##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



FORM 20-F





| ̈ | 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, 2008

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

For the transition
period from  to

Commission file number 0-18760



UNILENS VISION INC.



(Exact name of Registrant specified in its charter)



UNILENS VISION INC.



(Translation of Registrants name into English)



BRITISH COLUMBIA, CANADA



(Jurisdiction of incorporation or organization)



1780-400 Burrard Street

Vancouver, British Columbia, Canada, V6C 3A6



(Address of principal executive offices)



Michael J. Pecora

President and Chief Executive Officer

1780-400 Burrard Street

Vancouver, British Columbia, Canada, V6C 3A6

604-689-1280

michael.pecora@unilens.com



(Name, Telephone, E-Mail and/or Facsimile Number and Address of Company Contact Person)



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##### Table of Contents

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

Number of outstanding shares of Unilens Vision Inc.s capital stock as of June 30, 2008:    4,550,715 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 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 whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated
filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):



|                           |  |                      |  |                         
|-------------------------- |  | -------------------- |  | ------------------------
|Large accelerated filer   ̈ |  | Accelerated filer   ̈ |  | Non-accelerated filer  x

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements
included in this filing:



|           |  |                                                                                                          |  |         
|---------- |  | -------------------------------------------------------------------------------------------------------- |  | --------
|US GAAP  x |  | International Financial Reporting Standards as issued by the International Accounting Standards Board   ̈ |  | Other   ̈

If Other has been checked in response to the previous question indicate by check mark which financial
statement item the registrant has elected to follow. Item 17   ̈    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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##### Table of Contents

INTRODUCTION AND USE OF CERTAIN TERMS

As used in this Annual Report for the fiscal year ending June 30, 2008, 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. 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. 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. READERS ARE CAUTIONED TO CONSIDER THE SPECIFIC RISK FACTORS DESCRIBED IN THIS ANNUAL REPORT 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 4A.  |  | UNRESOLVED STAFF COMMENTS                                                    |  | 11  
|          |  |                                                                             
|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                                                        |  | 20  
|          |  |                                                                             
|ITEM 10.  |  | ADDITIONAL INFORMATION                                                       |  | 22  
|          |  |                                                                             
|ITEM 11.  |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                   |  | 31  
|          |  |                                                                             
|ITEM 12.  |  | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                       |  | 31  
|          |  |                                                                             
|ITEM 13.  |  | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                              |  | 31  
|          |  |                                                                             
|ITEM 14.  |  | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |  | 31  
|          |  |                                                                             
|ITEM 15T. |  | CONTROLS AND PROCEDURES                                                      |  | 31  
|          |  |                                                                             
|ITEM 16A. |  | AUDIT COMMITTEE FINANCIAL EXPERT                                             |  | 32  
|          |  |                                                                             
|ITEM 16B. |  | CODE OF ETHICS                                                               |  | 32  
|          |  |                                                                             
|ITEM 16C. |  | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                       |  | 32  
|          |  |                                                                             
|ITEM 16D. |  | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                   |  | 33  
|          |  |                                                                             
|ITEM 16E. |  | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS       |  | 33  
|          |  |                                                                             
|ITEM 16F. |  | CHANGES IN REGISTRANTS CERTIFYING ACCOUNTANT                                |  | 33  
|          |  |                                                                             
|ITEM 16G. |  | CORPORATE GOVERNANCE                                                         |  | 33  
|          |  |                                                                             
|ITEM 17.  |  | FINANCIAL STATEMENTS                                                         |  | 34  
|          |  |                                                                             
|ITEM 18.  |  | FINANCIAL STATEMENTS                                                         |  | 66  
|          |  |                                                                             
|ITEM 19.  |  | EXHIBITS                                                                     |  | 66  



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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, 2008, 2007, 2006, 2005 and 2004 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 years 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 |           
|                                                                           |  | 2008          |            | 2007 |   | 2006       |  | 2005 |            | 2004 |  
|Balance Sheet Data                                                         |  |               |            |      |   |            |  |      |            |      |   |            |  |   |            |  
|Total assets                                                               |  | $             | 6,784,128  |      | $ | 7,987,808  |  | $    | 8,969,222  |      | $ | 7,316,946  |  | $ | 6,095,950  |  
|Working capital                                                            |  |               | 4,627,289  |      |   | 4,949,732  |  |      | 4,747,777  |      |   | 2,540,624  |  |   | 1,381,148  |  
|Long-term liabilities                                                      |  |               |           |      |   |           |  |      |           |      |   |           |  |   | 688,139    |  
|Total liabilities                                                          |  |               | 957,434    |      |   | 819,005    |  |      | 997,010    |      |   | 1,082,242  |  |   | 2,085,117  |  
|Shareholders equity                                                       |  |               | 5,826,694  |      |   | 7,168,803  |  |      | 7,972,212  |      |   | 6,234,704  |  |   | 4,010,833  |  
|Share capital                                                              |  |               | 27,627,581 |      |   | 27,596,810 |  |      | 27,575,628 |      |   | 27,434,950 |  |   | 27,432,100 |  
|                                                                           |  |               |            |      |  
|Statement of Operations Data (fiscal year ended)                           |  |               |            |      |   |            |  |      |            |      |   |            |  |   |            |  
|Revenues                                                                   |  |               | 6,665,566  |      |   | 6,370,930  |  |      | 6,110,040  |      |   | 4,971,577  |  |   | 4,074,577  |  
|Income (loss) from operations(1)                                           |  |               | 24,818     |      |   | 14,785     |  |      | 53,359     |      |   | 91,580     |  |   | (42,387    | )
|Income before tax benefit, discontinued operations and extraordinary items |  |               | 2,636,652  |      |   | 2,179,742  |  |      | 2,018,040  |      |   | 1,710,687  |  |   | 863,121    |  
|Income before discontinued operations and extraordinary items              |  |               | 1,630,592  |      |   | 1,309,961  |  |      | 1,596,830  |      |   | 2,237,787  |  |   | 4,124,171  |  
|Income for the year                                                        |  |               | 1,630,592  |      |   | 1,309,961  |  |      | 1,596,830  |      |   | 2,237,787  |  |   | 6,076,734  |  
|Weighted average number of common shares                                   |  |               | 4,554,061  |      |   | 4,546,820  |  |      | 4,522,566  |      |   | 4,458,266  |  |   | 4,114,722  |  
|Income per common share outstanding - basic and diluted:                   |  |               |            |      |   |            |  |      |            |      |   |            |  |   |            |  
|Income before discontinued operations and extraordinary item               |  |               |            |      |   |            |  |      |            |      |   |            |  |   |            |  
|Basic                                                                      |  |               | 0.36       |      |   | 0.29       |  |      | 0.37       |      |   | 0.53       |  |   | 1.01       |  
|Diluted                                                                    |  |               | 0.36       |      |   | 0.29       |  |      | 0.35       |      |   | 0.50       |  |   | 1.00       |  
|Income for the year                                                        |  |               |            |      |   |            |  |      |            |      |   |            |  |   |            |  
|Basic                                                                      |  |               | 0.36       |      |   | 0.29       |  |      | 0.37       |      |   | 0.53       |  |   | 1.49       |  
|Diluted                                                                    |  |               | 0.36       |      |   | 0.29       |  |      | 0.35       |      |   | 0.50       |  |   | 1.48       |  
|Dividends                                                                  |  |               | 3,003,472  |      |   | 2,134,552  |  |      |           |      |   |           |  |   |           |  



Notes:



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



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Dividend Policy

On August 1, 2006 the Board of Directors declared the Companys first special cash dividend. The Company also stated its plan to begin paying a regular quarterly dividend. Beginning on November 1, 2006 the Board of Directors
declared its initial quarterly cash dividend. The table below shows all Company dividends paid from inception.



|                 |  |               |  |             |  |            |  |                       |      
|---------------- |  | ------------- |  | ----------- |  | ---------- |  | --------------------- | -----
|Type of Dividend |  | Date Declared |  | Record Date |  | Date Paid  |  | Amount Paid Per Share
|Special          |  | 8/1/2006      |  | 8/14/2006   |  | 8/28/2006  |  | $                     | 0.250
|Quarterly        |  | 11/1/2006     |  | 11/14/2006  |  | 11/28/2006 |  | $                     | 0.075
|Quarterly        |  | 2/1/2007      |  | 2/14/2007   |  | 2/28/2007  |  | $                     | 0.075
|Quarterly        |  | 5/1/2007      |  | 5/14/2007   |  | 5/25/2007  |  | $                     | 0.075
|Special          |  | 8/1/2007      |  | 8/14/2007   |  | 8/28/2007  |  | $                     | 0.300
|Quarterly        |  | 8/1/2007      |  | 8/14/2007   |  | 8/28/2007  |  | $                     | 0.090
|Quarterly        |  | 11/1/2007     |  | 11/14/2007  |  | 11/28/2007 |  | $                     | 0.090
|Quarterly        |  | 2/1/2008      |  | 2/14/2008   |  | 2/28/2008  |  | $                     | 0.090
|Quarterly        |  | 5/1/2008      |  | 5/14/2008   |  | 5/28/2008  |  | $                     | 0.090
|Special          |  | 8/1/2008      |  | 8/14/2008   |  | 8/28/2008  |  | $                     | 0.300
|Quarterly        |  | 8/1/2008      |  | 8/14/2008   |  | 8/28/2008  |  | $                     | 0.090
|Quarterly        |  | 11/3/2008     |  | 11/14/2008  |  | 11/28/2008 |  | $                     | 0.090

The amount and frequency of future dividends will depend on earnings, cash flow, and other aspects of our business
as determined and declared by the Board of Directors.



|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 2001, we entered into an exclusive worldwide license on one of our patented multi-focal design technologies with
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 in the future utilizing 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 52% of sales during the 2008 fiscal year). The agreement is renewable from year to year and is terminable pursuant to customary termination clauses. 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 as to any renewal of our supply agreement. 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



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assurance that an alternate supplier can successfully manufacture lenses to our specifications or material requirements on acceptable terms, or within the
constraints of our exclusive license agreement with Bausch and Lomb.

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 Vistakon a unit of
Johnson & Johnson, 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 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.

We believe that certain of our competitors are
planning to introduce new multifocal or other specialty lens designs in the near future. Competition from products utilizing new lens designs may 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. Silicone hydrogel lenses are
gaining market acceptance in the specialty lens business and we are not yet able to manufacture and market our own competitive silicone hydrogel specialty products, which could erode our specialty lens market share and margins. 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.



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Significant changes in beneficial ownership of Company common stock, may effect utilization of deferred tax assets.

The utilization of our deferred tax asset may be subject to limitations in the event of significant changes in the beneficial ownership of our
shares. We 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.

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

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

Our common shares are traded in the U.S. only on the OTC Bulletin Board, so 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
Global, Global Selected Capital Markets. 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.

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.



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Dividends to holders of our common shares cannot be assured.

The special and quarterly dividends we have paid since August 2006 are the first dividends paid by us. So far for the fiscal year ending June 30, 2009, in addition
to the special cash dividend paid in August 2008 of $.30 per common share, the Company has paid quarterly cash dividends totalling $0.18 per common share. The amount of future dividends will depend on earnings, cash flow, and other aspects of our
business as determined and declared by the Board of Directors. There can be no assurance that we can generate sufficient earnings and cash flow to continue paying quarterly dividends.

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.

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.



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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 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 were 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.



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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 would not in fact be found to infringe those intellectual property rights. From time to time, we receive notices of claim of potential infringement. There may be
intellectual property rights of others that may cover some of our technology and of which we are unaware. 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.

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.



|ITEM 4. | INFORMATION ON THE COMPANY
|------- | --------------------------

SUMMARY



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



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



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|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 1780-400 Burrard Street, Vancouver, B.C. V6C 3A6 and our telephone number is
(604) 689-1280. 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 its 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 by us in the
United States exclusively to eye care professionals.

(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 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 agreed to pay $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 paid as the inventory was sold. The final payment was made in November 2008. 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 through February 2010.



|5. | Our principal capital expenditures and divestitures over our 2008, 2007 and 2006 fiscal years were as follows:
|-- | --------------------------------------------------------------------------------------------------------------

Expenditures during the period:



|                                           |  |                    |         |              |   |  
|------------------------------------------ |  | ------------------ | ------- | ------------ | - | -
|Year                                       |  | Plant andEquipment |         | Other Assets
|Amounts Deferred (capitalized or invested) |  |                    |         |              |   |  
|2008                                       |  | $                  | 81,754  |              | $ | 0
|2007                                       |  | $                  | 184,620 |              | $ | 0
|2006                                       |  | $                  | 337,348 |              | $ | 0



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Divestitures: There were no divestitures during the period.



|6. | The principal capital expenditures currently in progress in our Largo FL facility, which are financed by the Companys existing cash balances are as follows:
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------



|                |  |                     |         |              |   |      
|--------------- |  | ------------------- | ------- | ------------ | - | -----
|                |  | Plant and Equipment |         | Other Assets
|2009 Activities |  | $                   | 500,000 |              | $ | 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 license, manufacture, distribute and market specialty lens products using proprietary design and manufacturing technology from our manufacturing distribution 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.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Our disposable lenses line consists of the C-Vue, a mulitfocal cast molded blister-packed box of six lenses sold for frequent
replacement, the C-Vue Aspheric single vision lens, a single vision disposable soft contact lens sold for 2-week replacement and the all new C-Vue 1 Day Aspheric single vision daily disposable soft contact lens sold for one day wear then just simply
thrown away. The C-Vue multifocal 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. The C-Vue Aspheric single vision lens is
manufactured for us by a third party utilizing Wavefront inspired technology. The cast molded C-Vue Aspheric single vision lens is marketed to eye care professionals in a blister-packed box of six lenses. The cast molded C-Vue 1 Day Aspheric single
vision lens is manufactured for us by a third party utilizing Wavefront inspired technology, and is marketed to eye care professionals in blister-packs of 30 and 90 lenses. We expect that our C-Vue multifocal, C-Vue Aspheric single vision lenses and
the C-Vue 1 Day Aspheric single vision lens will continue to make up an increasing percentage of our 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, an 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 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 2002. During the fiscal years ended June 30, 2008, 2007 and 2006 we recorded approximately $2,629,000, $2,190,000 and $1,933,000 in royalty income.



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| | 2. | We operate within the highly competitive contact lens market. We compete with industry leaders, such as Vistakon, a unit of Johnson and Johnson, 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 perceptions of product quality, product development, technical innovation, and price. We market our
products worldwide. For the fiscal years ending June 30, 2008, 2007 and 2006, approximately 4% of our revenue was derived from sales outside the United States, primarily from sales in Germany, Switzerland, 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 exclusively to qualified practitioners through a combination of authorized independent distributors, authorized manufactures
representatives, and in house sales representatives.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 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.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 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 it.



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|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 June 30, 2013, with current monthly rental payments of $16,261. All of our manufacturing, research and development activities are located
in this facility. We also lease a sales office in Clearwater, Florida, pursuant to a Lease Agreement providing for a lease term through May 31, 2009, and monthly rental payments of $2,950 with an escalation of rental payments based on increases
in the landlords operating expenses, utility costs and real estate taxes. 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, 2008 for the use of that office. We are not aware of any environmental issues with respect to our manufacturing facility or offices.

We have approximately $5.0 million dollars at cost of specialized manufacturing equipment located in our Largo, Florida manufacturing facility with a net book value of
approximately $180,000 as of June 30, 2008.



|ITEM 4A. | UNRESOLVED STAFF COMMENTS
|-------- | -------------------------

Not Applicable



|ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS
|------- | --------------------------------------------



|A. | Operating Results
|-- | -----------------

Fiscal 2008 Compared to Fiscal 2007

During the twelve months ended June 30, 2008 (the Current Year) we earned income before tax of $2,636,652 compared to income before
tax of $2,179,742 for the twelve months ended June 30, 2007 (the Prior Year). The increase in income before tax during the Current Year of $456,910 as compared to the Prior Year, was primarily due to (i) an increase in gross
margin of $78,891, (ii) an increase in royalty income under the license agreement with Bausch & Lomb of $438,695 to $2,629,123 in the Current Year as compared to $2,190,428 in the Prior Year, (iii) offset by an increase in
expenses of $68,858 as described below, and (iv) an increase in other items including interest income and other income of $8,182. After recording income tax expense of $1,006,060, we had net income of $1,630,592 or $0.36 per diluted share for
the Current Year. In comparison, in the Prior Year we had net income of $1,309,961 or $0.29 per diluted share after recording income tax expense of $869,781.

Sales during the Current Year were $6,665,566, an increase of $294,636 (4.6%), as compared to sales of $6,370,930 during the Prior Year. The disposable lens category increased by 12.2% due to continued sales growth of our best selling lens,
the C-Vue disposable multifocal. Our conventional soft lens category decreased 9.4% due to a sales dollar decrease in our C-Vue toric multifocal product line along with decreases in some of our older product lines that are nearing the end of their
life cycle. Our gas permeable lens category decreased, by 17.5%, due to a continued overall decline in gas permeable fits in the contact lens industry. The replacement lens category increased by 11.0%. We had some growth in our C-Vue custom toric
lens and low vision product lines, which was offset by the expected decline in product lines that are nearing the end of their life cycle. Gross margin decreased to 44.4% in the Current Year compared to 45.2% in the Prior Year due primarily to sales
increases in lower margin products and from a one-time waste disposal expense and over-time production labor costs associated with the Current Year revenue mix.

The increase in expenses during the Current Year, as compared to the Prior Year, was primarily due to increases in administration expenses. As a percentage of sales, total Current Year expenses decreased from 45.0% to 44.0%. The increase in
administration expenses of $65,336 was due primarily to higher payroll and payroll related benefits, higher insurance premiums and rental payments, and other expenses associated with the general increase in the Companys business during the
Current Year.

During the Current Year we recorded income tax expense of $1,006,060 compared to income tax expense in the Prior Year of $869,781. We record
income tax at the statutory rates, but currently only pay alternative minimum tax of approximately 2% due to the utilization of tax loss carry-forwards. The increase in income tax expense is the result of higher income before tax in the Current Year
compared to the Prior Year and 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 Prior Year.



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Fiscal 2007 Compared to Fiscal 2006

During the 2007 Fiscal Year (the 2007 Year) we earned income before tax of $2,179,742 compared to income before tax of $2,018,040 for the 2006 Fiscal Year (the 2006 Year). The increase in
income before tax during the 2007 Year of $161,702 as compared to the 2006 Year, was primarily due to (i) an increase in expenses of $214,459 as described below, offset by (ii) an increase in gross margin of $175,885, (iii) an
increase in royalty income under our license agreement with Bausch & Lomb of $257,486 to $2,190,428 in the 2007 Year as compared to $1,932,942 in the 2006 Year, and (iv) a decrease in other items including interest income and other
income of $57,210. After recording income tax expense of $869,781, we had net income of $1,309,961 or $0.29 per diluted share for the 2007 Year. In comparison, in the 2006 Year we had net income of $1,596,830 or $0.35 per diluted share after
recording income tax expense of $421,210.

Sales during the 2007 Year were $6,370,930, an increase of $260,890 (4.3%), as compared to sales of $6,110,040
during the 2006 Year. The disposable lens category increased by 11.7% due to continued sales growth of our best selling lens, the C-Vue disposable multifocal. Our conventional soft lens category decreased 0.1% due to a decrease in some of our older
product lines that are nearing the end of their life cycles offset by an increase in sales of our C-Vue toric multifocal product line despite a price cut in early November 2006 of over 25%. Our gas permeable lens category decreased, by 6.0%, due to
a continued overall decline in gas permeable fits in the contact lens industry. The replacement lens category decreased by 2.9% due to the expected decline in product lines that are nearing the end of their life cycles. Gross margin increased to
45.2% in the 2007 Year compared to 44.3% in the 2006 Year due to efficiencies gained in our manufacturing operations and to a shift in product mix towards higher margin products offset by lower prices on our our C-Vue toric multifocal product line.

The increase in expenses during the 2007 Year, as compared to the 2006 Year, was primarily due to increases in administration expenses and sales and
marketing expenses. Administration expenses increased $128,636 due to higher insurance premiums, depreciation and other expenses associated with the general increase in the Companys business during the 2007 Year. Sales and marketing expenses
increased $129,129 primarily due to salaries associated with additional sales positions and during the Second Quarter, expenses associated with an industry educational sponsorship.

During the 2007 Year we recorded income tax expense of $869,781 compared to income tax expense in the 2006 Year of $421,210. We record income tax at the statutory rates, but currently pay no income tax due to the
utilization of tax loss carry-forwards. The increase in income tax expense is the result of higher income before tax in the 2007 Year compared to the 2006 Year and 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 2006 Year.

Fiscal 2006
Compared to Fiscal 2005

During the 2006 Year we earned income before tax of $2,018,040 compared to income before tax of $1,710,687 for the 2005 Fiscal
Year (the 2005 Year). The increase in income before tax during the 2006 Year of $307,353, as compared to the 2005 Year, was primarily due to (i) an increase in royalty income, derived from the license agreement with
Bausch & Lomb of $300,891 to $1,932,942 during the 2006 Year as compared to $1,632,051 of royalty income earned during the 2005 Year, (ii) an increase in gross margin of $691,884 on higher sales during the 2006 Year, offset by
(iii) an increase in expenses of $730,105 as described below, and (iv) a decrease in interest and other expenses together with an increase in interest income, for a net increase in income of $44,683. After recording income tax expense of
$421,210, we had net income of $1,596,830 or $0.35 per diluted share for the 2006 Year. In comparison, in the 2005 Year we had net income of $2,237,787 or $0.50 per diluted share after recording a net deferred income tax benefit of $527,100.

Sales during the 2006 Year were $6,110,040, an increase of $1,138,463 (22.9%), as compared to sales of $4,971,577 during the 2005 Year. The disposable
lens category increased by 25.1% due to continued sales growth of our best selling lens, the C-Vue disposable multifocal. Our conventional soft lens category increased by 23.1% due to sales of our C-Vue Toric multifocal which was launched in January
2005. Our gas permeable category as expected decreased, by 5.0%, due to a continued overall decline in gas permeable fits in the contact lens industry. The replacement lens category increased by 37.9% due to the acquisition of the SoftCon and
Aquaflex brands from CIBA Vision at the end of February 2005, which accounted for approximately 11% of our sales during the 2006 Year. Gross margin increased from 40.5% in the 2005 Year to 44.3% in the 2006 Year due to a shift in product mix towards
higher margin products and price increases.

The increase in expenses during the 2006 Year, as compared to the 2005 Year, was primarily due to increases in
sales and marketing expenses of $374,026 and administration expenses of $264,895. Sales and marketing expenses



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increased primarily due to increased sales commissions on higher sales, salaries associated with additional sales positions, and costs associated with an
escalation in our marketing campaigns to support existing and new product launches. Administration expenses increased primarily due to increased consulting, legal, and professional fees associated with general regulatory compliance issues and
strategic analysis, increased insurance expense, and additional wages for personnel associated with the general increase in the Companys activities during the year.

During the 2006 Year we recorded income tax expense of $421,210 compared to an income tax benefit in the 2005 Year 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.



|B. | Liquidity and Capital Resources
|-- | -------------------------------

By the close of our 2005 fiscal
year, we retired obligations relating to our prior major financial restructuring and the settlement of litigation related to our technology. Since that time, we have relied primarily on royalty payments from our Royalty Agreement with
Bausch & Lomb for our liquidity. In addition,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. In April 2006, the
line of credit was amended and increased to $1,500,000, with the same interest rate terms and maturing in April 2007. In May 2007, the line of credit was renewed through April 2008. The line was collateralized by a security interest in all of the
assets of our subsidiary Unilens Corp. USA. This line of credit expired in May 2008.

In August 2008, the Company obtained a new line of credit of
$1,500,000 with interest rate terms of LIBOR plus 1.5 percent. This line of credit is collateralized by all assets of Unilens Corp. USA, excluding, the Royalty Agreement with Bausch & Lomb. Under this credit agreement, the Company is
required to meet specified financial covenants. As of September 30, 2008, the Company does not have any amounts outstanding under this line of credit and we were in full compliance of the financial covenants.

Fiscal 2008 Compared with Fiscal 2007

As of June 30, 2008, the
Company had working capital of $4,627,289 representing a decrease of $322,443 from our working capital at June 30, 2007. The decrease in working capital was principally due to a decrease in cash from the payment of cash dividends offset by a
increase in accounts payable. During the Current Year, we generated $2,694,414 in cash from operations representing a increase of $630,649 from $2,063,765 generated during the prior year period ended June 30, 2007. We used cash of $81,754
during the Current Year for the purchase of capital additions, a decrease of $102,866 from the Prior Year. The Company also received cash of $30,771 from capital stock issued from the exercise of stock options during the Current Year. We estimate
that we will have sufficient resources to fund our working capital requirements during the year ended June 30, 2009.

Fiscal 2007 Compared with
Fiscal 2006

As of June 30, 2007, the Company had working capital of $4,949,732 representing an increase of $201,955 from our working capital at
June 30, 2006. The increase in working capital was principally due to a decrease in cash from the payment of cash dividends totaling $2,134,552, and a decrease in inventory offset by a decrease in accounts payable. During the 2007 Year, we
generated $2,063,765 in cash from operations representing a increase of $39,859 from $2,023,906 generated during the 2006 Year. We used cash of $184,620 during the 2007 Year for the purchase of capital additions, a decrease of $152,728 from the 2006
Year. The Company also received cash of $45,121 from capital stock issued from the exercise of stock options and used cash of $23,939 to repurchase 5,600 shares of common stock during the 2007 Year.

Fiscal 2006 Compared with Fiscal 2005

As of June 30, 2006 we
had positive working capital of $4.7 million, which represents an increase of $2.2 million compared to the 2005 Year. The increase in working capital was principally due to an increase in cash (primarily from royalty income) and a decrease in
accrued liabilities. At the end of the 2006 Year we had stockholders equity of $8.0 million representing an increase of $1.7 million. The increase in stockholders equity was primarily from operating profits and royalty income during the
2006 Year. During the 2006 Year, we generated $2,023,906 in cash



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from operations representing an increase of $761,531 from $1,262,375 million generated during the 2005 Year. We used cash of $337,348 during the 2006 Year
for the purchase of capital additions, an increase of $214,878 million from the 2005 Year. The Company also received cash of $140,678 from capital stock issued from the exercise of stock options during the 2006 Year.



|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, which may take a significant amount of time. There can
be no assurance that any approval will be obtained or that we can successfully develop new products.

Research and development spending for the fiscal
years ending June 30, 2008, 2007, and 2006 was $124,451, $119,558 and $162,864, respectively.



|D. | Trend Information
|-- | -----------------

The conventional soft multifocal contact lens
business has been impacted during the past decade by the introduction of molding manufacturing technology, allowing for the mass production of most lens types at a fraction of the cost of lathe production. This has created significant price
competition in the marketplace. The reduced cost of the molded lens allows for liberal numbers of trial lenses to be provided to eye care professionals for a more productive fitting session and immediate dispensing of lenses. Furthermore, lower
manufacturing costs has 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 disposal multifocal
molded soft contact lenses (C-Vue) utilizing our patented design. The C-Vue brand was launched for sale to eye care professionals in the United States during September of 2002. In February 2006, we announced the launch of the first aspheric, single
vision daily wear, two week disposable soft contact lens ever available under the C-Vue brand. The C-Vue Aspheric single vision lens is manufactured by a third party utilizing, Wavefront inspired technology. In May 2008, we launched the all-new
C-Vue 1 Day ASV, which is the first aspheric daily disposable contact lens sold under the C-Vue brand. The cast molded C-Vue 1 Day ASV lens is manufactured for us by a third party utilizing Wavefront inspired technology, and is marketed to eye care
professionals in blister-packs of 30 and 90 lenses. During the Current Year the Companys C-Vue disposable products accounted for approximately 55% of sales. The Company expects that the sales of the C-Vue brand multifocal, the C-Vue Aspheric
single vision and the C-Vue 1 Day ASV lenses will make up an increasing percentage of its future sales.

We are not aware of any other events or
uncertainties in our industry that are likely to have a material effect on our results of operations or financial condition during the 2009 fiscal year, (other than the current recession and general economic uncertainties, the effect of which cannot
yet be determined).



|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, 2008. Amounts set forth below are expressed in U.S. dollars.



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|                         |  |                        |           |                |   |         |  |         |         |                 |   |         |  |   |  
|------------------------ |  | ---------------------- | --------- | -------------- | - | ------- |  | ------- | ------- | --------------- | - | ------- |  | - | -
|                         |  | Payments due by period
|Contractual Obligations: |  | Total                  |           | Less than 1 yr |   | 1-3 yrs |  | 3-5 yrs |         | More than 5 yrs
|Long-Term Debt           |  | $                      | 0         |                | $ | 0       |  | $       | 0       |                 | $ | 0       |  | $ | 0
|Capital Lease            |  |                        | 0         |                |   | 0       |  |         | 0       |                 |   | 0       |  |   | 0
|Operating Lease          |  |                        | 1,042,178 |                |   | 227,582 |  |         | 599,842 |                 |   | 214,754 |  |   | 0
|Purchase Obligations     |  |                        | 244,314   |                |   | 244,314 |  |         | 0       |                 |   | 0       |  |   | 0
|Other                    |  |                        | 0         |                |   | 0       |  |         | 0       |                 |   | 0       |  |   | 0
|                         |  |                        |           |                |   |         |  |         |         |                 |   |         |  |   |  
|Total                    |  | $                      | 1,286,492 |                | $ | 471,896 |  | $       | 599,842 |                 | $ | 214,754 |  | $ | 0



|G. | Safe Harbor
|-- | -----------

The safe harbor provided in Section 27A of the
Securities Act and Section 21E of the Exchange Act (statutory safe harbors) shall apply to forward-looking information provided pursuant to Item 5F.



|ITEM 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
|------- | ------------------------------------------



|A. | Directors and Senior Management
|-- | -------------------------------

Principal Occupation of Our
Current Directors and Management

ALFRED W. VITALE  Director and Chairman of the Board

Mr. Vitale has been a Director of Unilens since December 22, 1994. He served as the President and CEO of Unilens from December 22, 1994 until
August 1, 2007. Mr. Vitale also served as the President and Chief Executive Officer of our subsidiary, Unilens Corp. USA from January 1993 through July 31, 2007. Prior to January 1993, Mr. Vitale served as the President of
Whistler Corporation, a management consulting firm. Mr. Vitale is 80 years old.

WILLIAM D. BAXTER  Director

Mr. Baxter has served as one of our directors since December 22, 1994. From April 1, 2001 through November 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 54 years old.

NICHOLAS 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 66 years old.

ELIZABETH J. HARRISON  Director

Ms. Elizabeth J. Harrison, Q.C. is a Senior Partner of the Vancouver law firm Farris, Vaughan, Wills & Murphy. She was admitted to the British Columbia
Bar in 1973 and was appointed Queens Counsel (Q.C.) in 1986. Ms. Harrison is Chair of the British Columbia Ferry Authority, the British Columbia Ferry Services Corporation. Ms. Harrison was added to the Board at the
request of Uniinvest Holding AG (formerly EBC Zurich AG), and has served as one of our directors since February 27, 2006. Ms. Harrison is 59 years old.

MICHAEL J. PECORA  President, Chief Executive Officer

On August 1, 2007 Mr. Pecora was appointed our President and Chief
Executive Officer. He has served as Vice President of Unilens Corp, USA since July 2005. Mr. Pecora had 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 was an Accounting Manager for Unisys Corporation. Mr. Pecora is 46 years old.



15



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LEONARD F. BARKER  Vice President, Chief Financial Officer and Secretary

On August 1, 2007, Mr. Barker was appointed our Vice President and Chief Financial Officer, Treasurer and Secretary. Prior to joining Unilens Corp, USA as
Manager of Accounting in August 2005, Mr. Barker was Manager of Financial Reporting for Eckerd Corporation and held various accounting positions over a 33-year career with the former Eckerd drug store chain. Mr. Barker holds a
Bachelors of Science degree from University at AlbanyState University of New York. Mr. Barker is 60 years old.

KELLY MCKNIGHT-GOELZ
 Vice President of Sales and Marketing

In July, 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 June 2001 to October 2004). 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 40 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, 2008, June 30, 2007 and June 30, 2006 was $371,728, $426,492 and $390,361, respectively. During the fiscal years ending June 30, 2008, 2007 and
2006, no options were issued to our officers and directors. Other than as described in the following paragraph, there were no amounts accrued during such fiscal years ended June 30, 2008, 2007 and 2006 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 past President, Alfred W. Vitale, pursuant to which, under certain circumstances, we were obligated to pay Mr. Vitale or his estate 12 months compensation, upon
his retirement on December 31, 2006. On July 24, 2007, Mr. Vitale announced his planned retirement effective as of July 31, 2007. Mr. Vitale remains a Director and Chairman of the Board and was a consultant and special
advisor to the Company and the Board of Directors through December 31, 2007. Under Mr. Vitales consulting agreement with the Company, he retained his current salary for his services as a consultant and special advisor as well as
certain benefits payable upon a change-of-control. Mr. Vitales annual compensation and consulting fees for fiscal year 2008 were $12,500 and $62,500, respectively.

Pursuant to a letter agreement, dated March 1, 1999, and as subsequently amended, we are obligated to pay our President, 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 2008 was $131,000.

Pursuant to a letter agreement, dated September 6, 2006, we are obligated to pay our Vice President of Sales and Marketing, Kelly McKnight-Goelz, 12 months, compensation if her employment is terminated or
upon a change-of-control of Unilens. Ms. McKnight-Goelzs annual compensation for fiscal year 2008 was $98,750.



16



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##### Table of Contents

The compensation paid to our directors and officers during our three most recently completed financial years is as set
out below:

SUMMARY COMPENSATION TABLE



|                                                                                                   |      |           |         |                     |                                        |                             |                                             |       |                          |     |         |     |     |     |     |     |         |    
|-------------------------------------------------------------------------------------------------- | ---- | --------- | ------- | ------------------- | -------------------------------------- | --------------------------- | ------------------------------------------- | ----- | ------------------------ | --- | ------- | --- | --- | --- | --- | --- | ------- | ---
|Name and Principal Position                                                                        |      | Year      |         | Annual Compensation |                                        |                             | Long Term Compensation                      |       | All OtherCompensation($) |    
|                                                                                                   |      | Salary($) |         | Bonus($)            |                                        | Other AnnualCompensation($) |                                             |       | Awards                   |     | Payouts |    
|                                                                                                   |      |           |         |                     | SecuritiesUnderOptions/SARs Granted(#) |                             | RestrictedShares orRestrictedShare Units($) |       | LTIPPayouts($)           |    
|Alfred W. Vitale,President (1)                                                                     |      | 2008      |         | 12,500              |                                        | Nil                         |                                             | Nil   |                          |     | Nil     |     | Nil |     | Nil |     | 212,500 | (6)
|                                                                                                   | 2007 |           | 147,625 |                     | 46,500                                 |                             | Nil                                         |       |                          | Nil |         | Nil |     | Nil |     | Nil |        
|                                                                                                   | 2006 |           | 130,095 |                     | 50,500                                 |                             | Nil                                         |       |                          | Nil |         | Nil |     | Nil |     | Nil |        
|                                                                                                   |      |           |         |                     |                                        |                             |                                             |      
|Michael J. PecoraPresident and CEO (as at August 1, 2007)                                          |      | 2008      |         | 118,125             |                                        | 29,521                      |                                             | 4,258 | (4)                      |     | Nil     |     | Nil |     | Nil |     | Nil     |    
|                                                                                                   |      |           |         |                     |                                        |                             |                                             |      
|Michael J. Pecora,Vice President & Chief Financial Officer (2)                                     |      | 2008      |         | 12,875              |                                        | Nil                         |                                             | 515   | (4)                      |     | Nil     |     | Nil |     | Nil |     | Nil     |    
|                                                                                                   | 2007 |           | 99,042  |                     | 26,125                                 |                             | 5,007                                       | (4)   |                          | Nil |         | Nil |     | Nil |     | Nil |        
|                                                                                                   | 2006 |           | 83,583  |                     | 29,200                                 |                             | 4,511                                       | (4)   |                          | Nil |         | Nil |     | Nil |     | Nil |        
|                                                                                                   |      |           |         |                     |                                        |                             |                                             |      
|Leonard F. Barker,Chief Financial Officer Treasurer and Corporate Secretary (as at August 1, 2007) |      | 2008      |         | 77,500              |                                        | 4,032                       |                                             | 3,261 | (4)                      |     | Nil     |     | Nil |     | Nil |     | Nil     |    
|                                                                                                   |      |           |         |                     |                                        |                             |                                             |      
|Kelly McKnight-Goelz,Vice President Sales & Marketing (3)                                          |      | 2008      |         | 98,750              |                                        | 18,425                      |                                             | 5,673 | (5)                      |     | Nil     |     | Nil |     | Nil |     | Nil     |    
|                                                                                                   | 2007 |           | 91,250  |                     | 15,950                                 |                             | 6,214                                       | (5)   |                          | Nil |         | Nil |     | Nil |     | Nil |        
|                                                                                                   | 2006 |           | 79,583  |                     | 17,400                                 |                             | 2,638                                       | (5)   |                          | Nil |         | Nil |     | Nil |     | Nil |        
|                                                                                                   |      |           |         |                     |                                        |                             |                                             |      
|William S. Harper,Secretary (until July 31, 2007)                                                  |      | 2008      |         | Nil                 |                                        | Nil                         |                                             | Nil   |                          |     | Nil     |     | Nil |     | Nil |     | Nil     |    
|                                                                                                   | 2007 |           | Nil     |                     | Nil                                    |                             | Nil                                         |       |                          | Nil |         | Nil |     | Nil |     | Nil |        
|                                                                                                   | 2006 |           | Nil     |                     | Nil                                    |                             | Nil                                         |       |                          | Nil |         | Nil |     | Nil |     | Nil |        
|                                                                                                   |      |           |         |                     |                                        |                             |                                             |      
|William D. Baxter,Director                                                                         |      | 2008      |         | Nil                 |                                        | Nil                         |                                             | Nil   |                          |     | Nil     |     | Nil |     | Nil |     | Nil     |    
|                                                                                                   | 2007 |           | 2,821   |                     | Nil                                    |                             | Nil                                         |       |                          | Nil |         | Nil |     | Nil |     | Nil |        
|                                                                                                   | 2006 |           | Nil     |                     | Nil                                    |                             | Nil                                         |       |                          | Nil |         | Nil |     | Nil |     | Nil |        
|                                                                                                   |      |           |         |                     |                                        |                             |                                             |      
|Nicholas Bennett,Director                                                                          |      | 2008      |         | Nil                 |                                        | Nil                         |                                             | Nil   |                          |     | Nil     |     | Nil |     | Nil |     | Nil     |    
|                                                                                                   | 2007 |           | Nil     |                     | Nil                                    |                             | Nil                                         |       |                          | Nil |         | Nil |     | Nil |     | Nil |        
|                                                                                                   | 2006 |           | Nil     |                     | Nil                                    |                             | Nil                                         |       |                          | Nil |         | Nil |     | Nil |     | Nil |        
|                                                                                                   |      |           |         |                     |                                        |                             |                                             |      
|Elizabeth J. Harrison,Director                                                                     |      | 2008      |         | Nil                 |                                        | Nil                         |                                             | Nil   |                          |     | Nil     |     | Nil |     | Nil |     | Nil     |    
|                                                                                                   | 2007 |           | Nil     |                     | Nil                                    |                             | Nil                                         |       |                          | Nil |         | Nil |     | Nil |     | Nil |        
|                                                                                                   | 2006 |           | Nil     |                     | Nil                                    |                             | Nil                                         |       |                          | Nil |         | Nil |     | Nil |     | Nil |        



|(1) | Mr. Vitales salary, was paid (prior to his retirement at the end of July 2007) with respect to his position as the President of our subsidiary, Unilens Corp. USA.
Mr. Vitale received no compensation during the 2008, 2007, and 2006 fiscal years in respect of his position as our President.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Positions were with Unilens Corp. USA. Mr. Pecora was 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.
|--- | -------------------------------------------------------------------------------------

|(5) | These amounts represent $4,763, $4,394 and $818 of contributions under the Companys 401(k) profit-sharing plan and $910, $1,820 and $1820 for a medical allowance.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | This amount represents $62,500 from consulting agreement payments and $150,000 from a retirement payment.
|--- | ---------------------------------------------------------------------------------------------------------



|C. | Board Practices
|-- | ---------------

All of our directors except Mr. Pecora, who
was newly elected, were re-elected at our December 1, 2008 annual general meeting and have a term of office expiring at the next annual general meeting of our directors. All of our officers have a term of office lasting until the next annual
general meeting of shareholders or their earlier removal or replacement by the board of directors. The number of directors is currently fixed at five.



17



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During the fiscal year ended June 30, 2008, 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, 2008, 2007, and 2006 was 47, 48 and 49, respectively.



|E. | Share Ownership
|-- | ---------------

The following table shows the amount of our common
shares beneficially owned (unless otherwise indicated) as of December 12, 2008 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                                                                                 |  | 93,500                           |  | 2.1     | %
|William D. Baxter                                                                                |  | 68,300                           |  | 1.5     | %
|Nicholas Bennett                                                                                 |  | 24,900                           |  | *       |  
|Elizabeth J. Harrison                                                                            |  | 0                                |  | N/A     |  
|Michael J. Pecora                                                                                |  | 55,550                           |  | 1.2     | %
|Kelly McKnight-Goelz                                                                             |  | 20,000                           |  | *       |  
|Leonard F. Barker                                                                                |  | 2,000                            |  | *       |  
|William S. Harper (4)                                                                            |  | 0                                |  | N/A     |  
|                                                                                                 |  |                                 
|All directors and executive officers as a group (7 persons)                                      |  | 264,750                          |  | 5.8     | %
|                                                                                                 |  |                                 
|Shareholders                                                                                     |  |                                  |  |         |  
|UNIINVEST HOLDING AG IN LIQUIDATIONRechtsanwalteSeefeldstrasse 116 8034Switzerland               |  | 2,188,861                        |  | 48.1    | %
|Cede & Co. (2)P.O. Box 20 Bowling Green StationNew York, New York 10274 USA                      |  | 1,306,957                        |  | 28.7    | %
|CDS & Co. (2)NCI Account 25, The EsplanadeP.O. Box 1038 Station AToronto, Ontario M5W 1G5 Canada |  | 469,217                          |  | 10.3    | %
|Robeco Investment Management Inc. (3)909 third AvenueNew York, NY 10022 USA                      |  | 330,857                          |  | 7.3     | %



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



18



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##### Table of Contents

|(1) | Includes the number of shares subject to currently exercisable options or options exercisable within 60 days of December 12, 2008, as follows: Mr. Vitale,
Mr. Baxter, Mr. Bennett, and Ms. Harrison 0 shares; Mr. Pecora and Mr. Barker, 0 shares; Ms. McKnight, 17,500 shares; and all directors and officers as a group, 17,500 shares.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The above information was obtained from our registered shareholders list dated as of December 12, 2008. We have no information as to the beneficial ownership of the
shares held by these parties in street name.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | The above information is as set forth in the Form SC 13G filed February 7, 2008 with the Securities and Exchange Commission.
|--- | ----------------------------------------------------------------------------------------------------------------------------

|(4) | On August 1, 2007, Mr. Harper resigned as Unilens Corporate Secretary.
|--- | -----------------------------------------------------------------------

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, were determined by the directors in accordance with the policies of the TSX
Venture Exchange.

At the annual general meeting of shareholders held on February 27, 2006, the shareholders voted against the proposal to approve the
Unilens Incentive Stock Option Plan-2006, and therefore failed to extend the stock option plan, which is terminated.



|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 our 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 and those parties who have furnished statements of beneficial ownership on
schedules 13D or 13G. See Item 6E  Share Ownership for more information regarding our major shareholders. As of December 12, 2008, we had authorized 100,000,000 common shares of which 4,550,715 were issued and outstanding. As
of December 12, 2008, to the best of our knowledge Uniinvest beneficially owned 2,188,861 of our common shares, which represents about 48.1% of our shares, and accordingly, control of our Company. We are aware of no significant change in
Uniinvests ownership during the past three years. In addition, as of December 12, 2008, 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. Any other shareholders that own beneficially 5% or more of our outstanding common shares are listed in Item 6E  Share Ownership. We are not a
party to any arrangement that could result in a change of control of us, and we are not aware of any such arrangement between any other parties.

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).

As of December 12, 2008, there were 419 shareholders of record holding a total of 4,550,715 of our common shares. To the best of our knowledge there were 22
shareholders of record with addresses in Canada, 388 shareholders of record with addresses in the U.S. and 9 shareholders of record with addresses in other countries holding approximately 812,771 (17.9%), 1,770,713 (38.9%) and 1,967,231
(43.2%) 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 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 three-year period ended June 30, 2008 except as follows:

During the
year ended June 30, 2007 we paid $2,821 in consulting fees to one of directors, and during the year ended June 30, 2005 we paid or accrued $5,269 in accounting fees to one of our officers, both of which are included in administrative
expense in the respective years.



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|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 paid a
special cash dividend of $0.25 to holders of our common shares in August 2006. In November 2006, the we paid our initial quarterly cash dividend of $0.075 to our common shareholders. For the fiscal year ended June 30, 2007, in addition to the
special cash dividend, the we paid quarterly cash dividends totalling $0.225 per common share. These were the first dividends paid by us. In August 2007, the we paid a second special cash dividend of $0.30 per common share and its fourth regular
quarterly dividend at an increased rate of $.09 per common share. For the fiscal year ended June 30, 2008, in addition to the special cash dividend, the we paid quarterly cash dividends totalling $0.36 per common share. So far for the fiscal
year ending June 30, 2009, in addition to the second special cash dividend, we have paid quarterly cash dividends totalling $0.18 per common share. The amount and frequency of future dividends will depend on earnings, cash flow, and other
aspects of our business as determined and declared by the Board of Directors.



|B. | Significant Changes
|-- | -------------------

As of December 12, 2008, there have been
no significant changes to our business since our financial statements dated June 30, 2008.



|ITEM 9. | THE OFFER AND LISTING
|------- | ---------------------



|A. | Offer and Listing Details
|-- | -------------------------

Trading Markets



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CANADIAN MARKETS

TSX Venture Exchange:

UVI  Trading in Canadian Dollars



|                     |  |             |  |            |  |                  |  |             |  |           
|-------------------- |  | ----------- |  | ---------- |  | ---------------- |  | ----------- |  | ----------
|                     |  | High(CDN $) |  | Low(CDN $) |  |                  |  | High(CDN $) |  | Low(CDN $)
|Annual  Fiscal Year |  |             |  |            |  | By Quarter       |  |             |  |           
|2008                 |  | 3.97        |  | 2.42       |  | Fiscal Year 2007 |  |             |  |           
|2007                 |  | 5.05        |  | 2.58       |  | First Quarter    |  | 4.12        |  | 2.58      
|2006                 |  | 5.50        |  | 3.53       |  | Second Quarter   |  | 4.51        |  | 3.52      
|2005                 |  | 4.30        |  | 1.66       |  | Third Quarter    |  | 5.05        |  | 3.96      
|2004                 |  | 2.20        |  | 0.02       |  | Fourth Quarter   |  | 4.56        |  | 3.06      
|                     |  |             |  |            | 
|By Quarter           |  |             |  |            |  | Monthly          |  |             |  |           
|Fiscal Year 2008     |  |             |  |            |  | July 2008        |  | 2.95        |  | 2.72      
|First Quarter        |  | 3.97        |  | 2.42       |  | August 2008      |  | 4.01        |  | 2.93      
|Second Quarter       |  | 3.17        |  | 2.78       |  | September 2008   |  | 3.65        |  | 3.10      
|Third Quarter        |  | 3.05        |  | 2.57       |  | October 2008     |  | 3.73        |  | 2.63      
|Fourth Quarter       |  | 3.15        |  | 2.68       |  | November 2008    |  | 3.73        |  | 3.16      
|                     |  |             |  |            |  | December 2008    |  | 3.73        |  | 3.30      

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       |  |             |  |           
|2008                 |  | 4.65        |  | 3.09       |  | Fiscal Year 2007 |  |             |  |           
|2007                 |  | 4.72        |  | 2.62       |  | First Quarter    |  | 4.08        |  | 2.62      
|2006                 |  | 4.99        |  | 3.05       |  | Second Quarter   |  | 4.25        |  | 3.80      
|2005                 |  | 3.45        |  | 1.30       |  | Third Quarter    |  | 4.72        |  | 3.80      
|2004                 |  | 1.75        |  | 0.01       |  | Fourth Quarter   |  | 4.09        |  | 3.30      
|                     |  |             |  |            | 
|By Quarter           |  |             |  |            |  | Monthly          |  |             |  |           
|Fiscal Year 2008     |  |             |  |            |  | July 2008        |  | 3.18        |  | 2.95      
|First Quarter        |  | 4.65        |  | 3.09       |  | August 2008      |  | 3.59        |  | 3.14      
|Second Quarter       |  | 4.24        |  | 3.41       |  | September 2008   |  | 3.65        |  | 3.01      
|Third Quarter        |  | 3.86        |  | 3.25       |  | October 2008     |  | 3.88        |  | 2.82      
|Fourth Quarter       |  | 3.40        |  | 3.14       |  | November 2008    |  | 3.88        |  | 2.98      
|                     |  |             |  |            |  | December 2008    |  | 3.00        |  | 2.85      



|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. 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.



|D. | Selling Shareholders
|-- | --------------------

Not applicable.



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|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.

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



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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.)

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 paid a special cash dividend of $0.25 to
holders of our common shares in August 2006. In November 2006, the we paid our initial quarterly cash dividend of $0.075 to holders of our common shares. For the fiscal year ended June 30, 2007, in addition to the special cash dividend, we paid
quarterly cash dividends totalling $0.225 per common share. These were the first dividends paid by us. In August 2007, we paid the second special cash dividend at an increased rate, of $0.30 per common share and its fourth regular quarterly dividend
at an increased rate of $.09 per common share. For the fiscal year ended June 30, 2008, in addition to the special cash dividend, we paid quarterly cash dividends totalling $0.36 per common share. So far for the fiscal year ending June 30,
2009, in addition to a third special cash dividend, at the rate of $0.30 per common share, we have paid quarterly cash dividends totalling $0.18 per common share. The amount and frequency of future dividends will depend on earnings, cash flow, and
other aspects of our business as determined and declared by the Board of Directors.



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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) | During August 2008, the Company obtained a new line of credit of $1,500,000 with interest rate terms of LIBOR plus 1.5 percent. This line of credit is collateralized by all assets
of Unilens Corp. USA, excluding, the Royalty Agreement with Bausch & Lomb. Under this credit agreement, the Company is required to meet specified financial covenants. As of September 30, 2008, the Company did not have any amounts
outstanding under this line of credit and we were in full compliance of the financial covenants.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | On April 28, 2005, we obtained a $1,000,000 line of credit bearing interest at LIBOR plus 2.5 percent and maturing in April 2006. In April 2006, the line of credit was amended
and increased to $1,500,000, with the same interest rate terms of LIBOR plus 2.5 percent and maturing in April 2007. In May 2007, the line of credit was renewed. The line was collateralized by all of the assets of our subsidiary, Unilens Corp. USA.
This line of credit expired in May 2008 and was replaced by the new line of credit described in (a) above.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | On February 23, 2005, we entered into an asset purchase agreement to acquire our Aquaflex and SoftCon product lines. Under the terms of the agreement, we agreed to pay $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 paid as the inventory was sold. At June 30, 2008,
the balance due was $36,067. The final payment was made in November 2008. 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 through February
2010.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) | 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.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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.



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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 2006 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.



|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 there under 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



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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.

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



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(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 are the
material U.S. federal income tax consequences generally applicable to a U.S. Holder (as hereinafter defined) of our common shares under current law. 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 as described in Section 7701(a)(30) of the Code 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 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. This summary does not address the tax consequences to, and U.S. Holder does not include, persons subject to specific
provisions of U.S. 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 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 U.S. federal income tax liability or, alternatively, may be deducted in computing the U.S. Holders U.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 (on a share by share basis) and thereafter as gain from the sale or exchange of property. Preferential



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tax rates for long-term capital gains and qualified dividend income (discussed below) are currently 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 passive foreign investment company, as defined below) if such U.S. Holder owns shares representing at least 10% of our voting power and value. 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% 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.

Current U.S. Tax Law Applicable to Capital Gains and Qualified Dividends for Individuals

U.S. tax legislation
enacted in 2003 (the 2003 Tax Act) generally reduced the rates of tax payable by individuals (as well as certain trusts and estates) on ordinary and other items of income. Under the 2003 Tax Act, the marginal tax rates applicable to
ordinary income generally were lowered effective January 1, 2003. In addition, for capital assets held for over one year and sold or exchanged in taxable years beginning before January 1, 2010, the maximum applicable U.S. federal rate of
tax generally is 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 before January 1, 2011, generally
are 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 ADRs, 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. Regarding the general effective dates described above, it is possible
that the U.S. tax law could be changed prior to 2011 in a way that could adversely impact the favorable rates currently applicable to capital gains and qualified dividend income. 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



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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, and general category income. 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:

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, 2008.

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 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



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any prior year but for interest on tax deferral rules discussed above (and set forth in Section 1291 of the Code) 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 corporations, or estates or trusts
other than foreign estates or trusts (as defined by Section 7701(a)(31) of the Code), 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. Because of the complexity of Subpart F of the Code, 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.



|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 1780  400 Burrard Street, Vancouver, British Columbia V6C 3A6 or on request of Unilens at 604-689-1280, Attention: Leonard F. Barker. 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.



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|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 accordingly, we are not exposed to the financial market risks related to such instruments.



|(b) | Qualitative Information About Market 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.



|(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
|-------- | ----------------------------------------------------------------------------

Not applicable.



|ITEM 15T. | 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
our 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, 2008.

Disclosure controls and procedures are
controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the
Securities and Exchange Commissions rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange
Act is accumulated and communicated to management, including our President and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control system is designed to provide reasonable assurance regarding the reliability of financial reporting and
the preparation and fair presentation of our consolidated financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements.



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Management of the Company has assessed the effectiveness of the Companys internal control over financial reporting
as of June 30, 2008. In making this assessment, management used criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on its assessment, as of
June 30, 2008, management believes the Companys internal control over financial reporting is effective.

This annual report does not include an
attestation report of our registered public accounting firm regarding internal control over financial reporting. Managements report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permits us to provide only managements report in this annual report.

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
determined that Alfred W. Vitale, because of his accounting and financial management expertise, is a audit committee financial expert as that term is defined under the Securities Exchange Act of 1934 and, accordingly, that at least one
audit committee financial expert is serving on our audit committee. Mr. Vitale is not, however, independent, as that term is defined in the Rules of the Nasdaq Market.



|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. The text of such Code is available on the Companys Internet website at
www.unilens.com. 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) 689-1280, or by writing to us at Suite 1780-400 Burrard Street, Vancouver, British Columbia
V6C 3A6, Attn: Leonard F Barker.



|ITEM 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES
|--------- | --------------------------------------

The aggregate amounts
billed by Pender Newkirk & Company LLP and Davidson & Company LLP for each of the fiscal years ended June 30, 2008 (Fiscal 2008) and 2007 for audit fees, audit-related fees, tax fees and all other fees are set
forth below:



|                       |  |                         |        |                         |   |       
|---------------------- |  | ----------------------- | ------ | ----------------------- | - | ------
|                       |  | Year EndedJune 30, 2008 |        | Year EndedJune 30, 2007
|Audit Fees (1)         |  | $                       | 87,609 |                         | $ | 90,041
|Audit-Related Fees (2) |  |                         | 0      |                         |   | 0     
|Tax Fees (3)           |  |                         | 11,600 |                         |   | 8,190 
|Totals                 |  | $                       | 99,209 |                         | $ | 98,231

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 a 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



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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 2008 were approved by the Audit Committee. The Audit Committee reviews with
Pender Newkirk & Company LLP 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. We do not believe that our reliance on such exemption materially adversely affects the ability of the audit committee to act independently.



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

On August 9, 2006, the TSX Venture Exchange approved a normal course issuer bid whereby we could purchase for cancellation up to 224,190 of our common shares, representing 5% of the then current issued and outstanding common shares.
The bid commenced on August 21, 2006 and ended on August 20, 2007. All share purchases were effected solely through the facilities of the TSX Venture Exchange. The Company purchased 4,600 and 1,000 of its common shares at $4.73 Cdn on
August 30, 2006 and September 14, 2006, respectively.



|ITEM 16F. | CHANGES IN REGISTRANTS CERTIFYING ACCOUNTANT
|--------- | ---------------------------------------------

Not Applicable



|ITEM 16G. | CORPORATE GOVERNANCE
|--------- | --------------------

Not Applicable



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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, 2008 and 2007, and the consolidated statements of operations, stockholders equity and cash flows
for the years ended June 30, 2008, 2007 and 2006;
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | Consolidated balance sheets as at June 30, 2008 and 2007;
|--- | ---------------------------------------------------------



|(3) | Consolidated statements of operations for each of the years ended June 30, 2008, 2007 and 2006;
|--- | -----------------------------------------------------------------------------------------------



|(4) | Consolidated statements of stockholders equity 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;
|--- | -----------------------------------------------



|(8) | Report of independent registered public accounting firm on Schedule.
|--- | --------------------------------------------------------------------



|(9) | Schedule of valuation and qualifying accounts;
|--- | ----------------------------------------------



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Financial Statements of

UNILENS VISION INC.

At June 30, 2008 and 2007 and

Years ended June 30, 2008, 2007 and 2006

Report date 
September 23, 2008



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Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders

Unilens Vision Inc.

We have audited the accompanying consolidated balance sheets of Unilens Vision Inc. as of June 30, 2008 and 2007 and the related consolidated statements of
operations, stockholders equity, and cash flows for the years ended June 30, 2008, 2007 and 2006. These consolidated financial statements are the responsibility of the management of Unilens Vision Inc. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required
at this time, to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the financial position of Unilens Vision Inc. as of June 30, 2008 and 2007 and the results of its operations and its cash flows for the years ended June 30, 2008, 2007
and 2006 in conformity with accounting principles generally accepted in the United States of America.

Pender Newkirk & Company LLP

Certified Public Accountants

Tampa, Florida

September 23, 2008



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UNILENS VISION INC.

CONSOLIDATED BALANCE SHEETS

(Expressed in U.S. Dollars)

AS AT JUNE 30





|                                                                                                                                                          |  |      |             |   |      |   |             |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ----------- | - | ---- | - | ----------- | -
|                                                                                                                                                          |  | 2008 |             |   | 2007 |  
|ASSETS                                                                                                                                                    |  |      |             |   |      |   |             |  
|Current                                                                                                                                                   |  |      |             |   |      |   |             |  
|Cash and cash equivalents                                                                                                                                 |  | $    | 1,603,476   |   |      | $ | 1,961,712   |  
|Accounts receivable, net of allowance of $310,155 and $315,166 at June 30, 2008 and 2007, respectively                                                    |  |      | 897,842     |   |      |   | 923,817     |  
|Royalties and other receivables                                                                                                                           |  |      | 748,065     |   |      |   | 644,382     |  
|Inventories (Note 3)                                                                                                                                      |  |      | 936,355     |   |      |   | 790,389     |  
|Prepaid expenses                                                                                                                                          |  |      | 38,585      |   |      |   | 94,427      |  
|Deferred tax asset  current (Note 14)                                                                                                                    |  |      | 1,360,400   |   |      |   | 1,354,010   |  
|                                                                                                                                                          |  |      |             |   |      |   |             |  
|Total current assets                                                                                                                                      |  |      | 5,584,723   |   |      |   | 5,768,737   |  
|Property, plant, and equipment, net (Note 4)                                                                                                              |  |      | 381,522     |   |      |   | 491,069     |  
|Other assets                                                                                                                                              |  |      | 111,483     |   |      |   | 63,902      |  
|Deferred tax asset (Note 14)                                                                                                                              |  |      | 706,400     |   |      |   | 1,664,100   |  
|                                                                                                                                                          |  |      |             |   |      |   |             |  
|Total assets                                                                                                                                              |  | $    | 6,784,128   |   |      | $ | 7,987,808   |  
|                                                                                                                                                          |  |      |             |   |      |   |             |  
|                                                                                                                                                          |  |     
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                      |  |      |             |   |      |   |             |  
|Current                                                                                                                                                   |  |      |             |   |      |   |             |  
|Accounts payable                                                                                                                                          |  | $    | 497,501     |   |      | $ | 228,528     |  
|Accrued wages and employee benefits                                                                                                                       |  |      | 341,288     |   |      |   | 453,168     |  
|Deferred income                                                                                                                                           |  |      | 60,713      |   |      |   |            |  
|Other accrued liabilities                                                                                                                                 |  |      | 57,932      |   |      |   | 137,309     |  
|                                                                                                                                                          |  |      |             |   |      |   |             |  
|Total current liabilities                                                                                                                                 |  |      | 957,434     |   |      |   | 819,005     |  
|                                                                                                                                                          |  |      |             |   |      |   |             |  
|Total liabilities                                                                                                                                         |  |      | 957,434     |   |      |   | 819,005     |  
|                                                                                                                                                          |  |      |             |   |      |   |             |  
|Commitments (Note 8)                                                                                                                                      |  |      |             |   |      |   |             |  
|Stockholders equity                                                                                                                                      |  |      |             |   |      |   |             |  
|Capital stock (Note 9)                                                                                                                                    |  |      |             |   |      |   |             |  
|Preference A shares, par value $10 Cdn. per share; 100,000,000 shares authorized; no shares issued and outstanding                                      |  |      |            |   |      |   |            |  
|Preference B shares, par value $50 Cdn. per share; 100,000,000 shares authorized; no shares issued and outstanding                                      |  |      |            |   |      |   |            |  
|Common shares, no par value; 100,000,000 shares authorized; shares issued and outstanding 4,550,715 and 4,513,215 at June 30, 2008 and
2007, respectively |  |      | 27,627,581  |   |      |   | 27,596,810  |  
|Additional paid-in capital                                                                                                                                |  |      | 8,970       |   |      |   | 8,970       |  
|Deficit                                                                                                                                                   |  |      | (21,809,857 | ) |      |   | (20,436,977 | )
|                                                                                                                                                          |  |      |             |   |      |   |             |  
|Total stockholders equity                                                                                                                                |  |      | 5,826,694   |   |      |   | 7,168,803   |  
|                                                                                                                                                          |  |      |             |   |      |   |             |  
|Total liabilities and stockholders equity                                                                                                                |  | $    | 6,784,128   |   |      | $ | 7,987,808   |  
|                                                                                                                                                          |  |      |             |   |      |   |             |  

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



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UNILENS VISION INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Expressed in U.S. Dollars)





|                                 |  |      |           |   |      |   |           |      |  |   |           |  
|-------------------------------- |  | ---- | --------- | - | ---- | - | --------- | ---- |  | - | --------- | -
|YEAR ENDED JUNE 30               |  | 2008 |           |   | 2007 |   |           | 2006 | 
|Sales                            |  | $    | 6,665,566 |   |      | $ | 6,370,930 |      |  | $ | 6,110,040 |  
|Cost of sales                    |  |      | 3,705,581 |   |      |   | 3,489,836 |      |  |   | 3,404,831 |  
|                                 |  |      |           |   |      |   |           |      |  |   |           |  
|Gross profit                     |  |      | 2,959,985 |   |      |   | 2,881,094 |      |  |   | 2,705,209 |  
|                                 |  |      |           |   |      |   |           |      |  |   |           |  
|Expenses:                        |  |      |           |   |      |   |           |      |  |   |           |  
|Administration                   |  |      | 1,294,701 |   |      |   | 1,229,365 |      |  |   | 1,100,729 |  
|Research and development         |  |      | 124,451   |   |      |   | 119,558   |      |  |   | 162,864   |  
|Sales and marketing              |  |      | 1,516,015 |   |      |   | 1,517,386 |      |  |   | 1,388,257 |  
|                                 |  |      |           |   |      |   |           |      |  |   |           |  
|                                 |  |      | 2,935,167 |   |      |   | 2,866,309 |      |  |   | 2,651,850 |  
|                                 |  |      |           |   |      |   |           |      |  |   |           |  
|Income from operations           |  |      | 24,818    |   |      |   | 14,785    |      |  |   | 53,359    |  
|                                 |  |      |           |   |      |   |           |      |  |   |           |  
|Other items:                     |  |      |           |   |      |   |           |      |  |   |           |  
|Royalty income (Note 5)          |  |      | 2,629,123 |   |      |   | 2,190,428 |      |  |   | 1,932,942 |  
|Other (expense) income           |  |      | (45,236   | ) |      |   | (71,812   | )    |  |   | 9,509     |  
|Remeasurement income (loss)      |  |      | 1,805     |   |      |   | 304       |      |  |   | (5,905    | )
|Interest income                  |  |      | 26,142    |   |      |   | 46,037    |      |  |   | 28,135    |  
|                                 |  |      |           |   |      |   |           |      |  |   |           |  
|                                 |  |      | 2,611,834 |   |      |   | 2,164,957 |      |  |   | 1,964,681 |  
|                                 |  |      |           |   |      |   |           |      |  |   |           |  
|Income before income tax expense |  |      | 2,636,652 |   |      |   | 2,179,742 |      |  |   | 2,018,040 |  
|Net income tax expense (Note 14) |  |      | 1,006,060 |   |      |   | 869,781   |      |  |   | 421,210   |  
|                                 |  |      |           |   |      |   |           |      |  |   |           |  
|Income for the year              |  | $    | 1,630,592 |   |      | $ | 1,309,961 |      |  | $ | 1,596,830 |  
|                                 |  |      |           |   |      |   |           |      |  |   |           |  
|Income per common share:         |  |      |           |   |      |   |           |      |  |   |           |  
|Basic                            |  | $    | 0.36      |   |      | $ | 0.29      |      |  | $ | 0.37      |  
|                                 |  |      |           |   |      |   |           |      |  |   |           |  
|Diluted                          |  | $    | 0.36      |   |      | $ | 0.29      |      |  | $ | 0.35      |  
|                                 |  |      |           |   |      |   |           |      |  |   |           |  

Weighted average number of common shares (Note 16)

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



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UNILENS VISION INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

(Expressed in U.S. Dollars)



|                                                                                                |                 |              |   |        |                          |            |                                 |  |   |         |  |   |         |   |  |   |             |   |  |   |            |  
|----------------------------------------------------------------------------------------------- | --------------- | ------------ | - | ------ | ------------------------ | ---------- | ------------------------------- |  | - | ------- |  | - | ------- | - |  | - | ----------- | - |  | - | ---------- | -
|                                                                                                |                 | Common Stock |   |        | AdditionalPaid-inCapital |            | CumulativeTranslationAdjustment |  |   | Deficit |  |   | Total   |  
|                                                                                                | Number ofshares |              |   | Amount |                          |            |                                 |  |  
|Balance, June 30, 2005                                                                          |                 | 4,193,815    |   |        | $                        | 27,434,950 |                                 |  | $ | 8,970   |  | $ | (18,922 | ) |  | $ | (21,190,294 | ) |  | $ | 6,234,704  |  
|Common stock issued for cash from exercise of stock options at $0.48 per share in July 2005     |                 | 10,000       |   |        |                          | 4,800      |                                 |  |   |         |  |   |         |   |  |   |             |   |  |   | 4,800      |  
|Common stock issued for cash from exercise of stock options at $0.71 per share in July 2005     |                 | 7,500        |   |        |                          | 5,325      |                                 |  |   |         |  |   |         |   |  |   |             |   |  |   | 5,325      |  
|Common stock issued for cash from exercise of stock options at $0.48 per share in February 2006 |                 | 105,000      |   |        |                          | 50,400     |                                 |  |   |         |  |   |         |   |  |   |             |   |  |   | 50,400     |  
|Common stock issued for cash from exercise of stock options at $0.54 per share in February 2006 |                 | 60,000       |   |        |                          | 32,286     |                                 |  |   |         |  |   |         |   |  |   |             |   |  |   | 32,286     |  
|Common stock issued for cash from exercise of stock options at $0.71 per share in February 2006 |                 | 50,000       |   |        |                          | 35,500     |                                 |  |   |         |  |   |         |   |  |   |             |   |  |   | 35,500     |  
|Common stock issued for cash from exercise of stock options at $0.82 per share in February 2006 |                 | 15,000       |   |        |                          | 12,367     |                                 |  |   |         |  |   |         |   |  |   |             |   |  |   | 12,367     |  
|Cumulative translation adjustment                                                               |                 |              |   |        |                          |            |                                 |  |   |         |  |   | 18,922  |   |  |   | (18,922     | ) |  |   |           |  
|Income for the year                                                                             |                 |              |   |        |                          |            |                                 |  |   |         |  |   |         |   |  |   | 1,596,830   |   |  |   | 1,596,830  |  
|                                                                                                |                 |              |   |        |                          |            |                                 |  |   |         |  |   |         |   |  |   |             |   |  |   |            |  
|Balance, June 30, 2006                                                                          |                 | 4,441,315    |   |        |                          | 27,575,628 |                                 |  |   | 8,970   |  |   |        |   |  |   | (19,612,386 | ) |  |   | 7,972,212  |  
|Common stock issued for cash from exercise of stock options at $0.48 per share in July 2006     |                 | 5,000        |   |        |                          | 2,400      |                                 |  |   |         |  |   |         |   |  |   |             |   |  |   | 2,400      |  
|Common stock issued for cash from exercise of stock options at $0.71 per share in July 2006     |                 | 22,500       |   |        |                          | 15,975     |                                 |  |   |         |  |   |         |   |  |   |             |   |  |   | 15,975     |  
|Common stock issued for cash from exercise of stock options at $0.84 per share in July 2006     |                 | 15,000       |   |        |                          | 12,600     |                                 |  |   |         |  |   |         |   |  |   |             |   |  |   | 12,600     |  
|Common stock issued for cash from exercise of stock options at $0.21 per share in October 2006  |                 | 10,000       |   |        |                          | 2,146      |                                 |  |   |         |  |   |         |   |  |   |             |   |  |   | 2,146      |  
|Common stock issued for cash from exercise of stock options at $0.48 per share in February 2007 |                 | 25,000       |   |        |                          | 12,000     |                                 |  |   |         |  |   |         |   |  |   |             |   |  |   | 12,000     |  
|Common stock buybacks for cash                                                                  |                 | (5,600       | ) |        |                          | (23,939    | )                               |  |   |         |  |   |         |   |  |   |             |   |  |   | (23,939    | )
|Common stock cash dividends paid                                                                |                 |              |   |        |                          |            |                                 |  |   |         |  |   |         |   |  |   | (2,134,552  | ) |  |   | (2,134,552 | )



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UNILENS VISION INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (Continued)

(Expressed in U.S. Dollars)



|                                                                                              |                 |              |        |                          |            |                                 |   |         |  |   |       |  |   |             |   |  |   |            |  
|--------------------------------------------------------------------------------------------- | --------------- | ------------ | ------ | ------------------------ | ---------- | ------------------------------- | - | ------- |  | - | ----- |  | - | ----------- | - |  | - | ---------- | -
|                                                                                              |                 | Common Stock |        | AdditionalPaid-inCapital |            | CumulativeTranslationAdjustment |   | Deficit |  |   | Total | 
|                                                                                              | Number ofshares |              | Amount |                          |            |                                 |  
|Income for the year                                                                           |                 |              |        |                          |            |                                 |   |         |  |   |       |  |   | 1,309,961   |   |  |   | 1,309,961  |  
|                                                                                              |                 |              |        |                          |            |                                 |   |         |  |   |       |  |   |             |   |  |   |            |  
|Balance, June 30, 2007                                                                        |                 | 4,513,215    |        |                          | 27,596,810 |                                 |   | 8,970   |  |   |      |  |   | (20,436,977 | ) |  |   | 7,168,803  |  
|Common stock issued for cash from exercise of stock options at $2.07 per share in August 2007 |                 | 2,500        |        |                          | 5,175      |                                 |   |         |  |   |       |  |   |             |   |  |   | 5,175      |  
|Common stock issued for cash from exercise of stock options at $0.91 per share in August 2007 |                 | 15,000       |        |                          | 13,686     |                                 |   |         |  |   |       |  |   |             |   |  |   | 13,686     |  
|Common stock issued for cash from exercise of stock options at $0.60 per share in August 2007 |                 | 20,000       |        |                          | 11,910     |                                 |   |         |  |   |       |  |   |             |   |  |   | 11,910     |  
|Common stock cash dividends paid                                                              |                 |              |        |                          |            |                                 |   |         |  |   |       |  |   | (3,003,472  | ) |  |   | (3,003,472 | )
|Income for the year                                                                           |                 |              |        |                          |            |                                 |   |         |  |   |       |  |   | 1,630,592   |   |  |   | 1,630,592  |  
|                                                                                              |                 |              |        |                          |            |                                 |   |         |  |   |       |  |   |             |   |  |   |            |  
|Balance, June 30, 2008                                                                        |                 | 4,550,715    |        | $                        | 27,627,581 |                                 | $ | 8,970   |  | $ |      |  | $ | (21,809,857 | ) |  | $ | 5,826,694  |  
|                                                                                              |                 |              |        |                          |            |                                 |   |         |  |   |       |  |   |             |   |  |   |            |  

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



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UNILENS VISION INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S. Dollars)





|                                                             |  |      |            |   |      |   |            |      |  |   |           |  
|------------------------------------------------------------ |  | ---- | ---------- | - | ---- | - | ---------- | ---- |  | - | --------- | -
|YEAR ENDED JUNE 30                                           |  | 2008 |            |   | 2007 |   |            | 2006 | 
|CASH FLOWS FROM OPERATING ACTIVITIES                         |  |      |            |   |      |   |            |      |  |   |           |  
|Income for the year                                          |  | $    | 1,630,592  |   |      | $ | 1,309,961  |      |  | $ | 1,596,830 |  
|Items not affecting cash:                                    |  |      |            |   |      |   |            |      |  |   |           |  
|Depreciation and amortization                                |  |      | 191,301    |   |      |   | 170,020    |      |  |   | 118,886   |  
|Deferred tax expense (benefit)                               |  |      | 951,310    |   |      |   | 869,781    |      |  |   | 421,210   |  
|Remeasurement (gain) loss                                    |  |      | (1,805     | ) |      |   | (304       | )    |  |   | 5,905     |  
|Change in non-cash working capital items (Note 10)           |  |      | (76,984    | ) |      |   | (285,693   | )    |  |   | (118,925  | )
|                                                             |  |      |            |   |      |   |            |      |  |   |           |  
|Net cash provided by operating activities                    |  |      | 2,694,414  |   |      |   | 2,063,765  |      |  |   | 2,023,906 |  
|                                                             |  |      |            |   |      |   |            |      |  |   |           |  
|                                                             |  |      |           
|CASH FLOWS FROM INVESTING ACTIVITIES                         |  |      |            |   |      |   |            |      |  |   |           |  
|Purchase of property, plant and equipment and other assets   |  |      | (81,754    | ) |      |   | (184,620   | )    |  |   | (337,348  | )
|                                                             |  |      |            |   |      |   |            |      |  |   |           |  
|Net cash used in investing activities                        |  |      | (81,754    | ) |      |   | (184,620   | )    |  |   | (337,348  | )
|                                                             |  |      |            |   |      |   |            |      |  |   |           |  
|                                                             |  |      |           
|CASH FLOWS FROM FINANCING ACTIVITIES                         |  |      |            |   |      |   |            |      |  |   |           |  
|Principal payments on long-term debt                         |  |      |           |   |      |   |           |      |  |   |          |  
|Common stock issued for cash from exercise of stock options  |  |      | 30,771     |   |      |   | 45,121     |      |  |   | 140,678   |  
|Common stock repurchased                                     |  |      |           |   |      |   | (23,939    | )    |  |   |          |  
|Common stock dividends paid                                  |  |      | (3,003,472 | ) |      |   | (2,134,552 | )    |  |   |          |  
|                                                             |  |      |            |   |      |   |            |      |  |   |           |  
|Net cash (used in) provided by financing activities          |  |      | (2,972,701 | ) |      |   | (2,113,370 | )    |  |   | 140,678   |  
|                                                             |  |      |            |   |      |   |            |      |  |   |           |  
|Change in cash and cash equivalents during the year          |  |      | (360,041   | ) |      |   | (234,225   | )    |  |   | 1,827,236 |  
|Effect of exchange rate changes on cash and cash equivalents |  |      | 1,805      |   |      |   | 304        |      |  |   | (5,905    | )
|Cash and cash equivalents, beginning of year                 |  |      | 1,961,712  |   |      |   | 2,195,633  |      |  |   | 374,302   |  
|                                                             |  |      |            |   |      |   |            |      |  |   |           |  
|Cash and cash equivalents, end of year                       |  | $    | 1,603,476  |   |      | $ | 1,961,712  |      |  | $ | 2,195,633 |  
|                                                             |  |      |            |   |      |   |            |      |  |   |           |  
|Cash paid during the year for interest                       |  | $    |           |   |      | $ |           |      |  | $ |          |  
|                                                             |  |      |            |   |      |   |            |      |  |   |           |  
|Cash paid during the year for income taxes                   |  | $    | 54,750     |   |      | $ |           |      |  | $ |          |  
|                                                             |  |      |            |   |      |   |            |      |  |   |           |  

Supplemental disclosure with respect to cash flows (Note 10)

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



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UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars)

JUNE 30, 2008





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

The business of Unilens Vision
Inc. and subsidiary (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, independent sales representatives and in house sales personnel. The Company also licenses one of its patented multifocal designs on an exclusive basis to Bausch and Lomb Inc. (Bausch and Lomb) (Note 5).



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

These consolidated
financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (US GAAP) and in United States dollars.

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

Consolidation

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

All significant inter-company accounts and 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.

Reclassifications

Certain reclassifications have been made to prior year amounts to conform to the current year
presentation. None of the reclassifications impacted the Companys income for the year in any period.

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.

The Companys functional currency is the United States dollar. The
Company follows the remeasurement method of translation since the Canadian records are kept in Canadian dollars. This method translates foreign monetary assets and liabilities at the rate of exchange at the balance sheet date. Foreign nonmonetary
assets, liabilities, and stockholders equity are translated at the appropriate historical rate. Revenues and expenses from Canadian operations, other than those related to nonmonetary assets and liabilities, are translated at the weighted
average exchange rate for the period. The resulting remeasurement gain or loss is taken directly to the income statement.

Financial
instruments

The Companys financial instruments consist of cash and cash equivalents, accounts receivable, royalties and other
receivables, accounts payable and accrued liabilities. 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.



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UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in U.S. Dollars)

JUNE 30, 2008





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.

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. Also included in this allowance is an amount for product returns, based on an analysis of
the Companys history of credit memos issued. Based on managements review of accounts receivable, an allowance for doubtful accounts of $310,155 and $315,166 at June 30, 2008 and 2007, 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
depreciation. Plant and equipment and office equipment are depreciated on a straight-line basis over the shorter of 5 years or the estimated useful life of the asset. Leasehold improvements are depreciated 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.

In accordance with Statement of Financial
Accounting Standards (SFAS) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS No. 144), the carrying values of 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.

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.

The Company offers our customers advanced sales commitments on certain of our optical products. The Company invoices the customer
when the sale commitment is made and defers the revenue until the optical product is shipped.



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UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in U.S. Dollars)

JUNE 30, 2008





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 items on the consolidated statement of operations.

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.

Advertising costs

The Company expenses advertising costs when incurred. Advertising expense was approximately $269,311, $307,947 and $325,005 for the years ended June 30, 2008, 2007 and 2006, respectively; there were no
advertising costs that met the criteria for capitalization.

Research and development costs

Research and development costs are expensed as incurred. The amounts charged to operations during the years ended June 30, 2008, 2007 and 2006 were
$124,451, $119,558 and $162,864, respectively. For tax purposes, the Company capitalizes these costs and amortizes them over 10 years.

Income per common share

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

Diluted income per common 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.

Stock-based compensation and stock options

Effective July 1, 2005, the Company adopted the provisions of Statement of Financial Accounting Standards No. 123 (Revised),
Share-Based Payment, (SFAS 123R), which requires the use of the fair value method of accounting for stock options. The statement was adopted using the modified prospective method of application. Under this method, in addition to
reflecting compensation expense for new share-based awards, expense is also recognized to reflect the remaining vesting period of awards that had been included in pro-forma disclosures in prior periods. There was no compensation expense attributable
to stock options charged against income for the years ended June 30, 2008, 2007 and 2006 since no options were granted during the years, and all options outstanding at the beginning of the years were fully vested.

See Note 9 for additional disclosure on the Companys stock-based compensation.

Income taxes

Deferred tax assets and
liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective income tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized as income in the period that included the enactment date.

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.



44



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##### Table of Contents

UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in U.S. Dollars)

JUNE 30, 2008





Effective July 1, 2007, the Company adopted Financial Accounting Standards (FASB) Interpretation
No. 48, (FIN 48) Accounting for uncertainty in income taxes  an interpretation of SFAS No. 109. The Company recognized no adjustments in its tax liability as a result of the adoption of FIN 48.

Recent accounting pronouncements

In September 2006, the FASB issued SFAS No. 157 (SFAS 157), Fair Value Measurements. SFAS 157 clarifies the principle that fair value should be based on the assumptions that market
participants would use when pricing an asset or liability. Additionally, it establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. SFAS 157 is effective for financial statements issued for fiscal years
beginning after November 15, 2007. The Company does not expect the adoption of SFAS 157 to have a material impact on their financial position, results of operations or cash flows.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities
(SFAS 159). SFAS 159 provides the option to report certain financial assets and liabilities at fair value, with the intent to mitigate volatility in financial reporting that can occur when related assets and liabilities are
recorded on different bases. SFAS 159 also amends SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities, by providing the option to record unrealized gains and losses on held-for-sale and
held-to-maturity securities currently. The effective date of FAS 159 is for fiscal years beginning after November 15, 2007. The implementation of FAS 159 is not expected to have a material impact on our results of operations or
financial position.

In December 2007, the FASB issued SFAS No. 141R (SFAS 141R), Business Combinationswhich replaces SFAS No. 141 Business Combinations.SFAS 141R establishes principals and requirements for determining how an enterprise recognizes and measures the fair value of certain assets and liabilities acquired
in a business combination, including noncontrolling interests, contingent consideration and certain acquire contingencies. SFAS 141R also requires acquisition-related transaction expenses and restructuring costs be expensed as incurred rather than
capitalized as a component of the business combination. SFAS 141R will be applicable to the Company prospectively to business combinations for which the acquisition date is on or after January 1, 2009. SFAS 141R would have an impact on
accounting for any business acquired after the effective date of this pronouncement.

In December 2007, the FASB issued SFAS No. 160
(SFAS 160), Noncontrolling Interests in Consolidated Financial Statements  An Amendment of ARB No. 51.SFAS No. 160 establishes accounting and reporting standards for the noncontrolling interest in a
subsidiary (previously referred to as a minority interest). SFAS No. 160 also requires that a retained noncontrolling interest upon the deconsolidation of a subsidiary be initially measured at its fair value. Upon adoption of SFAS No. 160,
the Company would be required to report any noncontrolling interests as a separate component of shareholders equity. The Company would also be required to present any net income allocable to noncontrolling interests and net income allocable to
the shareholders of the Company separately in its consolidated statement of operations. SFAS No. 160 is effective for the Company on January 1, 2009. SFAS No. 160 requires retroactive adoption of the presentation and disclosure
requirements for existing minority interests. All other requirements of SFAS No. 160 shall be applied prospectively. SFAS No. 160 would have an impact on the presentation and disclosure of the noncontrolling interest of any non-wholly
owned business acquired in the future.



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##### Table of Contents

UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in U.S. Dollars)

JUNE 30, 2008





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



|                                |  |      |           |      |   |          
|------------------------------- |  | ---- | --------- | ---- | - | ---------
|                                |  | 2008 |           | 2007
|Raw materials                   |  | $    | 320,453   |      | $ | 288,631  
|Work in progress                |  |      | 25,998    |      |   | 24,579   
|Finished goods                  |  |      | 1,005,632 |      |   | 964,947  
|                                |  |      |           |      |   |          
|                                |  |      | 1,352,083 |      |   | 1,278,157
|Less allowance for obsolescence |  |      | 415,728   |      |   | 487,768  
|                                |  |      |           |      |   |          
|                                |  | $    | 936,355   |      | $ | 790,389  
|                                |  |      |           |      |   |          

All inventories are pledged as collateral on loans (Note 7).



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



|                       |  |      |           |                         |   |               |  |      |         |                         |   |               |  |   |           |  |   |        
|---------------------- |  | ---- | --------- | ----------------------- | - | ------------- |  | ---- | ------- | ----------------------- | - | ------------- |  | - | --------- |  | - | -------
|                       |  | 2008 |           | 2007                   
|                       |  | Cost |           | AccumulatedDepreciation |   | NetBook Value |  | Cost |         | AccumulatedDepreciation |   | NetBook Value
|Plant and equipment    |  | $    | 4,987,016 |                         | $ | 4,806,343     |  | $    | 180,673 |                         | $ | 4,953,213     |  | $ | 4,717,694 |  | $ | 235,519
|Office equipment       |  |      | 546,556   |                         |   | 359,242       |  |      | 187,314 |                         |   | 509,936       |  |   | 295,795   |  |   | 214,141
|Leasehold improvements |  |      | 244,380   |                         |   | 230,845       |  |      | 13,535  |                         |   | 233,048       |  |   | 191,639   |  |   | 41,409 
|                       |  |      |           |                         |   |               |  |      |         |                         |   |               |  |   |           |  |   |        
|                       |  | $    | 5,777,952 |                         | $ | 5,396,430     |  | $    | 381,522 |                         | $ | 5,696,197     |  | $ | 5,205,128 |  | $ | 491,069
|                       |  |      |           |                         |   |               |  |      |         |                         |   |               |  |   |           |  |   |        

Depreciation expense of property, plant and equipment was $191,301, $170,020 and $118,886 during
2008, 2007 and 2006, respectively. All property, plant and equipment is pledged as collateral on loans (Note 7).



|5. | 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, 2008, 2007 and 2006, the Company recorded $2,629,123 $2,190,428 and $1,932,942, respectively, in Bausch & Lomb royalty revenues.



|6. | 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, 2008 and 2007, the balance due was $5,953 and $36,067. 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 two years.



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##### Table of Contents

UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in U.S. Dollars)

JUNE 30, 2008





|7. | LINE OF CREDIT
|-- | --------------

The Company had a line of credit of
$1,500,000, with interest rate terms of LIBOR plus 2.5 percent. This line of credit expired in May 2008. The Company did not have an outstanding balance at June 30, 2007.

During August 2008, the Company obtained a new line of credit of $1,500,000 with interest rate terms of LIBOR plus 1.5 percent. This line of credit is
collateralized by all assets of Unilens Corp. USA, excluding, the Royalty Agreement with Bausch & Lomb. Under this credit agreement, the Company is required to meet specified financial covenants.



|8. | OPERATING LEASES
|-- | ----------------

The Company leases, through
Unilens Corp. USA, a combined office and manufacturing facility in Largo, Florida and a sales office in Clearwater, Florida. The Largo 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 rental payments of $18,448. The Clearwater lease agreement calls for approximate monthly rental payments of $2,950, with an
escalation of rental payments based on increases in the landlords operating expenses, utility costs and real estate taxes. The lease term is through May 31, 2009.

During the fourth quarter of fiscal year 2008, the Company negotiated a new Largo lease agreement. Effective July 1, 2008 the new five-year lease
agreement, calls for approximate monthly rental payments of $16,261, and provides for escalation of rental payments in years four and five. The new lease term is through June 30, 2013 with a five-year option. If there is a change of control of
the Company after June 30, 2010, the new lease can be terminated by the Company with four and one half months written notice, and under certain conditions maybe subject to three months liquidating damages.

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

Rent expense under all operating leases was approximately $277,000, $250,000 and $224,000 for the years ended June 30, 2008, 2007 and 2006,
respectively.

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 three years and thereafter are approximately as follows:



|                    |  |                    |          
|------------------- |  | ------------------ | ---------
|Year ended June 30, |  | Operatingleases(1)
|2009                |  | $                  | 227,582  
|2010                |  |                    | 195,132  
|2011                |  |                    | 195,132  
|2012                |  |                    | 209,578  
|2013                |  |                    | 214,754  
|                    |  |                    |          
|Total               |  | $                  | 1,042,178
|                    |  |                    |          



|(1) | Includes future lease payments from the new five-year lease agreement.
|--- | ----------------------------------------------------------------------



|9. | CAPITAL STOCK AND SUBSEQUENT EVENTS
|-- | -----------------------------------

On
July 18, 2005, the Company issued 10,000 and 7,500 common shares on exercise of employee stock options at exercise prices of $0.48 and $0.71 per share raising gross proceeds of $4,800 and $5,325, respectively.



47



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##### Table of Contents

UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in U.S. Dollars)

JUNE 30, 2008





On February 17, 2006, the Company issued 105,000, 60,000, 50,000 and 15,000 common shares on
exercise of employee stock options at exercise prices of $0.48, $0.5381 ($0.62Cdn.), $0.71 and $0.8245 ($0.95Cdn.) per share raising gross proceeds of $50,400, $32,286, $35,500 and $12,367, respectively.

On July 27, 2006, the Company issued 5,000, 22,500 and 15,000 common shares on exercise of employee stock options at exercise prices of $0.48, $0.71
and $0.8400 ($0.95Cdn.) per share raising gross proceeds of $2,400, $15,975 and $12,600, respectively.

On October 3, 2006 the Company
issued 10,000 common shares on exercise of employee stock options at an exercise price of $0.2146 ($0.25Cdn.) per share raising gross proceeds of $2,146.

On February 1, 2007 the Company issued 25,000 common shares on exercise of consultants stock options at an exercise price of $0.48 per share raising gross proceeds of $12,000.

On August 9, 2007, the Company issued 2,500, 15,000 and 20,000 common shares on exercise of employee stock options at exercise prices of $2.07, $0.91
($0.95Cdn.) and $0.60 ($0.62Cdn.) per share raising gross proceeds of $5,175, $13,686 and $11,910, respectively.

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.

On August 1, 2006 the Board of Directors declared the Companys first special cash dividend. The Company also stated its plan to begin paying a regular quarterly dividend. Beginning on November 1, 2006
the Board of Directors declared its initial quarterly cash dividend. The table below shows all Company dividends paid from inception.



|                 |  |               |  |             |  |            |  |                      |      
|---------------- |  | ------------- |  | ----------- |  | ---------- |  | -------------------- | -----
|Type of Dividend |  | Date Declared |  | Record Date |  | Date Paid  |  | Amount PaidPer Share
|Special          |  | 8/1/2006      |  | 8/14/2006   |  | 8/28/2006  |  | $                    | 0.250
|Quarterly        |  | 11/1/2006     |  | 11/14/2006  |  | 11/28/2006 |  | $                    | 0.075
|Quarterly        |  | 2/1/2007      |  | 2/14/2007   |  | 2/28/2007  |  | $                    | 0.075
|Quarterly        |  | 5/1/2007      |  | 5/14/2007   |  | 5/25/2007  |  | $                    | 0.075
|Special          |  | 8/1/2007      |  | 8/14/2007   |  | 8/28/2007  |  | $                    | 0.300
|Quarterly        |  | 8/1/2007      |  | 8/14/2007   |  | 8/28/2007  |  | $                    | 0.090
|Quarterly        |  | 11/1/2007     |  | 11/14/2007  |  | 11/28/2007 |  | $                    | 0.090
|Quarterly        |  | 2/1/2008      |  | 2/14/2008   |  | 2/28/2008  |  | $                    | 0.090
|Quarterly        |  | 5/1/2008      |  | 5/14/2008   |  | 5/28/2008  |  | $                    | 0.090
|Special          |  | 8/1/2008      |  | 8/14/2008   |  | 8/28/2008  |  | $                    | 0.300
|Quarterly        |  | 8/1/2008      |  | 8/14/2008   |  | 8/28/2008  |  | $                    | 0.090

The amount of future dividends will depend on earnings, cash flow, and all other aspects of our
business as determined and declared by the Board of Directors.

On August 9, 2006 it was announced that the TSX Venture Exchange had
approved its normal course issuer bid whereby the Company may purchase for cancellation up to 224,190 of its common shares, representing 5% of the current issued and outstanding common shares of the Company. The bid commenced on August 21, 2006
and ended on August 20, 2007. All shares purchased were effected solely through the facilities of the TSX Venture Exchange. The Company purchased 4,600 and 1,000 of its common shares at $4.73 Cdn on August 30, 2006 and September 14,
2006, respectively.



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##### Table of Contents

UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in U.S. Dollars)

JUNE 30, 2008





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 cannot 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.

At the Annual General Meeting of Shareholders held on February 27, 2006, the shareholders voted against the proposal to approve the Unilens Incentive Stock Option Plan-2006, and therefore failed to extend
the stock option plan, which is currently terminated.

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 year ended June 30, 2008



|                                 |  |                  |   |  |                                    |      |                                           |     |                              |   |       
|-------------------------------- |  | ---------------- | - |  | ---------------------------------- | ---- | ----------------------------------------- | --- | ---------------------------- | - | ------
|                                 |  | Number ofOptions |   |  | Weighted AverageExercise Price (1) |      | Weighted AverageRemainingContractual Term |     | Aggregate IntrinsicValue (1)
|Outstanding, beginning of year   |  | 55,000           |   |  | $                                  | 1.12 |                                           |     |                              |   |       
|Exercised                        |  | (37,500          | ) |  | $                                  | 0.82 |                                           |     |                              |   |       
|Granted                          |  |                  |   |  |                                    |      |                                           |     |                              |   |       
|Employees                        |  |                 |   |  |                                    |     |                                           |     |                              |   |       
|Consultants                      |  |                 |   |  |                                    |     |                                           |     |                              |   |       
|                                 |  |                  |   |  |                                    |      |                                           |     |                              |   |       
|Sub-total granted                |  |                 |   |  |                                    |     |                                           |     |                              |   |       
|                                 |  |                  |   |  |                                    |      |                                           |     |                              |   |       
|Expired/cancelled                |  |                 |   |  |                                    |     |                                           |     |                              |   |       
|                                 |  |                  |   |  |                                    |      |                                           |     |                              |   |       
|Outstanding, end of year         |  | 17,500           |   |  | $                                  | 2.07 |                                           | 1.5 |                              | $ | 20,650
|                                 |  |                  |   |  |                                    |      |                                           |     |                              |   |       
|Options exercisable, end of year |  | 17,500           |   |  | $                                  | 2.07 |                                           | 1.5 |                              | $ | 20,650
|                                 |  |                  |   |  |                                    |      |                                           |     |                              |   |       



|(1) | For the purpose of calculating the weighted average exercise prices and aggregate intrinsic values 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 intrinsic value of a stock option is the amount by which the market value (closing price at June 30, 2008 - $3.49) exceeds the exercise price.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The weighted-average grant date fair value of stock options granted during the three years ended June 30, 2008, 2007 and 2006 was $0.00, because
there were no options granted.

Cash proceeds, tax benefits and intrinsic value related to options exercised during the three years ended
June 30, 2008, 2007 and 2006 are provided in the following table:



|                                               |  |      |         |      |   |         |  |   |        
|---------------------------------------------- |  | ---- | ------- | ---- | - | ------- |  | - | -------
|                                               |  | 2008 |         | 2007 |   | 2006   
|Proceeds from stock options exercised          |  | $    | 30,771  |      | $ | 45,121  |  | $ | 140,678
|Tax benefit related to stock options exercised |  | $    | 0       |      | $ | 0       |  | $ | 0      
|Intrinsic value of stock options exercised     |  | $    | 138,079 |      | $ | 242,044 |  | $ | 768,597
|                                               |  |      |         |      |   |         |  |   |        

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, 2008:



|                  |  |        |  |               |      |             |                
|----------------- |  | ------ |  | ------------- | ---- | ----------- | ---------------
|Number of Options |  | Vested |  | ExercisePrice |      | Expiry Date
|17,500            |  | 17,500 |  | US $          | 2.07 |             | January 4, 2010
|                  |  |        |  |               |      |             |                
|17,500            |  | 17,500 |  |               |      |             |                
|                  |  |        |  |               |      |             |                



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##### Table of Contents

UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in U.S. Dollars)

JUNE 30, 2008





The Company uses the Black-Scholes pricing model to estimate the fair value of stock-based awards.
The expected volatilities are based on the historical volatility of the Companys stock price. Historical data is used to estimate option exercises and employee terminations within the valuation model. The expected term of options granted is
based on historical exercise patterns of employees and represents the period of time that options granted are expected to be outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the U S Treasury
yield curve in effect at the time of the grant. There were no options granted during the three years ended June 30, 2008, 2007 and 2006.



|10. | SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS
|--- | --------------------------------------------------



|                                             |  |      |          |   |      |   |          |      |  |   |          |  
|-------------------------------------------- |  | ---- | -------- | - | ---- | - | -------- | ---- |  | - | -------- | -
|                                             |  | 2008 |          |   | 2007 |   |          | 2006 | 
|Cash provided by (used in):                  |  |      |          |   |      |   |          |      |  |   |          |  
|Accounts and royalties and other receivables |  | $    | (77,708  | ) |      | $ | (228,172 | )    |  | $ | (16,019  | )
|Inventories                                  |  |      | (145,966 | ) |      |   | 172,276  |      |  |   | (95,507  | )
|Prepaid expenses and other assets            |  |      | 8,261    |   |      |   | (83,790  | )    |  |   | (21,882  | )
|Accounts payable and accrued liabilities     |  |      | 138,429  |   |      |   | (146,007 | )    |  |   | 14,483   |  
|                                             |  |      |          |   |      |   |          |      |  |   |          |  
|Change in non-cash working capital items     |  | $    | (76,984  | ) |      | $ | (285,693 | )    |  | $ | (118,925 | )
|                                             |  |      |          |   |      |   |          |      |  |   |          |  

At June 30, 2008, 2007 and 2006, the Company has recorded $0, $6,715 and $38,713 of accounts
payable in connection with the acquisition of equipment.

During the years ended June 30, 2008, 2007 and 2006 there were no significant
non-cash investing or financing activities.



|11. | RELATED PARTY TRANSACTIONS
|--- | --------------------------

Related party
transactions entered into during the year ended June 30, 2008 not elsewhere disclosed herein were, accounting fees paid to a director of the Company, which is included in administrative expense in the amounts of $0, $2,821 and $0 during the
years ended June 30, 2008, 2007, and 2006, respectively.

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.



|12. | 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.



50



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##### Table of Contents

UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in U.S. Dollars)

JUNE 30, 2008





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.

Volume of business risk

The Company has a supply agreement with one supplier for the manufacture of its molded C-Vue multifocal lens, which currently accounts for approximately
52% of the Companys sales. The agreement is renewable from year to year and is terminable pursuant to customary termination clauses. The Company has concentrations in the volume of purchases it conducts with this supplier. For the year ended
June 30, 2008, the Company purchased approximately 24% of its inventory from this supplier (2007-17%, 2006-22%). At June 30, 2008, the Company owed this supplier approximately $114,000 (2007- $45,000). There is no assurance that an
alternate supplier can successfully manufacture these lenses to the Companys specifications, on acceptable terms, or within the constraints of the exclusive license agreement with Bausch and Lomb.



|13. | 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. Revenue consists of the following lens categories for the years ended
June 30:



|                             |  |      |           |      |   |           |  |   |          
|---------------------------- |  | ---- | --------- | ---- | - | --------- |  | - | ---------
|                             |  | 2008 |           | 2007 |   | 2006     
|Disposable lenses            |  | $    | 3,617,697 |      | $ | 3,229,418 |  | $ | 2,891,727
|Conventional soft lenses     |  |      | 1,199,119 |      |   | 1,320,376 |  |   | 1,322,303
|Gas permeable lenses         |  |      | 500,170   |      |   | 604,154   |  |   | 642,651  
|Replacement and other lenses |  |      | 1,348,580 |      |   | 1,216,982 |  |   | 1,253,359
|                             |  |      |           |      |   |           |  |   |          
|Total sales                  |  | $    | 6,665,566 |      | $ | 6,370,930 |  | $ | 6,110,040
|                             |  |      |           |      |   |           |  |   |          



|14. | INCOME TAXES
|--- | ------------

A reconciliation of income taxes
(recovery) at the United States statutory rate to the Companys effective rate for the years ended June 30, 2008, 2007 and 2006 is as follows:



|                                                               |  |      |           |   |      |   |         |      |  |   |          |  
|-------------------------------------------------------------- |  | ---- | --------- | - | ---- | - | ------- | ---- |  | - | -------- | -
|                                                               |  | 2008 |           |   | 2007 |   |         | 2006 | 
|Statutory expense at the federal rate of 34%                   |  | $    | 896,461   |   |      | $ | 741,113 |      |  | $ | 686,134  |  
|State tax expense, net of federal effect                       |  |      | 95,710    |   |      |   | 83,904  |      |  |   | 75,400   |  
|(Deductible) non-deductible expenses                           |  |      | (44,042   | ) |      |   | (357    | )    |  |   | 19,676   |  
|Increase (decrease) in deferred income tax valuation allowance |  |      | 57,931    |   |      |   | 45,121  |      |  |   | (360,000 | )
|                                                               |  |      |           |   |      |   |         |      |  |   |          |  
|                                                               |  | $    | 1,006,060 |   |      | $ | 869,781 |      |  | $ | 421,210  |  
|                                                               |  |      |           |   |      |   |         |      |  |   |          |  



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UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in U.S. Dollars)

JUNE 30, 2008





Income tax expense for the years ended June 30, 2008, 2007 and 2006 consists of the following:



|                                    |  |      |           |      |   |         |  |   |        
|----------------------------------- |  | ---- | --------- | ---- | - | ------- |  | - | -------
|                                    |  | 2008 |           | 2007 |   | 2006   
|Current income taxes                |  | $    | 54,750    |      | $ |        |  | $ |       
|Change in net deferred income taxes |  |      | 951,310   |      |   | 869,781 |  |   | 421,210
|                                    |  |      |           |      |   |         |  |   |        
|                                    |  | $    | 1,006,060 |      | $ | 869,781 |  | $ | 421,210
|                                    |  |      |           |      |   |         |  |   |        

Amounts of deferred tax assets and liabilities for the years ended June 30, 2008 and 2007 is
as follows:



|                                                  |  |      |            |   |      |   |            |  
|------------------------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | -
|                                                  |  | 2008 |            |   | 2007 |  
|Deferred tax assets                               |  |      |            |   |      |   |            |  
|Inventory allowance                               |  | $    | 156,400    |   |      | $ | 183,500    |  
|Allowance for bad debt, returns, and allowances   |  |      | 116,700    |   |      |   | 118,600    |  
|Tax depreciation of property, plant & equipment   |  |      | 59,200     |   |      |   |           |  
|Tax depreciation of intangibles                   |  |      | 170,800    |   |      |   | 166,400    |  
|Other timing differences                          |  |      | 145,900    |   |      |   | 138,210    |  
|Loss carry forward  United States                |  |      | 1,417,800  |   |      |   | 2,431,300  |  
|Loss carry forward  Canada                       |  |      | 240,900    |   |      |   | 183,000    |  
|                                                  |  |      |            |   |      |   |            |  
|                                                  |  |      | 2,307,700  |   |      |   | 3,221,010  |  
|Valuation allowance                               |  |      | (240,900   | ) |      |   | (183,000   | )
|                                                  |  |      |            |   |      |   |            |  
|                                                  |  |      | 2,066,800  |   |      |   | 3,038,010  |  
|Deferred tax liability                            |  |      |            |   |      |   |            |  
|Tax amortization of property, plant and equipment |  |      |           |   |      |   | (19,900    | )
|                                                  |  |      |            |   |      |   |            |  
|Net deferred tax asset                            |  |      | 2,066,800  |   |      |   | 3,018,110  |  
|Less current portion                              |  |      | (1,360,400 | ) |      |   | (1,354,010 | )
|                                                  |  |      |            |   |      |   |            |  
|Long-term portion                                 |  | $    | 706,400    |   |      | $ | 1,664,100  |  
|                                                  |  |      |            |   |      |   |            |  

As of June 30, 2008, 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 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 improvements over current levels of pretax income. It then compared its projected taxable income against its net operating loss schedule and determined an allowance against
the deferred tax asset was not necessary. 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 increase its current level of taxable
income, thereby fully realizing its deferred tax asset relating to its United States activity recorded at June 30, 2008. An allowance could be required 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.



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UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in U.S. Dollars)

JUNE 30, 2008





The Company has a deferred tax asset for a Canadian net operating loss. Consistent with prior years,
the Company has recorded a full valuation allowance against the Canadian net operating loss, since the loss may never be utilized.

The
Company has unused operating loss carryforwards available at June 30, 2008 that may be applied against future taxable income which expire as follows:



|                    |  |   |          
|------------------- |  | - | ---------
|Year ended June 30, |  |  
|2009                |  | $ | 1,183,444
|2010                |  |   | 1,111,012
|2011                |  |   | 333,958  
|2012                |  |   | 609,379  
|2013-2022           |  |   | 529,825  
|                    |  |   |          
|Total               |  | $ | 3,767,618
|                    |  |   |          

The Company also has approximately Cdn $522,300 of unused non-capital loss carryforwards in Canada
available at June 30, 2008 which expire from 2009 to 2017.



|15. | RETIREMENT PLANS
|--- | ----------------

The Company maintains a 401(k)
profit-sharing plan that covers substantially all of its employees. Contributions are made at the Companys discretion. For the years ended June 30, 2008, 2007 and 2006, the Company contributed to the plan $60,601, $49,911, and $44,165
respectively. The Company does not have any liabilities for the plan as of June 30, 2008.



|16. | WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
|--- | ----------------------------------------------------



|                           |  |           |  |           |  |          
|-------------------------- |  | --------- |  | --------- |  | ---------
|                           |  | 2008      |  | 2007      |  | 2006     
|Basic                      |  | 4,546,733 |  | 4,493,626 |  | 4,294,836
|Effect of dilutive options |  | 7,328     |  | 53,194    |  | 227,730  
|                           |  |           |  |           |  |          
|Diluted                    |  | 4,554,061 |  | 4,546,820 |  | 4,522,566
|                           |  |           |  |           |  |          



|17. | DIFFERENCES BETWEEN UNITED STATES AND CANADIAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
|--- | ---------------------------------------------------------------------------------------

These consolidated financial statements have been prepared in conformity with US GAAP. Prior to the year ended June 30, 2004 the Company prepared its
consolidated financial statements in United States dollars in accordance with generally accepted accounting principles in Canada (Cdn 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, 2008 and 2007 and, for the years ended June 30, 2008, 2007 and 2006, for the consolidated statements of operations, cash
flows and stockholders equity (deficiency).

Stock-based compensation

There were no material differences in the treatment of stock-based compensation under US GAAP and Cdn GAAP for the year ended June 30, 2004.
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



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UNILENS VISION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in U.S. Dollars)

JUNE 30, 2008





purpose of determining the material differences between US GAAP and Cdn GAAP and as permitted under Cdn GAAP, the Company would apply this difference in
accounting policy on a retroactive basis with the accumulated deficit balance and additional paid-in-capital balance being adjusted by $114,991 for the cumulative effect of the charges for the fiscal years ended prior to July 1, 2004. Stock
based compensation charges for the years ended June 30, 2008 and 2007 were $0 (no options were granted during the years ended June 30, 2008 and 2007). The stock based compensation charges for the years ended June 30, 2008 and 2007 had
no effect on basic or diluted income per common share.



|18. | CONTINGENCY
|--- | -----------

The Company has employment agreements
with two members of senior management. These agreements contain terms for which certain benefits are payable upon termination or a change-of-control.



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Report of Independent Registered Public Accounting Firm on Schedule

Board of Directors and Stockholders

Unilens Vision Inc.

In connection with our audit of the consolidated financial statements of Unilens Vision Inc. referred to in our report dated September 23, 2008, we have also
audited Schedule I for the year ended June 30, 2008. In our opinion, this schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

Pender Newkirk & Company LLP

Certified Public
Accountants

Tampa, Florida

September 23, 2008



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Unilens Vision Inc.

Schedule I

Valuation and Qualifying Accounts

Years Ended June 30, 2008 and 2007



|                                                  |  |                          |         |           |                         |         |            |  |   |                   |     |  |   |            |   |  |   |        
|------------------------------------------------- |  | ------------------------ | ------- | --------- | ----------------------- | ------- | ---------- |  | - | ----------------- | --- |  | - | ---------- | - |  | - | -------
|                                                  |  | BalanceBeginningof Year  |         | Additions |                         |         | Deductions |  |   | BalanceEndof Year
|                                                  |  | Chargedto CostandExpense |         |           | Charged toOtherAccounts |         |            | 
|June 30, 2008                                     |  |                          |         |           |                         |         |            |  |   |                   |     |  |   |            |   |  |   |        
|                                                  |  |                          |         |           |                        
|Allowance for doubtful accounts                   |  | $                        | 182,417 |           | $                       | 32,627  | (1)        |  |   |                   |     |  | $ | (5,549     | ) |  | $ | 209,495
|Allowance for returns                             |  |                          | 132,749 |           |                         |         |            |  | $ | 1,295,216         | (2) |  |   | (1,327,305 | ) |  |   | 100,660
|                                                  |  |                          |         |           |                         |         |            |  |   |                   |     |  |   |            |   |  |   |        
|Total allowance for doubtful accounts and returns |  |                          | 315,166 |           |                         | 32,627  |            |  |   | 1,295,216         |     |  |   | (1,332,854 | ) |  |   | 310,155
|Allowance for inventory                           |  |                          | 487,768 |           |                         | (59,158 | )(3)       |  |   |                   |     |  |   | (12,882    | ) |  |   | 415,728
|                                                  |  |                          |         |           |                         |         |            |  |   |                   |     |  |   |            |   |  |   |        
|Total                                             |  | $                        | 802,934 |           | $                       | (26,531 | )          |  | $ | 1,295,216         |     |  | $ | (1,345,736 | ) |  | $ | 725,883
|                                                  |  |                          |         |           |                         |         |            |  |   |                   |     |  |   |            |   |  |   |        
|June 30, 2007                                     |  |                          |         |           |                         |         |            |  |   |                   |     |  |   |            |   |  |   |        
|                                                  |  |                          |         |           |                        
|Allowance for doubtful accounts                   |  | $                        | 188,000 |           | $                       | 6,813   | (1)        |  |   |                   |     |  | $ | (12,396    | ) |  | $ | 182,417
|Allowance for returns                             |  |                          | 153,625 |           |                         |         |            |  | $ | 1,522,498         | (2) |  |   | (1,543,374 | ) |  |   | 132,749
|                                                  |  |                          |         |           |                         |         |            |  |   |                   |     |  |   |            |   |  |   |        
|Total allowance for doubtful accounts and returns |  |                          | 341,625 |           |                         | 6,813   |            |  |   | 1,522,498         |     |  |   | (1,555,770 | ) |  |   | 315,166
|Allowance for inventory                           |  |                          | 510,000 |           |                         | 46,034  | (3)        |  |   |                   |     |  |   | (68,266    | ) |  |   | 487,768
|                                                  |  |                          |         |           |                         |         |            |  |   |                   |     |  |   |            |   |  |   |        
|Total                                             |  | $                        | 851,625 |           | $                       | 52,847  |            |  | $ | 1,522,498         |     |  | $ | (1,624,036 | ) |  | $ | 802,934
|                                                  |  |                          |         |           |                         |         |            |  |   |                   |     |  |   |            |   |  |   |        



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

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

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



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FORM 51-102F1

UNILENS VISION INC.

MANAGEMENT DISCUSSION & ANALYSIS  JUNE 30, 2008

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, 2008 (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 17 to the Financial Statements describes any 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

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 disposable 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. In
February 2006, we launched the C-Vue Aspheric single vision lens, a single vision disposable soft contact lens sold for 2-week replacement. The C-Vue Aspheric single vision lens is manufactured for us by a third party utilizing Wavefront inspired
technology. The cast molded C-Vue Aspheric single vision lens is marketed to eye care professionals in a blister-packed box of six lenses. In May 2008, we launched the all-new C-Vue 1 Day ASV, which is the first aspheric daily disposable contact
lens sold under the C-Vue brand. The C-Vue 1 Day ASV lens is a daily disposable soft contact lens with no required daily cleaning or care required. The lenses may be worn for a day and then just simply thrown away. The cast molded C-Vue 1 Day ASV
lens is manufactured for us by a third party utilizing Wavefront inspired technology, and is marketed to eye care professionals in blister-packs of 30 and 90 lenses. We expect that the C-Vue multifocal, the C-Vue Aspheric single vision and the C-Vue
1 Day ASV lenses will 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 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.

We license, manufacture, distribute and market 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 inside sales representatives and independent sales brokers, and a network of distributors. 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.

The following MDA is for the fiscal year ended June 30, 2008 (the 2008 Fiscal Year or Current Year) and includes relevant information up to September 29, 2008 (the Report Date).



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Overall Performance

Revenue derived from our disposable lens segment including our C-Vue disposable multifocal, continues to steadily increase, and accounts for approximately 52% of our Current Year revenue. Revenue derived from our conventional lens segment
continues to decline, reflecting the overall market trend shift from conventional lenses to disposable lens modalities. We experienced a greater than expected 17% decline in our gas permeable product segment, some what higher than expected due to
sluggish replacement refits during the second half of the Current Year. We have addressed this recent trend by implementing several new sales programs aimed at increasing our market share of gas permeable refits. Royalty income from the license of
our key technologies, is a major component of our profitability, and continues to grow, showing a 20% increase in the Current Year. During the 2008 Fiscal Year we were debt free, and paid $3,003,472 in common stock dividends.

Sales for the 2008 Fiscal Year increased by 4.6% to $6.7 million, compared to $6.4 million for the fiscal year ended June 30, 2007 (the 2007 Fiscal Year or
Prior Year). The increase was primarily due to revenue growth in the sales of the C-Vue disposable multifocal, offset by the greater than expected decline in the sales of our gas permeable lenses and some of our other replacement soft
lathe-cut product lines that are nearing the end of their life cycle. Income before income taxes for the Current Year increased by $0.4 million to $2.6 million from $2.2 million in the Prior Year, primarily resulting from an increase in royalty
income and a small profit from operations in the Current Year. Income from operations in the Current Year increased $.001 million as compared to the Prior Year primarily due to higher gross margin dollars from higher sales and lower expense ratios.
As of June 30, 2008 we had positive working capital of $4.6 million, which represents a decrease of $0.3 million compared to the Prior Year. The decrease in working capital was principally due to a decrease in cash primarily from the payment of
cash dividends that were offset by royalty income received and increases in inventory and accounts payable.

At the end of the 2008 Fiscal Year we had
stockholders equity of $5.8 million representing a decrease of $1.3 million compared to the 2007 Fiscal Year. The decrease in stockholders equity was primarily from cash dividend payments totaling $3.0 million, offset by net income of
$1.6 million (primarily from royalty income offset by income taxes).

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, 2008, 2007, and 2006. 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                               |  | 2008 ($)  |  | 2007 ($)  |  | 2006 ($) 
|Income Statement Data                                    |  |           |  |           |  |          
|Revenues                                                 |  | 6,665,566 |  | 6,370,930 |  | 6,110,040
|Income from operations                                   |  | 24,818    |  | 14,785    |  | 53,359   
|Income before tax benefit                                |  | 2,636,652 |  | 2,179,742 |  | 2,018,040
|Income for the year                                      |  | 1,630,592 |  | 1,309,961 |  | 1,596,830
|                                                         |  |           | 
|Income per common share outstanding - basic and diluted: |  |           |  |           |  |          
|Income for the year                                      |  |           |  |           |  |          
|Basic                                                    |  | 0.36      |  | 0.29      |  | 0.37     
|Diluted                                                  |  | 0.36      |  | 0.29      |  | 0.35     
|                                                         |  |           | 
|Dividends                                                |  | 3,003,472 |  | 2,134,552 |  |         



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##### Table of Contents

|                      |  |            |  |            |  |           
|--------------------- |  | ---------- |  | ---------- |  | ----------
|As at June 30         |  | 2008 ($)   |  | 2007 ($)   |  | 2006 ($)  
|Balance Sheet Data    |  |            |  |            |  |           
|Total assets          |  | 6,784,128  |  | 7,987,808  |  | 8,969,222 
|Working capital       |  | 4,627,289  |  | 4,949,732  |  | 4,747,777 
|Long-term liabilities |  |           |  |           |  |          
|Total liabilities     |  | 957,434    |  | 819,005    |  | 997,010   
|Capital stock         |  | 27,627,581 |  | 27,596,810 |  | 27,575,628
|Stockholders equity  |  | 5,826,694  |  | 7,168,803  |  | 7,972,212 

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 two 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
$2,629,123, $2,190,428, and $1,932,942 for the 2008, 2007 and 2006 Fiscal Years, respectively.

In the 2006 Fiscal Year we recorded net income tax expense
of $421,210. The income tax expense is the result of a reduction in the deferred income tax asset due to offsetting the current years taxable income with the recognition of income tax loss carryforwards.

In the 2007 Fiscal Year we recorded net income tax expense of $869,781. The income tax expense is the result of a reduction in the deferred income tax asset due to
offsetting the current years taxable income with the recognition of income tax loss carryforwards.

In the Current Year we recorded net income tax expense
of $1,006,060. The income tax expense is the result of a reduction in the deferred income tax asset due to offsetting the current years taxable income with the recognition of income tax loss carryforwards.

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:             |  | 4,550,715 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                              |  |                                                            



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Dividends

On August 1, 2006 the Board of Directors declared the Companys first special cash dividend. The Company also stated its plan to begin paying a regular quarterly dividend. Beginning on November 1, 2006
the Board of Directors declared its initial quarterly cash dividend. The table below shows all Company dividends paid from inception.



|                 |  |               |  |             |  |            |  |                      |       |                        |   |          
|---------------- |  | ------------- |  | ----------- |  | ---------- |  | -------------------- | ----- | ---------------------- | - | ---------
|Type of Dividend |  | Date Declared |  | Record Date |  | Date Paid  |  | Amount PaidPer Share |       | GrossDisbursementsPaid
|Special          |  | 8/1/2006      |  | 8/14/2006   |  | 8/28/2006  |  | $                    | 0.250 |                        | $ | 1,120,954
|Quarterly        |  | 11/1/2006     |  | 11/14/2006  |  | 11/28/2006 |  | $                    | 0.075 |                        | $ | 336,616  
|Quarterly        |  | 2/1/2007      |  | 2/14/2007   |  | 2/28/2007  |  | $                    | 0.075 |                        | $ | 338,491  
|Quarterly        |  | 5/1/2007      |  | 5/14/2007   |  | 5/25/2007  |  | $                    | 0.075 |                        | $ | 338,491  
|Special          |  | 8/1/2007      |  | 8/14/2007   |  | 8/28/2007  |  | $                    | 0.300 |                        | $ | 1,365,215
|Quarterly        |  | 8/1/2007      |  | 8/14/2007   |  | 8/28/2007  |  | $                    | 0.090 |                        | $ | 409,564  
|Quarterly        |  | 11/1/2007     |  | 11/14/2007  |  | 11/28/2007 |  | $                    | 0.090 |                        | $ | 409,564  
|Quarterly        |  | 2/1/2008      |  | 2/14/2008   |  | 2/28/2008  |  | $                    | 0.090 |                        | $ | 409,564  
|Quarterly        |  | 5/1/2008      |  | 5/14/2008   |  | 5/28/2008  |  | $                    | 0.090 |                        | $ | 409,564  
|Special          |  | 8/1/2008      |  | 8/14/2008   |  | 8/28/2008  |  | $                    | 0.300 |                        | $ | 1,365,215
|Quarterly        |  | 8/1/2008      |  | 8/14/2008   |  | 8/28/2008  |  | $                    | 0.090 |                        | $ | 409,564  

On August 9, 2006 it was announced that the TSX Venture Exchange had approved its normal
course issuer bid whereby the Company may purchase for cancellation up to 224,190 of its common shares, representing 5% of the current issued and outstanding common shares of the Company. The bid commenced on August 21, 2006 and ended on
August 20, 2007. All shares purchased were effected solely through the facilities of the TSX Venture Exchange. The Company purchased 4,600 and 1,000 of its common shares at $4.73 Cdn on August 30, 2006 and September 14, 2006,
respectively.

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 ofOptions |  | Vested |  | ExercisePrice |      | Expiry Date
|17,500           |  | 17,500 |  | US$           | 2.07 |             | January 4, 2010
|                 |  |        |  |               |      |             |                
|17,500           |  | 17,500 |  |               |      |             |                
|                 |  |        |  |               |      |             |                

At the Annual General Meeting of Shareholders held on February 27, 2006, the shareholders
voted against the proposal to approve the Unilens Incentive Stock Option Plan-2006, and therefore failed to extend the stock option plan, which is currently terminated.

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 Current Year:



|               |  |                     |  |                 |  |                     |      |                     |   |                      |  |                 |  |    
|-------------- |  | ------------------- |  | --------------- |  | ------------------- | ---- | ------------------- | - | -------------------- |  | --------------- |  | ---
|Date of Issue  |  | Type of Issue       |  | Number ofShares |  | Ave. PricePer Share |      | Total GrossProceeds |   | Type ofConsideration |  | CommissionsPaid
|August 6, 2007 |  | Exercise of options |  | 2,500           |  | $                   | 2.07 |                     | $ | 5,175                |  | Cash            |  | Nil
|August 8, 2007 |  | Exercise of options |  | 35,000          |  | $                   | 0.73 |                     | $ | 25,596               |  | Cash            |  | Nil
|               |  |                     |  |                 |  |                    
|Total          |  |                     |  | 37,500          |  | $                   | 0.82 |                     | $ | 30,771               |  |                 |  |    



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Options granted by the Company during the fiscal year ending June 30, 2008  None

Shares in escrow or subject to pooling as at June 30, 2008  None

Results of Operations

Current Quarter

During the three months ended June 30, 2008 (the Current Quarter) we earned income before tax of $846,701 compared to income before tax of $670,471 for the three months ended June 30, 2007 (the Prior
Quarter). The increase in income before tax during the Current Quarter of $176,230 as compared to the Prior Quarter, was primarily due to (i) an increase in gross margin of $87,030, (ii) an increase in royalty income under the
license agreement with Bausch & Lomb of $109,550 to $740,482 in the Current Quarter as compared to $630,932 in the Prior Quarter, (iii) an increase in expenses of $79,094 as described below, and (iv) a increase in other items
including interest income and other income of $58,744. After recording income tax expense of $338,050, we had net income of $508,651 or $0.11 per diluted share for the Current Quarter. In comparison, in the Prior Quarter we had net income of
$406,264 or $0.09 per diluted share after recording an income tax benefit of $264,207.

Sales during the Current Quarter were $1,811,447, an increase of
$117,875 (7%), as compared to sales of $1,693,572 during the Prior Quarter. The disposable lens category increased by 10.9% due to continued sales growth of our best selling lens, the C-Vue disposable multifocal. Our conventional soft lens category
decreased 6.1% due to an increase in our C-Vue toric multifocal product line offset by decreases in some of our older product lines that are nearing the end of their life cycle. Our gas permeable lens category decreased, by 19.1%, due to a continued
overall decline in gas permeable fits in the contact lens industry. The replacement lens category increased by 22.9% with growth in our C-Vue custom toric lens and low vision product lines, offset by the expected decline in product lines that are
nearing the end of their life cycle. Gross margin increased to 47.5% in the Current Quarter compared to 45.7% in the Prior Quarter due primarily to sales mix increases in higher margin products during the Current Quarter.

The increase in expenses during the Current Quarter, as compared to the Prior Quarter, was due to increases in administrative and sales and marketing expenses. As a
percentage of sales, total Current Quarter expenses increased from 40.1% to 41.9%. Administration expenses increased $36,853 due to higher payroll and payroll related benefits, higher insurance premiums and rental payments, and other expenses
associated with the general increase in the Companys business during the Current Quarter. Sales and marketing expenses increased $34,148 primarily due to higher payroll from increased sales and related payroll benefits and higher promotional
and advertising spending.

The increase in other items was primarily from Prior Quarter expenses related to investment banking services with regard to
valuation and strategic alternatives pertaining to shareholder value.

During the Current Quarter we recorded income tax expense of $338,050 compared to
income tax expense in the Prior Quarter of $264,207. We record income tax at the statutory rates, but currently only pay alternative minimum tax of approximately 2% due to the utilization of tax loss carry-forwards. The increase in income tax
expense is the result of higher income before tax in the Current Quarter compared to the Prior Quarter.

Current Year

During the twelve months ended June 30, 2008 we earned income before tax of $2,636,652 compared to income before tax of $2,179,742 for the twelve months ended
June 30, 2007. The increase in income before tax during the Current Year of $456,910 as compared to the Prior Year, was primarily due to (i) an increase in gross margin of $78,891, (ii) an increase in royalty income under the license
agreement with Bausch & Lomb of $438,695 to $2,629,123 in the Current Year as compared to $2,190,428 in the Prior Year, (iii) offset by an increase in expenses of $68,858 as described below, and (iv) a increase in other items
including interest income and other income of $8,182. After recording income tax expense of $1,006,060, we had net income of $1,630,592 or $0.36 per diluted share for the Current Year. In comparison, in the Prior Year we had net income of $1,309,961
or $0.29 per diluted share after recording income tax expense of $869,781.



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Sales during the Current Year were $6,665,566, an increase of $294,636 (4.6%), as compared to sales of $6,370,930 during
the Prior Year. The disposable lens category increased by 12.2% due to continued sales growth of our best selling lens, the C-Vue disposable multifocal. Our conventional soft lens category decreased 9.4% due to a sales dollar decrease in our C-Vue
toric multifocal product line along with decreases in some of our older product lines that are nearing the end of their life cycle. Our gas permeable lens category decreased, by 17.5%, due to a continued overall decline in gas permeable fits in the
contact lens industry. The replacement lens category increased by 11.0%. We had some growth in our C-Vue custom toric lens and low vision product lines, which was offset by the expected decline in product lines that are nearing the end of their life
cycle. Gross margin decreased to 44.4% in the Current Year compared to 45.2% in the Prior Year due primarily to sales increases in lower margin products and from a one-time waste disposal expense and over-time production labor costs associated with
the Current Year revenue mix.

The increase in expenses during the Current Year, as compared to the Prior Year, was primarily due to increases in
administration expenses. As a percentage of sales, total Current Year expenses decreased from 45.0% to 44.0%. The increase in Administration expenses of $65,336 was due primarily higher payroll and payroll related benefits, higher insurance premiums
and rental payments, and other expenses associated with the general increase in the Companys business during the Current Year.

During the Current
Year we recorded income tax expense of $1,006,060 compared to income tax expense in the Prior Year of $869,781. We record income tax at the statutory rates, but currently only pay alternative minimum tax of approximately 2% due to the utilization of
tax loss carry-forwards. The increase in income tax expense is the result of higher income before tax in the Current Year compared to the Prior Year and 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 Prior Year.

Seasonality

The results of operations for the Current Quarter and Current Year are not necessarily indicative of the results for the entire fiscal year. While our sales are not
substantially subject to seasonality, sales during the quarter ending December 31, historically are normally lower than other quarters due to a decrease in patient visits to eye care professionals during the Christmas holiday season.

Summary of Quarterly Results

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



|                                                        |  |                                         |  |             |   |  |             |   |  |             |  |              |  |              |  |              |   |  |             
|------------------------------------------------------- |  | --------------------------------------- |  | ----------- | - |  | ----------- | - |  | ----------- |  | ------------ |  | ------------ |  | ------------ | - |  | ------------
|                                                        |  | For the Three Months Ending (Unaudited)
|                                                        |  | June 30,2008                            |  | Mar 31,2008 |   |  | Dec 31,2007 |   |  | Sep 30,2007 |  | June 30,2007 |  | Mar. 31,2007 |  | Dec. 31,2006 |   |  | Sep. 30,2006
|                                                        |  | ($)                                     |  | ($)         |   |  | ($)         |   |  | ($)         |  | ($)          |  | ($)          |  | ($)          |   |  | ($)         
|Income Statement Data                                   |  |                                         |  |             |   |  |             |   |  |             |  |              |  |              |  |              |   |  |             
|Total revenues                                          |  | 1,811,447                               |  | 1,668,397   |   |  | 1,512,361   |   |  | 1,673,361   |  | 1,693,572    |  | 1,634,429    |  | 1,438,153    |   |  | 1,604,776   
|Operating income (loss) for the quarter                 |  | 101,684                                 |  | (2,596      | ) |  | (88,282     | ) |  | 14,012      |  | 93,748       |  | 80,919       |  | (181,321     | ) |  | 21,439      
|Income (loss) before tax benefit                        |  | 846,701                                 |  | 631,193     |   |  | 542,257     |   |  | 616,501     |  | 670,471      |  | 635,197      |  | 358,891      |   |  | 515,183     
|Income for the period                                   |  | 508,651                                 |  | 368,730     |   |  | 375,915     |   |  | 377,296     |  | 406,264      |  | 372,355      |  | 220,850      |   |  | 310,492     
|Income per common share outstanding  basic and diluted |  |                                         |  |             |   |  |             |   |  |             |  |              |  |              |  |              |   |  |             
|Net income per common share for the period              |  |                                         |  |             |   |  |             |   |  |             |  |              |  |              |  |              |   |  |             
|Basic                                                   |  | 0.11                                    |  | 0.08        |   |  | 0.08        |   |  | 0.08        |  | 0.09         |  | 0.08         |  | 0.05         |   |  | 0.07        
|Diluted                                                 |  | 0.11                                    |  | 0.08        |   |  | 0.08        |   |  | 0.08        |  | 0.09         |  | 0.08         |  | 0.05         |   |  | 0.07        



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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.

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 our technology. The next contractual decrease will occur in the quarter
ending December 2016. The quarterly results in the above table include royalty income as follows:



|               |  |                             |  |             |  |             |  |             |  |              |  |              |  |              |  |             
|-------------- |  | --------------------------- |  | ----------- |  | ----------- |  | ----------- |  | ------------ |  | ------------ |  | ------------ |  | ------------
|               |  | For the Three Months Ending
|               |  | June 30,2008                |  | Mar 31,2008 |  | Dec 31,2007 |  | Sep 30,2007 |  | June 30,2007 |  | Mar. 31,2007 |  | Dec. 31,2006 |  | Sep. 30,2006
|               |  | ($)                         |  | ($)         |  | ($)         |  | ($)         |  | ($)          |  | ($)          |  | ($)          |  | ($)         
|Royalty income |  | 740,482                     |  | 628,993     |  | 646,849     |  | 612,799     |  | 630,932      |  | 545,293      |  | 537,653      |  | 476,550     

In the quarter ending June 30, 2007 we recorded approximately $0.05 million in income tax expense 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.

In the quarter ending June 30, 2008 we recorded approximately $.06 million in income tax expense that resulted from the change in deferred tax assets expected to be realized in the future, which was offset
by an increase in the deferred income tax asset during the quarter.

Liquidity and Capital Resources

Current Quarter

As of June 30, 2008, the Company had working
capital of $4,627,289, representing an increase of $584,943 from our working capital at March 31, 2008. Positive cash flow from operating activities totaled $845,756, and we used cash of $18,296 for the purchase of capital additions during the
quarter ending June 30, 2008.

Current Year

As of
June 30, 2008, the Company had working capital of $4,627,289 representing a decrease of $322,443 from our working capital at June 30, 2007. The decrease in working capital was principally due to a decrease in cash from the payment of cash
dividends offset by a increase in accounts payable. During the Current Year, we generated $2,694,414 in cash from operations representing a increase of $630,649 from $2,063,765 generated during the prior year period ended June 30, 2007. We used
cash of $81,754 during the Current Year for the purchase of capital additions, a decrease of $102,866 from the Prior Year. The Company also received cash of $30,771 from capital stock issued from the exercise of stock options during the Current
Year.

Related Party Transactions

During the Current
Year, there were no related party transactions. In the Prior Year we incurred $2,821 in fees to, William Baxter, a director of the Company, for accounting services. There was no related party interest incurred in the Current Year or Prior Year.

Trend Information

The conventional 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



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many consumers. Recognizing this trend, we signed an agreement with a third party in 2002 for the supply of disposal multifocal molded soft contact lenses
(C-Vue) utilizing our patented design. The C-Vue brand was launched to eye care professionals in the United States during September of 2002. In February 2006, we announced the launch of the first aspheric, single vision daily wear, two week
disposable soft contact lens ever available under the C-Vue brand. The C-Vue Aspheric single vision lens is manufactured by a third party utilizing, Wavefront inspired technology. In May 2008, we launched the all-new C-Vue 1 Day ASV, which is the
first aspheric daily disposable contact lens sold under the C-Vue brand. The cast molded C-Vue 1 Day ASV lens is manufactured for us by a third party utilizing Wavefront inspired technology, and is marketed to eye care professionals in blister-packs
of 30 and 90 lenses. During the Current Year the Companys C-Vue disposable products accounted for approximately 55% of sales. The Company expects the sales of the C-Vue brand multifocal, the C-Vue Aspheric single vision and the C-Vue 1 Day ASV
lenses will make up an increasing percentage of its future sales.

Risk Factors

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.

The Company entered into a supply agreement with one supplier for the manufacture of its molded C-Vue multifocal lens, which currently accounts for approximately 52% of
the Companys sales. The agreement is renewable from year to year and is terminable pursuant to customary termination clauses. 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 manufacture of the C-Vue multifocal contact lens have been identified. However, there can be no assurances that an alternate supplier can successfully manufacture the lens to the Companys
specifications, on acceptable terms, or within the constraints of the exclusive license agreement with Bausch and Lomb.

Financial Instruments

The Companys financial instruments consist of cash and cash equivalents, accounts receivable, royalties and other receivables, accounts payable
and accrued liabilities. 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

We anticipate continued
growth of our C-Vue brand of disposal specialty contact lenses to independent eye care professionals. We believe market demographics favoring specialty contact lenses will continue to drive our revenue and earnings growth. Over the next year we plan
on adding new contact lens products to our C-Vue brand, such as custom lenses in higher oxygen permeable materials.

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. We have retained the services of Newport Capital Consultants, Inc. (Newport) as our broker relations counsel. We pay Newport a monthly consulting fee, and reimburse Newport for pre-approved expenses incurred in providing us
services.

Disclosure Controls and Procedures

As at
the fiscal year ended June 30, 2008, an evaluation was carried out, under the supervision of and with the participation of Company management, including the President and Chief Executive Officer, and Chief Financial Officer, of the
effectiveness of our disclosure controls and procedures. Based on that evaluation, the President and Chief Executive Officer and Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were
effective as at June 30, 2008 to provide reasonable assurance that material information relating to the Company, would be made known to them by others within the Company.



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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      |  | Michael J. Pecora  President & Chief Executive Officer             
|William D. Baxter     |  | Leonard F. Barker  Chief Financial Officer, Treasurer and Secretary
|Nick Bennett          |  |                                                                     
|Elizabeth J. Harrison |  |                                                                     

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Michael J. PecoraMICHAEL J. PECORA, 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 ofDocument |  | 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.                                                     
|                | 
|2.4             |  | ******First Amendment to Loan and Security Agreement, dated April 25, 2006 by and between RBC Centura Bank and Unilens Corp. USA.                                 
|                | 
|2.5             |  | Loan, Security Agreement and Promissory Note dated August 26, 2008 by and between Bank of America, N.A. 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.                



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|     |  |                                                                                                                                          
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------
|     | 
|4.10 |  | **Offer Letter, dated March 1, 1999, by Unilens Corp. USA to Michael J. Pecora (including an amendment dated July 10, 2003)              
|     | 
|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.         
|     | 
|4.16 |  | ******Severance Compensation Agreement, dated September 6, 2006, between Unilens Corp. USA, Unilens Vision Inc. and Kelly McKnight-Goelz.
|     | 
|4.17 |  | ******Lease Agreement, dated May 4, 2006 between, Center Family, LTD. as Landlord, and Unilens Corp. USA as Tenant.                      
|     | 
|4.18 |  | *******Consulting Agreement dated July 2, 2007 between Unilens Vision Inc. and Alfred W. Vitale.                                         
|     | 
|4.19 |  | Lease Agreement, dated July 1, 2008, between Unilens Corp. USA as Lessee and FIVE AND TWO ASSOCIATES as Lessor.                          
|     | 
|8.1  |  | List of Subsidiaries                                                                                                                     
|     | 
|11.1 |  | ****Code of Ethics                                                                                                                       
|     | 
|12.1 |  | Certification of Michael J. Pecora Pursuant to Rule 13a-14(a)                                                                            
|     | 
|12.2 |  | Certification of Leonard F. Barker Pursuant to Rule 13a-14(a)                                                                            
|     | 
|13.1 |  | Certification of Michael J. Pecora Pursuant to 18 U.S.C. Section 1350                                                                    
|     | 
|13.2 |  | Certification of Leonard F. Barker 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
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------

|***** | Previously filed as an exhibit to our registration statement on Form 20-F for the year ended June 30, 2005, filed with the Commission on December 30, 2005
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------

|****** | Previously filed as an exhibit to our registration statement on Form 20-F for the year ended June 30, 2006, filed with the Commission on December 29, 2006
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------

|******* | Previously filed as an exhibit to our registration statement on Form 20-F for the year ended June 30, 2007, filed with the Commission on December 28, 2007
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------



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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/ Michael J. Pecora                              
|Michael J. Pecora President/Chief Executive
Officer
|                                                   
|DATED: December 29, 2008                           



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