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

                                  FORM 10-QSB/A

                                (Amendment No 2)

                                   (Mark One)


     [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                       For the quarter ended June 30, 2003

                                       OR

     [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

 For the transition period from _____________ to ____________

 Commission file number 0-32013

                              SPEAR & JACKSON, INC.
                    ----------------------------------------
             (Exact name of registrant as specified in its charter)


          Nevada                                          91-2037081
       ----------                                       ---------------
(State of other jurisdiction of                         (I.R.S. Employer
incorporation or organisation)                       Identification Number)

2200 Corporate Boulevard, Suite 314
Boca Raton, Florida                                     33431
------------------------------------------------       --------
(Address of principal executive offices)              (Zip Code)

Registrant's telephone number, including area code: 561-999-9011

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

           Securities registered pursuant to Section 12(g) of the Act:
                     Common Stock, par value $.001 per share

Indicate by checkmark 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 report(s), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

Registrant had 12,011,122 shares of Common Stock, $.001 par value per share,
outstanding as of July 31, 2003.

<PAGE>

EXPLANATORY NOTE

On January 13, 2003, Spear & Jackson Inc. ("the Company") filed its annual
report on Form 10-KSB for the fiscal year ended September 30, 2002. On May 28,
2003 the Company filed Amendment No. 1 to the Annual Report on Form 10-KSB for
the fiscal year ended September 30, 2002. The amendment restated the original
Form 10-KSB in order to re-present the acquisition of Spear & Jackson plc and
Bowers Group plc by Megapro Tools, Inc. as a reverse takeover. The impact of
this restatement of the basis of consolidation was reflected in the quarterly
report on form 10-QSB for the three and nine month periods ended June 30, 2003
and June 30, 2002 which was filed on August 5, 2003.

Amendment No. 2 to the Annual Report on Form 10-KSB for the year ended September
30, 2002 was filed on December 30, 2003 in order to amend and restate the
consolidated financial statements for both the year ended September 30, 2002 and
the year ended September 30, 2001. Adjustments that impacted the Consolidated
Statement of Operations, the Consolidated Balance Sheet and the Consolidated
Statement of Changes in Shareholders' Equity for the year ended September 30,
2002 also affected the previously filed forms 10-QSB and 10-QSB/A for the
quarters ended December 31, 2002, March 31, 2003 and June 30, 2003. These
quarterly returns have accordingly been restated.

This Amendment No. 1 to the Quarterly Return on Form 10-QSB for the quarter
ended June 30, 2003, is therefore being filed to restate the financial
statements and supplemental disclosures as follows:

PART I
Item 1 - Financial Statements

1.       The presentation of the Company's UK defined benefit pension plan has
         been restated. The adjustments required arose from errors and omissions
         in the calculations that were prepared by the Company's actuaries when
         producing the pension plan disclosures that were originally included in
         Amendment 1 to Form 10-KSB for the year ended 30 September 30, 2002.
         The errors and omissions comprised:

a)                Overstatements in the calculation of the market related value
                  of assets, which meant that additional unrecognized actuarial
                  losses should have been amortized in the consolidated income
                  statement for the years ended September 30, 2002 and September
                  30, 2001.


b)                At September 30, 2002, no comparison of the fair value of plan
                  assets to the accumulated benefit obligation ("ABO") was
                  performed. Consequently a pension prepayment was incorrectly
                  recognized in the consolidated balance sheet despite the ABO
                  being in excess of the fair value of plan assets. The 2002
                  consolidated balance sheet was therefore amended to properly
                  record an additional minimum pension liability equivalent to
                  the shortfall of plan assets compared to the plan's ABO.

c)                The pension disclosures at September 30, 2001 were also
                  reconsidered and an additional minimum pension liability was
                  recognized in respect of that year also.

Item (a)  impacted  the  previously  reported  figure for  Selling,  General and
Administrative  ("SG&A") expenses and also the tax charge for the year. Item (b)
resulted in the previously disclosed pension asset of $14,962 being presented as
a pension  liability of $20,442 with  corresponding  debit entries being made to
deferred  taxation of $10,621  and to the "Other  Comprehensive  Income  (Loss)"
caption  within   shareholders'   equity  of  $24,343.   The  2001  ABO  pension
adjustments,  item (c), were reflected in the consolidated  statement of changes
in  shareholders'  equity  for the year  ended  September  30,  2001.  They also
affected the SFAS 87 charges for 2002 and subsequent years.

                                       2

<PAGE>

These adjustments also impact on the previously submitted financial statements
for the three and nine month periods ended June 30, 2003 as follows. Item (a)
reduced the figure for retained profits brought forward at October 1, 2002, as
originally stated, by $440 with $628 being credited to the pension liability and
$188 debited to the deferred tax asset. Items (b) and (c) resulted in the
previously disclosed pension asset at June 30, 2003 of $18,202 being presented
as a pension liability of $19,370 with corresponding debit entries being made to
deferred taxation of $11,084 and to the "Other Comprehensive Income (Loss)"
caption within shareholders' equity of $25,860.

2.       The fair value of the consideration for the deemed acquisition of
         Megapro Tools, Inc. was revised. This resulted in goodwill of $1,138
         being recognized which was then written off following a goodwill
         impairment review. With regard to the financial statements for the
         three months ended December 31, 2002, retained profits brought forward
         at October 1, 2002 were correspondingly reduced by this amount.

3.       Sales rebates totalling $906 in the three months ended June 30, 2003
         and $800 in the three months ended June 30, 2002 and rebates of $2,635
         in the nine months ended June 30, 2003 and $2,258 in the nine months
         ended June 30, 2002, which were previously presented as a component of
         SG&A expense, have been reanalyzed and are now shown as a reduction
         to sales.

4.       Expanded disclosures were included in "Other Comprehensive Income" in
         respect of unrealized gains and losses on derivative instruments to
         provide the quantified disclosures required by paragraphs 45-47 of SFAS
         133.

5.       Additional detailed segmental analysis disclosure.

6.       Additional contingencies disclosure. This has been done to supplement
         the original presentation and to ensure consistency with the footnote
         incorporated in the financial statements for the year ended September
         30, 2002 which were included in Form 10-KSB/A (Amendment No 2) which
         was filed on December 29, 2003.

In addition to the above, following the disposal of the Company's Megapro
screwdriver division in September 2003, the results of that business were
re-classified as discontinued operations in the Company's Consolidated Statement
of Operations for the year ended September 30, 2003. The Consolidated Statements
of Operations for the quarters ended December 31, 2002, March 31, 2003 and June
30, 2003 have also been revised to incorporate a similar re-classification of
operations.

PART I
Item 2 - Management's Discussion and Analysis or Plan of Operation

Management's Discussion and Analysis or Plan of Operation has been extended to
include:
(a)  a discussion of critical accounting policies;
(b)  additional narrative concerning the disposal of the Megapro Screwdriver
     division and its presentation as a discontinued operation in the financial
     statements attached hereto.

PART II
Item 1

(a) additional contingencies discussion

The remaining disclosures contained within this Amendment consist of all other
disclosures originally contained in the Company's Quarterly Report on Form
10-QSB for the quarter ended June 30, 2003 in the form filed with the Securities
and Exchange Commission ("SEC") on August 5, 2003.

Other disclosures as originally included in the Company's Quarterly Report on
Form 10-QSB for the three months ended June 30, 2003 are not amended hereby, but
are included for the convenience of the reader.

In order to preserve the nature and character of the disclosures set forth in
the Company's Quarterly Report on Form 10-QSB for the quarter ended June 30,
2003, as originally filed, except as expressly noted herein, this report speaks
as of the date of the original filing, and we have not updated the disclosures
in this report to speak as of a later date.

                                       3

<PAGE>

Therefore, while this report primarily relates to the historical periods
covered, events may have taken place since the original filing that might have
been reflected in this report if they had taken place prior to the original
filing. All information contained in this Amendment No. 1 is subject to updating
and supplementing as provided in our reports filed with the Securities and
Exchange Commission subsequent to the date of the original filing of the
Quarterly Report on Form 10-QSB for the quarter ended June 30, 2003.



















                                       4

<PAGE>

                              Spear & Jackson, Inc.


                                      INDEX



PART I. FINANCIAL INFORMATION
                                                                     Page Number
Item 1  Financial Statements (Unaudited)

        Consolidated Balance Sheet June 30, 2003                         F-1

        Consolidated Statements of Operations - Three and Nine Months
        ended June 30, 2003 and 2002                                     F-2

        Consolidated Statements of Comprehensive Income (Loss) -
        Three and Nine Months ended June 30, 2003 and 2002               F-3

        Consolidated Statements of Cash Flows - Nine Months
        ended June 30, 2003 and 2002                                     F-4

        Notes to Consolidated Financial Statements                       F-5

Item 2  Management's Discussion and Analysis or
        Plan of Operation                                                  6

Item 3  Controls and Procedures                                            8

PART II OTHER INFORMATION

Item 1  Legal Proceedings                                                  8

Item 2  Changes in Securities and Use of Proceeds                          8

Item 3  Defaults Upon Senior Securities                                    8

Item 4  Submission of Matters to a Vote of Security Holders                8

Item 5  Other Information                                                 19

Item 6  Exhibits and Reports on Form 8-K                                  19

SIGNATURES


                                       5
<PAGE>

                              SPEAR & JACKSON, INC.

                           CONSOLIDATED BALANCE SHEET
                                   (Unaudited)
                                 (in thousands)

                                                           At June 30,
                                                              2003
                                                        ---------------
                                                           (Restated)
                      ASSETS
Current assets:
 Cash and cash equivalents                              $        8,307
 Trade receivables, net                                         18,270
 Inventories                                                    25,810
 Other current assets                                              832
                                                        ---------------
Total current assets                                            53,219

Property, plant and equipment, net                              20,030
Deferred taxation                                                8,872
Investments                                                        147
                                                        ---------------
Total assets                                            $       82,268
                                                        ===============


                           LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Notes payable                                          $          142
 Trade accounts payable                                         11,041
 Accrued expenses and other liabilities                         12,967
 Director's loan payable                                           100
 Foreign taxes payable                                              35
                                                        ---------------
Total current liabilities                                       24,285
Other liabilities                                                1,814
Pension liability                                               19,370
                                                        ---------------
Total liabilities                                               45,469
                                                        ---------------
Stockholders' equity:
 Common stock                                                       12
 Additional paid in capital                                     51,590
 Accumulated other comprehensive income:
  Pension additional minimum liability                         (25,860)
  Foreign currency translation adjustment                        7,501
  Unrealized losses on derivative instruments                      (12)
 Retained earnings                                               3,568
                                                        ---------------
                                                                36,799
                                                        ---------------

Total stockholders' equity                              $       82,268
                                                        ===============




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

                                      F-1

<PAGE>

SPEAR & JACKSON, INC.


                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                   (Unaudited)


                                 (in thousands)


<TABLE>
<CAPTION>
                                                 For the Three Months Ended           For the Nine Months Ended
                                                  June 30,        June 30,            June 30,         June 30,
                                                    2003            2002                2003             2002
                                              --------------- ------------------  ---------------- ----------------
                                                  (Restated)        (Restated)       (Restated)       (Restated)

<S>                                           <C>             <C>                 <C>              <C>
Net sales                                     $       24,787  $          23,394   $        72,003  $        66,022
Cost of goods sold                                    16,734             16,211            48,824           46,544
                                              --------------- ------------------  ---------------- ----------------
Gross profit                                           8,053              7,183            23,179           19,478

Operating costs and expenses:
Selling, general and administrative expenses           5,278              6,133            16,816           18,017
                                              --------------- ------------------  ---------------- ----------------
Operating income                                       2,775              1,050             6,363            1,461

Other income (expense)
Royalties                                                  2               -                   14             -
Rental income                                             38                 30               108               91
Interest and bank charges (net)                          (69)                11              (158)            (174)
                                              --------------- ------------------  ---------------- ----------------
Income from continuing operations
 before income taxes                                   2,746              1,091             6,327            1,378
Provision for income taxes                              (832)              (383)           (1,791)            (578)
                                              --------------- ------------------  ---------------- ----------------
Income from continuing operations                      1,914                708             4,536              800
                                              --------------- ------------------  ---------------- ----------------

Discontinued operations:

Income from operations of Megapro
 screwdriver division (including taxation
 of $0)                                                   12               -                   45             -
                                              --------------- ------------------  ---------------- ----------------
Income from discontinued operations                       12               -                   45             -
                                              --------------- ------------------  ---------------- ----------------

Net income                                    $        1,926  $             708   $         4,581  $           800
                                              =============== ==================  ================ ================

Basic and diluted earnings per share:

From continuing operations                             $0.16              $0.20             $0.38            $0.23

From discontinued operations                            0.00               0.00              0.00             0.00
                                              --------------- ------------------  ---------------- ----------------
Total                                                  $0.16              $0.20             $0.38            $0.23
                                              =============== ==================  ================ ================

Weighted average shares outstanding               12,011,122          3,543,281        12,011,122        3,543,281
                                              =============== ==================  ================ ================

</TABLE>

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

                                      F-2

<PAGE>

                              SPEAR & JACKSON, INC.


             CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)


                                   (Unaudited)


                                 (in thousands)
<TABLE>
<CAPTION>


                                               For the Three     For the Three     For the Nine     For the Nine
                                                Months Ended      Months Ended     Months Ended     Months Ended
                                                  June 30,          June 30,         June 30,         June 30,
                                                    2003              2002             2003             2002
                                               ---------------   ---------------  ---------------   --------------
                                                 (Restated)         (Restated)       (Restated)       (Restated)

<S>                                            <C>                <C>             <C>               <C>
Total net income                               $        1,926     $         708   $        4,581    $         800

Other comprehensive income (loss)

 Additional minimum pension liability                  (1,275)             (782)          (1,517)            (435)
 Foreign currency translation adjustments               3,220             3,892            4,445            2,136
 Unrealized (losses) gains on derivative
  instruments                                              (2)                7              (14)             (69)
                                               ---------------   ---------------  ---------------   --------------
Total comprehensive income                     $        3,869    $        3,825   $        7,495    $       2,432
                                               ===============   ===============  ===============   ==============


</TABLE>







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

                                      F-3




<PAGE>

                              SPEAR & JACKSON, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                       For the Nine Months Ended
                                                                       June 30,         June 30,
                                                                        2003              2002
                                                                   ----------------- -----------------

                                                                      (Restated)         (Restated)

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                <C>               <C>
Net income                                                         $          4,581  $            800
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation                                                                  2,137             2,122
Profit on sale of plant, property and equipment                                (170)             -
Deferred income taxes                                                         1,726               499
Changes in operating assets and liabilities, excluding the effects
of acquisitions and dispositions:
Decrease (increase) in trade receivables                                      1,064              (752)
(Increase) decrease in inventories                                           (3,543)              700
Decrease in other current assets                                                507               754
Contributions paid to pension plan                                           (2,101)           (2,358)
(Decrease) increase in other non-current liabilities                           (206)               55
Increase in trade accounts payable                                            1,477             3,007
(Decrease) increase in accrued expenses and other liabilities                  (609)              607
Decrease in foreign taxes payable                                                (5)             -
Increase (decrease) in other liabilities                                        768            (3,070)
                                                                   ----------------- -----------------
NET CASH  PROVIDED BY  OPERATING ACTIVITIES                                   5,626             2,364
                                                                   ----------------- -----------------

INVESTING ACTIVITIES:
Purchases of property, plant and equipment                                   (2,690)             (792)
Proceeds from sale of property, plant and equipment                             170              -
                                                                   ----------------- -----------------
NET CASH USED IN INVESTING ACTIVITIES                                        (2,520)             (792)
                                                                   ----------------- -----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt                                                     (23)               (9)
Repayment of overdraft                                                       (1,163)             (151)
Promissory notes repaid                                                        (235)             -
Repayment of shareholder loan                                                   (60)             -
                                                                   ----------------- -----------------
NET CASH USED IN FINANCING ACTIVITIES                                        (1,481)             (160)
                                                                   ----------------- -----------------

Effect of exchange rate changes on cash and cash equivalents                    196               202
                                                                   ----------------- -----------------

CHANGE IN CASH AND CASH EQUIVALENTS                                           1,821             1,614

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                              6,486             2,710
                                                                   ----------------- -----------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                         $          8,307  $          4,324
                                                                   ================= =================

SUPPLEMENTAL CASH FLOW INFORMATION
    Cash paid for interest                                         $            174  $            190
                                                                   ================= =================
    Cash paid for taxes                                            $             65  $             80
                                                                   ================= =================

</TABLE>


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

                                      F-4

<PAGE>


                              SPEAR & JACKSON, INC.


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                          (in thousands except shares)

Note 1--Basis of Presentation

     These consolidated  financial  statements are expressed in U.S. dollars and
have been prepared in accordance with accounting  principles  generally accepted
in the United States. The consolidated financial statements include the accounts
of Spear & Jackson Inc.  (the Company) and its wholly owned  subsidiaries,  Mega
Tools Ltd.,  Mega Tools USA,  Inc.,  Megapro  Tools,  Inc., S and J  Acquisition
Corp.,  Spear & Jackson plc and Bowers  Group plc.  Both Spear & Jackson plc and
Bowers Group plc are sub-holding  companies and their business is carried out by
the following  directly and  indirectly  owned  subsidiaries:  Bowers  Metrology
Limited,  Bowers  Metrology UK Limited,  Coventry Gauge Limited,  CV Instruments
Limited, Eclipse Magnetics Limited, Spear & Jackson (New Zealand) Limited, James
Neill Canada Inc., James Neill Holdings Limited,  James Neill U.S.A. Inc., Spear
& Jackson (Australia) Pty Ltd., Magnacut Limited,  Neill Tools Limited,  Spear &
Jackson Garden  Products  Limited,  Spear & Jackson  Holdings  Limited,  Spear &
Jackson France S.A. and Societe Neill France S.A.

As further  explained in note 4, below,  the purchase of Spear & Jackson plc and
Bowers Group plc by Megapro  Tools,  Inc. (now Spear & Jackson,  Inc.) which was
completed on September 6, 2002 was treated as a reverse acquisition.

All significant intercompany accounts and transactions have been eliminated on
consolidation.

The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
statements pursuant to both the rules and regulations of the Securities and
Exchange Commission and with instructions to Form 10-QSB. Accordingly, certain
information and footnote disclosures required for annual financial statements
have been condensed or omitted. The Company's management believes that all
adjustments necessary to present fairly the Company's financial position as of
June 30, 2003 and the results of operations for the three and nine month periods
ended June 30, 2003 and June 30, 2002 and cash flows for the nine months ended
June 30, 2003 and June 30, 2002 have been included and that the disclosures are
adequate to make the information presented not misleading.

It is suggested that these financial statements be read in conjunction with the
audited consolidated financial statements and related footnotes of the Company
for the period ended September 30, 2002 included in the Company's amended annual
report filed on Form 10-KSB/A for the period then ended.

The consolidated financial statements of Spear & Jackson, Inc. are denominated
in US dollars. Changes in exchange rates between UK sterling and the US dollar
will affect the translation of the UK subsidiaries' financial results into US
dollars for the purposes of reporting the consolidated financial results. The
process by which each foreign subsidiary's financial results are translated into
US dollars is as follows: income statement accounts are translated at average
exchange rates for the period; balance sheet asset and liability accounts are
translated at end of period exchange rates; and equity accounts are translated
at historical exchange rates. Translation of the balance sheet in this manner
affects the stockholders' equity account, referred to as the accumulated other
comprehensive loss account. Management have decided not to hedge against the
impact of exposures giving rise to these translation adjustments as such hedges
may impact upon the Company's cash flow compared to the translation adjustments
which do not affect cash flow in the medium term.


The results of operations for the three and nine month periods ended June 30,
2003 are not necessarily indicative of the results to be expected for the full
year.

Certain reclassifications have been made to prior period amounts to conform to
current period presentation.


The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

                                      F-5

<PAGE>

                              SPEAR & JACKSON, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                          (in thousands except shares)


Note 2 - Recently Issued Accounting Standards

SFAS No. 145, Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB
Statement No. 13, and Technical Corrections was issued April 2002. This
Statement rescinds FASB Statement No. 4, Reporting Gains and Losses from
Extinguishment of Debt, and an amendment of that Statement, FASB Statement No.
64, Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements. This
Statement also rescinds FASB Statement No. 44, Accounting for Intangible Assets
of Motor Carriers. This Statement amends FASB Statement No. 13, Accounting for
Leases, to eliminate an inconsistency between the required accounting for
sale-leaseback transactions and the required accounting for certain lease
modifications that have economic effects that are similar to sale-leaseback
transactions. This Statement also amends other existing authoritative
pronouncements to make various technical corrections, clarify meanings, or
describe their applicability under changed conditions. The provisions of this
Statement related to the rescission of Statement 4 shall be applied in fiscal
years beginning after May 15, 2002. The provisions in paragraph 8 and 9(c) of
this Statement related to Statement 13 shall be effective for transactions
occurring after May 15, 2002. All other provisions of this Statement shall be
effective for financial statements issued on or after May 15, 2002. The effects
of implementation are not material.

SFAS No. 146 Accounting for Costs Associated with Exit or Disposal Activities
was issued June 2002. This Statement addresses financial accounting and
reporting for costs associated with exit or disposal activities and nullifies
Emerging Issues Task Force (EITF) Issue No. 94-3, Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring). The provisions of this
Statement are effective for exit and disposal activities that are initiated
after December 31, 2002.

In September 2002, the FASB issued SFAS No. 147, Acquisition of Certain
Financial Institutions. SFAS No. 147 changed the special accounting for
unidentifiable intangible assets recognized under SFAS No. 72. Transition
provisions for previously recognized unidentifiable intangible assets were
effective on October 1, 2002. The effects of implementation had no impact on the
Company's consolidated financial statements.

In May 2003, the FASB issued SFAS No. 150, (Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity). The Standard
specifies that instruments within its scope embody obligations of the issues and
therefore, the issuer must classify them as liabilities. The Standard is
effective July 1, 2003. The Standard will have no material effect on the
Company's financial position.


Note 3 - Critical Accounting Policies

         A summary of significant accounting policies is included in Note 2 to
the audited consolidated financial statements included in the Company's Annual
Report on Form 10-KSB/A for the year ended September 30, 2002. Management
believes that the application of these policies on a consistent basis enables
the Company to provide useful and reliable financial information about the
Company's operating results and financial condition.

As disclosed in the annual report on Form 10-KSB/A for the fiscal year ended
September 30, 2002, the discussion and analysis of our financial condition and
results of operations are based upon our consolidated financial statements.
These have been prepared in conformity with accounting principles generally
accepted in the United States. The preparation of the financial statements
requires us to make estimates and assumptions that affect the reported amounts
of assets, liabilities, revenues and expenses as disclosed in those financial
statements. These judgements can be subjective and complex, and consequently
actual results could differ from those estimates. Our most critical accounting
policies relate to revenue recognition; foreign exchange risk; inventory and
pension and other post-retirement benefit costs. Since September 30, 2002, there
have been no changes in our critical accounting policies and no significant
changes to the assumptions and estimates related to them.

                                      F-6

<PAGE>

                              SPEAR & JACKSON, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                          (in thousands except shares)


Note 4 - Nature of Business

         The Company was incorporated in the State of Nevada on December 17,
1998 and was inactive until the acquisition of Mega Tools Ltd. and Mega Tools
USA, Inc. via reverse acquisition on September 30, 1999. The Company is engaged
in the manufacture and sale of a patented multi-bit screwdriver. The Company
entered into an exclusive North American license agreement with the patent
holder of a retracting cartridge type screwdriver. This license agreement gave
the Company unrestricted use of the patent in Canada and the United States until
November 8, 2005. The Company's wholly owned subsidiaries, Mega Tools USA, Inc.
and Mega Tools Ltd. manufactured and marketed the drivers to customers in the
United States and Canada. With effect from September 30, 2003 the Company exited
its screwdriver operations following the sale of the trade and net assets of
Mega Tools USA, Inc. and Mega Tools Ltd.

         On September 6, 2002 the Company acquired the entire issued share
capital of Spear & Jackson plc and Bowers Group plc. These companies through
their principal operating entities, as disclosed in note 1, manufacture and
distribute a broad line of hand tools, lawn and garden tools, industrial magnets
and metrology tools primarily in the United Kingdom, Europe, Australia, North
and South America, Asia and the Far East.

         Having considered the relative sizes of the businesses involved in the
combination and other factors, the acquisition of Spear & Jackson plc and Bowers
Group plc ("S&J") by Megapro Tools, Inc. was accounted for as a reverse
acquisition for financial reporting purposes. The reverse acquisition is deemed
a capital transaction and the net assets of S&J (the accounting acquirer) were
carried forward to Megapro Tools, Inc. (the legal acquirer and the reporting
entity) at their carrying value before the combination. Although S&J was deemed
to be the acquiring corporation for financial accounting and reporting purposes,
the legal status of Megapro Tools, Inc. as the surviving corporation does not
change. The relevant acquisition process utilizes the capital structure of
Megapro Tools, Inc. and the assets and liabilities of S&J are recorded at
historical cost.

          In these financial statements, S&J is the operating entity for
financial reporting purposes and the financial statements for all periods
presented represent S&J's financial position and results of operations. The
equity of Megapro Tools Inc. is the historical equity of S&J retroactively
restated to reflect the number of shares issued in the S&J acquisition.

         On 7 November 2002 the Company changed its name from Megapro Tools,
Inc. to Spear & Jackson, Inc.

Note 5 - Commitments and Contingencies


         From time to time, the Company is subject to legal proceedings and
claims arising from the conduct of its business operations, including litigation
related to personal injury claims, customer contract matters, employment claims
and environmental matters. While it is impossible to ascertain the ultimate
legal and financial liability with respect to contingent liabilities, including
lawsuits, the Company believes that the aggregate amount of such liabilities, if
any, in excess of amounts accrued or covered by insurance, will not have a
material adverse effect on the consolidated financial position or results of
operation of the Company.

Note 6 - Segment Data

         The Company's principal operations relate to the manufacture and
distribution of a broad line of hand tools, lawn and garden tools, industrial
magnets and metrology tools. These operations are conducted through business
divisions located primarily in the United Kingdom, France, USA and Australasia.

         Given below are summaries of the significant accounts and balances by
business segment and by geographical location, reconciled to the consolidated
totals. In both periods, transactions and balances applicable to the Company's
distribution companies in France, Australia and New Zealand have been aggregated
with the hand and garden product businesses since these products represent the
most significant proportion of the distribution companies' trades. The summaries
also provide an analysis of the accounts and balances between continuing and
discontinued operations.

                                      F-7

<PAGE>

                              SPEAR & JACKSON, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

                          (in thousands except shares)

Note 6--Segment Data - continued

         The financial information of the segments is regularly evaluated by the
corporate operating executives in determining resource allocation and assessing
performance and is periodically reviewed by the Company's Board of Directors.
The Company's senior management evaluates the performance of each business
segment based on its operating results and, other than general corporate
expenses, allocates specific corporate overhead to each segment. Accounting
policies for the segments are the same as those for the Company.

         The following is a summary of the significant accounts and balances (in
thousands) by business segment, reconciled to the consolidated totals.
<TABLE>
<CAPTION>
                                 Sales             Long-lived Assets (a)          Sales              Long-lived Assets (a)
                        -----------------------  -----------------------  ------------------------  -----------------------
                          Three Months Ended       Three Months Ended        Nine Months Ended        Nine Months Ended
                         June 30,   June 30,      June 30,    June 30,     June 30,    June 30,      June 30,    June 30,
                           2003       2002          2003        2002         2003        2002          2003        2002
                        ----------- -----------  ----------- -----------  ----------- ------------  ----------- -----------
<S>                     <C>         <C>          <C>         <C>          <C>         <C>           <C>         <C>
  Hand & garden tools   $   19,229  $   17,954   $    6,898  $   10,142   $   55,254  $    49,503   $    6,898  $   10,142
  Metrology tools            3,502       3,376        2,705       2,537       10,412       10,372        2,705       2,537
  Magnetic products          2,056       2,064        1,049       1,073        6,337        6,147        1,049       1,073
  Screwdrivers                 263        -             180        -             869         -             180        -
  Corporate                   -           -           9,198       8,680         -            -           9,198       8,680
                        ----------- -----------  ----------- -----------  ----------- ------------  ----------- -----------
     Total              $   25,050  $   23,394   $   20,030  $   22,432   $   72,872  $    66,022   $   20,030  $   22,432
                        =========== ===========  =========== ===========  =========== ============  =========== ===========
Attributable to:
Continuing operations   $   24,787  $   23,394   $   19,850  $   22,432   $   72,003  $    66,022   $   19,850  $   22,432
Discontinued operations        263        -             180        -             869         -             180        -
                        ----------- -----------  ----------- -----------  ----------- ------------  ----------- -----------
                        $   25,050  $   23,394   $   20,030  $   22,432   $   72,872  $    66,022   $   20,030  $   22,432
                        =========== ===========  =========== ===========  =========== ============  =========== ===========

                              Depreciation         Capital expenditure          Depreciation          Capital expenditure
                        -----------------------  -----------------------  ------------------------  -----------------------
                          Three Months Ended       Three Months Ended        Nine Months Ended        Nine Months Ended
                         June 30,   June 30,      June 30,    June 30,     June 30,    June 30,      June 30,    June 30,
                           2003       2002          2003        2002         2003        2002          2003        2002
                        ----------- -----------  ----------- -----------  ----------- ------------  ----------- -----------
  Hand & garden tools   $      488  $      476   $       41  $      572   $    1,448  $     1,462   $    1,721  $      755
  Metrology tools              101         108         -              1          297          311          543           5
  Magnetic products             51          75         -              2          206          199          333          32
  Screwdrivers                  12        -            -           -              36         -            -           -
  Corporate                     54          56           38        -             150          150           93        -
                        ----------- -----------  ----------- -----------  ----------- ------------  ----------- -----------
     Total              $      706  $      715   $       79  $      575   $    2,137  $     2,122   $    2,690  $      792
                        =========== ===========  =========== ===========  =========== ============  =========== ===========
Attributable to:
Continuing operations   $      694  $      715   $       79  $      575   $    2,101  $     2,122   $    2,690  $      792
Discontinued operations         12        -            -           -              36         -            -           -
                        ----------- -----------  ----------- -----------  ----------- ------------  ----------- -----------
                        $      706  $      715   $       79  $      575   $    2,137  $     2,122   $    2,690  $      792
                        =========== ===========  =========== ===========  =========== ============  =========== ===========

                           Operating Income      Net Interest                Operating Income       Net Interest
                        -----------------------  -----------------------  ------------------------  -----------------------
                          Three Months Ended       Three Months Ended        Nine Months Ended        Nine Months Ended
                         June 30,   June 30,      June 30,    June 30,     June 30,    June 30,      June 30,    June 30,
                           2003       2002          2003        2002         2003        2002          2003        2002
                        ----------- -----------  ----------- -----------  ----------- ------------  ----------- -----------
  Hand & garden tools   $    1,863  $      863   $      (77) $     (113)  $    4,532   $    1,337    $    (175) $     (294)
  Metrology tools              449         108           (6)         (2)       1,098          613          (11)         (7)
  Magnetic products            490         174           (4)         (4)       1,200          141           (9)         (7)
  Screwdrivers                  15           -           (3)          -           61            -          (18)          -
  Corporate                    (27)        (95)          18         130         (467)        (630)          39         134
                        ----------- -----------  ----------- -----------  ----------- ------------  ----------- -----------
     Total              $    2,790  $    1,050   $      (72) $       11   $    6,424  $     1,461   $     (174) $     (174)
                        =========== ===========  =========== ===========  =========== ============  =========== ===========
Attributable to:
Continuing operations   $    2,775  $    1,050   $      (69) $       11   $    6,363  $     1,461   $     (158) $     (174)
Discontinued operations         15        -              (3)       -              61         -             (16)       -
                        ----------- -----------  ----------- -----------  ----------- ------------  ----------- -----------
                        $    2,790  $    1,050   $      (72) $       11   $    6,424  $     1,461   $     (174) $     (174)
                        =========== ===========  =========== ===========  =========== ============  =========== ===========
</TABLE>
(a) Represents property, plant and equipment, net.

                                      F-8

<PAGE>

                              SPEAR & JACKSON, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                          (in thousands except shares)

Note 6 - Segment Data - continued

The following table presents certain data by geographic areas (in thousands):

<TABLE>
<CAPTION>

                                Sales (a)         Long-lived Assets (b)             Sales (a)         Long-lived Assets (b)
                        -----------------------  -------------------------   ----------------------  -----------------------
                           Three Months Ended       Three Months Ended          Nine Months Ended      Nine Months Ended
                         June 30     June 30       June 30      June 30       June 30    June 30      June 30     June 30
                          2003        2002          2003         2002           2003       2002         2003        2002
                        ---------- ------------  ------------ ------------   ----------- ----------  ----------- -----------

<S>                     <C>        <C>           <C>          <C>            <C>         <C>         <C>         <C>
  United Kingdom        $   7,460  $     6,884   $    17,881  $    20,709    $   29,242  $  30,626   $   17,881  $   20,709
  Europe                    5,548        6,618         1,288        1,185        14,187     12,088        1,288       1,185
  Australasia               5,456        4,231           681          538        16,599     11,671          681         538
  North America               982          164           180         -            5,281      4,188          180        -
  Other                     5,604        5,497          -            -            7,563      7,449         -           -
                        ---------- ------------  ------------ ------------   ----------- ----------  ----------- -----------
     Total              $  25,050  $    23,394   $    20,030  $    22,432    $   72,872  $  66,022   $   20,030  $   22,432
                        ========== ============  ============ ============   =========== ==========  =========== ===========
Attributable to:
Continuing operations   $  24,787  $    23,394   $    19,850  $    22,432    $   72,003  $  66,022   $   19,850  $   22,432
Discontinued operations       263         -              180         -              869       -             180        -
                        ---------- ------------  ------------ ------------   ----------- ----------  ----------- -----------
                        $  25,050  $    23,394   $    20,030  $    22,432    $   72,872  $  66,022   $   20,030  $   22,432
                        ========== ============  ============ ============   =========== ==========  =========== ===========

                             Depreciation           Capital expenditure            Depreciation        Capital expenditure
                        -----------------------  -------------------------   ----------------------  -----------------------
                           Three Months Ended       Three Months Ended          Nine Months Ended      Nine Months Ended
                         June 30     June 30       June 30      June 30       June 30    June 30      June 30     June 30
                          2003        2002          2003         2002           2003       2002         2003        2002
                        ---------- ------------  ------------ ------------   ----------- ----------  ----------- -----------

  United Kingdom        $     572  $       656   $        74  $       522    $    1,798  $   1,462   $    2,387  $      728
  Europe                       27            1             5         -               84        311            8           4
  Australasia                  92           58          -              53           213        199          285          60
  North America                15         -             -            -               42        150           10        -
                        ---------- ------------  ------------ ------------   ----------- ----------  ----------- -----------
     Total              $     706  $       715   $        79  $       575    $    2,137  $   2,122   $    2,690  $      792
                        ========== ============  ============ ============   =========== ==========  =========== ===========
Attributable to:
Continuing operations   $     694  $       715   $        79  $       575    $    2,101  $   2,122   $    2,690  $      792
Discontinued operations        12         -             -            -               36       -            -           -
                        ---------- ------------  ------------ ------------   ----------- ----------  ----------- -----------
                        $     706  $       715   $        79  $       575    $    2,137  $   2,122   $    2,690  $      792
                        ========== ============  ============ ============   =========== ==========  =========== ===========

                            Operating income     Net Interest                   Operating income     Net Interest
                        --------------------------------------------------   -----------------------------------------------
                           Three Months Ended       Three Months Ended          Nine Months Ended      Nine Months Ended
                         June 30     June 30       June 30      June 30       June 30    June 30      June 30     June 30
                          2003        2002          2003         2002           2003       2002         2003        2002
                        ---------- ------------  ------------ ------------   ----------- ----------  ----------- -----------

  United Kingdom        $   2,700  $     1,126   $       (32) $        82    $    6,032  $   1,300   $      (61) $       54
  Europe                      (10)         (81)          (54)         (31)          160        (21)        (127)       (129)
  Australasia                 297            5            (4)         (40)          828        182           (8)        (99)
  North America              (197)        -               18         -             (596)      -              22        -
                        ---------- ------------  ------------ ------------   ----------- ----------  ----------- -----------
     Total              $   2,790  $     1,050   $       (72) $        11    $    6,424  $   1,461   $     (174) $     (174)
                        ========== ============  ============ ============   =========== ==========  =========== ===========
Attributable to:
Continuing operations   $   2,775  $     1,050   $       (69) $        11    $    6,363  $   1,461   $     (158) $     (174)
Discontinued operations        15         -               (3)        -               61       -             (16)       -
                        ---------- ------------  ------------ ------------   ----------- ----------  ----------- -----------
                        $   2,790  $     1,050   $       (72) $        11    $    6,424  $   1,461   $     (174) $     (174)
                        ========== ============  ============ ============   =========== ==========  =========== ===========

</TABLE>


(a) Sales are attributed to geographic areas based on the location of the
customers.
(b) Represents property, plant and equipment, net.

                                      F-9

<PAGE>



                              SPEAR & JACKSON, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                          (in thousands except shares)


Note 7 - Restatement of Previously Issued Financial Statements

On January 13, 2003, Spear & Jackson Inc. ("the Company") filed its annual
report on Form 10-KSB for the fiscal year ended September 30, 2002. On May 28,
2003 the Company filed Amendment No. 1 to the Annual Report on Form 10-KSB for
the fiscal year ended September 30, 2002. The amendment restated the original
Form 10-KSB in order to re-present the acquisition of Spear & Jackson plc and
Bowers Group plc by Megapro Tools, Inc. as a reverse takeover. The impact of
this restatement of the basis of consolidation was reflected in the Quarterly
Report on form 10-QSB for the three and nine month periods ended June 30, 2003
and June 30, 2002 which was filed on August 5, 2003.

Amendment No. 1 to the Annual Report on Form 10-KSB for the year ended September
30, 2002 was filed on December 30, 2003 in order to amend and restate the
consolidated financial statements for both the year ended September 30, 2002 and
the year ended September 30, 2001. Adjustments that impacted the Consolidated
Statement of Operations, the Consolidated Balance Sheet and the Consolidated
Statement of Changes in Shareholders' Equity for the year ended September 30,
2002 also affected the previously filed forms 10-QSB and 10-QSB/A for the
quarters ended December 31, 2002, March 31, 2003 and June 30, 2003. These
quarterly returns have accordingly been restated.

Amendments made herewith to form 10-QSB, as filed on August 5, 2003, for the
three months ended June 30, 2003, as filed on August 5, 2003, in respect of the
above adjustments specifically comprise the following:

1.       The presentation of the Company's UK defined benefit pension plan has
         been restated. The adjustments required arose from errors and omissions
         in the calculations that were prepared by the Company's actuaries when
         producing the pension plan disclosures that were originally included in
         Amendment 1 to Form 10-KSB for the year ended 30 September 30, 2002.
         The errors and omissions comprised:

a)                Overstatements in the calculation of the market related value
                  of assets, which meant that additional unrecognized actuarial
                  losses should have been amortized in the consolidated income
                  statement for the years ended September 30, 2002 and September
                  30, 2001.


b)                At September 30, 2002, no comparison of the fair value of plan
                  assets to the accumulated benefit obligation ("ABO") was
                  performed. Consequently a pension prepayment was incorrectly
                  recognized in the consolidated balance sheet despite the ABO
                  being in excess of the fair value of plan assets. The 2002
                  consolidated balance sheet was therefore amended to properly
                  record an additional minimum pension liability equivalent to
                  the shortfall of plan assets compared to the plan's ABO.

c)                The pension disclosures at September 30, 2001 were also
                  reconsidered and an additional minimum pension liability was
                  recognized in respect of that year also.

         At September 30, 2002, item (a) impacted the previously reported figure
         for SGA expenses and also the tax charge for the year. Item (b)
         resulted in the previously disclosed pension asset of $14,962 being
         presented as a pension liability of $20,442 with corresponding debit
         entries being made to deferred taxation of $10,621 and to the "Other
         Comprehensive Income (Loss)" caption within shareholders' equity of
         $24,343. The 2001 ABO pension adjustments, item (c), were reflected in
         the consolidated statement of changes in shareholders' equity for the
         year ended September 30, 2001. They also affected the SFAS 87 charges
         for 2002 and subsequent years.

                                      F-10

<PAGE>

                              SPEAR & JACKSON, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                          (in thousands except shares)


Note 7 - Restatement of Previously Issued Financial Statements - continued

         These adjustments also impact on the previously submitted financial
         statements for the three and nine month periods ended June 30, 2003 and
         June 30, 2002 as follows. Item (a) reduced the figure for retained
         profits brought forward at October 1, 2002, as originally stated, by
         $440 with $628 being credited to the pension liability and $188 debited
         to the deferred tax asset. Items (b) and (c) resulted in the previously
         disclosed pension asset at June 30, 2003 of $18,202 being presented as
         a pension liability of $19,370 with corresponding debit entries being
         made to deferred taxation of $11,084 and to the "Other Comprehensive
         Income (Loss)" caption within shareholders' equity of $25,860.

2.       The fair value of the consideration for the deemed acquisition of
         Megapro Tools, Inc. was revised. This resulted in goodwill of $1,138
         being recognized which was then written off following a goodwill
         impairment review. With regard to the financial statements for the
         three months ended June 30, 2003, retained profits brought forward at
         October 1, 2002 were correspondingly reduced by this amount.

3.       Sales rebates totaling $906 in the three months ended June 30, 2003 and
         $800 in the three months ended June 30, 2002 and $2,635 in the nine
         months ended June 30, 2003 and $2,258 in the nine months ended June 30,
         2002 which were previously presented as a component of SG&A expense,
         have been reanalyzed and are now shown as a reduction to sales.


4.       Expanded disclosures were included in "Other Comprehensive Income" in
         respect of unrealized gains and losses on derivative instruments to
         provide the quantified disclosures required by paragraphs 45-47 of SFAS
         133.

5.       Additional detailed segmental analysis disclosure.


6.       Additional contingencies disclosure. This has been done to supplement
         the original presentation and to ensure consistency with the footnote
         included in the financial statements for the year ended September 30,
         2002 which were included in Form 10-KSB/A (Amendment No 2) which was
         filed on December 29, 2003.

In addition to the above, following the disposal of the Company's Megapro
screwdriver division in September 2003, the results of that business were
re-classified as discontinued operations in the Company's Consolidated Statement
of Operations for the year ended September 30, 2003. The Consolidated Statements
of Operations for the quarters ended December 31, 2002, March 31, 2003 and June
30, 2003 have also been revised to incorporate a similar re-classification of
operations.

The following tables present the Consolidated Statements of Operations for the
quarters ended June 30, 2003 and June 30, 2002 and the nine months ended June
30, 2003 and June, 30 2002 together with the Consolidated Balance Sheet as at
June 30, 2003, as previously reported and as restated. The financial information
is presented in thousands, except for per share data.



                                      F-11

<PAGE>

                              SPEAR & JACKSON, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                          (in thousands except shares)




Spear & Jackson, Inc.
Consolidated Statement of Operations

<TABLE>
<CAPTION>

                                                                    For the Three Months Ended
                                                                            June 30, 2003
                                                   -----------------------------------------------------------------
                                                   As Previously     As Restated      Discontinued     As Restated
                                                     Reported     Before Disclosure    Operations    After Disclosure
                                                                   Of Discontinued                   Of Discontinued
                                                                     Operations                         Operations
                                                   -------------- ------------------ ------------- ------------------
<S>                                                <C>            <C>                <C>           <C>
Net sales                                          $      25,956  $          25,050  $       (263) $          24,787
Cost of goods sold                                        16,886             16,886          (152)            16,734
                                                   -------------- ------------------ ------------- ------------------
Gross profit                                               9,070              8,164          (111)             8,053

Operating costs and expenses:
Selling, general and administrative expenses               6,280              5,374           (96)             5,278
                                                   -------------- ------------------ ------------- ------------------
Operating income (loss) from continuing operations         2,790              2,790           (15)             2,775

Other income (expense)
Royalties (net)                                                2                  2          -                     2
Rental income                                                 38                 38          -                    38
Interest and bank charges (net)                              (72)               (72)            3                (69)
                                                   -------------- ------------------ ------------- ------------------
Income (loss) from continuing operations
 before taxation                                           2,758              2,758           (12)             2,746
Provision for income taxes                                  (832)              (832)         -                  (832)
                                                   -------------- ------------------ ------------- ------------------
Income (loss) from continuing operations                   1,926              1,926           (12)             1,914
                                                   -------------- ------------------ ------------- ------------------

Discontinued operations:
       Income from operations of Megapro
        screwdriver division                                -                  -               12                 12
                                                   -------------- ------------------ ------------- ------------------
Income from discontinued operations                         -                  -               12                 12
                                                   -------------- ------------------ ------------- ------------------

Net income                                         $       1,926  $           1,926  $       -     $           1,926
                                                   ============== ================== ============= ==================

Basic and diluted earnings per share

From continuing operations                                 $0.16              $0.16         $0.00              $0.16
From discontinued operations                                0.00               0.00          0.00               0.00
                                                   -------------- ------------------ ------------- ------------------
Total                                                      $0.16              $0.16         $0.00              $0.16
                                                   ============== ================== ============= ==================

Weighted average shares outstanding                   12,011,122         12,011,122    12,011,122         12,011,122
                                                   ============== ================== ============= ==================

</TABLE>

                                      F-12

<PAGE>

                              SPEAR & JACKSON, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                          (in thousands except shares)




Spear & Jackson, Inc.
Consolidated Statement of Operations

<TABLE>
<CAPTION>

                                                                        For the Three Months Ended
                                                                              June 30, 2002
                                                   -----------------------------------------------------------------
                                                   As Previously     As Restated    Discontinued     As Restated
                                                     Reported     Before Disclosure  Operations    After Disclosure
                                                                   Of Discontinued                  Of Discontinued
                                                                     Operations                        Operations
                                                   -------------- ------------------ ------------ ------------------
<S>                                                <C>            <C>                <C>          <C>
Net sales                                          $      24,194  $          23,394  $      -     $          23,394
Cost of goods sold                                        16,211             16,211         -                16,211
                                                   -------------- ------------------ ------------ ------------------
Gross profit                                               7,983              7,183         -                 7,183

Operating costs and expenses:
Selling, general and administrative expenses               6,933              6,133         -                 6,133
                                                   -------------- ------------------ ------------ ------------------
Operating income                                           1,050              1,050         -                 1,050

Other income (expense)

Rental income                                                 30                 30         -                    30
Interest and bank charges (net)                               11                 11         -                    11
                                                   -------------- ------------------ ------------ ------------------
Income from operations before taxation                     1,091              1,091         -                 1,091
Provision for income taxes                                  (383)              (383)        -                  (383)
                                                   -------------- ------------------ ------------ ------------------
Income from continuing operations                            708                708         -                   708
                                                   ============== ================== ============ ==================

Discontinued operations:
 Income from operations of Megapro
  screwdriver division                                      -                  -            -                 -
                                                   -------------- ------------------ ------------ ------------------
Total income from discontinued operations                   -                  -            -                 -
                                                   -------------- ------------------ ------------ ------------------

Total net income                                   $         708  $             708  $      -     $             708
                                                   ============== ================== ============ ==================

Basic and diluted earnings per share:

From continuing operations                                 $0.20              $0.20         $0.00 $            0.20
From discontinued operations                                0.00               0.00          0.00              0.00
                                                   -------------- ------------------ ------------- -----------------
Total                                                      $0.20              $0.20         $0.00 $            0.20
                                                   ============== ================== ============= =================

Weighted average shares outstanding                    3,543,281          3,543,281     3,543,281         3,543,281
                                                   ============== ================== ============= =================

</TABLE>

                                      F-13

<PAGE>


                              SPEAR & JACKSON, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                          (in thousands except shares)



Spear & Jackson, Inc.
Consolidated Statement of Operations

<TABLE>
<CAPTION>

                                                                      For the Nine Months Ended
                                                                            June 30, 2003
                                                   ---------------------------------------------------------------
                                                   As Previously     As Restated    Discontinued      As Restated
                                                     Reported     Before Disclosure  Operations    After Disclosure
                                                                   Of Discontinued                  Of Discontinued
                                                                     Operations                       Operations
                                                   -------------- ------------------ ------------- ----------------
<S>                                                <C>            <C>                <C>           <C>
Net sales                                          $      75,507  $          72,872  $       (869) $         72,003
Cost of goods sold                                        49,370             49,370          (546)           48,824
                                                   -------------- ------------------ ------------- -----------------
Gross profit                                              26,137             23,502          (323)           23,179

Operating costs and expenses:
Selling, general and administrative expenses              19,713             17,078          (262)           16,816
                                                   -------------- ------------------ ------------- -----------------
Operating income (loss) from continuing operations         6,424              6,424           (61)            6,363

Other income (expense)
Royalties (net)                                               14                 14          -                   14
Rental income                                                108                108          -                  108
Interest and bank charges (net)                             (174)              (174)           16              (158)
                                                   -------------- ------------------ ------------- -----------------

Income (loss) from continuing operations
 before taxation                                           6,372              6,372           (45)            6,327
Provision for income taxes                                (1,791)            (1,791)         -               (1,791)
                                                   -------------- ------------------ ------------- -----------------
Income (loss) from continuing operations                   4,581              4,581           (45)            4,536
                                                   -------------- ------------------ ------------- -----------------

Discontinued operations:
 Income from operations of Megapro
  screwdriver division                                      -                  -               45                45
                                                   -------------- ------------------ ------------- -----------------
Income from discontinued operations                         -                  -               45                45
                                                   -------------- ------------------ ------------- -----------------

Net income                                         $       4,581  $           4,581  $       -     $          4,581
                                                   ============== ================== ============= =================

Basic and diluted earnings per share:

From continuing operations                                 $0.38              $0.38         $0.00             $0.38
From discontinued operations                                0.00               0.00          0.00              0.00
                                                   -------------- ------------------ ------------- -----------------
Total                                                      $0.38              $0.38         $0.00             $0.38
                                                   ============== ================== ============= =================

Weighted average shares outstanding                   12,011,122         12,011,122    12,011,122        12,011,122
                                                   ============== ================== ============= =================

</TABLE>

                                      F-14

<PAGE>

                              SPEAR & JACKSON, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                          (in thousands except shares)



Spear & Jackson, Inc.
Consolidated Statement of Operations

<TABLE>
<CAPTION>

                                                                      For the Nine Months Ended
                                                                           June 30, 2002
                                                   -----------------------------------------------------------------
                                                   As Previously     As Restated      Discontinued     As Restated
                                                     Reported     Before Disclosure   Operations    After Disclosure
                                                                   Of Discontinued                  Of Discontinued
                                                                     Operations                       Operations
                                                   -------------- ------------------ ------------- -----------------
<S>                                                     <C>       <C>                <C>           <C>
Net sales                                               $ 68,280  $          66,022  $       -     $         66,022
Cost of goods sold                                        46,544             46,544          -               46,544
                                                   -------------- ------------------ ------------- -----------------
Gross profit                                              21,736             19,478          -               19,478

Operating costs and expenses:
Selling, general and administrative expenses              20,275             18,017          -               18,017
                                                   -------------- ------------------ ------------- -----------------
Operating income  from continuing operations               1,461              1,461          -                1,461

Other income (expense)

Rental income                                                 91                 91          -                  91
Interest and bank charges (net)                             (174)              (174)         -                (174)
                                                  -------------- ------------------- ------------- -----------------

Income  from continuing operations before taxation         1,378              1,378          -                1,378
Provision for income taxes                                  (578)              (578)         -                 (578)
                                                   -------------- ------------------ ------------- -----------------
Income from continuing operations                            800                800          -                  800
                                                   -------------- ------------------ ------------- -----------------

Discontinued operations:
 Income from operations of Megapro
  screwdriver division                                      -                  -             -                 -

                                                   -------------- ------------------ ------------- ------------------
Income from discontinued operations                         -                  -             -                 -
                                                   -------------- ------------------ ------------- -----------------

Net income                                         $         800  $             800  $       -     $            800
                                                   ============== ================== ============= =================

Basic and diluted earnings per share:

From continuing operations                                 $0.23              $0.23         $0.00             $0.23
From discontinued operations                                0.00               0.00          0.00              0.00
                                                   -------------- ------------------ ------------- -----------------
Total                                                      $0.23              $0.23         $0.00             $0.23
                                                   ============== ================== ============= =================

Weighted average shares outstanding                    3,543,281          3,543,281     3,543,281         3,543,281
                                                   ============== ================== ============= =================

</TABLE>

                                      F-15

<PAGE>

                              SPEAR & JACKSON, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                          (in thousands except shares)




Spear & Jackson, Inc.
Consolidated Balance Sheet

                                             At June 30, 2003
                                              As Previously         As Restated
                                                Reported
                                             -----------------    --------------
                             ASSETS
Current assets:
  Cash and cash equivalents                  $          8,307     $       8,307
  Trade receivables, net                               18,270            18,270
  Inventories                                          25,810            25,810
  Other current assets                                    844               832
                                             -----------------    --------------
Total current assets                                   53,231            53,219

Property, plant and equipment, net                     20,030            20,030
Pension asset                                          18,202              -
Deferred taxation                                        -                8,872
Investments                                               147               147
                                             -----------------    --------------
Total assets                                 $         91,610     $      82,268
                                             =================    ==============


                  LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Notes payable                            $              142     $         142
  Trade accounts payable                               11,041            11,041
  Accrued expenses and other liabilities               12,964            12,967
  Director's loan payable                                 100               100
  Foreign taxes payable                                    35                35
                                             -----------------    --------------
Total current liabilities                              24,282            24,285
Other liabilities                                       1,814             1,814
Pension liability                                        -               19,370
Deferred income taxes                                   2,400              -
                                             -----------------    --------------
Total liabilities                                      28,496            45,469
                                             -----------------    --------------
Stockholders' equity:
Common stock                                               12                12
Additional paid in capital                             50,455            51,590
Accumulated other comprehensive income:
    Pension additional minimum liability                 -              (25,860)
    Foreign currency translation adjustment             7,501             7,501
    Unrealised loss on derivative instruments            -                  (12)
Retained earnings                                       5,146             3,568
                                             -----------------    --------------
                                             $         63,114     $      36,799
                                             -----------------    --------------
Total stockholders' equity                   $         91,610     $      82,268
                                             =================    ==============


                                      F-16

<PAGE>

ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

Forward Looking Statements

The information in this discussion contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1934, as amended. These
forward-looking statements involve risks and uncertainties, including statements
regarding the Company's capital needs, business strategy and expectations. Any
statements contained herein that are not statements of historical facts may be
deemed to be forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as "may", "will", "should",
"potential" or "continue", the negative of such terms or other comparable
terminology. Actual events or results may differ materially. In evaluating these
statements, you should consider various factors, including the risks outlined in
the Risk Factors section below, and, from time to time, in other reports the
Company files with the SEC. These factors may cause the Company's actual results
to differ materially from any forward-looking statement. The Company disclaims
any obligation to publicly update these statements, or disclose any difference
between its actual results and those reflected in these statements. The
information constitutes forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995.

Overview

We were founded to design, market and manufacture innovative multi-bit
screwdriver products under the Megapro name and incorporating the retractable
cartridge design patented by Winsire Enterprises Corporation. Our business
commenced in 1994 when we began selling our Megapro 15 in 1 screwdriver to the
industrial and commercial tools market. Our revenues have grown since 1994 as we
have expanded our product sales in the industrial and commercial tools market
and have expanded our line of screwdriver products. We commenced sales of our
screwdriver products to the retail market in late 1996. Our objectives are to
further pursue sales in this market and generate sales of the newly developed
Megapro Multi Quick-change screwdriver, the Megapro cordless screwdriver and our
Power2 Bits screwdriver bits.

With effect from September 30, 2003 the Company exited its screwdriver
operations following the disposal of the trade and assets of Mega Tools Limited
and Mega Tools USA, Inc. As a result of the sale, the results of the Megapro
business have been disclosed as a discontinued operation in the Consolidated
Statements of Operations of the Company for the three and nine-month periods
ended June 30, 2003.

                                       6

<PAGE>

On September 6, 2002 Megapro Tools, Inc. acquired the entire issued share
capital of Spear & Jackson plc and Bowers Group plc ("S&J"). As further
explained in note 4 of the financial statements, this transaction has been
treated as a reverse acquisition. Reflecting the relative size of S&J within the
continued business, Megapro Tools, Inc. changed its name to Spear & Jackson,
Inc.

Spear & Jackson, Inc., through its principal operating entities, as disclosed in
note 1 to the financial statements, manufactures and distributes a broad line of
hand tools, lawn and garden tools, industrial magnets and metrology tools
primarily in the United Kingdom, Europe, Australia, North and South America,
Asia and the Far East. These products are manufactured and distributed under
various brand names including:

*        Spear & Jackson - garden tools;
*        Neill - hand tools;
*        Bowers - bore gauges and precision measuring tools;
*        Coventry Gauge - air and other gauges;
*        CV - precision measuring instruments;
*        Robert Sorby - wood turning tools;
*        Moore & Wright - precision tools;
*        Eclipse - blades and magnetic equipment;
*        Elliot Lucas - pincers and pliers; and
*        Tyzack - builders' tools

Until the disposal of the screwdriver division in September 2003, the Company
also manufactured and sold a range of patented multi bit screwdrivers under the
"Megapro" brand name.

The principal operating divisions and their key products comprise:

*        Neill Tools (hand hacksaws, blades, hacksaw frames, builders' tools,
         riveter guns, wood saws and lawn, garden and agricultural tools, all
         non-powered).

*        Eclipse Magnetics (permanent magnets, magnetic tools, machine tools,
         magnetic chucks and turnkey magnetic systems).

*        The Metrology Division comprising Bowers Metrology (high specification
         metrology instruments including precision bore gauges, universal gauges
         and hardness testing equipment); Moore & Wright and Coventry Gauge (low
         technology measuring tools and hand held gauges for checking the
         threads, diameters and tapers of machined components);

*        Robert Sorby (hand held wood working tools and complementary products).

                                       7

<PAGE>

In addition, Spear & Jackson plc has subsidiary companies in France (Spear &
Jackson France S.A.) and Australasia (Spear & Jackson (Australia) Pty Ltd and
Spear & Jackson (New Zealand) Ltd which act as distributors for Spear & Jackson
and Bowers manufactured products and complementary products sourced from third
party suppliers.

Our strategy is to maintain and develop the revenues of our businesses through
such methods as:

(a)      Maintaining and heightening the profile of our existing quality brand
         names. Such activity will comprise trade, general and TV advertising,
         extensive promotional work at trade shows, the development of corporate
         web sites, etc.

(b)      Continuous product improvement and innovation.
(c)      Increasing market share by offering highly competitive product
         offerings.

(d)      Launch new and innovative product and product ranges.

Recent product announcements include:

In July 2003 we formally ceased trading with Toolbank, a major UK hand tool
wholesaler, because of a conflict in product distribution policy and
dissatisfaction with the level of support being given to the delivery of new
Spear & Jackson product to the market. Agreements have been secured to supply
various UK builders merchants, this will enable us to have a more direct route
to market and will allow us to give greater support to our branded product.

An agreement for the supply of hand and contractors tools has been secured with
Buildbase, a major UK builders merchant.

An agreement for the supply of hand and contractors tools has been secured with
Travis Perkins a major UK builders merchant.

An agreement for the supply of hand and contractors tools has been secured with
N.M.B.S. a buying group of large independent builders merchants and hardware
stores.

A contract for the supply of garden products has been agreed with Tesco, a major
supermarket retailer in the UK. The value of orders is expected to exceed $650k.

New listings for Eclipse branded hand tools, including sockets, spanners,
screwdrivers and hacksaws have been gained with Bauhaus, a major retailer in
Turkey.

                                       8

<PAGE>

We were awarded a contract to supply Neverbend forks, spades and agricultural
contractors' tools by the Government of Fiji. The tender was won on the basis of
both price and quality as we were able to demonstrate that our products are able
to withstand the rigors of sustained use in arduous conditions.

Gamma, a major retailer in the Netherlands, has increased its range of Spear &
Jackson garden products by including Razorsharp secateurs in its 144 stores.

Eclipse Magnetics separator business continues to flourish with a contract into
Parmargon Products, a supplier of rubber sealing rings to the automotive
industry. The component parts have metal inserts which require sorting and the
separator equipment is ideal for their ongoing control procedures.

Eclipse Magnetics will continue to develop the separation business for use in
food processing environments where the removal of metal contamination is vital.

S&J France has seen the launch of its new `Cottage range' of garden tools exceed
expectations this year. The product range has been sold through over 300 stores
across France and has achieved sales of $475,000 since the introduction of these
products.

In addition, S&J France increased its garden tools listings with OBI, a French
DIY store chain, by supplying them with a new range of bypass loppers.

DISCUSSION OF CRITICAL ACCOUNTING POLICIES

We prepare our consolidated financial statements in accordance with accounting
principles generally accepted in the United States. As such, we are required to
make certain estimates, judgements and assumptions that we believe are
reasonable based upon the information available. These estimates and assumptions
affect the reported amounts of assets and liabilities as of the date of the
consolidated financial statements and the reported amounts of revenues and
expenses during the periods presented. Actual results could differ significantly
from those estimates under different assumptions and conditions.

Management's Discussion and Analysis or Plan of Operations in the Company's 10
KSB/A (Amendment No. 2) filing for the year ended September 30, 2002 included a
detailed discussion which addressed our most critical accounting policies. The
quarterly financial statements for the period ended June 30, 2003, attached
hereto, should therefore be read in conjunction with that discussion.

These policies are those that are most important to the portrayal of our
financial condition and results of operations and which require our most
difficult and subjective judgements, often as a result of the need to make
estimates about the effect of matters that are inherently uncertain. Our most
critical accounting policies are those relating to revenue recognition, foreign
exchange risk and inventory valuation.

                                       9

<PAGE>

In addition, the Company operates a contributory defined benefit pension plan
covering certain of its employees in the United Kingdom based subsidiaries of
Spear & Jackson plc. Several statistical and other factors which attempt to
anticipate future events are used in calculating the expense and liability
related to the plan. These factors include assumptions about the discount rate,
expected return on plan assets and rate of future compensation increases as
determined by us, within certain guidelines, and in conjunction with our
actuarial consultants and auditors. Our actuarial consultants also use
subjective factors such as withdrawal and mortality rates to estimate the
expense and liability related to the plan. The actuarial assumptions used by us
may differ significantly, either favorably or unfavorably, from actual results
due to changing market and economic conditions, higher or lower withdrawal rates
or longer or shorter life spans of participants.

Since September 30, 2002 there have been no changes in our critical accounting
policies and no significant change to the assumptions and estimates related to
them.

RESULTS OF OPERATIONS

The results discussed below compare the three months ended June 30, 2003 with
the three months ended June 30, 2002 and the nine months ended June 30,2003 with
the nine months ended June 30, 2002. As explained in note 4 to the financial
statements, the acquisition of Spear & Jackson plc and Bowers Group plc ("S&J")
by Megapro Tools, Inc. (now Spear & Jackson, Inc.) has been accounted for as a
reverse acquisition. In these financial statements, S&J is the operating entity
for financial reporting purposes and the financial statements for all periods
represent S&J's financial position and results of operations. The operating
results and net assets of Megapro Tools, Inc. and its subsidiary companies are
included in the consolidated statements from September 6, 2002, the date of
their deemed acquisition, until September 30, 2003, the effective date of
disposal of the Megapro screwdriver division.

The disposal of the Megapro companies followed a strategic review of the
screwdriver division by the directors of Spear & Jackson, Inc. from which it was
determined that this business was not a core activity. As a result of the sale,
the Megapro business was disclosed in the consolidated financial statements for
the years ended September 30, 2003 and September 30, 2002 as a discontinued
operation. The Consolidated Statements of Operations for the three and nine
month periods ended June 30, 2003 and June 30, 2002 included within the attached
financial statements accordingly adopt this presentation.

All figures are expressed in $'000 unless otherwise stated.

OVERVIEW

Net revenues increased to $24,787 from $23,394 in the three months ended June
30, 2003 compared to the three months ended June 30, 2002. In the nine months
ended June 30, 2003 net revenues increased to $72,003 from a total of $66,022 in
the nine months ended June 30, 2002.

                                       10

<PAGE>

The increase in revenues of $6.0m in the nine months ended June 30, 2003
compared to the comparable period in 2002 is attributable to net sales volume
increases and favorable exchange movements.

Net revenues for the third quarter 2003 increased by $1.4 million over the three
months ended June 30, 2002.

Sales mix has altered significantly towards higher margin products and strict
cost control and manufacturing efficiencies have resulted in substantial
improvements in the gross profit percentage and operating income. These factors
are dealt with in more detail in the sections below.

DIVISIONAL REVIEW

We aim to maintain and develop the revenues of our businesses through the launch
of new products, the enhancement of existing items and the continued marketing
of these companies' brands in order to retain and gain market share.

All divisions of Spear & Jackson, Inc. delivered strong operating income
performances in the three months ended June 30, 2003 and the nine-month period
ending on that date.

Summary details are as follows:

Neill Tools

Agreements to supply various UK builders merchants have been secured.

Buildbase is to be supplied with hand and contractors tools. Travis Perkins is
to be supplied with hand and contractors tools.

N.M.B.S., a large independent builders merchant, is to be supplied with hand and
contractors tools.

Neill Tools are working in the US market to secure business with the `Big Box'
retailers.

The division continues to focus on new product development and this strategy has
seen the launch of a new range of dry lining tools, leather work wear, hand
power tools, spanners, sockets, screwdrivers, pliers and air power tools and
compressors. The decision to cease trading with Toolbank allied to new product
launches should see continued improvements in sales and margin.

To further enhance our end-user presence, we have recruited a team of dedicated
merchandisers to go direct to stores to ensure that our product is available,
prominently displayed and that the merchandiser displays are in good order.

                                       11

<PAGE>

Eclipse Magnetics

Eclipse's  financial  performance  remained  robust and in the nine months ended
June 30, 2003  operating  profits were  generated  representing  a 13% return on
sales  for  the  company.  Eclipse  quarter  three  operating  profit  was  also
significantly  better than the  previous  year as a result of  improved  margins
arising  from  manufacturing  and  purchasing  efficiencies  and good fixed cost
control.

Promotion of our magnetic separation products is currently receiving particular
focus within the business with our principal goal being expansion into the US
market. The separation division supplies high added value turnkey solutions to
the food, pharmaceutical and processing industries.

Penetration into Germany has previously been recognised as a key business driver
and entry into the German market has now been completed with Eclipse
establishing a new relationship with Hoffmann which is one of the largest
industrial distribution groups in Europe.

Robert Sorby

Focus continues to be maintained on the key markets of the USA, Canada, UK and
Ireland. This sales coverage has been further augmented by the development of
new dealers in both Norway and Austria.

A new video covering our collection of specialist tools has been finalized and
is now available for sale. We continued with our editorials on the recently
introduced "Easyheader Tools" in woodworking magazines. At the same time our
advertising promotion on the new eccentric chuck provoked considerable interest
which we anticipate will result in follow through sales.

We had demonstrations in the UK, Ireland, Australia and Germany which gave us
significant orders in quarter three.

The retail store, "Turners Retreat", is continuing to develop on the back of an
improvement in higher margin mail order sales.

Bowers

Profits for the quarter were once again ahead of forecast, due to a strong
performance from the export side of the business and the maintenance of margins.

The new two part Smart Plug has been received well and we look forward to
improving sales in the coming months.

We continue to keep tight cost controls in the business and optimize our
inventories to maximize profitability.

                                       12

<PAGE>

S&J France

The two key elements in sales growth were incremental sales to Castorama and the
launch of the new Cottage range of garden tools which, following on from an
encouraging performance in Q2, again generated significant sales in the most
recent quarter.

Spear & Jackson Australia and Spear & Jackson New Zealand

Both S&J Australia and S&J New Zealand continue to out perform their current
year sales targets and prior period performances.

COSTS OF GOODS SOLD AND GROSS PROFIT

Costs of goods sold increased to $48,824 in the nine-month period ended June 30,
2003 from $46,544 in the nine months ended June 30, 2002. In the three months
ended June 30, 2003 costs of goods sold rose to $16,734 from $16,211 in the
third quarter of 2002.

Costs of goods sold as a percentage of sales decreased to 67.8% during the first
nine months of 2003 compared to 70.5% during the nine months ending June 30,
2002. Similarly, costs of goods sold as a percentage of sales fell to 67.5% in
the three months ended June 30, 2003 from 69.3% in the comparable quarter in
2002.

These movements reflect more favorable sales mixes, focus on strict product
cost control and the benefit derived in 2003 from the closure of the loss making
calibration business division in September 2002.

Current year gross profit  percentages  and their prior period  comparatives
are  therefore as follows:  quarter  ended June 30, 2003: 32.5% (2002: 30.7%),
nine months ended June 30, 2003: 32.2% (2002: 29.5%).

We will continue to monitor and evaluate means of maintaining and improving
current sales mixes and of further reducing costs of goods sold across all our
principal trading operations to avoid any margin erosion.

EXPENSES

Selling, general and administrative expenses decreased by $1,201 from $18,017 in
the nine months ended June 30, 2002 to $16,816 in the nine months ending June
30, 2003.

                                       13

<PAGE>

The net movement of $1,201 comprises increases relating to adverse exchange
fluctuations of $1.9 million (caused by the movement in the US$/(pound) cross
rate between the two periods) mitigated by the significant cost savings accruing
from the staff reduction programs implemented in the Neill Tools and Eclipse
Magnetics divisions in September 2002, payroll reductions following the
reorganization of senior management, pension cost reductions, the reorganization
of the purchasing and customer service departments and the continued rigorous
control of costs and non-essential expenditure.

In the three months ended June 30, 2003, selling, general and administrative
expenses have decreased by $855 over the comparable three months last year. The
net decrease is attributable to adverse exchange movements of $0.6 million, and
decreases of $1.5 million relating to the three months benefit of the cost
saving initiatives outlined above. Expressed as a percentage of sales, selling,
general and administration expenses were 23.3% of revenues for the nine months
ended June 30, 2003 (2002: 27.3%) and 21.3% of revenues for the quarter ended
June 30, 2003 (2002: 26.2%).

Other income and expenses reduced from a net expense of $83 in the nine months
ended June 30, 2002 to a net expense of $36 in the nine months ended June 30,
2003. This movement is attributable to decreased interest charges in the
Company's French and Australian businesses and the receipt of royalty and rent
income in the acquired Megapro businesses.

In the quarter ended June 30, 2003, there was net other expense of $29 compared
to net income of $41 for the three months to June 30, 2002. This increase
relates to the receipt of interest in 2002 on the maturity of bank deposits for
which there is no comparable item in 2003.

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

Our income from  continuing  operations  before  income taxes in the nine months
ended June 30, 2003 amounted to $6,327.  This compares to an income before taxes
for the nine months  ended June 30, 2002 of $1,378.  As  discussed  above,  this
increase in profitability is derived from  improvements in gross margins and the
ongoing benefits arising from overhead cost savings.

In the quarter ended June 30, 2003, income before income taxes was $2,746
compared to a profit of $1,091 in the three months ended June 30, 2002. The
improvement of $1,655 is again attributable to increased sales margins and
continued overhead reductions.

INCOME TAX

Income taxes were $1,791 in the nine months ended June 30, 2003 compared to a
$578 income tax charge in the nine months ending June 30, 2002. The provision
for income taxes in the quarter ended June 30, 2003 was $832 an increase of $449
on the provision made in the three months ended June 30, 2002.

                                       14

<PAGE>

Income taxes were 28.3% of profits before tax in the nine months ended June 30,
2003 as opposed to 41.9% of the profit before income taxes in the nine months
ended June 30, 2002. Tax for the quarter ending June 30 was 30.3% of profits in
2003 and 35.1% in 2002.

Differences between the effective rate and the statutory rate of taxation result
from tax charges in certain overseas subsidiaries within the Spear & Jackson
group being taxed at rates different from the effective rate, the utilization of
tax losses which are not recognized within the deferred tax computation and
permanent differences between accounting and taxable income as a result of
non-deductible expenses and non-taxable income. Because of the availability of
tax net operating losses it is not anticipated that any significant element of
the tax charge for the nine months ended June 30, 2003 will result in the
payment of income tax.

NET PROFIT FROM CONTINUING OPERATIONS

Our net profit from continuing operations after income taxes was $4,536 for the
nine months ended June 30, 2003. This compares to a profit after income taxes of
$800 for the same period in 2002. In the quarter ended June 30, 2003, net profit
amounted to $1,914. This compares to a profit of $708 arising in the comparable
quarter last year.

DISCONTINUED OPERATIONS

The discontinued operations refer to the Megapro screwdriver division of Spear &
Jackson, Inc. which was acquired on September 6, 2002 and which was disposed
with effect from September 30, 2003. The directors of the Company had previously
carried out a goodwill impairment appraisal and a strategic review of the
division in September 2002 and had determined that this division did not
represent a continuing core activity. Various divestment strategies were
considered and, as of September 30, 2003, the trade and assets of the principal
Megapro companies were transferred, at their net book value, to a management
buy-in team headed by the managing director of the Megapro business.

Total income attributable to discontinued operations was $12 in the quarter
ended June 30, 2003 and $45 in the nine months ended on that date. There are no
comparable items in the quarter ended June 30, 2002 nor the nine months ended
June 30, 2002.

FINANCIAL CONDITION

Liquidity and Capital Resources

Our cash position was $8,307 at June 30, 2003 and our net assets were $36,799 at
that date.

                                       15

<PAGE>

Net cash generated from operating activities in the nine month period ended June
30, 2003 was $5,626 compared to an operating cash generation of $2,364 in the
nine months ended June 30, 2002. This improvement of $3,262 in 2003 arises from
the significant increase in net income (adjusted for depreciation and deferred
taxes) of $4.9 million and trade working capital inflows relating to improved
receivables collections of $1.8 million offset by a trade payables decrease of
$1.6 million, an increase in inventories of $4.2 million and a decrease in other
creditors of $1.2 million. The inventory increase arises in Spear & Jackson's
Australian subsidiary (stock build to service Q4 sales) and in the UK hand and
garden tools business (stock builds in advance of holidays and shut downs).

Other working capital movements include favorable movements in other current
and non-current liabilities of $3.7 million, which, in the main, are associated
with the increases in leasing liabilities following the replacement of the UK
leased vehicle fleet in January 2003 and the impact in 2002 of a $3 million loan
to the former parent of Spear & Jackson plc.

Cash outflow from investing activities was $2,520 in the period ended June 30,
2003. This compares to an outflow from investing activities in the period ended
June 30, 2002 of $792. Net cash used in investing activities in 2003 includes
$2,690 of capital expenditure (2002: $792) which relates principally to the
replacement of the UK car fleet under capitalized operating leases and the
purchase of computer equipment in Australia.

Net cash  absorbed by financing  activities  was $1,481 in the period ended June
30, 2003  compared to net cash  absorbed by financing  activities  in the period
ended June 30, 2002 of $160. Cash utilized by financing activities in the period
ended June 30, 2003  includes  the  repayment  of  overdrafts  in  Australia  of
approximately  $1 million,  the repayment of a  shareholder  loan of $60 and the
repayment of the  promissory  notes issued to the vendors of Spear & Jackson plc
and Bowers Group plc which formed part of the  purchase  consideration  of those
companies.  The cash provided by financing  activities in the period ended  June
30, 2002 comprises overdraft and loan repayments of $160.

Our business operations have been funded primarily from net operating income. We
have also utilized loans from the Bank of Montreal, shareholder loans and other
bank facilities in the US, UK, France, Australia and New Zealand.

Mr. Neil Morgan, a shareholder, has advanced us the amount of $100 as a
director's loan. The loan is unsecured, bears interest at 10.25% per annum and
has non specific terms of repayment.

Mr. Robert Jeffrey, another of our shareholders, had previously advanced to us
an unsecured loan at an interest rate of 10.25% per annum, repayable on demand.
This loan was repaid during the period ended June 30, 2003.

                                       16

<PAGE>

Mega Tools Limited, which formed part of the deemed Megapro Tools, Inc.
acquisition in September 2002, obtained a fixed loan from the Bank of Montreal
in 1998. This loan is payable on demand with an agreed repayment schedule
requiring payments of $10 per annum, paid monthly in equal instalments, plus
interest at the bank's funding plus 1.5% per annum. This loan was also repaid in
the period ended June 30, 2003.

The Spear & Jackson and Bowers companies have overdraft facilities with various
UK, French and Australian banks but none of the companies are currently funding
any of their financing requirements through bank or other loans.

The financing of new product launches in the Spear & Jackson and Bowers
companies will be funded from their existing banking facilities. We believe that
we have sufficient capital resources and liquidity over both the short and
medium term to sustain our business operations. While we may require additional
financing in order to pursue any planned expansion of the Spear & Jackson,
Bowers or Megapro operations, we do not require additional financing in order to
sustain our present business operations.

EFFECT OF NEW ACCOUNTING STANDARDS

SFAS No. 145, Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB
Statement No. 13, and Technical Corrections was issued April 2002. This
Statement rescinds FASB Statement No. 4, Reporting Gains and Losses from
Extinguishment of Debt, and an amendment of that Statement, FASB Statement No.
64, Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements. This
Statement also rescinds FASB Statement No. 44, Accounting for Intangible Assets
of Motor Carriers. This Statement amends FASB Statement No. 13, Accounting for
Leases, to eliminate an inconsistency between the required accounting for
sale-leaseback transactions and the required accounting for certain lease
modifications that have economic effects that are similar to sale-leaseback
transactions. This Statement also amends other existing authoritative
pronouncements to make various technical corrections, clarify meanings, or
describe their applicability under changed conditions. The provisions of this
Statement related to the rescission of Statement 4 shall be applied in fiscal
years beginning after May 15, 2002. The provisions in paragraph 8 and 9(c) of
this Statement related to Statement 13 shall be effective for transactions
occurring after May 15, 2002. All other provisions of this Statement shall be
effective for financial statements issued on or after May 15, 2002. The effects
of implementation are not material.

SFAS No. 146 Accounting for Costs Associated with Exit or Disposal Activities
was issued June 2002. This Statement addresses financial accounting and
reporting for costs associated with exit or disposal activities and nullifies
Emerging Issues Task Force (EITF) Issue No. 94-3, Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring). The provisions of this
Statement are effective for exit and disposal activities that are initiated
after December 31, 2002.

                                       17

<PAGE>

In September  2002,  the FASB issued SFAS No. 147,  Acquisition  of Certain
Financial  Institutions.  SFAS No. 147 changed the special accounting for
unidentifiable  intangible  assets  recognized  under SFAS No. 72.  Transition
provisions  for  previously  recognized unidentifiable  intangible  assets were
effective on October 1, 2002.  The effects of  implementation  had no impact on
the  Company's consolidated financial statements.

ITEM 3. CONTROLS AND PROCEDURES

Within the 90-day period prior to the filing of this report, an evaluation of
the effectiveness of the Company's disclosure controls and procedures was made
under the supervision and with the participation of the Company's management,
including the chief executive officer and chief financial officer. Based on that
evaluation, the CEO and CFO concluded that the Company's disclosure controls and
procedures are effective to ensure that information required to be disclosed by
the Company in reports that it files or submits under the Securities Exchange
Act of 1934 is recorded, processed, summarized and reported within the time
periods specified in Securities and Exchange Commission rules and forms.
Subsequent to the date of their evaluation, there were no significant changes in
the Company's internal controls or in other factors that could significantly
affect these controls, including any corrective actions with regard to
significant deficiencies and material weaknesses.

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

The Company is, from time to time, subject to legal proceedings and claims
arising from the conduct of its business operations, including litigation
related to personal injury claims, customer contract matters, employment claims
and environmental matters. While it is impossible to ascertain the ultimate
legal and financial liability with respect to contingent liabilities, including
lawsuits, the Company believes that the aggregate amount of such liabilities, if
any, in excess of amounts accrued or covered by insurance, will not have a
material adverse effect on the consolidated financial position or results of
operation of the Company.

Item 2.  Changes in Securities and use of Proceeds

None

Item 3.  Defaults upon Senior Securities

None

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

None

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<PAGE>

Item 5.  Other Information

None

Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits

31.1 302 Certification of Chief Executive Officer

31.2 302 Certification of Chief Accounting Officer

32.1 906 Certification of Chief Executive Officer

32.2 906 Certification of Chief Accounting Officer

(b) Reports on Form 8-K

Form 8-K was filed on December 12, 2002 pertaining to the Changes in
Registrant's name from MegaPro Tools, Inc. to Spear & Jackson, Inc. under Item
5.






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<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

SPEAR & JACKSON, INC.



By:      /s/Dennis Crowley    Dated: March 8, 2004
         -----------------

         Dennis Crowley
         Chairman, President and
         Chief Executive Officer
         (Principal Executive Officer)






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