<PAGE>   1

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

                                   FORM 10-K

(Mark One)

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

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997

                                       OR

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

                                   333-29727
                            (Commission File Number)

                                VIASYSTEMS, INC.
             (Exact name of registrant as specified in its charter)

                                    DELAWARE
         (State or other jurisdiction of incorporation or organization)

                                   43-177752
                      (I.R.S. Employer Identification No.)

                             101 SOUTH HANLEY ROAD
                           ST. LOUIS, MISSOURI 63105
                                 (314) 727-2087
         (Address, including zip code, and telephone number, including
            area code, of registrant's principal executive offices)

        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
        SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Act of 1934 during
the preceding 12 months (or for such shorter period that the registrants were
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.     Yes  [X]     No  [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [X]

     State the aggregate market value of the voting and non voting common equity
held by non-affiliates of the registrant. (The aggregate market value shall be
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such common equity, as of a specified date within 60
days prior to the date of filing.)

     NO ESTABLISHED PUBLISHED TRADING MARKET EXISTS FOR THE COMMON STOCK, PAR
VALUE $.01 PER SHARE, OF VIASYSTEMS, INC. ALL THE OUTSTANDING SHARES OF COMMON
STOCK, PAR VALUE $.01 PER SHARE, OF VIASYSTEMS, INC. ARE HELD BY VIASYSTEMS
GROUP, INC.

     Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.

<TABLE>
<CAPTION>
                                                               OUTSTANDING AT
                   CLASS                                       MARCH 16, 1998
                   -----                                       --------------
<S>                                             <C>
                Common Stock                                       1,000
</TABLE>

                   DOCUMENTS INCORPORATED BY REFERENCE: NONE
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<PAGE>   2

                                     PART I
                        CAUTIONARY STATEMENT CONCERNING
                           FORWARD-LOOKING STATEMENTS

     Information set forth in this Annual Report on Form 10-K regarding expected
or possible future events, including statements of the plans and objectives of
management for future growth, operations, products and services and statements
relating to future economic performance, is forward-looking and subject to risks
and uncertainties. For those statements, the Company claims the protection of
the safe harbor for forward-looking statements provided for by Section 27A of
the Securities Act of 1933, as amended (the "Securities Act"). Factors that
could affect the future results of the Company and could cause those results to
differ materially from those expressed in the forward-looking statements are
discussed at greater length herein. See Item 7, "Management's Discussion and
Analysis of Results of Operations and Financial Condition."

ITEM 1. BUSINESS

THE COMPANY

     Viasystems, Inc. is a wholly owned subsidiary of Viasystems Group, Inc.
("Viasystems Group"), a holding company. Hicks, Muse, Tate & Furst Incorporated
("Hicks Muse") and Mills & Partners, Inc. ("Mills & Partners") formed Viasystems
Group in August 1996 to make strategic acquisitions of printed circuit board
("PCB") manufacturers and backplane assemblers and to integrate those
acquisitions into a global enterprise that is the preferred manufacturer and
marketer of PCBs and backplanes.

     In October 1996, Viasystems Group completed the acquisition of Circo Craft
Co. Inc. ("Circo Craft"), a rigid PCB manufacturer with operations in Canada and
Puerto Rico, and in December 1996, Viasystems Technologies Corp. ("Viasystems
Technologies"), a wholly owned subsidiary of Viasystems Group, acquired
substantially all assets of the Interconnection Technologies Unit of the
Microelectronics Group (the "Lucent Division") of Lucent Technologies. The
combination of Circo Craft and the former Lucent Division created one of the
largest independent manufacturers of PCBs and backplanes in North America.

     In April 1997, an affiliate of Hicks Muse acquired Forward Group PLC
("Forward Group"), a rigid PCB manufacturer located in the United Kingdom.
Subsequently, Viasystems Group acquired Forward Group from the Hicks Muse
affiliate. On April 2, 1997, Viasystems, Inc. was formed as a subsidiary of
Viasystems Group. On April 10, 1997, Viasystems Group contributed (the
"Contribution") to Viasystems, Inc. all of the capital of its then existing
subsidiaries -- Circo Craft, Viasystems Technologies, and PCB Acquisition
Limited (the acquisition parent of Forward Group). Prior to the Contribution,
Viasystems, Inc. had no operations of its own. Also in April 1997 and subsequent
to the formation of Viasystems, Inc. and the Contribution, another affiliate of
Hicks Muse, Chips Holdings, Inc. ("Chips Holdings"), acquired Interconnection
Systems (Holdings) Limited ("Chips"). Viasystems Group subsequently acquired
Chips Holdings, which merged into Viasystems Group (the "Chips Merger"), and
Chips and its operating subsidiaries became indirect wholly-owned subsidiaries
of Viasystems, Inc.

     The discussion included herein of Viasystems or the Company represents the
results of operations of Viasystems, Inc. and its subsidiaries subsequent to the
Contribution by Viasystems Group and of Viasystems Group and its subsidiaries
prior to the Contribution of such subsidiaries to Viasystems, Inc.

     The Company believes it is the one of the largest manufacturers and
marketers of PCBs and backplanes in the world. PCBs are the basic platforms used
to interconnect microprocessors, integrated circuits and other components
essential to the functioning of virtually all electronic systems, ranging from
sophisticated computers and industrial products to basic household appliances.
Backplanes are used in electronic systems to distribute and ground power, to
connect PCBs, power supplies and other elements, and to relay information into
and out of electronic systems. The Company supplies over 800 customers globally,
serving, among others, the telecommunications, computer, automotive, industrial
and instrumentation, military, and consumer electronics industries. As of
December 31, 1997, the Company had 16 manufacturing facilities, strategically
located in North America and Europe, including one of the world's largest PCB
and backplane manufacturing plants.

                                        1
<PAGE>   3

MARKETS AND CUSTOMERS

     The Company designs, develops and manufactures products which it supplies
to more than 800 customers worldwide. The Company provides double-sided PCBs,
multilayer PCBs and backplanes to its diverse customer base. The Company's
position as a strategic supplier of quick-turnaround prototype and medium to
high volume PCBs and backplane assembly fosters close relationships with
customers. These relationships result in additional growth opportunities as the
Company has the capabilities and capacity to meet its customers' wide range of
needs.

     The Company has a unique, long-term supplier relationship with Lucent
Technologies, one of the world's leading designers, developers and manufacturers
of telecommunications systems, software and products. In connection with the
Lucent Division acquisition in December 1996, Lucent Technologies and the
Company have into a five-year supply agreement, through Viasystems Technologies,
pursuant to which substantial revenues may be derived. Sales to Lucent
Technologies by the Company for the period from inception (August 28, 1996) to
December 31, 1996, and for the year ended December 31, 1997 were $13.6 million
and $310.1 million, respectively. Lucent Technologies accounted for
approximately 27.0% and 39.0% of the Company's net sales for the period from
inception (August 28, 1996) to December 31, 1996, and for the year ended
December 31, 1997, respectively. The supply agreement contains automatic renewal
provisions for two additional one-year periods upon the Company's satisfaction
of certain specified performance requirements for cost, quality and service.
Under the agreement, Lucent Technologies is required to purchase a minimum
annual dollar volume of PCBs and backplanes from the Company, and is required to
compensate the Company if Lucent Technologies fails to purchase such minimum
annual dollar volume. The agreement requires that by January 1, 1999 the
Company's prices for products supplied shall be reduced to an agreed upon
benchmark standard. After the expiration of the two additional annual renewal
periods, the agreement continues to renew unless either party terminates the
agreement on 18 months notice. Lucent Technologies has also designated the
Company as a preferred supplier and afforded it the right to bid for all of
Lucent Technologies' product requirements for which the Company demonstrates
capability.

     The following table shows the Company's net sales and percentage of its net
sales to the principal end-user markets it serves:

<TABLE>
<CAPTION>
                                                                  DECEMBER 31,
                          MARKETS                                     1997
                          -------                             ---------------------
                                                              (DOLLARS IN MILLIONS)
<S>                                                           <C>            <C>
Telecommunications..........................................  $532.4          66.9%
Automotive..................................................    80.4          10.1
Computer....................................................    67.2           8.5
Industrial..................................................    61.9           7.8
Military....................................................    12.8           1.6
Other.......................................................    40.6           5.1
                                                              ------         -----
          Total.............................................  $795.3         100.0%
                                                              ======         =====
</TABLE>

PRODUCTS AND SERVICES

     The Company's offering of products and services includes the following:

     Design and Development. The Company provides design and engineering
assistance to customers in the early stages of product development to assure
that both mechanical and electrical considerations are integrated to achieve a
high quality and cost-effective product. Through development groups located at
various facilities, the Company identifies, develops and markets new
technologies that it believes will benefit its customers. These development
groups work closely with customers during all stages of product life-cycles. For
instance, process design changes and refinements required for volume production
are identified and implemented prior to production. The Company also evaluates
customer designs in light of manufacturing considerations and, when appropriate,
recommends design changes to reduce manufacturing costs or lead times or to
increase manufacturing yields or the quality of finished PCBs.

                                        2
<PAGE>   4

     Quick-Turnaround Prototype. Prototypes typically require lead times of
three to seven days, although lead times can be as short as 24 hours. The
Company provides quick-turnaround prototype services to customers to facilitate
their testing of products in development. Prototype development at the Company
has included multilayer PCBs of up to 24 layers, embedded discrete components,
and various high performance substrates for the high frequency microwave market.

     Pre-Production. Pre-production is the manufacture of limited quantities of
PCBs and backplanes during the transition period from prototype to volume
production. Pre-production generally requires quick-turnaround delivery to
accommodate time-to-volume pressures or as a temporary solution for
unpredictable customer demands.

     Medium to High Volume Production. Volume production is characterized by
longer lead times and increased emphasis on lower cost as the product moves to
full-scale commercial production. As customers increasingly demand a quick
transition from prototype to volume production, few independent manufacturers
can provide complex PCBs of 18 or more layers in the volume provided by the
Company's larger facilities. The Company operates nine facilities that have
medium and/or high volume PCB production capabilities.

     Backplanes. Backplanes are generally larger and thicker PCBs on which
connectors, pins and other components are mounted to interconnect PCBs,
integrated circuits and other electronic components. The Company incorporates
its own PCBs in backplanes to provide customers with a high level of PCB
technology on a quick-turnaround and volume basis.

     Specialty Production. The Company manufactures the following specialty
products in quick-turnaround and medium to high volume quantities:

          High-Performance PCBs. High-performance PCBs are used in electronic
     products that require high frequency interconnect solutions, such as
     cellular phone base stations and other telecommunications products, and are
     manufactured using specialty materials with properties that address the
     need for higher operating temperatures, higher frequencies and increased
     density. The Company has the expertise and specialized engineering
     processes required to manufacture high-performance PCBs with a broad range
     of materials and technological requirements.

          PCMCIA Products. Personal Computer Memory Card Industry Association
     ("PCMCIA") products are credit card-sized, plug-in PCBs, a significant
     portion of which are memory and communication cards tailored to the mobile
     computing market. PCMCIA production requires the ability to produce very
     thin, dense packaging.

MANUFACTURING PROCESSES

     The production of PCBs involves a variety of manufacturing disciplines,
including mechanical operations (such as lamination, drilling and routing),
chemical operations (such as copper deposition and etching), and graphics
operations (such as phototool generation, photoprinting and screen printing).
Much of the equipment is automated and highly specialized.

     The Company's customers require that their suppliers be qualified under
various industry standards, for manufacture of PCBs, including Bellcore
standards for telecommunications products, and UL (Underwriters Laboratories)
standards for electronics. All of the Company's facilities are ISO-9002
certified. This certification facilitates worldwide acceptance of the Company's
products. ISO-9002 certification is based on successful implementation of
certain quality assurance requirements and includes ongoing monitoring of the
Company's business and periodic compliance audits conducted by an independent
quality assessor.

     The Company's primary manufacturing processes are described below:

     Drilling. Complex multilayer PCBs require large numbers of small (less than
0.019 inches) holes in order to interconnect the various PCB layers.

     Automatic Plating. The Company has custom designed, computer controlled
plating lines that are capable of plating significant volumes of high quality
PCBs. The plating lines are installed above a special

                                        3
<PAGE>   5

purpose basement where chemicals are prepared and pumped to the manufacturing
lines, chemical wastes are pre-processed and water is pre-treated and recycled.

     Automatic Optical Inspection ("AOI") and Electrical Test ("ET") Equipment.
Because defects in complex circuitry cannot be readily detected by conventional
visual inspection, sophisticated AOI and ET equipment is necessary to improve
yields and reduce the potential for customer returns.

     Surface Mount Technology. The Company incorporates the use of surface mount
technology to achieve greater component packaging densities. Surface mount
technology allows components to be soldered to the surface of a PCB. The
traditional through-hole technique requires components to be affixed to PCBs by
inserting leads through the board. The use of surface mount technology has
facilitated several overall improvements in PCBs, including: (i) the
miniaturization of PCBs; (ii) end-user innovations using smaller and more
complex designs; and (iii) more reliable interconnection within the PCB.

SALES AND MARKETING

     The Company places a high priority on identifying and responding to its
customers' requirements on a timely basis. In order to ensure that the Company
is best positioned to respond to these requirements, it has developed a sales
and marketing strategy that utilizes global account managers, a highly trained
Company-employed direct sales force and independent manufacturers'
representatives. This global sales organization is structured to ensure
geographic coverage and account coordination.

     As of December 31, 1997, the Company employed 99 sales and marketing
employees, of which 22 were direct sales representatives strategically located
throughout 13 countries in North America, Europe, the Middle East and South
Africa. The Company is also represented by 19 manufacturers' representative
organizations in North America. The North American sales organization is divided
into 5 regions which are jointly serviced by direct sales representatives and
manufacturers' representatives. In Europe, the Company's sales force is
organized by country and, for specialty products, by customer. In both North
America and Europe, a staff of sales engineers, technical service personnel and
customer service organizations supports the sales organization to ensure
high-quality, customer-focused service. The global marketing organization
further supports the sales organization through market research, market
development and communications.

INTERNATIONAL OPERATIONS

     Approximately 37% of the Company's 1997 sales originated outside of North
America, primarily in Europe. As of December 31, 1997, the Company had
manufacturing facilities in the U.K., a backplane assembly facility in Spain,
and sales offices in Sweden, France, Germany and South Africa. The Company
believes that its global presence is important as it allows the Company to
provide consistent, quality products on a timely basis to its multinational
customers worldwide. See Note 13 of the Company's Consolidated Financial
Statements for geographic region information and Note 19 of the Company's
Financial Statements for subsequent acquisitions in Holland, Sweden and Italy.

     The Company is subject to risks generally associated with international
operations, including price and exchange controls and other restrictive actions.
In addition, fluctuations in currency exchange rates may affect the Company's
results of operations. See "Management's Discussion and Analysis of Results of
Operations and Financial Condition" in Item 7 hereof.

RAW MATERIALS AND SUPPLIER RELATIONSHIPS

     The Company orders materials and supplies based on purchase orders received
and accepted and seeks to minimize its inventory of materials that are not
identified for use in filling specific orders. Raw materials used in the
Company's products consist mainly of inorganic chemicals, copper foil, copper
clad epoxy glass laminate, epoxy glass prepreg and dryfilm resist. The Company
has undertaken a cost containment project whereby it is reducing the number of
raw material vendors and obtaining cost reductions by agreeing to increase
volumes of raw material purchases from specified vendors. This project's
effectiveness has been enhanced by the Company's size and worldwide presence.
Although the Company uses a select group of

                                        4
<PAGE>   6

suppliers, the materials used in manufacturing PCBs are generally readily
available in the open market. The Company works with its suppliers to develop
just-in-time supply systems reduce inventory carrying costs. The Company also
maintains a Supplier Certification Program to evaluate potential vendors on the
basis of such factors as quality, on-time delivery, cost, technical capability,
and potential technical advancement. In addition, the Company works closely with
certain of its suppliers to improve the raw materials used in PCB and backplane
production. Although adequate amounts of raw materials have been available in
the past, there can be no assurances this will continue in the future. The
Company purchases significant quantities of pins and similar products from Berg
Electronics Corp., which is managed by Mills & Partners (see Note 15 to the
Notes to Consolidated Financial Statements in Item 8 hereof).

TECHNOLOGY, DEVELOPMENT AND PATENTS

     The Company maintains a strong commitment to research and development,
focusing its efforts on enhancing existing product lines as well as developing
new products based on the Company's existing technologies and production
capabilities. During the period from the Company's inception (August 28, 1996)
to December 31, 1996 and the year ended December 31, 1997, the Company's
research and development expenditures were $0.5 million and $10.8 million,
respectively. In addition, in the Company's acquisitions of Circo Craft and the
Lucent Division in 1996 and of Forward Group and Chips in 1997, portions of the
purchase prices -- totals of $50.8 million and $294.5 million in 1996 and 1997,
respectively -- were assigned to acquired in process research and development
and expensed in the Company's statements of operations. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Consolidated Financial Statements included in Items 7 and 8, respectively,
hereof.

     The Company's research and development staff of over 650 experienced
engineers, chemists and laboratory technicians works together with the Company's
sales staff to identify specific customer and industry needs and develop
innovative, high performance solutions which satisfy those needs. This method of
product development allows the customer to become a member of the development
team, develops close ongoing working relationships between the Company and its
customers and, in many instances, permits the Company to gain an in-depth
understanding of its customers' businesses, thereby enabling it to better
anticipate and serve their needs. The Company also seeks to apply advancements
resulting from this process to other high-margin end user markets.

     The Company has developed proprietary techniques and manufacturing
expertise, particularly in the area of complex multilayer PCBs. The Company has
received certain U.S. and foreign patents, including patents on advanced
registration and positioning techniques, solder leveling, drilling and pin
insertion, but chooses to rely primarily on trade secret protection. Although
such techniques and expertise are subject to misappropriation or obsolescence,
the Company intends to continue to develop improved methods, processes and
techniques as dictated by the technological needs of the business.

COMPETITION

     The PCB and backplane industry is highly fragmented and characterized by
intense competition. The Company believes that its major competitors are the
independent and captive producers that manufacture multilayer PCBs and provide
backplane and other electronic assemblies.

     The demand for PCBs has continued to be affected by the development of
smaller, more powerful electronic components requiring less PCB area but a
higher layer count. Expansion of the Company's existing products or services
could expose the Company to new competition. Moreover, new developments in the
electronics industry could render existing technology obsolete or less
competitive and could potentially introduce new competition into the industry.
There can be no assurance that the Company will continue to compete successfully
against present and future competitors or that competitive pressures faced by
the Company will not have a material adverse effect on the Company's business,
financial condition and results of operations.

                                        5
<PAGE>   7

     The Company competes on the basis of product quality, timeliness of
delivery, price, customer technical support and its integrated offering from
development and design through volume production and backplane assembly.

BACKLOG

     The Company estimates that its backlog of unfilled orders on December 31,
1996 and December 31, 1997, was approximately $50.8 million and $108.5 million,
respectively. The increase in backlog in 1997 was due to the 1997 acquisitions
of Forward Group and Chips. Unfilled orders may be cancelled prior to delivery;
however, such cancellations have historically not been material. Substantially
all the backlog as of December 31, 1997, is expected to be filled by March 30,
1998. The backlog outstanding at any point in time is not necessarily indicative
of the level of business to be expected in the ensuing period.

ENVIRONMENTAL

     Certain operations of the Company are subject to federal, state, local and
foreign environmental laws and regulations, which govern, among other things,
the discharge of pollutants into the air and water, as well as the handling and
disposal of solid and hazardous wastes. The Company believes that it is in
material compliance with applicable environmental laws and the costs of
compliance with such current or proposed environmental laws and regulations will
not have a material adverse effect on the Company. Further, the Company is not a
party to any claim or proceeding and is not aware of any threatened claim or
proceeding under environmental laws, that could, if adversely decided,
reasonably be expected to have a material adverse effect. Currently, remedial
activities are being undertaken at the Company's facilities in Virginia and
Puerto Rico. While the cost of such remediation could be material, the prior
owners are conducting the requisite remedial actions pursuant to governmental
orders and have agreed to indemnify the Company for costs associated with the
remediations. The Company believes that their prior owners are fully capable of
performing and will perform under such agreements. Accordingly, the Company does
not believe that any of these matters are reasonably likely to have a material
adverse effect on the Company.

EMPLOYEES

     As of December 31, 1997, the Company had approximately 7,200 employees.
Approximately 2,380 employees, or about 33%, were represented by various unions
pursuant to collective bargaining agreements. The Company has not experienced
any labor problems resulting in a work stoppage, and believes it has good
relations with its employees.

RECENT DEVELOPMENTS

     On January 30, 1998, the Company acquired certain assets and assumed
certain liabilities of the PCB production facility of Ericsson Telecom AB
("Ericsson") located in Sweden (the "Ericsson Facility"), for a cash purchase
price of approximately $7.0 million. In addition, the company and Ericsson
signed a three-year supply agreement whereby Ericsson committed to purchase 40%
of its PCB requirements from the Company. On February 17, 1998, the Company
acquired Print Service Holding N.V., the holding company parent of Mommers Print
Service, B.V. ("Mommers"), a PCB manufacturer located in the Netherlands and
specializing in the production of high-volume, medium- to high-complexity PCBs
and backplanes, for a purchase price of approximately $59.4 million, including
assumed debt. On March 12, 1998, the Company acquired Zincocelere S.p.A.
("Zincocelere"), a PCB manufacturer located in northern Italy and specializing
in high volume, medium to high complexity PCB's, for a purchase price of
approximately $100.0 million, including assumed debt. The acquisition of the PCB
production facility from Ericsson, and the acquisitions of Mommers and
Zincocelere are herein referred to as the 1998 Acquisitions. The Company
anticipates that it will continue to make strategic acquisitions of PCB
companies throughout the world in accordance with its expansion strategy.

                                        6
<PAGE>   8

ITEM 2. PROPERTIES

     In addition to its executive offices in St. Louis, Missouri, as of December
31, 1997, the Company operated 16 principal manufacturing and research
facilities located in seven different countries with a total area of
approximately 2.1 million square feet. The Company owns approximately 1.8
million square feet and leases approximately 300,000 square feet. The Company is
currently constructing what it believes will be, upon its completion, the
largest PCB manufacturing facility in Europe. The Company believes its plants
and equipment include state-of-the-art technology and are well-maintained.
Production facilities for certain of the Company's products are operating at or
near capacity.

     All of the Company's owned facilities are subject to mortgages pursuant to
a credit facility with a financial institution. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in Item 7 hereof.

     The Company's facilities at December 31, 1997 were as follows:

<TABLE>
<CAPTION>
                                      SIZE              TYPE OF                DESCRIPTION OF
           LOCATION             (APPROX. SQ. FT)        INTEREST         PRODUCTS/SERVICES PROVIDED
           --------             ----------------   ------------------  ------------------------------
<S>                             <C>                <C>                 <C>
UNITED STATES
Richmond, Virginia............      700,000        Owned               High volume PCBs and
                                                                       backplanes
San German, Puerto Rico.......      185,000        Leased(1)           High volume inner layer and
                                                                       high density PCBs
CANADA
Kirkland, Quebec..............      117,000        Owned               High volume, high density PCBs
Pointe-Claire, Quebec.........      160,000        Owned               High volume inner layers,
                                                                       prototype and pre-production
Granby, Quebec................      103,000        Owned               High volume, high density PCBs
MEXICO
Juarez, Mexico................        5,000        Leased(2)           Backplanes
EUROPE
Tres Cantos, Spain............        5,000        Leased(3)           Backplanes
Galashiels, Scotland..........      121,000        Owned               High volume PCBs
Selkirk, Scotland.............      142,000        Owned/Leased(4)     High volume complex PCBs and
                                                                       quick-turnaround
Rugby, England................       36,000        Leased(5)           Pre-production PCBs
Tamworth, England.............       62,000        Owned               Prototype, quick-turnaround
                                                                       complex PCBs
Telford, England..............       44,000        Leased(6)           Medium volume PCBs
Manchester, England...........       30,000        Owned               Advanced prototype and pre-
                                                                       production PCBs
Portsmouth, England...........       27,000        Leased(7)           High reliability thick-film
                                                                       hybrids
South Shields, England........      320,000        Owned               High volume PCBs and quick-
                                                                       turnaround
Newcastle, England............      500,000        Under construction  High volume PCBs
</TABLE>

---------------

(1) Lease expires December 31, 2002.

(2) Lease is month to month.

(3) Lease is month to month

                                        7
<PAGE>   9

(4) Lease portion of facility (approximately 30,000 sq. ft.) expires May 15,
    2004 (includes options to renew through May 15, 2024 and to purchase).

(5) Lease expires June 24, 2009.

(6) Lease expires June 24, 2987 (999 year lease).

(7) Lease expires October 1, 2004.

     In addition to the facilities listed above, at December 31, 1997 the
Company maintained 18 sales and marketing facilities, all of which are leased,
including 14 located in North America and one each in Sweden, France, Germany
and South Africa.

ITEM 3. LEGAL PROCEEDINGS

     The operations of the Company have from time to time been involved in
claims and litigation. The nature of the Company's business is such that it is
anticipated that the Company will be involved from time to time in claims and
litigation considered to be in the ordinary course of its business. Based on
experience with similar claims and litigation, the Company does not anticipate
that these matters will have a material adverse effect on the Company.

     The Company anticipates that it may, from time to time, receive
notifications alleging infringements of patents generally held by other
manufacturers. Disputes over patent infringement are common in the electronics
industry and typically begin with notices of the type described above. Although
the ultimate resolution of the legal action and infringement notices described
above cannot be predicted, the Company believes that such resolution, including
any ultimate liability, will not have a material adverse effect on the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were submitted to a vote of security holders in the fourth
quarter of 1997.

                                    PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
        MATTERS.

     All of the Company's outstanding common stock is held by Viasystems Group,
and, accordingly, there is no established public trading market for the
Company's Common Stock. The Company has paid no dividends since inception, and
its ability to pay dividends is limited by the terms of certain agreements
related to its indebtedness.

                                        8
<PAGE>   10

ITEM 6. SELECTED FINANCIAL DATA

THE COMPANY

     The selected information below for the period from inception (August 28,
1996) to December 31, 1996 presents financial information of Viasystems Group
for the period during which Circo Craft and Viasystems Technologies were
operated by Viasystems Group, and prior to the formation of the Company and
Viasystems Group's contribution of its assets to the Company in April 1997. The
data for the period from inception (August 28, 1996) to December 31, 1996 has
been derived from the audited consolidated financial statements of Viasystems
Group. The selected information below for the year ended December 31, 1997,
presents the financial information of Viasystems, Inc. and its subsidiaries
subsequent to the capital contribution by Viasystems Group and the financial
information of Viasystems Group and its subsidiaries prior to the capital
contribution to Viasystems, Inc. The data for the year ended December 31, 1997,
has been derived from the audited consolidated financial statements of
Viasystems, Inc. The following information should be read in conjunction with
the audited Consolidated Financial Statements of Viasystems, Inc. and the notes
thereto and "Management's Discussion and Analysis of Results of Operations and
Financial Condition," all included elsewhere herein.

<TABLE>
<CAPTION>
                                                              FROM INCEPTION
                                                               (AUGUST 28,          YEAR
                                                                 1996) TO          ENDED
                                                               DECEMBER 31,     DECEMBER 31,
                                                                   1996             1997
                                                              --------------    ------------
                                                                  (DOLLARS IN THOUSANDS)
<S>                                                           <C>               <C>
STATEMENT OF OPERATIONS DATA:
Net sales...................................................     $ 50,400        $  795,289
Cost of goods sold..........................................       42,052           554,097
Selling, general and administrative expenses................        3,844            75,650
Depreciation................................................        4,102            51,884
Amortization of intangible assets...........................          533            58,153
Write-off of acquired in-process research and
  development(1)............................................       50,800           294,500
                                                                 --------        ----------
  Operating loss............................................      (50,931)         (238,995)
Interest expense............................................        2,503            64,612
Amortization of deferred financing costs....................          470             6,629
Other expense...............................................          262             1,024
                                                                 --------        ----------
  Loss before income taxes and extraordinary item...........      (54,166)         (311,260)
Provision (benefit) for income taxes........................       (5,424)            8,432
                                                                 --------        ----------
  Loss before extraordinary item............................      (48,742)         (319,692)
Extraordinary loss, net of tax(2)...........................           --             7,796
                                                                 --------        ----------
          Net loss..........................................     $(48,742)       $ (327,488)
                                                                 ========        ==========
OTHER DATA:
Adjusted EBITDA(3)..........................................     $  4,504        $  165,812
Operating cash flows........................................        1,662           104,906
Investing cash flows........................................     (286,286)         (273,067)
Financing cash flows........................................      300,713           184,077
Capital expenditures........................................        3,563           117,163
BALANCE SHEET DATA (END OF PERIOD):
Cash and cash equivalents...................................     $ 16,117        $   27,538
Working capital.............................................       44,938            16,659
Total assets................................................      387,741         1,068,912
Total debt, including current maturities....................      265,620           847,375
Stockholders' equity (deficit)..............................       54,973           (92,193)
</TABLE>

                                        9
<PAGE>   11

---------------

(1) Represents charges relating to the write-off of acquired in-process research
    and development costs associated with the acquisitions of Circo Craft and
    the Lucent Division in 1996 and Forward Group and Chips in 1997. The
    write-off relates to acquired research and development for projects that do
    not have a future alternative use. See "Notes to Consolidated Financial
    Statements" of Viasystems, Inc.

(2) The Company recorded, as an extraordinary item, a non-cash write-off of
    deferred financing fees of approximately $7,796, net of income tax benefit
    of $4,332, related to deferred financing fees incurred on debt retired
    before maturity.

(3) Adjusted EBITDA is defined as operating income (loss) plus depreciation,
    amortization and the non-cash charge relating to the write-off of acquired
    in-process research and development. The Company believes that Adjusted
    EBITDA provides additional information for determining its ability to meet
    debt service requirements as revenues increase more than cash expenditures
    for operating expenses. Adjusted EBITDA does not represent and should not be
    considered as an alternative to net income or cash flow from operations as
    determined by Generally Accepted Accounting Principles ("GAAP"). Adjusted
    EBITDA does not necessarily indicate whether cash flow will be sufficient
    for cash requirements. The calculation of Adjusted EBITDA does not include
    the commitments of the Company for capital expenditures and payment of debt
    and should not be deemed to represent funds available to the Company.
    Adjusted EBITDA, as presented, may not be comparable to similarly-titled
    measures of other companies.

                                       10
<PAGE>   12

CIRCO CRAFT CO. INC.

     The selected information below represents the financial information of
Circo Craft for the periods indicated. The data for the three fiscal years ended
December 31, 1995, and the nine months ended September 30, 1996 (the period
prior to the acquisition of Circo Craft by Viasystems Group), set forth in
Canadian GAAP in Canadian dollars ("C$"), has been derived from the audited
consolidated financial statements of Circo Craft. The consolidated financial
statements of Circo Craft have been prepared in accordance with Canadian GAAP,
which differs in certain significant respects from U.S. GAAP (see Note 12 to the
consolidated financial statements of Circo Craft). The data set forth in U.S.
GAAP for the two years ended December 31, 1995, the nine months ended September
30, 1996, has been derived from the audited consolidated financial statements of
Circo Craft and adjusted for differences between Canadian GAAP and U.S. GAAP.
The following information should be read in conjunction with the audited
consolidated statements of earnings, retained earnings and changes in financial
position of Circo Craft and the notes thereto and "Management's Discussion and
Analysis of Results of Operations and Financial Condition," all included
elsewhere herein.

                                 CANADIAN GAAP

<TABLE>
<CAPTION>
                                                                                    NINE MONTHS
                                              FISCAL YEARS ENDED DECEMBER 31,          ENDED
                                            -----------------------------------    SEPTEMBER 30,
                                              1993        1994(1)      1995(1)         1996
                                            ---------    ---------    ---------    -------------
                                                      (CANADIAN DOLLARS IN THOUSANDS)
<S>                                         <C>          <C>          <C>          <C>
STATEMENT OF OPERATIONS DATA:
Net sales.................................  C$106,244    C$151,825    C$185,156      C$129,633
Cost of goods sold........................     88,788      124,929      148,788        101,532
Selling, general and administrative
  expenses................................      7,908       10,079       11,087          7,969
Depreciation and amortization.............      7,296        7,160        7,931          8,456
                                            ---------    ---------    ---------      ---------
  Operating income........................      2,252        9,657       17,350         11,676
Interest expense..........................        337          515          852            646
Other income..............................         --         (195)        (915)          (880)
Expenses related to sale(2)...............         --           --           --          5,907
                                            ---------    ---------    ---------      ---------
  Income before income taxes..............      1,915        9,337       17,413          6,003
Provision for income taxes................      1,854        2,719        5,564          3,847
                                            ---------    ---------    ---------      ---------
          Net income before
            non-controlling interest......  C$     61    C$  6,618    C$ 11,849      C$  2,156
                                            =========    =========    =========      =========
OTHER DATA:
EBITDA(3).................................  C$  9,548    C$ 16,817    C$ 25,281      C$ 20,132
Capital expenditures......................     11,072        6,679       23,764         13,058
BALANCE SHEET DATA (END OF PERIOD)
Cash and cash equivalents.................               C$  7,202    C$ 19,231      C$ 28,438
Working capital...........................                  34,260       40,057         41,909
Total assets..............................                 101,175      128,964        134,725
</TABLE>

                                       11
<PAGE>   13

                        APPROXIMATE AMOUNTS IN U.S. GAAP

<TABLE>
<CAPTION>
                                                           FIVE YEARS ENDED        NINE MONTHS
                                                             DECEMBER 31,             ENDED
                                                        ----------------------    SEPTEMBER 30,
                                                         1994(1)      1995(1)         1996
                                                        ---------    ---------    -------------
                                                            (CANADIAN DOLLARS IN THOUSANDS)
<S>                                                     <C>          <C>          <C>
STATEMENT OF OPERATIONS DATA:
Net sales.............................................  C$142,840    C$194,140      C$129,633
Cost of goods sold....................................    122,513      148,788        101,532
Selling, general and administrative expenses..........     10,217       10,846          8,072
Depreciation and amortization.........................      7,160        7,931          8,456
                                                        ---------    ---------      ---------
  Operating income....................................      2,950       26,575         11,573
Interest expense......................................        515          852            646
Other income..........................................       (195)        (915)          (880)
Expenses related to sale(2)...........................         --           --          5,907
                                                        ---------    ---------      ---------
  Income before income taxes..........................      2,630       26,638          5,900
Provision for income taxes............................      2,822        6,079          3,680
                                                        ---------    ---------      ---------
  Net income (loss) before non-controlling interest...  C$   (192)   C$ 20,559      C$  2,220
                                                        =========    =========      =========
OTHER DATA:
EBITDA(3).............................................  C$ 10,110    C$ 34,506      C$ 20,029
Operating cash flows..................................      5,653       24,388         18,034
Investing cash flows..................................     (7,392)     (21,790)       (14,444)
Financing cash flows..................................      5,737        9,300          1,222
Capital expenditures..................................      6,679       23,764         13,058
BALANCE SHEET DATA (END OF PERIOD):
Cash and cash equivalents.............................  C$  4,703    C$ 16,600      C$ 21,411
Working capital.......................................     25,276       40,057         41,909
Total assets..........................................     91,139      128,964        134,725
Total debt, including current maturities..............     14,101       15,998         17,563
</TABLE>

---------------

(1) Under Canadian GAAP in effect at the time, the Company recognized certain
    revenues related to a gain on an out-of-court settlement in 1994. Under U.S.
    GAAP, that gain would have been deferred and recognized in 1995.

(2) Represents non-recurring expenses incurred in connection with the sale of
    Circo Craft to Viasystems Group which includes, among others, brokerage and
    legal fees.

(3) EBITDA is defined as operating income plus depreciation and amortization.
    The Company believes that EBITDA provides additional information for
    determining its ability to meet debt service requirements as revenues
    increase more than cash expenditures for operating expenses. EBITDA does not
    represent and should not be considered as an alternative to net income or
    cash flow from operations as determined by generally accepted accounting
    principles, and EBITDA does not necessarily indicate whether cash flow will
    be sufficient for cash requirements. The calculation of EBITDA does not
    include the commitments of the Company for capital expenditures and payment
    of debt and should not be deemed to represent funds available to the
    Company. EBITDA, as presented, may not be comparable to similarly-titled
    measures of other companies.

VIASYSTEMS TECHNOLOGIES CORP.

     The selected information below presents financial information of the Lucent
Division (renamed Viasystems Technologies) for the periods indicated. The
unaudited financial data for the fiscal year ended December 31, 1993, has been
derived from the unaudited financial statements of Viasystems Technologies
which, in the opinion of management of the Company, include all adjustments
(consisting only of normal recurring adjustments) necessary for a fair
presentation. The data for the fiscal years ended Decem-

                                       12
<PAGE>   14

ber 31, 1994 and 1995, and the eleven months ended November 30, 1996 (the period
prior to the acquisition of the Lucent Division by Viasystems Technologies), has
been derived from the audited statements of operations of Viasystems
Technologies. Presentation of balance sheet data for Viasystems Technologies is
not meaningful because such business was a division of Lucent Technologies for
the periods indicated. In addition, Viasystems Technologies was a captive
producer for Lucent Technologies and historical financial results for Viasystems
Technologies may not be indicative of its results of operations as an
independent entity. The following information should be read in conjunction with
the audited statements of operations of Viasystems Technologies and the notes
thereto and "Management's Discussion and Analysis of Results of Operations and
Financial Condition," all included elsewhere herein.

<TABLE>
<CAPTION>
                                                                                      ELEVEN MONTHS
                                                   FISCAL YEARS ENDED DECEMBER 31,        ENDED
                                                  ---------------------------------   NOVEMBER 30,
                                                    1993        1994        1995          1996
                                                  ---------   ---------   ---------   -------------
                                                               (DOLLARS IN THOUSANDS)
<S>                                               <C>         <C>         <C>         <C>
STATEMENT OF OPERATIONS DATA:
Net sales.......................................  $262,364    $310,559    $325,047      $325,102
Cost of goods sold..............................   217,277     238,623     274,824       244,313
Selling, general and administrative expenses....    24,259      42,930      42,445        34,792
Depreciation and amortization...................    17,606      16,111      16,378        18,317
                                                  --------    --------    --------      --------
  Operating income (loss).......................     3,222      12,895      (8,600)       27,680
Interest expense(1).............................        --           5         204           917
Other income....................................      (249)        (75)        (94)         (228)
                                                  --------    --------    --------      --------
  Income (loss) before income taxes.............     3,471      12,965      (8,710)       26,991
Provision (benefit) for income taxes............     1,319       4,927      (3,310)       10,257
                                                  --------    --------    --------      --------
          Net income (loss).....................  $  2,152    $  8,038    $ (5,400)     $ 16,734
                                                  ========    ========    ========      ========
OTHER DATA:
EBITDA(2).......................................  $ 20,828    $ 29,006    $  7,778      $ 45,997
Operating cash flows(3).........................
Investing cash flows(3).........................
Financing cash flows(3).........................
Capital expenditures............................     9,823      16,884      22,173        16,485
</TABLE>

---------------

(1) Interest expense represents interest incurred on capital leases.

(2) EBITDA is defined as operating income (loss) plus depreciation and
    amortization. The Company believes that EBITDA provides additional
    information for determining its ability to meet debt service requirements as
    revenues increase more than cash expenditures for operating expenses. EBITDA
    does not represent and should not be considered as an alternative to net
    income or cash flow from operations as determined by generally accepted
    accounting principles, and EBITDA does not necessarily indicate whether cash
    flow will be sufficient for cash requirements. The calculation of EBITDA
    does not include the commitments of the Company for capital expenditures and
    payment of debt and should not be deemed to represent funds available to the
    Company. EBITDA, as presented, may not be comparable to similarly-titled
    measures of other companies. Charges of $8,896, $14,565, $18,987, and
    $7,900, net of estimated additional administrative costs to be incurred, for
    fiscal years ended 1993, 1994, 1995 and the eleven months ended November 30,
    respectively, incurred with respect to corporate allocations to the Lucent
    Division by Lucent Technologies, which are not expected to be incurred by
    the Company are included in the historical results of operations and have
    not been eliminated to calculate EBITDA.

(3) Financial statements had not been previously prepared for the Lucent
    Division. The data in the table above has been derived from financial
    statements that present only assets purchased in the Lucent Division
    acquisition and results of operations related to the Lucent Division. Any
    computation of historical cash flow data for the Lucent Division would be
    based on arbitrary assumptions of the financial information necessary to
    prepare such data. As a result, the historical cash flow data of the Lucent
    Division has not been prepared or presented.

                                       13
<PAGE>   15

FORWARD GROUP PLC

     The selected information below presents financial information of Forward
Group for the periods indicated. The data for the four fiscal years ended
January 31, 1997, set forth in U.K. GAAP in U.K. pounds sterling ("U.K.L"), has
been derived from the audited consolidated financial statements of Forward
Group. The consolidated financial statements of Forward Group have been prepared
in accordance with U.K. GAAP, which differs in certain significant respects from
U.S. GAAP (see Note 25 to the consolidated financial statements of Forward Group
included elsewhere herein). The data set forth in U.S. GAAP as of and for the
three fiscal years ended January 31, 1997, has been derived from the audited
consolidated financial statements of Forward Group and adjusted for differences
between U.K. GAAP and U.S. GAAP. The following information should be read in
conjunction with the audited consolidated financial statements of Forward Group
and the notes thereto and "Management's Discussion and Analysis of Results of
Operations and Financial Condition," all included elsewhere herein.

                                   U.K. GAAP

<TABLE>
<CAPTION>
                                                            FISCAL YEARS ENDED JANUARY 31,
                                                         1994      1995      1996       1997
                                                        -------   -------   -------   --------
                                                                (POUNDS IN THOUSANDS)
<S>                                                     <C>       <C>       <C>       <C>
STATEMENT OF OPERATIONS DATA:
Net sales.............................................  L20,663   L23,819   L66,839   L105,029
Costs of goods sold...................................   11,505    17,032    49,850     79,030
Selling, general and administrative expenses..........    5,856     3,179     6,425     11,189
Depreciation and amortization.........................    1,143     1,215     2,701      4,694
Restructuring charges(1)..............................       --        --        --      1,244
                                                        -------   -------   -------   --------
  Operating income....................................    2,159     2,393     7,863      8,872
Interest expense......................................      208       228       412        996
Other income..........................................      (75)      (52)     (113)      (229)
Gain on disposal of discontinued operation(2).........       --    (1,503)       --         --
                                                        -------   -------   -------   --------
  Income before income taxes..........................    2,026     3,720     7,564      8,105
Provision for income taxes............................      699       744     2,641      2,707
                                                        -------   -------   -------   --------
          Net income..................................  L 1,327   L 2,976   L 4,923   L  5,398
                                                        =======   =======   =======   ========
OTHER DATA:
Adjusted EBITDA(3)....................................  L 3,302   L 3,608   L10,564   L 14,810
Capital expenditures..................................    3,050     2,724     4,678     11,841
BALANCE SHEET DATA (END OF PERIOD):
Cash and cash equivalents.............................  L     4   L     3   L   789   L     --
Working capital.......................................      (94)    1,245     1,898     (3,074)
Total assets..........................................   13,968    15,589    51,124     60,282
</TABLE>

                                       14
<PAGE>   16

                        APPROXIMATE AMOUNTS IN U.S. GAAP

<TABLE>
<CAPTION>
                                                                   FISCAL YEARS ENDED
                                                              -----------------------------
                                                               1995       1996       1997
                                                              -------   --------   --------
                                                                  (POUNDS IN THOUSANDS)
<S>                                                           <C>       <C>        <C>
STATEMENT OF OPERATIONS DATA:
Net Sales...................................................  L23,819   L 66,839   L105,029
Costs of goods sold.........................................   17,032     49,850     79,030
Selling, general and administrative expenses................    3,179      6,390     11,029
Depreciation and amortization...............................    1,219      2,787      4,870
Restructuring charges(1)....................................       --         --      1,244
                                                              -------   --------   --------
  Operating income..........................................    2,389      7,812      8,856
Interest expense............................................      228        412        996
Other income................................................      (52)      (113)      (229)
Gain on disposal of discontinued operation(2)...............   (1,523)        --         --
                                                              -------   --------   --------
  Income before income taxes................................    3,736      7,513      8,089
Provision for income taxes..................................    1,488      2,652      2,760
                                                              -------   --------   --------
          Net income........................................  L 2,248   L  4,861   L  5,329
                                                              =======   ========   ========
OTHER DATA:
Adjusted EBITDA(3)..........................................  L 3,608   L 10,599   L 14,970
Operating cash flows........................................    1,901      8,594     13,995
Investing cash flows........................................      301    (12,045)   (16,373)
Financing cash flows........................................   (2,203)     4,237      1,589
Capital expenditures........................................    2,724      4,678     11,841
BALANCE SHEET DATA (END OF PERIOD):
Cash and cash equivalents...................................  L     3   L    789   L     --
Working capital.............................................    1,534      2,553     (3,074)
Total assets................................................   15,134     56,539     67,406
Total debt, including current maturities....................    1,746      7,879     15,535
</TABLE>

---------------

(1) Represents non-recurring restructuring charges related to the consolidation
    and rationalization of several facilities at Forward Group.

(2) Represents the gain recognized from the sale of an unrelated business in
    December 1994.

(3) Adjusted EBITDA is defined as operating income plus depreciation,
    amortization and the non-cash charges related to the restructuring of
    facilities discussed in note (1) above in the amount of L1,244 and $2,006,
    in U.K.L and U.S.$, respectively. The Company believes that Adjusted EBITDA
    provides additional information for determining its ability to meet debt
    service requirements as revenues increase more than cash expenditures for
    operating expenses. Adjusted EBITDA does not represent and should not be
    considered as an alternative to net income or cash flow from operations as
    determined by generally accepted accounting principles, and does not
    necessarily indicate whether cash flow will be sufficient for cash
    requirements. The calculation of Adjusted EBITDA does not include the
    commitments of the Company for capital expenditures and payment of debt and
    should not be deemed to represent funds available to the Company. Adjusted
    EBITDA, as presented, may not be comparable to similarly-titled measures of
    other companies.

                                       15
<PAGE>   17

INTERCONNECTION SYSTEMS (HOLDINGS) LIMITED ("CHIPS")

     The selected information below presents financial information of Chips as
of and for the periods indicated. The data as of and for the fiscal years ended
April 1, 1994, March 31, 1995, March 29, 1996, and April 4, 1997 set forth in
U.K. GAAP in U.K.L, has been derived from the audited consolidated financial
statements of Chips. The consolidated financial statements of Chips have been
prepared in accordance with U.K. GAAP, which differs in certain significant
respects from U.S. GAAP (see Note 25 to the consolidated financial statements of
Chips included elsewhere herein). The data set forth in U.S. GAAP as of and for
the fiscal years ended March 31, 1995, March 29, 1996 and April 4, 1997, has
been derived from the audited consolidated financial statements of Chips and
adjusted for differences between U.K. GAAP and U.S. GAAP. The following
information should be read in conjunction with the audited consolidated
financial statements of Chips and the notes thereto and "Management's Discussion
and Analysis of Results of Operations and Financial Condition," all included
elsewhere herein.

                                   U.K. GAAP

<TABLE>
<CAPTION>
                                                                  FISCAL YEARS ENDED
                                                      -------------------------------------------
                                                      APRIL 1,   MARCH 31,   MARCH 29,   APRIL 4,
                                                        1994       1995        1996        1997
                                                      --------   ---------   ---------   --------
                                                                 (POUNDS IN THOUSANDS)
<S>                                                   <C>        <C>         <C>         <C>
STATEMENT OF OPERATIONS DATA:
Net Sales...........................................  L51,852     L70,805    L104,611    L141,643
Costs of goods sold.................................   36,024      49,149      73,407      94,466
Selling, general and administrative expenses........    6,264       6,242       7,522      10,514
Depreciation and amortization.......................    6,561      10,822      17,302      19,123
                                                      -------     -------    --------    --------
  Operating income..................................    3,003       4,592       6,380      17,540
Interest expense....................................      449         921         807         818
Other income........................................     (200)       (109)         --         (44)
                                                      -------     -------    --------    --------
  Income before income taxes........................    2,754       3,780       5,573      16,766
Provision for income taxes..........................    1,488       2,539       4,422       6,874
                                                      -------     -------    --------    --------
  Net income........................................  L 1,266     L 1,241    L  1,151    L  9,892
                                                      =======     =======    ========    ========
OTHER DATA:
EBITDA(1)...........................................  L 9,564     L15,414    L 23,682    L 36,663
Capital expenditures................................   11,434      14,477      25,544      27,591
BALANCE SHEET DATA (END OF PERIOD):
Cash and cash equivalents...........................  L    27     L 2,087    L  2,636    L 26,244
Working capital.....................................   (2,948)     (1,094)     (5,851)     11,516
Total assets........................................   36,067      52,616      67,349     129,921
</TABLE>

                                       16
<PAGE>   18

                        APPROXIMATE AMOUNTS IN U.S. GAAP

<TABLE>
<CAPTION>
                                                                      FISCAL YEARS ENDED
                                                               --------------------------------
                                                               MARCH 31,   MARCH 29,   APRIL 4,
                                                                 1995        1996        1997
                                                               ---------   ---------   --------
                                                                    (POUNDS IN THOUSANDS)
  <S>                                                          <C>         <C>         <C>
  STATEMENT OF OPERATIONS DATA:
  Net sales..................................................  L 70,805    L104,611    L141,643
  Costs of goods sold........................................    49,149      73,407      94,466
  Selling, general and administrative expenses...............     6,112       7,464      10,437
  Depreciation and amortization..............................     9,124      15,752      17,522
                                                               --------    --------    --------
    Operating income.........................................     6,420       7,988      19,218
  Interest expense...........................................       921         807         818
  Other income...............................................      (109)         --         (44)
                                                               --------    --------    --------
    Income before income taxes...............................     5,608       7,181      18,444
  Provision for income taxes.................................     2,080       2,584       6,112
                                                               --------    --------    --------
            Net income.......................................  L  3,528    L  4,597    L 12,332
                                                               ========    ========    ========
  OTHER DATA:
  EBITDA(1)..................................................  L 15,544    L 23,740    L 36,740
  Operating cash flows.......................................    10,763      18,670      27,826
  Investing cash flows.......................................   (12,670)    (16,816)    (24,119)
  Financing cash flows.......................................     3,967      (1,305)     19,901
  Capital expenditures.......................................    14,477      25,544      27,591
  BALANCE SHEET DATA (END OF PERIOD):
  Cash and cash equivalents..................................  L  2,087    L  2,636    L 26,244
  Working capital............................................      (677)     (3,929)     14,276
  Total assets...............................................    45,397      62,893     105,452
  Total debt, including current maturities...................    11,295      15,699      35,754
</TABLE>

---------------

(1) EBITDA is defined as operating income plus depreciation and amortization.
    The Company believes that EBITDA provides additional information for
    determining its ability to meet debt service requirements as revenues
    increase more than cash expenditures for operating expenses. EBITDA does not
    represent and should not be considered as an alternative to net income or
    cash flow from operations as determined by generally accepted accounting
    principles, and EBITDA does not necessarily indicate whether cash flow will
    be sufficient for cash requirements. The calculation of EBITDA does not
    include the commitments of the Company for capital expenditures and payment
    of debt and should not be deemed to represent funds available to the
    Company. EBITDA, as presented, may not be comparable to similarly-titled
    measures of other companies.

                                       17
<PAGE>   19

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
        FINANCIAL CONDITION

     The following discussion should be read in conjunction with the audited
Consolidated Financial Statements and the notes thereto included in Item 8 of
this report.

     Certain information presented herein includes "forward-looking statements"
within the meaning of Section 27A of the Securities Act. One can identify these
forward-looking statements by their use of words such as "expects," "plans,"
"will," "estimates," "forecasts," "projects" and other words of similar meaning.
One can also identify them by the fact that they do not relate strictly to
historical or current facts. These statements are likely to address expected or
possible future events, including statements of the plans and objectives of
management for future growth, operations, products and services and statements
relating to future economic performance. There can be no assurance that the
Company's actual results will not differ materially from its expectations. One
must carefully consider any such statement and should understand that many
factors could cause actual results to differ from the Company's forward-looking
statements. These factors include inaccurate assumptions and a broad variety of
other risks and uncertainties, including some that are known and some that are
not. No forward-looking statement can be guaranteed and actual future results
may vary materially. Although it is not possible to predict or identify all such
factors, they may include the following:

- General competition in the markets and industries in which the Company
  operates:

- Consequences of the Company's substantial leverage including: (i) significant
  cash requirements to service indebtedness, reducing funds available for
  operations and future business opportunities and increasing its vulnerability
  to adverse general economic and industry conditions and competition; (ii)
  possible limitations on its ability to obtain additional financing for
  operations and acquisitions; and (iii) restrictions placed on it by the
  agreements setting forth the terms and conditions of such indebtedness;

- Uncertainties arising from the Company's limited history of integrating the
  operations of separate and distinct businesses acquired since August 1996;

- Uncertainties arising from the Company's ability to implement its operating
  and acquisition strategy, including its ability to identify, negotiate and
  consummate future acquisitions on terms management consider favorable;

- Fluctuations in operating results arising from the variability in timing and
  volume of customer orders compared to the Company's capacity at time of such
  orders, timing of expenditures in anticipation of future sales, pricing
  pressures, variations in product mix, start-up expenses relating to new
  facilities, economic conditions in the electronics industry and adverse
  developments with respect to significant customers, including Lucent
  Technologies;

- Uncertainties arising from the rapidly changing technology and continually
  changing process developments characteristic of the market for the Company's
  products and services;

- Uncertainties relating to the Company's significant operations in
  international markets, including currency fluctuations and restrictions,
  inflation, changes in political and economic conditions, governmental
  regulation, changes in import duties, trade restrictions, work stoppages and
  taxes;

- Changes in accounting standards promulgated by the American Institute of
  Certified Public Accountants, the Financial Accounting Standards Board or the
  Securities and Exchange Commission that are adverse to the Company; and

- Economic factors over which the Company has no control, including inflation
  and interest rates.

     This list should not be considered an exhaustive statement of all potential
risks and uncertainties.

GENERAL

     Viasystems, Inc. is a wholly owned subsidiary of Viasystems Group. Hicks
Muse and Mills & Partners formed Viasystems Group in August 1996 to make
strategic acquisitions of PCB manufacturers and backplane assemblers and to
integrate those acquisitions into a global enterprise that is the preferred
manufacturer and marketer of PCBs and backplanes. In October 1996, Viasystems
Group completed the acquisition of Circo Craft, a rigid PCB manufacturer, for a
cash purchase price of approximately $129.9 million. In Decem-
                                       18
<PAGE>   20

ber 1996, Viasystems Technologies, a wholly owned subsidiary of Viasystems
Group, acquired substantially all the assets of the Lucent Division, in a
transaction valued at approximately $200.0 million. The combination of Circo
Craft and the former Lucent Division created one of the largest independent
manufacturers of PCBs and backplanes in North America. Prior to its acquisition
by Viasystems Technologies, the Lucent Division was a captive supplier of Lucent
Technologies. Accordingly, its historical results of operations are not
indicative of the results of operations to be expected for a stand-alone
enterprise.

     In April 1997, an affiliate of Hicks Muse acquired Forward Group, a rigid
PCB manufacturer located in the United Kingdom, for a cash purchase price of
approximately $208.5 million. Subsequently, Viasystems Group acquired Forward
Group from the Hicks Muse affiliate. Viasystems, Inc. was formed on April 2,
1997, as a subsidiary of Viasystems Group. On April 10, 1997, Viasystems Group
contributed to Viasystems, Inc. all of the capital of its then existing
subsidiaries -- Circo Craft, Viasystems Technologies, and PCB Acquisition
Limited (the acquisition parent of Forward Group). Prior to the contribution of
this capital by Viasystems Group, Viasystems, Inc. had no operations of its own.
Also in April 1997, Chips Holdings acquired Chips. Viasystems Group subsequently
acquired Chips in consideration for the issuance to Hicks Muse and certain of
its affiliates of Viasystems Group's common stock valued at $140.0 million and
the assumption of debt, and the Chips operating subsidiaries became indirect
wholly-owned subsidiaries of Viasystems, Inc.

     The discussion included herein of the Company represents the results of
operations of Viasystems, Inc. and its subsidiaries subsequent to the capital
contribution by Viasystems Group and of Viasystems Group and its subsidiaries
prior to the capital contribution of such subsidiaries to Viasystems, Inc.

     The Company manufactures PCBs and assembles backplanes in various regions
of the world and exports and imports these products to and from a large number
of countries. The Company's operations may therefore be subject to volatility
because of currency fluctuations, inflation and changes in political and
economic conditions in these countries. Sales and expenses are frequently
denominated in local currencies and may be affected as currency fluctuations
affect the Company's product prices and operating costs or those of its
competitors. The Company, from time to time, engages in hedging operations, such
as forward exchange contracts, to reduce its exposure to foreign currency
fluctuations. Such hedging operations historically have not been material, and
gains and losses from such operations have not been significant. There can be no
assurance that such hedging operations will eliminate or substantially reduce
such risk. The financial position and results of operations of the Company's
foreign subsidiaries are measured using the local currency as the functional
currency, although United States dollars would be used if any of these countries
were deemed hyperinflationary in accordance with Statement of Financial
Accounting Standard ("SFAS") No. 52.

     The Company's volume of products being produced by the Company's facilities
has increased since the acquisition of each entity, and certain of the Company's
production equipment is operating at or near capacity. A significant portion of
the Company's planned capital expenditures in 1998 is directed toward expansion
of production capacity to meet increased demand.

     Management has implemented a Company-wide initiative to ensure that its
information systems and systems applications are capable of processing data and
transactions pertaining to the year 2000. The initiative utilizes both Company
resources and external resources to identify systems and applications affected,
to correct existing systems or to acquire replacement systems, and to test the
systems and applications for compliance with the requirements for processing
year 2000 information. The majority of the Company's major information systems
are currently being upgraded and replaced as part of a strategy to implement
consistent systems worldwide. The new systems being installed are capable of
processing year 2000 information. All remaining systems will either be corrected
in order to enable them to process year 2000 information or will be replaced
with year 2000 compliant systems. The Company will capitalize and depreciate the
cost of replacement systems consistent with its existing capital expenditures
policies. Costs incurred to modify and maintain existing systems will be
expensed as incurred. Management believes that a substantial portion of the
costs for the new systems and the modifications will not represent incremental
costs to the Company, but rather will represent the reallocation of existing and
planned information technology resources. The amounts expensed in 1997 were
immaterial, and management expects that amounts required to be expensed in
future periods will not have a material effect on its financial position or
results of operations. The Company believes that it will achieve compliance with
year 2000 processing requirements in advance of the year 2000, and does

                                       19
<PAGE>   21

not anticipate any material disruption in its operations as the result of any
failure by the Company to be in compliance. The Company does not have sufficient
information concerning the year 2000 compliance of its suppliers and customers
and, therefore, is unable to predict what effect, if any, such compliance will
have on the Company. However, the Company plans to formally communicate with all
of its significant suppliers and large customers to determine the effect on the
Company if those third parties do not remediate their year 2000 issue. The
Company's present estimate of costs to address the year 2000 compliance include
any costs associated with the anticipated effect of third parties, based on
available information. However, there can be no guarantee that the systems of
third parties on which the Company's systems rely will be converted timely or
that a failure of a third party to convert would not have a material adverse
effect on the Company.

     Each of Viasystems Group, Circo Craft, Viasystems Technologies, Forward
Group and Chips are predecessors to Viasystems, Inc. A discussion of the results
of operations for each of the separate entities follows the discussion below
relating to the Company. The separate results of each entity are impacted by a
number of factors including target markets, customers, and local economics.
Differing demand for printed circuit boards in general and demand for different
technologies of printed circuit boards may not be consistent for each of the
predecessor entities acquired. The Company believes that the combination of the
predecessor entities will provide it with a significant advantage in managing
its operations to meet demand. The discussion of the results of operations of
the separate entities has been prepared based upon the results of each of
separate entity in accordance with the local GAAP of the entity and should be
read in conjunction with the "Selected Financial Data" of each of entity and the
financial statements and notes thereto of Viasystems Group, Circo Craft,
Viasystems Technologies, Forward Group, and Chips, all of which are included
elsewhere herein.

RESULTS OF OPERATIONS -- THE COMPANY

     Viasystems, Inc. is a wholly owned subsidiary of Viasystems Group.
Viasystems, Inc. was formed on April 2, 1997, as a subsidiary of Viasystems
Group. On April 10, 1997, Viasystems Group contributed to Viasystems, Inc. all
of the capital of its then existing subsidiaries -- Circo Craft, Viasystems
Technologies, and PCB Acquisition Limited (the acquisition parent of Forward
Group). Prior to the contribution of this capital by Viasystems Group,
Viasystems, Inc. had no operations of its own. The discussion included herein of
the Company represents the results of operations of Viasystems, Inc. and its
subsidiaries subsequent to the capital contribution by Viasystems Group and of
Viasystems Group and its subsidiaries prior to the capital contribution of such
subsidiaries to Viasystems, Inc.

  Year Ended December 31, 1997

     The Company's net sales for the year ended December 31, 1997 were $795.3
million and cost of goods sold were $554.1 million, or 69.7% of net sales.
Selling, general and administrative expenses for the same period were $75.6
million, or 9.5% of net sales. During the year ended December 31, 1997, net cash
from operations was $104.9 million. For the same period, the Company used
approximately $117.2 million for capital expenditures and used approximately
$155.9 million in other investing activities, primarily for the acquisitions of
Forward Group. The acquisitions were funded through the issuance of $187.1
million of long-term obligations and the proceeds of $59.8 million of equity
offerings offset by $34.5 million of financing costs.

  The Period From Inception (August 28, 1996) to December 31, 1996

     The Company's net sales for the period from inception (August 28, 1996) to
December 31, 1996 were $50.4 million and cost of goods sold were $42.1 million,
or 83.4% of net sales. Selling, general and administrative expenses for the same
period were $3.8 million, or 7.5% of net sales. During the period from inception
(August 28, 1996) to December 31, 1996, net cash provided by operating
activities was $1.7 million. For the same period, the Company used approximately
$286.3 million in investing activities primarily for the acquisitions of Circo
Craft and the Lucent Division. The acquisitions were funded through the issuance
of $238.3 million of long-term obligations and the proceeds of $73.8 million of
equity offerings offset by $11.4 million of financing costs.

     The Company believes that its operating results are not comparable between
the period from inception (August 28, 1996) to December 31, 1996 and the year
ended December 31, 1997 nor to the operating results expected to be achieved in
the future due to, among other things, the startup of the Company in 1996, the

                                       20
<PAGE>   22

acquisitions made in 1996 and 1997 and to date in 1998, the anticipated future
acquisitions, and the financing incurred to fund past and future acquisitions.
The Company believes that, due to the acquisitions made, sales in subsequent
periods will increase from that reported for the period from inception (August
28, 1996) to December 31, 1996 and for the year ended December 31, 1997.

RESULTS OF OPERATIONS -- CIRCO CRAFT

  Nine Months Ended September 30, 1996 Compared to Fiscal 1995

     Net sales and cost of goods sold for the nine months ended September 30,
1996, were C$129.6 million and C$101.5 million, respectively, compared to sales
and cost of goods sold for fiscal 1995 of C$185.2 million and C$148.8 million,
respectively. Net sales for the nine months ended September 30, 1996, were
approximately 70.0% of sales for fiscal 1995. In general, Circo Craft's sales
were lower during 1996 due to a shift in the product mix to lower layer count
products driven primarily by the demand of one of Circo Craft's customers in the
automotive industry. As a percentage of sales, cost of goods sold for the nine
months ended September 30, 1996, decreased to 78.3% from 80.4% for fiscal 1995
primarily as a result of cost savings achieved through improved production
processes. Selling, general and administrative expenses for the nine months
ended September 30, 1996, were C$8.0 million compared to selling, general and
administrative expenses for fiscal 1995 of C$11.1 million. Selling, general and
administrative expenses as a percentage of sales for the nine months ended
September 30, 1996, increased to 6.1% from 6.0% for fiscal 1995 primarily as a
result of the lower sales caused by the product mix shift discussed above.

RESULTS OF OPERATIONS -- VIASYSTEMS TECHNOLOGIES

  Eleven Months Ended November 30, 1996 Compared to Fiscal 1995

     Net sales and cost of goods sold for the eleven months ended November 30,
1996, were $325.1 million and $244.3 million, respectively, compared to sales
and cost of goods sold for fiscal 1995 of $325.0 million and $274.8 million,
respectively. Net sales for the eleven months ended November 30, 1996, were
approximately 100.0% of sales for fiscal 1995 as sales for Viasystems
Technologies increased during 1996 due to increased demand by Lucent
Technologies caused by the rapidly expanding telecommunications market. As a
percentage of sales, cost of goods sold for the eleven months ended November 30,
1996, decreased to 75.1% from 84.5% for fiscal 1995 primarily as a result of the
favorable impact of productivity improvements. Selling, general and
administrative expenses for the eleven months ended November 30, 1996, were
$34.8 million compared to selling, general and administrative expenses for
fiscal 1995 of $42.4 million. Selling, general and administrative expenses as a
percentage of sales for the eleven months ended November 30, 1996, decreased to
10.7% from 13.1% for fiscal 1995 as a result of decreased allocations from
Lucent Technologies.

RESULTS OF OPERATIONS -- FORWARD GROUP

  Fiscal Year Ended January 31, 1997 Compared to Fiscal Year Ended January 31,
1996

     Net sales and cost of goods sold for the fiscal year ended 1997 were L105.0
million and L79.0 million, respectively, compared to sales and cost of goods
sold for the fiscal year ended 1996 of L66.8 million and L49.9 million,
respectively. Sales during the fiscal year ended 1997 increased over the fiscal
year ended 1996 due primarily to the full year impact of the 1995 acquisition of
Exacta Circuits and three smaller companies in 1996. As a percentage of sales,
cost of goods sold for the fiscal year ended 1997 increased to 75.2% from 74.6%
for the fiscal year ended 1996 primarily as a result of the three smaller
acquisitions in 1996 which have products with lower margins. Selling, general
and administrative expenses for the fiscal year ended 1997 were L11.2 million
compared to selling, general and administrative expenses for the fiscal year
ended 1996 of L6.4 million. Selling, general and administrative expenses
increased in the fiscal year ended 1997 primarily due to the impact of the
acquisitions discussed above.

RESULTS OF OPERATIONS -- CHIPS

  Fiscal Year Ended April 4, 1997 Compared to Fiscal Year Ended March 29, 1996

     Net sales and cost of goods sold for the fiscal year ended 1997 were L141.6
million and L94.5 million, respectively, compared to sales and cost of goods
sold for the fiscal year ended 1996 of L104.6 million and L73.4 million,
respectively. Sales during the fiscal year ended 1997 increased over the fiscal
year ended 1996
                                       21
<PAGE>   23

due to increased demand for higher layer count PCBs for the telecommunications
and computer industries. As a percentage of sales, cost of goods sold for the
fiscal year ended 1997 decreased to 66.7% from 70.2% for the fiscal year ended
1996 primarily as a result of improved absorption of costs due to higher sales
and productivity improvements achieved as a result of a number of cost savings
projects underway including projects to decrease the cost of process materials
and improve process automation. Selling, general and administrative expenses for
the fiscal year ended 1997 were L10.5 million compared to selling, general and
administrative expenses for the fiscal year ended 1996 of L7.5 million. Selling,
general and administrative expenses as a percentage of sales for the fiscal year
ended 1997 remained relatively consistent at 7.4% compared to 7.2% for the
fiscal year ended 1996.

LIQUIDITY AND CAPITAL RESOURCES -- THE COMPANY

     Net cash provided by operating activities was $104.9 million for the year
ended December 31, 1997, which compared to $1.7 million provided by operations
for the period from inception (August 28, 1996) to December 31, 1996. Net cash
used in investing of $273.1 million for the year ended December 31, 1997,
consisted of capital expenditures of $117.2 million and acquisition activities
of a net of $155.9 million. Net cash used in investing of $286.3 million for the
period from inception (August 28, 1996) to December 31, 1996 consisted of
capital expenditures of $3.6 million and acquisition activities of a net of
$282.7 million. Net cash provided by financing activities was $184.1 million for
the year ended December 31, 1997, compared to net cash provided by financing
activities of $300.7 million for the period from inception (August 28, 1996) to
December 31, 1996. The net cash provided by financing activities for the year
ended December 31, 1997 was used primarily for the acquisition of Forward Group.
The acquisition of Chips was completed in a non-cash transaction in which the
selling stockholders received notes payable (the "Chips Loan Notes"). The net
cash provided by financing activities in the period from inception (August 28,
1996) to December 31, 1996 was used primarily to finance the acquisitions of
Circo Craft and the Lucent Division.

     On April 11, 1997, the Company entered into a $216.0 million Senior
Subordinated Credit Agreement (the "Subordinated Credit Facility"). The proceeds
of the Subordinated Credit Facility were used to repay a tender facility which
was used to acquire Forward Group and $20.0 million of term loans outstanding
under the Second Amended and Restated Credit Agreement (the "Senior Credit
Facilities"). In connection with the Chips Merger, Viasystems Group assumed the
$437.5 million of Chips Loan Notes. The Chips Loan Notes are collateralized by
letters of credit issued by banks. These letters of credit are in turn
collateralized in part by a fully cash collateralized $118.3 million
reimbursement obligation of Bisto Funding, Inc., a special purpose entity and
sister company of Viasystems established as a subsidiary of Viasystems Group in
connection with the acquisition of Chips, with the remainder, including interest
on the Chips Loan Notes for one year, collateralized by a reimbursement
obligation of the Company (the "Chips Reimbursement Obligation"). As such, the
Company's liability for principal under the Chips Loan Notes represents $319.3
million, or the net amount of the Chips Loan Notes and the cash collateral of
Bisto Funding, Inc. To the extent the interest income earned by Bisto Funding,
Inc. on the $118.3 million of cash it holds is insufficient to fund interest on
$118.3 million of the principal amount of the Chips Loan Notes, the Company will
be required pursuant to the terms of the Chips Reimbursement Obligation to fund
any such shortfall. When principal is paid on the Chips Loan Notes, the first
$118.3 million of principal payments will be paid by Bisto Funding, Inc. and the
remainder will be funded by the Company. In order to fund such principal, the
Senior Credit Facilities contain a committed, unfunded term loan facility that
may be drawn upon by the Company so that it may satisfy its reimbursement
obligation in respect of the $319.3 million principal amount of the Chips Loan
Notes (see Note 10 to the Notes to Consolidated Financial Statements in Item 8
hereof). On June 2, 1997, the Company completed the offering of $400.0 million
of 9 3/4% Senior Subordinated Notes due 2007 (the "1997 Notes"). The net
proceeds of the 1997 Notes were used to repay the Subordinated Credit Facility,
approximately $130.3 million of term loans outstanding under the Senior Credit
Facilities, and approximately $41.6 million of revolving credit amounts
outstanding under the Senior Credit Facilities which was borrowed subsequent to
December 31, 1996, to repay debt assumed in the acquisition of Chips. As of
December 31, 1997, the Company's indebtedness consisted of amounts outstanding
under the Senior Credit Facilities, the 1997 Notes, the Company's liability
under the Chips Reimbursement Obligation, capital leases and other debt.

                                       22
<PAGE>   24

     On February 9, 1998, the Company completed the offering of an additional
$100.0 million of 9 3/4% Senior Subordinated Notes due 2007 at a price of
104.5%, yielding net proceeds of $101.0 million (the "1998 Notes" and together
with the 1997 Notes, the "2007 Notes"). As a condition of the offering of the
1998 Notes, Hicks Muse agreed to contribute an additional $50.0 million of
equity to the Company and the Senior Credit Facilities were amended to, among
other things, establish an additional $70.0 million term loan (the "Amended
Senior Credit Facilities"). A portion of the proceeds of the 1998 Notes, the
additional term loan under the Senior Credit Facilities, and the equity
contribution have been used to fund the acquisitions of the Ericsson Facility,
Mommers, and Zincocelere. In addition, the Company used a portion of these
proceeds to repay revolving credit line amounts outstanding under the Senior
Credit Facilities which were borrowed subsequent to December 31, 1997.

     The Company's Adjusted EBITDA (as defined) for fiscal 1996 and 1997 was
$4.5 million and $165.8 million, respectively. As a percentage of sales,
Adjusted EBITDA was 8.9% and 20.9%, respectively, for the same periods. Adjusted
EBITDA is one of the financial measures in the covenants to the Senior Credit
Facilities. Although Adjusted EBITDA does not necessarily indicate whether cash
flows will be sufficient for cash requirements, the Company believes that
Adjusted EBITDA provides additional information for determining its ability to
meet debt service requirements as revenues increase more than cash expenditures
for operating expenses.

     The Company anticipates that in addition to the acquisitions discussed
above, its primary uses of cash in 1998 will be (i) for capital expenditures for
maintenance, replacement and acquisitions of equipment, expansion of capacity,
productivity improvements and product and process technology development and
(ii) to pay interest on, and to repay principal of, indebtedness under the
Amended Senior Credit Facilities, the 2007 Notes, the Chips Reimbursement
Obligation and other outstanding indebtedness of the Company as discussed in
Note 10 to the Notes to Consolidated Financial Statements in Item 8 hereof. The
Company anticipates making capital expenditures in 1998 for facilities,
equipment and information systems, including capital expenditures on the 1998
Acquisitions completed to date. The Amended Senior Credit Facilities contains
annual limits on the Company's capital expenditures. The Company believes that
such limits are sufficient to allow the Company to undertake all anticipated
capital projects. In 1998, the Company will be obligated to make principal and
interest payments of approximately $78.0 million under the Amended Senior Credit
Facilities, 2007 Notes, and Chips Reimbursement Obligation, which the Company
anticipates will be made from cash flow from operations.

     Borrowings under the Senior Credit Facilities bear interest at floating
rates and will require interest payments on varying dates depending on the
interest rate option selected by the Company. The Company has entered into
interest rate hedge agreements that provide a Eurocurrency Base Rate (as
defined) ceiling until March 10, 1998 of 7.0% per annum for up to $120.0 million
of Term Loans for which the Eurodollar Base Rate is in effect and a ceiling of
8.0% per annum until March 11, 1999. The 2007 Notes bear interest at the rate of
9 3/4% per annum, which is payable semiannually in arrears. The Chips Loan Notes
have a maturity of six years and pay cash interest quarterly at a fixed rate
initially of approximately 6.2% per annum and thereafter at a varying discount
to the Chase Manhattan Bank's prime rate. The Company is liable for payment of
interest on the Chips Loan Notes through the Chips Reimbursement Obligation. The
holders of the Chips Loan Notes have the right after the first anniversary of
their issuance to redeem the Chips Loan Notes by putting them to Viasystems
Group on any interest payment date at 100% of their principal amount. In the
event the Chips Loan Notes are redeemed, the Company's liability under the Chips
Reimbursement Obligation of $319.3 million will be funded by a term loan
available under the Senior Credit Facilities.

     The Company estimates that the acquired developed technologies it has
capitalized will retain economic utility for 15 years, but that revenues
contributed by the acquired developed technologies may decrease 40%-45% through
five years and 70-80% through ten years. The Company also anticipates that these
technologies will be supplanted over time by new products and processes
developed through the successful completion of acquired research and development
efforts and new research and development efforts. The Company believes that
efforts to complete the acquired in-process research and development projects
will consist primarily of internal engineering costs over the next two to four
years. These costs are estimated to be approximately $40-$60 million. Such
estimate is subject to revision should there be changes in the operating
environment or the technical knowledge available within the industry or the
Company. The Company anticipates that cash
                                       23
<PAGE>   25

generated from existing operations will be sufficient to fund such expenditures.
The Company, through its continued investment in research and development,
intends to achieve and sustain technical superiority in the design and delivery
of advanced PCB products, and believes, given its leadership position in the
industry, that it is well positioned to do so. The Company believes that the new
product and process technologies which result from ongoing research and
development will build on the existing core printed circuit board technology and
contribute to an anticipated growth in the Company's sales and anticipated
improvements in the Company's cost of production in the future.

     While the core PCB technology remains relatively consistent, the Company's
research and development projects aim to advance the technical know-how, further
develop complete technological solutions, enhance the conceptual formulation and
design of possible technological alternatives, and design and improve testing
capabilities. As such, these research and development projects bear a certain
amount of risk. If these efforts are successful, they will enable the Company to
further penetrate existing markets, pursue sizable new markets, and dramatically
expand the business. If acceptable advancements are not achieved, failed
research and development projects could have a material adverse effect on the
Company's financial position or results of operations. The Company is unable to
accurately quantify the potential impact in the future of the failure of any
single project or multiple projects which were acquired as in-process research
and development in the acquisitions of Circo Craft, Viasystems Technologies,
Forward Group, and Chips. Although there can be no guarantee that the acquired
in-process research and development projects will achieve technological
feasibility, the Company believes that the likelihood of development is
reasonable for these projects. The Company does not believe that it is subject
to any greater risk of failure than its competitors, and, in fact, believes that
its size, access to financial resources and relationships with customers
contribute to a reduction of that risk which gives the Company a competitive
technical advantage.

     The Company expects that its primary sources of cash will be cash from
operating activities and revolving borrowings under the Senior Credit
Facilities. As of December 31, 1997, there were no amounts outstanding under the
revolving credit facilities available under the Senior Credit Facilities, and
approximately $249.6 million ($100.0 million of which was only available for
future acquisitions) of available borrowing capacity thereunder, subject to
certain limitations. Pursuant to the Amended Senior Credit Facilities, the
revolving credit facilities available were increased by $25.0 million and an
additional $70.0 million term loan was added. The Company anticipates that the
cash flow from operations and additional funds available under the revolving
facilities of the Amended Senior Credit Facilities will be sufficient to meet
its foreseeable requirements for working capital, capital expenditures and debt
service and other operating cash requirements. The acquisition of other
businesses by the Company in the future likely would require external sources of
debt and/or equity financing. There can be no assurance that such funds would be
available on terms satisfactory to the Company, if at all. In addition, the
Company's future operating performance and ability to meet its financial
obligations will be subject to future economic conditions and to financial,
business and other factors, many of which will be beyond the Company's control.

     The Amended Senior Credit Facilities and the 2007 Notes restrict the
Company from, among other things: (i) incurring additional indebtedness (other
than permitted indebtedness); (ii) creating liens; (iii) disposing of assets;
(iv) guaranteeing indebtedness; (v) merging or selling substantially all of its
assets; (vi) declaring and paying certain dividends; (vii) making certain
investments and loans; and (viii) entering into certain transactions with
affiliates, in each case with certain exceptions customary for credit facilities
such as the Amended Senior Credit Facilities.

RECENT ACCOUNTING PRONOUNCEMENTS

     In 1998, the Company will adopt SFAS No. 130, "Reporting Comprehensive
Income," and SFAS No. 131, "Disclosure about Segments of an Enterprise and
Related Information," and SFAS No. 132, "Employers' Disclosures about Pensions
and Other Postretirement Benefits." The Company does not expect adoption of
these standards to have a material impact on its Consolidated Financial
Statements.

                                       24
<PAGE>   26

ITEM 8. FINANCIAL STATEMENTS

                  INDEX TO FINANCIAL STATEMENTS AND SCHEDULES

<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
VIASYSTEMS, INC. & SUBSIDIARIES
Report of Independent Auditors..............................   26
Consolidated Balance Sheets as of December 31, 1996 and
  1997......................................................   27
Consolidated Statements of Operations from inception (August
  28, 1996) to December 31, 1996 and for the year ended
  December 31, 1997.........................................   28
Consolidated Statements of Stockholder's Equity from
  inception (August 28, 1996) to December 31, 1996 and for
  the year ended December 31, 1997..........................   29
Consolidated Statements of Cash Flows from inception (August
  28, 1996) to December 31, 1996 and for the year ended
  December 31, 1997.........................................   30
Notes to Consolidated Financial Statements..................   31
Schedule II -- Valuation and Qualifying Accounts............   49
CIRCO CRAFT CO. INC.
Auditors' Report............................................   50
Auditors' Report............................................   51
Consolidated Statements of Retained Earnings for the year
  ended December 31, 1995 and the nine month period ended
  September 30, 1996........................................   52
Consolidated Statements of Earnings for the year ended
  December 31, 1995 and the nine month period ended
  September 30, 1996........................................   53
Consolidated Statements of Changes in Financial Position for
  the year ended December 31, 1995 and the nine month period
  ended September 30, 1996..................................   54
Notes to Consolidated Statements............................   55
VIASYSTEMS TECHNOLOGIES CORP. (FORMERLY MICROELECTRONICS
  GROUP, INTERCONNECTION TECHNOLOGIES UNIT OF LUCENT
  TECHNOLOGIES, INC.)
Report of Independent Auditors..............................   62
Statements of Operations for the year ended December 31,
  1995 and the eleven month period ended November 30,
  1996......................................................   63
Notes to Financial Statements...............................   64
FORWARD GROUP PLC
Report of Independent Auditors..............................   67
Consolidated Profit and Loss Accounts for the years ended
  January 31, 1996 and 1997.................................   68
Consolidated Statements of Total Recognized Gains and Losses
  for the years ended January 31, 1996, and 1997............   69
Consolidated Balance Sheet at January 31, 1997..............   70
Consolidated Statements of Cash Flows for the years ended
  January 31, 1996 and 1997.................................   71
Notes to the Consolidated Financial Statements..............   72
INTERCONNECTION SYSTEMS (HOLDINGS) LIMITED
Report of Independent Auditors..............................   93
Consolidated Profit and Loss Accounts for the years ended
  March 29, 1996 and April 4, 1997..........................   94
Consolidated Statements of Total Recognized Gains and Losses
  for the years ended March 29, 1996 and April 4, 1997......   95
Consolidated Balance Sheet at April 4, 1997.................   96
Consolidated Statements of Cash Flows for the years ended
  March 29, 1996 and April 4, 1997..........................   97
Notes to the Consolidated Financial Statements..............   98
</TABLE>

                                       25
<PAGE>   27

                         REPORT OF INDEPENDENT AUDITORS

The Board of Directors of Viasystems, Inc.:

     We have audited the consolidated financial statements and the financial
statement schedule of Viasystems, Inc. and subsidiaries (as defined in Note 1 to
the financial statements) listed in the index on page 25 of this Form 10-K.
These financial statements and financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and financial statement schedule based on
our audits.

     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Viasystems,
Inc. and subsidiaries as of December 31, 1996, and 1997 and the consolidated
results of their operations and their cash flows for the period from inception
(August 28, 1996) to December 31, 1996 and for the year ended December 31, 1997,
in conformity with generally accepted accounting principles. In addition, in our
opinion, the financial statement schedule referred to above, when considered in
relation to the basic financial statements taken as a whole, presents fairly, in
all material respects, the information required to be included therein.

                                            Coopers & Lybrand L.L.P.

St. Louis, Missouri
January 30, 1998,
except for Note 19
for which the date is
March 26, 1998

                                       26
<PAGE>   28

                        VIASYSTEMS, INC. & SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                  (DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)

                                     ASSETS

<TABLE>
<CAPTION>
                                                                DECEMBER 31,    DECEMBER 31,
                                                                    1996            1997
                                                                ------------    ------------
<S>                                                             <C>             <C>
Current assets:
  Cash and cash equivalents.................................      $ 16,117       $   27,538
  Accounts receivable, less allowance for doubtful accounts
     of $409 and $2,573, respectively.......................        37,149          113,269
  Inventories, net..........................................        43,123           84,631
  Prepaid expenses and other................................         7,333           26,240
                                                                  --------       ----------
          Total current assets..............................       103,722          251,678
Property, plant and equipment, net..........................       208,748          448,128
Deferred financing costs, net...............................        27,351           58,696
Intangible assets, net......................................        47,920          309,470
Other assets................................................            --              940
                                                                  --------       ----------
          Total assets......................................      $387,741       $1,068,912
                                                                  ========       ==========
                            LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
  Current maturities of long-term obligations...............      $ 10,804       $   31,363
  Accounts payable..........................................         5,185           86,941
  Accrued and other liabilities.............................        42,112           85,860
  Income taxes payable......................................           683           30,855
                                                                  --------       ----------
          Total current liabilities.........................        58,784          235,019
Deferred taxes..............................................         3,785           67,797
Long-term obligations, less current maturities..............       254,816          816,012
Other noncurrent liabilities................................        15,383           42,277
                                                                  --------       ----------
          Total liabilities.................................       332,768        1,161,105
                                                                  --------       ----------
Stockholder's equity (deficit)
  Common stock, par value $.01 per share, 1,000 shares
     authorized, issued and outstanding.....................            --               --
  Contributed capital.......................................       103,794          282,763
  Accumulated deficit.......................................       (48,742)        (376,230)
  Cumulative translation adjustment.........................           (79)           1,274
                                                                  --------       ----------
          Total stockholder's equity (deficit)..............        54,973          (92,193)
                                                                  --------       ----------
            Total liabilities and stockholder's equity
               (deficit)....................................      $387,741       $1,068,912
                                                                  ========       ==========
</TABLE>

 The accompanying notes are an integral part of the consolidated balance sheets

                                       27
<PAGE>   29

                        VIASYSTEMS, INC. & SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                               INCEPTION
                                                              (AUGUST 28,
                                                                1996) TO         YEAR ENDED
                                                              DECEMBER 31,      DECEMBER 31,
                                                                  1996              1997
                                                              ------------      ------------
<S>                                                           <C>               <C>
Net sales...................................................    $ 50,400         $ 795,289
Operating expenses:
  Cost of goods sold........................................      42,052           554,097
  Selling, general and administrative.......................       3,844            75,650
  Depreciation..............................................       4,102            51,884
  Amortization of intangibles...............................         533            58,153
  Write-off of acquired in-process research and
     development............................................      50,800           294,500
                                                                --------         ---------
Operating loss..............................................     (50,931)         (238,995)
Other expenses:
  Interest expense..........................................       2,503            64,612
  Amortization of deferred financing costs..................         470             6,629
  Other expense.............................................         262             1,024
                                                                --------         ---------
Loss before income taxes and extraordinary item.............     (54,166)         (311,260)
Provision (benefit) for income taxes........................      (5,424)            8,432
                                                                --------         ---------
Loss before extraordinary item..............................     (48,742)         (319,692)
Extraordinary item -- loss on early extinguishment of debt,
  net of income tax benefit of $4,332.......................          --             7,796
                                                                --------         ---------
Net loss....................................................    $(48,742)        $(327,488)
                                                                ========         =========
</TABLE>

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

                                       28
<PAGE>   30

                        VIASYSTEMS, INC. & SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                               CUMULATIVE
                                          COMMON   CONTRIBUTED   ACCUMULATED   TRANSLATION
                                          STOCK      CAPITAL       DEFICIT     ADJUSTMENT     TOTAL
                                          ------   -----------   -----------   -----------   --------
<S>                                       <C>      <C>           <C>           <C>           <C>
Balance at Inception (August 28,
  1996).................................  $  --     $     --      $      --      $   --      $     --
  Capital contributed to Viasystems
     Group prior to formation of the
     Company............................     --      103,794             --          --       103,794
  Net loss..............................     --           --        (48,742)         --       (48,742)
  Foreign currency translation
     adjustment.........................     --           --             --         (79)          (79)
                                          ------    --------      ---------      ------      --------
Balance at December 31, 1996............     --      103,794        (48,742)        (79)       54,973
  Capital contribution by Viasystems
     Group to the Company...............     --      178,969             --          --       178,969
  Net loss..............................     --           --       (327,488)         --      (327,488)
  Foreign currency translation
     adjustment.........................     --           --             --       1,353         1,353
                                          ------    --------      ---------      ------      --------
  Balance at December 31, 1997..........  $  --     $282,763      $(376,230)     $1,274      $(92,193)
                                          ======    ========      =========      ======      ========
</TABLE>

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

                                       29
<PAGE>   31

                        VIASYSTEMS, INC. & SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                               INCEPTION
                                                              (AUGUST 28,
                                                                1996) TO       YEAR ENDED
                                                              DECEMBER 31,    DECEMBER 31,
                                                                  1996            1997
                                                              ------------    ------------
<S>                                                           <C>             <C>
Cash flows provided by (used in) operating activities:
  Net loss..................................................   $ (48,742)      $(327,488)
  Adjustments to reconcile net loss to net cash provided by
     Operating activities:
     Write-off of acquired in-process research and
      Development...........................................      50,800         294,500
     Extraordinary item -- loss on early extinguishment of
      debt..................................................          --          12,128
     Depreciation...........................................       4,102          51,884
     Amortization of intangibles............................         533          58,153
     Amortization of deferred financing costs...............         470           6,629
     Deferred taxes.........................................      (5,874)        (15,109)
     Change in assets and liabilities, net of acquisitions:
       Accounts receivable..................................     (15,469)         (8,050)
       Inventories..........................................       2,655         (15,979)
       Prepaid expenses and other...........................        (927)         (6,640)
       Accounts payable and accrued and other liabilities...      14,875          38,539
       Income taxes payable.................................        (761)         16,339
                                                               ---------       ---------
  Net cash from operating activities........................       1,662         104,906
                                                               ---------       ---------
  Cash flows provided by (used in) investing activities:
     Acquisitions, net of cash acquired of $20,890 and
      $42,778, respectively.................................    (282,723)       (155,904)
       Capital expenditures.................................      (3,563)       (117,163)
                                                               ---------       ---------
     Net cash used in investing activities..................    (286,286)       (273,067)
                                                               ---------       ---------
     Cash flows provided by (used in) financing activities:
       Proceeds from issuance of long-term obligations......     238,283              --
       Proceeds from the issuance of Senior Subordinated
        Notes due 2007......................................          --         400,000
       Proceeds from the Subordinated Credit Facility.......          --         216,000
       Repayment of amounts due under the Credit Agreements
        and the Second Amended and Restated Credit
        Agreement...........................................          --        (151,964)
       Repayment of the Subordinated Credit Facility........          --        (216,000)
       Repayment of other long-term obligations.............          --         (90,187)
       Equity proceeds......................................      73,794          60,719
       Financing fees and other.............................     (11,364)        (34,491)
                                                               ---------       ---------
     Net cash from financing activities.....................     300,713         184,077
                                                               ---------       ---------
     Effect of exchange rate changes on cash................          28          (4,495)
                                                               ---------       ---------
     Net change in cash and cash equivalents................      16,117          11,421
     Cash and cash equivalents at beginning of period.......          --          16,117
                                                               ---------       ---------
     Cash and cash equivalents at end of period.............   $  16,117       $  27,538
                                                               =========       =========
     SUPPLEMENTAL CASH FLOW INFORMATION:
       Cash paid for interest...............................   $     323       $  59,956
                                                               =========       =========
       Cash paid for income taxes...........................   $   1,184       $   4,742
                                                               =========       =========
</TABLE>

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

                                       30
<PAGE>   32

                        VIASYSTEMS, INC. & SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)
1. BASIS OF PRESENTATION

     Viasystems, Inc. ("Viasystems") is a wholly owned subsidiary of Viasystems
Group, Inc. Viasystems was formed on April 2, 1997, as a subsidiary of
Viasystems Group, Inc. On April 10, 1997, Viasystems Group, Inc. contributed to
Viasystems all of the capital of its then existing subsidiaries. Prior to the
contribution of this capital by Viasystems Group, Inc., Viasystems had no
operations of its own. The consolidated financial statements included herein
present the results of operations of Viasystems and its subsidiaries subsequent
to the capital contribution by Viasystems Group, Inc., and the results of
operations of Viasystems Group, Inc. and its subsidiaries prior to the capital
contribution of such subsidiaries to Viasystems. As used herein, the Company
refers to Viasystems and its subsidiaries subsequent to the capital contribution
by Viasystems Group, Inc. and Viasystems Group, Inc. and its subsidiaries prior
to such capital contribution. These financial statements have been adjusted to
reflect the equity structure of Viasystems on a retroactive basis.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  Nature of Business

     The Company is primarily involved in manufacturing and distributing
advanced printed circuit boards ("PCBs") and assembling backplanes at various
facilities located in the United States, Canada, United Kingdom and Puerto Rico.
The Company's customers include a diversified base of manufacturers in the
telecommunications, computer and automotive industries throughout North America
and Europe.

  Principles of Consolidation

     The consolidated financial statements include the accounts of Viasystems
and its wholly-owned subsidiaries. All material intercompany balances and
transactions have been eliminated in consolidation.

  Foreign Currency Translation

     Local currencies have been designated as the functional currency for all
subsidiaries. Accordingly, assets and liabilities of foreign subsidiaries are
translated at the rates of exchange at the balance sheet date. Income and
expense items of these subsidiaries are translated at average monthly rates of
exchange. The resultant translation gains and losses are included as a component
of stockholders' equity on the consolidated balance sheet.

 Derivative Financial Instruments

     In 1997, the Company entered into an interest rate hedging arrangement for
the purpose of hedging against interest rate fluctuations. The Company paid a
fee of approximately $180 for the arrangement. This fee is included in deferred
financing fees and amortized on a straight-line basis over the life of the
arrangement, through March 1999. The interest rate hedging arrangement provides
a ceiling on the base interest rate of 7.0% on borrowings up to $120,000 under
the Second Amended and Restated Credit Agreement (see Note 10) through March
1998 and a ceiling on the base interest rate of 8.0% on borrowings up to
$120,000 under the Second Amended and Restated Credit Agreement thereafter
through March 1999. The Company estimates that fair value approximates the
carrying value of the interest rate hedging arrangement.

     In 1997, the Company entered into forward foreign currency collars which
effectively lock in a range of exchange rates to protect the Company against
foreign currency fluctuations in connection with the Chips Term Loan (as defined
in Note 10), which the Company will convert to a foreign currency if the Chips
Term Loan is drawn. As discussed in Notes 3 and 10, the Company has entered into
the Chips Loan Notes that may be called, commencing April 1, 1997. If called,
the Chips Loan Notes will be repaid from proceeds from the Chips Term Loan. The
Company is required to convert the Chips Term Loan to a foreign currency after
it is

                                       31
<PAGE>   33
                        VIASYSTEMS, INC. & SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

drawn. The collars were acquired at no cost and expire in April 1998. Gains and
losses on the collars are recorded in current period earnings. The amount of
gain for the year ended December 31, 1997 was immaterial.

     From time to time, the Company engages in short-term hedging activities to
reduce its exposure to foreign currency fluctuations. Such hedging activities
are not material and gains and losses from such activities are not significant.
There can be no assurance that these hedging activities will eliminate or reduce
foreign currency risk.

  Inventories

     Inventories are stated at the lower of cost (valued using the first-in,
first-out (FIFO) method) or market. Cost includes raw materials, labor and
manufacturing overhead.

  Property, Plant, and Equipment

     Property, plant, and equipment are recorded at cost. Repairs and
maintenance which do not extend the useful life of an asset are charged to
expense as incurred. The useful lives of leasehold improvements are the lesser
of the remaining lease term or the useful life of the improvement. Depreciation
is computed using the straight-line method over the estimated useful lives of
the related assets as follows:

<TABLE>
<S>                                                           <C>
Building....................................................  40 years
Leasehold improvements......................................  10-12 years
Machinery and equipment.....................................  3-8 years
</TABLE>

  Deferred Financing Costs

     Deferred financing costs, consisting of fees and other expenses associated
with debt financings, are amortized over the term of the related debt using the
straight-line method, which approximates the effective interest method.

  Intangible Assets

     Intangible assets consist primarily of identifiable intangibles acquired
and goodwill arising from the excess of cost over the fair value of net assets
acquired. The Company assesses the recoverability of its intangible assets based
on its current and anticipated future undiscounted cash flows. In addition, the
Company's policy for the recognition and measurement of any impairment of
goodwill is to assess the current and anticipated future discounted cash flows
associated with the goodwill. An impairment of goodwill occurs when the
discounted cash flows (excluding interest) do not exceed the carrying amount of
goodwill. The amount of the impairment loss is the difference between the amount
of the goodwill and the discounted cash flows associated with the goodwill. At
December 31, 1997 the Company does not believe there has been any impairment of
its identified intangible assets or goodwill. Amortization of intangible assets
is computed using systematic methods over the estimated useful lives of the
related assets as follows:

<TABLE>
<CAPTION>
                                                     LIFE               METHOD
                                                     ----               ------
<S>                                                <C>         <C>
Developed technologies...........................  15 years    Double-declining balance
Assembled workforce..............................  1 year      Straight-line
Customer list....................................  3 years     Straight-line
Goodwill.........................................  20 years    Straight-line
</TABLE>

                                       32
<PAGE>   34
                        VIASYSTEMS, INC. & SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  Research and Development

     Expenditures for research and development activities relating to new
products and processes are charged to expense as incurred. The Company's
research and development expenditures were $545 and $10,797 for the period from
inception (August 28, 1996) to December 31, 1996 and for the year ended December
31, 1997, respectively.

  Revenue Recognition

     Sales and related costs of goods sold are included in income when goods are
delivered to the customer in accordance with the delivery terms.

  Use of Estimates

     The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.

  Fair Value of Financial Instruments

     The fair market value of the Senior Subordinated Notes due 2007 (see Note
10) is $413,500 at December 31, 1997. The Company has estimated this fair value
data by using current market data. The fair market values of the other financial
instruments included in the consolidated financial statements approximate the
carrying values of those instruments.

  Statement of Cash Flows

     For purposes of the Consolidated Statement of Cash Flows, the Company
considers investments purchased with an original maturity of three months or
less to be cash equivalents. In connection with the Viasystems Technologies
Acquisition, the Company received $2,802 and $1,778 of property, plant, and
equipment paid for by Lucent Technologies Inc. for the period from inception
(August 28, 1996) to December 31, 1996 and for the year ended December 31, 1997,
respectively.

     The purchase of the shares of Forward Group was partially funded through
the issuance of approximately $24,420 of notes payable to Forward Group's former
shareholders. The purchase of shares of ISL was entirely funded through the
issuance of approximately $437,500 of loan notes.

     In 1997, the Company received a non-cash contribution of $118,250 from
Viasystems Group, Inc, when Viasystems Group, Inc. transferred $118,250 in cash
to Bisto Funding, Inc. The cash transfer was recorded as a capital contribution
and a reduction of the carrying amount of the notes payable to the former
shareholders of Interconnection Systems (Holdings) Limited (see Note 3). The
notes payable recorded by the Company are net of the $118,250 as Bisto Funding,
Inc. is contractually obligated to pay such amount to the note holders in the
event the notes payable are redeemed (see Note 10).

3. ACQUISITIONS

     On October 1, 1996, the Company acquired all of the outstanding stock of
Circo Craft Co. Inc. ("Circo Craft"), a Quebec corporation and a rigid printed
circuit board manufacturer, for aggregate cash consideration of $129,850 plus
acquisition fees and expenses of $885 (the "Circo Craft Acquisition"). The
operating results of Circo Craft Co. Inc. are included in the consolidated
financial statements of Viasystems since the date of the Circo Craft
Acquisition.

                                       33
<PAGE>   35
                        VIASYSTEMS, INC. & SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The Circo Craft Acquisition has been accounted for using the purchase
method of accounting whereby the total purchase price has been allocated to the
assets and liabilities based on their estimated respective fair values. The
Company allocated a significant portion of the purchase price, as described
below, to intangible assets, including approximately $39,200 of in-process
research and development ("in-process R&D"). The portion of the purchase price
allocated to in-process R&D projects that did not have a future alternative use
totaled $39,200 and was charged to expense as of the acquisition date. The
in-process R&D projects relate primarily to developing significant enhancements
to the current product offering, as well as introducing advanced new products.
The incomplete projects include new connector functionality, chip packaging
solutions, component miniaturization, specialty drilling and surface finishes.
Given the uniqueness of the tasks and the technologies involved, alternative
future uses for these projects, apart from the objectives and economics of the
projects for which they are intended, do not exist. The Company believes that
the efforts to complete the acquired in-process R&D projects will consist of
internally-staffed engineering costs over the next two to four years. The costs
to complete the in-process R&D projects and to procure, develop and test the
required capital assets are anticipated to be significant. The other acquired
intangibles include developed technology, assembled workforce, and customer
list. These intangibles are being amortized over their estimated useful lives of
1-15 years. The remaining unidentified intangible asset has been allocated to
goodwill and is being amortized over its estimated useful life of 20 years (see
Note 2).

     The total purchase price including fees and expenses has been allocated to
the acquired net assets as follows:

<TABLE>
<S>                                                           <C>
Current assets..............................................  $ 52,846
Property, plant and equipment...............................    50,710
Developed technologies......................................    13,400
Assembled workforce.........................................     5,200
Customer list...............................................     3,400
In-process R&D..............................................    39,200
Goodwill....................................................     9,829
Non-current assets..........................................     2,500
Current liabilities.........................................   (24,103)
Non-current liabilities.....................................   (22,247)
                                                              --------
          Total.............................................  $130,735
                                                              ========
</TABLE>

     On December 1, 1996, the Company, through its newly formed subsidiary,
Viasystems Technologies Corp., acquired certain assets and assumed certain
liabilities of the Microelectronics Group, Interconnection Technologies Unit of
Lucent Technologies Inc. (the "Lucent Division"), a rigid printed circuit board
manufacturer and backplane assembler, (the "Lucent Division Acquisition") for an
aggregate cash consideration of $170,000 and 1,200,000 shares of preferred stock
valued at $30,000 plus acquisition fees and expenses of $1,969. The operating
results of Viasystems Technologies Corp. are included in the consolidated
financial statements of the Company since the date of the Lucent Division
Acquisition.

     The Lucent Division Acquisition was accounted for using the purchase method
of accounting whereby the total purchase price has been allocated to the assets
and liabilities based on their estimated respective fair values. The Company
allocated a significant portion of the purchase price, as described below, to
intangible assets, including approximately $11,600 of in-process R&D. The
portion of the purchase price allocated to in-process R&D projects that did not
have a future alternative use totaled $11,600 and was charged to expense as of
the acquisition date. The in-process R&D projects relate primarily to developing
significant enhancements to the current product offering as well as introducing
advanced new products. The incomplete projects include new connector
functionality, chip packaging solutions, component miniaturization, specialty
drilling and surface finishes. Given the uniqueness of the tasks and the
technologies involved, alternative future uses

                                       34
<PAGE>   36
                        VIASYSTEMS, INC. & SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

for these projects, apart from the objectives and economics of the projects for
which they are intended, do not exist. The Company believes that the efforts to
complete the acquired inprocess R&D projects will consist of internally-staffed
engineering costs over the next two to four years. The costs to complete the
in-process R&D projects and to procure, develop and test the required capital
assets are anticipated to be significant. The other acquired intangibles include
developed technology, assembled workforce, and customer list. These intangibles
are being amortized over their estimated useful lives of 1-15 years. The
remaining unidentified intangible asset has been allocated to goodwill and is
being amortized over its estimated useful life of 20 years (see Note 2).

     The total purchase price including fees and expenses has been allocated to
the acquired net assets as follows:

<TABLE>
<S>                                                           <C>
Current assets..............................................  $ 39,204
Property, plant and equipment...............................   155,674
Developed technologies......................................     7,866
Assembled workforce.........................................     5,810
Customer list...............................................     5,099
In-process R&D..............................................    11,600
Goodwill....................................................     1,013
Non-current assets..........................................    13,080
Current liabilities.........................................    (9,862)
Non-current liabilities.....................................   (27,515)
                                                              --------
          Total.............................................  $201,969
                                                              ========
</TABLE>

     On April 11, 1997, the Company acquired all of the outstanding stock of
Forward Group, PLC ("Forward"), a manufacturer of rigid printed circuit boards
located in the U.K. The purchase price of approximately $208,483 consisted of
cash and notes payable to certain Forward stockholders plus $5,585 of
acquisition fees and expenses (the "Forward Acquisition"). The Forward
Acquisition and related transaction fees and expenses were funded with (i)
$40,000 from the issuance of 1,600,000 shares of Series C Preferred Stock of
Viasystems Group, Inc. and (ii) $216,000 from a Subordinated Credit Facility.
The Subordinated Credit Facility was paid off with a subsequent debt offering
(see Note 10).

     The Forward Acquisition has been accounted for using the purchase method of
accounting whereby the total purchase price has been preliminarily allocated to
the assets and liabilities based on their estimated respective fair values.
Accordingly, the results of operations of Forward since its acquisition are
included in the results of operations of the Company. The Company has allocated
a significant portion of the purchase price, as described below, to intangible
assets, including approximately $97,800 of in-process research and development
("in-process R&D"). The portion of the purchase price allocated to in-process
R&D projects that did not have a future alternative use totaled $97,800 and was
charged to expense as of the acquisition date. The other acquired intangibles
include developed technology, assembled workforce, and customer list. These
intangibles are being amortized over their estimated useful lives of 1-15 years.
The remaining unidentified intangible asset has been allocated to goodwill and
is being amortized over its estimated useful life of 20 years (see Note 2).

                                       35
<PAGE>   37
                        VIASYSTEMS, INC. & SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The total purchase price including fees and expenses has been allocated to
the acquired net assets as follows:

<TABLE>
<S>                                                           <C>
Current assets..............................................    42,656
Property, plant and equipment...............................    58,534
Developed technologies......................................    34,800
Assembled workforce.........................................     6,600
Customer list...............................................    13,200
In-process R&D..............................................    97,800
Goodwill....................................................    53,083
Non-current assets..........................................     5,660
Current liabilities.........................................   (41,938)
Non-current liabilities.....................................   (56,327)
                                                              --------
          Total.............................................  $214,068
                                                              ========
</TABLE>

     In April 1997, Viasystems Group, Inc.'s stockholders and certain of its
affiliates formed Chips Holding, Inc., to acquire Interconnection Systems
(Holdings) Limited ("ISL"), a manufacturer of rigid printed circuit boards
located in the U.K. On April 21, 1997, Chips Holdings, Inc. acquired ISL for
$437,500 plus $8,953 of acquisition fees and expenses (the "ISL Acquisition").
The purchase price consisted entirely of notes payable to the former
stockholders of ISL. In connection with the transaction, the stockholders of
Viasystems Group, Inc. invested $140,000 of equity capital in Chips Holdings,
Inc. On June 6, 1997, Chips Holdings, Inc. merged with Viasystems Group, Inc.
and the subsidiaries of Chips Holdings, Inc., including ISL, became subsidiaries
of Viasystems and certain of its subsidiaries (the "Chips Merger") in
consideration for the issuance to Viasystems Group, Inc.'s stockholders and
certain of its affiliates of 140,000,000 shares of Viasystems Group, Inc. common
stock valued at $140,000. Viasystems Group, Inc. assumed the $437,500 of notes
payable which were incurred by Chips Holdings, Inc. (the "Chips Loan Notes") to
finance the ISL acquisition (see Note 10).

     The ISL Acquisition has been accounted for using the purchase method of
accounting whereby the total purchase price has been preliminarily allocated to
the assets and liabilities based on their estimated respective fair values. The
Company has allocated a significant portion of the purchase price, as described
below, to intangible assets, including approximately $196,700 of in-process
research and development ("in-process R&D"). The portion of the purchase price
allocated to in-process R&D projects that did not have a future alternative use
totaled $196,700 and was charged to expense as of the acquisition date. The
other acquired intangibles include developed technology, assembled workforce,
and customer list. These intangibles are being amortized over their estimated
useful lives of 1-15 years. The remaining unidentified intangible asset has been
allocated to goodwill and is being amortized over its estimated useful life of
20 years (see Note 2).

     The Chips Merger was accounted for as a transfer of assets among companies
under common control and was recorded at Chips Holdings, Inc.'s historical cost.
In the Chips Merger, ISL and its subsidiaries became wholly owned subsidiaries
of Viasystems, and as such, Viasystems will account for the acquisition of ISL
as of the acquisition by Chips Holdings, Inc. and the results of operations of
ISL since the acquisition by Chips Holdings, Inc. are included in the results of
operations of the Company.

                                       36
<PAGE>   38
                        VIASYSTEMS, INC. & SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The total purchase price including fees and expenses has been allocated to
the acquired net assets as follows:

<TABLE>
<S>                                                           <C>
Current assets..............................................  $  96,287
Property, plant and equipment...............................    114,983
Developed technologies......................................     66,500
Assembled workforce.........................................      8,000
Customer list...............................................     17,900
In-process R&D..............................................    196,700
Goodwill....................................................    115,092
Non-current assets..........................................     12,971
Current liabilities.........................................    (71,140)
Non-current liabilities.....................................   (110,840)
                                                              ---------
  Total.....................................................  $ 446,453
                                                              =========
</TABLE>

     The Company will evaluate the capacities and production capabilities of all
acquired entities to assess potential cost savings from consolidating those
facilities and optimize its global plant utilization by shifting production
between facilities to most efficiently satisfy particular customer orders.

     Included below is unaudited pro forma financial data setting forth results
of operations of the Company for the year ended December 31, 1996, as though the
Circo Craft Acquisition, the Lucent Division Acquisition, the Forward
Acquisition and the ISL Acquisition and the related financing had occurred at
January 1, 1996 and for the year ended December 31, 1997, as though the Forward
Acquisition and the ISL Acquisition and the related financing had occurred at
January 1, 1997. In preparing this data, the financial data of Circo Craft for
the period from January 1, 1996 to the date of the Circo Craft Acquisition has
been translated at an exchange rate of Canadian $1.36 = U.S. $1.00, the exchange
rate at September 30, 1996, which is not materially different from the average
exchange rate for the period. Due to the differing year ends of Forward and ISL
compared to the Company, the results of Forward for the month of January and ISL
for the three months ended April 4, 1997 are included in the unaudited pro forma
data for both the year ended December 31, 1996, and 1997. The financial data of
Forward for the year ended January 31, 1997 and for the three months ended March
31, 1997 has been translated at an exchange rate of U.K.L.62 = U.S.$1.00 and
U.K.L.61 = U.S.$1.00, respectively, which is not materially different from the
average exchange rate for the respective period. The financial data for ISL for
the year and three months ended April 4, 1997, has been translated at an
exchange rate of U.K. L0.61 = U.S. $1.00, which is not materially different from
the average exchange rate for the period.

<TABLE>
<CAPTION>
                                                                1996          1997
                                                              --------      --------
<S>                                                           <C>           <C>
Net sales...................................................  $872,424      $899,474
Loss before extraordinary item..............................   (51,411)      (35,245)
Net loss....................................................   (51,411)      (35,425)
</TABLE>

4. INVENTORIES

     The composition of inventories at December 31 is as follows:

<TABLE>
<CAPTION>
                                                                 1996       1997
                                                                -------    -------
<S>                                                             <C>        <C>
Raw materials...............................................    $12,829    $24,709
Work in process.............................................     16,796     28,472
Finished goods..............................................     13,498     31,450
                                                                -------    -------
          Total.............................................    $43,123    $84,631
                                                                =======    =======
</TABLE>

                                       37
<PAGE>   39
                        VIASYSTEMS, INC. & SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

5. INTANGIBLE ASSETS

     Intangible assets are amortized using systematic methods over various
estimated useful lives (see Note 2). The composition of intangible assets at
December 31 is as follows:

<TABLE>
<CAPTION>
                                                                1996        1997
                                                              --------    --------
<S>                                                           <C>         <C>
Developed technologies......................................  $ 21,185    $122,808
Assembled workforce.........................................    10,980      25,468
Customer list...............................................     8,479      39,679
Goodwill....................................................     7,809     180,039
                                                              --------    --------
                                                                48,453     367,994
Less: Accumulated amortization..............................      (533)    (58,524)
                                                              --------    --------
          Total.............................................  $ 47,920    $309,470
                                                              ========    ========
</TABLE>

6. PROPERTY, PLANT AND EQUIPMENT

     The composition of property, plant and equipment at December 31 is as
follows:

<TABLE>
<CAPTION>
                                                                1996        1997
                                                              --------    --------
<S>                                                           <C>         <C>
Land and buildings..........................................  $ 52,480    $ 77,346
Machinery, equipment and other..............................   144,455     343,028
Construction in progress....................................    12,533      78,101
Leasehold improvements......................................     3,368       1,505
                                                              --------    --------
                                                               212,836     499,980
Less: Accumulated depreciation..............................    (4,088)    (51,852)
                                                              --------    --------
          Total.............................................  $208,748    $448,128
                                                              ========    ========
</TABLE>

7. ACCRUED AND OTHER LIABILITIES

     The composition of accrued and other liabilities at December 31 is as
follows:

<TABLE>
<CAPTION>
                                                               1996         1997
                                                              -------      -------
<S>                                                           <C>          <C>
Accrued payroll and related costs...........................  $12,069      $22,761
Accrued capital expenditures................................    1,752       24,565
Accrued and other liabilities...............................   28,291       38,534
                                                              -------      -------
          Total.............................................  $42,112      $85,860
                                                              =======      =======
</TABLE>

                                       38
<PAGE>   40
                        VIASYSTEMS, INC. & SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8. COMMITMENTS

     The Company leases certain building and transportation and other equipment
under capital and operating leases. Included in property, plant, and equipment
as of December 31, 1996 and 1997, was $17,083 and $49,042, respectively, of cost
basis and $380 and $16,895, respectively, of accumulated depreciation related to
equipment held under capital leases. Total rental expense under operating leases
was $255 for the period from inception (August 28, 1998) to December 31, 1996
and $3,005 for the year ended December 31, 1997. Future minimum lease payments
under capital leases and operating leases that have initial or remaining
noncancelable lease terms in excess of one year are as follows:

<TABLE>
<CAPTION>
                        YEAR ENDING
                        DECEMBER 31,                          CAPITAL      OPERATING
                        ------------                          -------      ---------
<S>                                                           <C>          <C>
  1998......................................................  $12,638       $2,622
  1999......................................................   10,909        2,124
  2000......................................................    5,597          192
  2001......................................................      821           49
  2002......................................................        4           34
                                                              -------       ------
          Total.............................................   29,969       $5,021
                                                                            ======
  Less: Amounts representing interest.......................   (2,759)
                                                              -------
          Capital lease obligation (see Note 10)............  $27,210
                                                              =======
</TABLE>

     In connection with the Lucent Division Acquisition, the Company entered
into a supply agreement with Lucent Technologies Inc. ("Lucent Technologies")
under which Lucent Technologies agreed to purchase minimum annual dollar volumes
of PCBs and backplanes from the Company at defined prices. Such agreement also
provides the Company with specified remedies against Lucent Technologies in the
event Lucent Technologies does not purchase the minimum annual volumes set forth
in the agreement.

9. INCOME TAXES

     The Company accounts for income taxes in accordance with the provisions of
SFAS No. 109. The benefit for income taxes for the period from inception (August
28, 1996) to December 31, 1996 and the provision for income taxes for the year
ended December 31, 1997 consisted of the following:

<TABLE>
<CAPTION>
                                                               1996          1997
                                                              -------      --------
<S>                                                           <C>          <C>
Current:
  Federal...................................................  $    --      $  3,990
  State.....................................................       --           920
  Foreign...................................................      170        18,631
                                                              -------      --------
                                                                  170        23,541
                                                              -------      --------
Deferred:
  Federal...................................................   (5,698)       (2,195)
  State.....................................................       --          (507)
  Foreign...................................................      104       (12,407)
                                                              -------      --------
                                                               (5,594)      (15,109)
                                                              -------      --------
                                                              $(5,424)     $  8,432
                                                              =======      ========
</TABLE>

                                       39
<PAGE>   41
                        VIASYSTEMS, INC. & SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Reconciliation between the statutory income tax rate and effective tax rate
is summarized below:

<TABLE>
<CAPTION>
                                                                1996        1997
                                                              --------    ---------
<S>                                                           <C>         <C>
U.S. Federal statutory rate.................................  $(18,416)   $(108,941)
Permanent items.............................................    15,680      113,159
State taxes.................................................    (3,250)         269
Foreign taxes in excess of U.S. statutory rate..............       213        3,945
Other.......................................................       349           --
                                                              --------    ---------
                                                              $ (5,424)   $   8,432
                                                              ========    =========
</TABLE>

     The tax effects of significant temporary differences representing deferred
tax assets and liabilities are as follows:

<TABLE>
<CAPTION>
                                                             DECEMBER 31,    DECEMBER 31,
                                                                 1996            1997
                                                             ------------    ------------
<S>                                                          <C>             <C>
Deferred tax assets:
  Accrued liabilities not yet deductible...................    $10,112         $ 17,306
  Net operating loss carryforwards.........................      1,037              406
  Other....................................................        186            1,590
                                                               -------         --------
                                                                11,335           19,302
     Valuation Allowance...................................       (260)            (260)
                                                               -------         --------
                                                                11,075           19,042
                                                               -------         --------
Deferred tax liabilities:
  Intangibles..............................................     (5,418)         (40,251)
  Fixed Assets.............................................     (3,505)         (27,747)
  Other....................................................       (239)          (1,535)
                                                               -------         --------
                                                                (9,162)         (69,533)
                                                               -------         --------
Net deferred tax asset (liability).........................    $ 1,913         $(50,491)
                                                               =======         ========
</TABLE>

     Approximate domestic and foreign income before income tax provision are as
follows:

<TABLE>
<CAPTION>
                                                             INCEPTION           YEAR ENDED
                                                        (AUGUST 28, 1996) TO    DECEMBER 31,
                                                         DECEMBER 31, 1996          1997
                                                        --------------------    ------------
<S>                                                     <C>                     <C>
Domestic..............................................        $(14,426)          $   5,307
Foreign...............................................         (39,740)           (316,567)
</TABLE>

     As of December 31, 1997, the Company has $5,794 of Puerto Rican net
operating loss carryforwards, which will expire in 2001-2003, if not previously
utilized. At December 31, 1997, the Company has included a net current deferred
tax asset of $17,306 in prepaid expenses and other assets. Due to the recent
acquisitions of foreign subsidiaries, the Company is in the process of
determining the amount of undistributed earnings of its foreign subsidiaries.
The Company has not recognized and does not anticipate recognizing a deferred
tax liability for the undistributed earnings of its foreign subsidiaries because
the Company does not expect those earnings to reverse and become taxable to the
Company in the foreseeable future. Determination of the amount of deferred taxes
on undistributed earnings of the Company's foreign subsidiaries is not
practicable.

                                       40
<PAGE>   42
                        VIASYSTEMS, INC. & SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. LONG-TERM OBLIGATIONS

     The composition of long-term obligations at December 31 is as follows:

<TABLE>
<CAPTION>
                                                                1996        1997
                                                              --------    --------
<S>                                                           <C>         <C>
Credit Agreements:
  Term Facilities...........................................  $238,345    $ 87,500
  Revolvers.................................................     1,235          --
Senior Subordinated Notes Due 2007..........................        --     400,000
Chips Loan Notes Liability..................................        --     319,250
Capital lease obligations (see Note 8)......................    17,265      27,210
Other.......................................................     8,775      13,415
                                                              --------    --------
                                                               265,620     847,375
          Less current maturities...........................   (10,804)    (31,363)
                                                              --------    --------
                                                              $254,816    $816,012
                                                              ========    ========
</TABLE>

     The schedule of principal payments for long-term obligations at December
31, 1997 is as follows:

<TABLE>
<S>                                                 <C>
1998..............................................  $ 31,363
1999..............................................    45,752
2000..............................................    70,388
2001..............................................    65,570
2002..............................................    65,309
Thereafter........................................   568,993
                                                    --------
                                                    $847,375
                                                    ========
</TABLE>

EXISTING FINANCING

     In April 1997, the Company entered into a $216,000 Senior Subordinated
Credit Agreement (the "Subordinated Credit Facility"). The proceeds of the
Subordinated Credit Facility were used to repay $20,000 of term loans
outstanding under the Credit Agreement (see Prior Financing below) and to repay
a tender facility used to acquire Forward Group. In connection with the Forward
Acquisition and the subsequent organization of the Company as a subsidiary of
Viasystems Group, Inc., the Company entered into an Amended and Restated Credit
Agreement with terms substantially similar to the Credit Agreement of Viasystems
Group, Inc. In addition to existing facilities available under the Credit
Agreement, the Amended and Restated Credit Agreement provided for a U.K. L32,000
(approximately US $52,800) revolving facility to Forward Group.

     In June 1997, Viasystems completed an offering (the "1997 Offering") of
$400,000 of 9 3/4% Senior Subordinated Notes due 2007 (the "2007 Notes").
Interest on the 2007 Notes is due semiannually. The 2007 Notes may not be
redeemed prior to June 1, 2002, except in the event of a Change of Control (as
defined) or and Initial Public Offering (as defined) and at premium (as defined
in the Indenture). The 2007 Notes are redeemable, at the Company's option, at
the redemption prices of 104.875% at June 1, 2002, and at decreasing prices to
100% at June 1, 2005, and thereafter, plus accrued interest. In addition, prior
to June 1, 2001, the Company may redeem, within specified guidelines, up to
$35,000 of the 2007 Notes with proceeds of one or more Equity Offerings (as
defined) by the Company or Viasystems Group, Inc. at a redemption price of
109.75% plus accrued interest. Viasystems used the net proceeds of the 1997
Offering to repay the Subordinated Credit Facility, approximately $130,000 of
term loans outstanding under the Amended and Restated Credit Agreement, and
approximately $41,600 of revolving credit amounts outstanding under the

                                       41
<PAGE>   43
                        VIASYSTEMS, INC. & SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Amended and Restated Credit Agreement which was borrowed subsequent to December
31, 1996, to repay debt assumed in the acquisition of Chips, plus interest on
all debt repaid.

     Also in June 1997 and pursuant to the Chips Merger, Viasystems Group, Inc.
assumed the $437,500 of Chips Loan Notes, and the Company entered into a
reimbursement obligation which requires it to pay a portion of the Chips Loan
Notes in the event such notes are called. The Chips Loan Notes mature on March
31, 2003 and bear interest, payable quarterly, at approximately 6.22% per annum
through April 1, 1998, with variable rate thereafter discounted from the U.S.
prime rate. The Chips Loan Notes may be called by the holders on or after any
interest payment date commencing April 1, 1998. The Chips Loan Notes are
collateralized by letters of credit which are in turn collateralized in part by
a fully cash collateralized $118,250 reimbursement obligation of Bisto Funding,
Inc., a special purpose entity and sister company of Viasystems established as a
subsidiary of Viasystems Group, Inc. in connection with the acquisition of ISL,
with the remainder, including interest on the Chips Loan Notes for one year,
collateralized by a reimbursement obligation of Viasystems (the "Chips
Reimbursement Obligation"). As such, the Company's liability for principal under
the Chips Loan Notes represents $319,250 (the "Chips Loan Notes Liability"), or
the amount achieved by netting the $118,250 of cash collateral held by Bisto
Funding, Inc. against the $437,500 of Chips Loan Notes. To the extent the
interest income earned by Bisto Funding, Inc. on the $118,250 of cash it holds
is insufficient to fund interest on $118,250 of the principal amount of the
Chips Loan Notes, the Company will be required pursuant to the terms of the
Chips Reimbursement Obligation to fund any such shortfall. Upon redemption of
the Chips Loan Notes, the first $118,250 of principal payments will be paid by
Bisto Funding, Inc. and the remainder will be funded by the Company in
accordance with the Chips Reimbursement Obligation.

     In connection with the 1997 Offering and the Chips Merger, Viasystems
Group, Inc., as guarantor, and Viasystems and certain of its subsidiaries, as
borrowers, entered into a Second Amended and Restated Credit Agreement with
terms substantially similar to the Amended and Restated Credit Agreement. The
Second Amended and Restated Credit Agreement provides for (i) an $88,000 term
loan facility (the "U.S. Term Loan") and a $150,000 revolving credit facility
(the "U.S. Revolving Loan" and together with the U.S. Term Loan, the "U.S.
Loans"); (ii) a U.S. $25,000 revolving credit facility (the "Canadian Revolving
Loan"), (iii) a L32,000 revolving credit facility (the "Forward Group Revolving
Loan") and a L27,600 revolving credit facility (the "Chips Revolving Loan", and
together with the Forward Group Revolving Loan, the "U.K. Revolving Loans", and
together with the U.S. Revolving Loan and the Canadian Revolving Loan, the
"Revolving Loans") and (iv) US$346,463 Letter of Credit Facility in respect of
the Chips Loan Notes comprised of (a) a U.S.$319,250 term loan facility ("the
Chips Term Loan" and together with the U.S. Term Loan, the "Term Loans") in
respect of the principal portion of the Chips Loan Notes and (b) a U.S. $27,213
facility in respect of interest on the Chips Loan Notes. The Chips Term Loan is
an unfunded term loan facility that may be drawn upon by the Company so that it
may satisfy the Chips Loan Notes Liability. Although the Chips Loan Notes may be
called by the holders on or after any interest payment date commencing April 1,
1998, the Chips Loan Notes have not been classified as current at December 31,
1997, since the Company has in place a facility to replace the Chips Loan Notes
in the event they are called. Borrowings under the Second Amended and Restated
Credit Agreement are collateralized by first priority mortgages and liens on
substantially all of the material assets of the Company and its subsidiaries.

     The U.S. Term Loan consists of two tranches: (i) $55,000 of tranche B term
loans (the "Tranche B Loan") and (ii) $33,000 of tranche C term loans (the
"Tranche C Loan"). The Tranche B Loan amortizes semiannually over eight years
and the Tranche C Loan is payable $1,500 on December 31, 2004 and $31,500 on
June 30, 2005. The Chips Term Loan, if drawn, amortizes semi-annually over six
years.

     The Company may use the Revolving Loans for letters of credit in an amount
not to exceed $15,000, in the case of both the U.S. Revolving Loan and the
Canadian Revolving Loan, and related letters of credit and bankers' acceptances
in an amount not to exceed L5,000 in the case of the Forward Group Revolving
Loan and

                                       42
<PAGE>   44
                        VIASYSTEMS, INC. & SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

L10,000 in the case of the Chips Revolving Loan. Of the Forward Group Revolving
Loan, L2,232 is available solely to finance obligations in respect of the notes
payable to the selling stockholders of Forward. Of the U.S. Revolving Loan,
$100,000 is available solely to finance future acquisitions.

     The U.S. Loans bear interest, at the Company's election, at either: (i) the
Eurocurrency Base Rate plus (x) 2.5% in the case of the Chips Term Loan and U.S.
Revolving Loan, (y) 3.0% in the case of Tranche B Loan, or (z) 3.5% in the case
of Tranche C Loan; or (ii) the Alternate Base Rate plus (x) 1.5% in the case of
the Chips Term Loan or U.S. Revolving Loan, (y) 2.0% in the case of Tranche B
Loan, or (z) 2.5% in the case of Tranche C Loan. The Alternate Base Rate is the
highest of The Chase Manhattan Bank's Prime Rate, the Three-Month Secondary CD
Rate (as defined therein) plus 1.0%, and the Federal Funds Effective Rate (as
defined therein) plus 0.5%. The Canadian Revolving Loan denominated in U.S.
dollars bears interest, at Circo Craft's election, at either (i) the
Eurocurrency Base Rate plus 2.5% or (ii) the Canadian Alternate Base Rate plus
1.5%. The Canadian Revolving Loan denominated in Canadian Dollars bears
interest, at Circo Craft's election either (i) the Canadian Bankers Acceptance
Discount Rate plus 2.5% or (ii) the Canadian Prime Rate plus 1.5%. The Canadian
Alternate Base Rate is equal to the higher of Canadian Agent's prime rate or the
Federal Funds Effective Rate (as defined in the Credit Agreement) plus 0.5%. The
U.K. Revolving Loans and any Chips Term Loans converted to pounds sterling bear
interest at the Eurocurrency Base Rate plus 2.5%. At December 31, 1997 the
weighted average interest rate on outstanding borrowings under the Amended an
Restated Credit Agreement was 8.69%.

     The Company pays a per annum fee equal to the applicable margin on
Revolving Loans which bear interest at the Eurocurrency Base Rate, of the
average daily face amount of outstanding letters of credit, other than with
respect to the Chips Letter of Credit, which fee is equal to the applicable
margin on the Chips Term Loan bearing interest at the Eurocurrency Base Rate.
The Company pays a Commitment Fee equal to 0.5% on the undrawn portion of the
commitments in respect of Revolving Loans and a Facility Fee equal to 0.5% on
the Canadian revolving credit commitment. In addition, the Company pays a fee of
0.25% per annum of Bisto Funding, Inc.'s $118,250 portion of the Chips Letter of
Credit to the extent not paid by Bisto Funding, Inc.

     The Amended Senior Credit Facilities and the 2007 Notes restrict the
Company from, among other things: (i) incurring additional indebtedness (other
than permitted indebtedness); (ii) creating liens; (iii) disposing of assets;
(iv) guaranteeing indebtedness; (v) merging or selling substantially all of its
assets; (vi) declaring and paying certain dividends; (vii) making certain
investments and loans; and (viii) entering into certain transactions with
affiliates, in each case with certain exceptions customary for credit facilities
such as the Amended Senior Credit Facilities. In addition, the Second Amended
and Restated Credit Agreement contains financial covenants which require the
Company to maintain certain financial ratios and limit the Company's amount of
capital expenditures.

PRIOR FINANCING

     In connection with the Circo Craft Acquisition, the Company entered into a
credit agreement with a financial institution. This agreement was replaced when
Circo Craft and Viasystems Technologies entered into two credit agreements with
certain financial institutions dated as of November 26, 1996 (the "Circo Credit
Agreement" and the "Technologies Credit Agreement", respectively, and together,
the "Credit Agreement"). Borrowings under the Credit Agreement are
collateralized by first priority mortgages and liens on substantially all of the
material assets of the Company and its subsidiaries.

     The Circo Credit Agreement consists of a Cnd$86,750 (approximately
U.S.$65,000) Canadian term loan (the "Canadian Term Loan") and a U.S.$25,000 (or
the Canadian dollar equivalent) revolving credit facility (the "Circo
Revolver"). The Viasystems Technologies Credit Agreement consist of a $65,000
term loan (the "Term A Loan"), a $55,000 term loan (the "Term B Loan"), a
$55,000 term loan (the "Term C Loan"), and a $50,000 revolving credit facility
(the "Viasystems Technologies Revolver"). The Canadian Term Loan, the Term A
Loan, the Term B Loan, and the Term C Loan are together herein referred to as
the Term Facilities.
                                       43
<PAGE>   45
                        VIASYSTEMS, INC. & SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Circo Revolver and the Viasystems Technologies Revolver are together herein
referred to as the "Revolvers". The Revolvers provide that up to $15,000 of such
facilities may be used for the issuance of letters of credit. At December 31,
1996, the Company had no outstanding letters of credit. At December 31, 1996,
there was $73,765 of unused borrowing capacity under the Revolvers. The Credit
Agreements contain several financial covenants which, among other things,
require the Company to maintain certain financial ratios, restrict the Company's
ability to incur additional indebtedness, and limit the amount of capital
expenditures. A commitment fee of .5% on the unused portion of the Revolvers is
payable quarterly.

     Mandatory principal payments of the Term Facilities are due in semi-annual
installments. The final installments on the Term A Loan and Canadian Term Loan
are due on December 31, 2002 at which time the Revolvers are also due. The final
installment on the Term B Loan is due on June 30, 2004. The final installment on
the Term C Loan is due on June 30, 2005. Beginning in fiscal year 1997, the
Credit Agreements require annual prepayments of the Term Facilities based on
"Excess Cash Flow" (as defined).

     Borrowings under the Term A Loan, the Canadian Term Loan, and the United
States dollar borrowings under the Revolvers bear interest, at the option of the
Company, at a rate per annum equal to (a) the Alternate Base Rate (as defined in
the Credit Agreements) plus 1.5% or (b) the Eurodollar Rate (as defined in the
Credit Agreements) plus 2.5%. Canadian dollar borrowings under the Revolver bear
interest, at the option of the Company, at a rate per annum equal to (a) the
Alternate Base Rate plus 1.0% or (b) the Eurodollar Rate plus 2.0%. Borrowings
under the Term B Loan bear interest, at the option of the Company, at a rate per
annum equal to (a) the Alternate Base Rate plus 2.0% or (b) the Eurodollar Rate
plus 3.0%. Borrowings under the Term C Loan bear interest, at the option of the
Company, at a rate per annum equal to (a) the Alternate Base Rate plus 2.5% or
(b) the Eurodollar Rate plus 3.5%. The Alternate Base Rate and Eurodollar Rate
margins are established quarterly based on formulas as defined in the Credit
Agreements. Interest payment dates vary depending on the interest rate option to
which the Term Facilities and the Revolvers are tied, but generally interest is
payable quarterly. At December 31, 1996 the weighted average interest rate on
outstanding borrowings was 7.68%

11. OTHER NONCURRENT LIABILITIES

     Included in other noncurrent liabilities are liabilities for monitoring and
oversight fees to Hicks, Muse & Co. Partners L.P. ("Hicks, Muse"), a shareholder
and affiliate of the Company, (see Note 15) and deferred income related to
reimbursement agreements with two governmental agencies in the U.K. (the "U.K.
Agreements"). Pursuant to the U.K. Agreements, the agencies have provided funds
of approximately $18,000 as of December 31, 1997. Funds received by the Company
under the U.K. Agreements are not subject to repayment, provided that the
Company meets certain employment requirements at its manufacturing facilities.
As the Company has met and management believes that it will continue to meet
these requirements, the Company is recognizing the amounts to be received under
the U.K. Agreements as a reduction of cost of sales over the life of the U.K.
Reimbursement Agreements and, as such, recognized a reduction of cost of sales
of approximately $3,134 during the year ended December 31, 1997.

12. CONTINGENCIES

     The Company is subject to various lawsuits and claims with respect to such
matters as patents, product development and other actions arising in the normal
course of business. In the opinion of the Company's management, the ultimate
liabilities resulting from such lawsuits and claims will not have a material
adverse effect on the Company's financial condition and results of operations.

     The Company believes it is in material compliance with applicable
environmental laws and regulations and that its environmental controls are
adequate to address existing regulatory requirements.

                                       44
<PAGE>   46
                        VIASYSTEMS, INC. & SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. BUSINESS SEGMENT INFORMATION

     The Company operates in one business segment -- the manufacture and sale of
PCBs, which are sold throughout many diverse markets.

     The Company's operations are located worldwide and can be grouped into two
geographical segments.

     Pertinent financial data by major geographic segments is as follows:

<TABLE>
<CAPTION>
                                                                OPERATING        TOTAL
                                                 NET SALES    INCOME/(LOSS)      ASSETS
                                                 ---------    -------------    ----------
<S>                                              <C>          <C>              <C>
NORTH AMERICA:
  Inception (August 28, 1996) to December 31,
     1996......................................  $ 50,400       $ (50,931)     $  447,775
  Year ended December 31, 1997.................   499,266          50,495         803,526
EUROPE:
  Inception (August 28, 1996) to December 31,
     1996......................................  $     --       $      --      $       --
  Year ended December 31,1997..................   296,023        (289,490)        632,428
ELIMINATIONS
  Inception (August 28, 1996 to December 31,
     1996......................................  $     --       $      --      $  (60,034)
  Year ended December 31, 1997.................        --              --        (367,042)
TOTAL:
  Inception (August 28, 1996) to December 31,
     1996......................................  $ 50,400       $ (50,931)     $  387,741
  Year ended December 31, 1997.................   795,289        (238,995)      1,068,912
</TABLE>

14. CONCENTRATION OF BUSINESS

     Sales to one customer were 27% and 39% of net revenues for the period from
inception (August 28, 1996) to December 31, 1996 and for the year ended December
31, 1997, respectively.

15. RELATED PARTY TRANSACTIONS

     In connection with the Acquisitions and the related financing, the Company
entered into a Monitoring and Oversight Agreement ("Agreement") with Hicks, Muse
(a shareholder and affiliate of the Company) pursuant to which the Company paid
Hicks, Muse a cash fee of $5,013 for the period from inception (August 28, 1996)
to December 31, 1996 and $10,400 for the year ended December 31, 1997 as
compensation for financial advisory services. The fees have been allocated to
acquisition costs and the debt and equity securities issued in connection with
the Acquisitions as deferred financing costs. The Agreement further provides
that the Company shall pay Hicks, Muse an annual fee of $1,750 for ten years of
monitoring and oversight services, adjusted annually at the end of each fiscal
year to an amount equal to .2% of the budgeted consolidated net sales of the
Company, but in no event less than $1,750 annually. The obligation under the
Agreement and the related deferred financing costs have been recorded in the
consolidated balance sheet and will be amortized over the life of the agreement.

     Pursuant to the Chips Merger, Viasystems Group, Inc. assumed the $437,500
of Chips Loan Notes, and the Company entered into a Reimbursement Obligation
which requires it to pay a portion of the principal and interest on the Chips
Loan Notes in the event such notes are called. The Company's portion of the
Chips Loan Notes is $319,250, which is the net amount of the Chips Loan Notes of
$437,500 and cash collateral held by Bisto Funding, Inc. in the amount of
$118,250. The cash collateral held by Bisto Funding, Inc. is required to be paid
to the loan note holders prior to the Company's Reimbursement Obligation
commitment (see Note 10).

                                       45
<PAGE>   47
                        VIASYSTEMS, INC. & SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The Company purchased approximately $1,307 and $41,000 of connectors from
Berg Electronics Corp. (an affiliate of the Company) for the period from
inception (August 28, 1996) to December 31, 1996 and for the year ended December
31, 1997, respectively. The Company had a payable to Berg Electronics Corp. of
$1,307 and $4,600 as of December 31, 1996, and 1997, respectively

16. STOCK OPTION PLANS

     On February 4, 1997, Viasystems Group, Inc. adopted the Viasystems Group,
Inc. 1997 Stock Option Plan (the "Option Plan"), pursuant to which incentive and
non-qualified stock options, stock appreciation rights, stock awards,
performance awards, and stock units (vesting stock awards) may be issued. A
total of 8,409,782 shares of Viasystems Group, Inc. Common Stock will be
reserved for issuance under the Stock Option Plan. As of December 31, 1997,
options to purchase an aggregate of 5,235,000 shares of Viasystems Group, Inc.
Common Stock subject to the terms and conditions of the Stock Option Plan are
outstanding. The terms and vesting periods of the options granted are to be
determined by the board of directors. All options granted under the Option Plan
to date have ten year terms and vest over five year periods.

     Viasystems Group, Inc. has also granted performance options ("the
Performance Options") to certain key executives. The Performance Options are
exercisable only on the occurrence of certain events. The exercise price for the
Performance Options is initially equal to $1.00 per share and, effective each
anniversary of the grant date, the per share exercise price for the Performance
Options is equal to the per share exercise price for the prior year multiplied
by 1.08. The Performance Options terminate on the tenth anniversary date of the
date of grant.

     In accordance with Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation," the Company applies APB Opinion No.
25, "Accounting for Stock Issued to Employees," and related Interpretations in
accounting for the Option Plan. Had compensation cost for the Option Plan and
the Performance Options been determined based upon the fair value at the grant
date for awards under these plans consistent with the methodology prescribed
under Financial Accounting Standards No. 123, pro forma net loss for the year
ended December 31, 1997, would have been $(327,588).

     The fair value of each option grant is estimated on the date of grant using
the minimum value method with the following assumptions: (i) no dividend yield;
(ii) risk free interest rate of 5.5%; and (iii) expected life of 5 years.

     The effects of applying SFAS No. 123 in this pro forma disclosure are not
indicative of future amounts of compensation costs. Additional awards in future
years are anticipated.

     Changes in the status of the Option Plan are summarized below:

<TABLE>
<CAPTION>
                                                      WEIGHTED
                                                      AVERAGE
                                                   EXERCISE PRICE     OPTIONS     OPTIONS
                                                     PER SHARE        GRANTED     VESTED
                                                   --------------    ---------    -------
<S>                                                <C>               <C>          <C>
December 31, 1996................................      $  --                --         --
  Granted........................................       1.00         5,260,000         --
  Vested.........................................       1.00                --    200,000
  Forfeited......................................       1.00           (25,000)        --
                                                                     ---------    -------
December 31, 1997................................      $1.00         5,235,000    200,000
                                                                     =========    =======
</TABLE>

                                       46
<PAGE>   48
                        VIASYSTEMS, INC. & SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Changes in the status of the Performance Options are summarized below:

<TABLE>
<CAPTION>
                                                      WEIGHTED
                                                      AVERAGE
                                                   EXERCISE PRICE     OPTIONS     OPTIONS
                                                     PER SHARE        GRANTED     VESTED
                                                   --------------    ---------    -------
<S>                                                <C>               <C>          <C>
August 28, 1996 (inception)......................      $  --                --         --
  Granted........................................       1.00         1,085,187         --
                                                                     ---------    -------
December 31, 1996................................       1.00         1,085,187         --
  Granted........................................       1.00         8,138,904         --
  Vested.........................................         --                --         --
  Forfeited......................................         --                --         --
                                                                     ---------    -------
December 31, 1997................................      $1.01         9,224,091         --
                                                                     =========    =======
</TABLE>

     The weighted average grant-date fair value of options granted during 1997
was $1.00 per share. All options outstanding under the Option Plan at December
31, 1997, have exercise prices of $1.00 per share and have weighted average
remaining contractual lives of between 9 and 10 years.

     Of the Performance Options outstanding at December 31, 1997, 1,085,187 and
8,138,904 have exercise prices of $1.08 and $1.00, respectively, and have
weighted average remaining contractual lives of between 9 and 10 years.

17. RETIREMENT PLANS

     The Company has a defined contribution retirement savings plan (the "Plan")
covering substantially all domestic employees who meet certain eligibility
requirements as to age and length of service. The Plan incorporates the salary
deferral provision of Section 401(k) of the Internal Revenue Code and employees
may defer up to 15% of compensation or the annual maximum limit prescribed by
the Internal Revenue Code. The Company contributes 1% of employees salaries to
the Plan and matches a percentage of the employees' deferrals. The Company may
also elect to contribute an additional profit-sharing contribution to the Plan
at the end of each year. The Company's contributions to the Plan were $0 for the
period from inception (August 28, 1996) to December 31, 1996 and $807 for the
year ended December 31, 1997.

     The Company and its subsidiaries have two defined benefit pension plans
covering certain groups of employees in foreign countries. The benefits are
based on years of services and final average salary. The Company's funding
policy is to make annual contributions to the extent such contributions are
actuarially determined.

     Components of net pension expense are as follows:

<TABLE>
<CAPTION>
                                                               1997
                                                              ------
<S>                                                           <C>
Service cost (present value of benefits earned in the
  year).....................................................  $1,821
Interest cost on the projected benefit obligation...........   2,699
Actual return on assets.....................................  (6,970)
Net amortization and deferral...............................   4,016
                                                              ------
Net periodic pension costs..................................  $1,566
                                                              ======
</TABLE>

                                       47
<PAGE>   49
                        VIASYSTEMS, INC. & SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The following table sets forth the plans' funded status and the amounts
recognized in the Company's consolidated balance sheet:

<TABLE>
<CAPTION>
                                                                1997
                                                              --------
<S>                                                           <C>
Projected benefit obligation................................  $ 44,978
Plan assets at fair value, primarily equity and fixed-income
  securities................................................   (43,675)
                                                              --------
Net pension liability.......................................  $  1,303
                                                              ========
</TABLE>

     The principal assumptions used are as follows:

<TABLE>
<CAPTION>
                                                              PERCENT
                                                              -------
<S>                                                           <C>
Weighted average discount rates.............................   6.75%
Long term rate of return on plan assets.....................   8.75%
Salary Growth...............................................   4.75%
Pension Increases...........................................   3.00%
</TABLE>

18. EXTRAORDINARY ITEM

     During the year ended December 31, 1997, the Company recorded, as an
extraordinary item, a one-time, non-cash write-off of deferred financing fees of
approximately $7,796, net of income tax benefit of $4,332, related to deferred
financing fees incurred on debt retired before maturity.

19. SUBSEQUENT EVENTS

     On February 9, 1998, the Company completed the offering of an additional
$100,000 of 9 3/4% Series B Senior Subordinated Notes due 2007 (the "1998
Offering"). As a condition of the 1998 Offering and the Credit Agreement, Hicks
Muse agreed to contribute an additional $50,000 of equity to the Company and the
Second Amended and Restated Credit Agreement was amended to, among other things,
establish an additional $70,000 term loan and increase the U.S. Revolving Loan
by $25,000.

     On January 30, 1998, the Company acquired certain assets and assumed
certain liabilities of the PCB production facility of Ericsson Telecom AB
("Ericsson") located in Sweden (the "Ericsson Facility"), for a cash purchase
price of approximately $7,000. In addition, the company and Ericsson signed a
three-year supply agreement whereby Ericsson committed to purchase 40% of its
PCB requirements from the Company. On February 17, 1998, the Company acquired
Print Service Holding N.V., the holding company parent of Mommers Print Service,
B.V. ("Mommers"), a PCB manufacturer located in The Netherlands and specializing
in the production of high-volume, medium- to high-complexity PCBs and
backplanes, for a purchase price of approximately $59,400, including assumed
debt. On March 12, 1998, the Company acquired Zincocelere S.p.A.
("Zincocelere"), a PCB manufacturer located in northern Italy and specializing
in the production of high volume, medium to high complexity PCB's, for a
purchase price of approximately $100,000, including assumed debt. The
acquisition of the PCB production facility from Ericsson, and the acquisitions
of Mommers and Zincocelere are herein referred to as the 1998 Acquisitions. The
Company anticipates that it will continue to make strategic acquisitions of PCB
companies throughout the world in accordance with its expansion strategy.

     A portion of the proceeds of the 1998 Offering, the additional term loan
under the Senior Credit Facilities, and the $50,000 equity contribution by Hicks
Muse have been used to fund the acquisitions of the Ericsson Facility, Mommers,
and Zincocelere. In addition, the Company used a portion of these proceeds to
repay revolving credit line amounts borrowed subsequent to December 31, 1997,
and outstanding under the Second Amended and Restated Credit Agreement.

                                       48
<PAGE>   50

                        VIASYSTEMS, INC. & SUBSIDIARIES

                SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
                      FOR THE YEAR ENDED DECEMBER 31, 1997
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                     BALANCE
      ALLOWANCE FOR DOUBTFUL           AT                      CHARGES TO                               BALANCE AT
    ACCOUNTS -- DEDUCTED FROM       BEGINNING                   COST AND     ACCOUNTS     TRANSLATION     END OF
 RECEIVABLES IN THE BALANCE SHEET   OF PERIOD   ACQUISITIONS    EXPENSES    WRITTEN OFF   ADJUSTMENTS     PERIOD
----------------------------------  ---------   ------------   ----------   -----------   -----------   ----------
<S>                                 <C>         <C>            <C>          <C>           <C>           <C>
          1996....................    $  --        $  407        $   --       $    --        $  2         $  409
                                      =====        ======        ======       =======        ====         ======
          1997....................    $ 409        $1,632        $7,176       $(7,636)       $992         $2,573
                                      =====        ======        ======       =======        ====         ======
</TABLE>

                                       49
<PAGE>   51

                                AUDITORS' REPORT

To The Directors of Circo Craft Co. Inc.

     We have audited the consolidated statements of earnings, retained earnings
and changes in financial position of Circo Craft Co. Inc. for the nine-month
period ended September 30, 1996. These statements are the responsibility of the
company's management. Our responsibility is to express an opinion on these
statements based on our audit.

     We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance whether the statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall statement presentation.

     In our opinion, these consolidated statements of earnings, retained
earnings and changes in financial position present fairly, in all material
respects, the results of operations of the Company and the changes in its
financial position for the nine-month period then ended in accordance with
generally accepted accounting principles in Canada.

                                            Coopers & Lybrand
                                            General Partnership
                                            Chartered Accountants

Montreal, Quebec
December 20, 1996

                                       50
<PAGE>   52

                                AUDITORS' REPORT

To the Directors of Circo Craft Co. Inc.:

     We have audited the consolidated statements of earnings, retained earnings
and changes in financial position of Circo Craft Co. Inc. for the year ended
December 31, 1995. These statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these statements
based on our audit.

     We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance whether the statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall statement presentation.

     In our opinion, these consolidated statements of earnings, retained
earnings and changes in financial position present fairly, in all material
respects, the results of operations of the Company and the changes in its
financial position for the year ended December 31, 1995, in accordance with
generally accepted accounting principles in Canada.

                                            Deloitte & Touche
                                            Chartered Accountants

Montreal, Quebec
February 1, 1996

                                       51
<PAGE>   53

                              CIRCO CRAFT CO. INC.

                  CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
                        (EXPRESSED IN CANADIAN DOLLARS)

<TABLE>
<CAPTION>
                                                                               NINE MONTH
                                                               YEAR ENDED     PERIOD ENDED
                                                              DECEMBER 31,    SEPTEMBER 30,
                                                                  1995            1996
                                                              ------------    -------------
                                                                 (THOUSANDS OF DOLLARS)
<S>                                                           <C>             <C>
Balance -- Beginning of period..............................    $32,216          $43,909
          Net earnings for the period.......................     11,693            1,974
                                                                -------          -------
Balance -- End of period....................................    $43,909          $45,883
                                                                =======          =======
</TABLE>

                                       52
<PAGE>   54

                              CIRCO CRAFT CO. INC.

                      CONSOLIDATED STATEMENTS OF EARNINGS
                        (EXPRESSED IN CANADIAN DOLLARS)

<TABLE>
<CAPTION>
                                                                               NINE MONTH
                                                               YEAR ENDED     PERIOD ENDED
                                                              DECEMBER 31,    SEPTEMBER 30,
                                                                  1995            1996
                                                              ------------    -------------
                                                                 (THOUSANDS OF DOLLARS)
<S>                                                           <C>             <C>
Sales.......................................................    $185,156        $129,633
Cost of sales...............................................     148,788         101,532
                                                                --------        --------
Operating margin............................................      36,368          28,101
                                                                --------        --------
Selling, general and administrative expenses................      11,087           7,969
                                                                --------        --------
Other expenses (income)
  Depreciation of fixed assets..............................       7,931           8,456
  Interest on long-term debt................................         852             646
  Interest income...........................................        (915)           (880)
  Expenses related to sale (note 9).........................          --           5,907
                                                                --------        --------
                                                                   7,868          14,129
                                                                --------        --------
Earnings before income taxes and non-controlling interest...      17,413           6,003
Provision for income taxes (note 5).........................       5,564           3,847
                                                                --------        --------
Earnings before non-controlling interest....................      11,849           2,156
Non-controlling interest....................................         156             182
                                                                --------        --------
Net earnings for the period.................................    $ 11,693        $  1,974
                                                                ========        ========
</TABLE>

                                       53
<PAGE>   55

                              CIRCO CRAFT CO. INC.

            CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION
                        (EXPRESSED IN CANADIAN DOLLARS)

<TABLE>
<CAPTION>
                                                                               NINE MONTH
                                                               YEAR ENDED     PERIOD ENDED
                                                              DECEMBER 31,    SEPTEMBER 30,
                                                                  1995            1996
                                                              ------------    -------------
                                                                 (THOUSANDS OF DOLLARS)
<S>                                                           <C>             <C>
Operating activities
  Net earnings for the period...............................    $ 11,693        $  1,974
     Non-cash items --
       Depreciation of fixed assets.........................       7,931           8,456
       Deferred income taxes................................         800           1,050
       Gain on sale of fixed assets.........................        (397)           (716)
       Non-controlling interest.............................         156             182
                                                                --------        --------
                                                                  20,183          10,946
  Cash provided by (used for) non-cash operating working
     capital items..........................................       3,964           7,191
                                                                --------        --------
                                                                  24,147          18,137
                                                                --------        --------
Financing activities
  Increase in long-term debt................................       3,537           4,186
  Repayment of long-term debt...............................      (2,624)         (3,187)
  Decrease in non-controlling interest......................          --          (2,608)
  Issue of common shares....................................       8,827           4,047
                                                                --------        --------
                                                                   9,740           2,438
                                                                --------        --------
Investing activities
  Acquisition of fixed assets...............................     (23,764)        (13,058)
  Proceeds from sale of fixed assets........................         922           1,018
                                                                --------        --------
                                                                 (22,842)        (12,040)
                                                                --------        --------
Increase in cash............................................      11,045           8,535
Cash -- beginning of period.................................       6,685          17,730
                                                                --------        --------
Cash -- end of period.......................................    $ 17,730        $ 26,265
                                                                ========        ========
  Represented by --
     Cash and short-term deposits...........................      19,231          28,438
     Bank indebtedness......................................      (1,501)         (2,173)
                                                                --------        --------
                                                                $ 17,730        $ 26,265
                                                                ========        ========
</TABLE>

                                       54
<PAGE>   56

                              CIRCO CRAFT CO. INC.

                        NOTES TO CONSOLIDATED STATEMENTS
                        (EXPRESSED IN CANADIAN DOLLARS)
1. ACCOUNTING POLICIES

     The consolidated statements of earnings, retained earning and changes in
financial position have been prepared in accordance with accounting principles
generally accepted in Canada and include the following significant accounting
policies:

  Principles of Consolidation

     The consolidated statements of earnings, retained earnings and changes in
financial position include the accounts of the company and its wholly owned
subsidiary, Circo Caribe Corporation ("Circo Caribe"). All significant
intercompany transactions have been eliminated on consolidation.

  Inventories

     Inventories are valued at the lower of cost and market. Cost is determined
using the first-in, first-out method for raw materials. The cost of work in
process inventories and finished goods includes the cost of raw materials,
direct labour and applicable manufacturing overhead, excluding depreciation.
Market is defined as replacement cost for raw materials, and as net realizable
value for work in process and finished goods.

  Fixed Assets and Depreciation

     Fixed assets are recorded at cost less applicable investment tax credits,
government grants and accumulated depreciation. Assets under capital leases are
included in fixed assets. Depreciation is computed using the straight-line
method at the following annual rates:

<TABLE>
<S>                                                           <C>
Buildings...................................................              2 1/2%
Machinery and equipment.....................................       15% - 33 1/3%
Leasehold improvements......................................                 10%
</TABLE>

  Revenue Recognition

     Sales and related cost of sales are included in income when goods are
delivered to the customer in accordance with the delivery terms.

  Foreign Currency

     Foreign currency transactions and balances including those of Circo Caribe,
an integrated foreign subsidiary, are translated using the temporal method.
Under this method, monetary assets and liabilities are translated into Canadian
dollars at exchange rates in effect as at the balance sheet date and
non-monetary assets and liabilities at the exchange rates prevailing when the
assets were acquired and liabilities incurred. Sales and expenses, with the
exception of depreciation and amortization, are translated at average monthly
rates. Depreciation and amortization are translated at the rates used in the
translation of the relevant asset accounts. Translation gains and losses are
included in determining net earnings in the period in which the exchange rate
changes except for gains and losses on long-term debt, which are deferred and
amortized over the remaining life of the debt.

  Income Taxes

     The company follows the tax allocation method in providing for income
taxes. Deferred income taxes result primarily from the difference between
capital cost allowance claimed for income tax purposes and depreciation recorded
for accounting purposes.

                                       55
<PAGE>   57
                              CIRCO CRAFT CO. INC.

                NOTES TO CONSOLIDATED STATEMENTS -- (CONTINUED)
                        (EXPRESSED IN CANADIAN DOLLARS)

2. NON-CONTROLLING INTEREST

     The Economic Development Bank for Puerto Rico (EDB) subscribed to 150,000
Class A Preferred shares of Circo Caribe (EDB shares) for a total amount of U.S.
$1,500,000. The EDB shares have a par value of U.S. $10 per share and carry a
cumulative preferential annual dividend of 7.5% on the par value thereof,
payable on a semi-annual basis. EDB shares carry no voting rights.

3. CAPITAL STOCK

     (a) As at September 30, 1996, the authorized capital stock consists of the
following in an unlimited number:

          First Preferred shares, without nominal or par value, issuable in
     series

          Second Preferred shares, without nominal or par value, issuable in
     series

          Common shares, without nominal or par value

     The directors are responsible for defining the rights, privileges,
restrictions and conditions attached to each series of the First and Second
Preferred shares upon their issuance.

     (b) The issued and paid capital stock consists of the following:

<TABLE>
<CAPTION>
                                                                  SEPTEMBER 30,
                                                                       1996
                                                              ----------------------
                                                              (THOUSANDS OF DOLLARS)
<S>                                                           <C>
16,069,300 common shares....................................          41,823
1,200,000 Second Preferred shares, Series A (note 3(c)).....              --
156,000 Second Preferred shares, Series B (note 3(c)).......              --
2,556,000 Second Preferred shares, Series C (note 3(c)).....              --
                                                                      ------
                                                                      41,823
                                                                      ======
</TABLE>

     (c) The company issued Second Preferred shares, Series A, B and C in
connection with the financial assistance amounting to $1,200,000 in 1986,
$78,000 in 1988, $78,000 in 1990, $852,000 in 1991, $852,000 in 1992 and
$852,000 in 1993, received from the Government of Quebec for costs incurred in
the installation of facilities. Such shares are non-voting and are entitled to
receive, as and when declared, an aggregate non-cumulative preferential dividend
of $1 and upon liquidation, to receive an aggregate amount of $1. The company
issued such shares for the purposes of such financial assistance and will
repurchase such shares at their issue price of $1 per share upon request of the
holder thereof if the majority of the common shares or more than half of the
assets of the company are transferred, within five years following the granting
of such financial assistance, to an enterprise whose head office is not located
in the Province of Quebec or to an individual who does not reside therein unless
prior approval is obtained from the holder of such Preferred shares. The
proceeds from these issues were deducted from the cost of certain fixed assets.

     Subsequent to September 30, 1996, pursuant to an agreement with the
Government of Quebec, the company repurchased and cancelled all of the issued
Second Preferred shares, Series A, B and C for a total cash consideration of
$752,400. As at September 30, 1996, the company recorded a provision for the
share repurchase as an increase to the cost of certain fixed assets, which had
been previously reduced upon receiving the Government of Quebec grant.

     (d) On September 28, 1996, the company issued 317,100 common shares to the
Economic Development Bank for Puerto Rico in exchange for the 150,000 Class A
Preferred shares it previously held in Circo Caribe.

                                       56
<PAGE>   58
                              CIRCO CRAFT CO. INC.

                NOTES TO CONSOLIDATED STATEMENTS -- (CONTINUED)
                        (EXPRESSED IN CANADIAN DOLLARS)

The value attributed to the common shares issued corresponds to the redemption
price of the shares of Circo Caribe received, which was $2,044,950 (U.S.
$1,500,000).

     (e) In 1995, the company established a Key Employee Stock Option Plan (the
"Plan"). The maximum number of common shares that may be issued under the Plan
shall not exceed 1,250,000 common shares. In 1996, the company issued 317,000
common shares for a total cash consideration of $2,002,225 upon exercise of
options granted in 1995 and 1996 under this Plan. There were no outstanding
options as at September 30, 1996.

     (f) In 1995, the company issued 1,349,799 common shares at a price of $6.50
per share for the exercise of warrants.

     (g) In 1994, under the terms of specific employment contracts, the company
granted options to two officers to purchase from treasury a maximum of 150,000
common shares. During 1995, 12,500 options were exercised at a price of $4.24
per share. Following the resignation of these officers in 1995, the balance of
unvested options expired.

4. SALES

     In January 1995, the company reached an out-of-court settlement with a
competitor for an amount of $10,528,000. This amount was received in January
1995 and was presented as other receivable as at December 31, 1994.

5. INCOME TAXES

     (a) The company's provision for income taxes includes the following:

<TABLE>
<CAPTION>
                                                                              NINE MONTH
                                                              YEAR ENDED     PERIOD ENDED
                                                             DECEMBER 31,    SEPTEMBER 30,
                                                                 1995            1996
                                                             ------------    -------------
                                                                (THOUSANDS OF DOLLARS)
<S>                                                          <C>             <C>
Current....................................................     $4,764          $2,797
Deferred...................................................        800           1,050
                                                                ------          ------
                                                                $5,564          $3,847
                                                                ======          ======
</TABLE>

     (b) The company's effective income tax rate is as follows:

<TABLE>
<CAPTION>
                                                              1995     1996
                                                                %        %
                                                              -----    -----
<S>                                                           <C>      <C>
Combined basic federal and provincial income tax rate.......  45.09    45.09
Increase (decrease) in income tax rate resulting from:
  Active business income deduction..........................  (7.35)   (7.35)
  Manufacturing and processing deduction....................  (7.00)   (7.00)
  Non-deductible expenses...................................     --    12.82
  Surtax....................................................   1.07     1.12
  Other.....................................................   1.19     2.07
                                                              -----    -----
Combined Canadian rates.....................................  33.00    46.75
Unrecognized (recognized) income tax benefits of Circo
  Caribe....................................................  (1.05)   17.33
                                                              -----    -----
                                                              31.95    64.08
                                                              =====    =====
</TABLE>

                                       57
<PAGE>   59
                              CIRCO CRAFT CO. INC.

                NOTES TO CONSOLIDATED STATEMENTS -- (CONTINUED)
                        (EXPRESSED IN CANADIAN DOLLARS)

     (c) Circo Caribe obtained a fifteen-year tax exemption grant under the 1987
Puerto Rico Tax Incentives Act. The grant expires in December 2011 and provides
a 90% exemption on industrial development income and property taxes.

6. MAJOR CUSTOMERS

     Approximately 26%, 19%, and 10%, respectively (1995 -- 19%, 15%, 14%, and
11%) of the company's sales were to three unrelated multinational corporations
(four in 1995) which have multiple divisions responsible for their own
purchasing decisions.

7. BUSINESS AND GEOGRAPHIC SEGMENT

     The company's operations are concentrated in the manufacturing of printed
circuits, with facilities located in Canada and Puerto Rico selling to a
diversified base of manufacturers in the telecommunications, computer,
automotive, and industrial electronics markets throughout North America.
Information concerning the company's business by geographic segment is as
follows:

<TABLE>
<CAPTION>
                                    CANADA                      PUERTO RICO                    CONSOLIDATED
                         ----------------------------   ----------------------------   ----------------------------
                                         NINE MONTH                     NINE MONTH                     NINE MONTH
                          YEAR ENDED    PERIOD ENDED     YEAR ENDED    PERIOD ENDED     YEAR ENDED    PERIOD ENDED
                         DECEMBER 31,   SEPTEMBER 30,   DECEMBER 31,   SEPTEMBER 30,   DECEMBER 31,   SEPTEMBER 30,
                             1995           1996            1995           1996            1995           1996
                         ------------   -------------   ------------   -------------   ------------   -------------
                                                           (THOUSANDS OF DOLLARS)
<S>                      <C>            <C>             <C>            <C>             <C>            <C>
Sales to external
  Customers............    155,326         109,756         29,830         19,877         185,156         129,633
                           =======         =======         ======         ======         =======         =======
Inter-segment Sales....         --             678          7,211            775              --              --
                           =======         =======         ======         ======         =======         =======
Earnings (loss)
  Before income taxes
  And non-controlling
  Interest.............     16,859           8,228            554         (2,225)         17,413           6,003
                           =======         =======         ======         ======         =======         =======
</TABLE>

     Export sales amounted to approximately 66% (1995 -- 73%) of the company's
total sales to external customers.

8. UNITED STATES ACCOUNTING PRINCIPLES

     The consolidated statements of earnings, retained earnings and changes in
financial position have been prepared in accordance with accounting principles
generally accepted in Canada ("Canadian GAAP"). In certain respects, Canadian
GAAP differs from accounting principles generally accepted in the United States
("U.S. GAAP").

                                       58
<PAGE>   60
                              CIRCO CRAFT CO. INC.

                NOTES TO CONSOLIDATED STATEMENTS -- (CONTINUED)
                        (EXPRESSED IN CANADIAN DOLLARS)

  Net Earnings

     (a) The following summary sets out the material adjustments to the
company's reported net earnings, which would be made in order to conform to U.S.
GAAP:

<TABLE>
<CAPTION>
                                                                              NINE MONTH
                                                              YEAR ENDED     PERIOD ENDED
                                                             DECEMBER 31,    SEPTEMBER 30,
                                                                 1995            1996
                                                             ------------    -------------
                                                                (THOUSANDS OF DOLLARS)
<S>                                                          <C>             <C>
Net earnings for the period under Canadian GAAP............     11,693           1,974
U.S. GAAP adjustments:
  Contingent gain (note 8(b))..............................      8,984              --
  Translation gains and losses (note 8(c)).................        241            (103)
  Income taxes (note 8(d)).................................       (515)            167
                                                                ------           -----
Net earnings (loss) for the period under U.S. GAAP.........     20,403           2,038
                                                                ======           =====
</TABLE>

     (b) Under Canadian GAAP in effect before April 1, 1996, contingent gains,
when confirmed, were treated as prior period adjustments and the effect of the
change was applied retroactively to the years to which they relate. Under U.S.
GAAP, contingent gains are recorded in the year the uncertainty as to the
likelihood or amount is resolved. Accordingly, the out-of-court settlement of
$10,528,000 described in note 4 would have been recorded in earnings in 1995
under U.S. GAAP net of related expenses of $1,544,000.

     (c) Under Canadian GAAP, translation gains and losses arising on the
translation, at exchange rates prevailing at the balance sheet date, of
long-term debt denominated in foreign currency are deferred and amortized over
the remaining life of the related debt. Under U.S. GAAP, such gains and losses
are included in the statement of earnings in the period in which the exchange
rate changes.

     (d) Under Canadian GAAP, the company follows the tax allocation method in
providing for income taxes while under U.S. GAAP the liability method would be
used. Under this method, deferred income taxes are calculated on the difference
between accounting and tax values of the assets and liabilities. The current tax
rate is used to calculate deferred income taxes at the balance sheet date.
Deferred tax assets arising from losses and temporary differences are subject to
a valuation allowance whenever it is more likely that the assets will not be
realized.

     (e) Under Canadian GAAP, costs of providing life insurance and health care
benefits to employees after retirement are recognized as incurred while under
U.S. GAAP these costs are accrued during the employees' years of active service.
This difference in GAAP would not result in a material change to the company's
consolidated statements of earnings, retained earnings and changes in financial
position.

                                       59
<PAGE>   61
                              CIRCO CRAFT CO. INC.

                NOTES TO CONSOLIDATED STATEMENTS -- (CONTINUED)
                        (EXPRESSED IN CANADIAN DOLLARS)

  Cash flows

     (f) Under U.S. GAAP, the following amounts would be reported:

<TABLE>
<CAPTION>
                                                                              NINE MONTH
                                                              YEAR ENDED     PERIOD ENDED
                                                             DECEMBER 31,    SEPTEMBER 30,
                                                                 1995            1996
                                                             ------------    -------------
                                                                (THOUSANDS OF DOLLARS)
<S>                                                          <C>             <C>
Net cash provided by operating activities..................     24,388           18,034
Net cash provided by financing activities..................      9,300            1,222
Net cash used in investing activities......................    (21,790)         (14,444)
                                                               -------          -------
Net increase in cash.......................................     11,898            4,812
                                                               -------          -------
Cash at the end of the period..............................     16,600           21,412
                                                               =======          =======
</TABLE>

     (g) Canadian GAAP allows the disclosure of a subtotal of the amount of cash
provided by operating activities before cash provided by non-cash operating
working capital items. U.S. GAAP requires a statement of cash flows without
subtotal.

     (h) Under U.S. GAAP, the definition of cash in the statement of cash flows
would exclude short-term deposits with original maturities of three months or
more and bank indebtedness which amounted to $8,000,000 and $3,147,000,
respectively as at September 30, 1996 (December 31, 1995 $3,500,000 and
$2,370,000, respectively). Under U.S. GAAP, changes in short-term deposits with
original maturities of three months or more would be disclosed as an investing
activity and changes in bank indebtedness would be disclosed as a financing
activity.

     (i) Machinery and equipment financed through capital leases are included as
financing and investing activities in the consolidated statement of changes in
financial position under Canadian GAAP but would be excluded from a statement of
cash flows under U.S. GAAP. New capital leases amounted to $2,096,000 and
$2,052,000 for the nine-month period ended September 30, 1996 and for the year
ended December 31, 1995.

  Other disclosure

     (j) The disclosure of the following amounts is required under U.S. GAAP:

<TABLE>
<CAPTION>
                                                                              NINE MONTH
                                                               YEAR ENDED    PERIOD ENDED
                                                              DECEMBER 31,   SEPTEMBER 30,
                                                                  1995           1996
                                                              ------------   -------------
                                                                 (THOUSANDS OF DOLLARS)
<S>                                                           <C>            <C>
Research and development expenses...........................     4,159           3,495
Payments under operating leases.............................       795             799
Payments under capital leases...............................       975           1,713
Interest paid...............................................     1,025             631
Income taxes paid...........................................     4,115           3,931
</TABLE>

     (k) The company maintains defined contribution pension plans for certain
key employees. The plan allows for employee contributions for a maximum of
$11,500, subject to certain legal limitations, of which the company contributes
100%. Under both U.S. GAAP and Canadian GAAP, company contributions are expensed
when incurred. The company's contributions for the nine-month period ended
September 30, 1996 were $105,000 (year ended December 31, 1995 -- $88,000).

                                       60
<PAGE>   62
                              CIRCO CRAFT CO. INC.

                NOTES TO CONSOLIDATED STATEMENTS -- (CONTINUED)
                        (EXPRESSED IN CANADIAN DOLLARS)

     (l) As at September 30, 1996, Circo Caribe had net operating loss
carryforwards of approximately U.S.$5,400,000, which expire from 2000 to 2003.

9. COMMITMENTS

     Circo Caribe leases its manufacturing facilities in Puerto Rico under an
operating lease with the Puerto Rico Industrial Development Corporation, which
expires on December 31, 2002. Future lease payments will aggregate
U.S.$3,048,000, including the following amounts, over the next five years:

<TABLE>
<CAPTION>
                                                  (THOUSANDS OF
                                                  U.S. DOLLARS)
                                                  -------------
<S>                                               <C>
1997............................................       508
1998............................................       508
1999............................................       508
2000............................................       508
2001............................................       508
</TABLE>

10. SUBSEQUENT EVENT

     On October 1, 1996, the company was acquired and, effective November 8,
1996, was amalgamated with its new parent company, HMTF Canada Acquisition Inc.
under the provisions of Part IA of the Companies Act (Quebec). Combined
operations have continued under the name of Circo Craft Co. Inc.

                                       61
<PAGE>   63

                         REPORT OF INDEPENDENT AUDITORS

The Board of Directors
Lucent Technologies, Inc.
Berkeley Heights, New Jersey

and

The Board of Directors
Viasystems Group, Inc.
St. Louis, Missouri:

     We have audited the accompanying statements of operations of the
Interconnection Business (the "Business") of the Microelectronics Group,
Interconnection Technologies Unit of Lucent Technologies Inc. ("Lucent") for the
year ended December 31, 1995 and for the period January 1, 1996 through November
30, 1996. These statements are the responsibility of Lucent's management. Our
responsibility is to express an opinion on these statements based on our audits.

     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our
opinion.

     The accompanying financial statements were prepared to present the results
of operations of the Business pursuant to the acquisition agreement described in
Note 1, and are not intended to be a complete presentation of the Business'
results of operations or cash flows.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the statements of operations of the Business for the
year ended December 31, 1995 and for the period January 1, 1996 through November
30, 1996, pursuant to the acquisition agreement referred to in Note 1, in
conformity with generally accepted accounting principles.

                                            Coopers & Lybrand L.L.P.

St. Louis, Missouri
February 21, 1997

                                       62
<PAGE>   64

           MICROELECTRONICS GROUP, INTERCONNECTION TECHNOLOGIES UNIT
                          OF LUCENT TECHNOLOGIES INC.

                            STATEMENTS OF OPERATIONS
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                PERIOD FROM
                                                                              JANUARY 1, 1996,
                                                               YEAR ENDED         THROUGH
                                                              DECEMBER 31,      NOVEMBER 30,
                                                                  1995              1996
                                                              ------------    ----------------
<S>                                                           <C>             <C>
Net sales...................................................    $325,047          $325,102
Operating expenses:
  Cost of goods sold........................................     274,824           244,313
  Selling, general and administrative.......................      35,246            27,567
  Research and development..................................       7,199             7,225
  Depreciation and amortization.............................      16,378            18,317
                                                                --------          --------
          Operating income (loss)...........................      (8,600)           27,680
Other income (expenses):
  Other income..............................................          94               228
  Interest expense..........................................        (204)             (917)
                                                                --------          --------
          Income (loss) before income taxes.................      (8,710)           26,991
Provision (benefit) for income taxes........................      (3,310)           10,257
                                                                --------          --------
          Net income (loss).................................    $ (5,400)         $ 16,734
                                                                ========          ========
</TABLE>

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

                                       63
<PAGE>   65

           MICROELECTRONICS GROUP, INTERCONNECTION TECHNOLOGIES UNIT
                          OF LUCENT TECHNOLOGIES INC.

                         NOTES TO FINANCIAL STATEMENTS
                             (DOLLARS IN THOUSANDS)
1. BACKGROUND AND BASIS OF PRESENTATION:

     Pursuant to an Acquisition Agreement (the "Agreement") dated November 26,
1996, between Viasystems Technologies Corp. ("Viasystems Technologies"), a
wholly owned subsidiary of Viasystems Group, Inc., and Lucent Technologies, Inc.
("Lucent"), Viasystems Technologies agreed to acquire certain assets and assume
certain liabilities from the Microelectronics Group, Interconnection
Technologies Unit (the "Business") of Lucent in exchange for consideration
totaling $200,000. The Business designs, manufactures and markets printed
circuit boards, backplanes and related products and components for the
telecommunications and computer-related markets. The effective date of the
Agreement is December 1, 1996.

     The Business' financial statements are derived from the historical books
and records of the Microelectronics Group, Interconnection Technologies Unit of
Lucent and present assets sold and liabilities assumed and the results of
operations of the Business related to the acquisition by Viasystems
Technologies. The historical operating results may not be indicative of the
results after the acquisition by Viasystems Technologies. No statement of cash
flows has been presented since any computation of historical cash flow data for
the Business would be based on arbitrary assumptions of the financial
information necessary to prepare such data and, in the opinion of management,
would not be meaningful.

     The Business' financial statements include allocations of certain expenses
that have historically been accounted for by Lucent based on allocation methods
that depend on the nature of the account. For those costs that are labor
intensive, such as research and development, allocations are made based on
forecasted head count percentages. Most other costs are allocated based on
forecasted sales. Many of the marketing and sales costs are negotiated each year
between the department providing the service and the individual business unit.
The percentage of the negotiated cost of the business unit to the total
negotiated cost for that service is applied to the actual cost each month and
allocated to the individual business units. A portion of the operating expenses
are incurred at the Richmond Works location, particularly product management,
transportation and local research and development. These expenses are allocated
to the Business using estimates calculated by the department's manager. Some
transportation expense is based on specific service contracts when they can be
identified.

     Allocated expenses include certain direct and indirect selling, marketing,
and research and development costs from the Microelectronics Group and services
from Lucent. Services from Lucent represent the allocated costs for services
such as employee benefits, human resources, labor relations, corporate tax and
business planning and overhead expenses, public relations, legal services,
environmental management, data processing and training.

     Lucent's management believes that these allocations are based on
assumptions that are reasonable under the circumstances. However, these
allocations are not necessarily indicative of the costs and expenses that would
have resulted if the Business had been operated as a separate entity.

                                       64
<PAGE>   66
           MICROELECTRONICS GROUP, INTERCONNECTION TECHNOLOGIES UNIT
                          OF LUCENT TECHNOLOGIES INC.

                         NOTES TO FINANCIAL STATEMENTS
                     (DOLLARS IN THOUSANDS) -- (CONTINUED)

     The allocations and other components of cost of sales and selling, general
and administrative expenses are as follows:

<TABLE>
<CAPTION>
                                                                              PERIOD FROM
                                                                            JANUARY 1, 1996
                                                             YEAR ENDED         THROUGH
                                                            DECEMBER 31,     NOVEMBER 30,
                                                                1995             1996
                                                            ------------    ---------------
<S>                                                         <C>             <C>
Allocated cost of sales...................................    $  8,878         $  6,004
Other cost of sales.......................................     265,946          238,309
                                                              --------         --------
                                                              $274,824         $244,313
                                                              ========         ========
Allocated selling expense.................................    $  6,226         $  3,494
Other selling expense.....................................       3,823            2,472
Allocated general and administrative......................      14,187            8,706
Other general and administrative..........................      11,010           12,895
                                                              --------         --------
                                                              $ 35,246         $ 27,567
                                                              ========         ========
Allocated research and development........................    $     --         $     --
Other research and development............................       7,199            7,225
                                                              --------         --------
                                                              $  7,199         $  7,225
                                                              ========         ========
</TABLE>

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

     A. Use of Estimates: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amount of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the report period. Actual results could differ from those estimates.

     B. Revenue Recognition: Sales and related costs of goods sold are included
in income when goods are shipped to the customer.

     C. Income Taxes: The Business is not a separate taxable entity for federal,
state, or local income tax purposes. The Business' operations are included in
the consolidated Lucent tax returns. Lucent has historically allocated income
taxes to the Business using an assumed statutory tax rate in effect without
consideration to segregating current and deferred income taxes. In addition, the
statutory tax rate has not been reduced for research and development or other
tax credits, if any, as these amounts cannot be separately determined for the
Business. Accordingly, the provision for income taxes is based on an assumed
combined federal and state statutory rate of 38% for each year presented, but
current and deferred portions of the provision have not been determined.

     D. Research and Development Costs: Research and development costs are
charged to expense when incurred.

3. TRANSACTIONS WITH AFFILIATES:

     The Business through the normal course of business, conducts transactions
with Lucent and its affiliates. In addition to the various allocated costs and
expenses described in Note 1, the majority of the Business' net sales is with
Lucent affiliated entities.

                                       65
<PAGE>   67
           MICROELECTRONICS GROUP, INTERCONNECTION TECHNOLOGIES UNIT
                          OF LUCENT TECHNOLOGIES INC.

                         NOTES TO FINANCIAL STATEMENTS
                     (DOLLARS IN THOUSANDS) -- (CONTINUED)

     The Business' sales to Lucent and its affiliates were $282,971 and $295,189
for the year ended December 31, 1995 and for the period January 1, 1996 through
November 30, 1996, respectively.

     The cost of sales related to the sales to Lucent and its affiliates were
$239,624 and $232,276 for the year ended December 31, 1995 and for the period
January 1, 1996 through November 30, 1996, respectively.

     Receipts, disbursements and the net cash position of the Business have been
managed by the Microelectronics Group through a centralized treasury system.
Accordingly, both cash generated by and cash requirements of the Business flow
through the Microelectronics Group. There is no direct interest cost allocation
to the Business with respect to borrowings, if any, and, accordingly, the
Statements of Operations do not include any financing costs.

4. EMPLOYEE BENEFIT PLANS:

     A. Pension Plans: The Business participates in noncontributory defined
benefit plans sponsored by Lucent covering substantially all employees. Benefits
for management employees are principally based on career average pay. Benefits
for occupational employees are not directly pay-related. Information required
pursuant to SFAS No. 87, Employer's Accounting for Pensions, including the
funded status of the plans is not available for the Business as a separate
entity.

     Pension contributions are principally determined using the aggregate cost
method and are primarily made to trust funds held for the sole benefit of plan
participants. Pension cost is computed using the projected unit credit method
and an assumed long-term rate of return on plan assets of 9% in 1995 and 1996,
respectively.

     B. Savings Plans: The Business participates in savings plans sponsored by
Lucent covering the majority of employees. The plans allow employees to
contribute a portion of their pre-tax and/or after-tax income in accordance with
specified guidelines. Lucent matches a percentage of the employee contributions
up to certain limits.

     C. Postretirement Benefit Plans: The Business participates in benefit plans
for retirees, which include health care benefits, life insurance coverage and
telephone concessions sponsored by Lucent. Lucent adopted SFAS No. 106,
Employers' Accounting for Postretirement Benefits Other than Pensions, effective
January 1, 1993. This Standard requires that estimated future retiree benefits
be accrued for during the years the employees are working and accumulating these
benefits. Information required pursuant to SFAS No. 106, including the net
periodic postretirement benefit cost and information on the funded status of the
plan, is not available for the Business as a separate entity.

     The costs of these plans were allocated to the Business on the basis of
salaries, the majority of which are included in cost of sales. Benefit costs
included in cost of sales were approximately $7,300 and $6,200 for the year
ended December 31, 1995 and for the period January 1, 1996 through November 30,
1996, respectively.

5. COMMITMENTS:

     In conjunction with the Agreement, Lucent and Viasystems Technologies have
entered into certain contractual arrangements whereby Lucent has agreed to
provide to Viasystems Technologies manufacturing, labor and support services.
Lucent and Viasystems Technologies have also entered into a supply agreement
effective through December 31, 2001, which shall extend through December 31,
2003 in the event Viasystems Technologies has in all material respects satisfied
the Performance Metrics (as defined) of the supply agreement. Such agreement
shall continue thereafter until terminated by either party upon eighteen months
prior written notice.

                                       66
<PAGE>   68

                         REPORT OF INDEPENDENT AUDITORS

To the Shareholders and Board of Directors of Forward Group PLC

     We have audited the accompanying consolidated balance sheet of Forward
Group PLC and its subsidiaries at 31 January 1997 and the related consolidated
profit and loss accounts and cash flow statements for each of the years in the
two-year period ended 31 January 1997. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

     We conducted our audits in accordance with generally accepted auditing
standards in the United Kingdom and the United States of America. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes assessing the principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

     In our opinion, the aforementioned consolidated financial statements
present fairly, in all material respects, the financial position of Forward
Group PLC and its subsidiaries at 31 January 1997 and the results of their
operations and their cash flows for each of the years in the two-year period
ended 31 January 1997 in conformity with generally accepted accounting
principles in the United Kingdom.

     Generally accepted accounting principles in the United Kingdom vary in
certain significant respects from generally accepted accounting principles in
the United States of America. Application of generally accepted accounting
principles in the United States of America would have affected the profit for
the financial year for each of the years in the two-year period ended 31 January
1997 and equity shareholders' funds at 31 January 1997 to the extent summarized
in Note 25 to the consolidated financial statements.

                                        KPMG Audit Plc
                                        Chartered Accountants

Birmingham, England
7 April 1997

                                       67
<PAGE>   69

                               FORWARD GROUP PLC

                     CONSOLIDATED PROFIT AND LOSS ACCOUNTS
                     (EXPRESSED IN BRITISH POUNDS STERLING)

<TABLE>
<CAPTION>
                                                                       YEARS ENDED
                                                                        31 JANUARY
                                                                     ----------------
                                                                      1996     1997
                                                              NOTE   (L000)   (L000)
                                                              ----   ------   -------
<S>                                                           <C>    <C>      <C>
Turnover
  Continuing operations.....................................    2    66,839    97,001
  Acquisitions..............................................    2        --     8,028
                                                                     ------   -------
                                                                     66,839   105,029
                                                                     ------   -------
Operating profit
  Continuing operations.....................................    3     7,976     8,079
  Acquisitions..............................................    3        --     1,022
                                                                     ------   -------
                                                                      7,976     9,101
  Net interest payable......................................    5      (412)     (996)
                                                                     ------   -------
Profit on ordinary activities before taxation...............    6     7,564     8,105
Tax on profit on ordinary activities........................    8    (2,641)   (2,707)
                                                                     ------   -------
Profit for the financial year...............................          4,923     5,398
Dividends...................................................    9    (1,089)     (552)
                                                                     ------   -------
Retained profit for the financial year......................   18     3,834     4,846
                                                                     ======   =======
</TABLE>

     The results on a historical cost basis are not materially different to
those reported above.

     A reconciliation of the movement in shareholders' funds is shown in note
19.

                                       68
<PAGE>   70

                               FORWARD GROUP PLC

          CONSOLIDATED STATEMENTS OF TOTAL RECOGNIZED GAINS AND LOSSES
                     (EXPRESSED IN BRITISH POUNDS STERLING)

<TABLE>
<CAPTION>
                                                                 YEARS ENDED
                                                                  31 JANUARY
                                                              ------------------
                                                               1996       1997
                                                              (L000)     (L000)
                                                              -------    -------
<S>                                                           <C>        <C>
Profit for the financial year...............................   4,923      5,398
Currency translation adjustment.............................      --        (22)
                                                               -----      -----
                                                               4,923      5,376
                                                               =====      =====
</TABLE>

                                       69
<PAGE>   71

                               FORWARD GROUP PLC

                          CONSOLIDATED BALANCE SHEETS
                     (EXPRESSED IN BRITISH POUNDS STERLING)

<TABLE>
<CAPTION>
                                                                        31 JANUARY
                                                                           1997
                                                                NOTE      (L000)
                                                                ----    ----------
<S>                                                             <C>     <C>
Fixed assets
  Tangible assets...........................................     10       36,407
Current assets
  Stocks....................................................     12        6,586
  Debtors...................................................     13       17,289
                                                                         -------
                                                                          23,875
Creditors: amounts falling due within one year..............     14      (26,949)
                                                                         -------
Net current liabilities.....................................              (3,074)
                                                                         -------
Total assets less current liabilities.......................              33,333
Creditors: amounts falling due after more than one year.....     15       (6,574)
Provisions for liabilities and charges......................     16       (2,616)
                                                                         -------
Net assets..................................................              24,143
                                                                         =======
Capital and reserves
  Called up share capital...................................     17        2,754
  Share premium account.....................................     18        6,837
  Revaluation reserve.......................................     18          566
  Profit and loss account...................................     18       13,986
                                                                         -------
Equity shareholders' funds..................................              24,143
                                                                         =======
</TABLE>

                                       70
<PAGE>   72

                               FORWARD GROUP PLC

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                     (EXPRESSED IN BRITISH POUNDS STERLING)

<TABLE>
<CAPTION>
                                                                       YEARS ENDED 31,
                                                                           JANUARY
                                                                      ------------------
                                                                       1996       1997
                                                              NOTE    (L000)     (L000)
                                                              ----    -------    -------
<S>                                                           <C>     <C>        <C>
Net cash inflow from operating activities...................  20a      10,667     18,561
Returns on investments and servicing of finance
  Interest received.........................................               61         85
  Interest paid.............................................             (464)    (1,018)
  Dividends paid............................................             (722)    (1,207)
                                                                      -------    -------
Net cash outflow from returns on investments and servicing
  of finance................................................           (1,125)    (2,140)
UK tax paid.................................................           (1,670)    (3,633)
Investing activities
  Purchase of tangible fixed assets.........................  20e      (4,153)    (7,624)
  Acquisition of businesses (net of cash and cash
     equivalents acquired)..................................  20d      (8,191)    (9,184)
  Sale of tangible fixed assets.............................              299        435
                                                                      -------    -------
Net cash outflow from investing activities..................          (12,045)   (16,373)
                                                                      -------    -------
Net cash outflow before financing...........................           (4,173)    (3,585)
Financing
  Issue of Ordinary share capital...........................            7,550         92
  Capitalisation issue expenses.............................               --        (24)
  Repayment of bank loan....................................             (790)      (720)
  Capital element of hire purchase and finance lease
     payments...............................................           (1,170)    (2,393)
                                                                      -------    -------
Net cash inflow/(outflow) from financing....................  20b       5,590     (3,045)
                                                                      -------    -------
Net increase/(decrease) in cash and cash equivalents........  20c       1,417     (6,630)
                                                                      =======    =======
</TABLE>

                                       71
<PAGE>   73

                               FORWARD GROUP PLC

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     (EXPRESSED IN BRITISH POUNDS STERLING)

1. GENERAL

     As used in the consolidated financial statements and related notes, the
term "Company" refers to Forward Group PLC and the term "Group" refers to
Forward Group PLC and its subsidiary undertakings as set out in note 24.

PRINCIPAL ACCOUNTING POLICIES

     The following accounting policies have been applied consistently in dealing
with items which are considered material in relation to the consolidated
financial statements of Forward Group PLC:

  Basis of preparation

     The consolidated financial statements have been prepared under the
historical cost convention, modified to include the revaluation of certain
freehold property, and in accordance with applicable Accounting Standards.

  Basis of consolidation

     The consolidated financial statements incorporate the financial statements
of Forward Group PLC and all of its subsidiary undertakings made up to 31
January 1997 under the acquisition method of accounting. The results of
companies or businesses acquired during the year are included from the date of
acquisition. Internal sales and profits are eliminated on consolidation.
Goodwill arising on acquisitions is written off directly against reserves on
acquisition.

  Turnover

     Turnover represents the amounts (excluding value added tax) derived from
the provision of goods to third party customers and is recognized when goods are
shipped and title has passed.

  Government revenue grants

     Government revenue grants are recognized in the profit and loss account in
the period during which the expenditure to which they relate is incurred.

  Stocks and work in progress

     Stocks and work in progress are valued on a first in, first out basis at
the lower of cost and net realizable value. Cost comprises materials, labor and
an appropriate proportion of production overheads.

                                       72
<PAGE>   74
                               FORWARD GROUP PLC

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

  Depreciation

     Depreciation is provided so as to write off the cost or valuation,
including commissioning costs, of tangible fixed assets to their estimated
residual value on a straight line basis, at the following annual rates:

<TABLE>
<S>                                                           <C>
Freehold buildings..........................................  2.5%
Plant and machinery.........................................  10% -- 20%
Fixtures, fittings, tools and equipment.....................  10% -- 25%
Motor vehicles..............................................  25%
</TABLE>

Freehold land is not depreciated.

  Research and development

     Expenditure on research and development is expensed in the year in which it
is incurred.

  Deferred taxation

     Deferred taxation is provided using the liability method in respect of the
taxation effect of all timing differences to the extent that it is probable that
liabilities will crystallise or assets be realized in the foreseeable future.

  Hire purchase and leased assets

     Assets held under hire purchase or finance lease contracts are capitalized
and included in tangible fixed assets at their fair value. Each asset is
depreciated over the shorter of the contract term or its estimated useful life.
Obligations relating to such contracts, net of finance charges in respect of
future periods, are included as appropriate under creditors. Finance charges are
allocated to accounting periods over the period of the lease to produce a
constant rate of return on the outstanding balance. Rentals under operating
leases are charged to the profit and loss account on a straight-line basis over
the life of the lease.

  Pensions

     The Group operates both a defined contribution pension scheme and a defined
benefit pension scheme. The Group's contributions to the defined contribution
scheme are charged against profits on an accruals basis in the year to which
they relate. Contributions to the defined benefit scheme are charged against
profits so as to spread the cost of pensions over employees' working lives. The
funds of both schemes are administered by trustees and are independent of the
Group's finances.

  Foreign exchange

     Transactions denominated in foreign currencies are translated at the rate
of exchange ruling on the day the transaction occurs or at the contracted rate
if the transaction is covered by a forward exchange contract.

     Foreign currency monetary assets and liabilities in the balance sheet are
translated into sterling at the rates of exchange ruling at the end of the year
or, if appropriate, at the forward contract rate. Any resulting exchange gains
or losses are taken to the profit and loss account.

     The assets and liabilities of overseas subsidiary undertakings are
translated at the closing exchange rate. The profit and loss accounts of those
undertakings are translated using the average rate of exchange during the year.
Net exchange differences arising on translation are taken to reserves.

                                       73
<PAGE>   75
                               FORWARD GROUP PLC

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

2. SEGMENTAL ANALYSIS

     Turnover is analyzed by geographical destination as follows:

<TABLE>
<CAPTION>
                                                               1996      1997
                                                              (L000)    (L000)
                                                              ------    -------
<S>                                                           <C>       <C>
United Kingdom..............................................  40,263     55,848
Rest of Europe..............................................  25,200     42,364
Rest of the world...........................................   1,376      6,817
                                                              ------    -------
                                                              66,839    105,029
                                                              ======    =======
</TABLE>

     The Group's turnover, profit before taxation and assets relate to only one
business segment, the electronics division.

     In the opinion of the Directors an analysis of turnover, profit before
taxation and net assets by geographical area of operation would be seriously
prejudicial to the interests of the Group and therefore as permitted under
SSAP25 no disclosure is made.

3. OPERATING PROFIT

<TABLE>
<CAPTION>
                                                              CONTINUING
                                                              OPERATIONS
                            1996                                (L000)
                            ----                              ----------
<S>                                                           <C>
Turnover....................................................    66,839
Cost of sales...............................................   (52,251)
                                                               -------
Gross profit................................................    14,588
Selling, general and administrative expenses................    (6,725)
Other income................................................       113
                                                               -------
Operating profit............................................     7,976
                                                               =======
</TABLE>

<TABLE>
<CAPTION>
                                                       CONTINUING
                                                       OPERATIONS    ACQUISITIONS      TOTAL
                        1997                             (L000)         (L000)         (L000)
                        ----                           ----------    ------------   ------------
<S>                                                    <C>           <C>            <C>
Turnover.............................................    97,001          8,028        105,029
Cost of sales........................................   (78,339)        (5,916)       (84,255)
                                                        -------         ------        -------
Gross profit.........................................    18,662          2,112         20,774
Selling, general and administrative expenses.........   (10,780)        (1,122)       (11,902)
Other income.........................................       197             32            229
                                                        -------         ------        -------
Operating profit.....................................     8,079          1,022          9,101
                                                        =======         ======        =======
</TABLE>

     Included in the above for 1997 are the following exceptional charges
relating to the restructuring of continuing operations and acquired businesses:

<TABLE>
<CAPTION>
                                                       CONTINUING
                                                       OPERATIONS    ACQUISITIONS    TOTAL
                                                         (L000)         (L000)       (L000)
                                                       ----------    ------------    ------
<S>                                                    <C>           <C>             <C>
Cost of sales........................................     546            433           979
Selling, general and administrative expenses.........     168             97           265
                                                          ---            ---         -----
                                                          714            530         1,244
                                                          ===            ===         =====
</TABLE>

                                       74
<PAGE>   76
                               FORWARD GROUP PLC

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

     Acquisitions in 1997 comprise the former GEC-Marconi hybrid business,
Manchester Circuits Limited and TI Technologies (Pty) Limited.

4. STAFF NUMBERS AND COSTS

     The average number of persons employed by the Group (including executive
Directors) during the year, analysed by category, was as follows:

<TABLE>
<CAPTION>
                                                              1996     1997
                                                              -----    -----
<S>                                                           <C>      <C>
Sales.......................................................     32       51
Administration..............................................     49       80
Production..................................................    933    1,642
                                                              -----    -----
                                                              1,014    1,773
                                                              =====    =====
Employees at end of year....................................  1,454    1,874
                                                              -----    -----
</TABLE>

     The aggregate payroll costs of these persons were as follows:

<TABLE>
<CAPTION>
                                                               1996      1997
                                                              (L000)    (L000)
                                                              ------    ------
<S>                                                           <C>       <C>
Wages and salaries..........................................  18,215    30,503
Social security costs.......................................   1,755     2,916
Other pension costs.........................................     745     1,239
                                                              ------    ------
                                                              20,715    34,658
                                                              ======    ======
</TABLE>

5. NET INTEREST PAYABLE

<TABLE>
<CAPTION>
                                                               1996      1997
                                                              (L000)    (L000)
                                                              ------    ------
<S>                                                           <C>       <C>
Bank loan and overdrafts....................................   216        609
Hire purchase and finance lease contracts...................   257        472
                                                               ---      -----
Interest payable and similar charges........................   473      1,081
Interest receivable and similar income......................   (61)       (85)
                                                               ---      -----
                                                               412        996
                                                               ===      =====
</TABLE>

                                       75
<PAGE>   77
                               FORWARD GROUP PLC

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

6. PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION

     Profit on ordinary activities before taxation is stated after
charging/(crediting):

<TABLE>
<CAPTION>
                                                                 1996      1997
                                                                (L000)    (L000)
                                                                ------    ------
  <S>                                                           <C>       <C>
  Directors' emoluments (see note 7):
    As Directors..............................................    33        86
    Remuneration as executives................................   333       333
                                                                 ---       ---
                                                                 366       419
    Compensation for loss of office...........................    81        --
  Grants receivable...........................................   (21)      (19)
  Property rental income......................................   (88)      (87)
  Auditors' remuneration......................................    75        84
  Research and development expenditure........................   507       764
  Payments under operating leases:
    Plant and equipment.......................................   113       245
    Other assets..............................................   187       324
                                                                 ===       ===
</TABLE>

     In addition, KPMG Audit Plc and its associates received L97,000 (1996:
L91,000) in respect of other services provided during the year.

7. DIRECTORS' EMOLUMENTS

  (a) Remuneration

     The emoluments of the Chairman, excluding pension contributions, were
L97,000 (1996: L95,000). The emoluments of the highest paid Director, excluding
pension contributions, were 136,000. In 1996 the Chairman was also the highest
paid director.

     The emoluments of the Directors, excluding pension contributions, were
within the following ranges:

<TABLE>
<CAPTION>
                                                         1996    1997
                                                         ----    ----
    <S>                                                  <C>     <C>
    L5,001 --  L10,000...............................      1      --
    L10,001 -- L15,000...............................      2      --
    L15,001 -- L20,000...............................     --       1
    L20,001 -- L25,000...............................     --       1
    L25,001 -- L30,000...............................      2      --
    L40,001 -- L45,000...............................     --       1
    L70,001 -- L75,000...............................      1      --
    L75,001 -- L80,000...............................      1      --
    L95,001 -- L100,000..............................      1       1
    L100,001 -- L105,000.............................     --       1
    L135,001 -- L140,000.............................     --       1
                                                          ==      ==
</TABLE>

                                       76
<PAGE>   78
                               FORWARD GROUP PLC

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

  (b) Share options over Ordinary shares

<TABLE>
<CAPTION>
                                AT        NUMBER OF OPTIONS        AT
                            1 FEBRUARY   -------------------   31 JANUARY   EXERCISE         NORMAL
                               1996      GRANTED   EXERCISED      1997       PRICE      EXERCISE PERIOD
                            ----------   -------   ---------   ----------   --------   ------------------
  <S>                       <C>          <C>       <C>         <C>          <C>        <C>
  DA Bumpsteed............   100,000         --          --     100,000      88.75p    06.07.98--05.07.05
                                                               ==========
  MJ Glanfield............    80,000         --     (80,000)         --      56.25p    31.05.96--30.05.03
                              20,000         --          --      20,000      61.75p    24.02.98--23.02.05
                                  --     20,000          --      20,000        180p    13.02.99--12.02.06
                                                               ----------
                                                                 40,000
                                                               ==========
</TABLE>

     The figures shown as at 1 February 1996 have been restated to reflect the 3
for 1 capitalisation issue.

     The closing price of the Company's Ordinary shares on the London Stock
Exchange on 31 January 1997 was 171.5p. The range during the period was 103.5p
to 289.5p.

8. TAX ON PROFIT ON ORDINARY ACTIVITIES

<TABLE>
<CAPTION>
                                                                 1996      1997
                                                                (L000)    (L000)
                                                                ------    ------
  <S>                                                           <C>       <C>
  The charge for taxation all arises in the UK and comprises:
    Corporation tax on profit for the year at 33% (1996:
       33%)...................................................  2,486     2,556
    Deferred taxation.........................................    202       439
  Prior year adjustments in respect of:
    Corporation tax...........................................   (111)     (281)
    Deferred taxation.........................................     64        (7)
                                                                -----     -----
                                                                2,641     2,707
                                                                =====     =====
</TABLE>

     The 1997 current year charge includes the effect of tax losses which have
not been relieved.

9. DIVIDENDS

<TABLE>
<CAPTION>
                                                                   1996      1997
                                                                  (L000)    (L000)
                                                                  ------    ------
  <S>                                                             <C>       <C>
  Interim dividend paid.......................................      434      552
  Proposed final dividend.....................................      655       --
                                                                  -----      ---
                                                                  1,089      552
                                                                  =====      ===
</TABLE>

                                       77
<PAGE>   79
                               FORWARD GROUP PLC

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

10. TANGIBLE ASSETS

<TABLE>
<CAPTION>
                                     FREEHOLD LAND AND
                                         BUILDINGS                      FIXTURES,
                                    -------------------      PLANT      FITTINGS,
                                       AT          AT         AND       TOOLS AND     MOTOR
                                    VALUATION     COST     MACHINERY    EQUIPMENT    VEHICLES    TOTAL
                                     (L000)      (L000)     (L000)       (L000)       (L000)     (L000)
                                    ---------    ------    ---------    ---------    --------    ------
  <S>                               <C>          <C>       <C>          <C>          <C>         <C>
  Cost or valuation
    At beginning of year........      1,400      5,277      26,594        1,347         717      35,335
    Additions...................         --        890       9,430        1,130         391      11,841
    Transfers...................         --         --         295         (315)         20          --
    Acquisitions of
       businesses...............         --        710       1,644           84          85       2,523
    Disposals...................         --         (4)       (279)        (108)       (322)       (713)
    Translation adjustment......         --         --         (18)          (1)         --         (19)
                                      -----      -----      ------        -----        ----      ------
    At end of year..............      1,400      6,873      37,666        2,137         891      48,967
                                      =====      =====      ======        =====        ====      ======
  Depreciation
    At beginning of year........        195        247       7,073          540         252       8,307
    Charged in year.............         32        128       4,086          237         211       4,694
    Transfers...................         --         --          68          (68)         --          --
    Disposals...................         --         (1)       (238)         (25)       (183)       (447)
    Translation adjustment......         --         --           5            1          --           6
                                      -----      -----      ------        -----        ----      ------
    At end of year..............        227        374      10,994          685         280      12,560
                                      -----      -----      ------        -----        ----      ------
  Net book value
    At end of year..............      1,173      6,499      26,672        1,452         611      36,407
                                      =====      =====      ======        =====        ====      ======
    At beginning of year........      1,205      5,030      19,521          807         465      27,028
                                      =====      =====      ======        =====        ====      ======
</TABLE>

     On 25 January 1990 the freehold property then owned at Tamworth was valued
at open market value on the basis of existing use at L1,400,000. The historical
cost of tangible fixed assets included at a valuation at the end of the year was
L874,000. Accumulated historical cost depreciation was L258,000.

     The net book value of Group tangible fixed assets includes L10,412,000 in
respect of assets held under hire purchase or finance lease contracts, after
charging depreciation for the year of L1,286,000 and L1,439,000 of freehold
land, which is not depreciated.

     Plant and machinery includes L1,143,000 of assets which are under the
course of construction.

11. INVESTMENTS
  (a) Acquisition of businesses -- year ended 31 January 1996

     On 13 March 1995, Technograph Microcircuits Limited purchased the former
Ferranti International plc Hybrids Manufacturing and Test Division for a cash
consideration of L10,000. Goodwill arising on this acquisition of L67,000 has
been written off against merger reserve.

                                       78
<PAGE>   80
                               FORWARD GROUP PLC

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

     On 21 June 1995 the Group acquired the entire issued share capital of
Exacta Circuits Limited for a total consideration of up to L16,000,000, together
with acquisition costs of L766,000.

<TABLE>
<CAPTION>
                                                       BOOK      ACQUISITION     FAIR
                                                       VALUE     ADJUSTMENTS     VALUE
                                                      (L000)       (L000)       (L000)
                                                      -------    -----------    -------
<S>                                                   <C>        <C>            <C>
Assets
  Tangible fixed assets...........................     16,673          --        16,673
  Stocks..........................................      2,211          --         2,211
  Debtors.........................................     11,867         (92)       11,775
  Cash............................................          8          --             8
                                                      -------      ------       -------
                                                       30,759         (92)       30,667
                                                      =======      ======       =======
Liabilities
  Bank overdraft..................................       (285)         --          (285)
  Bank loan.......................................     (4,030)         --        (4,030)
  Taxation........................................     (2,665)         --        (2,665)
  Finance lease contracts.........................     (4,016)         --        (4,016)
  Other creditors.................................     (6,590)         --        (6,590)
  Provisions......................................       (655)     (1,445)       (2,100)
                                                      -------      ------       -------
                                                      (18,241)     (1,445)      (19,686)
                                                      =======      ======       =======
  Net assets acquired.............................     12,518      (1,537)       10,981
                                                      =======      ======
  Goodwill written off against merger reserve.....                                5,785
                                                                                -------
                                                                                 16,766
                                                                                =======
</TABLE>

     The acquisition adjustments reflect an assessment of the fair value of
debtors compared to book value together with recognition of the proceeds
receivable in respect of Exacta Circuits Limited's unexercised share options
(see below) and an adjustment to align Exacta Circuits Limited's accounting
policy on deferred taxation with that of the Group.

<TABLE>
<CAPTION>
                                                                (L000)
                                                                ------
<S>                                                             <C>
The consideration was satisfied by:
Shares issued and to be issued for non-cash consideration:
  Nominal value.............................................       122
  Fair value in excess of nominal value.....................     5,917
                                                                ------
                                                                 6,039
Cash element of consideration including costs of                 7,904
  acquisition...............................................
Deferred consideration:
  Share options.............................................       323
  Contingent................................................     2,500
                                                                ------
                                                                16,766
                                                                ======
</TABLE>

     On 27 February 1996, 30,966 Ordinary shares in Exacta Circuits Limited were
issued under that company's share option scheme, which was then wound up. These
shares were immediately acquired by the Company under the terms of the June 1995
Sale and Purchase Agreement. Included in the above consideration are 63,593
Ordinary shares in the Company issued for a non-cash consideration of L157,000
together with cash of L323,000.

                                       79
<PAGE>   81
                               FORWARD GROUP PLC

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

     The payment of L2,500,000 deferred consideration was made on 21 June 1996
to the vendors of Exacta Circuits Limited. It was contingent on a target profit
before taxation of L5,500,000 being achieved for the calendar year 1995. This
target was achieved.

  (c) Acquisition of businesses -- year ended 31 January 1997

     On 26 March 1996 Technograph Microcircuits Limited acquired GEC-Marconi's
hybrid business for a total cash consideration of L2,726,000.

     On 7 May 1996 the Company acquired the entire issued share capital of
Manchester Circuits Limited for a total consideration of L830,000.

     On 27 June 1996 the Company acquired the entire issued share capital of TI
Technologies (Pty) Limited (based in South Africa) for an initial consideration
of L510,000. Further consideration, which has not been provided for, of up to
L501,000 may become payable upon certain profit targets being achieved in the 22
months ending on 31 January 1998.

     The fair values of the assets and liabilities acquired as a result of the
above are as follows:

<TABLE>
<CAPTION>
                                                 GEC-                       TI
                                               MARCONI    MANCHESTER   TECHNOLOGIES
                                                HYBRID     CIRCUITS       (PTY)
                                               BUSINESS    LIMITED       LIMITED      TOTAL
                                                (L000)      (L000)        (L000)      (L000)
                                               --------   ----------   ------------   ------
<S>                                            <C>        <C>          <C>            <C>
Fixed assets.................................     123        2,098           302       2,523
Stocks.......................................   1,525          387           652       2,564
Debtors......................................     463          955           873       2,291
Cash in hand.................................      --           --            15          15
Creditors....................................    (431)        (960)       (1,190)     (2,581)
Bank loans and overdrafts....................      --       (1,645)         (698)     (2,343)
Taxation.....................................     113          (11)           --         102
Hire purchase obligations....................      --         (424)           --        (424)
Deferred tax.................................      83          (35)           --          48
                                                -----       ------        ------      ------
Fair value of net assets acquired............   1,876          365           (46)      2,195
                                                =====       ======        ======      ======
</TABLE>

     Fair values are after taking account of adjustments of L755,000 to reflect
an assessment of the differences between the book values and fair values of
assets acquired, L97,000 of alignments to accord with group accounting policies
and the recognition of unprovided liabilities of L265,000 at the relevant dates
of acquisition.

     Following the triennial valuation of the Exacta Circuits Pension Plan on 5
April 1996 the provision at 31 January 1996 has been released resulting in an
adjustment to the provisional assessment of fair values made at the date of
acquisition.

                                       80
<PAGE>   82
                               FORWARD GROUP PLC

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

     Goodwill written off in the year comprises:

<TABLE>
<CAPTION>
                                                              (L000)
                                                              ------
<S>                                                           <C>
Fair value of net assets acquired...........................  2,195
Consideration...............................................  4,225
                                                              -----
Goodwill arising on current year acquisitions...............  2,030
Revision to provisional fair value assessment made in
  respect of the acquisition of Exacta Circuits Limited.....   (584)
                                                              -----
                                                              1,446
                                                              =====
The consideration was satisfied by:
Shares issued for non-cash consideration:
  Nominal value.............................................      1
  Fair value in excess of nominal value.....................    191
                                                              -----
                                                                192
Cash consideration..........................................  3,874
Costs of acquisition........................................    159
                                                              -----
                                                              4,225
                                                              =====
</TABLE>

     The following table, which is presented for the purposes of disclosure
under US GAAP in accordance with the requirements of Accounting Principles Board
Opinion No. 16 "Business Combinations" ("APB 16"), reflects the unaudited pro
forma combined results of operations of the Group, together with the companies
and businesses acquired during the years ended 31 January 1996 and 1997 on the
basis that the acquisitions had taken place on 1 February 1995:

<TABLE>
<CAPTION>
                                                               1996       1997
                                                              -------    -------
                                                              (L000)     (L000)
                                                                 (UNAUDITED)
<S>                                                           <C>        <C>
Turnover....................................................  103,007    107,617
Profit on ordinary activities after taxation................    7,553      5,161
</TABLE>

     The following table, which is presented for the purposes of disclosure
under US GAAP in accordance with the requirements of APB 16, reflects the
unaudited pro forma combined results of continuing operations of the Group,
together with the companies and businesses acquired during the years ended 31
January 1996 and 1995 on the basis that the acquisitions had taken place on 1
February 1994:

<TABLE>
<CAPTION>
                                                               1995       1996
                                                              -------    -------
                                                              (L000)     (L000)
                                                                 (UNAUDITED)
<S>                                                           <C>        <C>
Turnover....................................................   68,211     90,845
Profit on ordinary activities after taxation................    3,927      7,425
</TABLE>

     These unaudited pro forma combined results have been prepared for
comparative purposes only. In management's opinion the unaudited pro forma
results of operations are not indicative of the actual results that would have
occurred had the acquisitions been consummated at the beginning of the years
presented or of future operations of the combined companies under the ownership
and management of the Company.

                                       81
<PAGE>   83
                               FORWARD GROUP PLC

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

12. STOCKS

<TABLE>
<CAPTION>
                                                               1997
                                                              (L000)
                                                              ------
<S>                                                           <C>
Raw materials and consumables...............................  3,233
Work in progress............................................  2,465
Finished goods and goods for resale.........................    888
                                                              -----
                                                              6,586
                                                              =====
</TABLE>

13. DEBTORS

<TABLE>
<CAPTION>
                                                               1997
                                                              (L000)
                                                              ------
<S>                                                           <C>
Trade debtors...............................................  16,368
Other debtors...............................................     454
Prepayments and accrued income..............................     467
                                                              ------
                                                              17,289
                                                              ======
</TABLE>

14. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

<TABLE>
<CAPTION>
                                                               1997
                                                              (L000)
                                                              ------
<S>                                                           <C>
Bank overdrafts.............................................   5,841
Bank loan...................................................     720
Obligations under hire purchase and finance lease
  contracts.................................................   2,400
Trade creditors.............................................  10,884
Corporation tax and Advance Corporation Tax payable.........   2,540
Other taxes and social security.............................   1,448
Other creditors.............................................     278
Accruals and deferred income................................   2,838
                                                              ------
                                                              26,949
                                                              ======
</TABLE>

     The bank overdrafts and loan are secured by charges over the Group's
assets.

15. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

<TABLE>
<CAPTION>
                                                               1997
                                                              (L000)
                                                              ------
<S>                                                           <C>
Bank loan...................................................  1,800
Obligations under hire purchase and finance lease
  contracts.................................................  4,774
                                                              -----
                                                              6,574
                                                              =====
Bank loan and overdrafts are repayable as follows:
Within one year.............................................  6,561
Between one and two years...................................    720
Between two and five years..................................  1,080
                                                              -----
                                                              8,361
                                                              =====
</TABLE>

                                       82
<PAGE>   84
                               FORWARD GROUP PLC

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

     Obligations under hire purchase and finance lease contracts are payable as
follows:

<TABLE>
<CAPTION>
                                                               1997
                                                              (L000)
                                                              ------
<S>                                                           <C>
Within one year.............................................  2,400
Between one and two years...................................  4,498
Between two and five years..................................    276
                                                              -----
                                                              7,174
                                                              =====
</TABLE>

16. PROVISIONS FOR LIABILITIES AND CHARGES

<TABLE>
<CAPTION>
                                                               1997
                                                              (L000)
                                                              ------
<S>                                                           <C>
Deferred taxation...........................................  2,616
Pension provision...........................................     --
                                                              -----
                                                              2,616
                                                              =====
</TABLE>

  (a) Deferred taxation

     Deferred taxation is provided using the liability method at a rate of 33%
as follows:

<TABLE>
<CAPTION>
                                                               1997
                                                              (L000)
                                                              ------
<S>                                                           <C>
Accelerated capital allowances..............................  2,413
Short term timing differences...............................    203
                                                              -----
                                                              2,616
                                                              =====
</TABLE>

<TABLE>
<CAPTION>
                                                               1997
                                                              (L000)
                                                              ------
<S>                                                           <C>
At beginning of year........................................  2,068
Charged to profit and loss account..........................    432
Arising on purchase of businesses...........................    (48)
Movement in Advance Corporation Tax.........................    164
                                                              -----
At end of year..............................................  2,616
                                                              =====
</TABLE>

     Unprovided deferred taxation in respect of deferred capital gains amounted
to L744,000.

  (a) Pension provision

     The pension provision which arose during the year ended 31 January 1996 as
a result of the acquisition of Exacta Circuits Limited was subsequently released
during the year ended 31 January 1997 as a result of the reassessment of
provisional fair values referred to in notes 11 and 22.

                                       83
<PAGE>   85
                               FORWARD GROUP PLC

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

17. SHARE CAPITAL

<TABLE>
<CAPTION>
                                                                   1997
                                                              ---------------
                                                              (L000)   (L000)
                                                              ------   ------
<S>                                                           <C>      <C>
Authorised:
  Ordinary shares of 5p each................................  72,900   3,645
                                                              ======   =====
Allotted, called up and fully paid:
  Ordinary shares of 5p each................................  55,088   2,754
                                                              ======   =====
</TABLE>

     On 13 March 1996 the Company issued 63,593 Ordinary shares for a non-cash
consideration of 157,000 as part of the arrangements regarding the purchase of
the remaining shares under option in Exacta Circuits Limited.

     On 20 May 1996 the Company issued 17,597 Ordinary shares in connection with
the acquisition of Manchester Circuits Limited for a non-cash consideration of
L134,000.

     On 27 June 1996 the Company issued 5,658 Ordinary shares in connection with
the acquisition of TI Technologies (Pty) Limited for a non-cash consideration of
L59,000.

     On 28 June 1996 the Company's authorised share capital was increased by the
creation of an additional 53,900,000 Ordinary shares of 5p each.

     On 28 June 1996 the Company authorised a 3 for 1 capitalisation issue
resulting in 40,991,664 new shares being allotted and distributed.

     During the year ended 31 January 1997, and following the capitalisation
issue, the Company issued 432,400 Ordinary shares with an aggregate nominal
value of L21,620 under the terms of the Forward Group Share Option Scheme for a
total cash consideration of L92,000.

     At the end of the year options over 810,000 Ordinary shares have been
granted and remain outstanding. These options, which also reflect the
capitalisation issue referred to above, are exercisable as follows:

<TABLE>
<CAPTION>
NUMBER OF SHARES   EXERCISE PRICE   EXERCISE PERIOD
----------------   --------------   ---------------
<S>                <C>              <C>
    140,000             51.5p          1996/2003
     40,000               47p          1997/2004
    280,000            61.75p          1998/2005
    260,000            88.75p          1998/2005
     20,000              180p          1999/2006
     70,000              107p          1999/2006
    -------
    810,000
    =======
</TABLE>

                                       84
<PAGE>   86
                               FORWARD GROUP PLC

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

18. RESERVES

<TABLE>
<CAPTION>
                                          SHARE                             PROFIT
                                         PREMIUM   MERGER    REVALUATION   AND LOSS
                                         ACCOUNT   RESERVE     RESERVE     ACCOUNT    TOTAL
                                         (L000)    (L000)      (L000)       (L000)    (L000)
                                         -------   -------   -----------   --------   ------
<S>                                      <C>       <C>       <C>           <C>        <C>
At 1 February 1996.....................   8,840       65         578        10,340    19,823
Retained profit for the financial
  year.................................      --       --          --         4,846     4,846
Capitalization issue (including
  expenses of L24,000).................  (2,073)      --          --            --    (2,073)
Issue of shares........................      70      191          --            --       261
Goodwill written off on acquisition of
  businesses (note 11).................      --     (256)         --        (1,190)   (1,446)
Currency translation adjustment........      --       --          --           (22)     (22)
Transfer...............................      --       --         (12)           12        --
                                         ------     ----         ---        ------    ------
At 31 January 1997.....................   6,837       --         566        13,986    21,389
                                         ======     ====         ===        ======    ======
</TABLE>

     At the end of the year cumulative goodwill written off against reserves in
respect of the acquisition of businesses amounted to L7,447,000.

19. RECONCILIATION OF MOVEMENT IN CONSOLIDATED EQUITY SHAREHOLDERS' FUNDS

<TABLE>
<CAPTION>
                                                               1996        1997
                                                              (L000)      (L000)
                                                              ------      ------
<S>                                                           <C>         <C>
Profit for the financial year...............................   4,923       5,398
Dividends...................................................  (1,089)       (552)
                                                              ------      ------
                                                               3,834       4,846
Issue of shares.............................................  13,432         284
Shares to be issued.........................................     157          --
Expenses of capitalisation issue............................      --         (24)
Goodwill written off........................................  (5,852)     (1,446)
Currency translation adjustment.............................      --         (22)
                                                              ------      ------
Net increase in equity shareholders' funds..................  11,571       3,638
At beginning of year........................................   8,934      20,505
                                                              ------      ------
At end of year..............................................  20,505      24,143
                                                              ======      ======
</TABLE>

                                       85
<PAGE>   87
                               FORWARD GROUP PLC

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

20. NOTES TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS

(a) Reconciliation of operating profit to net cash inflow from operating
activities

<TABLE>
<CAPTION>
                                                               1996      1997
                                                              (L000)    (L000)
                                                              ------    ------
<S>                                                           <C>       <C>
Operating profit............................................   7,976     9,101
Depreciation................................................   2,701     4,694
Profit on sale of tangible fixed assets.....................     (15)     (169)
                                                              ------    ------
                                                              10,662    13,626
Movements in working capital:
(Increase)/decrease in stocks...............................  (1,552)    1,454
(Increase)/decrease in debtors..............................    (778)    2,837
Increase in creditors.......................................   2,335       644
                                                              ------    ------
                                                                   5     4,935
                                                              ------    ------
Net cash inflow from operating activities...................  10,667    18,561
                                                              ======    ======
</TABLE>

(b) Analysis of changes in financing during the year

<TABLE>
<CAPTION>
                                                           SHARE          HIRE
                                                        CAPITAL AND     PURCHASE       BANK
                                                          PREMIUM      OBLIGATIONS     LOAN
                                                          (L000)         (L000)       (L000)
                                                        -----------    -----------    ------
<S>                                                     <C>            <C>            <C>
1996
  At beginning of year................................     1,850          1,115          --
  Acquisition of businesses...........................        --          4,016       4,030
  Net cash flows on financing.........................     7,550         (1,170)       (790)
  Issues of shares for non-cash consideration.........       119             --          --
  Shares to be issued.................................         3             --          --
  Inception of hire purchase contracts................        --            658          --
  Currency adjustment.................................        --             20          --
                                                           -----         ------       -----
                                                           9,522          4,639       3,240
                                                           =====         ======       =====
</TABLE>

<TABLE>
<CAPTION>
                                                           SHARE          HIRE
                                                        CAPITAL AND     PURCHASE       BANK
                                                          PREMIUM      OBLIGATIONS     LOAN
                                                          (L000)         (L000)       (L000)
                                                        -----------    -----------    ------
<S>                                                     <C>            <C>            <C>
1997
  At beginning of year................................     9,522          4,639       3,240
  Acquisition of businesses...........................        --            424          --
  Net cash flows on financing.........................        68         (2,393)       (720)
  Issues of shares for non-cash consideration.........         1             --          --
  Inception of hire purchase contracts................        --          4,548          --
  Currency adjustment.................................        --            (44)         --
                                                           -----         ------       -----
                                                           9,591          7,174       2,520
                                                           =====         ======       =====
</TABLE>

                                       86
<PAGE>   88
                               FORWARD GROUP PLC

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

  (c) Analysis of cash and cash equivalents

<TABLE>
<CAPTION>
                                                     CHANGE              CHANGE
                                            1995     IN YEAR    1996     IN YEAR    1997
                                           (L000)    (L000)    (L000)    (L000)    (L000)
                                           ------    -------   ------    -------   ------
<S>                                        <C>       <C>       <C>       <C>       <C>
Cash at bank and in hand.................      3        786      789       (789)       --
Bank overdrafts..........................   (631)       631       --     (5,841)   (5,841)
                                            ----      -----      ---     ------    ------
                                            (628)     1,417      789     (6,630)   (5,841)
                                            ====      =====      ===     ======    ======
</TABLE>

  (d) Acquisition of businesses

     The investing cash flows arising in respect of acquisitions during the year
ended 31 January 1996 were as follows:

<TABLE>
<CAPTION>
                                                               1996
                                                              (L000)
                                                              ------
<S>                                                           <C>
Ferranti International plc Hybrids Manufacturing and Test
  Division Cash consideration...............................      10
Exacta Circuits Limited
  Cash consideration including costs of acquisition.........   7,904
  Overdraft.................................................     285
  Cash balances.............................................      (8)
                                                               -----
                                                               8,191
                                                               =====
</TABLE>

     The investing cash flows arising in respect of acquisitions during the year
ended 31 January 1997 were as follows:

<TABLE>
<CAPTION>
                                                               1997
                                                              (L000)
                                                              ------
<S>                                                           <C>
Exacta Circuits Limited
  Deferred cash consideration...............................   2,823
GEC-Marconi's hybrid business
  Cash consideration including costs of acquisition.........   2,756
Manchester Circuits Limited
  Cash consideration including costs of acquisition.........     759
  Overdraft.................................................   1,645
TI Technologies (Pty) Limited
  Cash consideration including costs of acquisition.........     518
  Overdraft.................................................     698
  Cash balances.............................................     (15)
                                                               -----
                                                               9,184
                                                               =====
</TABLE>

Further information on the acquisitions is given in note 11.

  (e) Major non-cash transactions

     Fixed asset additions of L4,548,000 (1996: L658,000) were financed by hire
purchase borrowings.

                                       87
<PAGE>   89
                               FORWARD GROUP PLC

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

21. COMMITMENTS

     Capital commitments for which no provision has been made in these financial
statements, are as follows:

<TABLE>
<CAPTION>
                                                               1997
                                                              (L000)
                                                              ------
<S>                                                           <C>
Contracted but not provided for.............................    830
                                                                ===
</TABLE>

Annual commitments under operating leases are as follows:

<TABLE>
<CAPTION>
                                                              LAND AND
                                                              BUILDINGS        OTHER
                                                              ---------        ------
                                                                1997            1997
                                                               (L000)          (L000)
                                                              ---------        ------
<S>                                                           <C>              <C>
Expiring within one year....................................       8             61
Expiring between two and five years.........................      30            180
Expiring in more than five years............................     344             --
</TABLE>

22. PENSIONS

     Exacta Circuits Limited operates a funded defined benefit pension scheme
covering substantially all of its employees. Employer contributions are
determined by a qualified actuary on the basis of triennial valuations using the
projected unit method.

     The most recent full valuation by William M Mercer Limited was as at 5
April 1996. The assumptions which have the most significant effect on the result
of the valuation are those relating to the rate of return on investments and the
rates of increase in salaries and pensions. It was assumed that the investment
returns would be 9% per annum, that salary increases would average 7% per annum,
that present and future pensions would increase at rates of between 3% and 4.5%
per annum and that equity dividend growth would average 5% per annum. The
valuation showed that the market value of the scheme's assets at that date was
L17,593,000 and that the actuarial value of assets represented 110% of the
benefits that has accrued to members, after allowing for expected future
increases in earnings. Group contributions to the scheme in the year were
L955,000.

     As part of its provisional review of the fair value of the net assets of
Exacta Circuits Limited the Group took actuarial advice regarding the current
position of the pension scheme. This highlighted uncertainty concerning the
impact of equalisation of retirement ages. In view of this uncertainty, the
SSAP24 provision of Exacta Circuits Limited of L655,000 at the date of
acquisition was replaced by a provision of the same amount. Following the
valuation as at 5 April 1996 the provision was released.

     In addition, the Group made contributions of L284,000 during the year to
several defined contribution schemes.

                                       88
<PAGE>   90
                               FORWARD GROUP PLC

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

SFAS NO 87 DISCLOSURES (UNAUDITED)

     For the purpose of the disclosure in accordance with US GAAP, the pension
cost of the Exacta Circuits Limited pension scheme has been restated in the
following tables, in accordance with the requirements of SFAS No 87. The funded
status of the scheme, under SFAS No 87 is as follows:

<TABLE>
<CAPTION>
                                                               1997
                                                              (L000)
                                                              ------
<S>                                                           <C>
Projected benefit obligations...............................  19,380
Plan assets at fair value...................................  19,864
                                                              ------
Projected benefit obligations less than plan assets.........    (484)
Unrecognised net gain.......................................   1,099
                                                              ------
Accrued pension at end of year..............................     615
                                                              ======
</TABLE>

     Plan assets consist primarily of investments in UK and overseas equity and
fixed interest securities. The principal assumptions used for SFAS No 87
purposes were as follows:

<TABLE>
<CAPTION>
                                                              PERCENT
                                                              -------
<S>                                                           <C>
Discount rate...............................................    8.5
Long term rate of increase in remuneration..................    6.5
Long term rate of increase in pensions......................    3.5
</TABLE>

     The net periodic pension cost for the pension scheme under SFAS No 87
comprised:

<TABLE>
<CAPTION>
                                                               1997
                                                              (L000)
                                                              -------
<S>                                                           <C>
Service cost -- present value of benefits earned in the
  year......................................................   1,476
Interest cost on projected benefit obligations..............   1,397
Actual return on assets.....................................  (1,893)
Net amortization and deferral...............................     328
Contributions by employees..................................    (513)
                                                              ------
Net periodic pension cost...................................     795
                                                              ======
</TABLE>

23. POST BALANCE SHEET EVENT

     On 26 March 1997 the Recommended Cash Offer for Forward Group PLC by Hicks,
Muse, Tate and Furst Equity Fund III, L.P. was declared unconditional in all
respects and, in due course, the Company will become a wholly owned subsidiary
of PCB Investments plc.

                                       89
<PAGE>   91
                               FORWARD GROUP PLC

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

24. SUBSIDIARY UNDERTAKINGS

     The Company has the following trading subsidiary undertakings:

<TABLE>
<CAPTION>
                              COUNTRY OF
                              PRINCIPAL      CLASS OF
          COMPANY             OPERATION       SHARE      HOLDING       PRINCIPAL ACTIVITY
          -------            ------------   ----------   -------       ------------------
<S>                          <C>            <C>          <C>       <C>
Forward Circuits Limited     England        L1            100%     Manufacture of printed
                                            Ordinary                 circuit boards
Exacta Circuits Limited      Scotland       L1            100%     Manufacture of printed
                                            Ordinary                 circuit boards
Technograph Microcircuits    England        L1            100%     Manufacture of ceramic
  Limited                                   Ordinary                 based microcircuits
Forward Circuits             England        L1            100%     International trading in
  International Limited                     Ordinary                 printed circuit boards
Manchester Circuits Limited  England        L1            100%     Manufacture of printed
                                            Ordinary                 circuit boards
                                            L1            100%
                                            Preferred
                                            Ordinary
                                            L1            100%
                                            Cumulative
                                            redeemable
                                            preference
TI Technologies (Pty)        South Africa   R1            100%     Manufacture of printed
  Limited                                   Ordinary                 circuit boards
Swift International (Pty)    South Africa   R1            100%     Manufacture of printed
  Limited                                   Ordinary                 circuit boards
Exacta Circuits (France)     France         FF 100        100%     Sale of printed circuit
  SARL                                      Ordinary                 boards in France
</TABLE>

25. SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES
    OF AMERICA GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

     The Group's consolidated financial statements are prepared in conformity
with generally accepted accounting principles applicable in the United Kingdom
(UK GAAP), which differ in certain significant respects from those applicable in
the United States of America (US GAAP). These differences, together with the
approximate effects of the adjustments on net profit and equity shareholders'
funds, relate principally to the items set out below:

          (a) Goodwill: Under UK GAAP, goodwill arising from acquisitions is
     written off against equity shareholders' funds. Upon the subsequent
     disposal of the business, goodwill previously written off is reinstated and
     considered in the calculation of the gain or loss on disposal. Under US
     GAAP, goodwill is capitalised and amortised over its estimated useful life.
     For the purpose of calculating the amortisation of goodwill a life of 40
     years has been assumed. Upon the subsequent disposal of the business,
     unamortised goodwill is considered in the calculation of the gain or loss
     on disposal.

          (b) Dividends: Under UK GAAP, proposed dividends on ordinary shares,
     as recommended by the Directors, are deducted from equity shareholders'
     funds and shown as a liability in the balance sheet at the end of the
     period to which they relate. Under US GAAP, such dividends are deducted
     from equity shareholders' funds at the date of declaration of the dividend.

                                       90
<PAGE>   92
                               FORWARD GROUP PLC

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

          (c) Deferred taxation: UK GAAP requires that no provision for deferred
     taxation should be made if there is reasonable evidence that such taxation
     will not be payable in the foreseeable future. Under US GAAP, deferred
     taxation is recognised under the full liability method which permits
     deferred tax assets to be recognised if their realisation is considered
     more likely than not.

          Deferred taxation also arises in relation to the tax effect of other
     US GAAP differences.

          (d) Revaluation of properties: UK GAAP allows periodic revaluations of
     freehold land and buildings and the related depreciation is calculated on
     the revalued amounts. The surplus on revaluation of property is credited
     directly to equity shareholders' funds. Under US GAAP, such revaluations
     are not permitted and depreciation is provided on the original cost.

          (e) Pension costs: Under UK GAAP, the expected cost of pensions is
     charged to the profit and loss account so as to spread the cost of pensions
     over the expected service lives of employees. Surpluses arising from the
     actuarial valuation are similarly spread. Under US GAAP, costs and
     surpluses are also spread over the expected service lives but based on
     prescribed actuarial assumptions, allocation of costs and valuation
     methods, which differ from those used for UK GAAP.

          (f) Cash flows: The principal difference between UK GAAP and US GAAP
     is in respect of classification. Under UK GAAP, the Group presents its cash
     flows for operating activities, returns on investments and servicing of
     finance, taxation, investing activities, and financing activities. US GAAP
     requires only three categories of cash flow activities which are operating,
     investing and financing.

          Cash flows arising from taxation and returns on investments and
     servicing of finance under UK GAAP would, with the exception of dividends
     paid, be included as operating activities under US GAAP; dividend payments
     would be included as a financing activity under US GAAP. In addition, under
     UK GAAP, cash and cash equivalents include short term borrowings which
     under US GAAP would be presented as financing activities.

     Under US GAAP, the following amounts would be reported:

<TABLE>
<CAPTION>
                                                              YEAR ENDED 31 JANUARY
                                                              ----------------------
                                                                1996         1997
                                                               (L000)       (L000)
                                                              ---------    ---------
<S>                                                           <C>          <C>
Net cash provided by operating activities...................     8,594       13,995
Net cash used in investing activities.......................   (12,045)     (16,373)
Net cash provided by financing activities...................     4,237        1,589
                                                               -------      -------
Net increase/(decrease) in cash and cash equivalents........       786         (789)
                                                               =======      =======
Cash and cash equivalents under US GAAP.....................       789           --
                                                               =======      =======
</TABLE>

          (g) Current assets and liabilities: Current assets and liabilities
     under UK GAAP include amounts which fall due after more than one year.
     Under US GAAP such assets would be classified as non-current assets.
     Provisions for liabilities and other charges under UK GAAP include amounts
     due within one year which would be classified as current liabilities under
     US GAAP.

                                       91
<PAGE>   93
                               FORWARD GROUP PLC

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

  Approximate effects on net profit of differences between UK and US GAAP:

<TABLE>
<CAPTION>
                                                               YEAR ENDED 31
                                                                  JANUARY
                                                              ----------------
                                                               1996      1997
                                                              (L000)    (L000)
                                                              ------    ------
<S>                                                           <C>       <C>
Net profit in conformity with UK GAAP.......................  4,923     5,398
Adjustments:
  Goodwill..................................................    (99)     (188)
  Revaluation of properties.................................     13        12
  Pension cost..............................................     35       160
  Tax effect of US GAAP adjustments.........................    (11)      (53)
                                                              -----     -----
Net profit in conformity with US GAAP.......................  4,861     5,329
                                                              =====     =====
</TABLE>

  Approximate effects on equity shareholders' funds of differences between UK
and US GAAP at 31 January:

<TABLE>
<CAPTION>
                                                               1997
                                                              (L000)
                                                              ------
<S>                                                           <C>
Equity shareholders' funds in conformity with UK GAAP.......  24,143
Adjustments:
  Goodwill..................................................   7,690
  Deferred taxation.........................................    (744)
  Revaluation of properties.................................    (566)
  Pension cost..............................................    (615)
  Tax effect of US GAAP adjustments.........................     203
                                                              ------
Equity shareholders' funds in conformity with US GAAP.......  30,111
                                                              ======
</TABLE>

26. COMPANIES ACT 1985

     These consolidated financial statements do not comprise the Company's
statutory accounts within the meaning of Section 240 of the Companies Act 1985
of Great Britain. Statutory accounts have been prepared for each of the years
ended 31 January 1997 and 1996, on which the auditors' reports were unqualified.
The statutory accounts for the year ended 31 January 1996 have been delivered to
the Registrar of Companies for England and Wales. Those for the year ended 31
January 1997 have not yet been delivered.

                                       92
<PAGE>   94

                         REPORT OF INDEPENDENT AUDITORS

To: The Directors
Interconnection Systems (Holdings) Limited

     We have audited the consolidated balance sheets of Interconnection Systems
(Holdings) Limited as at April 4, 1997 and the related consolidated profit and
loss accounts and statements of total recognized gains and losses and cash flows
for the years ended March 29, 1996 and April 4, 1997. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

     We conducted our audits in accordance with United Kingdom auditing
standards which do not differ in any significant respect from United States
generally accepted auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Interconnection Systems (Holdings) Limited as at April 4, 1997, and the
consolidated results of its operations and its consolidated cash flows for the
years ended March 29, 1996 and April 4, 1997 in conformity with accounting
principles generally accepted in the United Kingdom which differ in certain
respects from those followed in the United States (see Note 25 of the Notes to
the Consolidated Financial Statements).

                                            Ernst & Young
                                            Chartered Accountants

Newcastle upon Tyne, England
May 27, 1997

                                       93
<PAGE>   95

                   INTERCONNECTION SYSTEMS (HOLDINGS) LIMITED

                     CONSOLIDATED PROFIT AND LOSS ACCOUNTS
                     (EXPRESSED IN BRITISH POUNDS STERLING)

<TABLE>
<CAPTION>
                                                                            YEAR ENDED
                                                                       ---------------------
                                                                       MARCH 29,    APRIL 4,
                                                                         1996         1997
                                                              NOTES     (L000)       (L000)
                                                              -----    ---------    --------
<S>                                                           <C>      <C>          <C>
Turnover....................................................    2       104,611     141,643
  Cost of sales.............................................             90,170     112,980
                                                                        -------     -------
  Gross profit..............................................             14,441      28,663
  Distribution costs........................................              1,148       1,632
  Administrative expenses...................................              6,913       9,491
                                                                        -------     -------
                                                                          6,380      17,540
  Other operating income....................................                 --          44
                                                                        -------     -------
Operating profit............................................    3         6,380      17,584
  Interest receivable.......................................    6            --         414
  Interest payable..........................................    7          (807)     (1,232)
                                                                        -------     -------
Profit on ordinary activities before taxation...............              5,573      16,766
  Tax on profit on ordinary activities......................    8         4,422       6,874
                                                                        -------     -------
Profit for the year after taxation*.........................              1,151       9,892
  Dividends.................................................    9           500         450
                                                                        -------     -------
Retained profit for the period..............................   20           651       9,442
                                                                        =======     =======
</TABLE>

---------------

* A summary of the significant adjustments to profit for the years that would be
  required if United States generally accepted accounting principles had been
  applied instead of those generally accepted in the United Kingdom is set forth
  in Note 25 of the Notes to the Consolidated Financial Statements.

<TABLE>
<CAPTION>
                                                                     YEAR ENDED
                                                                ---------------------
                                                                MARCH 29,    APRIL 4,
                                                                  1996         1997
                                                                 (L000)       (L000)
                                                                ---------    --------
<S>                                                             <C>          <C>
Note of historical cost profits
  Reported profit on ordinary activities before taxation....       5,573      16,766
  Depreciation charged during the period in respect of the
     excess of valuation over historical cost of revalued
     assets.................................................       1,449       1,500
                                                                 -------     -------
  Historical cost profit on ordinary activities before
     taxation...............................................       7,022      18,266
                                                                 =======     =======
  Historical cost profit on ordinary activities after
     taxation and dividends.................................       2,100      10,942
                                                                 =======     =======
</TABLE>

The Notes to the Consolidated Financial Statements are an integral part of these
                             Financial Statements.

                                       94
<PAGE>   96

                   INTERCONNECTION SYSTEMS (HOLDINGS) LIMITED

          CONSOLIDATED STATEMENTS OF TOTAL RECOGNIZED GAINS AND LOSSES
                     (EXPRESSED IN BRITISH POUNDS STERLING)

<TABLE>
<CAPTION>
                                                                            YEAR ENDED
                                                                       ---------------------
                                                                       MARCH 29,    APRIL 4,
                                                                         1996         1997
                                                              NOTES     (L000)       (L000)
                                                              -----    ---------    --------
<S>                                                           <C>      <C>          <C>
Profit on ordinary activities after taxation................              1,151       9,892
Unrealized surplus on revaluation of freehold land and
  buildings.................................................   10            --      (1,564)
Unrealized surplus on revaluation of plant and machinery....   10            --      23,743
                                                                        -------     -------
Total recognized gains and losses relating to the period....              1,151      32,071
                                                                        =======     =======
</TABLE>

The Notes to the Consolidated Financial Statements are an integral part of these
                             Financial Statements.

                                       95
<PAGE>   97

                   INTERCONNECTION SYSTEMS (HOLDINGS) LIMITED

                           CONSOLIDATED BALANCE SHEET
                     (EXPRESSED IN BRITISH POUNDS STERLING)

<TABLE>
<CAPTION>
                                                                       APRIL 4,
                                                                         1997
                                                              NOTES     (L000)
                                                              -----    --------
<S>                                                           <C>      <C>
Fixed assets
  Tangible assets...........................................   10       70,542
                                                                       -------
Current assets
  Stocks....................................................   11        9,132
  Debtors...................................................   12       24,003
  Cash at bank and in hand..................................   13       26,244
                                                                       -------
                                                                        59,379
Creditors: amounts falling due within one year..............   14      (47,863)
                                                                       -------
Net current (liabilities)/assets............................            11,516
                                                                       -------
Total assets less current liabilities.......................            82,058
Creditors: amounts falling due after more than one year
  Loans.....................................................   16       27,336
  Obligations under finance leases..........................   15        3,203
Accruals and deferred income
  Deferred Government grants................................   18           --
                                                                       -------
                                                                        51,519
                                                                       =======
Capital and reserves*
  Called up share capital...................................   19           --
  Share premium account.....................................   20        4,650
  Revaluation reserve.......................................   20       26,364
  Other reserves............................................   20          216
  Profit and loss account...................................   20       20,289
                                                                       -------
                                                                        51,519
                                                                       =======
</TABLE>

---------------

* A summary of the significant adjustments to capital and reserves that would be
  required if United States generally accepted accounting principles had been
  applied instead of those generally accepted in the United Kingdom is set forth
  in Note 25 of the Notes to the Consolidated Financial Statements.

The Notes to the Consolidated Financial Statements are an integral part of these
                             Financial Statements.

                                       96
<PAGE>   98

                   INTERCONNECTION SYSTEMS (HOLDINGS) LIMITED

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
              (EXPRESSED IN THOUSANDS OF BRITISH POUNDS STERLING)

<TABLE>
<CAPTION>
                                                                            YEAR ENDED
                                                                       ---------------------
                                                                       MARCH 29,    APRIL 4,
                                                                         1996         1997
                                                              NOTES     (L000)       (L000)
                                                              -----    ---------    --------
<S>                                                           <C>      <C>          <C>
Net cash inflow from operating activities...................    3(b)     22,757      33,842
                                                                        -------     -------
Returns on investments and servicing of finance
  Interest paid.............................................               (776)     (1,077)
  Interest received.........................................                 --         414
  Dividends paid to parent company shareholders.............               (500)       (450)
                                                                        -------     -------
Net cash outflow from returns on investments and servicing
  of finance................................................             (1,276)     (1,113)
                                                                        -------     -------
Taxation
  Corporation tax paid......................................             (2,811)     (4,903)
                                                                        -------     -------
Tax paid....................................................             (2,811)     (4,903)
                                                                        -------     -------
Management of liquid resources
  Investment in term deposit................................                 --     (16,000)
                                                                        -------     -------
Net cash outflow from management of liquid resources........                 --     (16,000)
                                                                        -------     -------
Investing activities
  Payments to acquire tangible fixed assets.................            (16,816)    (24,119)
Net cash outflow from investing activities..................            (16,816)    (24,119)
Net cash inflow/(outflow) before financing..................              1,854     (12,293)
                                                                        =======     =======
Financing
  New loans.................................................   16            --     (22,089)
  Repayment of loans........................................   16           682       1,183
  Repayment of finance leases...............................   15           623       1,005
                                                                        -------     -------
Net cash outflow/(inflow) from financing....................              1,305     (19,901)
Increase in cash and cash equivalents.......................   13           549       7,608
                                                                        -------     -------
                                                                          1,854     (12,293)
                                                                        =======     =======
</TABLE>

     The significant differences between the cash flow statement presented above
and that required under United States generally accepted accounting principles
are described in Note 25 of the Notes to the Consolidated Financial Statements.

The Notes to the Consolidated Financial Statements are an integral part of these
                             Financial Statements.

                                       97
<PAGE>   99

                   INTERCONNECTION SYSTEMS (HOLDINGS) LIMITED

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     (EXPRESSED IN BRITISH POUNDS STERLING)

1. ACCOUNTING POLICIES

  Accounting convention

     The financial statements are prepared under the historical cost convention
modified to include the revaluation of certain tangible fixed assets.

     The financial statements are prepared in accordance with applicable United
Kingdom accounting standards.

  Basis of consolidation

     The consolidated financial statements consolidate the accounts of
Interconnection Systems (Holdings) Limited (the "Company") and its subsidiary
undertaking Interconnection Systems Limited (together the "Group"). They do not
include the financial statements of Interconnection Systems Sales Limited as, in
the opinion of the directors, it would be of no real value to the Company's
members in view of the insignificant amounts involved. Interconnection Systems
Sales Limited has not traded since incorporation. The accounting period for both
companies comprises 52 weeks ending on the Friday nearest to March 31.
Periodically a 53 week period will be necessary to realign the accounting period
with the calendar.

  Revenue Recognition

     Revenue is recognized in the period in which goods are dispatched to
customers.

  Goodwill

     Goodwill, both positive and negative, arising on the acquisition of
Interconnection Systems Limited has been taken directly to reserves under "Other
reserves".

  Depreciation

     Depreciation is provided on all tangible fixed assets, at rates calculated
to write off the cost or valuation of each asset evenly over its expected useful
life, as follows:

<TABLE>
<S>                                                           <C>
Freehold buildings..........................................  -- over 40 years
Plant and machinery.........................................  -- over 2 to 10 years
Fixtures and fittings.......................................  -- over 3 to 10 years
</TABLE>

     The part of the annual depreciation charge on revalued assets which relates
to the surplus over cost is transferred from the revaluation reserve to retained
profits.

  Stocks

     Stocks are stated at the lower of cost and net realizable value as follows:

          Costs incurred in bringing each product to its present location and
     condition:

<TABLE>
<S>                                     <C>
Raw materials.........................  -- purchase cost on a first-in, first-out
                                           basis
Work in progress and finished goods...  -- cost of direct materials and labor plus
                                           attributable overheads based on a normal
                                           level of activity
</TABLE>

                                       98
<PAGE>   100
                   INTERCONNECTION SYSTEMS (HOLDINGS) LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

     Net realizable value is based on estimated selling price less further costs
expected to be incurred to completion and disposal.

  Finance leases

     Assets held under finance leases are capitalized in the balance sheet and
are depreciated over their useful lives. The interest element of rental
obligations is charged to the profit and loss account over the period of the
lease in accordance with Statement of Standard Accounting Practice 21.

  Research and development

     Research and development expenditure is written off as incurred.

  Foreign currencies

     Transactions in foreign currencies are recorded at the rate ruling at the
date of the transaction. Monetary assets and liabilities denominated in foreign
currencies are retranslated at the rate of exchange ruling at the balance sheet
date. All differences are taken to the profit and loss account.

  Deferred taxation

     Deferred taxation is provided using the liability method on all timing
differences to the extent that they are expected to reverse in the future
without being replaced, calculated at the rate at which it is estimated that
taxation will be payable.

  Pensions

     Interconnection Systems Limited operates a defined benefit pension scheme
which is funded by the payment of contributions to a separately administered
fund.

     Contributions to the fund are charged to the profit and loss account so as
to spread the cost of pensions over the employees' working lives.

     Future variations in pension cost, which are identified as a result of an
actuarial valuation, will be amortised over the expected remaining lives of
current employees in the scheme. Differences between the amounts funded and the
amounts charged to the profit and loss account will be treated as either
provisions or prepayments in the balance sheet.

2. TURNOVER

     Turnover represents the net invoiced sales, excluding value added tax, of
goods sold during the period.

     The Company's operations are all located in the United Kingdom and its
turnover and pre-tax profit is attributable to one continuing activity, the
manufacture of printed circuit boards.

                                       99
<PAGE>   101
                   INTERCONNECTION SYSTEMS (HOLDINGS) LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

     An analysis of turnover by geographical market is given below:

<TABLE>
<CAPTION>
                                                                   YEAR ENDED
                                                              --------------------
                                                              MARCH 29,   APRIL 4,
                                                                1996        1997
                                                               (L000)      (L000)
                                                              ---------   --------
<S>                                                           <C>         <C>
United Kingdom..............................................    55,236     61,209
Belgium.....................................................    11,539     16,915
Germany.....................................................    10,931     19,524
Sweden......................................................     8,065     21,630
Other Continental Europe....................................    18,840     22,365
                                                               -------    -------
                                                               104,611    141,643
                                                               =======    =======
</TABLE>

     Of the total turnover, 16.3% related to one customer (1996: 17.3%) and
15.8% to another (1996: 11.5%).

3. OPERATING PROFIT

(a) This is stated after charging/(crediting):

<TABLE>
<CAPTION>
                                                                   YEAR ENDED
                                                              --------------------
                                                              MARCH 29,   APRIL 4,
                                                                1996        1997
                                                               (L000)      (L000)
                                                              ---------   --------
<S>                                                           <C>         <C>
Directors' remuneration (see note 4)........................       42         192
Auditors' remuneration for audit services...................       31          35
Auditors' remuneration for non audit services...............       63          75
Depreciation of tangible fixed assets.......................   17,302      19,123
Exceptional depreciation charge.............................       --          --
Research and development expenditure........................      549         475
Exchange gains..............................................       41        (431)
Hire of plant and machinery.................................       42          18
Regional Selective Assistance...............................     (600)       (600)
                                                               ======      ======
</TABLE>

(b) Reconciliation of operating profit to net cash inflow from operating
activities

<TABLE>
<CAPTION>
                                                                   YEAR ENDED
                                                              ---------------------
                                                              MARCH 29,    APRIL 4,
                                                                1996         1997
                                                               (L000)       (L000)
                                                              ---------    --------
<S>                                                           <C>          <C>
Operating profit............................................     6,380      17,584
Depreciation................................................    17,302      19,123
Loss on disposal of tangible fixed assets...................        --          --
Government grants released..................................      (600)       (600)
Increase in debtors.........................................    (2,691)     (6,632)
Increase in stocks..........................................    (3,301)     (1,685)
Increase in creditors.......................................     5,667       6,052
                                                               -------      ------
Net cash inflow from operating activities...................    22,757      33,842
                                                               =======      ======
</TABLE>

                                       100
<PAGE>   102
                   INTERCONNECTION SYSTEMS (HOLDINGS) LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

4. DIRECTORS' REMUNERATION

<TABLE>
<CAPTION>
                                                                   YEAR ENDED
                                                              ---------------------
                                                              MARCH 29,    APRIL 4,
                                                                1996         1997
                                                               (L000)       (L000)
                                                              ---------    --------
<S>                                                           <C>          <C>
Fees........................................................        --           --
Other emoluments (including pension contributions)..........        42          192
                                                               -------     --------
                                                                    42          192
                                                               =======     ========
Emoluments of the chairman (excluding pension contributions)
  were:.....................................................   L23,547     L  9,078
                                                               =======     ========
Emoluments of the highest paid director (excluding pension
  contributions) were:......................................   L23,547     L181,413
                                                               =======     ========
</TABLE>

     Directors emoluments (excluding pension contributions) fell within the
following ranges:

<TABLE>
<CAPTION>
                                                YEAR ENDED
                                           ---------------------
                                           MARCH 29,    APRIL 4,
                                             1996         1997
                                           ---------    --------
<S>                                        <C>          <C>
LNil -- L5,000                                   1         --
L5,001 -- L10,000                               --          1
L15,001 -- L20,000                               1         --
L20,001 -- L25,000                               1         --
L180,001 -- L185,000                            --          1
</TABLE>

5. STAFF COSTS

<TABLE>
<CAPTION>
                                                                   YEAR ENDED
                                                              ---------------------
                                                              MARCH 29,    APRIL 4,
                                                                1996         1997
                                                               (L000)       (L000)
                                                              ---------    --------
<S>                                                           <C>          <C>
Wages and salaries..........................................     19,320     26,429
Social security costs.......................................      1,706      2,185
Other pension costs.........................................        232        212
                                                               --------     ------
                                                                 21,258     28,826
                                                               ========     ======
</TABLE>

     The average weekly number of employees during the period was made up as
follows:

<TABLE>
<CAPTION>
                                                                     YEAR ENDED
                                                                ---------------------
                                                                MARCH 29,    APRIL 4,
                                                                  1996         1997
                                                                ---------    --------
<S>                                                             <C>          <C>
Sales and administration....................................         78          67
Manufacturing...............................................      1,050       1,332
                                                                  -----       -----
                                                                  1,128       1,399
                                                                  =====       =====
</TABLE>

                                       101
<PAGE>   103
                   INTERCONNECTION SYSTEMS (HOLDINGS) LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

6. INTEREST RECEIVABLE

<TABLE>
<CAPTION>
                                                                     YEAR ENDED
                                                                ---------------------
                                                                MARCH 29,    APRIL 4,
                                                                  1996         1997
                                                                 (L000)       (L000)
                                                                ---------    --------
<S>                                                             <C>          <C>
Bank deposit interest.......................................        --         414
                                                                   ===         ===
</TABLE>

7. INTEREST PAYABLE

<TABLE>
<CAPTION>
                                                                     YEAR ENDED
                                                                ---------------------
                                                                MARCH 29,    APRIL 4,
                                                                  1996         1997
                                                                 (L000)       (L000)
                                                                ---------    --------
<S>                                                             <C>          <C>
Bank overdraft..............................................        141          10
Other loans wholly repayable within five years (net of
  rebate)...................................................        389         478
Other loans not wholly repayable within five years..........         77         544
Loan stock..................................................        200         200
                                                                  -----       -----
Other interest..............................................         --          --
                                                                  -----       -----
                                                                    807       1,232
                                                                  =====       =====
</TABLE>

8. TAX ON PROFIT ON ORDINARY ACTIVITIES

<TABLE>
<CAPTION>
                                                                     YEAR ENDED
                                                                ---------------------
                                                                MARCH 29,    APRIL 4
                                                                  1996         1997
                                                                 (L000)       (L000)
                                                                ---------    --------
<S>                                                             <C>          <C>
The taxation charge is made up as follows:
Based on the profit for the period
Corporation tax at 33%......................................      4,422       6,463
Deferred taxation...........................................         --          --
                                                                  -----       -----
                                                                  4,422       6,463
Corporation tax under/(over) provided in previous Periods...         --         411
                                                                  -----       -----
                                                                  4,422       6,874
                                                                  =====       =====
</TABLE>

     If full recognition had been made in respect of deferred taxation for the
period in respect of capital allowances in advance of depreciation and other
timing differences the taxation charge would have decreased by L2,252,930 (1996:
decreased by L1,466,000).

9. DIVIDENDS

<TABLE>
<CAPTION>
                                                                          YEAR ENDED
                                                                     ---------------------
                                                                     MARCH 29,    APRIL 4,
                                                                       1996         1997
                                                                      (L000)       (L000)
                                                                     ---------    --------
<S>       <C>                                                        <C>          <C>
Ordinary  -- interim paid..........................................     500         450
          -- final proposed........................................      --          --
                                                                        ---         ---
                                                                        500         450
                                                                        ===         ===
</TABLE>

                                       102
<PAGE>   104
                   INTERCONNECTION SYSTEMS (HOLDINGS) LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

10. TANGIBLE FIXED ASSETS

<TABLE>
<CAPTION>
                                                                      PLANT AND
                                                                      MACHINERY
                                                    FREEHOLD LAND    AND FIXTURES
                                                    AND BUILDINGS    AND FITTINGS     TOTAL
                                                       (L000)           (L000)       (L000)
                                                    -------------    ------------    -------
<S>                                                 <C>              <C>             <C>
Cost or valuation:
At March 31, 1995.................................      5,711           46,217        51,928
Additions.........................................      2,710           22,834        25,544
                                                       ------          -------       -------
At March 29, 1996.................................      8,421           69,051        77,472
Additions.........................................      8,605           18,986        27,591
Revaluation.......................................     (1,957)              --        (1,957)
Reclassification..................................       (960)             960            --
                                                       ------          -------       -------
At April 4, 1997..................................     14,109           88,997       103,106
                                                       ------          -------       -------
Depreciation:
At March 31, 1995.................................         54           20,221        20,275
Provided during the period........................        947           16,355        17,302
                                                       ------          -------       -------
At March 29, 1996.................................      1,001           36,576        37,577
Provided during the period........................        352           18,771        19,123
Revaluation.......................................       (393)         (23,743)      (24,136)
Reclassification..................................       (960)             960            --
                                                       ------          -------       -------
At April 4, 1997..................................         --           32,564        32,564
                                                       ------          -------       -------
Net book value
At March 29, 1996.................................      7,420           32,475        39,895
                                                       ======          =======       =======
At April 4, 1997..................................     14,109           56,433        70,542
                                                       ======          =======       =======
</TABLE>

     The historical cost of assets included at valuation is as follows:

<TABLE>
<CAPTION>
                                                                       PLANT AND
                                                                       MACHINERY
                                                     FREEHOLD LAND    AND FIXTURES
                                                     AND BUILDINGS    AND FITTINGS    TOTAL
                                                        (L000)           (L000)       (L000)
                                                     -------------    ------------    ------
<S>                                                  <C>              <C>             <C>
Historical cost:
At March 31, 1995 and March 29, 1996...............      3,685           39,425       43,110
Historical cost of additions revalued in Period....      2,796           40,684       43,480
                                                         -----           ------       ------
At April 4, 1997...................................      6,481           80,109       86,590
                                                         =====           ======       ======
Depreciation based on cost:
At March 31, 1995..................................        160           18,431       18,591
Provided during the period.........................         83            6,504        6,587
                                                         -----           ------       ------
At March 29, 1996..................................        243           24,935       25,178
Provided during the period.........................        131           17,474       17,605
Depreciation on prior year asset additions revalued
  in period........................................         48            8,258        8,306
                                                         -----           ------       ------
At April 4, 1997...................................        422           50,667       51,089
                                                         =====           ======       ======
</TABLE>

                                       103
<PAGE>   105
                   INTERCONNECTION SYSTEMS (HOLDINGS) LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

     Included in the valuation of freehold land and buildings is land valued at
L670,000 which is not depreciated.

     The net book value within plant and machinery and fixtures and fittings in
respect of assets held under finance leases and hire purchase contracts is as
follows:

<TABLE>
<CAPTION>
                                                                 APRIL 4,
                                                                   1997
                                                                  (L000)
                                                                 --------
 <S>                                                             <C>
 Plant and machinery.........................................     2,936
                                                                  =====
 Fixtures and fittings.......................................        --
                                                                  =====
</TABLE>

     The freehold land and buildings and all of the plant and machinery and
fixtures and fittings were revalued for existing use at depreciated replacement
cost on November 1, 1994 by Weatherall, Green & Smith (Chartered Surveyors). The
freehold land and buildings valuation of L5,600,000 resulted in a valuation
surplus of L315,000. The plant and machinery and fixtures and fittings valuation
of L28,271,000 resulted in a valuation surplus of L5,727,000.

     The freehold land and buildings and all of the plant and machinery and
fixtures and fittings at the South Shields plant excluding computer software
were revalued for existing use at depreciated replacement cost on April 1, 1997
by Weatherall, Green & Smith (Chartered Surveyors). The South Shields freehold
land and buildings valuation of L6,550,000 resulted in a valuation deficit of
L1,564,000. The South Shields plant and machinery and fixtures and fittings
valuation of L53,685,975 resulted in a valuation surplus of L23,743,000. If the
revalued assets were sold at their valuation a taxation liability of L8,720,000
would arise.

11. STOCKS

<TABLE>
<CAPTION>
                                                              APRIL 4,
                                                                1997
                                                               (L000)
                                                              --------
<S>                                                           <C>
Raw materials and consumables...............................   5,401
Work in progress............................................   2,492
Finished goods for resale...................................   1,239
                                                               -----
                                                               9,132
                                                               =====
</TABLE>

12. DEBTORS

<TABLE>
<CAPTION>
                                                              APRIL 4,
                                                                1997
                                                               (L000)
                                                              --------
<S>                                                           <C>
Trade debtors...............................................   20,910
Other debtors...............................................    2,499
Prepayments and accrued income..............................      594
                                                               ------
                                                               24,003
                                                               ======
</TABLE>

                                       104
<PAGE>   106
                   INTERCONNECTION SYSTEMS (HOLDINGS) LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

13. CASH AND CASH EQUIVALENTS

     Analysis of balances as shown in the consolidated balance sheet and changes
during the periods:

<TABLE>
<CAPTION>
                                                                                 CHANGE
                                                           1995       1996      IN PERIOD
               YEAR ENDED MARCH 29, 1996                  (L000)     (L000)      (L000)
               -------------------------                  -------    -------    ---------
<S>                                                       <C>        <C>        <C>
Cash at bank and in hand................................   2,087      2,636         549
                                                           =====     ======      ======
</TABLE>

<TABLE>
<CAPTION>
                                                                                 CHANGE
                                                           1996       1997      IN PERIOD
                YEAR ENDED APRIL 4, 1997                  (L000)     (L000)      (L000)
                ------------------------                  -------    -------    ---------
<S>                                                       <C>        <C>        <C>
Cash at bank and in hand................................   2,636     10,244       7,608
Short-term deposits.....................................      --     16,000      16,000
                                                           -----     ------      ------
                                                           2,636     26,244      23,608
                                                           =====     ======      ======
</TABLE>

     Included within liquid resources are term deposits of less than one year.

14. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

<TABLE>
<CAPTION>
                                                              APRIL 4,
                                                                1997
                                                               (L000)
                                                              --------
<S>                                                           <C>
Current installment due on loan (note 16)...................    4,183
Trade creditors.............................................   21,021
Amounts under finance leases (note 15)......................    1,032
Current corporation tax.....................................    7,233
Other taxes and social security costs.......................      702
Other creditors.............................................      361
Accruals....................................................   13,331
                                                               ------
                                                               47,863
                                                               ======
</TABLE>

15. OBLIGATIONS UNDER FINANCE LEASES AND HIRE PURCHASE CONTRACTS

<TABLE>
<CAPTION>
                                                              APRIL 4,
                                                                1997
                                                               (L000)
                                                              --------
<S>                                                           <C>
Amounts payable:
  Within one year...........................................   1,371
  In two to five years......................................   3,654
                                                               -----
                                                               5,025
Less: finance charges allocated to future periods...........     790
                                                               -----
                                                               4,235
                                                               =====
Finance leases and hire purchase contracts are analyzed as
  follows:
  Current obligations (note 14).............................   1,032
  Noncurrent obligations....................................   3,203
                                                               -----
                                                               4,235
                                                               =====
</TABLE>

                                       105
<PAGE>   107
                   INTERCONNECTION SYSTEMS (HOLDINGS) LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

     Analysis of changes in finance leases and hire purchase contracts:

<TABLE>
<CAPTION>
                                                              APRIL 4,
                                                                1997
                                                               (L000)
                                                              --------
<S>                                                           <C>
Opening balance.............................................    5,086
Inception of finance lease contracts........................      154
Capital element on finance lease rental payments............   (1,005)
                                                               ------
Closing balance.............................................    4,235
                                                               ======
</TABLE>

16. LOANS

<TABLE>
<CAPTION>
                                                              APRIL 4,
                                                                1997
                           GROUP                               (L000)
                           -----                              --------
<S>                                                           <C>
Wholly repayable within five years:
  Bank loan Bank of Scotland(1).............................    3,500
  Loan stock................................................    2,000
  European Coal and Steel Community (ECSC) loan(1)..........      125
  European Coal and Steel Community (ECSC) loan(2)..........    3,000
  European Coal and Steel Community (ECSC) loan(3)..........    6,000
Not wholly repayable within five years:
  Medium term loan at 1.75% over Libor per annum repayable
     in 80 quarterly installments of L14,375 from June 28,
     1991...................................................      805
  Bank loan Barclays repayable in 10 six monthly
     installments of L450,000 commencing July 31, 1999......    6,500
  Bank loan Bank of Scotland(2) repayable in 10 six monthly
     installments of L450,000 commencing July 31, 1999......    6,500
  DTI loan at variable interest rates repayable in one
     installment on April 15, 2016..........................    2,431
  English Partnerships loan at variable interest rates
     repayable in one installment on September 30, 2016.....      658
                                                               ------
                                                               31,519
Less: included in current liabilities (see note 14).........   (4,183)
                                                               ------
                                                               27,336
                                                               ======
For loans not wholly repayable within five years the amounts
  repayable by installments are:
  Within five years.........................................    8,090
  After five years..........................................    8,804
                                                               ------
                                                               16,894
                                                               ======
</TABLE>

                                       106
<PAGE>   108
                   INTERCONNECTION SYSTEMS (HOLDINGS) LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

<TABLE>
<CAPTION>
                                                                1997
                                                               (L000)
                                                              --------
<S>                                                           <C>
Loans are repayable as follows:
Amounts falling due: --
  Within one year...........................................    4,183
  Between one and two years.................................    3,058
  Between two and five years................................   15,474
  In five years or more.....................................    8,804
                                                               ------
                                                               31,519
                                                               ======
</TABLE>

     The first ECSC loan is secured by a first fixed charge over Interconnection
Systems Limited's tangible fixed assets and book debts and a floating charge
over its other assets.

     The second ECSC loan is secured by chattel mortgages over Interconnection
Systems Limited's plant and machinery, assignment of the book debts insurance
policy and assignment of key persons' life policies.

     The first Bank of Scotland loan is secured by a fixed and floating charge
over all of Interconnection Systems Limited's assets.

     The medium term loan is secured by a fixed charge over Interconnection
Systems Limited's freehold land and buildings.

     The second Bank of Scotland loan, the Barclays loan and the third ECSC loan
are secured by a first charge over the assets of Interconnection Systems Limited
excluding the property at Balliol Business Park and excluding assets acquired
under finance leases, and a second charge over the property at Balliol Business
Park.

     The DTI loan and the English Partnerships' loan are secured by a first
charge over the property at Balliol Business Park.

     The loan stock is unsecured. The loan stock holders have indicated that
redemption will not be sought before April 5, 1998.

     An analysis of changes in loan financing is as follows:

<TABLE>
<CAPTION>
                                                              MARCH 29,    APRIL 4,
                                                                1996         1997
                                                               (L000)       (L000)
                                                              ---------    --------
<S>                                                           <C>          <C>
Opening balance.............................................   11,295       10,613
New loans raised............................................       --       22,089
Repayment of loans..........................................     (682)      (1,183)
                                                               ------       ------
Closing balance.............................................   10,613       31,519
                                                               ======       ======
</TABLE>

                                       107
<PAGE>   109
                   INTERCONNECTION SYSTEMS (HOLDINGS) LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

17. DEFERRED TAXATION

     Deferred taxation provided in the financial statements and the amounts not
provided are as follows:

<TABLE>
<CAPTION>
                                                                            NOT
                                                              PROVIDED    PROVIDED
                                                              --------    --------
                                                              APRIL 4,    APRIL 4,
                                                                1997        1997
                                                               (L000)      (L000)
                                                              --------    --------
<S>                                                           <C>         <C>
Capital allowances in advance of depreciation...............     --           725
Other timing differences....................................     --        (2,978)
Taxation on valuation surplus...............................     --         8,720
                                                                 --        ------
                                                                 --         6,467
                                                                 ==        ======
</TABLE>

     The directors consider that the valuation surplus will not be realized in
the foreseeable future and therefore no provision for deferred tax on the
valuation surplus has been made.

18. DEFERRED GOVERNMENT GRANTS

<TABLE>
<CAPTION>
                                                                   YEAR ENDED
                                                              ---------------------
                                                              MARCH 29,    APRIL 4,
                                                                1996         1997
                                                               (L000)       (L000)
                                                              ---------    --------
<S>                                                           <C>          <C>
Opening balance.............................................    1,200         600
Received in the period......................................       --          --
Released during the period..................................     (600)       (600)
                                                                -----        ----
Closing balance.............................................      600          --
                                                                =====        ====
</TABLE>

19. SHARE CAPITAL

     The authorised and allotted, called up and fully paid share capital at
March 29, 1996 and April 4, 1997 was L200, consisting of 200 ordinary shares of
L1 each.

20. RECONCILIATION OF SHAREHOLDERS' FUNDS AND MOVEMENTS ON RESERVES

<TABLE>
<CAPTION>
                                                    SHARE                            PROFIT AND
                                          SHARE    PREMIUM   REVALUATION    OTHER       LOSS
                                         CAPITAL   ACCOUNT     RESERVE     RESERVE    ACCOUNT     TOTAL
                                         (L000)    (L000)      (L000)      (L000)      (L000)     (L000)
                                         -------   -------   -----------   -------   ----------   ------
<S>                                      <C>       <C>       <C>           <C>       <C>          <C>
At March 31, 1995......................     --      4,650       7,134        216        7,247     19,247
Transfer to retained profits...........     --         --      (1,449)        --        1,449         --
Retained profit for the period.........     --         --          --         --          651        651
                                           ---      -----      ------        ---       ------     ------
At March 29, 1996......................     --      4,650       5,685        216        9,347     19,898
Revaluation during the period..........     --         --      22,179         --           --     22,179
Transfer to retained profits...........     --         --      (1,500)        --        1,500         --
Retained profit for the period.........     --         --          --         --        9,442      9,442
                                           ---      -----      ------        ---       ------     ------
At April 4, 1997.......................     --      4,650      26,364        216       20,289     51,519
                                           ===      =====      ======        ===       ======     ======
</TABLE>

                                       108
<PAGE>   110
                   INTERCONNECTION SYSTEMS (HOLDINGS) LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

21. CAPITAL COMMITMENTS

<TABLE>
<CAPTION>
                                                              APRIL 4,
                                                                1997
                                                               (L000)
                                                              --------
<S>                                                           <C>
Contracted for but not provided.............................       --
                                                               ======
Authorized but not contracted for...........................   32,429
                                                               ======
</TABLE>

22. PENSION COMMITMENTS

     Interconnection Systems Limited operates a defined benefit pension scheme
which is funded by the payment of contributions to a separately administered
fund.

     The contributions to the scheme are determined on behalf of the company
with the advice of an independent qualified actuary on the basis of a triennial
valuation using the Projected Unit Method. The most recent valuation was carried
out as at January 1, 1996. The actuary's valuation used the following main
assumptions:

<TABLE>
<S>                                                           <C>
Long term investment return.................................  8.5% per annum
Increase in pensionable salaries............................  6.5% per annum
Increase in pensions in payment.............................  3.0% per annum
</TABLE>

     This valuation showed that the market value of the Scheme's assets at
January 1, 1996 amounted to L5,660,314 and the actuarial value was sufficient to
cover 103% of the benefits that had accrued to members after projecting
pensionable salaries to the assumed date of retirement or death.

     Included within accruals under "Creditors -- amounts falling due within one
year" is a pension scheme accrual of L515,877.

     The net periodic pension cost for each fiscal year is as follows:

<TABLE>
<CAPTION>
                                                              MARCH 29,    APRIL 4,
                                                                1996         1997
                                                                  L           L
                                                              ---------    --------
<S>                                                           <C>          <C>
Service cost................................................     176          263
Interest cost...............................................     385          443
Actual return on plan assets................................    (830)        (509)
Net amortization and deferral...............................     375          (57)
                                                                ----         ----
Net periodic pension cost...................................     106          140
                                                                ====         ====
</TABLE>

23. DIRECTORS' INTERESTS

     I H Bradbury has an interest in payments of L389,933 (1996 -- L383,640)
made by Interconnection Systems Limited to Interconnection Systems (Holdings)
Limited in the period ended 4 April 1997 in respect of consultancy services
provided to Interconnection Systems Limited by I H Bradbury.

     In addition, the company purchased a property during the year at its market
value of L145,000 from T P Robinson, a director of Interconnection Systems
Limited and Interconnection Systems (Holdings) Limited.

                                       109
<PAGE>   111
                   INTERCONNECTION SYSTEMS (HOLDINGS) LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

24. COMPANIES ACT 1985

     These financial statements do not comprise the Company's statutory accounts
within the meaning of section 240 of the Companies Act 1985 of Great Britain.
Statutory accounts for the year ended March 29, 1996, have been, and for the
year ended April 4, 1997, will be, delivered to the Registrar of Companies for
England and Wales. The auditors' reports on these accounts were unqualified.

25. DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES GENERALLY ACCEPTED
    ACCOUNTING PRINCIPLES

     The Group's consolidated financial statements are prepared in accordance
with accounting principles generally accepted in the United Kingdom ("UK GAAP")
which differ from United States generally accepted accounting principles ("US
GAAP"). The significant differences as they apply to the Group are summarized
below.

  Pension costs

     The Group provides for the cost of retirement benefits based upon
consistent percentages of employees' pensionable pay as recommended by
independent qualified actuaries. US GAAP require that the projected benefit
obligation (pension liability) be matched against the fair value of the plan's
assets and be adjusted to reflect any unrecognized obligations or assets in
determining the pension cost or credit for the year. For the purposes of the
reconciliations below, US GAAP have been adopted as of April 1, 1995. The
Company has not implemented FAS 87 as of the effective date specified in the
standard for a foreign plan (fiscal years beginning after December 15, 1988) due
to the unavailability of actuarial data. A portion of the transition liability
at April 1, 1995 has been allocated to shareholders' funds based on a ratio of
6/15, being the number of years elapsed between the effective date of FAS 87 and
April 1, 1995 over the 15 year period being used to amortize the transition
liability.

     Summary of principal assumptions made by the actuary:

<TABLE>
<CAPTION>
                                                              MARCH 29,   APRIL 4,
                                                                1996        1997
                                                                  %          %
                                                              ---------   --------
<S>                                                           <C>         <C>
Discount rate...............................................     9.0%       8.5%
Salary growth...............................................     7.0        6.5
Long-term return on assets..................................     9.0        9.0
Pension increases...........................................     3.0        3.0
</TABLE>

     The following table details the funded status of the plan under US GAAP:

<TABLE>
<CAPTION>
                                                              APRIL 4,
                                                                1997
                                                               (L000)
                                                              --------
<S>                                                           <C>
Vested benefit obligation...................................   5,800
Accrued benefit obligation..................................   5,800
Projected benefit obligation................................   6,520
Assets at market value......................................   6,368
Funded status...............................................    (152)
Unrecognized transition asset...............................    (395)
Other unrecognised net loss.................................     787
Prepaid pension cost........................................     240
</TABLE>

     Amounts funded to the pension are primarily invested in equity and fixed
income securities.

                                       110
<PAGE>   112
                   INTERCONNECTION SYSTEMS (HOLDINGS) LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

  Goodwill and negative goodwill

     Under UK GAAP, goodwill and negative goodwill arising on acquisitions is
set off against or credited to shareholders' funds in the year of acquisition.
Under US GAAP, such goodwill would be capitalized and amortized over its
estimated useful life which in the case of the acquisition of Interconnection
Systems Limited is estimated to be 10 years. Under US GAAP, negative goodwill
would be eliminated by reducing the value of the interest in the noncurrent
assets acquired.

     Accordingly, under US GAAP the carrying value of the additional 20%
interest in the tangible fixed assets of Interconnection Systems Limited
acquired in 1994 would have been reduced by L1,067,000 and subsequent
depreciation would have been reduced by L201,000 per annum.

  Revaluation of fixed assets

     Under UK GAAP, the Group's tangible fixed assets are carried at valuations
and depreciation is computed based on the revalued amounts. Under US GAAP, such
revaluations are not permitted and all tangible assets would be carried at cost
subject to any impairment write down and the depreciation charge would be based
on such carrying amount. The gain or loss arising on the disposal of tangible
assets under US GAAP would differ from that arising under UK GAAP by the amount
of the revaluation gain thus realized, which in the years ended March 29, 1996
and April 4, 1997 is not material.

  Deferred taxation

     Under UK GAAP, deferred taxation is provided using the liability method on
all timing differences to the extent that they are expected to reverse in the
future without being replaced, calculated at the rate at which it is estimated
that taxation will be payable. Under US GAAP, deferred taxation would be
computed on all temporary differences between the tax and book bases of assets
and liabilities which will result in taxable or tax deductible amounts in future
years. Deferred taxation assets would be recognized to the extent that it is
more likely than not that they will be realized.

     Deferred taxation also arises in relation to the tax effect of other UK
GAAP to US GAAP adjustments.

  Approximate effects on net income of differences between UK GAAP and US GAAP:

<TABLE>
<CAPTION>
                                                                    YEAR ENDED
                                                              ----------------------
                                                              MARCH 29,    APRIL 4,
                                                                1996         1997
                                                               (L000)       (L000)
                                                              ---------    ---------
<S>                                                           <C>          <C>
Profit for the year as reported in the consolidated profit
  and loss account..........................................    1,151        9,892
Pension costs...............................................       58           77
Amortization of Goodwill....................................      (84)         (84)
Depreciation of tangible fixed assets.......................    1,634        1,685
Deferred taxation -- methodology............................    1,858          787
                   -- on adjustments........................      (20)         (25)
                                                                -----        -----
Net income for the year as adjusted to accord with US
  GAAP......................................................    4,597       12,332
                                                                =====        =====
</TABLE>

                                       111
<PAGE>   113
                   INTERCONNECTION SYSTEMS (HOLDINGS) LIMITED

         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                     (EXPRESSED IN BRITISH POUNDS STERLING)

  Approximate effects on shareholders' funds of differences between UK GAAP and
US GAAP:

<TABLE>
<CAPTION>
                                                                    YEAR ENDED
                                                              ----------------------
                                                              MARCH 29,    APRIL 4,
                                                                1996         1997
                                                               (L000)       (L000)
                                                              ---------    ---------
<S>                                                           <C>          <C>
Shareholders' funds as reported in the consolidated balance
  sheet.....................................................   19,898        51,519
Intangible fixed assets -- goodwill:
  Cost......................................................      840           840
  Amortization..............................................     (472)         (556)
Tangible fixed assets:
  Cost......................................................   (4,076)       (2,304)
  Amortization..............................................   (2,491)      (24,942)
Current assets/liabilities:
  Pension costs.............................................      679           756
  Deferred taxation -- methodology..........................    1,466         2,253
                     -- on adjustments......................     (224)         (249)
Provisions for liabilities and charges:
  Deferred taxation -- methodology..........................       --            --
                     -- on adjustments......................       --            --
                                                               ------       -------
Shareholders' equity as adjusted to accord with US GAAP.....   15,620        27,317
                                                               ======       =======
</TABLE>

  Consolidated statement of cash flows

     The consolidated statement of cash flows prepared under UK GAAP presents
substantially the same information as that required under US GAAP. The
statements differ however with regard to the classification of items within the
statements and as regards the definition of cash and cash equivalents.

     Under US GAAP, cash and cash equivalents would not include bank overdrafts.
Under UK GAAP, cash flows are presented separately for operating activities,
returns on investments and servicing of finance, taxation, investing activities
and financing. US GAAP require only three categories of cash flow activity to be
reported; operating, investing and financing. Cash flows from taxation and
returns on investments and servicing of finance shown under UK GAAP would be
included as operating activities under US GAAP.

     The categories of cash flow activity under US GAAP can be summarized as
follows:

<TABLE>
<CAPTION>
                                                                   YEAR ENDED
                                                              --------------------
                                                              MARCH 29,   APRIL 4,
                                                                1996        1997
                                                               (L000)      (L000)
                                                              ---------   --------
<S>                                                           <C>         <C>
Cash inflow from operating activities.......................    18,670     27,826
Cash outflow on investing activities........................   (16,816)   (24,119)
Cash (outflow)/inflow from financing activities.............    (1,305)    19,901
                                                               -------    -------
Increase in cash and cash equivalents.......................       549     23,608
Cash and cash equivalents:
  Opening balance...........................................     2,087      2,636
                                                               -------    -------
  Closing balance...........................................     2,636     26,244
                                                               =======    =======
</TABLE>

                                       112
<PAGE>   114

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON AUDITING AND FINANCIAL
        DISCLOSURE

     Subsequent to the acquisition of Circo Craft, the Company dismissed the
former accountants and on January 7, 1997, the Company named Coopers & Lybrand,
L.L.P., the accountants for Viasystems Group, Inc. and Viasystems, Inc., as the
auditor of Circo Craft. The former accountants report did not contain an adverse
opinion or disclaimer of opinion nor was it modified as to an uncertainty, audit
scope, or accounting principle. Such change to the accountant was approved by
the stockholder of Circo Craft. There was no disagreement with the former
accountant on any matter which, if not resolved to the satisfaction of the
former accountant, would have caused the former accountant to make reference to
the subject matter of the disagreement in connection with their reports.

     Subsequent to the Acquisition of Forward Group and Chips, the Company
dismissed the former accountants and on November 12, 1997, the Company named
Coopers & Lybrand, L.L.P., the accountants for Viasystems Group, Inc. and
Viasystems, Inc., as the auditor of Forward Group and Chips. The former
accountants' reports did not contain an adverse opinions or disclaimers of
opinion nor were they modified as to an uncertainty, audit scope, or accounting
principle. Such changes to the accountants was approved by the stockholder of
Forward Group and Chips. There were no disagreements with the former accountants
on any matter which, if not resolved to the satisfaction of the former
accountants, would have caused the former accountants to make reference to the
subject matter of the disagreement in connection with their reports.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS

     Set forth below are the names and positions of the respective directors and
executive officers of the Company. All directors hold office until the next
annual meeting of stockholders of the Company and until their successors are
duly elected and qualified.

<TABLE>
<S>                                    <C>   <C>
James N. Mills.......................  60    Chairman of the Board and Chief Executive
                                             Officer of the Company and Viasystems Group
Thomas O. Hicks......................  51    Director of the Company and Viasystems Group
Jack D. Furst........................  38    Director of the Company and Viasystems Group
Richard W. Vieser....................  70    Director of the Company and Viasystems Group
Kenneth F. Yontz.....................  52    Director of the Company and Viasystems Group
Robert N. Mills......................  55    President, Chief Operating Officer and Director
                                             of the Company and Viasystems Group
David M. Sindelar....................  40    Senior Vice President, Chief Financial Officer
                                             of the Company and Viasystems Group
Larry S. Bacon.......................  51    Senior Vice President, Human Resources of the
                                               Company
W. Thomas McGhee.....................  61    Secretary and General Counsel of the Company
Gerald C. Nelson.....................  45    Executive Vice President -- Operations of the
                                               Company
James G. Powers......................  36    Vice President -- Finance of the Company
</TABLE>

     James N. Mills has been Chairman of the Board and Chief Executive Officer
of Viasystems Group since January 1997 and the Chairman of the Board and Chief
Executive Officer of the Company since April 1997. Mr. Mills is the Chairman,
President and Chief Executive Officer of Mills & Partners, Inc. Mr. Mills is
also Chairman of the Board and Chief Executive Officer of Berg Electronics
Corp., Chairman of the Board and sole director of Berg Electronics Group, Inc.,
Chairman of the Board and Chief Executive Officer of International Wire Holding
Company and International Wire Group, Inc. Mr. Mills was Chairman of the Board
and Chief Executive Officer of Crain Holdings Corp. and Crain Industries, Inc.
from August 1995 through December 1997 and of Jackson Holding Company and
Jackson Products, Inc. from February 1993 through August 1995. Mr. Mills was
Chairman of the Board and Chief Executive Officer of Thermadyne Holdings
Corporation from February 1989 through February 1995. Mr. Mills was Executive
Vice President of

                                       113
<PAGE>   115

McGraw-Edison Company from 1978 to 1985, and served as Industrial Group
President and President of the Bussman Division of the McGraw-Edison Company
from 1980 to 1984.

     Thomas O. Hicks has been a director of Viasystems Group since January 1997
and a director of the Company since May 1997. Mr. Hicks is Chairman of the Board
and Chief Executive Officer of Hicks Muse. From 1984 to May 1989, Mr. Hicks was
Co-Chairman of the Board and Co-Chief Executive Officer of Hicks & Haas
Incorporated, a Dallas-based private investment firm. Mr. Hicks serves as a
director of Berg Electronics Corp., Chancellor Broadcasting Company,
International Home Foods, Inc., D.A.C. Vision, Inc., Sybron International
Corporation, Capstar Broadcasting Partners, Inc. and Cooperative Computing
Holding Company, Inc.

     Jack D. Furst has been a director of Viasystems Group since August 1996 and
a director of the Company since May 1997. Mr. Furst is a Managing Director and
Principal of Hicks Muse and has held such position since 1989. Mr. Furst has
approximately 15 years of experience in leveraged acquisitions and private
investments. Mr. Furst is involved in all aspects of Hicks Muse's business and
has been actively involved in originating, structuring and monitoring its
investments. Mr. Furst is primarily responsible for managing the relationship
with Mills & Partners. Prior to joining Hicks Muse, Mr. Furst was a Vice
President and subsequently a Partner of Hicks & Haas, Incorporated, a
Dallas-based private investment firm from 1987 to May 1989. From 1984 to 1986,
Mr. Furst was a merger and acquisition/corporate finance specialist for The
First Boston Corporation in New York. Before joining First Boston, Mr. Furst was
a financial consultant at Price Waterhouse. Mr. Furst serves on the board of
directors of Omni America Holdings, Inc., International Wire Holding Company and
Cooperative Computing, Inc.

     Richard W. Vieser has been a director of Viasystems Group since January
1997 and a director of the Company since May 1997. Mr. Vieser is the retired
Chairman of the Board, Chief Executive Officer and President of Lear Siegler,
Inc. (a diversified manufacturing company), the former Chairman of the Board and
Chief Executive Officer of FL Industries, Inc. and FL Aerospace (also
diversified manufacturing companies), and the former President and Chief
Operating Officer of McGraw-Edison Co. He is also a director of Ceridian
Corporation (formerly Control Data Corporation), Berg Electronics Corp., Dresser
Industries, Inc., INDRESCO Inc., Sybron International Corporation and Varian
Associates, Inc.

     Kenneth F. Yontz has been a director of Viasystems Group since January 1997
and a director of the Company since May 1997. Mr. Yontz is the Chairman,
President and Chief Executive Officer of Sybron International Corporation, a
manufacturer and marketer of laboratory apparatus products, dental sundry
supplies and orthodontic appliances. Mr. Yontz is also a director of Playtex
Products, Inc. and Berg Electronics Corp. Prior to joining Sybron, Mr. Yontz was
Group Vice President and Executive Vice President of the Allen-Bradley Company.
Mr. Yontz also held various managerial and professional positions with Chemetron
from 1974 to 1980 and at Ford Motor Company from 1966 to 1974.

     Robert N. Mills has been a director of Viasystems Group since January 1997
and has been President, Chief Operating Officer since the Company's formation in
April 1997 and a director of the Company since May 1997. Mr. Mills is also Vice
Chairman of Berg Electronics Corp. and previously served as President of Berg
Electronics Corp. from June 1995 through December 1996 and as Chief Operating
Officer of Berg Electronics Corp. and as President and Chief Executive Officer
of Berg Electronics Group from March 1993 through December 1996. Mr. Mills
served as a Vice President of the Berg Electronics Corp. from March 1993 through
June 1995, Mr. Mills is a Vice President of Mills & Partners, Inc. Prior to
joining Berg in March 1993, Mr. Mills was Vice President of Thermadyne
Industries, Inc. and President of Stoody Deloro Stellite and has held such
positions since February 1990 and July 1989, respectively. Prior thereto, he
served as President, Chief Operating Officer and Director of Tridex Corporation
from 1987 through 1989, and Vice President and General Manager of Elco
Corporation, a subsidiary of Wickes Manufacturing Company, from 1983 through
1987. Robert N. Mills is the brother of James N. Mills.

     David M. Sindelar has been a Senior Vice President since January 1997 and
Chief Financial Officer of Viasystems Group since its inception and has been
Senior Vice President, Chief Financial Officer and Treasurer of the Company
since its formation in April 1997. Mr. Sindelar is also Senior Vice President
and Chief Financial Officer of Mills & Partners, Inc., Berg Electronics Corp.
and International Wire Holding
                                       114
<PAGE>   116

Company. Mr. Sindelar was Senior Vice President and Chief Financial Officer of
Crain Industries, Inc. and Crain Holdings Corp. from August 1995 through
December 1997 and of Jackson Holding Company from February 1993 through August
1995. From 1987 to February 1995, Mr. Sindelar held various other positions at
Thermadyne Holdings Corporation including Senior Vice President and Chief
Financial Officer, Vice President -- Corporate Controller and Controller. Mr.
Sindelar was employed by Arthur Andersen & Co. from 1979 to 1987.

     Larry S. Bacon has been a Senior Vice President of Viasystems Group since
January 1997 and Senior Vice President of the Company since May, 1997. Mr. Bacon
is also Senior Vice President of Mills & Partners, Inc., Berg Electronics Corp.
and International Wire Holding Company. Mr. Bacon was Senior Vice President of
Crain Industries, Inc. and Crain Holdings Corp. from August 1995 through
December 1997 and of Jackson Holding Company from February 1993 through August
1995. Previously, Mr. Bacon was Senior Vice President -- Human Resources of
Thermadyne Holdings Corporation from September 1987 until February 1995. Prior
to that, he held a variety of senior human resources management positions with
Cooper Industries, McGraw-Edison Company and Hoechst Celanese.

     W. Thomas McGhee has been Secretary and General Counsel of Viasystems Group
since January 1997 and has been Secretary of the Company since its formation in
April 1997. Mr. McGhee is also a partner of the law firm of Herzog, Crebs and
McGhee and has held that position since 1987. In addition, Mr. McGhee serves as
Secretary and General Counsel of International Wire Holding Company,
International Wire Group, Inc. and Berg Electronics Corp. Mr. McGhee was
Secretary and General Counsel of Crain Industries, Inc. and Crain Holdings Corp.
from August 1995 through December 1997.

     Gerald C. Nelson is Executive Vice President, Operations of the Company and
has held that position since May, 1997. Prior to joining the Company, Mr. Nelson
held several executive positions, such as President of the Harness Division of
International Wire Group, Inc. and President and Chief Operating Officer of the
Wear Resistance Division of Thermadyne Industries, Inc.

     James G. Powers has been a Vice President of Viasystems Group since April
1997 and a Vice President of the Company since its formation in April 1997.
Prior to joining the Company, Mr. Powers served as Vice President -- Finance of
Crain Industries, Inc. He also held various positions at Berg Electronics Corp.,
including Vice President -- Controller, from June 1993 to August 1995.
Previously, Mr. Powers was Controller of Moog Automotive, Inc. from 1991 through
1993 and was employed by Arthur Andersen & Co. from 1983 to 1991.

ITEM 11. EXECUTIVE COMPENSATION

COMPENSATION OF DIRECTORS

     The directors of Viasystems Group and the Company did not receive
compensation from either Viasystems Group or the Company for services rendered
in that capacity during the prior fiscal year. Directors who are officers,
employees or otherwise an affiliate of Viasystems Group or the Company receive
no compensation for their services as directors. Each director of Viasystems
Group or the Company who is not also an officer, employee or an affiliate of
Viasystems Group or the Company (an "Outside Director") will receive an annual
retainer of $12,000 and a fee of $1,000 for each meeting of the board of
directors at which the director is present. Directors of Viasystems Group and
the Company are entitled to reimbursement of their reasonable out-of-pocket
expenses in connection with their travel to and attendance at the meetings of
the board of directors or committees thereof.

COMPENSATION OF EXECUTIVE OFFICERS

     The following table sets forth the cash and non-cash compensation earned
during the fiscal year ended December 31, 1997 by the Chief Executive Officer
and the four other most highly compensated executive officers of the Company.
The executive officers of Viasystems Group and the Company did not receive any

                                       115
<PAGE>   117

compensation from either Viasystems Group or the Company during the period from
inception (August 28, 1996) to December 31, 1996.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                             LONG-TERM
                                                                           COMPENSATION
                                                                              AWARDS
                                                 ANNUAL COMPENSATION(1)     SECURITIES
                                                 -----------------------    UNDERLYING        ALL OTHER
                                          YEAR   SALARY($)   BONUS($)(2)   OPTIONS(#)(3)   COMPENSATION($)
                                          ----   ---------   -----------   -------------   ---------------
<S>                                       <C>    <C>         <C>           <C>             <C>
James N. Mills, Chairman of the Board
  and Chief Executive Officer...........  1997    395,000      550,000       2,132,392(4)            --
Robert N. Mills, President and Chief
  Operating Officer.....................  1997    482,000      313,300              --               --
Barry Brigmann, President of the
  Americas..............................  1997    310,000      201,500         750,000           66,285(5)
Gerald C. Nelson, Executive Vice
  President.............................  1997    289,678      188,290         750,000               --
James G. Powers, Vice
  President -- Finance..................  1997    190,094      123,500         750,000               --
</TABLE>

---------------

(1) The Company provides a car allowance, reimbursement of club memberships and
    other benefits to certain executives. The aggregate incremental costs of
    these benefits to the Company do not exceed the lesser of either $50,000 or
    10% of the total of annual salary and bonus reported for each executive.

(2) Bonuses were paid in 1998 for 1997.

(3) Options were granted under the Viasystems Group, Inc. 1997 Stock Option Plan
    (the "Stock Option Plan") pursuant to which incentive and non-qualified
    stock options may be issued to certain of its Holdings or the Company's
    officers, key employees and directors.

(4) Reflects Performance Options (as hereinafter defined) granted by Viasystems
    Group, Inc. For a description of the material terms of such options, see
    "Benefit Plans -- Performance Options." The Performance Options are
    exercisable only in the event that Hicks, Muse Equity Fund III, as of the
    exercise date, realized an overall rate of return of at least 35% per annum,
    compounded annually on its equity funds invested in Viasystems Group, Inc.

(5) Mr. Brigmann received compensation in the form of reimbursement of
    relocation expenses during 1997.

     The following table summarizes option grants made with respect to the
common stock, par value $.01 per share of Viasystems Group, Inc.'s common stock
during fiscal year 1997 to the executive officers named above:

                       OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
                                 NUMBER OF      % OF TOTAL
                                 SECURITIES   OPTIONS GRANTED   EXERCISE
                                 UNDERLYING    TO EMPLOYEES       PRICE         EXPIRATION
                                 OPTIONS(#)   IN FISCAL YEAR    ($/SHARE)          DATE
                                 ----------   ---------------   ---------   ------------------
<S>                              <C>          <C>               <C>         <C>
James N. Mills (1).............  2,132,392         26.2%          1.00      September 30, 2006
Robert N. Mills (2)............         --          N/A            N/A             N/A
Barry Brigmann (2).............    750,000         14.3%          1.00        February 4, 2007
Gerald C. Nelson (2)...........    750,000         14.3%          1.00        February 4, 2007
James G. Powers (2)............    750,000         14.3%          1.00        February 4, 2007
</TABLE>

                                       116
<PAGE>   118

<TABLE>
<CAPTION>
                                                                POTENTIAL REALIZABLE
                                                                      VALUE AT
                                                                ASSUMED ANNUAL RATES
                                                                         OF
                                                              STOCK PRICE APPRECIATION
                                                                 FOR OPTION TERM(3)
                                                              -------------------------
                                                                5%($)         10%($)
                                                              ----------   ------------
<S>                                                           <C>          <C>
James N. Mills..............................................         --        768,000
Robert N. Mills.............................................        N/A            N/A
Barry Brigmann..............................................    413,000      1,020,000
Gerald Nelson...............................................    413,000      1,020,000
James G. Powers.............................................    413,000      1,020,000
</TABLE>

---------------

(1) Reflects Performance Options granted by Viasystems Group, Inc. for a
    description of the material terms of such options, See "Benefit
    Plans -- Performance Options:"

(2) Reflects Options to purchase Viasystems Group Inc.'s Common Stock granted
    under the Stock Option Plan. For a description of the material terms of such
    options, See "Benefit Plans -- Stock Option Plan."

(3) The potential realizable value portion of the foregoing table illustrates
    the value that might be realized upon exercise of the option immediately
    prior to the expiration of its term, assuming the specified compound rules
    of appreciation of Viasystems Group, Inc.'s Common Stock over the term of
    the options. Actual gains on the exercise of the options are dependent on
    the future performance of Viasystems Group, Inc.'s Common Stock. There can
    be no assurance that the potential values reflected in this table will be
    achieved. All amounts have been rounded to the nearest whole dollar.

     The following table summarizes the number of options exercised during the
fiscal year ended December 31, 1997 for the above named executive officers and
the value of unexercised options as of December 31, 1997:

   AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR END OPTION VALUES

<TABLE>
<CAPTION>
                                                                       NUMBER OF SECURITIES
                                                                            UNDERLYING
                                                                      UNEXERCISED OPTIONS AT
                                                                          FISCAL YEAR END
                                     ACQUIRED ON      VALUE      ---------------------------------
                                     EXERCISE(#)   REALIZED($)   EXERCISABLE(#)   UNEXERCISABLE(#)
                                     -----------   -----------   --------------   ----------------
<S>                                  <C>           <C>           <C>              <C>
James N. Mills.....................        --            --              --          2,468,800
Robert N. Mills....................        --            --              --                 --
Barry Brigmann.....................        --            --              --            750,000
Gerald C. Nelson...................        --            --              --            750,000
James G. Powers....................        --            --              --            750,000
</TABLE>

<TABLE>
<CAPTION>
                                                                      VALUE OF
                                                              UNEXERCISED IN-THE-MONEY
                                                                     OPTIONS AT
                                                                 FISCAL YEAR END(1)
                                                          ---------------------------------
                                                          EXERCISABLE($)   UNEXERCISABLE($)
                                                          --------------   ----------------
<S>                                                       <C>              <C>
James N. Mills..........................................          --                --
Robert N. Mills.........................................          --                --
Barry Brigmann..........................................          --                --
Gerald C. Nelson........................................          --                --
James G. Powers.........................................          --                --
</TABLE>

---------------

(1) Represents the difference between the value at December 31, 1997 of
    Viasystems Group, Inc.'s Common Stock underlying the options and the
    exercise price of such options.

                                       117
<PAGE>   119

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     Compensation decisions are made by the Board of Directors. James N. Mills
served as both and Executive Officer and Director during 1997 and is expected to
serve in such capacity in 1997.

EMPLOYMENT AGREEMENTS

     James N. Mills Executive Employment Agreement. Mr. James N. Mills entered
into an executive employment agreement with Viasystems Group, Viasystems
Technologies and Circo Craft as of January 1, 1997. Pursuant to his employment
agreement, Mr. J. Mills will serve as the Chairman of the Board of Directors and
Chief Executive Officer of Viasystems Group through December 31, 2001, unless
terminated earlier as provided therein. Mr. J. Mills is required to devote such
time as is reasonably necessary to faithfully and adequately supervise the
overall executive management of Viasystems Group and its subsidiaries, both
direct and indirect. Subject to the foregoing limitation on his activities, Mr.
J. Mills is free to participate in other endeavors.

     The compensation provided to Mr. J. Mills under his executive employment
agreement includes an annual base salary of not less than $685,000, subject to
upward adjustment at the sole discretion of the Board of Directors of Viasystems
Group, and such benefits as are customarily accorded the executives of
Viasystems Group as long as the executive employment agreement is in force. In
addition, Mr. J. Mills is entitled to an annual bonus in an amount determined in
accordance with the Senior Executive Incentive Compensation Plan and
reimbursement for expenses to own and maintain an automobile.

     Mr. J. Mills' executive employment agreement also provides that if Mr. J.
Mills' employment is terminated without cause, Mr. J. Mills will continue to
receive his then current salary, which shall not be less than $685,000, for the
longer of the remainder of the period the executive employment agreement is in
force or a period of one year following such termination. The executive
employment agreement terminates upon death or "total disability" (as defined
therein) and no further compensation shall be payable except that he or his
estate, heirs or beneficiaries, as applicable, shall receive his then current
salary for a period of 18 months, in addition to benefits otherwise specifically
provided for. The agreement also provides medical benefits for his and his
spouse's lifetime.

     Robert N. Mills Executive Employment Agreement. Mr. Robert N. Mills entered
into an executive employment agreement with Viasystems Group, Viasystems
Technologies and Circo Craft as of January 1, 1997. Pursuant to his employment
agreement, Mr. R. Mills will serve as the President and Chief Operating Officer
of Viasystems Group through December 31, 2001, unless terminated earlier as
provided therein. Mr. R. Mills is required to devote such time as is reasonably
necessary to faithfully and adequately supervise the overall financial
management of Viasystems Group and its subsidiaries, both direct and indirect.
Subject to the foregoing limitation on his activities, Mr. R. Mills is free to
participate in other endeavors.

     The compensation provided to Mr. R. Mills under his executive employment
agreement includes an annual base salary of not less than $510,000, subject to
upward adjustment at the sole discretion of the Chairman of the Board of
Directors of Viasystems Group, and such benefits as are customarily accorded the
executives of Viasystems Group as long as the executive employment agreement is
in force. In addition, Mr. R. Mills is entitled to an annual bonus in an amount
determined in accordance with the Senior Executive Incentive Compensation Plan
and reimbursement for expenses to own and maintain an automobile.

     Mr. R. Mills' executive employment agreement also provides that if Mr. R.
Mills' employment is terminated without cause, Mr. R. Mills will continue to
receive his then current salary, which shall not be less than $510,000, for the
longer of the remainder of the period the executive employment agreement is in
force or a period of one year following such termination. The executive
employment agreement terminates upon death or "total disability" (as defined
therein) and no further compensation shall be payable except that he or his
estate, heirs or beneficiaries, as applicable, shall receive his then current
salary for a period of 18 months, in addition to benefits otherwise specifically
provided for. The agreement also provides medical benefits for his and his
spouse's lifetime.

                                       118
<PAGE>   120

     David M. Sindelar Executive Employment Agreement. Mr. David M. Sindelar
entered into an executive employment agreement with Viasystems Group, Viasystems
Technologies and Circo Craft as of January 1, 1997. Pursuant to his employment
agreement, Mr. Sindelar will serve as the Senior Vice President and Chief
Financial Officer of Viasystems Group through December 31, 2001, unless
terminated earlier as provided therein. Mr. Sindelar is required to devote such
time as is reasonably necessary to faithfully and adequately supervise the
overall financial management of Viasystems Group and its subsidiaries, both
direct and indirect. Subject to the foregoing limitation on his activities, Mr.
Sindelar is free to participate in other business endeavors.

     The compensation provided to Mr. Sindelar under his executive employment
agreement includes an annual base salary of not less than $230,000, subject to
upward adjustment at the sole discretion of the Chairman of the Board of
Directors of Viasystems Group, and such benefits as are customarily accorded the
executives of Viasystems Group as long as the executive employment agreement is
in force. In addition, Mr. Sindelar is entitled to an annual bonus in an amount
determined in accordance with the Senior Executive Incentive Compensation Plan
and reimbursement for expenses to own and maintain an automobile.

     Mr. Sindelar's executive employment agreement also provides that if Mr.
Sindelar's employment is terminated without cause, Mr. Sindelar will continue to
receive his then current salary, which shall not be less than $230,000, for the
longer of the remainder of the period the executive employment agreement is in
force or a period of one year following such termination. The executive
employment agreement terminates upon death or "total disability" (as defined
therein) and no further compensation shall be payable except that he or his
estate, heirs or beneficiaries, as applicable, shall receive his then current
salary for a period of 18 months, in addition to benefits otherwise specifically
provided for. The agreement also provides medical benefits for his and his
spouse's lifetime.

     Gerald C. Nelson Executive Employment Agreement. Mr. Gerald C. Nelson
entered into an executive employment agreement with Viasystems Group, Viasystems
Technologies and Circo Craft as of January 1, 1997. Pursuant to his employment
agreement, Mr. Nelson will serve as the Senior Vice President -- Operations of
Viasystems Group through December 31, 1999, unless terminated earlier as
provided therein. Mr. Nelson is required to devote such time as is reasonably
necessary to faithfully and adequately supervise the operations of Viasystems
Group and its subsidiaries, both direct and indirect.

     The compensation provided to Mr. Nelson under his executive employment
agreement includes an annual base salary of not less than $300,000 subject to
upward adjustment at the sole discretion of the Chairman of the Board of
Directors of Viasystems Group, and such benefits as are customarily accorded the
executive of Viasystems Group as long as the executive employment agreement is
in force. In addition, Mr. Nelson is entitled to an annual bonus in an amount
determined in accordance with the Senior Executive Incentive Compensation Plan
and reimbursement for expenses to own and maintain an automobile.

     Mr. Nelson's executive employment agreement also provides that if Mr.
Nelson's employment is terminated without cause, Mr. Nelson will continue to
receive his then current salary, which shall not be less than $300,000, for the
longer of the remainder of the period the executive employment agreement is in
force or a period of one year following such termination. The executive
employment agreement terminates upon death or "total disability" (as defined
therein) and no further compensation shall be payable except that he or his
estate, heirs or beneficiaries, as applicable, shall receive his then current
salary for a period of 18 months, in addition to benefits otherwise specifically
provided for and medical benefits for his lifetime.

BENEFIT PLANS

  Stock Option Plan

     Viasystems Group has adopted the Viasystems Group, Inc. 1997 Stock Option
Plan (the "Stock Option Plan") pursuant to which incentive and non-qualified
stock options, stock appreciation rights, stock awards, performance awards and
stock units may be issued to such employees of Viasystems Group and any parent
or subsidiary corporation designated by the Board of Directors of Viasystems
Group. A total of 8,409,782 shares of Viasystems Group Common Stock will be
reserved for issuance under the Stock Option Plan. As of

                                       119
<PAGE>   121

December 31, 1997, options to purchase an aggregate of 5,235,000 shares of
Viasystems Group Common Stock subject to the terms and conditions of the Stock
Option Plan are outstanding.

     The Stock Option Plan provides that it is to be administered by a committee
of the Board of Directors of Viasystems Group or a subcommittee of such a
committee (the "Committee"). The Committee has the authority to grant to any
participant one or more stock options, and to establish the terms and conditions
of such options, subject to certain limitations specified in the Stock Option
Plan. For example, the per-share exercise price of each option must not be less
than 100% of the fair market value of the Viasystems Group Common Stock on the
date such option is granted, and no option may be exercisable later than ten
years after the date of grant. In the event of a change in control (as defined
in the Stock Option Plan), the Committee, in its discretion, may take such
actions as it deems appropriate with respect to outstanding awards, including,
without limitation, accelerating the exercisability or vesting of such awards.

     The Stock Option Plan became effective as of February 4, 1997. Effective
concurrent with the consummation of the Chips Merger, the Stock Option Plan was
amended to increase the number of shares of Viasystems Group Common Stock
reserved for issuance under the Stock Option Plan. The Stock Option Plan, as
amended, is subject to stockholder approval and will terminate on February 4,
2007, unless sooner terminated by the Committee.

  Performance Options

     On November 26, 1996, Viasystems Group granted options (the "Performance
Options") to purchase 1,085,187 shares of Viasystems Group Common Stock. Messrs.
J. Mills and Sindelar were granted Performance Options to purchase 336,408 and
227,889 shares of Viasystems Group Common Stock, respectively, and Performance
Options to purchase the remaining 520,890 shares of Viasystems Group Common
Stock were granted to certain officers of the Company who are also affiliated
with Mills & Partners. On June 2, 1997, Viasystems Group granted Performance
Options to purchase an additional 8,138,904 shares of Viasystems Group Common
Stock. Messrs. J. Mills and Sindelar were granted additional Performance Options
to purchase 2,132,392 and 1,318,501 shares of Viasystems Group Common Stock,
respectively, and additional Performance Options to purchase the remaining
4,688,011 shares of Viasystems Group Common Stock were granted to certain
officers of the Company who are also affiliated with Mills & Partners.

     Pursuant to the terms of the option agreements (the "Performance Option
Agreements") related to the Performance Options, the Performance Options will
become options to purchase an identical number of shares of Viasystems Group
Common Stock. The Performance Options are exercisable only in the event that HM
Fund III has, as of the exercise date, realized an overall rate of return of at
least 35% per annum, compounded annually, on all equity funds invested by it in
Viasystems Group. Subject to the foregoing, the Performance Options are
exercisable (i) immediately prior to the consummation of a Liquidity Event (as
hereinafter defined), (ii) concurrently with the consummation of a Qualified IPO
(as hereinafter defined), or (iii) on the ten year anniversary of their grant. A
"Liquidity Event" generally means (i) one or more sales or other dispositions of
Viasystems Group Common Stock if, thereafter, the amount of Viasystems Group
Common Stock owned by HM Fund III is reduced by 50%, (ii) any merger,
consolidation or other business combination of Viasystems Group pursuant to
which any person or group acquires a majority of the common stock of the
resulting entity, or (iii) any sale of all or substantially all of the assets of
Viasystems Group. A "Qualified IPO" means a firm commitment underwritten public
offering of Viasystems Group Common Stock for gross proceeds of at least $50
million pursuant to an effective registration statement under the Securities
Act.

     The exercise price for the Performance Options is initially equal to $1.00
per share and, effective each anniversary of the grant date, the per share
exercise price for the Performance Options is equal to the per share exercise
price for the prior year multiplied by 1.08. The exercise price of the
Performance Options and the number of shares of Viasystems Group Common Stock
for which the Performance Options are exercisable is subject to adjustment in
the event of certain fundamental changes in the capital structure of Viasystems
Group. All Performance Options terminate on the ten year anniversary of their
grant.

                                       120
<PAGE>   122

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

     All the issued and outstanding shares of common stock of the Company are
held by Viasystems Group. The following table sets forth certain information
regarding the expected beneficial ownership of the voting securities of
Viasystems Group by each person who is expected to beneficially own more than 5%
of any class of Viasystems Group voting securities and by the directors and
certain executive officers of Viasystems Group, individually, and by the
directors and executive officers of Viasystems Group as a group. The Viasystems
Group Class A Common Stock votes together with the Viasystems Group Common Stock
as a single class and is entitled to one vote for each share.

<TABLE>
<CAPTION>
                                                           SHARES BENEFICIALLY OWNED
                                           ---------------------------------------------------------
                                                                      VIASYSTEMS GROUP
                                              VIASYSTEMS GROUP             CLASS A
                                                COMMON STOCK           COMMON STOCK(1)
                                           ----------------------   ---------------------
                                             NUMBER      PERCENT      NUMBER     PERCENT    PERCENT
                                            OF SHARES    OF CLASS   OF SHARES    OF CLASS   OF TOTAL
                                           -----------   --------   ----------   --------   --------
<S>                                        <C>           <C>        <C>          <C>        <C>
5% STOCKHOLDERS:
HM Parties(2)............................  254,980,004     99.9%            --        --      87.9%
  c/o Hicks, Muse, Tate & Furst
  Incorporated
  200 Crescent Court, Suite 1600
  Dallas, Texas 75201
OFFICERS AND DIRECTORS:
  James N. Mills(3)......................      200,000        --    34,835,832    100.0%      12.0%
  Thomas O. Hicks(2).....................  255,000,004     99.9%            --        --      87.9%
  Jack D. Furst(2).......................  255,000,004     99.9%            --        --      87.9%
  Richard W. Vieser......................      400,000         *            --        --          *
  Kenneth F. Yontz(4)....................      200,000         *            --        --          *
  Robert N. Mills(5).....................           --        --     7,140,000     20.5%       2.5%
  David M. Sindelar(6)...................           --        --     7,333,331     21.1%       2.5%
  Larry S. Bacon(7)......................           --        --     1,700,000      4.9%          *
  W. Thomas McGhee(8)....................           --        --     1,700,000      4.9%          *
  All executive officers and directors as
     a group (11 persons)(9).............  256,200,004    100.0%    34,835,832    100.0%     100.0%
</TABLE>

---------------

 *  Represents less than 1%.

(1) Viasystems Group Class A Common Stock is convertible into Viasystems Group
    Common Stock (i) at the option of any holder thereof at any time, (ii) at
    the option of Viasystems Group upon the occurrence of a Triggering Event (as
    defined below), and (iii) automatically on September 30, 2006. A "Triggering
    Event" means any sale of substantially all of the assets of Viasystems Group
    or any merger, consolidation or other business combination of Viasystems
    Group in which Hicks Muse and its affiliates cease to beneficially own,
    directly or indirectly, at least 50% of the resulting entity. Each share of
    Viasystems Group Class A Common Stock is convertible into a fraction of a
    share of Viasystems Group Common Stock equal to the quotient of (i) the fair
    market value of a share of Viasystems Group Common Stock at the time of
    conversion less the sum of $.99 plus imputed interest thereon at a rate of
    8% per annum, compounded annually, at the time of conversion, divided by
    (ii) the fair market value of a share of Viasystems Group Common Stock at
    the time of conversion. Because the fraction of a share of Viasystems Group
    Common Stock into which Viasystems Group Class A Common Stock is convertible
    is determinable only at the time of a conversion, shares of Viasystems Group
    Common Stock that may be issuable upon conversion of Viasystems Group Class
    A Common Stock are not included in the shares of Viasystems Group Common
    Stock beneficially owned in the foregoing table.

(2) Includes (i) shares owned of record by Hicks, Muse, Tate & Furst Equity Fund
    III, L.P. ("Fund III"), a limited partnership, of which the ultimate general
    partner of Fund III is Hicks, Muse, Tate & Furst Fund III, Incorporated, an
    affiliate of Hicks Muse; and (ii) shares owned of record by HM3 Coinvestors,
    L.P., a limited partnership of which the ultimate general partner is Fund
    III. Thomas O. Hicks is a

                                       121
<PAGE>   123

    controlling stockholder of Hicks Muse and serves as Chairman of the Board,
    President, Chief Executive Officer, Chief Operating Officer and Secretary of
    Hicks Muse. Accordingly, Mr. Hicks may be deemed to be the beneficial owner
    of Viasystems Group Common Stock held by Fund III and HM3 Coinvestors, L.P.
    John R. Muse, Charles W. Tate, Jack D. Furst, Lawrence D. Stuart Jr.,
    Michael J. Levitt, David R. Deneger and Alan B. Menkes are officers,
    directors and minority stockholders of Hicks Muse and as such may be deemed
    to share with Mr. Hicks the power to vote or dispose of Viasystems Group
    Common Stock held by Fund III and HM3 Coinvestors, L.P. Each of Messrs.
    Hicks, Muse, Tate, Furst, Stuart, Levitt and Menkes disclaims the existence
    of a group and disclaims beneficial ownership of Viasystems Group Common
    Stock not respectively owned of record by him.

(3) Includes shares of Viasystems Group Common Stock and Viasystems Group Class
    A Common Stock held by James N. Mills and shares of Viasystems Group Common
    Stock and Viasystems Group Class A Common Stock owned of record by certain
    individuals, including Messrs. R. Mills and D. Sindelar, subject to an
    irrevocable proxy in favor of Mr. Mills. See "Certain Transactions." Does
    not include 2,468,800 shares of Viasystems Group Common Stock issuable to
    Mr. Mills upon the exercise of Performance Options that are not currently
    exercisable. See "Management -- Benefit Plans -- Stock Option Plan."

(4) Excludes 400,000 shares of Viasystems Group Common Stock owned of record by
    the Kenneth F. Yontz 1997 Family Trust, a trust of which Mr. Yontz does not
    have the power to vote or dispose of such stock. Mr. Yontz disclaims
    beneficial ownership of Viasystems Group Common Stock not owned of record by
    him.

(5) Includes 7,090,000 shares held of record by the Robert N. Mills Revocable
    Living Trust, a trust of which Mr. R. Mills is a trustee having the power to
    vote and dispose of such stock, and 50,000 shares owned of record by another
    individual, subject to an irrevocable proxy in favor of Mr. R. Mills. Mr. R.
    Mills disclaims beneficial ownership of Viasystems Group Class A Common
    Stock not owned of record by him.

(6) Includes 200,000 shares owned of record by two children's trusts, of which
    Mr. Sindelar is a trustee having the power to vote and dispose of such
    stock, Mr. Sindelar disclaims beneficial ownership of Viasystems Group Class
    A Common Stock not owned of record by him. Does not include 1,546,390 shares
    of Viasystems Group Common Stock issuable to Mr. Sindelar upon exercise of
    Performance Options that are not exercisable within the next 60 days. See
    "Management -- Benefit Plans -- Performance Options"

(7) Does not include 1,454,149 shares of Viasystems Group Common Stock issuable
    to Mr. Bacon upon exercise of Performance Options that are not exercisable
    within the next 60 days. See "Management -- Benefit Plans -- Performance
    Options."

(8) Includes 500,000 shares held of record by the McGhee Family Limited
    Partnership, of which Mr. McGhee is the general partner having the power to
    vote and dispose of such stock, and 1,200,000 shares held of record by the
    W. Thomas McGhee Revocable Living Trust, of which Mr. McGhee is the trustee
    having the power to vote and dispose of such stock. Mr. McGhee disclaims
    beneficial ownership of Viasystems Group Class A Common Stock not owned of
    record by him. Does not include 1,454,149 shares of Viasystems Group Common
    Stock issuable to Mr. McGhee upon exercise of Performance Options that are
    not exercisable within the next 60 days. See "Management -- Benefit
    Plans -- Performance Options."

(9) Does not include 10,724,091 shares of Viasystems Group Common Stock issuable
    to executive officers of Viasystems Group upon the exercise of Performance
    Options or options issued under the Stock Option Plan, or Performance
    Options to be issued in connection with the Equity Contribution, none of
    which are exercisable within the next 60 day. See "Management -- Benefit
    Plans -- Performance Options."

                                       122
<PAGE>   124

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     In April 1997, an affiliate of Hicks Muse acquired Forward Group, a rigid
PCB manufacturer located in the United Kingdom, for a purchase price of
approximately $236.0 million (including the issuance of the Forward Group Loan
Notes and assumed debt), which was funded with $216.0 million of borrowings
under a tender offer facility with a financial institution (the "Tender
Facility") and the proceeds from the issuance to Hicks Muse of $40.0 million
initial liquidation preference of preferred stock. Subsequently, Viasystems
Group acquired Forward Group for cost, consisting of the assumption of the
Tender Facility and the issuance to Hicks Muse and certain affiliates of $40.0
million initial liquidation preference of Viasystem Group's preferred stock.

     In April 1997, Chips Holdings acquired Chips, a rigid PCB manufacturer
located in the United Kingdom. In connection with such transaction, Hicks Muse
and its affiliates invested $140.0 million in the equity capital of Chips
Holdings. The Chips Merger was consummated concurrently with the consummation of
the 1997 Offering, in consideration for the issuance to Hicks Muse and certain
affiliates of common stock valued at $140.0 million. In addition, the Company
became the obligor on the Chips Reimbursement Obligation.

     Viasystems Group and its subsidiaries have entered into a ten-year
agreement (the "Monitoring and Oversight Agreement") with an affiliate of Hicks
Muse ("Hicks Muse Partners") which was amended upon consummation of the
Transactions and pursuant to which Viasystems Group and its subsidiaries will
pay Hicks Muse Partners an annual fee payable quarterly for oversight and
monitoring services to the Company. The annual fee is adjustable on January 1 of
each calendar year to an amount equal to 0.2% of the budgeted consolidated
annual net sales of Viasystems Group and its subsidiaries for the then-current
fiscal year, but in no event less than $1,750,000 (the "Base Fee"). Upon the
acquisition by Viasystems Group or any of its subsidiaries of another entity or
business, the fee shall be adjusted prospectively in the same manner using the
pro forma combined budgeted consolidated annual net sales of Viasystems Group
and its subsidiaries. Thomas O. Hicks and Jack D. Furst, directors of Viasystems
Group and the Company, are each principals of Hicks Muse Partners. Hicks Muse
Partners is also entitled to reimbursement for any expenses incurred by it in
connection with rendering services allocable to the Company under the Monitoring
and Oversight Agreement. In addition, Viasystems Group and its subsidiaries,
jointly and severally, have agreed to indemnify Hicks Muse Partners, its
affiliates, and their respective directors, officers, controlling persons,
agents and employees from and against all claims, liabilities, losses, damages,
expenses and fees and disbursements of counsel related to or arising out of or
in connection with the services rendered by Hicks Muse Partners under the
Monitoring and Oversight Agreement and not resulting primarily from the bad
faith, gross negligence, or willful misconduct of Hicks Muse Partners. The
Monitoring and Oversight Agreement makes available the resources of Hicks Muse
Partners concerning a variety of financial and operational matters. The Company
does not believe that the services that have been and will continue to be
provided to the Company by Hicks Muse Partners could otherwise be obtained by
the Company without the addition of personnel or the engagement of outside
professional advisors. In the Company's opinion, the fees provided for under the
Monitoring and Oversight Agreement reasonably reflect the benefits received and
to be received by Viasystems Group, the Company and their respective
subsidiaries.

     Chips Holdings and its subsidiaries entered into a ten-year agreement (the
"Chips Monitoring and Oversight Agreement") with Hicks Muse Partners pursuant to
which Chips and its subsidiaries agreed to pay Hicks Muse Partners an annual fee
on terms substantially similar to those under the Monitoring and Oversight
Agreement except that the Base Fee thereunder is $530,000. Upon consummation of
the Chips Merger, the Chips Monitoring and Oversight Agreement was terminated.

     Viasystems Group and its subsidiaries entered into a ten-year agreement
(the "Financial Advisory Agreement"), pursuant to which Hicks Muse Partners is
entitled to receive a fee equal to 1.5% of the "transaction value" (as defined)
for each "add-on transaction" (as defined) in which Viasystems Group or any of
its subsidiaries is involved. In respect of the acquisitions to date, Hicks Muse
has received aggregate fees of approximately $4.9 million under the Financial
Advisory Agreement. The term "transaction value" means the total value of the
add-on transaction including without limitation, the aggregate amount of the
funds required to complete the add-on transaction (excluding any fees payable
pursuant to the Financial

                                       123
<PAGE>   125

Advisory Agreement), including the amount of any indebtedness, preferred stock
or similar terms assumed (or remaining outstanding). The term "add-on
transaction" means any future proposal for a tender offer, acquisition, sale,
merger, exchange offer, recapitalization, restructuring or other similar
transaction directly involving Viasystems Group or any of its subsidiaries or
any of their respective subsidiaries and any other person or entity. In
addition, Viasystems Group and its subsidiaries, jointly and severally, have
agreed to indemnify Hicks Muse Partners, its affiliates, and their respective
directors, officers, controlling persons, agents and employees from and against
all claims, liabilities, losses, damages, expenses and fees related to or
arising out of or in connection with the services rendered by Hicks Muse
Partners under the Financial Advisory Agreement and not resulting primarily from
the bad faith, gross negligence, or willful misconduct of Hicks Muse Partners.
The Financial Advisory Agreement makes available the resources of Hicks Muse
Partners concerning a variety of financial and operational matters. The Company
does not believe that the services that have been and will continue to be
provided by Hicks Muse Partners could otherwise be obtained by the Company
without the addition of personnel or the engagement of outside professional
advisors. In the Company's opinion, the fees provided for under the Financial
Advisory Agreement reasonably reflect the benefits received and to be received
by Viasystems Group, the Company and their respective subsidiaries. No fee was
paid under the Financial Advisory Agreement in connection with the Chips Merger.

     Forward Group and its subsidiaries previously entered into a ten-year
agreement (the "Forward Group Financial Advisory Agreement"), pursuant to which
Hicks Muse Partners was entitled to receive certain fees on terms substantially
identical to those described in the Financial Advisory Agreement. In respect of
acquisitions to date, Hicks Muse Partners has received aggregate fees of
approximately $3.5 million under the Forward Group Financial Advisory Agreement.
Upon consummation of the acquisition of Forward Group, the Forward Group
Financial Advisory Agreement was terminated and no fees were paid in connection
with the Company's acquisition of the Forward Group.

     Chips Holdings and its subsidiaries entered into a ten-year agreement (the
"Chips Financial Advisory Agreement"), pursuant to which Hicks Muse Partners is
entitled to receive certain fees on terms substantially identical to those fees
described in the Financial Advisory Agreement. In respect of the acquisitions to
date, Hicks Muse Partners has received aggregate fees of approximately $6.9
million under the Chips Financial Advisory Agreement. Upon consummation of the
Chips Merger, the Chips Financial Advisory Agreement was terminated and no fee
was paid in connection with the Chips Merger.

     Each investor in any class of common stock of Viasystems Group has entered
into an amended and restated stockholders agreement (the "Stockholders
Agreement"). The Stockholders Agreement, among other things, grants preemptive
rights and certain registration rights to the parties thereto and contains
provisions requiring the parties thereto to sell their shares of common stock in
connection with certain sales of Viasystems Group Common Stock by Fund III
("drag-along rights") and granting the parties thereto the right to include a
portion of their shares of common stock in certain sales in which Fund III does
not exercise its drag-along rights ("tag-along rights"). All parties to the
Stockholders Agreement agreed to take all action within their respective power
(including the voting of Viasystems Group Common Stock and Viasystems Group
Class A Common Stock) to cause the Board of Directors of the Company to at all
times be constituted by the members designated by Fund III. The Stockholders
Agreement contains an irrevocable proxy pursuant to which all parties to the
Stockholders Agreement (other than the initial holders of Viasystems Group Class
A Common Stock and their transferees) grant to Fund III the power to vote all
shares of Viasystems Group Common Stock held by such parties on all matters
submitted to the Company's stockholders. Further, the Stockholders Agreement
contains an irrevocable proxy pursuant to which the initial holders of
Viasystems Group Class A Common Stock and their transferees grant to James N.
Mills (or to Fund III if Mr. Mills is no longer an officer or director of
Viasystems Group) the power to vote all shares of Viasystems Group Class A
Common Stock held by such parties on all matters submitted to the Company's
stockholders. The Stockholders Agreement terminates on its tenth anniversary
date, although the preemptive rights, drag-along rights and tag-along rights
contained therein terminate earlier upon the consummation of a firm commitment
underwritten public offering of Viasystems Group Common Stock.

     The Company purchases certain connectors and other products needed to
manufacture PCBs and backplanes from Berg. Prior to the Company's acquisition of
the Lucent Division, the Lucent Division

                                       124
<PAGE>   126

purchased certain electronic connections from Berg pursuant to a written supply
contract (the "Berg Supply Agreement"). Berg and the Company have agreed to
continue to supply and purchase products on the same terms and condition as set
forth in the Berg Supply Agreement. Berg is controlled by Hicks Muse, through
its affiliates, and managed by Mills and Partners. In addition, certain of the
Company's directors and executive officers have financial interests in Berg. In
fiscal year 1997, the company purchased approximately $41.0 million of product
from Berg. In fiscal year 1996, the Company and the Lucent Division collectively
purchased approximately $38.8 million of product from Berg. In fiscal years 1994
and 1995, the Lucent Division purchased $30.1 million and $37.1 million,
respectively, of product from Berg. The Company expects to continue to purchase
product from Berg on terms and conditions substantially similar to the terms and
conditions of the Berg Supply Agreement, which the Company believes to be
comparable to the terms that would be reached in an arm's-length transaction.

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(A) The following financial statements, schedules and exhibits are filed as part
of this report.

     (1) Financial Statements

          See Index to Financial Statements and Schedules at Item 8 on page 29.

     (2) Exhibits (numbered in accordance with Item 601 of Regulation S-K)

<TABLE>
<CAPTION>
        EXHIBIT
          NO.
        -------
<C>                      <S>
          2.1            -- Securities Purchase Agreement, dated as of October 1,
                            1996, among Circo Craft Holding Company and certain
                            Purchasers (defined therein).(1)
          2.2            -- Acquisition Agreement, dated as of November 26, 1996,
                            among Lucent Technologies Inc., Circo Technologies Group,
                            Inc. and Circo Craft Technologies, Inc.(1)
          2.3            -- Agreement and Plan of Merger, dated as of April 11, 1997,
                            by and among Viasystems Group, Inc., HMTF Acquisition,
                            L.P., HMTF U.K. Acquisition Company, Hicks, Muse, Tate &
                            Furst Equity Fund III and HM3 Coinvesters, L.P.(1)
          2.4            -- Agreement and Plan of Merger, dated as of June 6, 1997,
                            by and between Viasystems Group, Inc. and Chips Holdings,
                            Inc.(1)
          2.5            -- Agreement and Plan of Merger dated, as of June 6, 1997,
                            by and between Viasystems, Inc. and Chips Acquisition,
                            Inc.(1)
          2.6            -- Acquisition Agreement, dated as of January 29, 1998,
                            among Viasystems B.V. and Print Service Holding N.V.*
          2.7            -- Sale and Purchase Agreement, dated as of February 11,
                            1998, between Viasystems, S.r.1., as purchaser, European
                            Circuits SA and individuals named therein, as sellers.*
          3.1            -- Certificate of Incorporation of Viasystems, Inc.(1)
          3.2            -- Bylaws of Viasystems, Inc.(1)
          4.1            -- Indenture, dated as of June 6, 1997, by and between
                            Viasystems, Inc. and The Bank of New York, as Trustee.(1)
          4.2            -- Form of the Old Note (included in Exhibit 4.1, Exhibit
                            A).(1)
          4.3            -- Form of the New Note (included in Exhibit 4.1, Exhibit
                            B).(1)
</TABLE>

                                       125
<PAGE>   127

<TABLE>
<CAPTION>
        EXHIBIT
          NO.
        -------
<C>                      <S>
          4.4            -- Second Amended and Restated Credit Agreement dated as of
                            June 5, 1997 among Viasystems Group, Inc., Viasystems,
                            Inc., Circo Craft Co. Inc., PCB Investments Plc, Forward
                            Group Plc, Chips Acquisition Limited and Interconnection
                            Systems (Holdings) Limited; and The Chase Manhattan Bank
                            of Canada, Chase Manhattan International Limited and The
                            Chase Manhattan Bank.(1)
          4.5            -- Amended and Restated Guarantee and Collateral Agreement,
                            dated as of April 11, 1997.(1)
          4.6            -- Supplement to Guarantee and Collateral Agreement, dated
                            as of June 5, 1997.(1)
          4.7            -- Indenture, dated as of February 17, 1998, by and between
                            Viasystems, Inc. and the Bank of New York, as Trustee.*
          4.8            -- Form of Initial Note (included in Exhibit 4.7, Exhibit
                            A).*
          4.9            -- Form of Exchange Note (included in Exhibit 4.8, Exhibit
                            B).*
          4.10           -- First Amendment, dated as of August 29, 1997, to the
                            Second Amended and Restated Credit Agreement, dated as of
                            June 5, 1997, among Viasystems Group, Inc., Viasystems,
                            Inc., Circo Craft Co. Inc., PCB Investments Plc, Forward
                            Group Plc, Chips Acquisition Limited and Interconnection
                            Systems (Holdings) Limited; and The Chase Manhattan Bank
                            of Canada, Chase Manhattan International Limited and The
                            Chase Manhattan Bank.*
          4.11           -- Second Amendment, dated as of February 3, 1998, to the
                            Second Amended and Restated Credit Agreement, dated as of
                            June 5, 1997 among Viasystems Group, Inc., Viasystems,
                            Inc., Circo Craft Co. Inc., PCB Investments Plc, Forward
                            Group Plc, Chips Acquisition Limited and Interconnection
                            Systems (Holdings) Limited; and The Chase Manhattan Bank
                            of Canada, Chase Manhattan International Limited and The
                            Chase Manhattan Bank.*
         10.1            -- Supply Agreement dated as of November 26, 1996, by and
                            between Lucent Technologies Inc. and Circa Craft
                            Technologies, Inc. (confidential Treatment was granted
                            with respect to certain portions of this exhibit).(1)
         10.2            -- [Intentionally omitted.]
         10.3            -- Amended and Restated Viasystems Group, Inc. 1997 Stock
                            Option Plan.(1)
         10.4            -- Amended and Restated Stock Option Agreement dated, as of
                            November 26, 1996 between Circo Technologies Group, Inc.,
                            formerly Circo Craft Holding Company and James N.
                            Mills.(1)
         10.5            -- Amended and Restated Stock Option Agreement dated, as of
                            November 26, 1996 between Circo Technologies Group, Inc.,
                            formerly Circo Craft Holding Company and David M.
                            Sindelar.(1)
         10.6            -- Amended and Restated Stock Option Agreement, dated as of
                            November 26, 1996 between Circo Technologies Group, Inc.,
                            formerly Circo Craft Holding Company and Larry S.
                            Bacon.(1)
         10.7            -- Amended and Restated Stock Option Agreement, dated as of
                            November 26, 1996 between Circo Technologies Group, Inc.,
                            formerly Circo Craft Holding Company and W. Thomas
                            McGhee.(1)
         10.8            -- Stock Option Agreement, dated as of June 6, 1997 between
                            Viasystems Group, Inc. and James N. Mills.(1)
         10.9            -- Stock Option Agreement, dated as of June 6, 1997 between
                            Viasystems Group, Inc. and David M. Sindelar.(1)
</TABLE>

                                       126
<PAGE>   128

<TABLE>
<CAPTION>
        EXHIBIT
          NO.
        -------
<C>                      <S>
         10.10           -- Stock Option Agreement, dated as of June 6, 1997 between
                            Viasystems Group, Inc. and Larry S. Bacon.(1)
         10.11           -- Stock Option Agreement, dated as of June 6, 1997 between
                            Viasystems Group, Inc. and W. Thomas McGhee.(1)
         10.12           -- Viasystems Group, Inc. Stock Option Agreement, dated as
                            of February 4, 1997, with Richard W. Vieser.(1)
         10.13           -- Viasystems Group, Inc. Stock Option Agreement, dated as
                            of February 4, 1997, with Kenneth F. Yontz.(1)
         10.14           -- Third Amended and Restated Monitoring and Oversight
                            Agreement, dated as of June 6, 1997, among Viasystems
                            Group, Inc., Viasystems, Inc., Viasystems Technologies
                            Corp., Circo Craft Co. Inc., Viasystems International,
                            Inc., PCB Acquisition Limited, PCB Investments PLC, Chips
                            Acquisition Limited and Hicks, Muse & Co. Partners,
                            L.P.(1)
         10.15           -- Third Amended and Restated Financial Advisory Agreement,
                            dated as of June 6, 1997, among Viasystems Group, Inc.,
                            Viasystems, Inc., Viasystems Technologies Corp., Circo
                            Craft Co. Inc., Viasystems International, Inc., PCB
                            Acquisition Limited, PCB Investments PLC, Chips
                            Acquisition Limited and Hicks, Muse & Co. Partners,
                            L.P.(1)
         10.16           -- Purchase Agreement, dated as of June 2, 1997, by and
                            among Viasystems, Inc. and Chase Securities Inc., NatWest
                            Capital Markets Limited and Schroder Wertheim & Co.
                            Incorporated.(1)
         10.17           -- Exchange and Registration Rights Agreements, dated as of
                            June 6, 1997, by and among Viasystems, Inc. and Chase
                            Securities, Inc., NatWest Capital Markets Limited and
                            Schroder Wertheim & Co. Incorporated.(1)
         10.18           -- Executive Employment Agreement, dated as of January 1,
                            1997, by and among Circo Technologies Group, Inc., Circo
                            Craft Technologies, Inc. and James N. Mills.(1)
         10.19           -- Executive Employment Agreement, dated as of January 1,
                            1997, by and among Circo Technologies Group, Inc., Circo
                            Craft Technologies, Inc. and David M. Sindelar.(1)
         10.20           -- Executive Employment Agreement, dated as of January 1,
                            1997, by and among Circo Technologies Group, Inc., Circo
                            Craft Technologies, Inc. and Robert N. Mills.(1)
         10.21           -- Executive Employment Agreement, dated as of January 1,
                            1997, by and among Circo Technologies Group, Inc., Circo
                            Craft Technologies, inc. and Larry S. Bacon.(1)
         10.22           -- Executive Employment Agreement, dated as of January 1,
                            1997, by and among Circo Technologies Group, Inc., Circo
                            Craft Technologies, Inc. and W. Thomas McGhee.(1)
         10.23           -- Executive Employment Agreement, dated as of January 1,
                            1997, by and among Circo Technologies Group, Inc., Circo
                            Craft Technologies, Inc. and Gerald C. Nelson.(1)
         10.24           -- Agreement, dated as of December 30, 1996, between Circo
                            Craft Technologies, Inc. and the Communication Workers of
                            America.(1)
         10.25           -- Environmental, Health and Safety Agreement, dated as of
                            November 26, 1996, between Lucent Technologies and Circo
                            Craft Technologies, Inc.(1)
</TABLE>

                                       127
<PAGE>   129

<TABLE>
<CAPTION>
        EXHIBIT
          NO.
        -------
<C>                      <S>
         10.26           -- Purchase Agreement, dated as of February 9, 1998, among
                            Viasystems Inc., Chase Securities Inc. and NatWest
                            Capital Markets Limited.*
         10.27           -- Exchange and Registration Rights Agreement, dated as of
                            February 17, 1998, by and between Viasystems, Inc., Chase
                            Securities Inc. and NatWest Capital Markets Limited.*
         16.1            -- Letter from Deloitte & Touche regarding change in
                            certifying accountant for Circo Craft Co. Inc.*
         16.2            -- Letter from KPMG Audit PLC regarding change in auditors
                            for Forward Group PLC.*
         16.3            -- Letter from Ernst & Young regarding change in auditors
                            for Interconnection Systems (Holdings) Limited.*
         21.1            -- Subsidiaries of Viasystems, Inc.*
         25.1            -- Statement of Eligibility and Qualification of The Bank of
                            New York, as Trustee under the Indenture filed as Exhibit
                            4.1 on Form T-1.(1)
         27.1            -- Financial Data Schedule.*
         99.1            -- Form of Letter of Transmittal.(1)
         99.2            -- Form of Notice of Guaranteed Delivery. (1)
</TABLE>

---------------

     (1) Previously filed.

      *  Filed herewith.

(B) No reports on Form 8-K were filed by the Registrant during the last quarter
of 1997.

                                       128
<PAGE>   130

                                   SIGNATURES

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

                                            VIASYSTEMS, INC.

                                            By    /s/ DAVID M. SINDELAR

                                             -----------------------------------
                                                      David M. Sindelar
                                                    Senior Vice President
                                                 and Chief Financial Officer
Date: March 30, 1998

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been duly signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
                     SIGNATURES                                          TITLE                        DATE
                     ----------                                          -----                        ----
<C>                                                      <S>                                    <C>

                 /s/ JAMES N. MILLS                      Chairman of the Board of Directors      March 30, 1998
-----------------------------------------------------      and Chief Executive Officer
                   James N. Mills                          (Principal Executive Officer)

                /s/ DAVID M. SINDELAR                    Senior Vice President and Chief         March 30, 1998
-----------------------------------------------------      Financial Officer (Principal
                  David M. Sindelar                        Financial Officer)

                 /s/ ROBERT N. MILLS                     Director, President and Chief           March 30, 1998
-----------------------------------------------------      Operating Officer
                   Robert N. Mills

                 /s/ THOMAS O. HICKS                     Director                                March 30, 1998
-----------------------------------------------------
                   Thomas O. Hicks

                  /s/ JACK D. FURST                      Director                                March 30, 1998
-----------------------------------------------------
                    Jack D. Furst

                /s/ RICHARD W. VIESER                    Director                                March 30, 1998
-----------------------------------------------------
                  Richard W. Vieser

                /s/ KENNETH F. YONTZ                     Director                                March 30, 1998
-----------------------------------------------------
                  Kenneth F. Yontz
</TABLE>

                                       129
<PAGE>   131

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
        EXHIBIT
          NO.                                    DESCRIPTION
        -------                                  -----------
<C>                      <S>
          2.1            -- Securities Purchase Agreement, dated as of October 1,
                            1996, among Circo Craft Holding Company and certain
                            Purchasers (defined therein).(1)
          2.2            -- Acquisition Agreement, dated as of November 26, 1996,
                            among Lucent Technologies Inc., Circo Technologies Group,
                            Inc. and Circo Craft Technologies, Inc.(1)
          2.3            -- Agreement and Plan of Merger, dated as of April 11, 1997,
                            by and among Viasystems Group, Inc., HMTF Acquisition,
                            L.P., HMTF U.K. Acquisition Company, Hicks, Muse, Tate &
                            Furst Equity Fund III and HM3 Coinvesters, L.P.(1)
          2.4            -- Agreement and Plan of Merger, dated as of June 6, 1997,
                            by and between Viasystems Group, Inc. and Chips Holdings,
                            Inc.(1)
          2.5            -- Agreement and Plan of Merger dated, as of June 6, 1997,
                            by and between Viasystems, Inc. and Chips Acquisition,
                            Inc.(1)
          2.6            -- Acquisition Agreement, dated as of January 29, 1998,
                            among Viasystems B.V. and Print Service Holding N.V.*
          2.7            -- Sale and Purchase Agreement, dated as of February 11,
                            1998, between Viasystems, S.r.1., as purchaser, European
                            Circuits SA and individuals named therein, as sellers.*
          3.1            -- Certificate of Incorporation of Viasystems, Inc.(1)
          3.2            -- Bylaws of Viasystems, Inc.(1)
          4.1            -- Indenture, dated as of June 6, 1997, by and between
                            Viasystems, Inc. and The Bank of New York, as Trustee.(1)
          4.2            -- Form of the Old Note (included in Exhibit 4.1, Exhibit
                            A).(1)
          4.3            -- Form of the New Note (included in Exhibit 4.1, Exhibit
                            B).(1)
          4.4            -- Second Amended and Restated Credit Agreement dated as of
                            June 5, 1997 among Viasystems Group, Inc., Viasystems,
                            Inc., Circo Craft Co. Inc., PCB Investments Plc, Forward
                            Group Plc, Chips Acquisition Limited and Interconnection
                            Systems (Holdings) Limited; and The Chase Manhattan Bank
                            of Canada, Chase Manhattan International Limited and The
                            Chase Manhattan Bank.(1)
          4.5            -- Amended and Restated Guarantee and Collateral Agreement,
                            dated as of April 11, 1997.(1)
          4.6            -- Supplement to Guarantee and Collateral Agreement, dated
                            as of June 5, 1997.(1)
          4.7            -- Indenture, dated as of February 17, 1998, by and between
                            Viasystems, Inc. and the Bank of New York, as Trustee.*
          4.8            -- Form of Initial Note (included in Exhibit 4.7, Exhibit
                            A).*
          4.9            -- Form of Exchange Note (included in Exhibit 4.8, Exhibit
                            B).*
          4.10           -- First Amendment, dated as of August 29, 1997, to the
                            Second Amended and Restated Credit Agreement, dated as of
                            June 5, 1997, among Viasystems Group, Inc., Viasystems,
                            Inc., Circo Craft Co. Inc., PCB Investments Plc, Forward
                            Group Plc, Chips Acquisition Limited and Interconnection
                            Systems (Holdings) Limited; and The Chase Manhattan Bank
                            of Canada, Chase Manhattan International Limited and The
                            Chase Manhattan Bank.*
</TABLE>
<PAGE>   132

<TABLE>
<CAPTION>
        EXHIBIT
          NO.                                    DESCRIPTION
        -------                                  -----------
<C>                      <S>
          4.11           -- Second Amendment, dated as of February 3, 1998, to the
                            Second Amended and Restated Credit Agreement, dated as of
                            June 5, 1997 among Viasystems Group, Inc., Viasystems,
                            Inc., Circo Craft Co. Inc., PCB Investments Plc, Forward
                            Group Plc, Chips Acquisition Limited and Interconnection
                            Systems (Holdings) Limited; and The Chase Manhattan Bank
                            of Canada, Chase Manhattan International Limited and The
                            Chase Manhattan Bank.*
         10.1            -- Supply Agreement dated as of November 26, 1996, by and
                            between Lucent Technologies Inc. and Circa Craft
                            Technologies, Inc. (confidential Treatment was granted
                            with respect to certain portions of this exhibit).(1)
         10.2            -- [Intentionally omitted.]
         10.3            -- Amended and Restated Viasystems Group, Inc. 1997 Stock
                            Option Plan.(1)
         10.4            -- Amended and Restated Stock Option Agreement dated, as of
                            November 26, 1996 between Circo Technologies Group, Inc.,
                            formerly Circo Craft Holding Company and James N.
                            Mills.(1)
         10.5            -- Amended and Restated Stock Option Agreement dated, as of
                            November 26, 1996 between Circo Technologies Group, Inc.,
                            formerly Circo Craft Holding Company and David M.
                            Sindelar.(1)
         10.6            -- Amended and Restated Stock Option Agreement, dated as of
                            November 26, 1996 between Circo Technologies Group, Inc.,
                            formerly Circo Craft Holding Company and Larry S.
                            Bacon.(1)
         10.7            -- Amended and Restated Stock Option Agreement, dated as of
                            November 26, 1996 between Circo Technologies Group, Inc.,
                            formerly Circo Craft Holding Company and W. Thomas
                            McGhee.(1)
         10.8            -- Stock Option Agreement, dated as of June 6, 1997 between
                            Viasystems Group, Inc. and James N. Mills.(1)
         10.9            -- Stock Option Agreement, dated as of June 6, 1997 between
                            Viasystems Group, Inc. and David M. Sindelar.(1)
         10.10           -- Stock Option Agreement, dated as of June 6, 1997 between
                            Viasystems Group, Inc. and Larry S. Bacon.(1)
         10.11           -- Stock Option Agreement, dated as of June 6, 1997 between
                            Viasystems Group, Inc. and W. Thomas McGhee.(1)
         10.12           -- Viasystems Group, Inc. Stock Option Agreement, dated as
                            of February 4, 1997, with Richard W. Vieser.(1)
         10.13           -- Viasystems Group, Inc. Stock Option Agreement, dated as
                            of February 4, 1997, with Kenneth F. Yontz.(1)
         10.14           -- Third Amended and Restated Monitoring and Oversight
                            Agreement, dated as of June 6, 1997, among Viasystems
                            Group, Inc., Viasystems, Inc., Viasystems Technologies
                            Corp., Circo Craft Co. Inc., Viasystems International,
                            Inc., PCB Acquisition Limited, PCB Investments PLC, Chips
                            Acquisition Limited and Hicks, Muse & Co. Partners,
                            L.P.(1)
         10.15           -- Third Amended and Restated Financial Advisory Agreement,
                            dated as of June 6, 1997, among Viasystems Group, Inc.,
                            Viasystems, Inc., Viasystems Technologies Corp., Circo
                            Craft Co. Inc., Viasystems International, Inc., PCB
                            Acquisition Limited, PCB Investments PLC, Chips
                            Acquisition Limited and Hicks, Muse & Co. Partners,
                            L.P.(1)
         10.16           -- Purchase Agreement, dated as of June 2, 1997, by and
                            among Viasystems, Inc. and Chase Securities Inc., NatWest
                            Capital Markets Limited and Schroder Wertheim & Co.
                            Incorporated.(1)
         10.17           -- Exchange and Registration Rights Agreements, dated as of
                            June 6, 1997, by and among Viasystems, Inc. and Chase
                            Securities, Inc., NatWest Capital Markets Limited and
                            Schroder Wertheim & Co. Incorporated.(1)
</TABLE>
<PAGE>   133

<TABLE>
<CAPTION>
        EXHIBIT
          NO.                                    DESCRIPTION
        -------                                  -----------
<C>                      <S>
         10.18           -- Executive Employment Agreement, dated as of January 1,
                            1997, by and among Circo Technologies Group, Inc., Circo
                            Craft Technologies, Inc. and James N. Mills.(1)
         10.19           -- Executive Employment Agreement, dated as of January 1,
                            1997, by and among Circo Technologies Group, Inc., Circo
                            Craft Technologies, Inc. and David M. Sindelar.(1)
         10.20           -- Executive Employment Agreement, dated as of January 1,
                            1997, by and among Circo Technologies Group, Inc., Circo
                            Craft Technologies, Inc. and Robert N. Mills.(1)
         10.21           -- Executive Employment Agreement, dated as of January 1,
                            1997, by and among Circo Technologies Group, Inc., Circo
                            Craft Technologies, inc. and Larry S. Bacon.(1)
         10.22           -- Executive Employment Agreement, dated as of January 1,
                            1997, by and among Circo Technologies Group, Inc., Circo
                            Craft Technologies, Inc. and W. Thomas McGhee.(1)
         10.23           -- Executive Employment Agreement, dated as of January 1,
                            1997, by and among Circo Technologies Group, Inc., Circo
                            Craft Technologies, Inc. and Gerald C. Nelson.(1)
         10.24           -- Agreement, dated as of December 30, 1996, between Circo
                            Craft Technologies, Inc. and the Communication Workers of
                            America.(1)
         10.25           -- Environmental, Health and Safety Agreement, dated as of
                            November 26, 1996, between Lucent Technologies and Circo
                            Craft Technologies, Inc.(1)
         10.26           -- Purchase Agreement, dated as of February 9, 1998, among
                            Viasystems Inc., Chase Securities Inc. and NatWest
                            Capital Markets Limited.*
         10.27           -- Exchange and Registration Rights Agreement, dated as of
                            February 17, 1998, by and between Viasystems, Inc., Chase
                            Securities Inc. and NatWest Capital Markets Limited.*
         16.1            -- Letter from Deloitte & Touche regarding change in
                            certifying accountant for Circo Craft Co. Inc.*
         16.2            -- Letter from KPMG Audit PLC regarding change in auditors
                            for Forward Group PLC.*
         16.3            -- Letter from Ernst & Young regarding change in auditors
                            for Interconnection Systems (Holdings) Limited.*
         21.1            -- Subsidiaries of Viasystems, Inc.*
         25.1            -- Statement of Eligibility and Qualification of The Bank of
                            New York, as Trustee under the Indenture filed as Exhibit
                            4.1 on Form T-1.(1)
         27.1            -- Financial Data Schedule.*
         99.1            -- Form of Letter of Transmittal.(1)
         99.2            -- Form of Notice of Guaranteed Delivery. (1)
</TABLE>

---------------

     (1) Previously filed.

      *  Filed herewith.