap Market or the Nasdaq National Market. Very few market makers take interest in shares traded over-the-counter, and accordingly the markets for
such shares are less orderly than is usual for Nasdaq stocks. As a result of the low trading volumes ordinarily obtained in the OTC Bulletin Board market, sales of our common shares in any significant amount could not be absorbed without a dramatic
reduction in price. Moreover, thinly traded shares in the OTC Bulletin Board market are more susceptible to trading manipulations than is ordinarily the case for more actively traded shares.



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Penny stock rules may make buying or selling our common shares difficult, severely limiting the market
price of our common shares and the liquidity of our shares in the U.S.



Trading in our common shares is subject to the penny stock regulations adopted by the U.S. Securities and Exchange Commission. These regulations generally define a penny stock to be any equity security that has a
market price of less than $5.00 per share, subject to certain exceptions. These rules require that any broker-dealer who recommends our securities to persons other than prior customers and accredited investors, must, prior to the sale, make a
special written suitability determination for the purchaser and receive the purchasers written agreement to execute the transaction. Unless an exception is available, the regulations require delivery, prior to any transaction involving a
penny stock, of a disclosure schedule explaining the penny stock market and the risks associated with trading in the penny stock market. In addition, broker-dealers must disclose commissions payable to both the broker-dealer and
registered representative and current quotations for the securities they offer. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our stock, which could severely
limit their market price and the liquidity of our stock.



The price of
our common shares in the U.S. and Canada continues to be highly volatile.



The market price of our common shares in the U.S. and Canada is, and is likely to continue to be, volatile and may be significantly affected by factors such as: actual or anticipated fluctuations in our operating results or those of our
competitors; competitive factors; trade practice litigation; new products offered by us or our competitors; developments with respect to patents or proprietary rights; conditions and trends in our industry and other related industries; regulatory
actions; adoption of new accounting standards; changes in financial estimates by securities analysts; general market conditions; and other factors.



We do not pay dividends to holders of our common shares.



All of our available funds will be invested to finance the growth of our business and therefore, investors cannot expect and should not
anticipate a dividend on our common shares in the foreseeable future.



Our manufacturing facility located in the U.S. and our products sold in the U.S. are subject to stringent regulation by the Food and Drug Administration.



Under the Food, Drug and Cosmetic Act (the FDC Act) and implementing regulations, the Food and Drug Administration (the
FDA) regulates the testing, manufacturing, labeling, distribution, and promotion of medical devices such as contact lenses. Noncompliance with applicable requirements can result in, among other things, fines, injunctions, civil
penalties, recall or seizure of products, total or partial suspension of product distribution, failure of the government to grant premarket clearance or approval for devices, withdrawal of marketing clearances or approvals, and criminal prosecution.
The FDA also has the authority to request the recall, repair, replacement or refund of the cost of any device manufactured or distributed by us.



Before a new device can be introduced into the U.S. market, it must receive FDA premarket notification clearance under Section 510(k) of the FDC Act (Section
510(k)) or premarket approval pursuant to the more costly and time-consuming premarket approval application (PMA) procedure. For devices that are cleared through the Section 510(k) process, modifications or enhancements that
could significantly affect safety or effectiveness, or constitute a major change in the intended use of the device, will require new Section 510(k) submissions. While less expensive and time-consuming than obtaining PMA clearance, securing
Section 510(k) clearance may involve the submission of a substantive review of six months or more. Any products manufactured or distributed pursuant to Section 510(k) clearance are subject to pervasive and continuing regulation by the FDA,
including record keeping requirements and reporting of adverse experience with the use of the device.



We are seeking Section 510(k) clearances for all of the new products we intend to manufacture and market in the U.S. New products may require clinical studies to support a Section 510(k) clearance or PMA.
There is no certainty that clinical studies involving new products will be completed in a timely manner or that the data and information obtained will be sufficient to support the filing of a PMA or Section 510(k) clearance. We may not be able
to obtain necessary clearances and approvals to market new devices or any other products under development on a timely basis, if at all, and delays in receipt or failure to receive such clearances or approvals, the loss of previously received
clearances, or failure to comply with existing or future regulatory requirements could have a material adverse effect on our business, financial condition and results of operations.



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As a manufacturer of medical devices, we are required to register with the FDA and comply with the FDAs Code of
Federal Regulations quality system requirements. If the FDA believes that we may not be operating in compliance with applicable laws and regulations, it can record its observations on a Form FDA 483; place us under observation and re-inspect the
facilities; institute proceedings to issue a warning letter apprising of violative conduct; detain or seize products; mandate a recall; enjoin future violations; and assess civil and criminal penalties against us, our officers or our employees. In
addition, in appropriate circumstances, the FDA could withdraw clearances or approvals. Failure to comply with regulatory requirements or any adverse regulatory action could have a material adverse affect on us.



Manufacturers of medical devices for marketing in the U.S. also must comply with the medical
device reporting (MDR) requirements of the FDA, that require companies report to the FDA any incident in which its product may have caused or contributed to a death or serious injury, or in which its product malfunctioned and, if the
malfunction were to recur, it would be likely to cause or contribute to a death or serious injury. Labeling and promotional activities are subject to scrutiny by the FDA. Current FDA enforcement policy prohibits the marketing of approved medical
devices for unapproved uses. We are subject to routine inspection by the FDA for compliance with quality systems requirements, MDR requirements, and other applicable regulations. We cannot assure you that we will not incur significant costs to
comply with laws and regulations in the future or that laws and regulations will not have a material adverse effect upon our business, financial condition or results of operation.



Our products are subject to stringent regulation by various foreign jurisdictions in which our products are sold.



Our products also are subject to regulation in other countries in which
we sell our products. The laws and regulations of such countries range from comprehensive medical device approval procedures such as those described above to simple requests for product data or certifications. The number and scope of these laws and
regulations are increasing. In particular, medical devices in the European Union (the EU) are subject to the EUs medical devices directive (the Directive).



Under the system established by the Directive, all medical devices other than active implants and in vitro diagnostic products currently
must qualify for CE marking. CE marking means that a manufacturer certifies that its product bearing the CE mark satisfies all requirements essential for the product to be considered safe and fit for its intended purpose. We
have received CE marking authorization for all products that we currently market in the EU.In addition, medical device sales in the EU require auditing by a certified third party (a Notified Body) to ensure that the
manufacturers quality systems are in compliance with the requirements of the ISO 9000 standards.



Although member countries must accept for marketing medical devices bearing a CE marking without imposing further requirements related to product safety and performance, each country may require the use of its own
language or labels and instructions for use. Authorities who are required to enforce compliance with the requirements of the Directive can restrict, prohibit and recall CE-marked products if they are unsafe. Such a decision must be confirmed by the
European Commission in order to be valid. Member countries can impose additional requirements as long as they do not violate the Directive or constitute technical barriers to trade.



Additional approvals from foreign regulatory authorities may be required for international sale of our products in non-EU countries. Failure
to comply with applicable regulatory requirements can result in the loss of previously received approvals and other sanctions and could have a material adverse effect on our business, financial condition and results of operations.



We face an inherent risk of exposure to product liability claims in the event that the
use of the products we manufacture or sell results in personal injury.



We face an inherent risk of exposure to product liability claims in the event that the use of the products we manufacture and/or sell results in personal injury. Although we have not experienced any losses due to product



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liability claims, we cannot assure you that we will not experience such losses in the future. We maintain insurance against product liability claims, but we
cannot be certain that such coverage will be adequate to cover any liabilities that we may incur, or that such insurance will continue to be available on terms acceptable to us. A successful claim brought against us in excess of available insurance
coverage, or any claim that results in significant adverse publicity against us, could harm our business.



All of our manufacturing operations are conducted at a single facility.



We conduct all of our manufacturing operations at a single facility in Largo, Florida. As a result, any prolonged disruption in the operations of our manufacturing
facility, whether due to technical or labor difficulties, destruction of or damage to the facility or other reasons, could have a material adverse effect on our business, financial condition and results of operations. In this regard, because our
principal manufacturing facility is located in Largo, Florida, such facility is exposed to the risks of damage from certain weather conditions including, without limitation: hurricanes, windstorms, and floods. If our facility was to be out of
production for an extended period, our business, financial condition and results of operation would be materially adversely affected.



Our manufacturing capacity may not be adequate to meet the demands of our business.



Our products are manufactured in quantities sufficient to satisfy our current level of product sales. If we experience increases in sales,
we will need to increase our production beyond our present manufacturing capacity. The process for transferring the manufacture of our products to new facilities is lengthy and requires regulatory approval, and our manufacturing and related costs
could increase as a result of the transaction. Any prolonged disruption in the operation of our manufacturing facilities or those of our third-party manufacturers, or any significant increase in associated costs, could materially harm our business,
financial condition and results of operations.



If we are unable to
protect our intellectual property rights, our business and prospects may be harmed.



Our ability to compete effectively is dependent upon the proprietary nature of the designs, processes, technologies and materials owned by, used by or licensed to us. Although we attempt to protect our proprietary
property, technologies and processes both in the U.S. and in foreign countries through a combination of patent law, trade secrets and non-disclosure agreements, these may be insufficient. In addition, because of the differences in foreign patent and
other laws concerning proprietary rights, our products may not receive the same degree of protection in foreign countries as they would in the U.S.



We may be subject to intellectual property litigation and infringement claims, which could cause us to incur significant expenses or prevent us from selling our
products.



There is a substantial amount of litigation over patent and
other intellectual property rights in the eye care industry, and in the contact lens markets particularly. The fact that we have patents issued to us for our products does not mean that we will always be able to successfully defend our patents and
proprietary rights against challenges or claims of infringement by our competitors. A successful claim of patent or other intellectual property infringement against us could adversely affect our growth and profitability, in some cases materially. We
cannot assure you that others will not claim that our proprietary or licensed products are infringing their intellectual property rights or that we do not in fact infringe those intellectual property rights. From time to time, we receive notices
from third parties of potential infringement and receive claims of potential infringement. We may be unaware of intellectual property rights of others that may cover some of our technology. If someone claims that our products infringed their
intellectual property rights, any resulting litigation could be costly and time consuming and would divert the attention of management and key personnel from other business issues. The complexity of the technology involved and the uncertainty of
intellectual property litigation increase these risks. Claims of intellectual property infringement also might require us to enter into costly royalty or license agreements. However, we may be unable to obtain royalty or license agreements on terms
acceptable to us or at all. We also may be subject to significant damages or an injunction preventing us from manufacturing, selling or using some or some aspect of our products in the event of a successful claim of patent or other intellectual
property infringement. Any of these adverse consequences could have a material adverse effect on our business and profitability.



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If we do not introduce new commercially successful products in a timely manner, our products may become obsolete
over time, customers may not buy our products and our revenue and profitability may decline.



Demand for our products may change in ways we may not anticipate because of: evolving customer needs; the introduction of new products and technologies; evolving surgical practices; and evolving industry standards.
Without the timely introduction of new commercially successful products and enhancements, our products may become obsolete over time, in which case our revenue and operating results would suffer. The success of our new product offerings will depend
on several factors, including without limitation our ability to: properly identify and anticipate customer needs; commercialize new products in a timely manner; manufacture and deliver products in sufficient volumes on time; differentiate our
offerings from competitors offerings; achieve positive clinical outcomes for new products; satisfy the increased demands by healthcare payors, providers and patients for lower-cost products; and innovate and develop new materials
and product designs. Moreover, innovations generally will require a substantial investment in research and development before we can determine the commercial viability of these innovations, and we may not have the financial resources necessary
to fund these innovations. In addition, even if we are able to successfully develop enhancements or new generations of our products, they may not produce revenue in excess of the costs of development, and they may be quickly rendered obsolete by
changing customer preferences or the introduction by our competitors of products embodying new technologies or features.



Risks of international operations and the effects of foreign currency fluctuations can adversely impact our business and operating results.



In the fiscal years ending 2005, 2004 and 2003, our international sales represented
approximately 1%, 2% and 7%, respectively, of our net sales for each such year. As a result, our business is subject to the risks generally associated with doing business abroad, such as: foreign consumer preferences; changes in currency exchange
rates; increased government regulations; longer accounts receivable payment cycles; and foreign tax laws or tariffs.



ITEM 4. INFORMATION ON THE COMPANY



SUMMARY



|A. | History and Development of the Company
|-- | --------------------------------------



|1. | Our legal name is Unilens Vision Inc.
|-- | ---------------------------------------



|2. | We are incorporated in British Columbia, Canada, pursuant to its Business Corporations Act (the BCBCA). We registered our articles and memorandum on December 20,
1982 under the predecessor statute of the BCBCA. Our duration is perpetual.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3. | The address of our registered office is 1910-400 Burrard Street, Vancouver, B.C. V6C 3A6 and our telephone number is (604) 685-8666. We operate our business in Florida through
one of our wholly-owned subsidiaries, Unilens Corp. USA. Unilens Corp. USAs office is located at 10431 72ndStreet North, Largo, Florida 33777 and its telephone number is (727) 544-2531.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4. | Important recent events in the development of our business:
|-- | -----------------------------------------------------------



(i) In mid 2001, we began focusing on the licensing of our key technology to interested third parties. In October 2001, we entered into an exclusive
worldwide licensing agreement with Bausch & Lomb for one of our patented multifocal soft lens designs. Under the terms of the agreement, Bausch & Lomb pays us a royalty ranging from two to five percent of its worldwide sales
of the product.



(ii) At the same time, we entered into a
supply agreement for the C-Vue® lens, a molded soft
multifocal contact lens launched in September 2002. The C-Vue lens is manufactured for us utilizing one of our patented multifocal soft lens designs by a third party and is marketed exclusively in the United States to eye care professionals.



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(iii) On February 17, 2004, we entered into an asset purchase agreement to acquire the toric bifocal
business owned by the Lifestyle Company, Inc. (Lifestyle Company). Under the terms of the agreement, in consideration for selected fixed assets, regulatory approvals, and various other assets of the Lifestyle Company, we paid Lifestyle
Company $75,000 in cash and pay royalties ranging from 5% to 8% on all sales of acquired products over the next 1 to 4 years. We expect to manufacture the product lines at our manufacturing facility located in Largo, Florida. The products acquired
include a soft bifocal toric contact lens that is marketed worldwide under the LifeStyle MVt trade name, along with certain other bifocal lens designs sold under the Xtra and 4vue trade names. The soft toric bifocal line addresses
the market for patients with astigmatism that require bifocal correction.



(iv) On February 23, 2005, we entered into an asset purchase agreement to acquire the Aquaflex and SoftCon product lines from CIBA Vision Corporation. Under the terms of the agreement, we will pay up to $350,000
for inventory, trademarks, regulatory approvals, and various other assets. The Company assigned the $350,000 cost to inventory, of which $150,000 was paid at closing, with the remaining $200,000 to be paid upon the sale of inventory. As part of this
agreement, the Company will also pay a royalty ranging from five percent to eight percent on all future sales of the acquired product lines over the next five years.



|5. | Our principal capital expenditures and divestitures over the period beginning three years prior to June 30, 2005 are as follows:
|-- | --------------------------------------------------------------------------------------------------------------------------------



Expenditures during the period:



|                                           |  |                     |         |              |   |    
|------------------------------------------ |  | ------------------- | ------- | ------------ | - | ---
|Year                                       |  | Plant and Equipment |         | Other Assets
|Amounts Deferred (capitalized or invested) |  |                     |         |              |   |    
|2005                                       |  | $                   | 122,470 |              | $ | 0  
|2004                                       |  | $                   | 157,354 |              | $ | 0  
|2003                                       |  | $                   | 21,109  |              | $ | 455



Divestitures: There
were no divestitures during the period.



|6. | The principal capital expenditures and divestitures by property currently in progress, including the distribution of these investments geographically and the method of financing are
as follows:
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Expenditures, all of which are in
the United States and are financed by the Companys existing cash balances:



|                |  |                     |        |              |   |      
|--------------- |  | ------------------- | ------ | ------------ | - | -----
|                |  | Plant and Equipment |        | Other Assets
|2006 Activities |  | $                   | 75,000 |              | $ | 5,000



Divestitures: There
are no divestitures currently in progress



|7. | We have not received any indication of any public takeover offers by third parties in respect of our common shares during the last or current fiscal year.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------



|B. | Business Overview
|-- | -----------------



|1. | We manufacture, distribute and license specialty lens products using proprietary design and manufacturing technology from our manufacturing and administrative facility in Largo,
Florida. Our lens business is broken down into the following four categories: (i) disposable lenses; (ii) conventional soft lenses; (iii) gas permeable lenses; and (iv) replacement and other lenses.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Our disposal lenses line consists of the C-Vue®, a mulitfocal cast molded blister-packed box of six
lenses sold for frequent replacement. The C-Vue lens is manufactured for us by a third party utilizing one of our patented soft lens designs and is marketed exclusively in the United States to eye care professionals. We expect the C-Vue multifocal
to make up an increasing percentage of our future sales.



Our
conventional soft lenses line of soft lathe-cut multifocal and toric multifocal products consists of the following: the C-Vue Toric Multifocal, designed for patients with an astigmatism that require bifocal correction; the Unilens, a aspheric
multifocal contact lens; the SoftSite, a highadd multifocal contact lens; the SimulVue, a simultaneous vision bifocal contact lens with the capabilities for correcting advanced presbyopia; the Unilens EMA, a visibility tinted multifocal
contact lens available in planned replacement modality; and the C-Vue 55, a highadd multifocal contact lens manufactured in a comfortable high-water content material.



Our gas permeable lens line of products consist of the following: the Unilens GP, a multifocal contact lens intended
for patients with astigmatism who need low to moderate presbyopic correction; the Unilens GP Plus, designed to accommodate wearers requiring higher presbyopic correction; and the C-Vue GP, a front aspheric design incorporating the C-Vue design
technology.



Our replacement and other lenses line of business
primarily consists of the Sof-Form and LifeStyle brand of toric multifocal, toric and spherical daily, and extended wear lenses marketed under the Lombart brand; the UniVision, an aspheric low vision lens; and our newest acquisition, the Aquaflex
and SoftCon spherical daily and extended wear brand of lenses acquired from CIBA Vision.



Our lens products are marketed, as a family of specialty vision correction products. In October 2001, we licensed the exclusive worldwide rights to one of our multifocal designs to Bausch & Lomb. Under the
terms of the agreement, Bausch & Lomb pays us a royalty ranging from two to five percent of worldwide net sales utilizing the technology. Bausch & Lomb began selling product utilizing the technology in October of 2002. During the
fiscal year ending June 30, 2005, we recorded approximately $1,632,000 in royalty income.



|2. | We operate within the highly competitive contact lens market. We compete with industry leaders, such as Johnson and Johnson, a unit of Vistakon, Bausch & Lomb, Ciba Vision
Corporation, a division of Novartis AG, and Cooper Vision. Our ability to compete successfully is dependent in part on eye care professionals perception of product quality, product development, technical innovation, and price. We market our
products worldwide. For the fiscal years ending June 30, 2005, 2004 and 2003, approximately 1%, 2% and 7%, respectively, of our revenue was derived from sales outside the United States, primarily from sales in Switzerland, Germany, Spain, and
Brazil.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3. | Our sales are not substantially subject to seasonality, except that sales during the quarter ending December 31, are normally lower than other quarters due to a decrease in patient
visits to eye care professionals during the Christmas holiday season.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4. | We rely on one supplier, Benz Research Corporation, for the raw materials used in the production of soft contact lenses. The raw materials are readily available in our industry and
alternate vendors have been identified as potential suppliers with competitive pricing and quality. Over the past three fiscal years, we have not experienced any volatility in the price of raw materials.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5. | We currently market and distribute our products to qualified practitioners through a combination of authorized independent distributors, authorized manufactures
representatives, and sales representatives.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|6. | We are materially dependent on our software and lens design technology. Our technology allows us to license and manufacture high quality reproducible lenses. We have been granted
the following patent for our key technology: U.S. Patent No. 5,754,270 is for a unique aspheric design that may be configured in a soft multifocal, toric, rigid gas permeable lens, or intraocular lens. We have been granted the following U.S.
trademarks for our products: (i) the Unilens mark covers soft and rigid multifocals, (ii) SimulVue is a simultaneous vision bifocal contact lens, (iii) SoftSite is a highadd multifocal contact lens,
(iv) UniVision is a aspheric low vision lens, (v) Sof-Form and Lombart brands are a series of spherical, toric, and extended wear lenses and (iv) C-Vue covers multifocal and toric multifocal lenses utilizing
our patented technology.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7. | We regularly compete with a number of other companies in the contact lens industry that have substantially greater financial resources than we do. Our ability to compete is based
upon marketing quality products to eye care professionals utilizing our patented technology.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|8. | Contact lenses are regulated as medical devices in the U.S., the EU and other countries. In the U.S., all devices must receive pre-market approval by the FDA. There are two review
procedures to gain this pre-market approval: a PMA and a Section 510(k) submission. Under a PMA, the manufacturer must submit to the FDA supporting evidence sufficient to prove the safety and effectiveness of the device. The FDA has 180 days to
review a PMA. Certain products, however, may qualify for a submission authorized by Section 510(k). Under this procedure, the manufacturer gives the FDA a pre-market notification that it intends to commence marketing the product, and that it
has established that the product is substantially equivalent to another product already on the market. The FDA has 90 days to review a Section 510(k) submission. In the EU, the CE mark is required for all medical devices sold. We
hold a CE mark for the classes of contact lenses that we sell. The CE mark allows us to market products upon signing a declaration of conformity with the EUs Medical Device Directive requirements, which we do for each product sold. In
addition, medical device sales in the EU require auditing by a Notified Body to ensure that the manufacturers quality systems are in compliance with the requirements of the ISO 9000 standards. We have a Notified Body which routinely audits our
quality systems. See Item 3(D.) Risk Factors  Our manufacturing facility located in the U.S. and our products sold in the U.S. are subject to stringent regulation by the Food and Drug Administration and Item
3(D.) Risk Factors  Our products are subject to stringent regulation by various foreign jurisdictions in which our products are sold.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|C. | Organizational Structure
|-- | ------------------------



We are incorporated in British Columbia, Canada. Currently, all of our operations are carried out through a wholly owned subsidiary, Unilens Corp. USA, a Delaware
corporation, located in Largo, Florida. Our only other subsidiary, Unilens Contact Lens Laboratory, Inc., a Florida corporation, does not currently hold any of our assets and we do not currently conduct any of our operations through this subsidiary.



|D. | Property, Plants and Equipment
|-- | ------------------------------



We lease a 27,000 square foot manufacturing facility in Largo, Florida, pursuant to a Lease Agreement providing for a lease term through September 30, 2008, and
monthly rental payments of $17,045, with one adjustment effective in September 2007 based on the Consumer Price Index, not to exceed three percent. Our executive, administrative, and head office is located in Vancouver, British Columbia. We have no
written lease agreement with respect to the use of our Vancouver office, nor did we pay any fees during the fiscal year ended June 30, 2005 for the use of the office.



We have approximately $4.9 million dollars at cost of specialized manufacturing equipment located in our Largo, Florida manufacturing
facility with a net book value of approximately $300,000 as of June 30, 2005. All of the equipment was pledged as collateral on a loan from a related party. The Company paid the full amount due on this note during the year ended June 30,
2005. (See Item 7.  Major Shareholders and Related Party Transactions).



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ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS



A. Operating Results



Fiscal 2005 Compared to Fiscal 2004



During the 2005 Fiscal Year (the Current Year) we earned net
income before tax and extraordinary item of $1,710,687 compared to a net income before tax and extraordinary item of $863,121 for the 2004 Fiscal Year (the Prior Year). The increase in income before tax and extraordinary item during the
Current Year of $847,566, as compared to the Prior Year, was primarily due to (i) an increase in royalty income, derived from the license agreement with Bausch & Lomb, of $694,657 to $1,632,051 during the Current Year as compared to
$937,394 of royalty income earned during the Prior Year, (ii) an increase in gross margin of $353,755 on higher sales during the Current Year, and (iii) a decrease in interest and other expense of $18,942, all of which were partially
offset by an increase in expenses of $219,788 described below. After recording a net deferred income tax benefit of $527,100, we had net income of $2,237,787 or $0.50 per diluted share for the 2005 Fiscal Year. In comparison, in the Prior Year we
had net income of $6,076,734 or $1.48 per diluted share after recording a net deferred income tax benefit of $3,261,050 and a one-time extraordinary gain from the extinguishment of debt of $1,952,563.



Sales during the Current Year were $4,971,577, an increase of $897,000 (22.0%), as compared
to sales of $4,074,577 during the Prior Year. The increase in sales was primarily due to continued growth in the Companys C-Vue disposable multifocal and the C-Vue toric multifocal contact lenses which was partially offset by an expected
decline in certain of the Companys soft lathe-cut product lines that are nearing the end of their life cycle. In addition, we acquired the SoftCon and Aquaflex brands from CIBA Vision at the end of February that account for approximately 6% of
sales during the Current Year. Gross margin decreased slightly from 40.7% in the Prior Year to 40.5% in the Current Year due to a shift in product mix.



The increase in expenses during the Current Year, as compared to the Prior Year, was primarily due to increases in sales and marketing expenses of $226,517 which was
partially offset by a decrease in administration expenses of $26,291. Sales and marketing expenses increased primarily due to increased promotional and advertising activity associated with the launch of the C-Vue Toric Multifocal lens in January of
2005 along with marketing efforts associated with the acquisition of the SoftCon EW and Aquaflex lenses acquired from CIBA Vision at the end of February 2005. Administration expenses decreased primarily due to a reduction in amortization of
intangibles and lower expense allocations, offset by increased consulting fees associated with general regulatory compliance issues, increased insurance expense, and additional wages for personnel associated wit the general increase in the
Companys activities during the period.



During the Current Year we
recorded an income tax benefit of $527,100 compared to an income tax benefit in the Prior Year of $3,261,050. The income tax benefit is the result from the recognition of income tax loss carry-forwards offset by a reduction in the deferred income
tax asset due to the application of tax loss carry forwards against the taxable income earned during the year.



During the 2004 Fiscal Year, a one-time extraordinary gain of $1,952,563 (net of associated expenses and income tax amortizations) was recorded as a result of a settlement agreement signed with Competitive
Technologies Inc. There were no extraordinary items recorded for the 2005 and 2003 Fiscal Years.



During the fiscal year ended June 30, 2005, we generated $1,262,375 in cash from operations. We used cash of $122,470 during the Current Year for the purchase of capital additions. In addition, the Company used
net cash of $1,235,289 for financing activities during the Current Year, primarily consisting of $1,238,139 used for the early repayment and complete elimination of our term debt.



Fiscal 2004 Compared to Fiscal 2003



During the 2004 fiscal year we earned net income of $6,076,734 compared to a net income of $1,558,270 for the 2003 fiscal year. The increase in profit during the 2004
fiscal year of $4,518,464, as compared to the 2003 fiscal year, was primarily due to (i) a one-time extraordinary gain of $1,952,563 (net of associated expenses and income tax amortizations) due to the elimination of debt that resulted from a
settlement agreement signed with Competitive Technologies Inc. on October 17, 2003, (ii) a net increase in deferred income tax benefit of $1,562,050 that resulted from the recognition of income tax loss carry-forwards offset by a reduction
in the deferred income tax asset resulting from the application of tax loss carry forwards against the taxable income earned during the 2004 fiscal year, (iii) an



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increase in royalty income, derived from the license agreement with Bausch & Lomb, of $669,742 to $937,394
during the 2004 fiscal year as compared to $267,652 of royalty income earned during the 2003 fiscal year, (iv) an increase in gross margin of $604,787 on higher sales during the 2004 fiscal year, (v) an increase in expenses of $374,596
described below and (vi) a decrease in interest and other expense of $103,918. Sales during the 2004 fiscal year were $4,074,577, an increase of $945,476 (30.2%), as compared to sales of $3,129,101 during the 2003 fiscal year. The increase in
sales was primarily due to significant growth in sales of our C-Vue Multifocal, which was partially offset by an expected decline in certain of our soft lathe-cut product lines that are nearing the end of their life cycle. Gross margin increased
from 33.7% in the 2003 fiscal year to 40.7% in the 2004 fiscal year due to a favorable shift in product mix to higher margin products and a decrease in contract-manufactured unit cost.



The increase in expenses during the 2004 fiscal year, as compared to the 2003 fiscal year, was primarily due to increases in sales and
marketing expenses of $130,730 and in administration expenses of $254,314. Sales and marketing expenses increased primarily due to increased commissions paid on higher sales to independent sales representatives and increased salary expense
associated with an expanded customer support and consultation department. Administration expenses increased primarily due to increased legal, professional and consulting fees associated with obtaining a listing on the OTC Bulletin Board in the
United States, as well fees associated with general regulatory compliance issues, investor relations, and increased salary expense for additional personnel associated with the general increase in our activities during the period.



During the fiscal year ended June 30, 2004, we generated $827,218 in cash from
operations. We used cash of $157,354 during the 2004 fiscal year for the purchase of capital asset additions. In addition, we used net cash of $397,376 for financing activities during the June 30, 2004, consisting of $461,861 used for the
repayment of debt offset by $64,485 we received from the issuance of common shares on exercise of incentive stock options.



Fiscal 2003 Compared to Fiscal 2002



During the 2003 fiscal year we reported net income of $1,558,270 compared to a net loss of $228,673 for the 2002 fiscal year primarily due to a $1,699,000 income tax
benefit that resulted from the recognition of future tax assets expected to be realized. On a before tax basis, we had a decrease in net loss during the 2003 fiscal year of $87,943, as compared to the 2002 fiscal year. This decrease was primarily
due to royalty income of $267,652 derived from the license agreement with Bausch & Lomb, which was partially offset by a decrease in gross margin of $201,431 in the 2003 fiscal year, as compared to the gross margin in the 2002 fiscal year.
Gross margin declined from 37.35% in the 2002 fiscal year to 33.7% in the 2003 fiscal year. The decrease was primarily due to a shift in the product mix to the more competitively priced, lower margin multifocal lenses. Sales during the 2003 fiscal
year of $3,129,101 decreased by $234,248 as compared to sales of $3,363,349 during the 2002 fiscal year due to a decline in soft lathe-cut product lines which was partially offset by increased sales of the our newest product, the C-Vue multifocal.



Sales and marketing expenses for the 2003 fiscal year, as compared to the 2002
fiscal year, increased by approximately $13,246 primarily due to increased advertising and promotional expense associated with the launch of the C-Vue multifocal product. Administrative expenses increased by approximately $11,402 primarily due to
increased rental expense and an increase in the reserve for bad debts.



B.
Liquidity and Capital Resources



Historical Overview:



Since our inception and through the fiscal year ended June 30, 1992, we experienced
ongoing negative cash flows from operations. During this period, we used a combination of debt and small equity private placements to fund ongoing operations. Due to this continuing negative operating cash flow, we determined that it was necessary
to re-evaluate, on a comprehensive basis, our operations with the goal to develop and implement a plan to bring us to an ongoing positive cash flow. Accordingly, in early December of 1992, we effected a major financial restructuring. The
reorganization included a reduction in our personnel from 92 to 53 employees or approximately 43%. Our sales and marketing efforts were redefined and restructured. Integral to the restructuring was mid-term debt funding in the amount of $450,000
from UNIINVEST Holding AG (Uniinvest, formerly EBC Zürich AG) (See Item 7.  Major Shareholders and Related Party Transactions), and the renegotiation of long-term debt with our primary creditor, Competitive
Technologies, Inc. (CTI, formerly University Patents, Inc.). On September 30, 1993, we



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completed the first step of a two step partial settlement with CTI by issuing 275,000 of our common shares at a price of
$1.25 per share. The issuance of the stock increased our equity by $343,750. Step two of the partial settlement was completed when $75,000 was paid to CTI on January 31, 1994. The plan successfully achieved positive operating cash flow for the
fiscal years ended June 30, 1997, 1996 and 1995.



However, during the
fiscal year 1998 and the first of half of fiscal year 1999, we experienced negative cash flow on decreased sales primarily due to significant price competition in the multifocal marketplace, as well as the entrance of a molded disposable multifocal
lens into the market. Accordingly, during the 1998 and 1999 fiscal years we initiated a sales and marketing restructuring as well as implemented other cost containment initiatives with the goal of generating ongoing positive cash flows. The
restructuring plan of 1998 and 1999 yielded a positive cash flow from operating activities during the fiscal years ending June 30, 2000, 2001 and 2002. During the fiscal year ended June 30, 2003, we incurred negative cash flow from
operations principally due to the funds invested in inventories and receivables in connection with the launching of the C-Vue multifocal product as further described below.



In October 2003, we entered into a settlement agreement with CTI. Under the terms of the agreement, all of our prior obligations to CTI were
discharged in exchange for a $1,250,000 non-interest bearing installment note, secured by our assets. We paid CTI $100,000 on the execution of this agreement and on December 31, 2003 began quarterly payments equal to the greater of $100,000 or
an amount equal to 50% of the royalties received by us from Bausch & Lomb during the quarter ending on the payment due date. We paid this note in full during the year ended June 30, 2005.



Also, in October 2003, we exchanged our $450,000 secured term note payable to Uniinvest,
which was due in full for a new secured term note. The new note was in the same principal amount, but payable in quarterly principal payments in the amount of $25,000 per quarter beginning January 2004 and maturing April 2008, with monthly interest
at the rate of prime plus 3%. We repaid this note in full during the year ended June 30, 2005.



On April 28, 2005, we obtained a line of credit of $1,000,000 from a commercial lender with an interest rate of LIBOR plus 2.5 percent and maturing in April 2006. The line is collateralized by a security interest
in all of the assets of our subsidiary Unilens Corp. USA. As of June 30, 2005, the Company does not have any amounts outstanding under this line of credit. Under the related loan agreement, the Company is required to meet specified financial
covenants, with which we were in full compliance at June 30, 2005.



Fiscal 2005 Compared with Fiscal 2004



As of June 30,
2005 we had positive working capital of $2.5 million, which represents an increase of $1.1 million compared to Fiscal Year 2004. The increase in working capital was principally due to a reduction in debt from the early repayment and complete
elimination of our term debt, an increase in receivables on higher sales and royalties, and the increase in the deferred tax asset. At the end of the 2005 Fiscal Year, we had positive stockholders equity of $6.2 million representing an
increase of $2.2 million. The increase in stockholders equity was primarily from operating profits, royalty income and the recognition of deferred tax assets during the 2005 Fiscal Year. Positive cash flow from operating activities totalled
$1,262,375 for the 2005 Fiscal Year, which was primarily used for the repayment of long-term debt of $1,238,139, and for the purchase of capital assets in the amount of $122,470. We estimate that we will have sufficient resources to fund our working
capital requirements during the year ended June 30, 2006.



Fiscal 2004
Compared with Fiscal 2003



During the 2004 fiscal year, we achieved
positive stockholders equity of $4.0 million as of June 30, 2004 as compared to a stockholders deficiency of $2.1 million as of June 30, 2003, principally due to the elimination of debt, the recording of deferred income tax
benefits and operating profits achieved during the 2004 fiscal year. Positive cash flow from operating activities totaled $827,218 for the fiscal year ended June 30, 2004 as compared to negative cash flow from operating activities of $157,633
for the fiscal year ended June 30, 2003. During the 2004 fiscal year, we primarily used our cash balance for the repayment of debt. We estimate that we will have sufficient resources to fund working capital requirements during the 2005 fiscal
year.



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Fiscal 2003 Compared with Fiscal 2002



We ended our fiscal year 2003 with working capital of $1,969,314 compared with a working capital deficit of $2,843,009 at the end of the
previous year. Working capital increased by $4,812,323 when compared to the previous year, primarily due to the elimination of approximately $3,200,000 in short term debt that was a result of the October 2003 settlement agreement with CTI, along
with the recognition of approximately $1,500,000 in future tax assets. Negative cash flow from operating activities totaled $157,633 for the fiscal year ended June 30, 2003 as compared to positive cash flow from operating activities of $48,177
for the fiscal year ended June 30, 2002. During the 2003 fiscal year, we primarily used our cash balance to increase inventories and receivables associated with the launch of our latest product, the C-Vue multifocal.



C. Research Expenditures



We have ongoing research and development relating to different contact lens products, other
applications of our technology and component materials. We have been granted the following patent for our key technology: U.S. Patent No. 5,754,270 is for a unique aspheric design that may be configured in a soft multifocal, toric, rigid gas
permeable lens, or intraocular lens. Future new product development may involve additional costs including the cost of obtaining FDA approval. Obtaining FDA approval, if required, may take a significant amount of time. Also, there can be no
assurance that such approval can be obtained or that we can successfully develop new products.



Research and development spending for fiscal years ending June 30, 2005, 2004, and 2003 was $71,680, $52,118, and $62,566, respectively.



D. Trend Information



The soft multifocal contact lens business has been impacted over the past several years by the introduction of molding manufacturing technology, allowing for the mass
production of most lens types at a fraction of the cost to lathe lenses, the manufacturing method used by us. The entrance of these molded lenses has created significant price competition in the marketplace. The reduced cost of the molded lens
allows for liberal trial lenses to be provided to eye care professionals for a more productive fitting session and immediate dispensing of lenses. Furthermore, lower manufacturing costs led to the introduction of frequent replacement and disposable
lenses, a modality preferred by many consumers. Recognizing this trend, we signed an agreement with a third party in 2002 for the supply of molded soft contact lenses (C-Vue) utilizing our patented design. See Item 10(C.)Material
Contracts. The C-Vue brand was launched in September 2002, and accounts for a significant portion of our business (approximately 46% of sales during the 2005 fiscal year).



E. Off-Balance Sheet Arrangements



None.



F. Tabular Disclosure of Contractual Obligations



The following table contains a summary of our obligations and commitments to make future payments under contracts, including debt, lease and purchase agreements as of
June 30, 2005. Amounts set forth below are expressed in U.S. dollars.



14



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##### Table of Contents

|                         |  |                        |         |                |   |         |  |         |         |                    |   |   |  |   |  
|------------------------ |  | ---------------------- | ------- | -------------- | - | ------- |  | ------- | ------- | ------------------ | - | - |  | - | -
|                         |  | Payments due by period
|Contractual Obligations: |  | Total                  |         | Less than 1 yr |   | 1-3 yrs |  | 3-5 yrs |         | Greater than 5 yrs
|Long-Term Debt           |  | $                      | 0       |                | $ | 0       |  | $       | 0       |                    | $ | 0 |  | $ | 0
|Capital Lease            |  |                        | 0       |                |   | 0       |  |         | 0       |                    |   | 0 |  |   | 0
|Operating Lease          |  |                        | 695,439 |                |   | 204,540 |  |         | 490,899 |                    |   | 0 |  |   | 0
|Purchase Obligations     |  |                        | 173,276 |                |   | 173,276 |  |         | 0       |                    |   | 0 |  |   | 0
|Other                    |  |                        | 0       |                |   | 0       |  |         | 0       |                    |   | 0 |  |   | 0
|                         |  |                        |         |                |   |         |  |         |         |                    |   |   |  |   |  
|Total                    |  | $                      | 868,715 |                | $ | 377,816 |  | $       | 490,899 |                    | $ | 0 |  | $ | 0



ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES



A. Directors and Senior Management



Principal Occupation of
Our Current Directors and Management



ALFRED W. VITALE 
President, Chief Executive Officer and Director



Mr. Vitale has
served as the President and a director of Unilens Vision Inc. since December 22, 1994. Mr. Vitale has also served as the President and Chief Executive Officer of Unilens Corp. USA since January 1993. Prior to January 1993, Mr. Vitale
served as the President of Whistler Corporation, a management consulting firm. Mr. Vitale is 77 years old.



WILLIAM D. BAXTER  Director



Mr. Baxter has served as one of our directors since December 22, 1994. From April 1, 2001 until November 30, 2005 Mr. Baxter served as President
and Chief Executive Officer of Cascadia Brands, Inc. Prior to April 2001, Mr. Baxter served as the Vice President of Finance of Cascadia Brands, Inc. Mr. Baxter is 51 years old.



NICK BENNETT  Director



Mr. Bennett has served as one of our directors since June 7, 2001. From 1995 to March of 2003, Mr. Bennett served as a Director and Vice President of
Operations for Cascadia Brands, Inc. After his retirement in March 2003, Mr. Bennett continued to consult to Cascadia Brands, Inc., until they underwent a change of ownership in September 2005. Mr. Bennett is 63 years old.



WILLIAM S. HARPER, C.A.  Secretary



Mr. Harper has served as our Secretary since August 26, 1993. Currently,
Mr. Harper is the Vice-President Finance and Corporate Secretary of Ondine Biopharma Corporation (Ondine) (since July 2005). He is also a director of Icon Industries Limited (since August 1998) and a director of Tri-Gold Resources
Corp. (formerly Tri-Alpha Investments Ltd., since July 2001). Prior to joining Ondine, Mr. Harper was a Financial Manager and Accountant for several publicly traded companies; including Icon Industries Limited (CFO and Secretary from June 1998
to September 2005); Tri-Gold Resources Corp. (CFO and Secretary from August 1998 to July 2005) and Ialta Industries Limited (President from April 1999 to February 2000; CFO and Secretary from February 2000 to May 2004). He was also a director of
Ialta Industries Limited (from January 1995 to March 2005) and the Chief Financial Officer of Fortune Oil and Gas Inc. (from June 2001 to February 2002). Mr. Harper is 57 years old.



15



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##### Table of Contents

MICHAEL J. PECORA  Vice President



On July 7, 2005, Mr. Pecora was appointed Vice President of Unilens Corp, USA. Mr. Pecora has served as Chief Financial
Officer of Unilens Vision Inc. and our operating subsidiary, Unilens Corp. USA since August 3, 1994. Prior to 1994, Mr. Pecora served as Accounting Manager for Unisys Corporation. Mr. Pecora is 43 years old.



KELLY MCKNIGHT-GOELZ  Vice President of Sales and Marketing



On July 7, 2005 Ms. McKnight-Goelz was appointed Vice President of Sales and
Marketing of Unilens Corp, USA. Ms. McKnight-Goelz joined Unilens Corp, USA in November 2004 as Executive Director of Marketing and Sales. Prior to joining Unilens Corp, USA, Ms. McKnight-Goelz was Vice President of Marketing and New
Product Development for Renew Life Formulas, Inc (from October 2004 to June 2001). Prior to June 2001, Ms. McKnight-Goelz served as Vice President for Impact Publishing and Director of Operations for Power-Pak Communications. Ms. McKnight
is 37 years old.



There are no family relationships among our directors and
senior management.



B. Compensation



The aggregate direct or indirect remuneration paid to our directors and officers as a group
during the fiscal years ended June 30, 2005, June 30, 2004 and June 30, 2003 was $308,612 $194,704 and $162,735, respectively. During the fiscal years ending June 30, 2005, June 30, 2004 and June 30, 2003, we
issued 20,000, 265,000 and 45,000 options, respectively, to our officers and directors. Other than as described in the following paragraph, there were no amounts accrued during the fiscal years ended June 30, 2005, 2004 and 2003 to provide
pension, retirement or similar benefits for our directors and executive officers, pursuant to any existing plan provided or contributed to by us.



On August 1, 2000 and as subsequently amended, we entered into a severance compensation agreement with our President, Alfred W. Vitale, pursuant to which, under
certain circumstances we will be obligated to pay Mr. Vitale or his estate up to 24 months compensation upon his death or 12 months compensation upon his retirement on December 31, 2006. If there is a change of control of Unilens prior to
Mr. Vitales retirement, we will be obligated to pay Mr. Vitale his compensation through the December 31, 2006 retirement date in addition to 12 months of severance compensation plus 18 months of change-in-control compensation.
Mr. Vitales annual compensation for the fiscal year 2005 was $91,500.



Pursuant to a letter agreement, dated March 1, 1999, and as subsequently amended, we are obligated to pay our Chief Financial Officer, Michael J. Pecora, nine months compensation should he resign or 24 months compensation if his
employment otherwise is terminated or upon a change-of-control of Unilens. Mr. Pecoras annual compensation for fiscal year 2005 was $74,000. The compensation paid to our directors and officers during our three most recently completed
financial years is as set out below:



16



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##### Table of Contents

SUMMARY COMPENSATION TABLE



|                                                                |  |              |  |                     |  |                 |                        |                             |           |  |                                        |  |                                              |  |                |  |                         
|--------------------------------------------------------------- |  | ------------ |  | ------------------- |  | --------------- | ---------------------- | --------------------------- | --------- |  | -------------------------------------- |  | -------------------------------------------- |  | -------------- |  | ------------------------
|                                                                |  |              |  | Annual Compensation |  |                 | Long Term Compensation |                             |          
|                                                                |  |              |  |                     |  |                 |                        |                             |           |  | Awards                                 |  | Payouts                                      |  |               
|Name and Principal Position                                     |  | Year         |  | Salary($)           |  | Bonus($)        |                        | Other AnnualCompensation($) |           |  | SecuritiesUnderOptions/SARs Granted(#) |  | RestrictedShares orRestrictedShare Units ($) |  | LTIPPayouts($) |  | All OtherCompensation($)
|Alfred W. Vitale,                                               |  | 2005         |  | 91,500              |  | 61,225          |                        | Nil                         |           |  | Nil                                    |  | Nil                                          |  | Nil            |  | Nil                     
|President (1)                                                   |  | 2004         |  | 80,500              |  | 22,000          |                        | Nil                         |           |  | 85,000                                 |  | Nil                                          |  | Nil            |  | Nil                     
|                                                                |  | 2003         |  | 84,060              |  | Nil             |                        | Nil                         |           |  | 25,000                                 |  | Nil                                          |  | Nil            |  | Nil                     
|                                                                |  |              |  |                     |  |                 |                        |                            
|Michael J. Pecora, Vice President & Chief Financial Officer (2) |  | 200520042003 |  | 74,00071,16774,665  |  | 33,72816,575Nil |                        | 3,2271,7551,493             | (4)(4)(4) |  | Nil55,00020,000                        |  | NilNilNil                                    |  | NilNilNil      |  | NilNilNil               
|                                                                |  |              |  |                     |  |                 |                        |                            
|Kelly McKnight-Goelz, Vice President Sales & Marketing (3)      |  | 2005         |  | 38,610              |  | 4,280           |                        | Nil                         |           |  | 20,000                                 |  | Nil                                          |  | Nil            |  | Nil                     
|                                                                |  |              |  |                     |  |                 |                        |                            
|William S. Harper, Secretary                                    |  | 200520042003 |  | 5,2694,4624,010     |  | NilNilNil       |                        | NilNilNil                   |           |  | Nil35,000Nil                           |  | NilNilNil                                    |  | NilNilNil      |  | NilNilNil               
|                                                                |  |              |  |                     |  |                 |                        |                            
|William D. Baxter, Director                                     |  | 200520042003 |  | NilNilNil           |  | NilNilNil       |                        | NilNilNil                   |           |  | Nil45,000Nil                           |  | NilNilNil                                    |  | NilNilNil      |  | NilNilNil               
|                                                                |  |              |  |                     |  |                 |                        |                            
|Nicholas Bennett, Director                                      |  | 200520042003 |  | NilNilNil           |  | NilNilNil       |                        | NilNilNil                   |           |  | Nil45,000Nil                           |  | NilNilNil                                    |  | NilNilNil      |  | NilNilNil               

---

|(1) | Mr. Vitales salary, which is paid one month in advance, is in respect of his position as the President of our subsidiary, Unilens Corp. USA, which he joined in January of
1993. Mr. Vitale received no compensation during the 2005, 2004, and 2003 years in respect to his position as our President.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Positions are with Unilens Corp. USA. Mr. Pecora is also Chief Financial officer of Unilens Vision Inc.
|--- | -------------------------------------------------------------------------------------------------------

|(3) | Position is with Unilens Corp. USA.
|--- | -----------------------------------

|(4) | These amounts represent contributions under the Companys 401(k) profit-sharing plan.
|--- | -------------------------------------------------------------------------------------



Securities Held By Insiders



As of December 8, 2005, the aggregate beneficial security holdings of our current directors and officers as a group are 437,100 common shares (which
represents approximately 9.7% of the issued and outstanding common shares as of such date). This beneficial ownership of 437,100 common shares is comprised of 142,100 outstanding shares plus 295,000 shares subject to issuance on exercise of fully
vested and currently exercisable options as described in the following table:



|                  |  |                |  |                 
|----------------- |  | -------------- |  | ----------------
|Number of Options |  | Exercise Price |  | Expiration Date 
|10,000            |  | Cdn$0.25       |  | May 6, 2006     
|90,000            |  | US$0.48        |  | December 9, 2008
|80,000            |  | Cdn$0.62       |  | December 9, 2008
|50,000            |  | US$0.71        |  | March 3, 2009   
|45,000            |  | Cdn$0.95       |  | March 3, 2009   
|20,000            |  | US$2.07        |  | January 4, 2010 



17



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##### Table of Contents

C. Board Practices



All of our directors were re-elected at the December 29, 2004 annual general meeting and have a term of office expiring at the next annual general meeting of our
directors scheduled to be held on February 27, 2006. All of our officers have a term of office lasting until their removal or replacement by the board of directors. The number of directors is currently fixed at three.



During the fiscal year ended June 30, 2005, no options were granted to our directors.
Messrs. Vitale, Baxter, and Bennett are members of our audit committee. The audit committee is elected annually by our directors at the first meeting of our board of directors held after our annual general meeting. The audit committees primary
function is to review our financial statements before they are submitted to our board of directors for approval. The audit committee is also available to assist the board of directors, if required, with matters relating to the appointment of our
independent auditor and the overall scope and results of the audit, internal financial controls, and financial information for publication for various purposes. We do not have a remuneration or nomination committee.



D. Employees



The total number of our employees, all of whom are located in our Largo, Florida, facility, for the fiscal years ending June 30, 2005,
2004, and 2003 were 44, 38 and 38, respectively.



E. Share Ownership



The following table shows the amount of our common shares beneficially
owned (unless otherwise indicated) as of December 8, 2005 by (1) any person who is known by us to be the beneficial owner of more than 5% of our outstanding common shares, (2) our directors, (3) our executive officers, and
(4) all of our directors and executive officers as a group.



|                                                            |  |                                  |  |         |  
|----------------------------------------------------------- |  | -------------------------------- |  | ------- | -
|                                                            |  | Common Shares Beneficially Owned | 
|                                                            |  | Number (1)                       |  | Percent |  
|Directors and Other Named Executive Officers                |  |                                  |  |         |  
|Alfred W. Vitale                                            |  | 150,000                          |  | 3.5     | %
|William D. Baxter                                           |  | 68,300                           |  | 1.6     | %
|Nicholas Bennett                                            |  | 57,500                           |  | 1.4     | %
|William S. Harper                                           |  | 47,800                           |  | 1.1     | %
|Michael J. Pecora                                           |  | 93,500                           |  | 2.2     | %
|Kelly McKnight-Goelz                                        |  | 20,000                           |  | *       |  
|                                                            |  |                                 
|All directors and executive officers as a group (6 persons) |  | 437,100                          |  | 9.7     | %



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##### Table of Contents

|                                                                                                                |  |                                  |  |         |  
|--------------------------------------------------------------------------------------------------------------- |  | -------------------------------- |  | ------- | -
|                                                                                                                |  | Common Shares Beneficially Owned | 
|                                                                                                                |  | Number (1)                       |  | Percent |  
|Shareholders                                                                                                    |  |                                  |  |         |  
|UNIINVEST HOLDING AG (formerly EBC Zürich AG)Zurcherstrasse 32, Postfach CH-8400Winterthur, Zurich, Switzerland |  | 1,867,221                        |  | 44.3    | %
|Cede & Co. (2)P.O. Box 20 Bowling Green StationNew York, New York 10274 USA                                     |  | 1,444,986                        |  | 34.3    | %
|CDS & Co. (2)NCI Account 25, The EsplanadeP.O. Box 1038 Station AToronto, Ontario M5W 1G5 Canada                |  | 553,647                          |  | 13.1    | %

---

|* | Less than 1% of the outstanding common stock
|- | --------------------------------------------

|(1) | Includes the number of shares subject to currently exercisable options or options exercisable within 60 days of December 8, 2005, as follows: Mr. Vitale, 85,000
shares; Mr. Baxter, 45,000 shares; Mr. Bennett, 45,000 shares; Mr. Harper, 45,000 shares; Mr. Pecora, 55,000 shares; Ms. McKnight, 20,000 shares; and all directors and officers as a group, 295,000 shares.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The above information listed under Shareholders was obtained from our registered shareholders list dated as of December 8, 2005. We have no current
information as to the beneficial ownership of the shares held by parties other than our officers and directors.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



At our 2003 annual general meeting the shareholders approved and ratified an incentive stock option plan authorizing the issuance of common share purchase options
of up to 10% of our issued and outstanding common shares to directors, employees, and consultants. The number of shares under option from time to time and the exercise prices of such options, and any amendments thereto, will be and have been
determined by the directors in accordance with the policies of the TSX Venture Exchange.



ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS



A. Major Shareholders



Our common shares are recorded on the
books of our transfer agent Computershare Trust Company of Canada in registered form, however, the majority of such shares are registered in the name of intermediaries such as brokerage houses and clearing houses on behalf of their respective
brokerage clients, and we do not have knowledge or access to current information about the beneficial owners of the shares held by parties other than our officers and directors. See Item 6E  Share Ownership for more information
regarding our major shareholders. To the best of our knowledge, we are controlled by Uniinvest. As of December 8, 2005, we had authorized 100,000,000 common shares of which 4,211,315 were issued and outstanding. As of December 8, 2005,
Uniinvest beneficially owned 1,867,221 of our common shares per Schedule 13D filed with the United States Securities and Exchange Commission on November 2, 1995, which represents about 44.3% of such class of stock. We are aware of no
significant change in Uniinvests ownership during the past three years. In addition, as of December 8, 2005, we had authorized capital of 100,000,000 Preference A shares at a par value of Cdn.$10 each and 100,000,000
Preference B shares at a par value of Cdn.$50 each, of which no shares are issued and outstanding.



Major Shareholders do not have different voting rights.



Under the Securities Act(British Columbia) (the SABC) insiders (generally officers, directors and holders of 10% or more of our shares) are required to file insider reports of changes in their
ownership in the first 10 days of the month following a trade in our securities. Copies of such reports are available for public inspection at the offices of the British Columbia Securities Commission, 701 West Georgia Street, Vancouver, British
Columbia V7Y 1L2 (phone (604) 899-6500) or at the British Columbia Securities Commission web site (www.bcsc.bc.ca).



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##### Table of Contents

As of December 8, 2005, there were 439 shareholders of record holding a total of 4,211,315 of our common shares. To
the best of our knowledge there were 25 shareholders of record with addresses in Canada, 404 shareholders of record with addresses in the U.S. and 25 shareholders of record with addresses in other countries holding approximately 680,865 (16.2%),
1,559,219 (37.0%) and 1,971,231 (46.8%) of the outstanding common shares, respectively. Shares registered in the names of intermediaries were assumed to be held by residents of the same country in which the intermediary was located.



B. Related Party Transactions



No director or senior officer, and no associate or affiliate of the foregoing persons, no
insider and no family member of such persons has or has had any material interest, direct or indirect, in any other transactions, or in any other proposed transaction, which in either such case has materially affected or will materially affect us or
our predecessors during the year ended June 30, 2005 except as follows:



In January 1993, Uniinvest loaned us $450,000. In October 2003, we exchanged the related $450,000 secured term note for a new secured term note. The new note was in the same principal amount, but payable in quarterly principal payments in
the amount of $25,000 per quarter beginning January 2004 and maturing April 2008, with interest payable monthly at the rate of prime plus 3%. During the year ended June 30, 2005 we paid or accrued interest of $20,252 (2004$48,483;
2003$44,084) on the $450,000 term note. All other terms and conditions of the original contract remained unchanged. We paid our indebtedness to Uniinvest in full during the year ended June 30, 2005.



During the year ended June 30, 2005, we paid or accrued $5,269 (2004$4,462;
2003$4,010) in accounting fees to one of our officers, which is included in administrative expense.



C. Interests of Experts and Counsel



Not applicable.



ITEM 8. FINANCIAL INFORMATION



A. Consolidated
Statements and Other Financial Information



See Item 17 Financial Statements with regard to items 1 and 2 of this subsection A.



Legal Proceedings



Other than ordinary
routine litigation incidental to our business, there are no material pending legal proceedings to which we are a party or to which any of our properties is subject.



Dividend Policy



We have not paid any dividends on our outstanding common shares since our incorporation.



B. Significant Changes



As of December 8, 2005, there have been no significant changes to our business since our financial statements dated June 30, 2005.



20



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##### Table of Contents

ITEM 9. THE OFFER AND LISTING



A. Offer and Listing Details



Trading Markets



CANADIAN MARKETS

TSX Venture Exchange:

UVI 
Trading in Canadian Dollars



|                     |  |             |  |            |  |                  |  |             |  |           
|-------------------- |  | ----------- |  | ---------- |  | ---------------- |  | ----------- |  | ----------
|                     |  | High(CDN $) |  | Low(CDN $) |  |                  |  | High(CDN $) |  | Low(CDN $)
|Annual  Fiscal Year |  |             |  |            |  | By Quarter       |  |             |  |           
|2005                 |  | 4.30        |  | 1.66       |  | Fiscal Year 2004 |  |             |  |           
|2004                 |  | 2.20        |  | 0.02       |  | First Quarter    |  | 0.03        |  | 0.02      
|2003                 |  | 0.19        |  | 0.02       |  | Second Quarter   |  | 0.85        |  | 0.04      
|2002                 |  | 0.40        |  | 0.02       |  | Third Quarter    |  | 1.25        |  | 0.55      
|2001                 |  | 0.30        |  | 0.04       |  | Fourth Quarter   |  | 2.20        |  | 0.77      
|                     |  |             |  |            | 
|By Quarter           |  |             |  |            |  | Monthly          |  |             |  |           
|Fiscal Year 2005     |  |             |  |            |  | July 2005        |  | 4.25        |  | 3.98      
|First Quarter        |  | 2.72        |  | 1.66       |  | August 2005      |  | 4.33        |  | 3.91      
|Second Quarter       |  | 2.60        |  | 2.21       |  | September 2005   |  | 4.30        |  | 3.53      
|Third Quarter        |  | 4.25        |  | 2.00       |  | October 2005     |  | 4.13        |  | 3.69      
|Fourth Quarter       |  | 4.30        |  | 3.21       |  | November 2005    |  | 5.27        |  | 3.92      
|                     |  |             |  |            |  | December 2005    |  | 5.50        |  | 4.40      



U.S. MARKETS

OTC Bulletin Board and Pink Sheets

UVICF/UVICF.PK  Trading in U.S. Dollars



|                     |  |             |  |            |  |                  |  |             |  |           
|-------------------- |  | ----------- |  | ---------- |  | ---------------- |  | ----------- |  | ----------
|                     |  | High($U.S.) |  | Low($U.S.) |  |                  |  | High($U.S.) |  | Low($U.S.)
|Annual  Fiscal Year |  |             |  |            |  | By Quarter       |  |             |  |           
|2005                 |  | 3.45        |  | 1.30       |  | Fiscal Year 2004 |  |             |  |           
|2004                 |  | 1.75        |  | 0.01       |  | First Quarter    |  | 0.03        |  | 0.01      
|2003                 |  | 0.67        |  | 0.01       |  | Second Quarter   |  | 0.65        |  | 0.02      
|2002                 |  | 0.11        |  | 0.01       |  | Third Quarter    |  | 0.94        |  | 0.38      
|2001                 |  | 0.26        |  | 0.01       |  | Fourth Quarter   |  | 1.75        |  | 0.60      
|                     |  |             |  |            | 
|By Quarter           |  |             |  |            |  | Monthly          |  |             |  |           
|Fiscal Year 2005     |  |             |  |            |  | July 2005        |  | 3.60        |  | 3.07      
|First Quarter        |  | 2.10        |  | 1.30       |  | August 2005      |  | 3.65        |  | 3.18      
|Second Quarter       |  | 2.29        |  | 1.72       |  | September 2005   |  | 3.44        |  | 3.05      
|Third Quarter        |  | 3.45        |  | 1.92       |  | October 2005     |  | 3.48        |  | 3.05      
|Fourth Quarter       |  | 3.39        |  | 2.67       |  | November 2005    |  | 4.50        |  | 3.30      
|                     |  |             |  |            |  | December 2005    |  | 4.99        |  | 4.25      



B. Plan of Distribution



Not applicable.



C. Markets



Our shares have traded on the Vancouver Stock Exchange its successor, the Canadian Venture Exchange, and its successor the TSX Venture
Exchange since March 31, 1992. In addition, there has been a U.S. market for the quotation of our common shares on the OTC Bulletin Board and the pink sheets, a centralized quotation service that collects and publishes market maker
quotes for certain over the counter securities. In addition, our common shares are subject to the Securities and Exchange Commission rules regarding penny stocks which require broker-dealers who sell relevant securities (securities with
a price less than U.S.$5.00) to persons who are not established customers or accredited investors must make specified suitability determinations and must receive the purchasers written consent to the transaction prior to the sale.



21



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D. Selling Shareholders



Not applicable.



E. Dilution



Not applicable.



F. Expenses of the Issue



Not applicable.



ITEM 10. ADDITIONAL INFORMATION



A. Share
Capital



Not applicable.



B. Memorandum and Articles of Association



Our Articles of Association and Memorandum (the Articles) are registered with
the British Columbia Registrar of Companies under Corporation No. 257974. A copy of the Articles were filed with our initial registration statement on Form 20-F filed on July 3, 1989.



Objects and Purposes



The Articles do not specify objects or purposes. Under the BCBCA, a British Columbia corporation has all the legal powers of a natural
person.



Directors  Powers and Limitations



The Articles do not specify a maximum number of directors. The minimum number of directors
for a public company under our Articles and under the BCBCA is three. The Articles also specify that the number of directors shall be the number of directors fixed by shareholders annually or the number which are actually elected at a general
shareholders meeting. The number of directors is determined annually by our shareholders at the annual shareholders meeting and all directors are elected at that time. There are no staggered directorships. Under the Articles the directors are
entitled between successive annual general meetings to appoint one or more additional directors but not more than one-third of the number of directors fixed at a shareholders meeting or actually elected at the preceding annual general meeting
of shareholders. Directors automatically retire at the commencement of each annual meeting subject to being re-elected.



Under the Articles, a director who is any way directly or indirectly interested in a proposed contract or transaction with us or who holds any office or possesses any
property whereby directly or indirectly a duty might be created which would conflict with his duty or interest as a director, shall declare the nature and extent of such interest in such contract or transaction to the board of directors. A director
shall not vote in respect of any such contract or transaction if he is interested in the transaction and if he should vote his vote shall not be counted but shall be counted for the purpose of establishing the presence of a quorum at the meeting.
Similarly, under the BCBCA directors are obligated to abstain from voting on matters in which they may be financially interested and additionally they must fully disclose such interest to the full board of directors. Directors must abstain in such
circumstances both under the Articles and under the BCBCA.



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Under the BCBCA, directors must be of the age of majority (18), and meet eligibility criteria including: (i) not
being mentally infirmed, (ii) undischarged bankrupt and (iii) no fraud related convictions in the previous five years. There is no mandatory retirement age either under the Articles or the BCBCA.



Directors borrowing powers are not restricted except as may be restricted pursuant to
the BCBCA. The directors may not authorize us to provide financial assistance where we are insolvent or when the providing of a guarantee would render us insolvent. Directors need not own any of our shares in order to qualify as a director.



Changes to Rights of Common Shareholders



Changes to our Articles require a special resolution passed by not less than 75%
of the shares voted in person or by proxy at a duly convened shareholders meeting. Some corporate changes including amalgamation with another company, sale of substantially all of our assets, re-domiciling out of the jurisdiction of British
Columbia, creation of new classes of shares, not only require such 75% approval, but generally also give rise to a dissent right which is the right to be paid the fair value of the shareholders shares in cash if the required special resolution
is actually passed and we elect to proceed with the matter notwithstanding receipt of dissent notices. A notice of a shareholders meeting at which such an action is intended to be effected must include a prominent notice of the dissent right. The
dissent right provisions are governed by the BCBCA and not by the Articles.



Shareholders Meetings



Shareholders meetings are only
peripherally governed by our Articles with most shareholder protections contained in the SABC and the BCBCA. The Articles provide that we will hold an annual general meeting, will provide at least 21 days notice and will provide for certain
procedural matters and rules of order with respect to conduct of such meeting. The SABC and the BCBCA superimpose requirements that generally provide that shareholders meetings require not less than a 60 day period from initial public notice and
that we make a thorough advanced search of intermediary and brokerage registered shareholdings to ascertain the location of beneficial shareholders so that materials can be sent to our shareholders. The form and content of information circulars and
proxies and like matters typically are governed by the SABC. SABC specifies the disclosure requirements for various corporate actions, background information on the nominees for election for director, executive compensation paid in the previous year
and full details of any unusual matters. We must hold an annual general meeting of shareholders at least once in every calendar year and within 15 months of the previous annual general meeting of shareholders and must present audited statements at
such meeting.



Redemption



We have no redeemable securities authorized or issued.



Pre-emptive Rights



There are no pre-emptive rights applicable to us, which provide a right to any person to
participate in offerings of our securities



Liquidation



All of our common shares participate ratably in any
available assets in the event of a winding up or other liquidation.



No
Limitation on Foreign Ownership



There are no limitations under the
Articles or the BCBCA on the right of persons who are not citizens of Canada to hold or vote our common shares. (See also Exchange Controls  below.)



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Dividends



Dividends may be declared by our board of directors out of available assets and are paid ratably to holders of common shares. No dividend may be paid if we are, or would
thereby become, insolvent. We have not declared or paid any dividends since our inception and do not intend to do so in the foreseeable future.



Voting Rights



Each holder of our common shares is entitled to one vote for each common share on matters to which common shares ordinarily vote, including without limitation the election of directors, appointment of independent
auditors, approval of corporate changes and other matters requiring shareholder approval under the BCBCA.



Change in Control



We have not
implemented any shareholders rights or other poison pill protection against possible take-overs. Other than as disclosed in this Form 20-F, we do not have any agreements, which are triggered by a take-over or other change of
control. There are no provisions in the Articles triggered by or affected by a change in outstanding shares which gives rise to a change in control.



Share Ownership Reporting



The Articles do not require disclosure of share ownership. Share ownership of director nominees must be reported annually in proxy materials sent to our shareholders.
There are no requirements under the BCBCA to report ownership of our common shares, however, the BCSA requires disclosure of trading by insiders including holders of 10% of our voting shares within 10 days of the trade. Controlling shareholders
(generally those in excess of 20% of our outstanding common shares) must provide seven days advance notice of share sales.



C. Material Contracts



Our material contracts are summarized as follows:



|(a) | On April 28, 2005, we obtained a $1,000,000 line of credit bearing interest at of LIBOR plus 2.5 percent and maturing in April 2006. The line is collateralized by all of the
assets of our subsidiary, Unilens Corp. USA. As of June 30, 2005, we did not have any amounts outstanding under this line of credit. Under the related loan agreement, the Company is required to meet specified financial covenants with which, at
June 30, 2005, we were in compliance.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | On February 23, 2005, we entered into an asset purchase agreement to acquire the Aquaflex and SoftCon product lines. Under the terms of the agreement, we will pay up to
$350,000 for inventory, trademarks, regulatory approvals, and various other assets. The Company assigned the $350,000 cost to inventory, of which $150,000 was paid at closing, with the remaining $200,000 to be paid upon the sale of inventory. At
June 30, 2005, the balance due was $178,260. As part of this agreement, the Company will also pay a royalty ranging from five percent to eight percent on all future sales of the acquired product lines over the next five years.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | On February 17, 2004, we entered into an asset purchase agreement to acquire the toric bifocal business owned by the Lifestyle Company, Inc. Under the terms of the agreement,
in consideration for selected capital assets, regulatory approvals, and various other assets of the Lifestyle Company, we paid Lifestyle Company $75,000 in cash, and pay royalties ranging from 5% to 8% on all sales of acquired products over the next
1 to 4 years. We manufacture the product lines at our manufacturing facility located in Largo, Florida. The products acquired include a soft bifocal toric contact lens that is marketed worldwide under the LifeStyle MVt trade name, along with
certain other bifocal lens designs sold under the Xtra and 4vue trade names. The soft toric bifocal line addresses the market for patients with astigmatism that require bifocal correction.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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D. Exchange Controls



We are a corporation organized under the provincial laws of British Columbia, Canada. There is no law or governmental decree or regulation in Canada that restricts the
export or import of capital, or affects the remittance of dividends, interest or other payments to a non-resident holder of common shares, other than withholding tax requirements. Any such remittances to U.S. residents are generally subject to
withholding tax. See Taxation below.



There is no limitation
imposed by the laws of Canada or by our charter or other constituent documents on the right of a non-resident to hold or vote the common shares, other than as provided in the Investment Canada Act (Canada) (the Investment
Act). The following discussion summarizes the material features of the Investment Act for a non-resident who proposes to acquire a controlling number of common shares. It is general only, it is not a substitute for independent
advice from an investors own advisor, and it does not anticipate statutory or regulatory amendments. We do not believe the Investment Act will have any affect on us or on our non-Canadian shareholders due to a number of factors
including the nature of our operations and our relatively small capitalization.



The Investment Act generally prohibits implementation of a reviewable investment by an individual, government or agency thereof, corporation, partnership, trust or joint venture (each an entity) that is not a
Canadian as defined in the Investment Act (a non-Canadian), unless after review the Director of Investments appointed by the minister responsible for the Investment Act is satisfied that the investment is likely
to be of net benefit to Canada. The size and nature of a proposed transaction may give rise to an obligation to notify the Director to seek an advance ruling. An investment in our common shares by a non-Canadian other than a WTO Investor
(as that term is defined in the Investment Act and which term includes entities which are nationals of or are controlled by nationals of member states of the World Trade Organization) when we were not controlled by a WTO Investor, would be
reviewable under the Investment Act if it was an investment to acquire control of us and the value of our assets, as determined in accordance with the regulations promulgated under the Investment Act, was $5 million or more, or if an order
for review was made by the federal cabinet on the grounds that the investment related to Canadas cultural heritage or national identity, regardless of the value of our assets. An investment in our common shares by a WTO Investor, or by a
non-Canadian when we were controlled by a WTO Investor, would be reviewable under the Investment Act if it was an investment to acquire control of us and the value of our assets, as determined in accordance with the regulations promulgated
under the Investment Act, was not less than a specified amount, which for 2005 exceeds Cdn$237 million. A non-Canadian would acquire control of us for the purposes of the Investment Act if the non-Canadian acquired a majority of our common
shares. The acquisition of less than a majority but one-third or more of our common shares would be presumed to be an acquisition of our control unless it could be established that, on the acquisition, we were not controlled in fact by the acquiror
through the ownership of our common shares.



The foregoing assumes we will not
engage in the production of uranium or own an interest in a uranium producing property in Canada, or provide any financial service or transportation service, as the rules governing these businesses are different.



Certain transactions relating to our common shares would be
exempt from the Investment Act, including



(a) an
acquisition of our common shares by a person in the ordinary course of that persons business as a trader or dealer in securities,



(b) an acquisition of control of us in connection with the realization of security granted for a loan or other financial assistance and not for a purpose
related to the provisions of the Investment Act, and



(c) an acquisition of control of us by reason of an amalgamation, merger, consolidation or corporate reorganization following which the ultimate direct or indirect control in fact of us, through the ownership of our common shares, remained
unchanged.



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E. Taxation



Certain Canadian Federal Income Tax Consequences



The discussion under this heading summarizes the principal Canadian federal income tax consequences of acquiring, holding and disposing of shares of our common stock for
a shareholder of ours who is not a resident of Canada but is a resident of the U.S. and who will acquire and hold our common shares as capital property for the purposes of the Income Tax Act (Canada) (the Canadian Tax Act). This
summary does not apply to a shareholder who carries on business in Canada through a permanent establishment situated in Canada or performs independent personal services in Canada through a fixed base in Canada if the shareholders
holding in Unilens is effectively connected with such permanent establishment or fixed base. This summary is based on the provisions of the Canadian Tax Act and the regulations thereunder and on an understanding of the administrative practices of
Canada Customs & Revenue Agency, and takes into account all specific proposals to amend the Canadian Tax Act or regulations made by the Minister of Finance of Canada as of the date hereof. It has been assumed that there will be no other
relevant amendment of any governing law although no assurance can be given in this respect. This discussion is general only and is not, nor is it intended to provide a detailed analysis of the income tax implications of any particular
shareholders interest. Investors are advised to obtain independent advice from a shareholders own Canadian and U.S. tax advisors with respect to income tax implications pertinent to their particular circumstances.



The provisions of the Canadian Tax Act are subject to income tax treaties to which Canada is
a party, including the Canada-United States Income Tax Convention (1980), as amended (the Convention).



Dividends on Common Shares and Other Income



Under the Canadian Tax Act, a non-resident of Canada is generally subject to Canadian withholding tax at the rate of 25 percent on dividends paid or deemed to have been
paid to him or her by a corporation resident in Canada. We are responsible for withholding of tax at the source. The Convention limits the rate to 15 percent if the shareholder is a resident of the U.S. and the dividends are beneficially owned by
and paid to such shareholder, and to 5 percent if the shareholder is also a corporation that beneficially owns at least 10 percent of the voting stock of the payor corporation.



The amount of a stock dividend (for tax purposes) would generally be equal to the amount by which the paid up or our stated capital had
increased by reason of the payment of such dividend. We will furnish additional tax information to our shareholders in the event of such a dividend. Interest paid or deemed to be paid on our debt securities held by non-Canadian residents may also be
subject to Canadian withholding tax, depending upon the terms and provisions of such securities and any applicable tax treaty.



The Convention generally exempts from Canadian income tax dividends paid to a religious, scientific, literary, educational or charitable organization or to an
organization constituted and operated exclusively to administer a pension, retirement or employee benefit fund or plan, if the organization is a resident of the U.S. and is exempt from income tax under the laws of the U.S.



Dispositions of Common Shares



Under the Canadian Tax Act, a taxpayers capital gain or capital loss from a
disposition of a share of our common stock is the amount, if any, by which his or her proceeds of disposition exceed (or are exceeded by, respectively) the aggregate of his or her adjusted cost base of the share and reasonable expenses of
disposition. The capital gain or loss must be computed in Canadian currency using a weighted average adjusted cost base for identical properties. The capital gains net of losses included in income are as follows. For gains net of losses realized
before February 28, 2000, as to 75%. For gains net of losses realized after February 27, 2000 and before October 18, 2000, as to 66 2/3%. For gains net of losses realized after October 17, 2000, as to 50%. There are special
transitional rules to apply capital losses against capital gains that arose in different periods. The amount by which a shareholders capital loss exceeds the capital gain in a year may be deducted from a capital gain realized by the
shareholder in the three previous years or any subsequent year, subject to certain restrictions in the case of a corporate shareholder.



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Under the Canadian Tax Act, a non-resident of Canada is subject to Canadian tax on taxable capital gains, and may deduct
allowable capital losses, realized on a disposition of taxable Canadian property. Shares of our common stock will constitute taxable Canadian property of a shareholder at a particular time if the shareholder used the shares in carrying
on business in Canada, or if at any time in the five years immediately preceding the disposition 25% or more of the issued shares of any class or series in our capital stock belonged to one or more persons in a group comprising the shareholder and
persons with whom the shareholder and persons with whom the shareholder did not deal at arms length and in certain other circumstances.



The Convention relieves U.S. residents from liability for Canadian tax on capital gains derived on a disposition of shares unless



(a) the value of the shares is derived principally from real
property in Canada, including the right to explore for or exploit natural resources and rights to amounts computed by reference to production,



(b) the shareholder was resident in Canada for 120 months during any period of 20 consecutive years preceding, and at any time during the 10 years
immediately preceding, the disposition and the shares were owned by him when he or she ceased to be resident in Canada, or



(c) the shares formed part of the business property of a permanent establishment that the holder has or had in Canada within the 12 months
preceding the disposition.



U.S. Tax Consequences



U.S. Federal Income Tax Consequences



The following is, in our opinion after consultation with our professional advisors, a
discussion of material U.S. federal income tax consequences generally applicable to a U.S. Holder (as hereinafter defined) of our common shares under current law including the American Jobs Creation Act of 2004 (the 2004 Tax Act), signed
into law on October 22, 2004. This discussion does not address all potentially relevant federal income tax matters and it does not address consequences peculiar to persons subject to special provisions of federal income tax law, such as those
described below as excluded from the definition of a U.S. Holder. In addition, this discussion does not cover any state, local or foreign tax consequences. (see Taxation  Canadian Federal Income Tax Consequences above).
Accordingly, holders and prospective holders of our common shares are urged to consult their own tax advisors about the specific federal, state, local, and foreign tax consequences to them of purchasing, owning and disposing of our common shares,
based upon their individual circumstances.



The following discussion is based
upon the sections of the Internal Revenue Code of 1986, as amended (the Code), Treasury Regulations, published Internal Revenue Service (IRS) rulings, published administrative positions of the IRS and court decisions that are
currently applicable, any or all of which could be materially and adversely changed, possibly on a retroactive basis, at any time and which are subject to differing interpretations. This discussion does not consider the potential effects, both
adverse and beneficial, of any proposed legislation which, if enacted, could be applied, possibly on a retroactive basis, at any time.



U.S. Holders



As used in this Annual Report, a U.S. Holder means a holder of our common shares who is a citizen or individual resident of the U.S., a corporation or partnership created or organized in or under the laws
of the U.S. or of any political subdivision thereof, an entity created or organized in or under the laws of the U.S. or of any political subdivision thereof which has elected to be treated as a corporation for U.S. federal income tax purposes (under
Treasury Regulation Section 301.7701-3), an estate whose income is taxable in the U.S. irrespective of source or a trust subject to the primary supervision of a court within the U.S. and control of a U.S. fiduciary as described in
Section 7701(a)(30) of the Code. This summary does not address the tax consequences to, and U.S. Holder does not include, persons subject to specific provisions of federal income tax law, such as tax-exempt organizations, qualified retirement
plans, individual retirement accounts and other tax-deferred accounts, financial institutions, insurance companies, real estate investment trusts, regulated investment companies, broker-dealers, non-resident alien



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individuals, persons or entities that have a functional currency other than the U.S. dollar, shareholders
subject to the alternative minimum tax, shareholders who hold common shares as part of a straddle, hedging or conversion transaction, and shareholders who acquired their common shares through the exercise of employee stock options or otherwise as
compensation for services. This summary is limited to U.S. Holders who own common shares as capital assets and who own (directly and indirectly, pursuant to applicable rules of constructive ownership) no more than 5% of the value of our total
outstanding stock. This summary does not address the consequences to a person or entity holding an interest in a shareholder or the consequences to a person of the ownership, exercise or disposition of any options, warrants or other rights to
acquire common shares. In addition, this summary does not address special rules applicable to U.S. persons (as defined in Section 7701(a)(30) of the Code) holding common shares through a foreign partnership or to foreign persons holding common
shares through a domestic partnership.



Distributions on Our Common
Shares



In general, U.S. Holders receiving dividend distributions
(including constructive dividends) with respect to our common shares are required to include in gross income for U.S. federal income tax purposes the gross amount of such distributions, equal to the U.S. dollar value of such distributions on the
date of receipt (based on the exchange rate on such date), to the extent that we have current or accumulated earnings and profits, without reduction for any Canadian income tax withheld from such distributions. Such Canadian tax withheld may be
credited, subject to certain limitations, against the U.S. Holders federal income tax liability or, alternatively, may be deducted in computing the U.S. Holders federal taxable income by those who itemize deductions. (See more detailed
discussion at Foreign Tax Credit below). To the extent that distributions exceed our current or accumulated earnings and profits, they will be treated first as a return of capital up to the U.S. Holders adjusted basis in the common
shares and thereafter as gain from the sale or exchange of property. Preferential tax rates for long-term capital gains are applicable to a U.S. Holder which is an individual, estate or trust. There are currently no preferential tax rates for
long-term capital gains for a U.S. Holder which is a corporation.



In the case
of foreign currency received as a dividend that is not converted by the recipient into U.S. dollars on the date of receipt, a U.S. Holder will have a tax basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Generally
any gain or loss recognized upon a subsequent sale or other disposition of the foreign currency, including the exchange for U.S. dollars, will be ordinary income or loss. However, an individual whose realized gain does not exceed $200 will not
recognize that gain, provided that there are no expenses associated with the transaction that meet the requirements for deductibility as a trade or business expense (other than travel expenses in connection with a business trip) or as an expense for
the production of income.



Dividends paid on our common shares will not
generally be eligible for the dividends received deduction provided to corporations receiving dividends from certain United States corporations. A U.S. Holder that is a corporation may, under certain circumstances, be entitled to a 70% deduction of
the United States source portion of dividends received from us (unless we qualify as a foreign personal holding company or a passive foreign investment company, as defined below) if such U.S. Holder owns shares representing
at least 10% of our voting power and value, or to a 85% deduction in limited situations provided by the 2004 Tax Act. The availability of this deduction is subject to several complex limitations that are beyond the scope of this discussion.



Under current Treasury Regulations, dividends paid on our common shares, if
any, generally will not be subject to information reporting and generally will not be subject to U.S. backup withholding tax. However, dividends and the proceeds from a sale of our common shares paid in the U.S. through a U.S. or U.S. related paying
agent (including a broker) will be subject to U.S. information reporting requirements and may also be subject to the 28% (for 2004) U.S. backup withholding tax, unless the paying agent is furnished with a duly completed and signed Form W-9. Any
amounts withheld under the U.S. backup withholding tax rules will be allowed as a refund or a credit against the U.S. Holders U.S. federal income tax liability, provided the required information is furnished to the IRS.



Recent U.S. Tax Law Changes Applicable to Individuals



Recent U.S. tax legislation (the 2003 Tax Act) generally has reduced the rates
of tax payable by individuals (as well as certain trusts and estates) on many items of income. Under the 2003 Tax Act, the marginal tax rates applicable to ordinary income generally have been lowered effective January 1, 2003. In addition, for
capital assets held for over one year and sold or exchanged on or after May 6, 2003 but in taxable years beginning before January



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1, 2009, the maximum applicable U.S. federal rate of tax generally will be 15% (rather than the higher rates of tax
generally applicable to items of ordinary income). Furthermore, qualified dividend income received by individuals in taxable years beginning after December 31, 2002 and beginning before January 1, 2009, generally will be taxed
at a maximum U.S. federal rate of 15% (rather than the higher rates of tax generally applicable to other items of ordinary income) provided certain holding period requirements are met. For this purpose, qualified dividend income
generally includes dividends paid on stock in U.S. corporations as well as dividends paid on stock in certain non-U.S. corporations if, among other things, (i) the shares of the non-U.S. corporation (including ADRs backed by such shares) are
readily tradable on an established securities market in the U.S., or (ii) the non-U.S. corporation is eligible with respect to substantially all of its income for the benefits of a comprehensive income tax treaty with the U.S. which contains an
exchange of information program. (The Convention has been identified by the U.S. Treasury as a qualifying treaty). We currently anticipate that if we were to pay any dividends with respect to our shares and ADSs, they should constitute
qualified dividend income for U.S. federal income tax purposes and that U.S. Holders who are individuals should be entitled to the reduced rates of tax, as applicable. However, the precise extent to which dividends paid by non-U.S.
corporations will constitute qualified dividend income and the effect of such status on the ability of a taxpayer to utilize any associated foreign tax credits is not entirely clear at present. It is anticipated that there will be
administrative pronouncements concerning these provisions in the future. In the meantime, you are urged to consult your own tax adviser regarding the impact of the provisions of the 2003 Tax Act on your particular situation.



Foreign Tax Credit



A U.S. Holder who pays (or has withheld from distributions) Canadian income tax with respect
to the ownership of our common shares may be entitled, at the option of the U.S. Holder, to either receive a deduction or a tax credit for such foreign tax paid or withheld. Generally, it will be more advantageous to claim a credit because a credit
reduces U.S. federal income taxes on a dollar-for-dollar basis, while a deduction merely reduces the taxpayers income subject to tax. This election is made on a year-by-year basis and generally applies to all foreign taxes paid by (or withheld
from) the U.S. Holder during that year. There are significant and complex limitations which apply to the credit, among which is the general limitation that the credit cannot exceed the proportionate share of the U.S. Holders U.S. income tax
liability that the U.S. Holders foreign source income bears to his or its worldwide taxable income. In the determination of the application of this limitation, the various items of income and deduction must be classified into foreign and
domestic sources. Complex rules govern this classification process. In addition, this limitation is calculated separately with respect to specific categories of income such as passive income, high withholding tax interest,
financial services income, shipping income, and certain other classifications of income. Dividends distributed by us will generally constitute passive income or, in the case of certain U.S. Holders,
financial services income for these purposes. The 2004 Tax Act eliminates the 90% limitation on the use of foreign tax credits against the alternative minimum tax for years beginning after 2004. The availability of the foreign tax credit
and the application of the limitations on the credit are fact specific, and U.S. Holders of our common shares should consult their own tax advisors regarding their individual circumstances.



Disposition of Our Common Shares



In general, U.S. Holders will recognize gain or loss upon the sale of our common shares
equal to the difference, if any, between (i) the amount of cash plus the fair market value of any property received, and (ii) the shareholders tax basis in our common shares. Preferential tax rates apply to long-term capital gains of
U.S. Holders that are individuals, estates or trusts. In general, gain or loss on the sale of our common shares will be long-term capital gain or loss if our common shares are a capital asset in the hands of the U.S. Holder and are held for more
than one year. Deductions for net capital losses are subject to significant limitations. For U.S. Holders that are not corporations, any unused portion of such net capital loss may be carried over to be used in later tax years until such net capital
loss is thereby exhausted. For U.S. Holders that are corporations (other than corporations subject to Subchapter S of the Code), an unused net capital loss may be carried back three years and carried forward five years from the loss year to be
offset against capital gains until such net capital loss is thereby exhausted.



Other Considerations



Set forth below are certain
material exceptions to the above-described general rules describing the U.S. federal income tax consequences resulting from the holding and disposition of common shares:



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Foreign Personal Holding Company



If at any time during a taxable year more than 50% of the total combined voting power or the total value of our outstanding shares is owned,
directly or indirectly (pursuant to applicable rules of constructive ownership), by five or fewer individuals who are citizens or residents of the U.S. and 60% or more of our gross income for such year is derived from certain passive sources (e.g.,
from certain interest and dividends), we may be treated as a foreign personal holding company. In that event, U.S. Holders that hold common shares would be required to include in gross income for such year their allocable portions of
such passive income to the extent we do not actually distribute such income. We do not believe that we currently qualify as a foreign personal holding company. However, there can be no assurance that we will not be considered a foreign personal
holding company for the current taxable year. The 2004 Tax Act repeals those rules after 2004. Each U.S. Holder should consult his own tax advisor about this change of law.



Foreign Investment Company



If 50% or more of the combined voting power or total value of our outstanding shares is held, directly or indirectly, by citizens or residents of the U.S., U.S. domestic
partnerships or corporations, or estates or trusts other than foreign estates or trusts (as defined by Code Section 7701(a)(31)), and we are found to be engaged primarily in the business of investing, reinvesting, or trading in securities,
commodities, or any interest therein, it is possible that we may be treated as a foreign investment company as defined in Section 1246 of the Code, causing all or part of any gain realized by a U.S. Holder selling or exchanging
common shares to be treated as ordinary income rather than capital gain. We do not believe that we currently qualifies as a foreign investment company. However, there can be no assurance that we will not be considered a foreign investment company
for the current taxable year. The 2004 Tax Act repeals those rules after 2004. Each U.S. Holder should consult his own tax advisor about this change of law.



Passive Foreign Investment Company



U.S. income tax law contains rules governing passive foreign investment companies (PFIC) which can have significant tax effects on U.S. Holders of
foreign corporations. These rules do not apply to non-U.S. Holders. Section 1297 of the Code defines a PFIC as a corporation that is not formed in the U.S. if, for any taxable year, either (i) 75% or more of its gross income is
passive income, which includes interest, dividends and certain rents and royalties or (ii) the average percentage, by fair market value (or, if the corporation is not publicly traded and either is a controlled foreign corporation or
makes an election, by adjusted tax basis), of its assets that produce or are held for the production of passive income is 50% or more. We do not believe that we are currently a PFIC and we do not expect to be a PFIC for the fiscal year
ended June 30, 2005.



U.S. Holders owning shares of a PFIC are subject to
a special tax and to an interest charge based on the value of deferral of U.S. tax attributable to undistributed earnings of a PFIC for the period during which the shares of the PFIC are owned. This special tax would apply to any gain realized on
the disposition of shares of a PFIC. In addition, the gain is subject to U.S. federal income tax as ordinary income, taxed at top marginal rates, rather than as capital gain income. The special tax would also be payable on receipt of excess
distributions (any distributions received in the current year that are in excess of 125% of the average distributions received during the 3 preceding years or, if shorter, the shareholders holding period). However, if the U.S. Holder makes a
timely election to treat a PFIC as a qualified electing fund (QEF) with respect to such shareholders interest therein, the above-described rules generally will not apply. Instead, the electing U.S. Holder would include annually in
his gross income his pro rata share of the PFICs ordinary earnings and any net capital gain regardless of whether such income or gain was actually distributed. A U.S. Holder of a QEF can, however, elect to defer the payment of United States
Federal income tax on such income inclusions. Special rules apply to U.S. Holders who own their interests in a PFIC through intermediate entities or persons.



U.S. Holders who hold, actually or constructively, marketable stock of a foreign corporation that qualifies as a PFIC may elect to mark such stock to the market (a
mark-to-market election). If such an election is made, such U.S. Holder will not be subject to the special taxation rules of PFIC described above for the taxable years for which the mark-to-market election is made. A U.S. Holder who
makes such an election will include in income for the taxable year an amount equal to the excess, if any, of the fair market value of our common shares as of the close of such tax year over such U.S. Holders adjusted basis in such shares. In
addition, the U.S. Holder is allowed a deduction for



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the lesser of (i) the excess, if any, of such U.S. Holders adjusted tax basis in the shares over the fair
market value of such shares as of the close of the tax year, or (ii) the excess, if any of (A) the mark-to-market gains for our common shares included by such U.S. Holder for prior tax years, including any amount which would have been
included for any prior year but for Section 1291 interest on tax deferral rules discussed above with respect to a U.S. Holder, who has not made a timely QEF election during the year in which he holds (or is deemed to have held) our common
shares and the Company is a PFIC (Non-Electing U.S. Holder), over (B) the mark-to-market losses for shares that were allowed as deductions for prior tax years. A U.S. Holders adjusted tax basis in our common shares will be
increased or decreased to reflect the amount included or deducted as a result of mark-to-market election. A mark-to-market election will apply to the tax year for which the election is made and to all later tax years, unless the PFIC stock ceases to
be marketable or the IRS consents to the revocation of the election.



The IRS
has issued proposed regulations that, subject to certain exceptions, would treat as taxable certain transfers of PFIC stock by a Non-Electing U.S. Holder that are generally not otherwise taxed, such as gifts, exchanges pursuant to corporate
reorganizations, and transfers at death. Generally, in such cases, the basis of our common shares in the hands of the transferee and the basis of any property received in the exchange for those shares would be increased by the amount of gain
recognized. A U.S. Holder who has made a timely QEF election (as discussed above) will not be taxed on certain transfers of PFIC stock, such as gifts, exchanges pursuant to corporate reorganizations, and transfers at death. The transferees
basis in this case will depend on the manner of the transfer. The specific tax effect to the U.S. Holder and the transferee may vary based on the manner in which the common shares are transferred. Each U.S. Holder should consult a tax advisor with
respect to how the PFIC rules affect their tax situation.



The PFIC and QEF
election rules are complex. U.S. Holders should consult a tax advisor regarding the availability and procedure for making the QEF election as well as the applicable method for recognizing gains or earnings and profits under the foregoing rules.



Controlled Foreign Corporation



If more than 50% of the total combined voting power of all classes of shares entitled to
vote or the total value of our common shares is owned, actually or constructively, by citizens or residents of the U.S., U.S. domestic partnerships or corporation, or estates or trusts other than foreign estates or trusts (as defined by Code
Section 7701(a)(31)), each of which owns, actually or constructively, 10% or more of our total combined voting power of all classes of shares entitled to vote (U.S. Shareholder), we would be treated as a controlled foreign
corporation (CFC) under Subpart F of the Code. This classification could effect many complex results, one of which is the inclusion by the U.S. shareholders of certain income of a CFC which is subject to current U.S. tax. The U.S.
generally taxes U.S. Shareholders of a CFC currently on their pro rata shares of the Subpart F income of the CFC. Such U.S. Shareholders are generally treated as having received a current distribution out of the CFCs Subpart F income and are
also subject to current U.S. tax on their pro rata shares of increases in the CFCs earnings invested in U.S. property. The foreign tax credit described above may reduce the U.S. tax on these amounts. In addition, under Section 1248 of the
Code, gain from the sale or exchange of shares of the CFC by a U.S. Holder which is or was a U.S. Shareholder at any time during the five-year period ending on the date of the sale or exchange is treated as ordinary income to the extent of earnings
and profits of the CFC attributable to the shares sold or exchanged. If a foreign corporation is both a PFIC and a CFC, the foreign corporation generally will not be treated as a PFIC with respect to U.S. Shareholders of the CFC. This rule generally
will be effective for taxable years of U.S. Shareholders beginning after 1997 and for taxable years of foreign corporations ending with or within such taxable years of U.S. Shareholders. Special rules apply to U.S. Shareholders who are subject to
the special taxation rules under Section 1291 discussed above with respect to a PFIC. Because of the complexity of Subpart F, a more detailed review of these rules is outside of the scope of this discussion. We do not believe that we currently
qualify as a CFC. However, there can be no assurance that we will not be considered a CFC for the current or any future taxable year.



F. Dividends and Paying Agents



Not applicable.



31



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##### Table of Contents

G. Statement by Experts



Not applicable.



H. Documents on Display



Exhibits
attached to this Form 20-F are also available for viewing at our offices, Suite 1910  400 Burrard Street, Vancouver, British Columbia V6C 3A6 or on request of Unilens at 604-685-8666, Attention: William Harper. Copies of our financial
statements and other continuous disclosure documents required under the BCSA are available for viewing on the Internet at www.sedar.com.



I. Subsidiary Information



Not applicable.



ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



(a) Quantitative Information About Market Risk



Our operations do not employ financial instruments or derivatives, which are market sensitive and we do not have financial market risks.



(b) Qualitative Information About Mark Risk



Our financial statements are reported in U.S. Dollars, the same as the currency of our operating subsidiary, Unilens Corp. USA. The effects of exchange rate fluctuations
related to the US dollar is therefore limited to the assets and liabilities related to our administrative office. Included in our long term debt at June 30, 2004 is a $450,000 non-revolving term note carrying an interest rate of the Citibank
base rate plus 3%, payable monthly. The interest rate on the loan is adjusted based on the effective date of any change in the Citibank base rate. Accordingly, monthly interest paid fluctuated based on the corresponding change in the Citibank base
rate. The Company paid the full amount due on this note during the year ended June 30, 2005.



(c) Interim Periods



Not applicable.



ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES



Not applicable.



PART II



ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES



Not applicable.



ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS



Under the terms of the loan from Uniinvest we were not permitted, without the prior written consent of Uniinvest, to declare or pay or set aside for payment any dividend
on our common shares or voluntary purchase, redeem, accrue, or retire any of our common shares. As we repaid the full amount of this loan during the year ended June 30, 2005, this restriction no longer applies. (See Item 7  Major
Shareholders and Related Party Transactions.)



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ITEM 15. CONTROLS AND PROCEDURES



In
accordance with Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934 (the Exchange Act), our management, under the supervision of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the
effectiveness of the design and operation of the Companys disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(f) under the Securities Exchange Act) as of the end of the period covered by this Annual Report. Based on
that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2005.



There has been no change in the Companys internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under
the Securities Exchange Act) that occurred during the period covered by this Annual Report that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting



ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT



Our board of directors has not designated an Audit Committee Financial Expert as that term is defined under Section 407 of the Sarbanes-Oxley Act of 2002. We are currently reviewing candidates for this role and seek to
appoint or elect such a person as a director in the near term.



ITEM 16B. CODE OF ETHICS



We have adopted a
Code of Business Conduct and Ethics (the Code) that applies to all directors and officers, including our Chief Executive Officer, Chief Financial Officer and principal accounting officer. We will provide to any person, without charge,
upon request, a copy of the Code. A person may request a copy by telephoning us at (604) 685-8666, or by writing to us at Suite 1910-400 Burrard Street, Vancouver, British Columbia V6C 3A6, Attn: William Harper.



ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES



The aggregate amounts billed by Davidson & Company for each of the fiscal years ended June 30, 2005 (Fiscal 2005) and 2004 for audit fees, audit-related fees, tax fees and all other fees are set forth below:



|                       |  |                         |        |                         |   |       
|---------------------- |  | ----------------------- | ------ | ----------------------- | - | ------
|                       |  | Year EndedJune 30, 2005 |        | Year EndedJune 30, 2004
|Audit Fees (1)         |  | $                       | 37,000 |                         | $ | 19,966
|Audit-Related Fees (2) |  |                         | 0      |                         |   | 0     
|Tax Fees (3)           |  |                         | 1,500  |                         |   | 1,338 
|                       |  |                         |        |                         |   |       
|Totals                 |  | $                       | 38,500 |                         | $ | 21,304
|                       |  |                         |        |                         |   |       



NOTES:



(1) Audit Fees represent fees for the audit of
our annual financial statements, and consulting in connection with our statutory and regulatory filings.



(2) Audit-Related Fees represent fees for assurance and related services that are related to the performance of the audit, including an impact study of decrease in stock option exercise price, and
consultation with the audit committee concerning our financial statements.



(3)
Tax Fees represent fees for tax compliance, tax advice and tax planning including analysis relating to stock option matters and relating to tax on sale of short-term investments.



The Audit Committee has adopted procedures requiring Audit Committee review and approval in
advance of all particular engagements for services provided by our independent auditors. Consistent with applicable laws, the



33



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##### Table of Contents

procedures permit limited amounts of services, other than audit, review or attest services, to be approved by one or more
members of the Audit Committee pursuant to authority delegated by the Audit Committee, provided the Audit Committee is informed of each particular service. All of the engagements and fees for Fiscal 2005 were approved by the Audit Committee. The
Audit Committee reviews with Davidson & Company whether the non-audit services to be provided are compatible with maintaining the auditors independence. Our board of directors has determined that, starting in the fiscal year ending
June 30, 2005, fees paid to the independent auditors for non-audit services in any year will not exceed the fees paid for audit services during the year. Permissible non-audit services will be limited to fees for tax services, accounting
assistance or audits in connection with acquisitions, and other services specifically related to accounting or audit matters such as audits of employee benefit plans.



ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES



As our common shares are not listed on a national securities exchange or listed in an automated inter-dealer quotation system of a national securities association as provided under Rule 10A-3 under the Exchange Act,
the requirements of that Rule are not applicable to us and, as such, there is no requirement to provide any information under this Item.



ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS



We made no purchases of our equity securities during the fiscal year ended June 30, 2005.



PART III



ITEM 17. FINANCIAL STATEMENTS



The following attached financial statements and schedule are incorporated in this Annual Report:



|    |  |                                                                                                                                                                                                                                            
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) |  | Auditors Report on the consolidated balance sheets as at June 30, 2005 and 2004, and the consolidated statements of operations, stockholders equity (deficiency) and cash
flows for each of the years ended June 30, 2005, 2004 and 2003;
|    | 
|(2) |  | Consolidated balance sheets as at June 30, 2005 and 2004;                                                                                                                                                                                  
|    | 
|(3) |  | Consolidated statements of operations for each of the years ended June 30, 2005, 2004 and 2003;                                                                                                                                            
|    | 
|(4) |  | Consolidated statements of stockholders equity (deficiency) for the periods referred to in (3) above;                                                                                                                                     
|    | 
|(5) |  | Consolidated statements of cash flows for the periods referred to in (3) above;                                                                                                                                                            
|    | 
|(6) |  | Notes to the consolidated financial statements;                                                                                                                                                                                            
|    | 
|(7) |  | Schedule of valuation and qualifying accounts;                                                                                                                                                                                             
|    | 
|(8) |  | Report of independent registered public accounting firm.                                                                                                                                                                                   



34



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Financial Statements of



UNILENS VISION INC.



Year ended June 30, 2005 and 2004



Report date  October 20, 2005



35



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##### Table of Contents

LOGO



INDEPENDENT AUDITORS REPORT



To the Stockholders of

Unilens Vision Inc.



We have audited the consolidated balance sheets of Unilens Vision Inc. as at June 30, 2005 and 2004 and the consolidated statements of operations, stockholders equity (deficiency) and cash flows for the years
ended June 30, 2005, 2004 and 2003. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits.



We conducted our audits in accordance with Canadian generally accepted auditing standards and
with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance about 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.



In our opinion, these
consolidated financial statements present fairly, in all material respects, the financial position of the Company as at June 30, 2005 and 2004 and the results of its operations and cash flows for the years ended June 30, 2005, 2004 and
2003 in accordance with generally accepted accounting principles in the United States.



DAVIDSON & COMPANY



|                  |  |                      
|----------------- |  | ---------------------
|Vancouver, Canada |  | Chartered Accountants
|                  | 
|October 20, 2005  |  |                      



A Member of
SC INTERNATIONAL

---



1200 - 609 Granville Street, P.O. Box 10372, Pacific Centre, Vancouver, BC, Canada, V7Y 1G6

Telephone (604) 687-0947 Fax (604) 687-6172



36



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##### Table of Contents

UNILENS VISION INC.

CONSOLIDATED BALANCE SHEETS

(Expressed in U.S. Dollars)

AS AT JUNE 30



|                                                                    |  |      |             |   |      |   |             |  
|------------------------------------------------------------------- |  | ---- | ----------- | - | ---- | - | ----------- | -
|                                                                    |  | 2005 |             |   | 2004 |  
|ASSETS                                                              |  |      |             |   |      |   |             |  
|Current                                                             |  |      |             |   |      |   |             |  
|Cash and cash equivalents                                           |  | $    | 374,302     |   |      | $ | 472,439     |  
|Accounts receivable (net of allowance of $305,000; 2004 - $258,000) |  |      | 842,206     |   |      |   | 562,981     |  
|Royalties and other receivables                                     |  |      | 481,802     |   |      |   | 318,061     |  
|Inventories (Note 3)                                                |  |      | 867,158     |   |      |   | 703,753     |  
|Prepaid expenses                                                    |  |      | 16,598      |   |      |   | 10,392      |  
|Deferred tax asset  current (Note 17)                              |  |      | 1,040,800   |   |      |   | 710,500     |  
|                                                                    |  |      |             |   |      |   |             |  
|Total current assets                                                |  |      | 3,622,866   |   |      |   | 2,778,126   |  
|                                                                    |  |     
|Property, plant, and equipment (Note 4)                             |  |      | 389,719     |   |      |   | 201,084     |  
|Other assets (Note 5)                                               |  |      | 36,061      |   |      |   | 45,240      |  
|Deferred tax asset (Note 17)                                        |  |      | 3,268,300   |   |      |   | 3,071,500   |  
|                                                                    |  |      |             |   |      |   |             |  
|Total assets                                                        |  | $    | 7,316,946   |   |      | $ | 6,095,950   |  
|                                                                    |  |      |             |   |      |   |             |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                |  |      |             |   |      |   |             |  
|Current                                                             |  |      |             |   |      |   |             |  
|Accounts payable and accrued liabilities                            |  | $    | 1,082,242   |   |      | $ | 846,978     |  
|Current portion of long-term debt - related party (Note 9)          |  |      |            |   |      |   | 100,000     |  
|Current portion of long-term debt (Note 10)                         |  |      |            |   |      |   | 450,000     |  
|                                                                    |  |      |             |   |      |   |             |  
|Total current liabilities                                           |  |      | 1,082,242   |   |      |   | 1,396,978   |  
|                                                                    |  |     
|Long-term debt  related party (Note 9)                             |  |      |            |   |      |   | 300,000     |  
|Long-term debt(Note 10)                                             |  |      |            |   |      |   | 388,139     |  
|                                                                    |  |      |             |   |      |   |             |  
|Total liabilities                                                   |  |      | 1,082,242   |   |      |   | 2,085,117   |  
|                                                                    |  |      |             |   |      |   |             |  
|Commitments (Note 11)                                               |  |      |             |   |      |   |             |  
|Stockholders equity                                                |  |      |             |   |      |   |             |  
|Capital stock (1) (Note 12)                                         |  |      | 27,434,950  |   |      |   | 27,432,100  |  
|Additional paid-in capital                                          |  |      | 8,970       |   |      |   | 8,970       |  
|Cumulative translation adjustment                                   |  |      | (18,922     | ) |      |   | (2,156      | )
|Deficit                                                             |  |      | (21,190,294 | ) |      |   | (23,428,081 | )
|                                                                    |  |      |             |   |      |   |             |  
|Total stockholders equity                                          |  |      | 6,234,704   |   |      |   | 4,010,833   |  
|                                                                    |  |      |             |   |      |   |             |  
|Total liabilities and stockholders equity                          |  | $    | 7,316,946   |   |      | $ | 6,095,950   |  
|                                                                    |  |      |             |   |      |   |             |  

---

|(1) | 100,000,000 Common shares at no par value are authorized. At June 30, 2005 and 2004, 4,193,815 and 4,178,815 shares were issued and outstanding. 100,000,000 Preference
A shares at a par value of Cdn.$10 each and 100,000,000 Preference B shares at a par value of Cdn.$50 each are authorized. At June 30, 2005 and 2004, no Preference shares were issued and outstanding.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



On behalf of the Board:



|                     |  |          |  |                       |  |         
|-------------------- |  | -------- |  | --------------------- |  | --------
|/s/ Alfred W. Vitale |  | Director |  | /s/ William D. Baxter |  | Director



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



37



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##### Table of Contents

UNILENS VISION INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Expressed in U.S. Dollars)



|                                                                                                                              |  |      |           |   |      |   |           |      |  |   |           |  
|----------------------------------------------------------------------------------------------------------------------------- |  | ---- | --------- | - | ---- | - | --------- | ---- |  | - | --------- | -
|YEAR ENDED JUNE 30                                                                                                            |  | 2005 |           |   | 2004 |   |           | 2003 | 
|SALES                                                                                                                         |  | $    | 4,971,577 |   |      | $ | 4,074,577 |      |  | $ | 3,129,101 |  
|COST OF SALES                                                                                                                 |  |      | 2,958,252 |   |      |   | 2,415,007 |      |  |   | 2,074,318 |  
|                                                                                                                              |  |      |           |   |      |   |           |      |  |   |           |  
|GROSS PROFIT                                                                                                                  |  |      | 2,013,325 |   |      |   | 1,659,570 |      |  |   | 1,054,783 |  
|                                                                                                                              |  |      |           |   |      |   |           |      |  |   |           |  
|EXPENSES                                                                                                                      |  |      |           |   |      |   |           |      |  |   |           |  
|Administration                                                                                                                |  |      | 835,834   |   |      |   | 862,125   |      |  |   | 607,811   |  
|Research and development                                                                                                      |  |      | 71,680    |   |      |   | 52,118    |      |  |   | 62,566    |  
|Sales and marketing                                                                                                           |  |      | 1,014,231 |   |      |   | 787,714   |      |  |   | 656,984   |  
|                                                                                                                              |  |      |           |   |      |   |           |      |  |   |           |  
|                                                                                                                              |  |      | 1,921,745 |   |      |   | 1,701,957 |      |  |   | 1,327,361 |  
|                                                                                                                              |  |      |           |   |      |   |           |      |  |   |           |  
|Income (loss) from operations                                                                                                 |  |      | 91,580    |   |      |   | (42,387   | )    |  |   | (272,578  | )
|                                                                                                                              |  |      |           |   |      |   |           |      |  |   |           |  
|OTHER ITEMS                                                                                                                   |  |      |           |   |      |   |           |      |  |   |           |  
|Royalty income (Note 6)                                                                                                       |  |      | 1,632,051 |   |      |   | 937,394   |      |  |   | 267,652   |  
|Other income                                                                                                                  |  |      | 7,267     |   |      |   | 1,468     |      |  |   | 6,619     |  
|Interest on long-term debt                                                                                                    |  |      | (20,211   | ) |      |   | (33,354   | )    |  |   | (142,423  | )
|                                                                                                                              |  |      |           |   |      |   |           |      |  |   |           |  
|                                                                                                                              |  |      | 1,619,107 |   |      |   | 905,508   |      |  |   | 131,848   |  
|                                                                                                                              |  |      |           |   |      |   |           |      |  |   |           |  
|Income (loss) before income tax benefit and extraordinary item                                                                |  |      | 1,710,687 |   |      |   | 863,121   |      |  |   | (140,730  | )
|                                                                                                                              |  |      |          
|Net deferred income tax benefit (Note 17)                                                                                     |  |      | 527,100   |   |      |   | 3,261,050 |      |  |   | 1,699,000 |  
|                                                                                                                              |  |      |           |   |      |   |           |      |  |   |           |  
|Income before net extraordinary item                                                                                          |  |      | 2,237,787 |   |      |   | 4,124,171 |      |  |   | 1,558,270 |  
|                                                                                                                              |  |      |          
|Net extraordinary item                                                                                                        |  |      |           |   |      |   |           |      |  |   |           |  
|Gain on extinguishment of debt which is net of associated expenses and applicable income taxes of 2004 - $1,178,050 (Note 10) |  |      |          |   |      |   | 1,952,563 |      |  |   |          |  
|                                                                                                                              |  |      |           |   |      |   |           |      |  |   |           |  
|Income for the year                                                                                                           |  |      | 2,237,787 |   |      |   | 6,076,734 |      |  |   | 1,558,270 |  
|                                                                                                                              |  |      |           |   |      |   |           |      |  |   |           |  
|Other comprehensive loss: Foreign currency translation adjustment                                                             |  |      | (16,766   | ) |      |   | (1,378    | )    |  |   | (9,472    | )
|                                                                                                                              |  |      |           |   |      |   |           |      |  |   |           |  
|Comprehensive income for the year                                                                                             |  | $    | 2,221,021 |   |      | $ | 6,075,356 |      |  | $ | 1,548,798 |  
|                                                                                                                              |  |      |           |   |      |   |           |      |  |   |           |  
|Income per common share before extraordinary item:                                                                            |  |      |           |   |      |   |           |      |  |   |           |  
|Basic                                                                                                                         |  | $    | 0.53      |   |      | $ | 1.01      |      |  | $ | 0.41      |  
|                                                                                                                              |  |      |           |   |      |   |           |      |  |   |           |  
|Diluted                                                                                                                       |  | $    | 0.50      |   |      | $ | 1.00      |      |  | $ | 0.41      |  
|                                                                                                                              |  |      |           |   |      |   |           |      |  |   |           |  
|Income per common share from net extraordinary item                                                                           |  |      |           |   |      |   |           |      |  |   |           |  
|Basic                                                                                                                         |  | $    |          |   |      | $ | 0.48      |      |  | $ |          |  
|                                                                                                                              |  |      |           |   |      |   |           |      |  |   |           |  
|Diluted                                                                                                                       |  | $    |          |   |      | $ | 0.48      |      |  | $ |          |  
|                                                                                                                              |  |      |           |   |      |   |           |      |  |   |           |  
|Income per common share:                                                                                                      |  |      |           |   |      |   |           |      |  |   |           |  
|Basic                                                                                                                         |  | $    | 0.53      |   |      | $ | 1.49      |      |  | $ | 0.41      |  
|                                                                                                                              |  |      |           |   |      |   |           |      |  |   |           |  
|Diluted                                                                                                                       |  | $    | 0.50      |   |      | $ | 1.48      |      |  | $ | 0.41      |  
|                                                                                                                              |  |      |           |   |      |   |           |      |  |   |           |  



Weighted average number of common
shares (Note 20)



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



38



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##### Table of Contents

UNILENS VISION INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIENCY)

(Expressed in U.S. Dollars)



|                                                                |  |                 |  |                          |            |                                 |   |       |         |   |         |       |  |   |             |   |  |   |            |  
|--------------------------------------------------------------- |  | --------------- |  | ------------------------ | ---------- | ------------------------------- | - | ----- | ------- | - | ------- | ----- |  | - | ----------- | - |  | - | ---------- | -
|                                                                |  | Common Stock    |  | AdditionalPaid-inCapital |            | CumulativeTranslationAdjustment |   |       | Deficit |   |         | Total | 
|                                                                |  | Number ofshares |  | Amount                   |            |                                 |   |      
|Balance, June 30, 2002                                          |  | 3,838,815       |  | $                        | 27,367,615 |                                 | $ |      |         | $ | 8,694   |       |  | $ | (31,063,085 | ) |  | $ | (3,686,776 | )
|                                                                |  |                 |  |                          |            |                                
|Income for the year                                             |  |                 |  |                          |            |                                 |   |       |         |   |         |       |  |   | 1,558,270   |   |  |   | 1,558,270  |  
|Cumulative translation adjustment                               |  |                 |  |                          |            |                                 |   |       |         |   | (9,472  | )     |  |   |             |   |  |   | (9,472     | )
|                                                                |  |                 |  |                          |            |                                 |   |       |         |   |         |       |  |   |             |   |  |   |            |  
|Balance, June 30, 2003                                          |  | 3,838,815       |  |                          | 27,367,615 |                                 |   |      |         |   | (778    | )     |  |   | (29,504,815 | ) |  |   | (2,137,978 | )
|                                                                |  |                 |  |                          |            |                                
|Common stock issued for cash at $0.19 per share in October 2003 |  | 325,000         |  |                          | 61,750     |                                 |   |       |         |   |         |       |  |   |             |   |  |   | 61,750     |  
|Common stock issued for cash at $0.1823 per share in April 2004 |  | 15,000          |  |                          | 2,735      |                                 |   |       |         |   |         |       |  |   |             |   |  |   | 2,735      |  
|Stock-based compensation                                        |  |                 |  |                          |            |                                 |   | 8,970 |         |   |         |       |  |   |             |   |  |   | 8,970      |  
|Cumulative translation adjustment                               |  |                 |  |                          |            |                                 |   |       |         |   | (1,378  | )     |  |   |             |   |  |   | (1,378     | )
|Income for the year                                             |  |                 |  |                          |            |                                 |   |       |         |   |         |       |  |   | 6,076,734   |   |  |   | 6,076,734  |  
|                                                                |  |                 |  |                          |            |                                 |   |       |         |   |         |       |  |   |             |   |  |   |            |  
|Balance, June 30, 2004                                          |  | 4,178,815       |  |                          | 27,432,100 |                                 |   | 8,970 |         |   | (2,156  | )     |  |   | (23,428,081 | ) |  |   | 4,010,833  |  
|                                                                |  |                 |  |                          |            |                                
|Common stock issued for cash at $0.19 per share in March 2005   |  | 15,000          |  |                          | 2,850      |                                 |   |       |         |   |         |       |  |   |             |   |  |   | 2,850      |  
|Cumulative translation adjustment                               |  |                 |  |                          |            |                                 |   |       |         |   | (16,766 | )     |  |   |             |   |  |   | (16,766    | )
|Income for the year                                             |  |                 |  |                          |            |                                 |   |       |         |   |         |       |  |   | 2,237,787   |   |  |   | 2,237,787  |  
|                                                                |  |                 |  |                          |            |                                 |   |       |         |   |         |       |  |   |             |   |  |   |            |  
|Balance, June 30, 2005                                          |  | 4,193,815       |  | $                        | 27,434,950 |                                 | $ | 8,970 |         | $ | (18,922 | )     |  | $ | (21,190,294 | ) |  | $ | 6,234,704  |  
|                                                                |  |                 |  |                          |            |                                 |   |       |         |   |         |       |  |   |             |   |  |   |            |  



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



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##### Table of Contents

UNILENS VISION INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S. Dollars)



|                                                             |  |      |            |   |      |   |            |      |  |   |            |  
|------------------------------------------------------------ |  | ---- | ---------- | - | ---- | - | ---------- | ---- |  | - | ---------- | -
|YEAR ENDED JUNE 30                                           |  | 2005 |            |   | 2004 |   |            | 2003 | 
|CASH FLOWS FROM OPERATING ACTIVITIES                         |  |      |            |   |      |   |            |      |  |   |            |  
|Income for the year                                          |  | $    | 2,237,787  |   |      | $ | 6,076,734  |      |  | $ | 1,558,270  |  
|Items not affecting cash:                                    |  |      |            |   |      |   |            |      |  |   |            |  
|Amortization                                                 |  |      | 79,177     |   |      |   | 117,414    |      |  |   | 130,183    |  
|Amortization of discount on long-term debt                   |  |      |           |   |      |   |           |      |  |   | 98,338     |  
|Deferred tax benefit                                         |  |      | (527,100   | ) |      |   | (2,083,000 | )    |  |   | (1,699,000 | )
|Gain on extinguishment of debt  net of associated costs     |  |      |           |   |      |   | (3,130,613 | )    |  |   |           |  
|Stock-based compensation                                     |  |      |           |   |      |   | 8,970      |      |  |   |           |  
|Change in non-cash working capital items (Note 13)           |  |      | (527,489   | ) |      |   | (162,287   | )    |  |   | (245,424   | )
|                                                             |  |      |            |   |      |   |            |      |  |   |            |  
|Net cash provided by (used in) operating activities          |  |      | 1,262,375  |   |      |   | 827,218    |      |  |   | (157,633   | )
|                                                             |  |      |            |   |      |   |            |      |  |   |            |  
|CASH FLOWS FROM INVESTING ACTIVITIES                         |  |      |            |   |      |   |            |      |  |   |            |  
|Purchase of property, plant and equipment and other assets   |  |      | (122,470   | ) |      |   | (157,354   | )    |  |   | (21,564    | )
|                                                             |  |      |            |   |      |   |            |      |  |   |            |  
|Net cash used in investing activities                        |  |      | (122,470   | ) |      |   | (157,354   | )    |  |   | (21,564    | )
|                                                             |  |      |            |   |      |   |            |      |  |   |            |  
|CASH FLOWS FROM FINANCING ACTIVITIES                         |  |      |            |   |      |   |            |      |  |   |            |  
|Payments on long-term debt  related party (Note 9)          |  |      | (400,000   | ) |      |   |           |      |  |   |           |  
|Principal payments on long-term debt                         |  |      | (838,139   | ) |      |   | (461,861   | )    |  |   |           |  
|Capital stock issued for cash                                |  |      | 2,850      |   |      |   | 64,485     |      |  |   |           |  
|                                                             |  |      |            |   |      |   |            |      |  |   |            |  
|Net cash used in financing activities                        |  |      | (1,235,289 | ) |      |   | (397,376   | )    |  |   |           |  
|                                                             |  |      |            |   |      |   |            |      |  |   |            |  
|Change in cash and cash equivalents during the year          |  |      | (95,384    | ) |      |   | 272,488    |      |  |   | (179,197   | )
|                                                             |  |      |           
|Effect of exchange rate changes on cash and cash equivalents |  |      | (2,753     | ) |      |   | (1,378     | )    |  |   | 178        |  
|                                                             |  |      |           
|Cash and cash equivalents, beginning of year                 |  |      | 472,439    |   |      |   | 201,329    |      |  |   | 380,348    |  
|                                                             |  |      |            |   |      |   |            |      |  |   |            |  
|Cash and cash equivalents, end of year                       |  | $    | 374,302    |   |      | $ | 472,439    |      |  | $ | 201,329    |  
|                                                             |  |      |            |   |      |   |            |      |  |   |            |  
|Cash paid during the year for interest                       |  | $    | 20,252     |   |      | $ | 48,483     |      |  | $ | 36,172     |  
|                                                             |  |      |            |   |      |   |            |      |  |   |            |  
|Cash paid during the year for income taxes                   |  | $    |           |   |      | $ |           |      |  | $ |           |  
|                                                             |  |      |            |   |      |   |            |      |  |   |            |  



Supplemental disclosure with respect
to cash flows (Note 13)



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



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##### Table of Contents

UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

JUNE 30, 2005



|1. | NATURE OF BUSINESS
|-- | ------------------



The business of Unilens Vision Inc. (the Company) is to develop and sell optical products using proprietary design and manufacturing
technology. The Companys products are being sold primarily in the United States through a network of national distributors and independent sales representatives. The Company also licenses one of its patented multifocal designs on an exclusive
basis to Bausch and Lomb Inc. (Bausch and Lomb) (Note 6).



|2. | SIGNIFICANT ACCOUNTING POLICIES
|-- | -------------------------------



During the fiscal year ended June 30, 2004, the Company elected to prepare these consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America (US GAAP) and in United States dollars. Previously the Company prepared its annual and interim consolidated financial statements in accordance with generally accepted
accounting principles in Canada (Cdn GAAP) and in United States dollars. There were no material differences between the amounts previously reported and the amounts that would have been reported had those statements been prepared in
conformity with US GAAP. Refer to Note 21 for differences between the amounts reported in these consolidated financial statements and the amounts that would have been reported had they been prepared in conformity with Cdn GAAP.



The significant accounting policies adopted by the Company are as follows:



Consolidation



These consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiary, Unilens Corp. USA and its subsidiary.



All significant inter-company transactions have been eliminated.



Use of estimates



The
preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amount of revenues and expenses during the period. Actual results could differ from these estimates.



Currency



These financial statements are expressed in United States dollars as the Companys operations are based predominately in the United States. Any
amounts expressed in Canadian dollars are indicated as such.



Revenue recognition and discounts



The
Company recognizes revenue on sales of optical products upon shipment, when title passes, and ultimate collection is reasonably assured. At the same time, the Company charges operations for the estimated cost of future returns based on historical
experience for the respective product types. The Company offers discounts on its products. The costs of these discounts are recognized at the date at which the related sales revenue is recognized and are recorded as a reduction of sales revenue.



Royalty income



The Company recognizes royalty income at the end of each quarter based on
the net sales of licensed products sold during the quarter, which is provided by the licensee, times the royalty rate. Royalty income is included in other income on the consolidated statement of operations.



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##### Table of Contents

UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

JUNE 30, 2005



|2. | SIGNIFICANT ACCOUNTING POLICIES (contd)
|-- | -----------------------------------------



Shipping and handling



The Company records amounts billed to customers for shipping and handling costs as sales revenue. Costs incurred by the Company for shipping and handling
are included in cost of sales.



Accounts receivable



Accounts receivable consist of contact lens sales to
customers. The Company records an allowance for doubtful accounts to allow for any amounts that may not be recoverable, which is based on an analysis of the Companys prior collection experience, customer credit worthiness, and current economic
trends. Based on managements review of accounts receivable, an allowance for doubtful accounts of $305,000 and $258,000 at June 30, 2005 and 2004, respectively, is considered adequate. Receivables are determined to be past due based on
payment terms of original invoices. The Company does not typically charge interest on past due receivables.



Inventories



Inventories are carried at the lower of cost or net realizable value. Cost is determined on a first-in, first-out basis. The Company provides reserves for
inventory that management believes to be obsolete or slow moving.



Property, plant and equipment and intangible assets



Property, plant and equipment are recorded at cost less accumulated amortization. Plant and equipment and office equipment are amortized on a straight line basis over the shorter of 5 years or the estimated useful life of the asset.
Leasehold improvements are amortized over the shorter of the term of the lease or the estimated useful life of the asset. Expenditures for certain maintenance and repairs are charged to expense as incurred, and renewals and betterments are
capitalized. Gains and losses on disposals are credited or charged to operations. For US income tax purposes, the Company uses accelerated methods of depreciation for all assets.



Patents and trademarks are recorded at cost and are amortized over their estimated useful lives of up to 10 years on a
straight-line basis.



Property, plant and equipment and
intangible assets are reviewed by the Company for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. In performing the review of recoverability, the Company estimates the
future cash flows that are expected to result from the use of the assets and their eventual disposition. Because events and circumstances frequently do not occur as expected, there will usually be differences between the estimated and actual future
cash flows, and these differences may be material. If an asset is determined to be impaired, the Company recognizes a loss being the difference between the carrying amount and the fair value of the asset. The fair value of the asset is measured
using quoted market prices or, in the absence of quoted market prices, fair value is based on discounting the estimated future cash flows. During the periods presented, the Company determined that its property, plant and equipment and intangible
assets were not impaired.



Foreign currency translation



The Companys functional currency is the United
States dollar. The Company follows the current rate method of translation which translates foreign assets and liabilities, into United States dollar equivalents, at the rate of exchange at the balance sheet date. Any revenues and expenses from
Canadian operations are translated into United States dollar equivalents at the average rate of exchange throughout the period.



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##### Table of Contents

UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

JUNE 30, 2005



|2. | SIGNIFICANT ACCOUNTING POLICIES (contd)
|-- | -----------------------------------------



Foreign currency translation(contd)



Gains and losses arising from translation of the financial statements are disclosed as a separate component of stockholders equity. Net gains and
losses from foreign currency transactions are included in the consolidated statements of operations.



Cash and cash equivalents



Cash and cash equivalents include short-term, highly liquid investments that are both readily convertible to known amounts of cash and whose original
maturity is three months or less when purchased.



Income per
share



Basic income per share is calculated by dividing
the income for the year by the weighted-average number of shares outstanding during the year.



Diluted income per share is calculated using the treasury stock method. Under the treasury stock method, the weighted average number of common shares outstanding used for the calculation of diluted income per share
assumes that the proceeds to be received on the exercise of dilutive stock options and warrants are used to repurchase common shares at the average market price during the year.



Research and development costs



Research and development costs are expensed as incurred. The amounts charged to operations during the years ended
June 30, 2005, 2004 and 2003 were $71,680, $52,118 and $62,566, respectively. For tax purposes, the Company capitalizes these costs and amortizes them over 10 years.



Income taxes



A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating losses carry forwards.
Deferred tax expense (benefits) result from the net change during the period of deferred tax assets and liabilities.



Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the
deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.



Stock-based compensation and stock options



Statements of Financial Accounting Standards No. 123 Accounting for Stock-Based Compensation (SFAS
123) encourages, but does not require, companies to record compensation cost for stock-based employee compensation plans at fair value. The Company has chosen to account for stock-based compensation using Accounting Principles Board Opinion
No. 25, Accounting for Stock Issued to Employees (APB 25). Accordingly, compensation cost for stock options is measured as the excess, if any, of the quoted market price of the Companys stock at the date of grant
over the amount employees are required to pay for the stock.



The Company accounts for stock-based compensation issued to non-employees in accordance with the provisions of SFAS 123 and the consensus in Emerging Issues Task Force No. 96-18, Accounting for Equity Instruments that are issued
to Other Than Employees for Acquiring or in Conjunction with Selling, Goods or Services.



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##### Table of Contents

UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

JUNE 30, 2005



|2. | SIGNIFICANT ACCOUNTING POLICIES (contd)
|-- | -----------------------------------------



Stock based compensation and stock options (contd)



The following table illustrates the effect on income and income per share if the Company had applied the fair value
recognition provisions of SFAS 123 to stock-based employee compensation.



|                                                                                                                    |  |      |           |   |      |   |           |      |  |   |           |  
|------------------------------------------------------------------------------------------------------------------- |  | ---- | --------- | - | ---- | - | --------- | ---- |  | - | --------- | -
|                                                                                                                    |  | 2005 |           |   | 2004 |   |           | 2003 | 
|Income as reported:                                                                                                 |  | $    | 2,237,787 |   |      | $ | 6,076,734 |      |  | $ | 1,558,270 |  
|Add: total stock-based employee compensation expense included in income (loss), as reported determined under APB 25 |  |      |          |   |      |   | 8,970     |      |  |   |          |  
|Deduct: total stock-based employee compensation expense determined under fair value based method for all awards     |  |      | (21,356   | ) |      |   | (87,283   | )    |  |   | (6,352    | )
|                                                                                                                    |  |      |           |   |      |   |           |      |  |   |           |  
|Pro-forma income                                                                                                    |  | $    | 2,216,431 |   |      | $ | 5,998,421 |      |  | $ | 1,551,918 |  
|                                                                                                                    |  |      |           |   |      |   |           |      |  |   |           |  
|Income per common share, as reported                                                                                |  |      |           |   |      |   |           |      |  |   |           |  
|Basic                                                                                                               |  | $    | 0.53      |   |      | $ | 1.49      |      |  | $ | 0.41      |  
|                                                                                                                    |  |      |           |   |      |   |           |      |  |   |           |  
|Diluted                                                                                                             |  | $    | 0.50      |   |      | $ | 1.48      |      |  | $ | 0.41      |  
|                                                                                                                    |  |      |           |   |      |   |           |      |  |   |           |  
|Pro-forma income per common share                                                                                   |  |      |           |   |      |   |           |      |  |   |           |  
|Basic                                                                                                               |  | $    | 0.53      |   |      | $ | 1.47      |      |  | $ | 0.40      |  
|                                                                                                                    |  |      |           |   |      |   |           |      |  |   |           |  
|Diluted                                                                                                             |  | $    | 0.50      |   |      | $ | 1.46      |      |  | $ | 0.40      |  
|                                                                                                                    |  |      |           |   |      |   |           |      |  |   |           |  



Financial
instruments



The Companys financial instruments
consist of cash and cash equivalents, accounts receivable, royalties and other receivables, accounts payable and accrued liabilities, and long term debt. Unless otherwise noted, it is managements opinion that the Company is not exposed to
significant interest, currency or credit risks arising from these financial instruments. The fair value of these financial instruments approximates their carrying values, unless otherwise noted.



Advertising costs



The Company expenses costs when incurred. Advertising expense was
approximately $217,409, $81,000 and $61,600 for the years ended June 30, 2005, 2004 and 2003, respectively; there were no advertising costs that met the criteria for capitalization.



Recent accounting pronouncements



In December 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting
Standards No. 153, Exchanges of Nonmonetary Assets  an amendment of APB Opinion No. 29 (SFAS 153) which amends Accounting Principles Board Opinion No. 29, Accounting for Nonmonetary
Transactions to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has
commercial substance if the future cash flows of the



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##### Table of Contents

UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

JUNE 30, 2005



|2. | SIGNIFICANT ACCOUNTING POLICIES (contd)
|-- | -----------------------------------------



Recent accounting pronouncements (contd)



entity are expected to change significantly as a result of the exchange. SFAS 153 is effective for nonmonetary asset exchanges occurring in fiscal periods
beginning after June 15, 2005. The adoption of SFAS 153 is not expected to have a material effect on the Companys consolidated financial position or results of operations.



In December 2004, the FASB issued Statement of Financial Accounting Standards No. 123R, Share Based Payment
(SFAS 123R). SFAS 123R supersedes APB 25 and its related implementation guidance by requiring entities to recognize the cost of employee services received in exchange for awards of equity instruments based on the grant-date fair value of
those awards (with limited exceptions) and revises SFAS 123 as follows:



| | i) | Public entities are required to measure liabilities incurred to employees in share-based payment transactions at fair value and nonpublic entities may elect to measure their
liabilities to employees incurred in share-based payment transactions at their intrinsic value whereas under SFAS 123, all share-based payment liabilities were measured at their intrinsic value.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ii) | Nonpublic entities are required to calculate fair value using an appropriate industry sector index for the expected volatility of its share price if it is not practicable to
estimate the expected volatility of the entitys share price.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iii) | Entities are required to estimate the number of instruments for which the requisite service is expected to be rendered as opposed to accounting for forfeitures as they occur.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iv) | Incremental compensation cost for a modification of the terms or conditions of an award is measured by comparing the fair value of the modified award with the fair value of the
award immediately before the modification whereas SFAS 123 required that the effects of a modification be measured as the difference between the fair value of the modified award at the date it is granted and the awards value immediately before
the modification determined based on the shorter of (1) its remaining initially estimated expected life or (2) the expected life of the modified award.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



SFAS 123R also clarifies and expands guidance in several areas, including measuring fair value, classifying an award as
equity or as a liability and attributing compensation cost to reporting periods. SFAS 123R does not change the accounting guidance for share-based payment transactions with parties other than employees provided in SFAS 123 as originally issued and
Emerging Issues Task Force No. 96-18 Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring or in Conjunction with Selling, Goods and Services (EITF 96-18). SFAS 123R also does not
address the accounting for employee share ownership plans which are subject to Statement of Position 93-6, Employers Accounting for Employee Stock Ownership Plans. Public entities (other than those filing as small business issuers)
will be required to apply SFAS 123R as of the first annual reporting period that begins after June 15, 2005. Public entities that file as small business issuers will be required to apply SFAS 123R in the first annual reporting period that
begins after December 15, 2005. For nonpublic entities, SFAS 123R must be applied as of the beginning of the first annual reporting period beginning after December 15, 2005. The adoption of SFAS 123R may have a material effect, which is
not determinable at this time, on the Companys consolidated financial position or results of operations.



In May 2005, the FASB issued Statement of Financial Accounting Standards No. 154, Accounting Changes and Error Corrections  A Replacement
of APB Opinion No. 20 and FASB Statement No. 3 (SFAS 154) which is effective for fiscal years ending after December 15, 2005. SFAS 154 requires that changes in accounting policy be accounted for on a retroactive
basis. The adoption of SFAS 154 is not



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##### Table of Contents

UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

JUNE 30, 2005



|2. | SIGNIFICANT ACCOUNTING POLICIES (contd)
|-- | -----------------------------------------



Recent accounting pronouncements (contd)



expected to have a material effect on the Companys consolidated financial position or results of operations.



|3. | INVENTORIES
|-- | -----------



|                                |  |      |           |      |   |          
|------------------------------- |  | ---- | --------- | ---- | - | ---------
|                                |  | 2005 |           | 2004
|Raw materials                   |  | $    | 220,708   |      | $ | 181,725  
|Work in progress                |  |      | 28,342    |      |   | 56,949   
|Finished goods                  |  |      | 1,077,603 |      |   | 951,079  
|                                |  |      |           |      |   |          
|                                |  |      | 1,326,653 |      |   | 1,189,753
|Less allowance for obsolescence |  |      | 459,495   |      |   | 486,000  
|                                |  |      |           |      |   |          
|                                |  | $    | 867,158   |      | $ | 703,753  
|                                |  |      |           |      |   |          



All inventories are
pledged as collateral on loans (Notes 8 and 10).



|4. | PROPERTY, PLANT AND EQUIPMENT
|-- | -----------------------------



|                       |  |      |           |                         |   |               |  |      |         |                         |   |               |  |   |           |  |   |        
|---------------------- |  | ---- | --------- | ----------------------- | - | ------------- |  | ---- | ------- | ----------------------- | - | ------------- |  | - | --------- |  | - | -------
|                       |  | 2005 |           | 2004                   
|                       |  | Cost |           | AccumulatedAmortization |   | Net BookValue |  | Cost |         | AccumulatedAmortization |   | Net BookValue
|Plant and equipment    |  | $    | 4,867,873 |                         | $ | 4,559,018     |  | $    | 308,855 |                         | $ | 4,652,881     |  | $ | 4,513,685 |  | $ | 139,196
|Office equipment       |  |      | 277,014   |                         |   | 214,409       |  |      | 62,605  |                         |   | 249,967       |  |   | 194,124   |  |   | 55,843 
|Leasehold improvements |  |      | 161,053   |                         |   | 142,794       |  |      | 18,259  |                         |   | 142,195       |  |   | 136,150   |  |   | 6,045  
|                       |  |      |           |                         |   |               |  |      |         |                         |   |               |  |   |           |  |   |        
|                       |  | $    | 5,305,940 |                         | $ | 4,916,221     |  | $    | 389,719 |                         | $ | 5,045,043     |  | $ | 4,843,959 |  | $ | 201,084
|                       |  |      |           |                         |   |               |  |      |         |                         |   |               |  |   |           |  |   |        



Amortization expense
of property, plant and equipment was $72,262, $49,287 and $57,467 during 2005, 2004 and 2003 respectively. All plant and equipment is pledged as collateral on loans (Notes 8 and 10).



|5. | OTHER ASSETS
|-- | ------------



|                                                                                      |  |      |        |      |   |       
|------------------------------------------------------------------------------------- |  | ---- | ------ | ---- | - | ------
|                                                                                      |  | 2005 |        | 2004
|Patents and trademarks(net of accumulated amortization - $1,407,811; 2004-$1,401,021) |  | $    |       |      | $ | 6,915 
|Spare parts and tools                                                                 |  |      | 26,926 |      |   | 29,190
|Other                                                                                 |  |      | 9,135  |      |   | 9,135 
|                                                                                      |  |      |        |      |   |       
|                                                                                      |  | $    | 36,061 |      | $ | 45,240
|                                                                                      |  |      |        |      |   |       



46



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UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

JUNE 30, 2005



|5. | OTHER ASSETS(contd)
|-- | ---------------------



Amortization expense of patents and trademarks was $6,915, $68,127 and $72,716 during 2005, 2004 and 2003, respectively.



|6. | ROYALTY AGREEMENT
|-- | -----------------



On October 26, 2001, Bausch & Lomb licensed the exclusive worldwide rights to the Companys multi-focal soft contact lens design. Under
the terms of the agreement, Bausch & Lomb will develop, manufacture, and market a cast-molded multi-focal soft contact lens using the Companys technology. For this, Bausch & Lomb will pay the Company a royalty ranging from
two to five percent of the products worldwide net sales for as long as they manufacture and sell products utilizing the technology. During the years ended June 30, 2005, 2004 and 2003, the Company recorded $1,632,051, $937,394 and
$267,652, respectively, in Bausch & Lomb royalty revenues.



|7. | ASSET PURCHASE AGREEMENT
|-- | ------------------------



On February 23, 2005, the Company entered into an asset purchase agreement to acquire the Aquaflex and SoftCon product lines. Under the terms of the
agreement, the Company will pay up to $350,000 for inventory, trademarks, regulatory approvals, and various other assets. The Company assigned the $350,000 cost to inventory, of which $150,000 was paid at closing, with the remaining $200,000 to be
paid upon the sale of inventory. At June 30, 2005, the balance due was $178,260. As part of this agreement, the Company will also pay a royalty ranging from five percent to eight percent on all future sales of the acquired product lines over
the next five years.



|8. | LINE OF CREDIT
|-- | --------------



During 2005, the Company obtained a line of credit of $1,000,000 with terms of LIBOR plus 2.5 percent interest rate maturing in April 2006. The line is
collateralized by all assets of its subsidiary Unilens Corp. USA. As of June 30, 2005, the Company does not have any amounts outstanding on this line of credit. Under the credit agreement, the Company is required to meet specified financial
covenants. At June 30, 2005, the Company was in compliance with these covenants.



|9. | NOTE PAYABLE, RELATED PARTY
|-- | ---------------------------



At June 30, 2004, the Company had a note payable with a related party in the amount of $400,000. The note was collateralized by the assets of its
subsidiary Unilens Corp. USA. and guaranteed by the Company. The note was originally due, but not paid, on January 31, 1995. The Company paid interest monthly at prime plus three percent through December 2003. During October 2003, this note was
amended and the payment terms of the note changed to quarterly instalments of $25,000 plus interest starting January 2004 and maturing April 2008. The Company paid the full amount due on this note during the year ended June 30, 2005.



The terms and conditions of the above related party debt are
not necessarily indicative of the terms and conditions that would have been incurred had comparable transactions been entered into with independent parties.



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UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

JUNE 30, 2005



|10. | LONG-TERM DEBT AND EXTRAORDINARY ITEM
|--- | -------------------------------------



During 1989, the Company acquired substantially all of the assets that comprise its business through an Asset Purchase Agreement. The purchase price for
the business and its assets was for $6,000,000 to be paid with $500,000 down and $250,000 per year, increasing at a rate of five percent per year. The Company recorded the assets and the obligation net of imputed interest. The Company defaulted on
the obligation in 1992 and 1993 and, as a result of litigation, the Company entered into a Settlement and Forbearance Agreement with its creditor, Competitive Technologies, Inc. This agreement established a payment schedule to cure the delinquent
payments; however, it stipulated that in the event of default by the Company, all amounts owed through the date of the default would be due in accordance with the original debt agreement. The Company continued to default on the loan and, during
1994, began negotiations with Competitive Technologies, Inc. for relief with respect to the debt. The Company did not make any of its annual payments from 1995 through June 30, 2003.



During October 2003, the Company entered into another settlement agreement
with Competitive Technologies, Inc. Under the terms of the settlement agreement, all prior obligations of the Company have been irrevocably terminated in exchange for a $1,250,000 non-interest bearing installment note, secured by the assets of the
Company. The settlement calls for a $100,000 payment on the signing of the agreement and quarterly payments beginning on December 31, 2003 for the greater of (i) $100,000 or (ii) an amount equal to 50 percent of the royalties received
by the Company from Bausch & Lomb, Inc. during the quarter ending on the payment due date. Any quarterly payment increase will accelerate payment of the obligation, but not increase it. On the date of the settlement agreement, the Company
recognized a one-time extraordinary gain of approximately $1,952,000, which is net of related costs and applicable income taxes. At June 30, 2004 the Company owed $838,139 on this note. The Company paid the full amount due on this note during
the year ended June 30, 2005.



The calculation of the
extraordinary gain on extinguishment of debt at June 30, 2004 is as follows:



|                                     |  |   |          
|------------------------------------ |  | - | ---------
|Note balance before debt forgiveness |  | $ | 4,474,576
|Note balance after debt forgiveness  |  |   | 1,250,000
|                                     |  |   |          
|Gross amount forgiven                |  |   | 3,224,576
|Related cost                         |  |   | 93,963   
|                                     |  |   |          
|Extraordinary gain pre-tax           |  |   | 3,130,613
|Tax effect (37.63 percent)           |  |   | 1,178,050
|                                     |  |   |          
|Extraordinary gain net of tax        |  | $ | 1,952,563
|                                     |  |   |          



|11. | OPERATING LEASES
|--- | ----------------



The Company leases, through its subsidiary, a combined office and manufacturing facility in Largo, Florida. The lease agreement, which is guaranteed by
the Company, provides for escalation of rental payments based on taxes and increases in the Consumer Price Index. The lease term is through September 30, 2008 and calls for approximate monthly payments of $17,000 with an adjustment effective
September 30, 2007. These adjustments will be based on the Consumer Price Index, not to exceed three percent.



The Company also rents certain office equipment under operating leases with lease terms of less than one year.



Rent expense under all operating leases was approximately $221,000, $221,000
and $216,000 for the years ended June 30, 2005, 2004 and 2003, respectively.



48



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##### Table of Contents

UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

JUNE 30, 2005



|11. | OPERATING LEASES(contd)
|--- | -------------------------



Minimum future lease payments under operating leases, which have an initial or remaining non-cancelable lease term in excess of one year, over the next
four years and thereafter are approximately as follows:



|                    |  |                  |        
|------------------- |  | ---------------- | -------
|Year ended June 30, |  | Operating leases
|2006                |  | $                | 204,540
|2007                |  |                  | 204,540
|2008                |  |                  | 227,553
|2009                |  |                  | 58,806 
|                    |  |                  |        
|                    |  | $                | 695,439
|                    |  |                  |        



|12. | CAPITAL STOCK
|--- | -------------



On October 16, 2003, the Company issued 280,000 common shares on exercise of employee stock options at an average exercise price of $0.19 per share
raising gross proceeds of $53,200.



On October 28, 2003,
the Company issued 45,000 common shares on exercise of employee stock options at an average exercise price of $0.19 per share raising gross proceeds of $8,550.



On April 12, 2004, the Company issued 15,000 common shares on exercise of employee stock options at an exercise price of $0.1823 per share raising
gross proceeds of $2,735.



On March 24, 2005, the Company
issued 15,000 common shares on exercise of employee stock options at an exercise price of $0.19 per share raising gross proceeds of $2,850.



Common stock



The common stock of the Company is all of the same class, is voting and entitles the stockholders to receive dividends. In the event of a liquidation,
dissolution or winding up, the common stockholders are entitled to receive equal distribution of net assets or any dividends, which may be declared.



Stock option plan and stock options



The Company has adopted a stock option plan (the Stock Option Plan). The purpose of the Stock Option Plan is to advance the interests of the
Company by providing directors, officers, employees and consultants with a financial incentive for the continued improvement in the performance of the Company and encouragement for them to remain with the Company. The term of any option granted
under the Stock Option Plan may not exceed 5 years. The exercise price of each option must equal or exceed the market price of the Companys stock as calculated on the date of grant. In connection with stock options granted to employees and
consultants who are normally compensated by the Company in US dollars, the Company has clarified its Stock Option Plan that the exercise price is set in US dollars, based on the exchange rate at the date of grant, as was intended. The maximum number
of common shares of the Company reserved for issuance under the Stock Option Plan can not exceed ten percent of the Companys issued and outstanding common shares. Options, in general, vest immediately except for options granted to consultants
performing investor relations activities, which vest at 25% at the grant date and at 25% at the end of each three month period thereafter. No more than 5% of the issued and outstanding capital of the Company may be granted to any one individual in
any 12 month period and no more than 2% of the issued and outstanding capital of the Company may be granted to any one consultant in any 12 month period.



49



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UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

JUNE 30, 2005



|12. | CAPITAL STOCK(contd)
|--- | ----------------------



Stock option plan and stock options(contd)



The following table, which is presented in US dollars, describes the number and the exercise price of options that have been granted, exercised, or
cancelled during the years ended June 30:



|                                 |  |                  |   |      |                               |      |                  |   |  |                               |  |                  |  |                              
|-------------------------------- |  | ---------------- | - | ---- | ----------------------------- | ---- | ---------------- | - |  | ----------------------------- |  | ---------------- |  | -----------------------------
|                                 |  | 2005             |   | 2004 |                               | 2003
|                                 |  | Number ofOptions |   |      | Weighted AverageExercisePrice |      | Number ofOptions |   |  | Weighted AverageExercisePrice |  | Number ofOptions |  | Weighted AverageExercisePrice
|Outstanding, beginning of year   |  | 375,000          |   |      | 0.53                          |      | 350,000          |   |  | 0.19                          |  | 270,000          |  | 0.19                         
|                                 |  |                  |   |      |                               |      |                  |   |  |                               |  |                  |  |                              
|Exercised                        |  | (15,000          | ) |      | 0.19                          |      | (340,000         | ) |  | 0.19                          |  |                 |  |                             
|                                 |  |                  |   |      |                               |      |                  |   |  |                               |  |                  |  |                              
|Granted                          |  |                  |   |      |                               |      |                  |   |  |                               |  |                  |  |                              
|Employees                        |  | 20,000           |   |      | 2.07                          |      | 360,000          |   |  | 0.55                          |  | 80,000           |  | 0.19                         
|Consultants                      |  |                 |   |      |                              |      | 25,000           |   |  | 0.48                          |  |                 |  |                             
|                                 |  |                  |   |      |                               |      |                  |   |  |                               |  |                  |  |                              
|Sub-total granted                |  | 20,000           |   |      | 2.07                          |      | 385,000          |   |  | 0.54                          |  | 80,000           |  | 0.19                         
|                                 |  |                  |   |      |                               |      |                  |   |  |                               |  |                  |  |                              
|Expired/cancelled                |  |                 |   |      |                              |      | (20,000          | ) |  | 0.48                          |  |                 |  |                             
|                                 |  |                  |   |      |                               |      |                  |   |  |                               |  |                  |  |                              
|Outstanding, end of year         |  | 380,000          |   |      | .63                           |      | 375,000          |   |  | 0.53                          |  | 350,000          |  | 0.19                         
|                                 |  |                  |   |      |                               |      |                  |   |  |                               |  |                  |  |                              
|Options exercisable, end of year |  | 380,000          |   |      | .63                           |      | 368,750          |   |  | 0.53                          |  | 350,000          |  | 0.19                         
|                                 |  |                  |   |      |                               |      |                  |   |  |                               |  |                  |  |                              



For the purpose of
calculating the average exercise prices in the above table, options exercisable in Canadian dollars have been converted to US dollars based on the exchange rate on the applicable dates.



The following table describes the number of options, exercise price, and expiry date of the share purchase options granted
by the Company that were outstanding at June 30, 2005:



|                  |  |         |  |                |      |             |                 
|----------------- |  | ------- |  | -------------- | ---- | ----------- | ----------------
|Number of Options |  | Vested  |  | Exercise Price |      | Expiry Date
|10,000            |  | 10,000  |  | Cdn. $         | 0.25 |             | May 6, 2006     
|80,000            |  | 80,000  |  | Cdn. $         | 0.62 |             | December 9, 2008
|145,000           |  | 145,000 |  | US $           | 0.48 |             | December 9, 2008
|45,000            |  | 45,000  |  | Cdn. $         | 0.95 |             | March 3, 2009   
|80,000            |  | 80,000  |  | US $           | 0.71 |             | March 3, 2009   
|20,000            |  | 20,000  |  | US $           | 2.07 |             | January 4, 2010 



The assumptions used
and the estimated weighted-average fair values of the options issued, using the Black-Scholes option pricing model, during the last three fiscal years were:



|                                                        |  |      |         |   |      |       |         |      |  |       |         |  
|------------------------------------------------------- |  | ---- | ------- | - | ---- | ----- | ------- | ---- |  | ----- | ------- | -
|                                                        |  | 2005 |         |   | 2004 |       |         | 2003 | 
|Risk free interest rate                                 |  |      | 4       | % |      |       | 2.75    | %    |  |       | 4.5     | %
|Expected life                                           |  |      | 5 years |   |      |       | 5 years |      |  |       | 5 years |  
|Expected volatility                                     |  |      | 56      | % |      |       | 85      | %    |  |       | 303     | %
|Expected dividends                                      |  |      | Nil     |   |      |       | Nil     |      |  |       | Nil     |  
|Weighted average estimated fair value per option issued |  | US $ | 1.07    |   |      | Cdn.$ | 0.25    |      |  | Cdn.$ | 0.12    |  



50



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##### Table of Contents

UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

JUNE 30, 2005



|13. | SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS
|--- | --------------------------------------------------



|                                             |  |      |          |   |      |   |          |      |  |   |          |  
|-------------------------------------------- |  | ---- | -------- | - | ---- | - | -------- | ---- |  | - | -------- | -
|                                             |  | 2005 |          |   | 2004 |   |          | 2003 | 
|Cash provided by (used in):                  |  |      |          |   |      |   |          |      |  |   |          |  
|Accounts and royalties and other receivables |  | $    | (442,421 | ) |      | $ | (261,317 | )    |  | $ | (127,623 | )
|Inventories                                  |  |      | (163,405 | ) |      |   | 24,235   |      |  |   | (190,108 | )
|Prepaid expenses and other assets            |  |      | (3,942   | ) |      |   | 1,768    |      |  |   | 31,240   |  
|Accounts payable and accrued liabilities     |  |      | 82,279   |   |      |   | 73,027   |      |  |   | 41,067   |  
|                                             |  |      |          |   |      |   |          |      |  |   |          |  
|Change in non-cash working capital items     |  | $    | (527,489 | ) |      | $ | (162,287 | )    |  | $ | (245,424 | )
|                                             |  |      |          |   |      |   |          |      |  |   |          |  



At June 30, 2005,
the Company has recorded $138,427 of accounts payable in connection with the acquisition of equipment.



During the years ended June 30, 2005, 2004 and 2003 there were no significant non-cash investing or financing activities.



|14. | RELATED PARTY TRANSACTIONS
|--- | --------------------------



Related party transactions entered into during the year ended June 30, 2005 not elsewhere disclosed herein are as follows:



| | i) | the Company paid or accrued $5,269 (2004 - $4,462; 2003 - $4,010) in accounting fees to an officer of the Company which is included in administrative expense;
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ii) | the Company paid or accrued interest of $20,252, (2004 - $48,483; 2003 - $44,084) on a note payable to an affiliated company (Note 9).
| | --- | --------------------------------------------------------------------------------------------------------------------------------------



Except as elsewhere disclosed herein, these transactions were in the normal
course of operations and were measured at the exchange value, which represented the amount of consideration established and agreed to by the related parties.



|15. | CONCENTRATIONS
|--- | --------------



Credit risk



Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash investments and trade
receivables. The Company places its temporary cash investments with a high credit quality financial institution. Concentrations of credit risk with respect to uncollateralized trade receivables are limited due to the Companys large number of
customers and their geographic dispersion. The Company uses an allowance for doubtful accounts on an item-by-item basis to cover any collectibility issues. As a consequence, concentrations of credit risk which could subject the Company to a loss are
limited and are consistent with managements expectations as reflected in the consolidated financial statements.



Volume of business risk



The Company has concentrations in the volume of purchases it conducts with one supplier. For the year ended June 30, 2005, the Company purchased
approximately 28% of its inventory from that supplier (2004-24%, 2003-20%). At June 30, 2005, the Company owed this supplier approximately $54,000 (2004- $67,000).



51



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UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

JUNE 30, 2005



|16. | SEGMENTED INFORMATION
|--- | ---------------------



Substantially all of the Companys assets are located in the United States. The Company currently conducts substantially all of its operations in the
United States in one business segment. Segment revenue consists of the following lens categories for the years ended June 30:



|                             |  |      |           |      |   |           |  |   |          
|---------------------------- |  | ---- | --------- | ---- | - | --------- |  | - | ---------
|                             |  | 2005 |           | 2004 |   | 2003     
|Disposable lenses            |  | $    | 2,312,152 |      | $ | 1,652,970 |  | $ | 480,132  
|Conventional soft lenses     |  |      | 1,073,740 |      |   | 914,611   |  |   | 1,240,967
|Gas permeable lenses         |  |      | 676,670   |      |   | 818,908   |  |   | 714,462  
|Replacement and other lenses |  |      | 909,015   |      |   | 688,088   |  |   | 693,540  
|                             |  |      |           |      |   |           |  |   |          
|Total sales                  |  | $    | 4,971,577 |      | $ | 4,074,577 |  | $ | 3,129,101
|                             |  |      |           |      |   |           |  |   |          



|17. | INCOME TAXES
|--- | ------------



A reconciliation of income taxes (recovery) at the United States statutory rate to the Companys effective rate is as follows:



|                                                       |  |      |            |   |      |   |            |      |  |   |            |  
|------------------------------------------------------ |  | ---- | ---------- | - | ---- | - | ---------- | ---- |  | - | ---------- | -
|                                                       |  | 2005 |            |   | 2004 |   |            | 2003 | 
|Statutory expense (benefit) at the federal rate of 34% |  | $    | 581,634    |   |      | $ | 293,461    |      |  | $ | (47,848    | )
|State tax expense (benefit), net of federal effect     |  |      | 64,500     |   |      |   | 37,000     |      |  |   | (2,000     | )
|(Deductible) non-deductible expenses                   |  |      | (14,800    | ) |      |   | 16,450     |      |  |   | 1,000      |  
|Decrease in deferred income tax valuation allowance    |  |      | (1,158,434 | ) |      |   | (3,607,961 | )    |  |   | (1,650,152 | )
|                                                       |  |      |            |   |      |   |            |      |  |   |            |  
|                                                       |  | $    | (527,100   | ) |      | $ | (3,261,050 | )    |  | $ | (1,699,000 | )
|                                                       |  |      |            |   |      |   |            |      |  |   |            |  



The income tax benefit
for the year ended June 30, 2005 and 2004 consists of recording deferred taxes in the amount of $527,100 and $3,261,050, respectively.



Amounts of deferred tax assets and liabilities are as follows:



|                                                  |  |      |            |   |      |   |            |  
|------------------------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | -
|                                                  |  | 2005 |            |   | 2004 |  
|Deferred tax assets                               |  |      |            |   |      |   |            |  
|Inventory allowance                               |  | $    | 172,900    |   |      | $ | 182,900    |  
|Allowance for bad debt, returns, and allowances   |  |      | 114,800    |   |      |   | 97,100     |  
|Other timing differences                          |  |      | 125,500    |   |      |   | 82,700     |  
|Loss carry forward  United States                |  |      | 4,258,200  |   |      |   | 4,970,200  |  
|Loss carry forward - Canada                       |  |      | 117,233    |   |      |   | 108,200    |  
|                                                  |  |      |            |   |      |   |            |  
|                                                  |  |      | 4,788,633  |   |      |   | 5,441,100  |  
|Valuation allowance                               |  |      | (477,233   | ) |      |   | (1,648,200 | )
|                                                  |  |      |            |   |      |   |            |  
|                                                  |  |      | 4,311,400  |   |      |   | 3,792,900  |  
|                                                  |  |     
|Deferred tax liability                            |  |      |            |   |      |   |            |  
|Tax amortization of property, plant and equipment |  |      | (2,300     | ) |      |   | (10,900    | )
|                                                  |  |      |            |   |      |   |            |  
|Net deferred tax asset                            |  |      | 4,309,100  |   |      |   | 3,782,000  |  
|Less current portion                              |  |      | (1,040,800 | ) |      |   | (710,500   | )
|                                                  |  |      |            |   |      |   |            |  
|Long-term portion                                 |  | $    | 3,268,300  |   |      | $ | 3,071,500  |  
|                                                  |  |      |            |   |      |   |            |  



As of June 30,
2005, the deferred tax asset is primarily the result of net operating loss carryforwards which are available in future years to offset taxable income. Realization of that asset is dependent on the



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UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

JUNE 30, 2005



17. INCOME TAXES(contd)



Company generating future taxable income against which its loss carryforwards can be offset before they expire. The Company estimated its future taxable
income for the next ten fiscal years, assuming no material improvements over current levels of pretax income. It then compared its projected taxable income against its net operating loss schedule and established an allowance of $360,000 for the
amount of net operating losses that will expire. Based on all positive and negative evidence available, including sales trends and outlook data, the Company believes it is more likely than not that it will be able to maintain its current level of
taxable income, thereby fully realizing its deferred tax asset recorded at June 30, 2005. The allowance could change if near-term estimates of future taxable income during the carryforward periods are changed. Utilization of the deferred tax
asset may be subject to limitations in the event of significant changes in the beneficial ownership of the Companys shares. The Company cannot predict if or when such changes might occur, or their effect, if any, on the deferred tax
asset, which will be dependent on such factors as the size of the beneficial ownership change, its timing and the prices at which shares involved in the change are disposed. The Company is aware, however, that its largest shareholder is the
subject of bankruptcy proceedings that conceivably could result in such shareholders disposition of all or a portion of its Company shares.



The Company has unused operating loss carryforwards available at June 30, 2005 that may be applied against future taxable income which expire as
follows:





|                    |  |   |           
|------------------- |  | - | ----------
|Year ended June 30, |  |  
|2006                |  | $ | 1,662,317 
|2007                |  |   | 2,666,778 
|2008                |  |   | 2,249,395 
|2009                |  |   | 923,057   
|2010 - 2022         |  |   | 3,814,309 
|                    |  |   |           
|                    |  | $ | 11,315,856
|                    |  |   |           



The Company also has
approximately Cdn$329,306 of unused non-capital loss carryforwards in Canada available at June 30, 2005 which expire from 2006 to 2015.



|18. | SIGNIFICANT SUPPLIER
|--- | --------------------



The Company has a supply agreement with one supplier for the manufacture of its molded C-Vue multi-focal lens. During the years ended June 30, 2005
and 2004, the Company purchased approximately 28% and 24%, respectively, of inventory from this supplier. At June 30, 2005 and 2004, the Company owed this supplier approximately $54,000 and $67,000, respectively.



|19. | RETIREMENT PLANS
|--- | ----------------



The Company maintains a 401(k) profit-sharing plan that covers substantially all of its employees. Contributions are to be made at the discretion of the
Companys board of directors. For the years ended June 30, 2005, 2004 and 2003, the Company contributed to the plan $28,248, $17,022, and $17,113 respectively. The Company does not have any liabilities for the plan as of June 30,
2005.



|20. | WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
|--- | ----------------------------------------------------



|                           |  |           |  |           |  |          
|-------------------------- |  | --------- |  | --------- |  | ---------
|                           |  | 2005      |  | 2004      |  | 2003     
|Basic                      |  | 4,182,842 |  | 4,069,881 |  | 3,838,815
|Effect of dilutive options |  | 275,424   |  | 44,841    |  |         
|                           |  |           |  |           |  |          
|Diluted                    |  | 4,458,266 |  | 4,114,722 |  | 3,838,815
|                           |  |           |  |           |  |          



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##### Table of Contents

UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

JUNE 30, 2005



|21. | DIFFERENCES BETWEEN UNITED STATES AND CANADIAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
|--- | ---------------------------------------------------------------------------------------



These consolidated financial statements have been prepared in conformity with US GAAP. Material variations in the accounting
principles, practices and methods used in preparing these financial statements from Cdn GAAP are described and quantified below.



Except as disclosed hereunder, there are no material differences between US GAAP and Cdn GAAP in connection with the Companys consolidated
balance sheets as at June 30, 2005 and 2004 and, for the years ended June 30, 2005, 2004 and 2003, for the consolidated statements of operations, cash flows and of stockholders equity (deficiency).



|                                           |  |                     |             |   |             |   |          |           |  |   |             |  
|------------------------------------------ |  | ------------------- | ----------- | - | ----------- | - | -------- | --------- |  | - | ----------- | -
|                                           |  | As at June 30, 2005 |            
|                                           |  | US GAAP             |             |   | Adjustments |   |          | Cdn. GAAP | 
|ASSETS                                     |  |                     |             |   |             |   |          |           |  |   |             |  
|Current                                    |  |                     |             |   |             |   |          |           |  |   |             |  
|Cash and cash equivalents                  |  | $                   | 374,302     |   |             | $ |         |           |  | $ | 374,302     |  
|Accounts receivable                        |  |                     | 842,206     |   |             |   |         |           |  |   | 842,206     |  
|Royalties and other receivables            |  |                     | 481,802     |   |             |   |         |           |  |   | 481,802     |  
|Inventories                                |  |                     | 867,158     |   |             |   |         |           |  |   | 867,158     |  
|Prepaid expenses                           |  |                     | 16,598      |   |             |   |         |           |  |   | 16,598      |  
|Deferred tax asset  current               |  |                     | 1,040,800   |   |             |   |         |           |  |   | 1,040,800   |  
|                                           |  |                     |             |   |             |   |          |           |  |   |             |  
|Total current assets                       |  |                     | 3,622,866   |   |             |   |         |           |  |   | 3,622,866   |  
|Property, plant, and equipment             |  |                     | 389,719     |   |             |   |         |           |  |   | 389,719     |  
|Other assets                               |  |                     | 36,061      |   |             |   |         |           |  |   | 36,061      |  
|Deferred tax asset                         |  |                     | 3,268,300   |   |             |   |         |           |  |   | 3,268,300   |  
|                                           |  |                     |             |   |             |   |          |           |  |   |             |  
|Total assets                               |  | $                   | 7,316,946   |   |             | $ |         |           |  | $ | 7,316,946   |  
|                                           |  |                     |             |   |             |   |          |           |  |   |             |  
|LIABILITIES AND STOCKHOLDERS EQUITY       |  |                     |             |   |             |   |          |           |  |   |             |  
|Current                                    |  |                     |             |   |             |   |          |           |  |   |             |  
|Accounts payable and accrued liabilities   |  | $                   | 1,082,242   |   |             | $ |         |           |  | $ | 1,082,242   |  
|                                           |  |                     |             |   |             |   |          |           |  |   |             |  
|Total current liabilities                  |  |                     | 1,082,242   |   |             |   |         |           |  |   | 1,082,242   |  
|                                           |  |                     |             |   |             |   |          |           |  |   |             |  
|Total liabilities                          |  |                     | 1,082,242   |   |             |   |         |           |  |   | 1,082,242   |  
|                                           |  |                     |             |   |             |   |          |           |  |   |             |  
|Stockholders equity                       |  |                     |             |   |             |   |          |           |  |   |             |  
|Capital stock                              |  |                     | 27,434,950  |   |             |   |         |           |  |   | 27,434,950  |  
|Additional paid-in capital                 |  |                     | 8,970       |   |             |   | 114,991  |           |  |   | 123,961     |  
|Cumulative translation adjustment          |  |                     | (18,922     | ) |             |   |         |           |  |   | (18,922     | )
|Deficit                                    |  |                     | (21,190,294 | ) |             |   | (114,991 | )         |  |   | (21,305,285 | )
|                                           |  |                     |             |   |             |   |          |           |  |   |             |  
|Total stockholders equity                 |  |                     | 6,234,704   |   |             |   |         |           |  |   | 6,234,704   |  
|                                           |  |                     |             |   |             |   |          |           |  |   |             |  
|Total liabilities and stockholders equity |  | $                   | 7,316,946   |   |             | $ |         |           |  | $ | 7,316,946   |  
|                                           |  |                     |             |   |             |   |          |           |  |   |             |  



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UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

JUNE 30, 2005



21. DIFFERENCES BETWEEN UNITED STATES AND CANADIAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES(contd)



|                                                     |  |                          |           |   |                          |   |         |           |  |   |           |   |  |                |           |   |           |   |            |   |  |   |           |  
|---------------------------------------------------- |  | ------------------------ | --------- | - | ------------------------ | - | ------- | --------- |  | - | --------- | - |  | -------------- | --------- | - | --------- | - | ---------- | - |  | - | --------- | -
|                                                     |  | Year Ended June 30, 2005 |           |   | Year Ended June 30, 2004 |  
|                                                     |  | US GAAP                  |           |   | Adjustments(1)           |   |         | Cdn. GAAP |  |   | US GAAP   |   |  | Adjustments(1) |           |   | Cdn. GAAP |  
|SALES                                                |  | $                        | 4,971,577 |   |                          | $ |        |           |  | $ | 4,971,577 |   |  | $              | 4,074,577 |   |           | $ |           |   |  | $ | 4,074,577 |  
|                                                     |  |                          |           |   |                          |  
|COST OF SALES                                        |  |                          | 2,958,252 |   |                          |   |        |           |  |   | 2,958,252 |   |  |                | 2,415,007 |   |           |   |           |   |  |   | 2,415,007 |  
|                                                     |  |                          |           |   |                          |   |         |           |  |   |           |   |  |                |           |   |           |   |            |   |  |   |           |  
|GROSS PROFIT                                         |  |                          | 2,013,325 |   |                          |   |        |           |  |   | 2,013,325 |   |  |                | 1,659,570 |   |           |   |           |   |  |   | 1,659,570 |  
|                                                     |  |                          |           |   |                          |   |         |           |  |   |           |   |  |                |           |   |           |   |            |   |  |   |           |  
|EXPENSES                                             |  |                          |           |   |                          |   |         |           |  |   |           |   |  |                |           |   |           |   |            |   |  |   |           |  
|Administration                                       |  |                          | 835,834   |   |                          |   | 21,356  |           |  |   | 857,190   |   |  |                | 862,125   |   |           |   |           |   |  |   | 862,125   |  
|Research and development                             |  |                          | 71,680    |   |                          |   |        |           |  |   | 71,680    |   |  |                | 52,118    |   |           |   |           |   |  |   | 52,118    |  
|Sales and marketing                                  |  |                          | 1,014,231 |   |                          |   |        |           |  |   | 1,014,231 |   |  |                | 787,714   |   |           |   |           |   |  |   | 787,714   |  
|                                                     |  |                          |           |   |                          |   |         |           |  |   |           |   |  |                |           |   |           |   |            |   |  |   |           |  
|                                                     |  |                          | 1,921,745 |   |                          |   | 21,356  |           |  |   | 1,943,101 |   |  |                | 1,701,957 |   |           |   |           |   |  |   | 1,701,957 |  
|                                                     |  |                          |           |   |                          |   |         |           |  |   |           |   |  |                |           |   |           |   |            |   |  |   |           |  
|Income (loss) from operations                        |  |                          | 91,580    |   |                          |   | (21,356 | )         |  |   | 70,224    |   |  |                | (42,387   | ) |           |   |           |   |  |   | (42,387   | )
|                                                     |  |                          |           |   |                          |   |         |           |  |   |           |   |  |                |           |   |           |   |            |   |  |   |           |  
|OTHER ITEMS                                          |  |                          |           |   |                          |   |         |           |  |   |           |   |  |                |           |   |           |   |            |   |  |   |           |  
|Royalty income                                       |  |                          | 1,632,051 |   |                          |   |        |           |  |   | 1,632,051 |   |  |                | 937,394   |   |           |   |           |   |  |   | 937,394   |  
|Other income                                         |  |                          | 7,267     |   |                          |   |        |           |  |   | 7,267     |   |  |                | 1,468     |   |           |   |           |   |  |   | 1,468     |  
|Interest on long-term debt                           |  |                          | (20,211   | ) |                          |   |        |           |  |   | (20,211   | ) |  |                | (33,354   | ) |           |   |           |   |  |   | (33,354   | )
|Gain on debt settlement - net of associated expenses |  |                          |          |   |                          |   |        |           |  |   |          |   |  |                |          |   |           |   | 3,130,613  |   |  |   | 3,130,613 |  
|                                                     |  |                          |           |   |                          |   |         |           |  |   |           |   |  |                |           |   |           |   |            |   |  |   |           |  
|                                                     |  |                          | 1,619,107 |   |                          |   |        |           |  |   | 1,619,107 |   |  |                | 905,508   |   |           |   | 3,130,613  |   |  |   | 4,036,121 |  
|                                                     |  |                          |           |   |                          |   |         |           |  |   |           |   |  |                |           |   |           |   |            |   |  |   |           |  
|Income before tax benefit and extraordinary item     |  |                          | 1,710,687 |   |                          |   | (21,356 | )         |  |   | 1,689,331 |   |  |                | 863,121   |   |           |   | 3,130,613  |   |  |   | 3,993,734 |  
|Net deferred income tax benefit                      |  |                          | 527,100   |   |                          |   |        |           |  |   | 527,100   |   |  |                | 3,261,050 |   |           |   | (1,178,050 | ) |  |   | 2,083,000 |  
|                                                     |  |                          |           |   |                          |   |         |           |  |   |           |   |  |                |           |   |           |   |            |   |  |   |           |  
|Income before extraordinary item                     |  |                          | 2,237,787 |   |                          |   | (21,356 | )         |  |   | 2,216,431 |   |  |                | 4,124,171 |   |           |   | 1,952,563  |   |  |   | 6,076,734 |  
|Net extraordinary item                               |  |                          |          |   |                          |   |        |           |  |   |          |   |  |                | 1,952,563 |   |           |   | (1,952,563 | ) |  |   |          |  
|                                                     |  |                          |           |   |                          |   |         |           |  |   |           |   |  |                |           |   |           |   |            |   |  |   |           |  
|Income for the year                                  |  | $                        | 2,237,787 |   |                          | $ | (21,356 | )         |  | $ | 2,216,431 |   |  | $              | 6,076,734 |   |           | $ |           |   |  | $ | 6,076,734 |  
|                                                     |  |                          |           |   |                          |   |         |           |  |   |           |   |  |                |           |   |           |   |            |   |  |   |           |  



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UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

JUNE 30, 2005



21. DIFFERENCES BETWEEN UNITED STATES AND CANADIAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES(contd)



|                                                    |  |                          |      |                          |   |           |  |         |      |                |   |      |           |   |      |   |  |   |     
|--------------------------------------------------- |  | ------------------------ | ---- | ------------------------ | - | --------- |  | ------- | ---- | -------------- | - | ---- | --------- | - | ---- | - |  | - | ----
|                                                    |  | Year Ended June 30, 2005 |      | Year Ended June 30, 2004
|                                                    |  | US GAAP                  |      | Adjustments(1)           |   | Cdn. GAAP |  | US GAAP |      | Adjustments(1) |   |      | Cdn. GAAP
|Income per common share before extraordinary item:  |  |                          |      |                          |   |           |  |         |      |                |   |      |           |   |      |   |  |   |     
|Basic                                               |  | $                        | 0.53 |                          | $ |          |  | $       | 0.53 |                | $ | 1.01 |           | $ | .48  |   |  | $ | 1.49
|                                                    |  |                          |      |                          |   |           |  |         |      |                |   |      |           |   |      |   |  |   |     
|Diluted                                             |  | $                        | 0.50 |                          | $ |          |  | $       | 0.50 |                | $ | 1.00 |           | $ | .48  |   |  | $ | 1.48
|                                                    |  |                          |      |                          |   |           |  |         |      |                |   |      |           |   |      |   |  |   |     
|Income per common share from net extraordinary item |  |                          |      |                          |   |           |  |         |      |                |   |      |           |   |      |   |  |   |     
|Basic                                               |  | $                        |     |                          | $ |          |  | $       |     |                | $ | 0.48 |           | $ | (.48 | ) |  | $ |    
|                                                    |  |                          |      |                          |   |           |  |         |      |                |   |      |           |   |      |   |  |   |     
|Diluted                                             |  | $                        |     |                          | $ |          |  | $       |     |                | $ | 0.48 |           | $ | (.48 | ) |  | $ |    
|                                                    |  |                          |      |                          |   |           |  |         |      |                |   |      |           |   |      |   |  |   |     
|Income per common share:                            |  |                          |      |                          |   |           |  |         |      |                |   |      |           |   |      |   |  |   |     
|Basic                                               |  | $                        | 0.53 |                          | $ |          |  | $       | 0.53 |                | $ | 1.49 |           | $ |     |   |  | $ | 1.49
|                                                    |  |                          |      |                          |   |           |  |         |      |                |   |      |           |   |      |   |  |   |     
|Diluted                                             |  | $                        | 0.50 |                          | $ |          |  | $       | 0.50 |                | $ | 1.48 |           | $ |     |   |  | $ | 1.48
|                                                    |  |                          |      |                          |   |           |  |         |      |                |   |      |           |   |      |   |  |   |     

---

|(1) | Adjustments
|--- | -----------



Stock-based compensation



Under Cdn GAAP, but not under US GAAP, commencing July 1, 2004, the Company is required to record stock based compensation for all options
granted to employees. The Company has applied this charge on a retroactive basis with the opening deficit balance being adjusted for the cumulative effect of the change for the years ended June 30, 2004 and 2003.



Extraordinary item



Under US GAAP, the gain on debt settlement is disclosed in the
statement of operations as an extraordinary item net of related taxes. Under Cdn GAAP, a gain on debt settlement is disclosed as an unusual item and the related tax effect is included in the tax provision for the year.



Stock-based compensation



There were no material differences in the treatment of stock-based compensation under
US GAAP and Cdn GAAP for the years ended June 30, 2004, and 2003. However, under Cdn GAAP, commencing July 1, 2004, the Company is required to record stock-based compensation for all options granted to employees. For the purpose of
determining the material differences between US GAAP and Cdn GAAP and as permitted under Cdn GAAP, the Company will apply this change in accounting policy on a retroactive basis with the opening deficit balance being adjusted for the cumulative
effect of the change.



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Unilens Vision Inc.



Valuation and Qualifying Accounts



Years Ended June 30, 2005 and 2004



|                                                  |  |                         |         |                           |   |        |                         |  |   |            |     |  |                    |            |   |  |   |        
|------------------------------------------------- |  | ----------------------- | ------- | ------------------------- | - | ------ | ----------------------- |  | - | ---------- | --- |  | ------------------ | ---------- | - |  | - | -------
|                                                  |  |                         |         | Additions                 |   |        |                         |  |   |           
|                                                  |  | BalanceBeginningof Year |         | Charged toCost andExpense |   |        | Charged toOtherAccounts |  |   | Deductions |     |  | BalanceEnd of Year
|June 30, 2005                                     |  |                         |         |                           |   |        |                         |  |   |            |     |  |                    |            |   |  |   |        
|                                                  |  |                         |         |                           |  
|Allowance for doubtful accounts                   |  | $                       | 168,000 |                           | $ | 16,477 | (1)                     |  |   |            |     |  | $                  | (9,477     | ) |  | $ | 175,000
|Allowance for returns                             |  |                         | 90,000  |                           |   |        |                         |  | $ | 1,149,838  | (2) |  |                    | (1,109,838 | ) |  |   | 130,000
|                                                  |  |                         |         |                           |   |        |                         |  |   |            |     |  |                    |            |   |  |   |        
|Total allowance for doubtful accounts and returns |  |                         | 258,000 |                           |   | 16,477 |                         |  |   | 1,149,838  |     |  |                    | (1,119,315 | ) |  |   | 305,000
|Allowance for inventory                           |  |                         | 486,000 |                           |   | 41,932 | (3)                     |  |   |            |     |  |                    | (68,437    | ) |  |   | 459,495
|                                                  |  |                         |         |                           |   |        |                         |  |   |            |     |  |                    |            |   |  |   |        
|Total                                             |  | $                       | 744,000 |                           | $ | 58,409 |                         |  | $ | 1,149,838  |     |  | $                  | (1,187,752 | ) |  | $ | 764,495
|                                                  |  |                         |         |                           |   |        |                         |  |   |            |     |  |                    |            |   |  |   |        
|June 30, 2004                                     |  |                         |         |                           |   |        |                         |  |   |            |     |  |                    |            |   |  |   |        
|Allowance for doubtful accounts                   |  | $                       | 145,000 |                           | $ | 24,011 | (1)                     |  |   |            |     |  | $                  | (1,011     | ) |  | $ | 168,000
|Allowance for returns                             |  |                         | 105,000 |                           |   |        |                         |  | $ | 979,348    | (2) |  |                    | (994,348   | ) |  |   | 90,000 
|                                                  |  |                         |         |                           |   |        |                         |  |   |            |     |  |                    |            |   |  |   |        
|Total allowance for doubtful accounts and returns |  |                         | 250,000 |                           |   | 24,011 |                         |  |   | 979,348    |     |  |                    | (995,359   | ) |  |   | 258,000
|Allowance for inventory                           |  |                         | 519,492 |                           |   | 23,753 | (3)                     |  |   |            |     |  |                    | (57,245    | ) |  |   | 486,000
|                                                  |  |                         |         |                           |   |        |                         |  |   |            |     |  |                    |            |   |  |   |        
|Total                                             |  | $                       | 769,492 |                           | $ | 47,764 |                         |  | $ | 979,348    |     |  | $                  | (1,052,604 | ) |  | $ | 744,000
|                                                  |  |                         |         |                           |   |        |                         |  |   |            |     |  |                    |            |   |  |   |        

---

|(1) | Uncollected receivables written-off, net of recoveries.
|--- | -------------------------------------------------------

|(2) | Returned product, offset to sales.
|--- | ----------------------------------

|(3) | Obsolete inventory written-off.
|--- | -------------------------------



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LOGO



REPORT OF INDEPENDENT
REGISTERED

PUBLIC ACCOUNTING FIRM



To the Stockholders and Directors of

Unilens Vision Inc.



Our report on the consolidated financial statements of Unilens Vision Inc. is included in this Form 20-F. In connection with our audits of such consolidated financial
statements, we have also audited the related consolidated financial statement schedule listed in the index of this Form 20-F.



In our opinion, the consolidated financial statement schedule referred to above, when considered in relation to the basic consolidated financial statements taken as a
whole, present fairly the information required to be included therein.



DAVIDSON & COMPANY LLP



|                  |  |                      
|----------------- |  | ---------------------
|Vancouver, Canada |  | Chartered Accountants



October 20, 2005



A Member of SC INTERNATIONAL

---



1200 - 609 Granville Street, P.O. Box 10372,
Pacific Centre, Vancouver, BC, Canada, V7Y 1G6

Telephone (604) 687-0947 Fax (604) 687-6172



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##### Table of Contents

Certification of Annual Filings during Transition Period



I, Alfred Vitale, President and Chief Executive Officer of
Unilens Vision Inc. (the Issuer), certify that:



1. I have
reviewed the annual filings (as this term is defined in Multilateral 52-109 Certification of Disclosure in Issuers Annual and Interim Filings) of the Issuer for the period ending June 30, 2005;



2. Based on my knowledge, the annual filings do not contain any untrue statement of a
material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the annual filings; and



3. Based on my knowledge, the annual financial statements together with the
other financial information included in the annual filings fairly present in all material respects the financial condition, results of operations and cash flows of the Issuer, as of the date and for the periods presented in the annual filings.



Date: October 28, 2005



|                                     
|-------------------------------------
|/s/ Alfred Vitale                    
|Alfred Vitale                        
|President and Chief Executive Officer



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##### Table of Contents

Certification of Annual Filings during Transition Period



I, Michael Pecora, Chief Financial Officer of Unilens Vision
Inc. (the Issuer), certify that:



1. I have reviewed the annual
filings (as this term is defined in Multilateral 52-109 Certification of Disclosure in Issuers Annual and Interim Filings) of the Issuer for the period ending June 30, 2005;



2. Based on my knowledge, the annual filings do not contain any untrue statement of a
material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the annual filings; and



3. Based on my knowledge, the annual financial statements together with the
other financial information included in the annual filings fairly present in all material respects the financial condition, results of operations and cash flows of the Issuer, as of the date and for the periods presented in the annual filings.



Date: October 28, 2005



|                       
|-----------------------
|/s/ Michael Pecora     
|Michael Pecora         
|Chief Financial Officer



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##### Table of Contents

FORM 51-102F1



UNILENS VISION INC.



MANAGEMENT DISCUSSION & ANALYSIS  JUNE 30, 2005



The following management discussion and analysis (MDA) provides information on the activities of Unilens Vision Inc. As used in this MDA, unless the context otherwise requires, we,
us, our, the Company or Unilens refers to Unilens Vision Inc. and its subsidiaries and should be read in conjunction with the annual financial statements and notes thereto for the year ended
June 30, 2005 (the Financial Statements). The Financial Statements have been prepared in United States dollars and in conformity with United States generally accepted accounting principles (US GAAP). Note 21 to the
Financial Statements describes material differences between the amounts reported therein and the amounts that would have been reported had the Financial Statements been prepared in conformity with Cdn GAAP. Unless otherwise indicated, all dollar
amounts disclosed in this MDA are expressed in United States Dollars. Readers are cautioned that managements discussion and analysis contains forward-looking statements and that actual events may vary from managements expectations.



Description of Business and Report Date



We manufacture, distribute and license specialty optical products using proprietary design
and manufacturing technology from our manufacturing, distribution, and administrative facility in Largo, Florida. Our products are sold primarily in the United States through a network of distributors, sales representatives and independent sales
brokers. In mid 2001, we entered into an exclusive worldwide license agreement with Bausch and Lomb for our key multifocal technology. Under the terms of the agreement, Bausch and Lomb will pay us a royalty ranging from two to five percent of their
sales of products utilizing the technology.



Our lens business is broken down
into the following four categories: (i) disposable lenses; (ii) conventional soft lenses; (iii) gas permeable lenses; and (iv) replacement and other lenses. Our disposal lenses line consists of the C-Vue®, a mulitfocal cast
molded blister-packed box of six lenses sold for frequent replacement. The C-Vue lens is manufactured for us by a third party utilizing one of our patented soft lens designs and is marketed exclusively in the United States to eye care professionals.
We expect the C-Vue multifocal to make up an increasing percentage of our future sales. Our conventional soft lenses line of soft lathe-cut multifocal and toric multifocal products consists of the following: the C-Vue Toric Multifocal, designed for
patients with an astigmatism that require bifocal correction; the Unilens, a aspheric multifocal contact lens; the SoftSite, a highadd multifocal contact lens; the SimulVue, a simultaneous vision bifocal contact lens with the
capabilities for correcting advanced presbyopia; the Unilens EMA, a visibility tinted multifocal contact lens available in planned replacement modality; and the C-Vue 55, a highadd multifocal contact lens manufactured in a comfortable high-water
content material. Our gas permeable lens line of products consist of the following: the Unilens GP, a multifocal contact lens intended for patients with astigmatism who need low to moderate presbyopic correction; the Unilens GP Plus,
designed to accommodate wearers requiring higher presbyopic correction; and the C-Vue GP, a front aspheric design incorporating the C-Vue design technology. Our replacement and other lenses line of business primarily consists of the Sof-Form and
LifeStyle brand of toric multifocal, toric and spherical daily, and extended wear lenses marketed under the Lombart brand; the UniVision, an aspheric low vision lens; and our newest acquisition, the Aquaflex and SoftCon spherical daily and extended
wear brand of lenses acquired from CIBA Vision. Our lens products are marketed, as a family of vision correction products that can serve the majority of the populations vision correction needs.



The following MDA is for the fiscal year ended June 30, 2005 (the 2005 Fiscal
Year) and includes relevant information up to October 26, 2005 (the Report Date).



Overall Performance



Revenue derived
from the C-Vue disposable multifocal, continues to steadily increase. Revenue was bolstered by the launch in January 2005 of a new toric multifocal utilizing our patented technology and from product acquisitions



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in February 2005, which account for 8% and 6% respectively of our revenue for the 2005 Fiscal Year. Royalty income from the license of our key technologies,
is a major component of our profitability, and continues to post strong gains. During the 2005 Fiscal Year we paid-off all of our term debt 3-years ahead of schedule, and recognized approximately 1.1 million in deferred tax benefits. Sales for
the 2005 Fiscal Year increased by 22% to $5.0 million, compared to $4.1 million for the fiscal year ended June 30, 2004 (the 2004 Fiscal Year). The increase was primarily due to significant growth in the sales of the C-Vue
disposable multifocal, new product acquisitions and a product launch, which was partially offset by an expected decline in the sales of some of our gas permeable and other replacement soft lathe-cut product lines that are nearing the end of their
life cycle. Income before tax benefit and extraordinary items for the 2005 Fiscal Year increased by $.8 million to $1.7 million, primarily resulting from an increase in royalty income. As of June 30, 2005 we had positive working capital of $2.5
million, which represents an increase of $1.1 million compared to Fiscal Year 2004. The increase in working capital was principally due to a reduction in debt, an increase in receivables on higher sales and royalties, and the increase in the
deferred tax asset.



At the end of Fiscal Year 2005 we had positive
stockholders equity of $6.2 million representing an increase of $2.2 million. The increase in stockholders equity was primarily from operating profits, royalty income and the recognition of deferred tax assets during the 2005 Fiscal
Year.



Selected Annual Information



The following table sets out selected financial information for Unilens Vision Inc. which
has been derived from our audited financial statements as at and for the fiscal years ended June 30, 2005, 2004, and 2003. These financial statements were prepared in accordance with accounting principles generally accepted in the United States
and are in United States dollars.



|                                                         |  |            |  |            |   |  |            |  
|-------------------------------------------------------- |  | ---------- |  | ---------- | - |  | ---------- | -
|For the year ended June 30                               |  | 2005 ($)   |  | 2004 ($)   |   |  | 2003 ($)   |  
|Income Statement Data                                    |  |            |  |            |   |  |            |  
|Revenues                                                 |  | 4,971,577  |  | 4,074,577  |   |  | 3,129,101  |  
|Income (loss) from operations                            |  | 91,580     |  | (42,387    | ) |  | (272,578   | )
|Income (loss) before tax benefit and extraordinary items |  | 1,710,687  |  | 863,121    |   |  | (140,730   | )
|Income before extraordinary items                        |  | 2,237,787  |  | 4,124,171  |   |  | 1,558,270  |  
|Income for the year                                      |  | 2,237,787  |  | 6,076,734  |   |  | 1,558,270  |  
|                                                         |  |            | 
|Income per common share outstanding - basic and diluted: |  |            |  |            |   |  |            |  
|Income before extraordinary item                         |  |            |  |            |   |  |            |  
|Basic                                                    |  | 0.53       |  | 1.01       |   |  | 0.41       |  
|Diluted                                                  |  | 0.50       |  | 1.00       |   |  | 0.41       |  
|Income for the year                                      |  |            |  |            |   |  |            |  
|Basic                                                    |  | 0.53       |  | 1.49       |   |  | 0.41       |  
|Diluted                                                  |  | 0.50       |  | 1.48       |   |  | 0.41       |  
|Dividends                                                |  |           |  |           |   |  |           |  
|                                                         |  |            | 
|As at June 30                                            |  |            |  |            |   |  |            |  
|Balance Sheet Data                                       |  |            |  |            |   |  |            |  
|Total assets                                             |  | 7,316,946  |  | 6,095,950  |   |  | 3,466,586  |  
|Working capital                                          |  | 2,540,624  |  | 1,381,148  |   |  | 1,969,314  |  
|Long-term liabilities                                    |  |           |  | 688,139    |   |  | 4,474,576  |  
|Total liabilities                                        |  | 1,082,242  |  | 2,085,117  |   |  | 5,604,564  |  
|Capital stock                                            |  | 27,434,950 |  | 27,432,100 |   |  | 27,367,615 |  
|Stockholders equity (deficiency)                        |  | 6,234,704  |  | 4,010,833  |   |  | (2,173,978 | )



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Factors That Affect the Comparability of the Annual Financial Data Disclosed Above



On October 25, 2001 we licensed the exclusive worldwide rights for one of our patented
soft multifocal contact lens designs to Bausch and Lomb. Under the terms of the agreement we will receive a royalty payment ranging from three to five percent of Bausch and Lombs product sales utilizing the technology. We began receiving
royalty payments in February of 2003 and recorded royalty income totaling $1,632,051, $937,934, and $267,652 for the 2005, 2004 and 2003 Fiscal Years, respectively.



In the 2003 Fiscal Year we recorded $1.7 million in net income tax benefits that resulted from the recognition of deferred tax assets
expected to be realized. The recognition of the tax asset increased our net income and working capital during the 2003 Fiscal Year by $1.7 million and 1.5 million, respectively. Also in the 2003 Fiscal Year, we reclassified $3.2 million of
short-term debt to long term, which resulted in an increase in working capital of $3.2 million during the year.



In the 2004 Fiscal Year, we renegotiated our debt obligations, which resulted in the recognition of $3.2 million in extraordinary income before tax amortization and a
reduction of $3.2 million in long-term debt during the quarter ending December 31, 2004. Also in the 2004 Fiscal Year we recorded approximately $3.3 million in net income tax benefits that resulted from the recognition of deferred tax assets
expected to be realized in the future which was offset by a reduction in the deferred tax asset during the year.



In the 2005 Fiscal Year we recorded a net income tax benefit of $527,100. The income tax benefit is the result of the recognition of income tax loss carry-forwards,
offset by a reduction in the deferred income tax asset due to the application of tax loss carry forwards against the taxable income earned during the year.



Supplemental Information in Connection with Cost of Sales, General and Administrative and Marketing Expense



|                                    |  |                          |           |   |                          |   |           |  
|----------------------------------- |  | ------------------------ | --------- | - | ------------------------ | - | --------- | -
|Cost of Sales:                      |  | Year Ended June 30, 2005 |           |   | Year Ended June 30, 2004 |  
|Payroll and benefits                |  | $                        | 900,093   |   |                          | $ | 737,634   |  
|Raw materials and supplies          |  |                          | 1,070,874 |   |                          |   | 1,003,428 |  
|Allocations and other expenses      |  |                          | 987,285   |   |                          |   | 673,945   |  
|                                    |  |                          |           |   |                          |   |           |  
|                                    |  | $                        | 2,958,252 |   |                          | $ | 2,415,007 |  
|                                    |  |                          |           |   |                          |   |           |  
|                                    |  |                         
|General and Administrative:         |  | Year Ended June 30, 2005 |           |   | Year Ended June 30, 2004 |  
|Consulting fees                     |  | $                        | 180,862   |   |                          | $ | 162,504   |  
|Bad debts                           |  |                          | 16,902    |   |                          |   | 24,429    |  
|Depreciation and amortization       |  |                          | 29,135    |   |                          |   | 75,756    |  
|License, taxes, and regulatory fees |  |                          | 59,193    |   |                          |   | 59,071    |  
|Office, insurance, and supplies     |  |                          | 224,915   |   |                          |   | 185,927   |  
|Professional fees                   |  |                          | 156,339   |   |                          |   | 159,877   |  
|Rental and utilities                |  |                          | 332,677   |   |                          |   | 317,889   |  
|Travel and entertainment            |  |                          | 35,523    |   |                          |   | 28,213    |  
|Wages and benefits                  |  |                          | 502,863   |   |                          |   | 387,727   |  
|Allocated expenses                  |  |                          | (702,575  | ) |                          |   | (539,268  | )
|                                    |  |                          |           |   |                          |   |           |  
|                                    |  | $                        | 835,834   |   |                          | $ | 862,125   |  
|                                    |  |                          |           |   |                          |   |           |  



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|                                |  |                          |           |                         |   |        
|------------------------------- |  | ------------------------ | --------- | ----------------------- | - | -------
|Sales and Marketing:            |  | Year Ended June 30, 2005 |           | Year EndedJune 30, 2004
|Consulting fees                 |  | $                        | 212,243   |                         | $ | 182,611
|Depreciation and amortization   |  |                          | 1,287     |                         |   | 782    
|Office, insurance, and supplies |  |                          | 56,711    |                         |   | 35,291 
|Promotion and advertising       |  |                          | 280,505   |                         |   | 161,729
|Rental and utilities            |  |                          | 1,993     |                         |   | 1,236  
|Travel and entertainment        |  |                          | 20,061    |                         |   | 17,919 
|Wages and benefits              |  |                          | 264,475   |                         |   | 240,319
|Allocated expenses              |  |                          | 176,956   |                         |   | 147,827
|                                |  |                          |           |                         |   |        
|                                |  | $                        | 1,014,231 |                         | $ | 787,714
|                                |  |                          |           |                         |   |        



Capital Shares and Options



As at the Report date, the Company had
the following:



Capital Shares



|                                  |  |                                                            
|--------------------------------- |  | -----------------------------------------------------------
|Authorized Common Shares:         |  | 100,000,000 common shares with no par value                
|Issued Common Shares:             |  | 4,211,315 common shares                                    
|Shares in escrow                  |  | None                                                       
|                                  | 
|Authorized Preference A Shares: |  | 100,000,000 Preference A shares at par value Cdn.$10 each
|Issued Preference A Shares:     |  | None                                                       
|Shares in escrow                  |  | None                                                       
|                                  | 
|Authorized Preference B Shares: |  | 100,000,000 Preference B shares at par value Cdn.$50 each
|Issued Preference B Shares:     |  | None                                                       
|Shares in escrow                  |  | None                                                       



Convertible
Securities



None



Options



The following table shows the number of options, vested options, exercise price and expiry date of the share purchase
options granted by the Company that were outstanding as of the report date:



|                  |  |         |  |                |      |             |                 
|----------------- |  | ------- |  | -------------- | ---- | ----------- | ----------------
|Number of Options |  | Vested  |  | Exercise Price |      | Expiry Date
|10,000            |  | 10,000  |  | Cdn. $         | 0.25 |             | May 6, 2006     
|80,000            |  | 80,000  |  | Cdn. $         | 0.62 |             | December 9, 2008
|135,000           |  | 135,000 |  | US $           | 0.48 |             | December 9, 2008
|45,000            |  | 45,000  |  | Cdn. $         | 0.95 |             | March 3, 2009   
|72,500            |  | 72,500  |  | US $           | 0.71 |             | March 3, 2009   
|20,000            |  | 20,000  |  | US $           | 2.07 |             | January 4, 2010 
|                  |  |         |  |                |      |             |                 
|362,500           |  | 362,500 |  |                |      |             |                 
|                  |  |         |  |                |      |             |                 



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##### Table of Contents

The above common shares issued and options table both as of the report date, reflect 17,500 options
exercised and shares issued, subsequent to the end of the 2005 Fiscal Year. Gross proceeds raised form the options exercised totalled $10,125.



The Unilens Vision Incentive Stock Option Plan allows for the issuance of common share purchase options of up to 10% of the issued and outstanding common
shares to directors, employees, and consultants. The number of shares under option from time to time and the exercise prices of such options, and any amendments thereto, will be and have been determined by the directors in accordance with the
policies of the TSX Venture Exchange.



Common
shares issued by the Company during the 2005 Fiscal Year:



|               |  |                     |  |                  |  |                      |      |                      |   |                       |  |                  |  |    
|-------------- |  | ------------------- |  | ---------------- |  | -------------------- | ---- | -------------------- | - | --------------------- |  | ---------------- |  | ---
|Date of Issue  |  | Type of Issue       |  | Number of Shares |  | Ave. Price Per Share |      | Total Gross Proceeds |   | Type of Consideration |  | Commissions Paid
|March 24, 2005 |  | Exercise of options |  | 15,000           |  | $                    | 0.19 |                      | $ | 2,850                 |  | Cash             |  | Nil



Options granted by the Company during the fiscal year ending June 30, 2005:



|                     |  |                 |  |                 |  |                   |  |                |        
|-------------------- |  | --------------- |  | --------------- |  | ----------------- |  | -------------- | -------
|Name                 |  | Grant Date      |  | Expiry Date     |  | Number of Options |  | Exercise Price
|Kelly McKnight-Goelz |  | January 4, 2005 |  | January 4, 2010 |  | 20,000            |  | $              | 2.07 US



|Shares | in escrow or subject to pooling as at June 30, 2005 - None
|------ | ----------------------------------------------------------



Results of Operations



Current Quarter



During the three months ended June 30, 2005 (the Current Quarter) we earned income before tax and extraordinary item of $541,533 compared to income
before tax and extraordinary item of $375,302 for the three months ended June 30, 2004 (the Prior Quarter). The increase in income before tax and extraordinary item during the Current Quarter of $166,231 as compared to the Prior
Quarter, was primarily due to (i) an increase in royalty income of $159,954 to $473,627 in the Current Quarter as compared to $313,673 in the Prior Quarter derived from the license agreement with Bausch & Lomb, (ii) an increase in
gross margin of $177,695 on higher sales during the Current Quarter, (iii) an increase in expenses of $191,037 described below, and (iv) a decrease in interest and other expenses of $19,619. After recording a net deferred income tax
benefit of $973,585, we had net income of $1,515,118 or $0.34 per diluted share for the Current Quarter. In comparison, in the Prior Quarter we had net income of $3,800,561 or $0.90 per diluted share after recording a net deferred income tax benefit
of $3,483,864 and expenses associated with the one-time extraordinary gain from the extinguishment of debt of $58,605.



Sales during the Current Quarter were $1,569,306, an increase of $452,124 (40.5%), as compared to sales of $1,117,182 during the Prior Quarter. The increase in sales was
primarily due to continued growth in the Companys C-Vue disposable multifocal and the C-Vue toric multifocal contact lenses. In addition, we acquired the SoftCon and Aquaflex brands from CIBA Vision at the end of February that account for
approximately 15% of sales during the Current Quarter. Gross margin decreased from 44.3% in the Prior Quarter to 42.9% in the Current Quarter due to a shift in product mix.



The increase in expenses during the Current Quarter, as compared to the Prior Quarter, was primarily due to increases in sales and marketing
expenses of $137,819 and administration expenses of $41,343. Sales and marketing expenses increased primarily due to increased promotional and advertising activity associated with the launch of the C-Vue Toric Multifocal lens in January of 2005
along with marketing efforts associated with the acquisition of the SoftCon EW and Aquaflex lenses acquired from CIBA Vision at the end of February 2005. Administration expenses increased primarily due to increased consulting fees associated with
general regulatory compliance issues, increased insurance expense and additional wages for personnel associated with the general increase in the Companys activities during the period.



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During the Current Quarter we recorded an income tax benefit of $973,585 compared to an income tax benefit in the Prior
Quarter of $3,483,864. The income tax benefit is the result from the recognition of income tax loss carry-forwards offset by a reduction in the deferred income tax asset due to the application of tax loss carry forwards against the taxable income
earned during the quarter.



During the Current Quarter, we generated $421,831
in cash from operations. We used cash of $85,637 during the Current Quarter for the purchase of capital additions. In addition, the Company used cash of $310,608 for financing activities during the Current Quarter, all of which was used for the
repayment of term debt.



Current Year



During the 2005 Fiscal Year (the Current Year) we earned net
income before tax and extraordinary item of $1,710,687 compared to a net income before tax and extraordinary item of $863,121 for the 2004 Fiscal Year (the Prior Year). The increase in income before tax and extraordinary item during the
Current Year of $847,566, as compared to the Prior Year, was primarily due to (i) an increase in royalty income, derived from the license agreement with Bausch & Lomb, of $694,657 to $1,632,051 during the Current Year as compared to
$937,394 of royalty income earned during the Prior Year, (ii) an increase in gross margin of $353,755 on higher sales during the Current Year, and (iii) a decrease in interest and other expense of $18,942, all of which were partially
offset by an increase in expenses of $219,788 described below. After recording a net deferred income tax benefit of $527,100, we had net income of $2,237,787 or $0.50 per diluted share for the 2005 Fiscal Year. In comparison, in the Prior Year we
had net income of $6,076,734 or $1.48 per diluted share after recording a net deferred income tax benefit of $3,261,050 and a one-time extraordinary gain from the extinguishment of debt of $1,952,563.



Sales during the Current Year were $4,971,577, an increase of $897,000 (22.0%), as compared
to sales of $4,074,577 during the Prior Year. The increase in sales was primarily due to continued growth in the Companys C-Vue disposable multifocal and the C-Vue toric multifocal contact lenses which was partially offset by an expected
decline in certain of the Companys soft lathe-cut product lines that are nearing the end of their life cycle. In addition, we acquired the SoftCon and Aquaflex brands from CIBA Vision at the end of February that account for approximately 6% of
sales during the Current Year. Gross margin decreased slightly from 40.7% in the Prior Year to 40.5% in the Current Year due to a shift in product mix.



The increase in expenses during the Current Year, as compared to the Prior Year, was primarily due to increases in sales and marketing expenses of $226,517 which was
partially offset by a decrease in administration expenses of $26,291. Sales and marketing expenses increased primarily due to increased promotional and advertising activity associated with the launch of the C-Vue Toric Multifocal lens in January of
2005 along with marketing efforts associated with the acquisition of the SoftCon EW and Aquaflex lenses acquired from CIBA Vision at the end of February 2005. Administration expenses decreased primarily due to a reduction in amortization of
intangibles and lower expense allocations, offset by increased consulting fees associated with general regulatory compliance issues, increased insurance expense, and additional wages for personnel associated wit the general increase in the
Companys activities during the period.



During the Current Year we
recorded an income tax benefit of $527,100 compared to an income tax benefit in the Prior Year of $3,261,050. The income tax benefit is the result from the recognition of income tax loss carry-forwards offset by a reduction in the deferred income
tax asset due to the application of tax loss carry forwards against the taxable income earned during the year.



During the 2004 Fiscal Year, a one-time extraordinary gain of $1,952,563 (net of associated expenses and income tax amortizations) was recorded as a result of a settlement agreement signed with Competitive
Technologies Inc. There were no extraordinary items recorded for the 2005 and 2003 Fiscal Years.



During the fiscal year ended June 30, 2005, we generated $1,262,375 in cash from operations. We used cash of $122,470 during the Current Year for the purchase of capital additions. In addition, the Company used
net cash of $1,235,289 for financing activities during the Current Year, primarily consisting of $1,238,139 used for the early repayment and complete elimination of our term debt.



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Summary of Quarterly Results



Results for the eight most recent quarters ending with the Current Quarter are:



|                                                         |  |                             |  |               |  |               |   |  |               |  |               |  |               |   |  |               |   |  |              
|-------------------------------------------------------- |  | --------------------------- |  | ------------- |  | ------------- | - |  | ------------- |  | ------------- |  | ------------- | - |  | ------------- | - |  | -------------
|                                                         |  | For the Three Months Ending
|                                                         |  | June 30, 2005               |  | Mar. 31, 2005 |  | Dec. 31, 2004 |   |  | Sep. 30, 2004 |  | June 30, 2004 |  | Mar. 31, 2004 |   |  | Dec. 31, 2003 |   |  | Sep. 30, 2003
|                                                         |  | ($)                         |  | ($)           |  | ($)           |   |  | ($)           |  | ($)           |  | ($)           |   |  | ($)           |   |  | ($)          
|Income Statement Data                                    |  |                             |  |               |  |               |   |  |               |  |               |  |               |   |  |               |   |  |              
|Total revenues                                           |  | 1,569,306                   |  | 1,270,592     |  | 1,021,725     |   |  | 1,109,954     |  | 1,117,182     |  | 1,023,340     |   |  | 930,235       |   |  | 1,003,820    
|Operating income (loss) for the quarter                  |  | 57,246                      |  | 32,812        |  | (11,900       | ) |  | 13,422        |  | 70,588        |  | (67,145       | ) |  | (50,446       | ) |  | 4,616        
|Income (loss) before tax benefit and extraordinary items |  | 541,533                     |  | 440,790       |  | 361,901       |   |  | 366,463       |  | 375,302       |  | 137,129       |   |  | 190,743       |   |  | 159,947      
|Income before extraordinary items                        |  | 1,515,118                   |  | 272,206       |  | 210,153       |   |  | 240,310       |  | 3,859,166     |  | 64,047        |   |  | 108,795       |   |  | 92,163       
|Income for the period                                    |  | 1,515,118                   |  | 272,206       |  | 210,153       |   |  | 240,310       |  | 3,800,561     |  | 64,047        |   |  | 2,119,963     |   |  | 92,163       
|Income per common share outstanding  basic and diluted  |  |                             |  |               |  |               |   |  |               |  |               |  |               |   |  |               |   |  |              
|Income before extraordinary items                        |  |                             |  |               |  |               |   |  |               |  |               |  |               |   |  |               |   |  |              
|Basic                                                    |  | 0.36                        |  | 0.06          |  | 0.05          |   |  | 0.06          |  | 0.93          |  | 0.02          |   |  | 0.03          |   |  | 0.02         
|Diluted                                                  |  | 0.34                        |  | 0.06          |  | 0.05          |   |  | 0.05          |  | 0.92          |  | 0.02          |   |  | 0.03          |   |  | 0.02         
|Net income (loss) for the period                         |  |                             |  |               |  |               |   |  |               |  |               |  |               |   |  |               |   |  |              
|Basic                                                    |  | 0.36                        |  | 0.06          |  | 0.05          |   |  | 0.06          |  | 0.91          |  | 0.02          |   |  | 0.52          |   |  | 0.02         
|Diluted                                                  |  | 0.34                        |  | 0.06          |  | 0.05          |   |  | 0.05          |  | 0.90          |  | 0.02          |   |  | 0.52          |   |  | 0.02         



The financial data presented above is
derived from the Companys financial statements and is prepared in conformity with accounting principles generally accepted in the United States and in United States dollars. Certain of the prior period comparative figures have been
reclassified to conform to the presentation adopted for the current period.



Factors That Affect the Comparability of the Quarterly Financial Data Disclosed Above



On October 25, 2001 we licensed the exclusive worldwide rights for one of our patented soft multifocal contact lens designs to Bausch and Lomb. Under the terms of the agreement we will receive a royalty payment
ranging from two to five percent. of Bausch and Lombs product sales utilizing the technology. The quarterly results in the above table include royalty income as follows:



|               |  |                             |  |               |  |               |  |               |  |               |  |               |  |               |  |              
|-------------- |  | --------------------------- |  | ------------- |  | ------------- |  | ------------- |  | ------------- |  | ------------- |  | ------------- |  | -------------
|               |  | For the Three Months Ending
|               |  | June 30, 2005               |  | Mar. 31, 2005 |  | Dec. 31, 2004 |  | Sep. 30, 2004 |  | June 30, 2004 |  | Mar. 31, 2004 |  | Dec. 31, 2003 |  | Sep. 30, 2003
|               |  | ($)                         |  | ($)           |  | ($)           |  | ($)           |  | ($)           |  | ($)           |  | ($)           |  | ($)          
|Royalty income |  | 473,627                     |  | 414,207       |  | 386,983       |  | 357,234       |  | 313,673       |  | 212,054       |  | 205,229       |  | 206,438      



On October 17, 2003, we
renegotiated our debt obligations, which resulted in the recognition of $3.2 million in extraordinary income before tax and a reduction of $3.2 million in long-term debt during the quarter ending December 31, 2003.



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In the quarter ending June 30, 2004 we recorded approximately $3.4 million in net income tax benefits resulting from
the recognition of deferred tax assets expected to be realized, which was partially offset by a reduction in the deferred income tax asset resulting from the application of tax loss carry forwards against the taxable income earned during the
quarter.



In the quarter ending June 30, 2005 we recorded approximately
$1.2 million in income tax benefits that resulted from the recognition of deferred tax assets expected to be realized in the future, which was offset by a reduction in the deferred income tax asset during the quarter.



Liquidity and Capital Resources



Current Quarter



As of June 30, 2005, the Company had working capital of $2,540,624, representing an
increase of $658,701 from our working capital at March 31, 2005. Positive cash flow from operating activities totalled $421,831 for the quarter ending June 30, 2005, which was primarily used for the repayment of long-term debt of $310,608
and the purchase of capital assets in the amount of $85,637.



Current Year



During the 2005 Fiscal
Year our working capital increased to $2,540,624, compared to our working capital at June 30, 2004, by $1,159,476, primarily due to a reduction in debt. Positive cash flow from operating activities totalled $1,262,375 for the 2005 Fiscal Year,
which was primarily used for the repayment of long-term debt of $1,238,139, and for the purchase of capital assets in the amount of $122,470. We estimate that we will have sufficient resources to fund our working capital requirements during the year
ended June 30, 2006.



Related Party Transactions



During the 2005 Fiscal Year, we incurred $5,269 (2004$4,462) in fees to, William
Harper, an officer of the Company, for accounting services and incurred interest expense of $20,252 (2004$48,483) on a note payable owed to Uniinvest Holdings AG, a related financial institution.



Trend Information



The soft multifocal contact lens business has been impacted over the past several years by the introduction of molding manufacturing
technology, allowing for the mass production of most lens types at a fraction of the cost to lathe lenses. The entrance of these molded lenses has created significant price competition in the marketplace. The reduced cost of the molded lens allows
for liberal trial lenses to be provided to eye care professionals for a more productive fitting session and immediate dispensing of lenses. Furthermore, lower manufacturing costs led to the introduction of frequent replacement and disposable lenses,
a modality preferred by many consumers. Recognizing this trend, we signed an agreement with a third party in 2002 for the supply of molded soft contact lenses (C-Vue) utilizing our patented design. During the 2005 Fiscal Year the Companys
C-Vue disposable products accounted for approximately 46% of sales. The C-Vue brand was launched to eye care professionals in the United States during September of 2002. The Company expects the sales of the C-Vue brand will make up an increasing
percentage of its future sales.



Risk Factors



The Company entered into a supply agreement with one supplier for the manufacture of its
moulded C-Vue multifocal lens, which currently accounts for approximately 46% of the Companys sales during the 2005 fiscal year. Although to date the supplier has met the Companys requirements, there can be no assurances that they will
be able to continue to meet their obligations under the current agreement or any renewal of the agreement. Furthermore, there are no assurances that the supplier will meet the Companys possible future requirements for design or material
changes and enhancements. Alternative suppliers for the manufacturer of the speciality moulded, or partially moulded contact lenses have been identified. However, there can be no assurances that an alternate supplier can successfully manufacture the
lens to the Companys specifications or on terms that are acceptable to the Company.



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A significant portion of the Companys net income is derived from the Companys exclusive license of one of its
patented multifocal designs to Bausch and Lomb. The Company collects royalties based on Bausch and Lombs worldwide net sales of products utilizing the Companys technology. There can be no assurances that Bausch and Lomb will continue to
sell products in the future utilizing the Companys technology.



Financial Instruments



The Companys financial
instruments consist of cash and cash equivalents, accounts receivable, royalties and other receivables, accounts payable and accrued liabilities, and long term debt. It is managements opinion that the Company is not exposed to significant
interest, currency or credit risks arising from these financial instruments. The fair value of these financial instruments approximates their carrying values.



Outlook



Revenue and profitability trends remain strong and we anticipate increased market penetration for our C-Vue disposable lens, as well as solid earnings growth for the fiscal year ending June 30, 2006.



Other



Investor relations are done internally and consist of responding to inquiries from potential investors and stockholders as well as the
dissemination of Company news and information. In addition, we have retained RJ Falkner and Company (Falkner) as investor relations counsel for a full range of investor relations services including assisting us in responding to inquiries
from potential investors and stockholders as well as the development of independent analyses, research reports, and other services. We pay a monthly consulting fee and reimburse Falkner for their expenses incurred in providing the services, and have
granted Falkner an option to purchase up to 25,000 shares of common stock at an exercise price of US $0.48 with an expiry date of March 9, 2009.



Additional Information



Additional information is available concerning the Company and its operations on SEDAR at www.sedar.com and on our web site at www.unilens.com. Additional financial information concerning the Company is
provided in its audited comparative financial statements for the Companys most recently completed financial year. Copies of this information are available by contacting the Company at 800-446-2020.



Directors and Officers



The Companys directors and officers as at the Report Date are:



|                  |  |                                                       
|----------------- |  | ------------------------------------------------------
|Directors:        |  | Officers:                                             
|Alfred W. Vitale  |  | Alfred W. Vitale  President & Chief Executive Officer
|William D. Baxter |  | Michael J. Pecora  Chief Financial Officer           
|Nick Bennett      |  | William S. Harper  Secretary                         



Board Approval



The contents of this management discussion and analysis have been approved and its mailing
has been authorized by the board of directors of the Company.



ON BEHALF OF THE BOARD OF DIRECTORSAlfred W. VitaleALFRED W. VITALE, PRESIDENT




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|ITEM 18. | FINANCIAL STATEMENTS
|-------- | --------------------



Not Applicable. See Item 17.



|ITEM 19. | EXHIBITS
|-------- | --------



Exhibits attached to this Annual Report on Form 20-F are as follows:



|                 |  |                                                                                                                                                                   
|---------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Type of Document |  | Description                                                                                                                                                       
|1.1              |  | * Memorandum, Certificate of Incorporation and Articles of Association of Unilens Vision Inc.                                                                     
|                 | 
|2.1              |  | **Loan Agreement, dated January 19, 1993, between Unilens Corp. USA, Unilens Vision Inc. and UNIINVEST Holding AG (formerly EBC Zürich AG)                        
|                 | 
|2.2              |  | ***Amendment to Loan Agreement, dated as of October 28, 2003, between UNIINVEST Holding AG, Unilens Corp. USA and Unilens Vision Inc.                             
|                 | 
|2.3              |  | Loan and Security Agreement, dated April 28, 2005 by and between RBC Centura Bank and Unilens Corp. USA.                                                          
|                 | 
|4.1              |  | **License Agreement, dated October 25, 2001.                                                                                                                      
|                 | 
|4.2              |  | **Private Label Supply Agreement dated June 4, 2002, between Unilens Vision Inc. and Bausch & Lomb Incorporated.                                                  
|                 | 
|4.3              |  | *Lease Agreement, dated February 25, 1983, between Bryan Dairy Limited, as Lessor, and University Optical Products Co., as Lessee                                 
|                 | 
|4.4              |  | **Amendment to Lease, dated March 29, 1991, between Unilens Corp. USA and Dr. Klaus R. Hoffman and Mrs. Ursula Hoffman                                            
|                 | 
|4.5              |  | **Second Amendment to Lease, dated September 30, 1993, between Unilens Corp. USA and Dr. Klaus R. Hoffman and Mrs. Ursula Hoffman                                 
|                 | 
|4.6              |  | **Third Amendment to Lease, dated August 28, 1997, between Unilens Corp. USA and Dr. Klaus R. Hoffman and Mrs. Ursula Hoffman                                     
|                 | 
|4.7              |  | **Fourth Amendment to Lease, dated December 28, 1999, between Unilens Corp. USA and Five and Two Associates                                                       
|                 | 
|4.8              |  | **Severance Compensation Agreement, dated August 1, 2000, between Unilens Vision, Inc., Unilens Corp. USA and Alfred W. Vitale (including four amendments thereto)
|                 | 
|4.9              |  | ***Fifth Amendment to Severance Compensation Agreement, dated April 21, 2004, between Unilens Vision Inc., Unilens Corp. USA and Alfred W. Vitale.                
|                 | 
|4.10             |  | **Offer Letter, dated March 1, 1999, by Unilens Corp. USA to Michael J. Pecora (including an amendment dated July 10, 2003)                                       



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|     |  |                                                                                                                                         
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------
|     | 
|4.11 |  | ***Unilens Vision Inc. Incentive Stock Option Plan  2004                                                                               
|     | 
|4.12 |  | ***Settlement Agreement, dated as of October 17, 2003, between Competitive Technologies, Inc., Unilens Corp. USA and Unilens Vision Inc.
|     | 
|4.13 |  | ****Asset Purchase Agreement, dated as of February 2, 2004, between Unilens Corp. USA and THE LIFSTYLE COMPANY, INC.                    
|     | 
|4.14 |  | Asset Purchase Agreement, dated as of February 23, 2005, by and between Unilens Corp. USA and CIBA Vision Corporation.                  
|     | 
|4.15 |  | Severance Compensation Agreement, dated July 1, 2005, between Unilens Corp. USA, Unilens Vision Inc. and Michael J. Pecora.             
|     | 
|8.1  |  | List of Subsidiaries                                                                                                                    
|     | 
|11.1 |  | ****Code of Ethics                                                                                                                      
|     | 
|12.1 |  | Certification of Alfred W. Vitale Pursuant to Rule 13a-14(a)                                                                            
|     | 
|12.2 |  | Certification of Michael J. Pecora Pursuant to Rule 13a-14(a)                                                                           
|     | 
|13.1 |  | Certification of Alfred W. Vitale Pursuant to 18 U.S.C. Section 1350                                                                    
|     | 
|13.2 |  | Certification of Michael J. Pecora Pursuant to 18 U.S.C. Section 1350                                                                   

---

|* | Previously filed as an exhibit to our registration statement on Form 20-F, filed with the Commission on July 3, 1989.
|- | ---------------------------------------------------------------------------------------------------------------------

|** | Previously filed as an exhibit to our registration statement on Form 20-F for the year ended June 30, 2002, filed with the Commission on March 15, 2004
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------

|*** | Previously filed as an exhibit to our registration statement on Form 20-F for the year ended June 30, 2003, filed with the Commission on March 15, 2004
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------

|**** | Previously filed as an exhibit to our registration statement on Form 20-F for the year ended June 30, 2004, filed with the Commission on December 30, 2004
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------



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SIGNATURES



Unilens Vision Inc. certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this
annual report on its behalf.



|                                 
|---------------------------------
|UNILENS VISION INC.              
|                                 
|/s/ Alfred W. Vitale             
|Alfred W. Vitale                 
|President/Chief Executive Officer



DATED: December 28, 2005



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