U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB/A

(Mark One)
[X]   Annual Report Pursuant To Section 13 Or 15(D) Of The Securities Exchange
      Act Of 1934

[X ] Transition Report Under Section 13 Or 15(D) Of The Securities Exchange Act
     Of 1934

                        COMMISSION FILE NUMBER: 333-40738

                              SPEAR & JACKSON, INC.
                 (Name of small business issuer in its charter)

       Nevada                                           91-2037081
(State or other jurisdiction               (I.R.S. Employer of incorporation
                                            or organization) Identification No.)

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

                                 (561) 994-0744
                            Issuer's telephone number

Securities registered under Section 12(b) of the Exchange Act:     NONE.

Securities registered under Section 12(g) of the Exchange Act:

                    COMMON STOCK, PAR VALUE $0.001 PER SHARE.

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes [  ] No [X]

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  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-KSB
or any amendment to this Form 10-KSB. [X]

<PAGE>

State issuer's revenues for its most recent period ended September 30, 2002,
$90,979,000.

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. $ 557,936,652 as of May 23, 2003.

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. 12,011,122 Shares of Common Stock as
of May 23, 2003

Transitional Small Business Disclosure Format (check one): Yes [X] No [ ]

The discussion in this report on Form 10-KSB regarding Spear & Jackson, Inc. and
its subsidiaries, and their business and operations includes "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1996. Such statements consist of any statement other than a recitation of
historical fact and can be identified by the use of forward-looking terminology
such as "may," "expect," "anticipate," "estimate," or "continue" or the negative
thereof or variations thereon or comparable terminology. The reader is cautioned
that all forward-looking statements are necessarily speculative and there are
certain risks and uncertainties that could cause actual events or results to
differ materially from those referred to in such forward-looking statements. We
do not have a policy of updating or revising forward-looking statements and thus
it should not be assumed that sounds bias over time means that actual events are
bearing out as estimated in such forward-looking statements.

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS.

General

         We are in the business of manufacturing and distributing a wide range
of tools and magnetic and metrology equipment under various brand names
including:
         *        Spear & Jackson  - garden tools;
         *        Neill - hand tools;
         *        Bowers -  bore gauges and precision measuring tools;
         *        Coventry Gauge - air and other gauges;
         *        CV - precision measuring instruments;
         *        Robert Sorby - wood turning tools;
         *        Moore & Wright - precision tools ;
         *        Eclipse - blades and magnetic equipment;
         *        Elliot Lucas - pincers and pliers ;
         *        Tyzack - builders' tools, and
         *        Megapro - screwdrivers.

<PAGE>

We currently sell our products to industrial, commercial and retail markets
throughout the world, with a significant concentration in the United Kingdom,
European Union, Australia and New Zealand.

The Company sells its products in a variety of related industries. These
principally comprise:

The non-powered hand tool industry in which the Company has hand tool,
engineer's hand tool and garden tool business interests. These products are
typically sold in industrial catalogs, hardware stores, garden centers and
multiple retailers. This industry is highly mature with clearly defined
traditional brand names being joined by a broad base of "house brands" easily
supplied from third world manufacturers.

The magnetic industry. This can be split into magnet manufacturers and magnetic
integrators. The magnet users and integrators utilize the magnetic materials to
produce products such as security sensors, watches, electrical windows and
magnetic filters.

The metrology industry which can be split into two main market segments: (i) low
tolerance tools such as tape measures, rulers and carpenters protractors and
(ii) the measurement of technologically precise machined components using
surface roughness measuring equipment and laser measuring instruments, etc. The
Company's Bowers Metrology Group presently operates in the latter market segment
on a worldwide basis.

The hobbyist and professional wood turning industry. This industry is relatively
small and caters to individuals who either have reasonable disposable income,
often retirees, or professional wood turners producing crafts.

Corporate Organization

We were incorporated in December, 1998 under the laws of the state of Nevada. We
conduct our business operations through our wholly owned subsidiaries, Spear &
Jackson plc and Bowers Group plc, Mega Tools Ltd. and Mega Tools USA, Inc.

We acquired  each of Mega Tools Ltd. and Mega Tools USA,  Inc. on September  30,
1999.  Prior to  September  30,  1999,  Mega Tools USA,  Inc.  was operated as a
subsidiary of Mega Tools Ltd. We acquired Mega Tools Ltd. from Ms. Maria Morgan,
Envision Worldwide Products Ltd., Mr. Robert Jeffery,  Mr. Lex Hoos and Mr. Eric
Paakspuu in exchange for the issue of 6,200,000  restricted shares of our common
stock. We acquired Mega Tools USA, Inc. from Mega Tools Ltd. in exchange for the
payment of $340,000,  which was  satisfied  by the issue of a demand  promissory
note by us to Mega Tools Ltd.  Our  acquisition  of Mega  Tools  USA,  Inc.  was
completed  immediately  prior to our  acquisition  of Mega Tools Ltd.  We had no
business  assets prior to the acquisition of Mega Tools Ltd. and Mega Tools USA.
Mega Tools Ltd. was incorporated in British Columbia, Canada on January 7, 1994.
Mega Tools USA, Inc. was incorporated  under the laws of the State of Washington
on April 18, 1994.

                                       3
<PAGE>

In September 2002, we acquired all the issued and outstanding shares of Spear &
Jackson plc and Bowers Group, plc together ("S&J") owned by USI Mayfair Limited
for a purchase price of 3,543,281 shares of common stock and promissory notes in
the principal amount of (pound)150,000. As further explained in note 3 of the
financial statements, this transaction has been treated as a reverse
acquisition.

Reflecting the relative size of S&J within the continued business, Megapro
Tools, Inc. changed its name to Spear & Jackson, Inc.

Strategy

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

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

(b)      Continuous product improvement and innovation.

(c)      Increasing market share by offering highly competitive product
         offerings.

(d)      The launch of new and innovative products and product ranges.

(e)      Significantly increasing our US market penetration via large "Big Box"
         outlets.

Products and Services

The Company offers a comprehensive range of tools and equipment ranging from
hacksaw blades to pliers from secateurs to digging forks and from a simple red
magnet to a computer controlled materials handling system. The Company's product
offering is supported by a pipeline of new products and extensions.

Since the deemed acquisition of Megapro Tools, Inc. on September 6, 2002, recent
product announcements include:

                                       4
<PAGE>

The world's strongest shovel range, a new range of shovels for use in
construction, civil engineering and on landscape sites. This product line was
launched in December 2002 and is the Company's most recent collaboration with
JCB branded products.

In November 2002, the Company's Eclipse Magnetics operations announced that it
would be supplying Jaguar with magnetic oil filters. The low and high pressure
oil filters are rated to operate at 20 and 200 bar, respectively, making a
significant impact in a power train plant and pressing industries.

In November 2002, the Company announced a new magnetic pickup tool, "Needle
Stick". The hand-held magnetic pickup tool allows handlers of needles to safely
extract and dispose of needles in a safe manner without the need for cumbersome
forceps. In addition, multiple needles can be extracted in one operation.

In January 2003 the Company's Neill Tools operations launched "The Demolition
Saw", a multipurpose hard wearing saw with the ability to cut through metal,
plastic, wood and concrete blocks thanks to the application of a new edge
treatment to the saw's high tensile toughened blade.

Also in January the Company launched a new Eclipse high access saw and a new
design of a junior hacksaw which allows access into restricted spaces.

A range of power tools and air power tools was launched in February 2003 in the
UK and Europe. The range of 71 products includes such items as compressors, air
drills, impact wrenches, spray guns, angle grinders, impact drills, jig saws,
sanders, circular saws, engravers to Mitre saws and many more. The significance
of these power tools is that they are all finished with a new "soft touch" and
are sold as kits in blow mold cases.

All of the new products were presented at the Cologne Show in March 2003, the
premier hardware and tool show in the world.

The Tyzack brand, synonymous with plastering, and the initiator of the first
steel plasterers' trowel launched a comprehensive range of drywall lining tools.
The range comprises jointing, taping knives and saws with numerous accessories
including support props, corners and lifters.

Eclipse Magnetics signed an exclusive supply agreement with a leading
manufacturer of metal detection equipment. This will complement the division's
existing expertise in the separation field land will provide total foreign body
detection of all metals to the food and pharmaceutical industries.

In March 2003, Eclipse also launched a European multi-lingual merchandiser range
of 52 different magnets at the Cologne International Hardware Fair. The
revolutionary packaging and display units enable the magnets to be positioned at
key point of sale locations, enabling magnets to take their rightful place at
the forefront of engineering consumables.

                                       5
<PAGE>

In addition, in April 2003 Eclipse Magnetics began a worldwide launch of a new
safety shim (TM). This ingenious idea of creating a safety pre-test system to
guarantee a safe lift for lifting loads has been granted full patent status.

Also in April 2003, Bowers launched two new products in the USA, the Checkmatic
universal bench gauge and the revolutionary Smart Plug 2-point measuring system.
These tools are capable of performing a multitude of internal and external
measuring tasks.

The principal business units and their product offerings can be summarized as:

Neill Tools which consists of S&J Garden Tools and Neill Tools, manufactures,
among other products, hand hacksaws, blades, hacksaw frames, builder's tools,
riveter guns, wood saws and lawn, garden agricultural tools, all non-powered. In
addition, Neill Tools has supplemented its UK manufactured products with
factored products from Far Eastern suppliers.

Eclipse Magnetics' key products are permanent magnets (cast alloy), magnetic
tools, machine tools, magnetic chucks and turnkey magnetic systems. Products
range from very simple low-cost items to technically complex high value added
systems. In addition, Eclipse Magnetics engages in the trading of other magnetic
material sources from the Far East both to end-customers as well as parts to UK
manufacturers. Eclipse is also involved in applied magnetics and supplies many
areas of manufacturing with products such as separators, conveyors, lifting
equipment and material handling solutions.

The Company's metrology division comprises:

Moore & Wright and Coventry Gauge which manufacture a wide variety of products.
These products include: low technology measuring tools and hand held gauges for
checking the threads, diameters and tapers of machined components. This division
has supplemented its manufactured products with a range of factored items.

Bowers Metrology which is a manufacturer of high specification metrology
instruments including precision bore gauges, which measure the diameter of
machined components. In addition to the core range of bore gauges, the Company
also manufacturers universal gauges and hardness testing equipment.

Robert Sorby is a manufacturer of hand held wood working tools and complementary
products. The products are handcrafted with strong aesthetic appeal.

                                       6
<PAGE>

Customers

The Company has a broad customer base with no single customer accounting for
greater than 10% of total sales.

Marketing and Distribution

The garden and hand tools are primarily sold through three main channels,
retail, wholesale and industrial. The metrology and magnetics divisions sell
through industrial product distributors and directly to end users. The hobby
products are sold by hobby retailers and in their speciality catalogs.

The marketing and distribution policies are dictated by the unit price of the
product in the market segment for which the products are ultimately destined.
High volume consumable products such as hacksaw blades are treated as
commodities and sold widely via engineering distributors. Precision laboratory
based measuring machines which require a technical sale, are treated as a piece
of capital equipment, and are sold directly to the end users. Our products are
distributed in the United Kingdom, European Union, Australasia and North
America. Our products are sold through the various distribution channels
supported by in-house sales professionals. Products are handled by the mass
merchants, independent sales agents, engineering distributors, as well as sales
direct to retailer and end users. Specific distribution routes are adopted by
the divisions, reflecting either the value of the product being marketed or its
various types of complexity. For the high volume low unit value products such as
garden tools, hand tools and certain magnetic and metrology tools the normal
course of distribution is via the merchandiser or industrial tool distributors.
For low volume, high unit value products such as magnetic systems the normal
route would be direct to the end user.

Brands

A significant part of the Company's operation is branding and brands strategy.
Spear & Jackson has held leading brand names in its core business since 1760.
Neill Tools is one of the largest British based manufacturers of hand tools with
leading brand names such as Neill Tools, Eclipse, Elliott Lucas and Spear &
Jackson. In the metrology division, the Moore & Wright brand has been recognized
for over 100 years for its traditional craftsmanship while the Bowers name has
been at the forefront of international precision measuring equipment for over 50
years. Eclipse Magnetics is a recognized brand name in the UK manufacturing
industry because of its long history supplying magnetic tools. Robert Sorby is a
recognized specialist in marketing its wood turning tools.

Competition

We compete for sales of our products with many established companies including
Henry Taylor and Pfeil in carving and turning tools, Fiskars and Wilkinson Sword
in cutting tools and T&T in air tools. In addition, AMES/True Temper possesses a
significant share of the North American lawn and garden tools market.

                                       7

<PAGE>

Employees

At April 30, 2003, the Company employed 835 full-time and 2 part-time employees.
512 were in manufacturing, 80 in engineering, 139 in sales and marketing, 32 in
distribution and 74 in general administration. 367 of the Company's employees
are subject to union agreements. Our Company's union contracts with Neill Tools
at the Company's Atlas and Wednesbury UK sites come due in January 2004 and the
agreements with the Bowers workforce at Bradford in the UK become due in July
2003. The Company believes its relationships with employees are good.

Intellectual Property

Our ability to compete effectively depends in part on the protection of our
license patents and trademarks, which are used in the design, marketing and
sales of our many products. We can provide no assurance to investors that the
patents and trademark licensed by us will not be challenged, invalidated, or
circumvented by other manufacturers.

The Company currently maintains the rights to 2 patents issued by the United
States Patent and Trademark Office, 3 patents issued by Canada, 3 patents issued
by Great Britain, 3 patents issued by Taiwan, 3 patents issued by China, and 1
patent issued by APDC. The patents relate to certain tools manufactured by the
Company and certain mechanisms utilized in the tools manufactured by the
Company.

The Company currently maintains the rights to 7 registered designs issued by the
United States, 2 registered designs issued by Canada, 38 registered designs
issued by Great Britain, 13 registered designs issued by Taiwan, 7 registered
designs issued by China, 2 registered designs issued by France, 1 registered
design issued by New Zealand, 1 registered design issued by Benelux, 1
registered design issued by Germany, and 1 registered design issued by India.
The registered designs relate to certain tools manufacture d by the Company.

ITEM 2.           DESCRIPTION OF PROPERTY.

Our principal executive office is located at 2200 Corporate Boulevard, Suite
314, Boca Raton, Florida 33494. The premises consist of approximately 3,000
square feet. We lease the space at a monthly rate of $3,728. The lease expires
in September 2003. We operate from ten sites in the United Kingdom. Six of such
locations are plant facilities and four are office distribution facilities.
Three of the locations are owned and the remaining seven are leased under
long-term leases. We own one distribution and manufacturing facility in France.
The square footage ranges from 3,000 to 240,000 square feet. In addition, we
have two leased sales units located in Australia and New Zealand.

                                       8
<PAGE>

We do not lease or own any other real property.

ITEM 3.           LEGAL PROCEEDINGS.

We are not a party to any material legal proceedings.

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

No matters were submitted to our security holders for a vote during the final
quarter of our fiscal year ending September 30, 2002.

                                     PART II

ITEM 5.           MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Market Information

Our shares are currently trading on the OTC Bulletin Board under the stock
symbol SJCK. Our shares began trading on the OTC Bulletin Board on November 17,
2001. The high and the low trades for our shares for each quarter of actual
trading were:

<TABLE>
<CAPTION>

Quarter                                          High                          Low
------------------------------------------------ ----------------------------- -------------------------------------
<C>                        <C> <C>               <C>                           <C>
4th Quarter ended December 31, 2001              $1.40                         $1.10
------------------------------------------------ ----------------------------- -------------------------------------
Quarter ended March 31, 2002                     $3.05                         $1.03
------------------------------------------------ ----------------------------- -------------------------------------
Quarter ended June 30, 2002                      $3.65                         $1.66
------------------------------------------------ ----------------------------- -------------------------------------
Quarter ended September 30, 2002                 $2.40                         $ .91
------------------------------------------------ ----------------------------- -------------------------------------
Quarter ended December 31, 2002                  $4.15                         $2.60
------------------------------------------------ ----------------------------- -------------------------------------
Quarter ended March 31, 2003                     $5.89                         $3.37
------------------------------------------------ ----------------------------- -------------------------------------

</TABLE>

The trades reflect inter-dealer prices, without retail mark-up, markdown or
commission and may not represent actual transactions.

Holders of Common Stock

As of October 1, 2002, there were 37 record owners of our common stock.

                                       9
<PAGE>

Dividends

We have not paid any dividends on our common stock and do not intend to do so
for the foreseeable future. Any earnings will be retained by the Company and
used to expand the Company's existing operations.

Recent Sales of Unregistered Securities

We issued 6,005,561 shares of common stock in September 2002 to PNC Tool
Holdings, LLC in consideration for $2,000,0000. These shares of common stock
were issued under an exemption from registration provided by Section 4(2) of the
Securities Act of 1933. Dennis Crowley, our Chief Executive Officer is the sole
owner of PNC Tool Holdings LLC.

In September 2002, we issued 3,543,281 shares of our common stock in connection
with the acquisition of all the issued and outstanding shares of Spear & Jackson
PLC and its affiliate, Bowers Group, PLC. The shares were issued under an
exemption from registration provided by Section 4(2) of the Securities Act of
1933.

<TABLE>
<CAPTION>

Equity Plan Compensation Information
-------------------------------------- --------------------------- ----------------------- -------------------------
                                                                                             Number of Securities
                                       Number  of  Securities  to  Weighted average          remaining available for
                                       be  issued  upon  exercise  exercise price of         future issuance under
                                       of  outstanding   options,  outstanding options,      equity compensation
                                       warrants and rights.        warrants, and rights.     plans.
-------------------------------------- --------------------------- ----------------------- -------------------------
<S>                                             <C>                         <C>                     <C>
Equity compensation plans approved              0                           0                       0
by security holders
-------------------------------------- --------------------------- ----------------------- -------------------------
Equity compensation plans not                   0                           0                       0
approved by security holders
-------------------------------------- --------------------------- ----------------------- -------------------------
</TABLE>

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

RESULTS OF OPERATIONS

2002 compared with 2001

The results discussed below compare the year ended September 30, 2002 with the
year ended September 30, 2001. As explained in note 3 to the financial
statements, the acquisition of Spear & Jackson plc and Bowers Group plc
(together "S&J") by Megapro Tools, Inc. (now Spear & Jackson, Inc.) on September
6, 2002 has been accounted for as a reverse acquisition. In these financial
statements, S&J is the operating entity for financial reporting purposes and the
financial statements for all periods represent S&J's financial position and
results of operations. The operating results and net assets of Megapro Tools,
Inc. and its subsidiary companies are included in the consolidated statements
from September 6, 2002, the date of its deemed acquisition. All figures are
expressed in $'000 unless otherwise stated.

OVERVIEW

Net revenues decreased by $6,892 (7.0%) from $97,871 in the year ended September
30, 2001 to $90,979 in the twelve months to September 30, 2002.

$7,825 of the reduction relates to the inclusion in 2001 of revenues from the
Industrial Saws Division which was sold in March of that year. This decrease was
compensated by an increase in revenues from existing businesses of $933. Focus
on altering the sales mix towards higher margin products, the implementation of
strict cost control and manufacturing efficiencies together with the beneficial
impact of the sale of the Industrial Saws Division with its previously
dilutionary effect on margins have resulted in an improved gross profit
percentage. It is anticipated that further benefits will accrue from these
strategic decisions in the year to September 30, 2003.

These factors are dealt with in more detail in the sections below.

DIVISIONAL REVIEW

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

Detailed comments on the principal business divisions are as follows:

                                       10
<PAGE>

Neill Tools

Revenues for the twelve months ended September 30, 2002 were $0.8 million less
than those in the year ended September 30, 2001.

Export sales were adversely affected by the strength of sterling against the
major currencies but margins were maintained at their budgeted levels by
resisting price reductions.

There was a restructuring of the administration, production and management teams
in the final quarter of the year ended September 30, 2002 and focus has been
placed on reducing overheads, improved efficiencies and better customer service.
Significant cost savings and earning benefits will flow from these initiatives
from Quarter 1 of the year ending September 30, 2003

Despite difficult home and export trading conditions the company secured
substantial new contracts. These include:

(a)      A contract to supply Neverbend forks, spades and agricultural tools to
         the Government of Fiji. This order was won on the basis of quality and
         value for money which were superior to rival product offerings. This
         contract is additional to a contract awarded by the Government of Fiji
         earlier in the year.

(b)      Tesco Stores, one of the top "Big Box" retailers in the world, took
         delivery of a range of garden tools to sell through their 2,291 stores
         worldwide.

(c)      Gamma DIY, the biggest DIY superstore in the Netherlands with some 144
         outlets added our new range of Razorsharp Secateurs to its ever-growing
         list of Neill Tools products.

Further revenue and earnings increases are anticipated following the launch of a
wide range of new products including dry lining tools, leather work wear, hand
power tools, spanners, sockets, screwdrivers, pliers, air power tools,
compressors, new garden products and woodsaws.

The range and volume of products are now unparalleled in the company's history
and the drive for new product and further market penetration will continue with
further launches anticipated in the year.

Eclipse Magnetics

Eclipse Magnetics sales for the year to September 30, 2002 were some $2.1
million less than in the comparable period last year. The reduction in sales
revenues was principally attributable to the loss of a major customer who has
now re-sourced magnetic products from the Far East.

The management team has been restructured and overheads reduced significantly.
Profit will be recovered by new product launches which will have unique features
and which will offer good value for money to our customers.

                                       11
<PAGE>

New products and listings have been established within the company's
"Separation" range. These products supply the food, pharmaceutical and
processing industries.

In addition Eclipse has designed and launched a new permanent lifting magnet
that has new patented features.

The North American and German markets are being reviewed as we see these as a
major opportunities for growth.

Robert Sorby

Robert Sorby revenues in the year ended September 30, 2002 showed an increase of
$0.65 million over revenues in the twelve months to September 30, 2001.

The company's extensive dealer network and its proactive consumer marketing
(some 130 demonstrations and shows per annum) ensured that sales increased
despite the strength of sterling in the export markets.

During the coming months the mail order business will continue to be developed
through our retail outlet at `Turners Retreat'.

With the new lathe chuck we have established ourselves as the leading supplier
in the U.K. and this now accounts for 10% of our sales. Another significant
success has been the introduction of the `Sandmaster' which is now listed by
almost every major dealer network worldwide.

Both of these products underline our commitment to introducing consumer-friendly
high quality products.

Bowers

Sales in the twelve months ending September 30, 2002 were $2.4 million less than
previous year due to flat industrial and automotive markets.

Significant sales and earnings initiatives have been implemented which will
reduce the overhead base by closing the loss making calibration business and by
consolidating two sites in the south of England. This will lead to greater
efficiencies and ensure increased focus on customer service.

In addition we have transferred the manufacture of micrometer products to our
Bradford site which will also generate significant cost savings.

New product launches include the `Smart Plug' and a new range of digital
Micrometers which have further extended our product range in the Precision
Measuring market.

                                       12
<PAGE>

Sales to Germany continue to grow significantly with new listings being obtained
with the Hoffmann Group, one of the largest industrial catalogs in Europe.

The special products division is currently running at 400% above last year.

New ranges of precision products were launched in the first and second quarter
of 2003 which were supported by the issue of a 180-page catalog.

S&J France

Sales in the year ended September 30, 2002 were little changed from those in the
twelve months ended September 30, 2001.

As with other divisions in the group S&J France has launched a range of new
garden tools and has been successful in penetrating new markets including a
listing in Castorama the largest "Big Box" retailer in France.

Spear & Jackson Australia and Spear & Jackson New Zealand

S&J Australia and S&J New Zealand 2002 revenues were over $3 million more than
those in the year ended September 30, 2001 thanks to significant additional
listings of power, air and hand tools in major "Big Boxes" in Australia and New
Zealand.

Sales are continuing to increase in 2003 through further new products listings.

S&J Australia has transferred its operations into a purpose built new
distribution facility in Melbourne and is now well placed to deal with further
expansion.

EXPENSES

Selling, general and administration expenses were $30,355 for the year ended
September 30, 2002 and $29,436 for the year ended September 30,2001.

This increase is attributable to the costs incurred in the fourth quarter of
2002 associated with the reorganization of senior management, a UK severance
program and the relocation of businesses in the UK and Australia. Significant
cost savings from these initiatives are expected to benefit earnings in 2003.

Other income and expenses reduced from a net expense of $13,788 in the year
ended September 30, 2001 to a net expense of $98 in the year ended September 30,
2002.

The 2001 expense total includes a charge of $13,534 which comprises a loss of
$6,994 million arising on the disposal of the company's Industrial Saws Division
and a $6,540 million net realisable value write down on the carrying value of
the company's subsidiary, True Temper Ireland Limited.

Other reasons for the decrease in net other expense are attributable to bank
interest cost savings following the disposal of the company's Industrial Saws
Division and an increase in UK rental income as a result of the sub-letting of
part of one of the Company's UK manufacturing plants.

                                       13
<PAGE>

INCOME BEFORE INCOME TAXES

Our loss before income taxes in the year to September 30, 2002 amounted to
$1,480. This compares to a loss before income tax for the year ended September
30, 2001 of $13,402. Excluding the impact of losses arising on the disposal of
businesses in 2001, the Company incurred a loss before income taxes of $1,480 in
the year ended September 30, 2002 compared to a profit of $132 in the twelve
months ended September 30, 2001. The decrease in profitability is primarily
attributable to the reorganization and severance costs described in the
"Expenses" section above.

INCOME TAX

The provision for income taxes was $931 in the year to September 30, 2002
compared to a $122 income tax benefit in the period to December 31, 2001.

Income taxes were 62.91% of the loss before tax in 2002 as opposed to 92% of the
loss before income taxes (excluding losses arising on the disposal of
businesses) in 2001. Differences between the effective rate and the statutory
rate result from tax charges in certain overseas subsidiaries within the Spear &
Jackson group being taxed at rates different from the effective rate, the non
recognition of tax losses within the deferred tax computation and permanent
differences between accounting and taxable income as a result of non-deductible
expenses and non-taxable income. Because of the availability of tax net
operating losses it is not anticipated that any of the 2002 tax charge will
result in the payment of any income taxes.

NET LOSS

Our net loss after income taxes was $2,411 for the year to September 30, 2002.
This compares to a loss after income taxes of $13,280 for the year ended
September 30, 2001.

FINANCIAL CONDITION

Liquidity and Capital Resources

Our cash position was $6,486 at September 30, 2002 and our total net assets were
$54,085 at that date.

Net cash used in operating activities in the year to September 30, 2002 was $983
compared to an operating cash generation of $4,200 in the period to September
30, 2001. The reduction in 2002 arises from the decrease in profitability
(principally attributable to the cost of reorganisation and redundancy
initiatives implemented in 2002) and increased operating assets and liabilities
outflows arising from the repayment of amounts owed to the former parent of
Spear & Jackson plc.

                                       14
<PAGE>

Cash inflow from investing activities was $2,436 in the period to September 30,
2002. This compares to an outflow from investing activities in the year to
September 30, 2001 of $2,705. 2002 benefited from both the receipt of $1 million
in respect of the sale proceeds of the Company's Irish subsidiary and proceeds
of $3.1 million received on the sale of a UK manufacturing plant.

Net cash provided by financing activities was $1,982 in the year to September
30, 2002 compared to net cash provided by financing activities of $17 in the
period to September 30, 2001. Cash provided by financing activities in the
period to September 30, 2002 includes $2,009 received from shares issued in the
year. There was no comparable item in the twelve months ended September 30,
2001.

Our business operations have been funded primarily from net operating income. We
have also utilized loans from the Bank of Montreal, shareholder loans and other
bank facilities.

Mr.  Neil  Morgan,  a  shareholder,  has  advanced to us the amount of $100 as a
director's  loan. This amount was outstanding at September 30, 2002. The loan is
unsecured,  bears  interest  at 10.25%  per annum and has no  specific  terms of
repayment.

Mr. Robert Jeffrey, another of our shareholders, had advanced to us an unsecured
loan at an interest rate of 10.25% per annum.  Until maturity,  we were required
to make quarterly payments of interest to Mr. Jeffrey. At September 30, 2002 the
principal  amount of this loan was $60.  This loan,  together  with all  accrued
interest, was repaid in the quarter ended March 31, 2003.

The Company's subsidiary, Mega Tools Limited, obtained a fixed loan from the
Bank of Montreal in 1998. This loan is payable on demand with an agreed
repayment schedule requiring payments of $10 per annum, paid monthly in equal
instalments, plus interest at the bank's funding plus 1.5% per annum. The
principal amount of the loan outstanding at September 30, 2002 was $22.

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

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

                                       15
<PAGE>

ITEM 7.  FINANCIAL STATEMENTS.

 See financial statements beginning on page F-1

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE.

Effective December 16, 2002, the Company dismissed BDO Dunwoody LLP ("BDO") as
its principal accountants. The reports of BDO on the financial statements of
Megapro Tools, Inc. for the past two years contained no adverse opinion or
disclaimer of opinion and were unqualified or not modified as to uncertainty,
audit scope or accounting principle. The decision to dismiss BDO was recommended
by management and approved by the Company's Board of Directors. In connection
with its audits for the two most recent fiscal years and the subsequent interim
period preceding dismissal on December 16, 2002, there were no disagreements
with BDO on any matter of accounting principles or practices, financial
statement, disclosure, or auditing scope or procedure, which disagreements, if
not resolved to the satisfaction of BDO would have caused them to make reference
thereto and report on the financial statements for such years. During the two
most recent fiscal years and prior to December 16, 2002, the Company had no
reportable events.

The Company requested BDO furnish a letter addressed to the Securities and
Exchange Commission stating whether or not BDO agrees with the statements above
and on December 22, 2002 BDO filed such letter with the Securities and Exchange
Commission.

Effective December 19, 2002, the Company engaged the accounting firm of Sherb &
Co LLP to audit the Company's financial statements for the fiscal year ended
September 30, 2002. The Company had not consulted with Sherb & Co, LLP during
the last two years or subsequent interim period on either the application of
accounting principles or type of opinion, Sherb & Co, LLP might issue on the
Company's financial statements.

                                       16

<PAGE>

                                    PART III


ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT.

Our executive officers and directors and their respective ages as of September
30, 2002 are as follows:

<TABLE>
<CAPTION>

Directors:

---------------------------------------- -------------------- ------------------------------------------------------
<S>                                      <C>                  <C>
Name of Director                         Age                  Title
---------------------------------------- -------------------- ------------------------------------------------------
Dennis Crowley                           41                   Chairman, Chief Executive Officer, and President
---------------------------------------- -------------------- ------------------------------------------------------
Joseph Piscitelli                        63                   Director and Chief Operating Officer
---------------------------------------- -------------------- ------------------------------------------------------
 William Fletcher                        57                   Chief Financial Officer
---------------------------------------- -------------------- ------------------------------------------------------
</TABLE>

We have set forth below a brief description of the background and business
experience of our executive officers and directors for the past five years.

Mr. Dennis Crowley is our Chief Executive  Officer,  Secretary and Treasurer and
Chairman of the Board.  Mr. Crowley was appointed in September 2002. Mr. Crowley
has served as the  principal  owner of PNC  Investments  Ltd a private  merchant
banking firm since 1997.

Mr. Joseph  Piscitelli  was appointed as one of our directors on March 13, 2002.
Mr.  Piscitelli was appointed  Chief  Operating  Officer in September  2002. Mr.
Piscitelli is a retired  businessman.  Mr.  Piscitelli  founded a consumer goods
manufacturing  company specializing in fire place products in 1978. He sold this
company in 1988 and  retired  from active  business  at that time.  From 1964 to
1976, Mr.  Piscitelli  served as a chief financial officer and a chief executive
officer of a number of consumer goods  manufacturing  companies.  Mr. Piscitelli
holds a degree in accounting.

Mr. William  Fletcher was appointed Chief  Financial  Officer in September 2002.
Mr.  Fletcher  has served in various  positions  with Spear & Jackson  plc since
1970, and was appointed Group Finance Director in May 2002.

Term of Office

         Our Directors are appointed for terms of one year to hold office until
the next annual general meeting of the holders of our common stock, as provided
by the Nevada Revised Statutes, or until removed from office in accordance with
our bylaws. Our officers are appointed by our board of directors and hold office
until removed by the board. For the fiscal period ended September 30, 2002, the
Board acted once by unanimous consent.

                                       17
<PAGE>

Committees

The Company presently has no committees of its Board of Directors.

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

Section 16(a) of the Exchange Act requires our executive officers and directors,
and persons who beneficially own more than ten percent of our equity securities,
to file reports of ownership and changes in ownership with the Securities and
Exchange Commission. Officers, directors and greater than ten percent
shareholders are required by SEC regulation to furnish us with copies of all
Section 16(a) forms they file. Based on our review of the copies of such forms
received by it, we believe that during the fiscal period ended September 30,
2002, all such filing requirements applicable to our officers and directors were
complied with.

ITEM 10.          EXECUTIVE COMPENSATION. COMPENSATION OF EXECUTIVE OFFICERS

The following table sets forth certain compensation information as to each
individual who served as the Company's chief executive officer during the year
ended September 30, 2002 and each executive officer who received in excess of
$100,000 for such fiscal period.
<TABLE>
<CAPTION>

                                             SUMMARY COMPENSATION TABLE
--------------------------- --------- -------------------------------- --------------------------------- ----------
                   Annual Compensation Long-Term Compensation
--------------------------- --------- -------------------------------- --------------------------------- ----------
                                                                         Awards                 Payouts
--------------------------- --------- ----------- --------- ---------- ---------------------- ---------- ----------
                                                                                   Securities
                                                               Other                 Under-
                                                              Annual   Restricted     Lying               All Other
   Name and Principal                                         Compen-     Stock     Options/     LTIP      Compen-
        Position               Year     Salary      Bonus     sation    Award(s)      SARs      Payouts    sation
                                                                ($)        ($)         (#)        ($)        ($)
           (a)                  (b)       (c)        (d)        (e)        (f)         (g)        (h)        (i)
--------------------------- --------- ----------- --------- ---------- ----------- ---------- ---------- ----------
Dennis Crowley
Chief  Executive  Officer,
President,  Secretary  and
<S>                         <C>
Chairman of the Board**     2002           -          -          -          -           -          -          -
--------------------------- --------- ----------- --------- ---------- ----------- ---------- ---------- ----------

Neil Morgan*                2002      $146,485        -          -          -           -          -          -
--------------------------- --------- ----------- --------- ---------- ----------- ---------- ---------- ----------
                            2001      $142,405    $51,714        -          -           -          -          -
--------------------------- --------- ----------- --------- ---------- ----------- ---------- ---------- ----------
                            2000      $132,642    $74,588   $19,500         -      $130,000        -          -
--------------------------- --------- ----------- --------- ---------- ----------- ---------- ---------- ----------

         **       Mr. Crowley was appointed Chief Executive Officer, President and Chairman of the Board in September 2002.
         *        Mr. Morgan resigned his officer and director positions in September 2002.
</TABLE>
                                       18

<PAGE>

Stock Option Grants

No stock options were granted to our directors and executive officers during our
most recent fiscal period ended September 30, 2002.

Exercises of Stock Options and Year-end Option Values

No stock options held by our directors and executive officers were exercised
during our most recent fiscal period ended September 30, 2002. At September 30,
2002, no director or executive officer held any stock options.

Compensation Arrangements

In September 2002, the Company entered into an employment agreement with Neil
Morgan which terminated in March 2003. Under the terms of such agreement, Mr.
Morgan shall receive a salary at a monthly rate of $12,500 per month payable
semi-monthly solely out of available cash flow from the Company's Vancouver and
Seattle operations.

In September 2002, the Company entered into an employment agreement with Joseph
Piscitelli which terminated in March 2003. Under the terms of the employment
agreement, Mr. Piscitelli shall serve as the Company's Chief Operating Officer.
Mr. Piscitelli shall receive a salary at a monthly rate of $10,000 per month
payable semi-monthly. Under the terms of the agreement Mr. Piscitelli has agreed
that he will not during the term of such agreement and for a period of six
months from the date of termination engage in any competitive business
activities with the Company in the State of Florida, call upon any of the
Company's customers or clients for the purposes of engaging in any competitive
activities or divert, solicit or take away any of the Company's customers or
clients for the purpose of engaging in any competitive activities.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth our common stock ownership information as of
October 1, 2002, with respect to(i) each person known to us to own more than
five percent (5%) of our outstanding common stock, (ii) each director of the
Company; and(iii) all directors and executive officers as a group. The
information as to beneficial ownership was furnished to the Company by or on
behalf of the persons named. As other indicated, the business address of each
person listed is 2200 Corporate Boulevard, Suite 314, Boca Raton, FL 33431.

                                       19

<PAGE>
<TABLE>
<CAPTION>


Name and Address                         Shares Beneficially Owned              Percent of Shares Outstanding
---------------------------------------- ------------------------------------- -------------------------------------
<S>                   <C>                             <C>                                      <C>
PNC Tool Holdings LLC (1)                             6,005,561                                50.00%
---------------------------------------- ------------------------------------- -------------------------------------
Dennis Crowley(1)                                     6,005,561                                50.00%
---------------------------------------- ------------------------------------- -------------------------------------
Joseph Piscitelli(2)                                     10,000                                     *
---------------------------------------- ------------------------------------- -------------------------------------
William Fletcher(3)                                           -                                     -
---------------------------------------- ------------------------------------- -------------------------------------
USI Global Corp.                                      3,543,281                                29.05%
777 S. Flagler Drive
Suite 1108
West Palm Beach, FL 33495
---------------------------------------- ------------------------------------- -------------------------------------
All Executive Officers and                            6,015,561                                50.08%
directors as a group
(3 persons)
---------------------------------------- ------------------------------------- -------------------------------------
* Less than 1.0%

(1)      Dennis Crowley is the Company's  Chief  Executive  Officer,  President,
         Treasurer,  Secretary and a Director.  He is the sole owner of PNC
         Tools Holdings LLC.  Includes 6,005,561 shares beneficially held by PNC
         Tools Holdings, LLC.

(2)      Joseph Piscitelli is a Director and the Chief Operating Officer of the
         Company.

(3)      William Fletcher is the Chief Financial Officer of the Company.

</TABLE>

Registration Agreement

The Company, USI Mayfair Limited and PNC Tool Holdings LLC have entered into a
Registration Rights Agreement. Under the terms of such agreement at any time
after 18 months from September 2002, or expiration or earlier termination of
that two-year lock-up period contained in the Stockholders` Agreement between
the Company, PNC Tool Holdings, LLC and USI Mayfair owners of 15% of the
securities held by (i) USI issued under the Acquisition Agreement between the
Company, USI Mayfair, Spear & Jackson Acquisition Corp and Spear & Jackson,
Inc., or (ii) PNC as of September 6, 2002 may demand that the Company register
all or part of such securities under the Securities Act of 1933. Each holder and
subsequent transferee shall have the right to exercise three demand registration
statements on Form S-1 or other similar form. Each holder of the security shall
have the right to an unlimited number demand registrations on Form S-3 provided
the Company shall not be obligated to effect more than two demand registrations
on Form S-3 in any 12-month period. In addition, after expiration or early
termination of the two-year lock-up period, the holders of the registrable
securities shall have a right, if the Company proposes to register any of its
securities (except for registration to the offer on Form S-8 or Form S-4) to
piggyback such registrable securities on such registration statement.

                                       20
<PAGE>

The Company has agreed not to make any public sale or distribution of its equity
securities or any other securities convertible into or exchangable or
exercisable for its equity securities during the 7 days prior to and 90 days
after the effective date of any underwritten demand registration or underwritten
piggyback registration. The Company also agrees that after filing a registration
statement with respect to the registrable securities, the Company will not
register any of its equity securities or the convertible securities issued on
its own behalf or at the request of any holder until at least 3 months have
lapsed from the effective date of the previous registration. This three-month
restriction does not apply to registrations of securities issued in connection
with employee benefits plans, to permit exercise or conversions of previously
issued options, warrants or other convertible securities or registrations on
Form S-4.

Change in Control

On September 6, 2002, we entered into a Stockholders' Agreement with USI Mayfair
Limited, PNC Tool Holdings LLC, and Dennis Crowley (collectively the
"Stockholders"). Pursuant to the terms of the Stockholders' Agreement the
Stockholders have agreed not to transfer any Company securities for a period of
two years following the date of the Agreement, other than certain unrestricted
transfers. An "Unrestricted Transfer" is any transfer (i) from any Stockholder
to any affiliate of such Stockholder, (ii) from any Stockholder to any other
Stockholder, (iii) from Dennis Crowley to any member of the immediate family of
Dennis Crowley or certain estate planning vehicles of Dennis Crowley, (iv) as
collateral security, by USI Mayfair Limited or its affiliates to one or more
third party banks or financial institutions, and (v) in the case of any
Stockholder that is not a natural person, transfers to non-affiliates of such
Stockholder resulting from a bona fide merger, stock sale, sale of all or
substantially all the assets of such Stockholder or other business combination
transaction involving such Stockholder, provided that clause (v) shall not apply
in the case of any such transaction effected with the intent of circumventing
the transfer restrictions of the Stockholders' Agreement.

Under the terms of the Stockholders' Agreement the Stockholders have agreed,
except in the case of an Unrestricted Transfer or a transfer of Company
securities registered under the Securities Act to a non-affiliated third person
effected through an ordinary course open market transaction, if at any time
after the two year anniversary of the date of the Stockholders' Agreement one or
more Stockholders propose to transfer any Company securities in a transaction or
series of transactions where the consideration for such Company securities is in
excess of $10,000, then the selling Stockholder shall provide written notice of
the proposed transaction to the other Stockholders and provide them with an
opportunity to participate in the proposed sale of Company securities on a pro
rata basis.

                                       21
<PAGE>

In addition, under the terms of the Stockholders' Agreement, subject to certain
exceptions set forth in the following paragraph, the Company has agreed not to
issue, sell or exchange, agree to issue, sell or exchange, or reserve or set
aside for issuance, sale or exchange, (i) any Company securities or (ii) any
option, warrant or other right to subscribe for, purchase or otherwise acquire
any Company securities, (collectively, the "Offered Securities"), unless in each
such case the Company shall have first delivered to the Stockholders a written
notice of any proposed or intended issuance, sale or exchange of Offered
Securities (the "Offer"), which Offer shall (A) identify and describe the
Offered Securities, (B) describe the price and other terms upon which the
Offered Securities are to be offered, issued, sold or exchanged, and (C) offer
to issue and sell to or exchange with the Stockholders up to their respective
pro rata portion of such Offered Securities. Each Stockholder's pro rata portion
of the Offered Securities shall be determined by multiplying seventy-five
percent (75%) of the aggregate amount of the Offered Securities by a fraction,
the numerator of which is the number of shares of voting securities then held by
such Stockholder and the denominator of which is the number of shares of voting
securities then outstanding. Each Stockholder shall have the right, for a period
of twenty (20) days following delivery of the Offer, to purchase or acquire such
Stockholder's pro rata portion of the Offered Securities at the price and upon
the other terms specified in the Offer. The Offer, by its terms, shall remain
open and irrevocable for such twenty (20) day period. To accept an Offer, in
whole or in part (provided, however, that the Stockholders may only elect to
purchase part of the Offered Securities if the Offer is not contingent on the
sale to the prospective purchaser of all of the Offered Securities), such
Stockholder must deliver a written notice ("Notice of Acceptance") to the
Company prior to the end of the twenty (20) day period of the Offer, setting
forth the portion (or all, if the Offer is contingent upon the sale to the
prospective purchaser of all of the Offered Securities) of such Stockholder's
pro rata portion of the Offered Securities that such Stockholder elects to
purchase. In addition, each Stockholder shall have the right to purchase (which
right shall be exercised by notice to such effect in the Notice Of Acceptance)
any Offered Securities not accepted by any other Stockholder, in which case the
Offered Securities not accepted by any such other Stockholders shall be deemed,
on the same terms and conditions, to be offered from time to time during such
twenty (20) day period to and accepted by such Stockholders who exercised their
options under this sentence ratably based on their interests in the Company or
as they may otherwise agree. Any Offered Securities that are not acquired by the
Stockholders or the offerees or purchasers described in the Offer in accordance
with this Section 6 may not be issued, sold or exchanged until they are again
offered to the Stockholders under the procedures specified in this Section 6.

Notwithstanding the foregoing, the pre-emptive rights of the Stockholders set
forth in the prior paragraph shall not apply to: (i) the issuance by the Company
of Offered Securities to employees, directors or consultants of the Company
pursuant to any Company stock option or other equity incentive plan, in
connection with an employment or consulting agreement or arrangement with the
Company, or in exchange for other securities of the Company (including, without
limitation, options granted under option plans) held by any such employees,
directors or consultants, (ii) Offered Securities issued in connection with the
acquisition of the business of another entity, whether by the purchase of equity
securities, assets or otherwise, (iii) Offered Securities issued as a stock
dividend to Stockholders or upon any subdivision or combination of Company
Securities, (iv) Offered Securities issued pursuant to or as contemplated by
that certain Stock Purchase Agreement, dated August 2001 by and between USI
Mayfair Limited and the Company, (v) Offered Securities sold by 18 the Company
in an underwritten public offering pursuant to an effective registration
statement under the Securities Act, (vi) capital stock or securities exercisable
for or convertible into such capital stock issued in connection with any
equipment leases or borrowings, direct or indirect, from third-party financial
or other institutions regularly engaged in such businesses, (vii) any warrants
issued without consideration or for nominal consideration in connection with any
third-party debt financings, or (viii) any performance-based equity issued to
third-parties in connection with strategic relationships.

                                       22
<PAGE>

The Stockholders' Agreement shall terminate upon the earliest of (i) our
dissolution, bankruptcy, or insolvency, or any assignment of all or
substantially all of our assets for the benefit of any creditor, (ii) an
agreement to terminate between us and certain of the Stockholders, and (iii) the
five year anniversary of the date of the Stockholders' Agreement.

ITEM 12.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Except as disclosed in this section below, none of the following parties has,
since our date of incorporation, had any material interest, direct or indirect,
in any transaction with us or in any presently proposed transaction which has or
will materially affect us:

         *        Any of our directors or officers;
         *        Any person proposed as a nominee for election as a director;
         *        Any person who beneficially owns, directly or indirectly,
                  shares carrying more than 10% of the voting rights attached to
                  our outstanding shares of common stock;
         *        Any relative or spouse of any of the foregoing persons who has
                  the same house as such person.

Mr. Neil Morgan, our former president, advanced to us $80,000 during the three
months ended June 30, 2002. The loan is unsecured, bears interest at 10.25% per
annum and has no specific repayment terms. At September 30, 2002, we owed Mr.
Morgan $100,019.

Mr. Robert Jeffery, a shareholder who owned in excess of 10% of our common
stock, has advanced unsecured shareholders loans in an amount of $60,000 which
bear interest at the rate of 10.25% per annum. The loans were repaid in March
2003.

In connection with our acquisition of Spear & Jackson, PLC, Envision Worldwide
Products, Ltd., Neil Morgan and Maria Morgan contributed an aggregate of
4,742,820 shares of their common stock of the Company to its capital and have
agreed to a two-year transfer of restriction until September 2004 with respect
to their remaining 192,480 shares of common stock of the Company. The
shareholders did not receive any consideration in connection with their
contribution of shares.

                                       23
<PAGE>

In September 2002, the Company closed a private placement pursuant to which it
issued 6,005,561 shares of its common stock to PNC Tool Holdings, LLC in
consideration for $2,000,000. The sole shareholder of PNC Tool Holdings LLC is
Dennis Crowley, our Chief Executive Officer.


ITEM 13.          EXHIBITS AND REPORTS ON FORM 8-K.

                  (a)      EXHIBITS

EXHIBIT
NUMBER   DESCRIPTION

3-1     Articles of Incorporation(1)
3-2     Articles of Amendment changing our name to Megapro Tools Corporation(1)
3-3     Articles of Amendment changing our name to Megapro Tools Inc.(1)
3-4     Articles of Amendment amending Article 6 (1) 3.5 Amended By-Laws(1)
3-5     Articles of Amendment changing our name to Spear & Jackson, Inc.(2)
3-6     Amended and Restated Bylaws(2)
5.1     Opinion of Cane & Company, LLC, with consent to use(1)
10.1    Acquisition Agreement dated September 30, 1999 between us and Ms. Maria
        Morgan, Envision Worldwide Products Ltd., Mr. Robert Jeffery, Mr. Lex
        Hoos and Mr. Eric Paakspuu(1)
10.2    Stock Purchase Agreement dated September 2002 between us, USI Mayfair
        Limited, and PNC Tool Holdings, LLC(3) 10.3 Registration Rights
        Agreement dated September 2002, between us, USI Mayfair Limited, and
        PNC Tool Holdings, LLC(3)
10.4    Stockholders'  Agreement dated September  2002,  between us, USI Mayfair
        Limited, PNC Tool Holdings LLC, and Dennis Crowley(3)
10.5    Employment Agreement dated September 2002, between us and Neil Morgan(2)
10.6    Employment Agreement dated September 2002, between us and Joseph
        Piscitelli(2)
21      List of Subsidiaries(2)
99.1    Certification  of Principal  Executive  Officer  Pursuant to 18 U.S.C.
        Section 1350 as Adopted  Pursuant to Section 906 of the Sarbanes-Oxley
        Act of 2002(2)
99.2    Certification  of Principal  Accounting  Officer  Pursuant to 18 U.S.C.
        Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
        Act of 2002(2)

                                       24
<PAGE>

         (1)      Filed as an exhibit to the Company's Form SB-2 registration
                  statement, as amended, filed with the Securities and Exchange
                  Commission originally on July 3, 2000 and as amended through
                  April 23, 2001.
         (2)      Filed herewith.
         (3)      Filed as an Exhibit to the  Company's  Report on Form 8-K
                  filed with the  Securities  and Exchange  Commission on
                  September 9, 2002.

                  (b)      REPORTS ON FORM 8-K

On September 9, 2002, we filed a current report on Form 8-K disclosing our
execution of a Stock Purchase Agreement pursuant to which we acquired all of the
issued and outstanding shares of Spear & Jackson PLC and its affiliate Bowers
Group PLC, the issuance of 6,005,561 shares of our common stock in a private
placement in consideration for $2,000,000, and related transactions.

On September 24, 2002, we filed a current report on Form 8-K disclosing the
change of our fiscal year from December 31 to September 30, and our intent to
file a Form 10-KSB with respect to the transitional period of January 1, 2002,
through September 30, 2002.

ITEM 14.          CONTROLS AND PROCEDURES.

Our management, which includes our Chief Executive Officer and Chief Financial
Officer, has conducted an evaluation of the effectiveness of our disclosure
controls and procedures (as defined in Rule 13(a)-14(c) promulgated under the
Securities Exchange Act of 1934) as of a date ("the Evaluation Date") within 90
days prior to the filing date of this report. Based upon that evaluation, our
Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures are effective for timely gathering, analyzing
and disclosing the information we are required to disclose in our reports filed
under the Securities Exchange Act of 1934, as amended. There have been no
significant changes made in our internal controls or in other factors that could
significantly affect our internal controls subsequent to the Evaluation Date.

                                       25
<PAGE>


                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

Dated: May 27, 2003                                   SPEAR & JACKSON, INC.

                                            By:      /s/Dennis Crowley
                                                        ----------------------
                                                        Dennis Crowley
                                                        Chief Executive Officer

In accordance with the Securities Exchange Act, this report has been signed
below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.

Dated:   May 27, 2003                       By:      /s/Dennis Crowley
                                                      --------------------------
                                                        Dennis Crowley
                                                        Chief Executive Officer,
                                                        President,and a Director

Dated:   May 27, 2003                       By:      /s/Joseph Piscitelli
                                                     ---------------------------
                                                        Joseph Piscitelli
                                                        Director

Dated:   May 27, 2003                       By:      /s/William Fletcher
                                                     ---------------------------
                                                        William Fletcher
                                                        Chief Financial Officer


                                       26
<PAGE>



CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Dennis Crowley, the principal executive officer of SPEAR & JACKSON, INC., a
Nevada corporation (the "Registrant"), certify that:

1. I have reviewed this annual report on Form 10-KSB for the year ended
September 30, 2002, of the Registrant (the "Report").

2.       Based on my knowledge, the Report does not contain any untrue statement
         of a material fact or omit to state a material fact necessary to make
         the statements made, in light of the circumstances under which such
         statements were made, not misleading with respect to the period covered
         by the Report.

3.       Based on my knowledge, the financial statements, and other financial
         information included in the Report, fairly present in all material
         respects the financial condition, results of operations and cash flows
         of the Registrant as of, and for, the periods presented in the Report.

4.       The Registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and
         we have:

                  a) designed such disclosure controls and procedures to ensure
                  that material information relating to the Registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which the Report is being prepared.

                  b) evaluated the effectiveness of the Registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of the Report (the "Evaluation Date"); and

                  c) presented in the Report our conclusions about the
                  effectiveness of the disclosure  controls and procedures
                  based on our evaluation as of the Evaluation Date;

5.       The Registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the Registrant's auditors and the
         Audit Committee of the Registrant's Board of Directors:

                  a) all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  Registrant's ability to record, process, summarize and report
                  financial data and have identified for the Registrant's
                  auditors any material weaknesses in internal controls; and

                  b) any fraud, whether or not material, that involves
                  management or other employees who have a significant role in
                  the Registrant's internal control.

6.       The Registrant's other certifying officers and I have indicated in the
         Report whether or not there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.

                                              /s/ Dennis Crowley
                                                --------------------------------
                                         Name:   Dennis Crowley
                                        Title:   Principal Executive Officer and
                                                 Principal Accounting Officer

Dated: May 27, 2003


<PAGE>

CERTIFICATION BY PRINCIPAL ACCOUNTING OFFICER

I, William Fletcher, the principal accounting officer of SPEAR & JACKSON, INC.,
a Nevada corporation (the "Registrant"), certify that:

1. I have reviewed this annual report on Form 10-KSB for the year ended
September 30, 2002, of the Registrant (the "Report").

2.       Based on my knowledge, the Report does not contain any untrue statement
         of a material fact or omit to state a material fact necessary to make
         the statements made, in light of the circumstances under which such
         statements were made, not misleading with respect to the period covered
         by the Report.

3.       Based on my knowledge, the financial statements, and other financial
         information included in the Report, fairly present in all material
         respects the financial condition, results of operations and cash flows
         of the Registrant as of, and for, the periods presented in the Report.

4.       The Registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and
         we have:

                  a) designed such disclosure controls and procedures to ensure
                  that material information relating to the Registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which the Report is being prepared.

                  b) evaluated the effectiveness of the Registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of the Report (the "Evaluation Date"); and

                  c) presented in the Report our conclusions  about the
                     effectiveness of the disclosure  controls and procedures
                     based on our evaluation as of the Evaluation Date;

5.       The Registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the Registrant's auditors and the
         Audit Committee of the Registrant's Board of Directors:

                  a) all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  Registrant's ability to record, process, summarize and report
                  financial data and have identified for the Registrant's
                  auditors any material weaknesses in internal controls; and b)
                  any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  Registrant's internal control.

6.       The Registrant's other certifying officers and I have indicated in the
         Report whether or not there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.

                                               /s/  William Fletcher
                                                    ----------------------------
                                           Name:    William Fletcher
                                           Title:   Principal Accounting Officer

Dated: May 27, 2003

<PAGE>

                          INDEX TO FINANCIAL STATEMENTS
                                                                         Page

Audited Financial Statements for the years Ended
September 30, 2002 2001

Independent Auditors' Report                                             F-1

Consolidated Balance Sheet at September 30, 2002                         F-2

Consolidated Statements of Operations for the years
ended September 30, 2002 and 2001                                        F-3

Consolidated Statements of Stockholders Equity for
the years ended September 30, 2002 and 2001                              F-4

Consolidated Statements of Cash Flows for the
years ended September 30, 2002 and 2001                                  F-5

Notes to Consolidated Financial Statements                               F-6-26




<PAGE>

                          INDEPENDENT AUDITORS' REPORT


To the Stockholders and Board of Directors
Spear & Jackson, Inc.
New York, New York

         We have audited the accompanying consolidated balance sheet of
Spear & Jackson, Inc. as of September 30, 2002 and the related consolidated
statements of operations, stockholders' equity and cash flows for the years
ended September 30, 2002 and 2001. 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 audit.

         We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated 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 financial position of Spear &
Jackson , Inc. as of September 30, 2002 and the results of their operations and
their cash flows for the years ended September 30, 2002 and 2001, in conformity
with accounting principles generally accepted in the United States of America.



                                                /s/Sherb & Co., LLP
                                                   ----------------
                                                   Certified Public Accountants

New York, New York
May 23, 2003


                                       F-1
<PAGE>


                              SPEAR & JACKSON, INC.
                         (Formerly MegaPro Tools, Inc.)

                           CONSOLIDATED BALANCE SHEET
                                 (in thousands)


                               September 30, 2002


                                     ASSETS
Current assets:
 Cash and cash equivalents                                     $  6,486
 Trade receivables, net                                          17,516
 Income taxes refundable                                             18
 Inventories                                                     19,659
 Other current assets                                             1,305
                                                                --------
Total current assets                                             44,984

Property, plant and equipment, net                               18,852
Pension assets                                                   14,962
Investments                                                         138
                                                                --------
                                                               $ 78,936
                                                                ========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Notes payable                                                 $  1,253
 Short-term debt                                                     60
 Trade accounts payable                                           8,258
 Accrued expenses and other liabilities                          13,469
 Director's loan payable                                            100
 Foreign taxes payable                                               57
                                                                --------
Total current liabilities                                        23,197
Other liabilities                                                   977
Deferred income taxes                                               677
                                                                --------
Total liabilities                                                24,851
                                                                --------
Stockholders' equity:
 Common stock                                                        12
 Additional paid in capital                                      50,452
 Accumulated other comprehensive income:
   Foreign currency translation                                   3,056
 Retained earnings                                                  565
                                                                --------
                                                                 54,085
                                                                --------
Total liabilities and stockholders' equity                     $ 78,936
                                                                ========





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

                                       F-2

<PAGE>
                              SPEAR & JACKSON INC.
                         (Formerly MegaPro Tools, Inc.)

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (in thousands)





                                         For the Fiscal Years
                                                Ended
                                              September 30,
                                         ----------------------
                                           2002          2001
                                         ---------     ---------

Net sales                                $  90,979     $  97,871

Cost of goods sold                          62,006        68,049
                                          --------      ---------
Gross profit                                28,973        29,822


Operating costs and expenses:
 Selling, general and
  administrative expenses                   30,355        29,436
                                          --------      ---------
Operating income (loss)                     (1,382)          386

Other Income (Expense):
 Royalties (net)                                13             -
 Rental income                                 125            61
 Loss on sale of businesses                      -       (13,534)
 Interest and bank charges (net)              (236)         (315)
                                          --------      ---------
Loss before income taxes                    (1,480)      (13,402)
(Provision) benefit for income taxes          (931)          122
                                          --------      ---------
Net loss                                $   (2,411)     $(13,280)
                                          ========      =========


Basic and diluted loss per share            ($0.59)     $  (3.75)
                                          ========      =========
Weighted average shares outstanding      4,100,071      3,543,281
                                         =========      =========


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

                                       F-3
<PAGE>

                              SPEAR & JACKSON INC.
                         (Formerly MegaPro Tools, Inc.)

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                       (in thousands except share amounts)

<TABLE>
<CAPTION>



                                 Common Stock                           Accumulated
                              -------------------     Additional       Other comprehensive     Retained
                                 Number    Amount   Paid in capital     Income (Loss)          Earnings       Total
                              ----------- --------  ----------------  ---------------------   ---------    ----------
<S>                           <C>         <C>       <C>                <C>                     <C>           <C>
                                            $000    $000               $000                    $000          $000

Balance October 31, 2000       3,543,281  $   3     $   48,428         $    235                $ 16,256     $ 64,922
                              =========== ========  ================ =============         ==============   =========

Comprehensive loss:
 Foreign currency adjustment        -         -           -                (206)                   -            (206)
 Net loss for the year              -         -           -                  -                  (13,280)     (13,280)
                              ----------- --------  ---------------- -------------         ---------------  ---------
Total comprehensive loss            -         -           -                (206)                (13,280)     (13,486)
                              =========== ========  ================ =============         ===============  =========

Balance September 30, 2001     3,543,281      3         48,428               29                   2,976       51,436
                              =========== ======== ================= =============         ===============  =========

Balance October 1, 2002        3,543,281      3          48,428              29                   2,976       51,436

Shares issued less
  cancellations                8,467,841      9           2,024              -                     -           2,033
                              ----------- --------  ----------------  -------------        ----------------  --------
Balance September 30, 2002    12,011,122     12          50,452              29                   2,976       53,469
                              =========== ========  ================  =============        ================  ========

Foreign currency adjustment         -         -           -               3,027                    -           3,027
Net loss for the year               -         -           -                  -                   (2,411)      (2,411)
                              ----------- --------  ----------------  -------------        ----------------  ---------
Comprehensive loss for the year     -         -           -               3,027                  (2,411)         616
                              =========== ========  ================  =============        ================  =========
Balance September 30, 1002    12,011,122  $  12     $    50,452        $  3,056                $    565     $ 54,085
                              =========== ========  ================  =============        ================  =========


</TABLE>



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

                                      F-4


<PAGE>

                              SPEAR & JACKSON INC.
                         (Formerly MegaPro Tools, Inc.)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)


                                              For the Fiscal
                                                Years Ended
                                              September 30,
                                         ----------------------
                                           2002          2001
                                         ---------     ---------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                $   (2,411)    $ (13,280)
Adjustments to reconcile net
 loss to net cash provided by
 (used in) operating activities:
 Depreciation                                3,211         4,245
 Loss on sale of businesses                      -        13,534
 Loss (profit) on sale of fixed assets          95          (247)
 Deferred income taxes                         818          (304)
Changes in operating assets and
 liabilities, excluding the effects
 of acquisitions and dispositions:
 Decrease in trade receivables                 605         3,943
 Decrease in inventories                     1,331         2,406
 Decrease in other current assets              607           331
 Increase in other non-current assets       (3,102)      (10,443)
 Increase (decrease) in trade
 accounts payable                            1,110        (4,246)
 Decrease (increase) in accrued expenses
 and other liabilities                      (3,112)        8,270
 Increase in foreign taxes payable              17            32
 Decrease in other liabilities                (152)         (284)
                                         ----------     ---------
NET CASH PROVIDED BY (USED IN)
 OPERATING ACTIVITIES                         (983)        3,957
                                         ----------     ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and
 equipment                                  (1,434)       (1,571)
Costs incurred on purchase of businesses      (281)         (836)
Proceeds from sale of businesses
net of costs                                 1,000          (266)
Net cash acquired (relinquished) on
purchase/sale of businesses                     46          (538)
Proceeds from sale of property, plant
 and equipment                               3,105           506
                                         ----------     ---------
NET CASH PROVIDED BY (USED IN)
 INVESTING ACTIVITIES                        2,436        (2,705)
                                         ----------     ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt                     (9)          (66)
Net repayemtns of notes payable                (18)           83
Share capital issued                         2,009            -
                                         ----------     ---------
NET CASH PROVIDED BY
 FINANCING ACTIVITIES                        1,982            17
                                         ----------     ---------
Effect of exchange rate changes on
 cash and cash equivalents                     341           357
                                         ----------     ---------
CHANGE IN CASH AND CASH EQUIVALENTS          3,776         1,626

CASH AND CASH EQUIVALENTS AT
 BEGINNING OF YEAR                           2,710         1,084
                                         ----------     ---------
CASH AND CASH EQUIVALENTS AT
 END OF YEAR                            $    6,486     $   2,710
                                         ==========     =========
SUPPLEMENTAL CASH FLOW INFORMATION

   Cash paid for interest               $      147     $     304
                                         ==========     =========
   Cash paid for taxes                  $       96     $     150
                                         ==========     =========
NON-CASH INVESTING AND FINANCING
 ACTIVITIES:

   Common stock issued for acquisitions $      -      $    3,543
                                         ==========     =========

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

                                       F-5




<PAGE>

                              SPEAR & JACKSON INC.


                         (Formerly Megapro Tools, Inc.)


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                          (in thousands except shares)

Note 1--Basis of Presentation

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

As further  explained in note 3, below,  the purchase of Spear & Jackson plc and
Bowers Group plc by Megapro  Tools,  Inc.  (now Spear & Jackson,  Inc.) has been
treated as a reverse acquisition.

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

Note 2--Accounting Policies

Fiscal Year: Following the acquisition of Spear & Jackson plc and Bowers Group
plc on September 6 2002, the Company changed its fiscal year end from December
31 to September 30. September 30 was the existing year end of the acquired
companies. All fiscal year data contained herein reflect results of operations
for the years ended September 30, 2001, and September 30, 2002.

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

Foreign Currency  Translation:  The functional currency of each of the Company's
foreign operations is the local currency.  The consolidated financial statements
of Spear & Jackson, Inc. are denominated in US dollars.

Changes in exchange rates between the UK sterling, the Euro, the New Zealand
dollar, the Australian dollar and the US dollar will affect the translation of
the UK, French, New Zealand and Australian subsidiaries' financial results into
US dollars for the purposes of reporting the consolidated financial results. The
process by which each foreign subsidiary's financial results are translated into
US dollars is as follows: income statement accounts are translated at average
exchange rates for the period; balance sheet asset and liability accounts are
translated at end of period exchange rates; and equity accounts are translated
at historical exchange rates.

Translation adjustments arising from the use of differing exchange rates from
period to period are included in the Accumulated Other Comprehensive Income
(Loss) account in Stockholders' Equity. Management have decided not to hedge
against the impact of exposures giving rise to these translation adjustments as
such hedges may impact upon the Company's cash flow compared to the translation
adjustments which do not affect cash flow in the medium term.

                                       F-6
<PAGE>

                              SPEAR & JACKSON INC.

                         (Formerly Megapro Tools, Inc.)


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                          (in thousands except shares)

Note 2--Accounting Policies - continued

Fixed Assets: Property, plant and equipment are stated on the basis of cost less
accumulated depreciation provided under both the straight-line method and the
declining balance basis, depending on type and class of asset.

Depreciation is calculated using the following estimated useful lives:
Buildings - depreciation based on lives ranging from 25 to 70 years
Equipment - depreciation based on lives ranging from 2 to 10 years
Vehicles - depreciation based on lives ranging from 3 to 4 years
Computer hardware - depreciation based on lives ranging from 3 to 5 years
Computer software - depreciation based on lives ranging from 1to 3 years
Molds - depreciation based on a life of 10 years

Inventories: Inventories are principally valued at the lower of cost, determined
under the first-in, first-out method, or net realizable value. Certain finished
goods inventories are recorded at the lower of average cost and net realizable
In addition, certain raw materials and work-in-progress inventories are stated
at the lower of cost and replacement cost, where cost is determined on a
weighted average basis.

Comprehensive Income: The Company has adopted SFAS No. 130, "Reporting
Comprehensive Income", which establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. Comprehensive
income is comprised of net income and all changes to stockholders' equity,
except those due to investment by stockholders, changes in paid in capital and
distributions to stockholders.

Financial  Instruments:  The fair value of all short-term financial  instruments
approximate their carrying value due to their short maturity.

The Company's financial instruments consist of cash, accounts receivable, bank
indebtedness, accounts payable, accrued liabilities, director's loan payable and
loans and notes payable. Unless otherwise noted, it is management's opinion that
the Company is not exposed to significant interest, or credit risks arising from
these financial instruments. Unless otherwise noted the fair values of these
financial instruments approximate their carrying values since they are
receivable or payable on demand, or the interest rates on these instruments
fluctuate with market rates.

Derivative Financial Instruments: SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities, as amended, requires that all derivative
instruments be reported on the balance sheet at fair value and establishes
criteria for designation and effectiveness of hedging relationships. The Company
uses forward contracts to hedge its exposure to volatility of currency exchange
rates. These hedges are intended to offset the effect of transaction gains and
losses, which arise when payments of collections in a foreign currency are made
or received one to three months after the asset or liability is generated. The
fair value of these instruments is reflected in other current assets on the
Company's balance sheet. Where the Company's assessment of these hedges reveals
no ineffectiveness, gains and losses on these instruments are deferred in Other
comprehensive income (loss) until the underlying transaction gain or loss is
recognized in earnings.

                                      F-7
<PAGE>
                              SPEAR & JACKSON INC.

                         (Formerly Megapro Tools, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

                          (in thousands except shares)


Note 2--Accounting Policies - continued

Income Taxes: The Company follows the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes", which
requires the Company to recognize deferred tax liabilities and assets for the
expected future tax consequences of events that have been recognized in the
Company's financial statements or tax returns using the liability method. Under
this method, deferred tax liabilities and assets are determined based on the
temporary differences between the financial statement carrying amounts and tax
bases of assets and liabilities using enacted rates in effect in the years in
which the differences are expected to reverse.

Deferred tax assets and liabilities are computed based on the difference between
the financial reporting and tax bases of assets and liabilities using enacted
tax rates and laws. Deferred income tax expense or benefit is based on the
changes in the asset or liability from period to period.

Earnings per Share: Earnings (loss) per share is computed in accordance with
SFAS No. 128, "Earnings Per Share". Basic earnings (loss) per share is
calculated by dividing the net income (loss) available to common stockholders by
the weighted average number of common shares outstanding for the period. Diluted
earnings (loss) per share reflects the potential dilution of securities that
could share in earnings of an entity. In loss periods, dilutive common
equivalent shares are excluded as the effect would be anti-dilutive. Basic and
diluted earnings per share are the same for the periods presented.

Stock Based Compensation:

Stock-Based Compensation Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation," ("SFAS 123"), encourages, but does
not require, companies to record compensation cost for stock-based employee
compensation plans at fair value. The Company has chosen to account for stock-
based compensation using the intrinsic value method prescribed in Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees", and
related Interpretations. Accordingly, compensation cost for the Company's stock
at the date of the grant over the amount of an employee must pay to acquire the
stock. The Company has adopted the "disclosure only" alternative described in
SFAS 123 and SFAS 148, which require pro forma disclosures of net income and
earnings per share as if the fair value method of accounting had been applied.

Advertising and Marketing Expenses: The Company follows the provisions of
Statement of Position 93-7 in respect of advertising expenses and costs are
expensed as incurred. Advertising and marketing costs charged to operations were
$1,192 in the year ended September 30, 2002 and $1,114 in the year ended
September 30, 2001.

Impairment of Long-Lived Assets to be Disposed of : The Company evaluates the
recoverability of its fixed assets in accordance with SFAS No. 121, "Accounting
for the Impairment of Long-Lived Assets to be Disposed of". SFAS 121 requires
recognition of impairment of long-lived assets in the event the net book value
of such assets exceeds the estimated undiscounted cash flows attributable to
such assets or the business to which such assets relate.

                                      F-8
<PAGE>
                              SPEAR & JACKSON INC.

                         (Formerly Megapro Tools, Inc.)


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                          (in thousands except shares)

Note 2--Accounting Policies - continued

Cash  Equivalents:   Cash  equivalents  represent   short-term,   highly  liquid
investments, which have maturities of ninety days or less when purchased.

Revenue Recognition: Revenue is recognized upon shipment of products or delivery
of products to the customer  depending on the terms of the sale.  Provisions are
made for warranty and return costs at the time of sale. Such provisions have not
been material.

Research and Development Costs: Research and development costs are expensed as
incurred. There was no material research and development expenditure in the year
to September 30, 2002 or the year to September 30, 2001.

Segment Reporting: Operating segments are defined as components of an enterprise
for which separate financial information is available that is evaluated
regularly by chief operating decision makers in deciding how to allocate
resources in assessing performance.

New Accounting Pronouncements: In June 2001, the Financial Accounting Standards
Board issued Statements of Financial Accounting Standards No. 141, Business
Combinations, and No. 142, Goodwill and Other Intangible Assets, effective for
the fiscal years beginning after December 15, 2001. Under the new rules,
goodwill and intangible assets deemed to have indefinite lives will no longer be
amortized but will be subject to annual impairment tests in accordance with the
Statements. Other intangible assets will continue to be amortized over their
useful lives. SFAS 141 was effective commencing July 1, 2001, and the Company
has elected to adopt SFAS 142 as of October 1, 2001.

In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. The FASB's new rules on asset impairment
supersede SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of, and provide a single accounting model
for long-lived assets to be disposed of. Although retaining many of the
fundamental recognition and measurement provisions of SFAS No. 121, the new
rules significantly change the criteria that would have to be met to classify an
asset as held-for-sale. The new rules also supersede the provisions of APB
Opinion No. 30, Reporting the Results of Operations-Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions, with regard to reporting the effects of a
disposal of a segment of business and require expected future operating losses
from discontinued operations to be displayed in discontinued operations in the
period(s) in which the losses are incurred (rather than as of the measurement
date as presently required by APB No. 30). The Statement is effective for the
Company in the beginning of fiscal year 2003. The Company does not believe this
statement will have a material effect on the earnings or financial position of
the Company.

                                      F-9
<PAGE>

                             SPEAR & JACKSON INC.

                         (Formerly Megapro Tools, Inc.)


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                          (in thousands except shares)

Note 2--Accounting Policies - continued

New Accounting Pronouncements - continued

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

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

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

In December 2002, the FASB issued SFAS 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure," which provides alternative methods of
transition for a voluntary change to fair value based method of accounting for
stock-based employee compensation as prescribed in SFAS 123, "Accounting for
Stock-Based Compensation." Additionally, SFAS 148 required more prominent and
more frequent disclosures in financial statements about the effects of
stock-based compensation. The provisions of this Statement are effective for
fiscal years ending after December 15, 2002, with early application permitted in
certain circumstances. The Company has adopted the disclosure provisions in
these consolidated financial statements as disclosed under Stock Based
Compensation.

                                      F-10
<PAGE>


                              SPEAR & JACKSON INC.

                         (Formerly Megapro Tools, Inc.)


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                          (in thousands except shares)

Note 3 - Nature of Business

The Company was incorporated in the State of Nevada on December 17, 1998 and was
inactive until the acquisition of Mega Tools Ltd. and Mega Tools USA, Inc. via
reverse acquisition on September 30, 1999. The Company is engaged in the
manufacture and sale of a patented multi-bit screwdriver. The Company has
entered into an exclusive North American licence agreement (Note 20) with the
patent holder of a retracting cartridge type screwdriver. This licence agreement
gives the Company unrestricted use of the patent in Canada and the United States
until November 8, 2005. The Company's wholly owned subsidiaries, Mega Tools USA,
Inc. and Mega Tools Ltd. manufacture and market the drivers to customers in the
United States and Canada.

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


Having considered the relative sizes of the businesses involved in the
combination and other factors, the acquisition of Spear & Jackson plc and Bowers
Group plc ("S&J") by Megapro Tools, Inc. has been accounted for as a reverse
acquisition for financial reporting purposes. The reverse acquisition is deemed
a capital transaction and the net assets of S&J (the accounting acquirer) are
carried forward to Megapro Tools, Inc. (the legal acquirer and the reporting
entity) at their carrying value before the combination. Although S&J was deemed
to be the acquiring corporation for financial accounting and reporting purposes,
the legal status of Megapro Tools, Inc. as the surviving corporation does not
change. The relevant acquisition process utilizes the capital structure of
Megapro Tools, Inc. and the assets and liabilities of S&J are recorded at
historical cost. In these financial statements, S&J is the operating entity for
financial reporting purposes and the financial statements for all periods
presented represent S&J's financial position and results of operations. The
equity of Megapro Tools Inc. is the historical equity of S&J retroactively
restated to reflect the number of shares issued in the S&J acquisition.

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


                                      F-11
<PAGE>

                              SPEAR & JACKSON INC.

                         (Formerly Megapro Tools, Inc.)


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                          (in thousands except shares)


Note 4--Acquisitions and Dispositions of Businesses

         (a) Acquisitions

         On September 6, 2002, the Company purchased the entire issued share
capital of Spear & Jackson plc and Bowers Group plc via the issue of 3,543,281
of its common stock and the issue of (pound)150,000 of 6% promissory notes.
Spear & Jackson manufactures and distributes a wide range of hand tools, garden
tools and magnetic products. The Bowers Group manufactures and distributes
metrology instruments.

         As explained in note 3 to these financial statements, this transaction
has been accounted for as reverse acquisition. Accordingly, the net assets of
Spear & Jackson plc and Bowers Group plc are included in the consolidated
financial statements at their historic carrying value. The operating results and
the fair value of Megapro tools, Inc. and its subsidiary companies are included
in the financial statements from September 6, 2002, the deemed date of
acquisition, onwards.

         The purchase price for the Megapro Tools, Inc. and its subsidiary
companies was $305, which has been allocated to the fair value of assets and
liabilities acquired as follows:


                                                        (in thousands)

        Inventories                                     $  271
        Trade receivables                                  101
        Trade payables                                     (38)
        Other assets                                        32
        Other liabilities and provisions                  (108)
        Property, plant and equipment                      202
        Deferred and current income taxes                   62
        Director and shareholder loans                    (160)
        Cash and cash equivalents                           46
        Bank indebtedness                                  (31)
                                                        ---------
                                                        $  305
                                                        =========
         (b) Dispositions

         The loss on disposal of businesses of comprises:

                                                               (in thousands)

        Loss on disposal of Industrial Saws Division (i)        $    6,994
        Loss on sale of subsidiary (ii)                              6,540
                                                                 ----------
                                                                $   13,534
                                                                 ==========


(i)      On March 7, 2001 the Company sold its Industrial Saws Division for
         nominal cash consideration which resulted in a loss of $6.994 million.
         The results of the Industrial Saws Division are included in the
         Company's statements of operation until the date of disposal.

                                      F-12
<PAGE>

                              SPEAR & JACKSON INC.

                         (Formerly Megapro Tools, Inc.)


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

                          (in thousands except shares)

Note 4--Acquisitions and Dispositions of Businesses - continued

         (b) Dispositions - continued

(ii) On January 20, 2002 the Company sold its subsidiary, True Temper Ireland
Limited, for $1million. This subsidiary had been excluded from the consolidated
results of the Company in prior periods as it had been regarded as an asset held
for resale. The original cost of investment in true Temper Ireland amounted to
$7.54 million and the difference of $6,54 million between the above cost and the
ultimate sale proceeds of $1million was provided in the Company's financial
statements for the year ended September 30, 2001.

Note 5 - Trade Receivables and Concentrations of Credit Risk:

                                                At September 30, 2002
                                                   (in thousands)

        Trade receivables                          $    19,491
        Allowance for doubtful accounts                 (1,975)
                                                    -----------
                                                   $    17,516
                                                    ===========

         The Company's sales are principally in the United Kingdom, Europe,
Australia, North and South America, Asia and the Far East. The Company performs
periodic credit evaluations of its customers' financial condition and generally
does not require collateral. Credit losses have been within management's
estimates.

Note 6 - Inventories


                                                At September 30, 2002
                                                   (in thousands)

        Finished products                          $    16,380
        In-process products                              4,140
        Raw materials                                    4,978
        Less: Allowance for slow moving and
         obsolete inventories                           (5,839)
                                                    -----------
                                                   $    19,659
                                                    ===========

                                      F-13
<PAGE>

                              SPEAR & JACKSON INC.

                         (Formerly Megapro Tools, Inc.)


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                          (in thousands except shares)



Note 7 - Property, Plant and Equipment, net

                                                                At September 30,
                                                                     2002
                                                                (in thousands)


        Land and buildings                                      $  11,423
        Machinery, equipment and vehicles                           5,982
        Furniture and fixtures                                        128
        Computer hardware                                             308
        Computer software                                             144
        Assets held under finance leases                              867
                                                                ------------
                                                                $  18,852
                                                                ============

Included in machinery and equipment at September 30, 2002 are capital leases of
$0.9 million. The cost of these assets held under capital leases was $2.0
million and the accumulated depreciation relating to the assets was $1.1
million.


Note 8--Income Taxes

         Spear & Jackson is subject to income taxes in the US and in the other
overseas tax jurisdictions where its principal trading subsidiaries operate. The
provision for US and foreign income taxes consists of:

                                        For the Fiscal Years Ended
                                                September 30,
                                            2002                 2001
                                                (in thousands)

        Current tax charge               $   113             $   182
        Deferred tax charge (credit)         818                (304)
                                        ----------          -----------
                                             931                (122)
                                        ==========          ===========

                                      F-14
<PAGE>


                              SPEAR & JACKSON INC.

                         (Formerly Megapro Tools, Inc.)


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                          (in thousands except shares)

Note 8--Income Taxes - continued

         The Company's income tax provision differs from the estimated,
composite statutory rate of 30% as follows:

<TABLE>
<CAPTION>
                                                                        For the Fiscal Years Ended
                                                                  September 30,            September 30,
                                                              -------------------------------------------------
                                                                       2002                    2001
                                                              -----------------------  ----------------------
                                                                  (in thousands)

<S>                                                                           <C>                   <C>
Statutory income tax (benefit) provision                                      $ (503)               $ (4,557)
Overseas tax at rates different to effective rate                                 59                     536
Permanent timing differences                                                      62                      90
Company disposals not giving rise to income tax benefits                           -                   4,060
Valuation allowance                                                            1,216                      89
Miscellaneous                                                                     97                    (340)
                                                              -----------------------  ----------------------
                                                                               $ 931                  $ (122)
                                                              =======================  ======================
</TABLE>

The deferred income tax balance comprises:

                                                    At September 30,
                                               ---------------------
                                                         2002
                                               ---------------------
                                                    (in thousands)

Deferred tax liabilities:
Property, plant and equipment                        $   143
Post-retirement benefits                               3,265
                                                ---------------------
Total deferred tax liabilities                         3,408
                                                ---------------------

Deferred tax assets:

Accruals and allowances                                2,674
Inventory                                                 57
Tax loss carry forwards and other tax credits         16,810

Other                                                      -
                                                ---------------------
Total deferred tax assets                             19,541
Valuation allowance                                  (16,810)
                                                ---------------------
Net deferred tax assets                                2,731
                                                ---------------------
   Deferred tax liability, net                      $    677
                                                =====================

                                      F-15
<PAGE>

                              SPEAR & JACKSON INC.

                         (Formerly Megapro Tools, Inc.)


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                          (in thousands except shares)



Note 8--Income Taxes - continued


A valuation allowance of $16.8 million has been made against certain deferred
tax assets of Spear & Jackson, Inc. at September 30, 2002, due to the
uncertainty of their future realization. These assets relate to operating loss
carry forwards in the Company's UK, US and Australian companies totaling
approximately $6.3 million and to other UK tax credits of approximately $10.5
million.

Note 9--Notes Payable


The French and Australian subsidiaries of Spear & Jackson plc maintain
short-term credit facilities of $4.1 million denominated in Euros and Australian
dollars. The facilities comprise bank overdraft lines, with interest rates
ranging from 6.8% to 12.6%, together with facilities for letters of credit and
the discount of bills receivable. There was $1.2 million outstanding under the
overdraft lines at September 30, 2002 (September 30, 2001: $1.1 million) and
$1.0 million of letters of credit and bills outstanding under these facilities
(September 30, 2001: $0.2 million). In addition, the UK subsidiaries of Spear &
Jackson plc and Bowers Group plc maintain a line of credit of $7.0 million. This
is secured by fixed and floating charges on the assets and undertakings of these
businesses. Of the total facility, $4.7 million relates to bank overdrafts and
$2.3 million is available for letters of credit. These facilities are
denominated in British pounds. The overdraft carries interest at UK base rate
plus 0.75%. At September 30, 2002 and September 30, 2001the Company had no
borrowings outstanding under the overdraft line but had $0.7 million in
outstanding letters of credit (September 30, 2001: $0.8 million).

Mega Tools Ltd. has a credit facility  agreement with The Bank of Montreal which
provides  revolving credit  facilities of up to $40,000  denominated in Canadian
dollars.  The credit  facility  bears  interest at bank prime lending rates plus
1.5% per annum and is  collateralized  by a first mortgage on the real estate of
Mega Tools Ltd., a general security  agreement covering all assets of Mega Tools
Ltd.,  guarantees by MegaPro Tools, Inc. and Mega Tools USA, Inc. and guarantees
by a director of the Company.  Funds  advanced  under this  agreement are due on
demand by The Bank of Montreal  which may terminate  the credit  facility at any
time. Bank prime lending rate was 4.5% as at September 30, 2002.

Note 10 - Short Term Debt

Loans comprise:

                                                At September 30, 2002
                                                   (in thousands)

        Payable to a stockholder of the
        Company, unsecured, with quarterly
        payments of interest only at 10.25%
        per annum, matures October 1, 2002,
        fair market value $62.                           60
                                                        ====

                                      F-16
<PAGE>

                              SPEAR & JACKSON INC.

                         (Formerly Megapro Tools, Inc.)


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                          (in thousands except shares)



Note 11 - Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consist of the following:


                                                             At September 30,
                                                           ------------------
                                                                  2002
                                                           ------------------
                                                             (in thousands)

Compensation related                                              $ 3,945
Rebates/dealer incentives                                           1,704
Sales taxes payable                                                   910
Commissions                                                           566
Promissory notes                                                      234
Provisions                                                          2,141
Other                                                               3,969
                                                           ---------------
                                                                 $ 13,469
                                                           ===============
Note 12 - Director's Loan Payable


The director's loan is unsecured and due on demand. It bears interest at 10.25%
per annum and has no specific terms of repayment. The balance on the director's
loan at September 30, 2002 was $100,019 (September 30, 2001 $20,000). During the
year a further advance of $100,019 was made by the director and $20,000 was
repaid by the company. There was no material difference between the accounts
carrying value of this loan and its fair market value.


                                      F-17
<PAGE>
                              SPEAR & JACKSON INC.

                         (Formerly Megapro Tools, Inc.)


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                          (in thousands except shares)

Note 13--Pension Plan

        The Company has a contributory defined benefit plan covering certain of
the United Kingdom employees in its Spear & Jackson subsidiary. A valuation of
the plan was carried out under SFAS 87 at both September 30, 2002 and September
30, 2001. The following table analyzes the movement in the pension plan
liability between September 30, 2001 and September 30, 2002 and provides a
reconciliation of changes in the projected benefit obligation, fair value of
plan assets and the funded status of the Company's defined benefit pension plan
with the amounts recognized in the Company's balance sheet at September 30 2002:


                                                                     2002
                                                               ---------------
                                                               (in thousands)
Change in projected benefit obligation:

Benefit obligation at September 30, 2001                          $ 121,049
Service cost                                                          1,723
Interest cost                                                         7,743
Employee contributions                                                  995
Foreign currency exchange rate changes                                6,412
Actuarial loss                                                       11,966
Benefits paid                                                        (4,989)
                                                                ---------------
   Projected benefit obligation at September 30, 2002             $ 144,899
                                                                ===============

Change in fair value of plan assets:
Fair value of plan assets at September 30, 2001                   $ 106,649
Actual return on plan assets                                         (2,536)
Foreign currency exchange rate changes                                5,650
Employer contributions                                                3,372
Employee contributions                                                  995
Benefits paid                                                        (4,989)
                                                                ---------------
   Fair value of plan assets at September 30, 2002                $ 109,141
                                                                ===============

Funded status of plan:
Projected benefit obligation in excess of plan assets             $ (35,758)
Unrecognized net actuarial loss                                      50,720
                                                                ---------------
   Net amount recognized                                          $  14,962
                                                                ===============

Amounts recognized in the balance sheet consist of:
 Pension asset                                                     $ 14,962
                                                                ===============

                                      F-18
<PAGE>

                              SPEAR & JACKSON INC.

                         (Formerly Megapro Tools, Inc.)


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                          (in thousands except shares)


Note 13--Pension Plan (continued)


         The assumptions used and the net periodic pension cost for the
Company's defined benefit plans are presented below:


                                                                     2002
                                                                ------------
Weighted average assumptions as of September 30, 2002
Discount rate                                                         5.75%
Rate of compensation increase                                         2.25%
Expected return on assets                                             7.50%
Fixed pension increase                                                5.00%
LPI pension increase                                                  2.25%
Post 1988 GMP increase                                                1.85%





                                                    2002          2001
                                                -----------   -----------

Components of net periodic benefit cost
 Defined benefit plans:
  Service cost                                    $ 1,723       $ 2,761
  Interest cost                                     7,743         6,984
  Expected return on plan assets                   (9,396)       (8,858)
  Recognition of actuarial loss                         6          -
                                                   ------        ------
Net periodic cost                                 $    76       $   887
                                                   ======        ======


         The tables above set forth the historical components of net periodic
pension cost and a reconciliation of the funded status of the pension plan for
the employees associated with the Company and is not necessarily indicative of
the amounts to be recognized by the Company on a prospective basis.

Note 14--Leases

         Rental expense for operating leases in the year to September 30, 2002
was $0.9 million. Operating lease costs in the year to September 30, 2001
amounted to $0.9 million. Future minimum rental commitments under noncancellable
operating leases as of September 30, 2002 are:

                                                        (in thousands)
                                                       ----------------

         2003                                             $   867
         2004                                                 707
         2005                                                 538
         2006                                                 368
         Thereafter                                           344
                                                           ------
         Total minimum lease payments                     $ 2,824
                                                           ======

                                      F-19
<PAGE>


                              SPEAR & JACKSON INC.

                         (Formerly Megapro Tools, Inc.)


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                          (in thousands except shares)


Note 14--Leases (Continued)

         Under capital lease agreements, the Company is required to make certain
monthly, quarterly or annual lease payments through 2006. The aggregate minimum
capital lease payments for the next four years, with their present value as of
September 30, 2002, are as follows:

                                                        (in thousands)
                                                     --------------------

         2003                                             $   654
         2004                                                 286
         2005                                                  70
         2006                                                   8
                                                          ----------
         Total minimum lease payments                       1,018
         Less amount representing interest at 9%             (102)
                                                          ----------
         Present value of net minimum lease payments          916
         Less current portion                                (654)
                                                          ----------
         Long-term portion                                $   262
                                                          ==========


Note 15 - Common Stock

Authorized: 25,000,000 Common shares with a par value of $.001 per share

Note 16 - Stock Option Plan

 On January 20, 2000, the Company's board of directors approved a Stock Option
Plan which provides for incentive stock options and non-qualified stock options
to be granted to officers, employees, directors and consultants to the Company.
Subject to restrictions outlined in the Stock Option Plan, options granted,
terms of exercise and expiration of options will be determined by the Board of
Directors or by a compensation committee selected by the Board of Directors. The
maximum number of shares of the Company's common stock that may be granted under
the plan is 950,000 shares increased quarterly commencing April 1, 2000 by the
lessor of (i) 15% of the outstanding shares of the common stock on the first day
of the fiscal quarter less the number of shares of common stock which may be
granted under the plan prior to the first day of the applicable fiscal quarter
or (ii) a lessor amount determined by the Board of Directors. No option shall be
exercisable after the expiration of the earliest of (i) ten years after the
option is granted and (ii) three months after the date of termination of the
optionor's employment. Under the terms of the plan no options may be granted to
any employee of the Company who owns more than 10% of the voting stock of the
Company or its subsidiaries unless the option price is at least 110% of the fair
market value of the shares subject to the option and the option is not
exercisable after the expiration of five years from the date such option is
granted.

Note 17 - Stock Options

Pro-forma information regarding Net Loss and Loss per Share is required under
SFAS No. 123 and has been determined as if the Company had accounted for its
stock options under the fair value method of SFAS No. 123. No options were
granted in the period to September 30, 2002. The fair value of options granted
in the year ended December 31, 2001 was $0.65. The fair value of these options
was estimated at the date of the grant using a Black-Scholes option pricing
model with the following assumptions: no dividends, an average risk-free
interest rate of 3.01% (2000 - 5.59%), volatility factor of the expected market
price of the Company's common stock of 100% (2000 - 0.00%) and a weighted
average expected life of the options of two years.


                                      F-20

<PAGE>

                              SPEAR & JACKSON INC.

                         (Formerly Megapro Tools, Inc.)


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                          (in thousands except shares)


Note 17 - Stock Options (Continued):


A summary of stock option transactions for the year ended September 30, 2002 and
the year ended September 30, 2001 is presented below:

                                                 Number       Weighted Average
                                                               Exercise price
Outstanding, September 30 2000                  260,000            $0.85
  Expired March 14, 2001                       (130,000)           $0.85
                                             -------------   --------------
Outstanding, September 30 2001                  130,000            $0.85
                                             =============   ==============

Outstanding, September 30 2001                  130,000            $0.85
  Issued October 16, 2001                        50,000            $1.50
  Exercised, May 2002                           (27,000)           $1.50
  Cancelled, September, 2002                   (153,000)           $0.95
                                             -------------   --------------
Outstanding, September 30 2002                     -               $0.00
                                             =============   ==============


For the year ended September 30, 2000 the Company recorded deferred compensation
of $39,000 based upon the difference between the exercise price and market price
for the options granted. The deferred compensation was amortized over the
vesting period of the stock options with compensation expense of $35,583
recognized for the year ended September 30, 2000. The remaining $3,417 of
deferred compensation was reversed upon expiration of the unvested portion of
the stock options on March 14, 2001. Compensation expense was not recorded in
respect to the stock options granted in 2001 to employees because the exercise
price exceeded the market price of the shares at the time of the grant.

Note 18 - Stock Compensation

On January 15, 2002 the company issued 321,000 shares of its common stock to a
business combination consultant in consideration for the provision of services
with the objective of increasing the company's revenues and earnings and
expanding its business. The company recorded compensation expense of $449,400
for this contract in the year ended September 30, 2002 based upon the fair
market value of the common stock on the date of issue.

On February 27, 2002 10,000 shares of common stock were issued as consideration
for director's services. The company recorded compensation expense of $28,000 in
the year to September 30, 2002 based upon the fair market value of the stock at
the date of issue.

Both the above items of stock compensation expense were charged to income in the
accounts of Megapro Tools, Inc. prior to its deemed purchase via a reverse
acquisition on September 6, 2002. They do not therefore impact the consolidated
statement of operations of Spear & Jackson, Inc. for the year ended September
30, 2002.


                                      F-21
<PAGE>


                              SPEAR & JACKSON INC.

                         (Formerly Megapro Tools, Inc.)


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                          (in thousands except shares)


Note 19 - Related Party Transactions and Balances

Transactions for the year ended September 30, 2002 and the year ended September
30, 2001 were as follows:

                                                            For the Fiscal
                                                              Year Ended
                                                             September 30,
                                                                 2002

Interest on the promissory note payable to a
significant stockholder of the company and interest
on director's loan                                                 $7
                                                                 ======

These transactions are recorded at the exchange amount, being the amount of
consideration established and agreed to by the related parties. At the year end,
the amounts due from and to related parties not disclosed elsewhere in these
consolidated financial are as follows:

                                                  For the Fiscal Years Ended
                                                 September 30,     September 30,
                                                    2002               2001


Accounts payable and accrued liabilities
to a significant stockholder                         $4                 $0
                                                   ======             ======

Note 20 - Contractual Obligations

(a)  On February 29, 2000 the Company entered into two licence agreements
     covering the period November 8, 1999 to November 8, 2005 with the owner of
     the patents for the Company's multi-bit screwdrivers. These agreements
     divide the licencing rights between sales to national accounts (certain
     listed retail outlets) and sales to regular accounts (all accounts which
     are not national accounts). These agreements require royalty payments as
     detailed below:

     The National Accounts Agreement requires a unit royalty of $.30 per unit
     manufactured or sold. The Regular Accounts Agreement requires a unit
     royalty of $.45 per unit manufactured in Canada and the U.S., $.40 per unit
     for the first 100,000 units annually manufactured outside of Canada and the
     U.S. and $.30 per unit for units in excess of 100,000 annually manufactured
     outside of Canada and the U.S.

     The Agreements require $150,000 minimum annual royalty payments for the
     years ended November 8, 2000 through 2005.

     The unit royalties and minimum annual royalties are to be adjusted annually
     commencing November 8, 2000 based upon the increase in the November 8, 1999
     Consumer Price Index for the City of Vancouver, British Columbia as
     provided by Statistics Canada.


     The Company has the option to renew both the National and Regular Accounts
     Licence Agreements until December 1, 2032 provided that it pays renewal
     fees of $25,000 on November 8, 2002, $30,000 on November 8, 2003 and
     $35,000 on November 8, 2004.

                                      F-22
<PAGE>

                              SPEAR & JACKSON INC.

                         (Formerly Megapro Tools, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                          (in thousands except shares)


Note 20 - Contractual Obligations (Continued):

(b)  On February 29, 2000 the Company entered into a sub-licence agreement
     covering the period November 9, 1999 to December 1, 2012 with a national
     account. This agreement permits the sub-licencee to manufacture and
     distribute the Company's drivers for a unit royalty of $.60 per unit sold.
     The minimum annual royalties required under the agreement for years ending
     November 8 are $30,000 for 2000 and $60,000 for 2001 to 2012. If the
     sub-licencee has produced and is airing an "infomercial" or equivalent
     video promotion the minimum annual royalties are to be doubled. On May 22,
     2001 the national account filed for voluntary reorganization under Chapter
     11 of the U.S. Bankruptcy Code. This entitles the Company to terminate its
     sub-licence agreement, however, it has not yet terminated the agreement.

(c)  The Company has acquired a 50% interest in Megapro Holdings Inc., a company
     incorporated in British Columbia, Canada to develop and hold patents for
     new products. To date, the company has been inactive.

(d)  In September 2002, the Company entered into an employment agreement with
     Neil Morgan which shall terminate on March 2003. Under the terms of such
     agreement, Mr. Morgan shall receive a salary at a monthly rate of $12,500
     per month payable semi-monthly solely out of available cash flow from the
     Company's Vancouver and Seattle operations.

(e)  In September 2002, the Company entered into an employment agreement with
     Joseph Piscitelli which shall terminate in March 2003. Under the terms of
     the employment agreement, Mr. Piscitelli shall serve as the Company's Chief
     Operating Officer. Mr. Piscitelli shall receive a salary at a monthly rate
     of $10,000 per month payable semi-monthly. Under the terms of the agreement
     Mr. Piscitelli has agreed that he will not during the term of such
     agreement and for a period of six months from the date of termination
     engage in any competitive business activities with the Company in the State
     of Florida, call upon any of the Company's customers or clients for the
     purposes of engaging in any competitive activities or divert, solicit or
     take away any of the Company's customers or clients for the purpose of
     engaging in any competitive activities.

Note 21--Segment Data

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

Given below are summaries of the significant accounts and balances by business
segment and by geographical location, reconciled to the consolidated totals. The
data for the year ended September 30, 2001 includes transactions relating to the
Industrial Saws division which was sold in March 2001 (see note 4). In both
years, transactions and balances applicable to the Company's distribution
companies in France, Australia and New Zealand have been aggregated with the
hand and garden product businesses since these products represent the most
significant proportion of the distribution companies' trades.

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


                                      F-23

<PAGE>
                              SPEAR & JACKSON INC.

                         (Formerly Megapro Tools, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

                          (in thousands except shares)

Note 21--Segment Data - continued

The following is a summary of the significant accounts and balances (in
thousands) by business segment, reconciled to the consolidated totals.

<TABLE>
<CAPTION>
                                         Sales                             Long-lived Assets (a)
                               --------------------------------       -----------------------------
                                Year Ended      Year Ended              Year Ended    Year Ended
                               September 30,   September 30,          September 30,  September 30,
                                   2002            2001                  2002            2001
                               -------------  ---------------         ------------   --------------
<S>                                <C>              <C>                   <C>              <C>
  Hand & garden tools              $ 68,827         $ 64,330              $ 6,638          $ 9,909
  Metrology tools                    13,806           15,729                2,318            2,761
  Magnetic products                   8,262            9,987                  915            1,199
  Screwdrivers                           84                -                  200                -
  Corporate                               -                -                8,781            8,595
  Industrial saws                         -            7,825                    -                -
                               ------------- ----------------         ------------   --------------
     Total                         $ 90,979         $ 97,871             $ 18,852         $ 22,464
                               ============= ================         ============   ==============

                                       Depreciation                       Capital expenditure
                               --------------------------------       -----------------------------
                                Year Ended      Year Ended              Year Ended    Year Ended
                               September 30,   September 30,          September 30,  September 30,
                                   2002            2001                  2002            2001
                               -------------  ---------------         ------------   --------------
  Hand & garden tools               $ 2,183          $ 3,123              $ 1,181            $ 817
  Metrology tools                       473              419                  139              259
  Magnetic products                     362              222                   75              402
  Screwdrivers                            2                -                    5                -
  Corporate                             191              220                   34               36
  Industrial saws                         -              261                    -               57
                               ------------- ----------------         ------------   --------------
     Total                          $ 3,211          $ 4,245              $ 1,434          $ 1,571
                               ============= ================         ============   ==============

                                     Operating Income                         Net Interest
                               --------------------------------       -----------------------------
                                Year Ended      Year Ended              Year Ended    Year Ended
                               September 30,   September 30,          September 30,  September 30,
                                   2002            2001                  2002            2001
                               -------------  ---------------         ------------   --------------
  Hand & garden tools               $ 2,907          $ 2,779               $ (358)          $ (304)
  Metrology tools                        90              606                  (17)             (23)
  Magnetic products                  (1,221)             756                   (8)             (13)
  Screwdrivers                          (23)               -                   (2)               -
  Corporate                          (3,135)          (3,118)                 149              122
  Industrial saws                         -             (637)                                  (97)
                               ------------- ----------------         ------------   --------------
     Total                         $ (1,382)           $ 386               $ (236)          $ (315)
                               ============= ================         ============   ==============
</TABLE>


                     (a)   Represents property, plant and equipment, net.

                                      F-24
<PAGE>

                              SPEAR & JACKSON INC.

                         (Formerly Megapro Tools, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                          (in thousands except shares)

Note 21--Segment Data - continued

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


<TABLE>
<CAPTION>
                                         Sales (a)                         Long-lived Assets (b)
                               --------------------------------       -----------------------------
                                Year Ended      Year Ended              Year Ended    Year Ended
                               September 30,   September 30,          September 30,  September 30,
                                   2002            2001                  2002            2001
                               -------------  ---------------         ------------   --------------
<S>                                <C>              <C>                   <C>              <C>
  United Kingdom                   $ 42,674         $ 47,457              $17,047          $20,911
  Europe                             15,777           18,976                1,135            1,126
  Australasia                        16,947           12,744                  463              427
  North America                       7,390            9,265                  207                -
  Other                               8,191            9,429                    -                -
                               ------------- ----------------         ------------   --------------
     Total                         $ 90,979         $ 97,871             $ 18,852         $ 22,464
                               ============= ================         ============   ==============

                                       Depreciation                       Capital expenditure
                               --------------------------------       -----------------------------
                                Year Ended      Year Ended              Year Ended    Year Ended
                               September 30,   September 30,          September 30,  September 30,
                                   2002            2001                  2002            2001
                               -------------  ---------------         ------------   --------------
  United Kingdom                   $ 2,913          $ 3,760              $ 1,241          $  1,314
  Europe                                73              328                   20                70
  Australasia                          223              153                  161               187
  North America                          2                4                   12                -
                               ------------- ----------------         ------------   --------------
     Total                         $ 3,211          $ 4,245              $ 1,434          $  1,571
                               ============= ================         ============   ==============

                                     Operating Income                         Net Interest
                               --------------------------------       -----------------------------
                                Year Ended      Year Ended              Year Ended    Year Ended
                               September 30,   September 30,          September 30,  September 30,
                                   2002            2001                  2002            2001
                               -------------  ---------------         ------------   --------------
  United Kingdom                   $(1,469)         $   736               $   58           $   27
  Europe                              (251)             (90)                (166)            (285)
  Australasia                          376             (358)                (126)             (67)
  North America                        (38)              98                   (2)              10
                               ------------- ----------------         ------------   --------------
     Total                         $(1,382)           $ 386               $ (236)          $ (315)
                               ============= ================         ============   ==============
</TABLE>


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


                                      F-25

<PAGE>



                              SPEAR & JACKSON INC.

                         (Formerly Megapro Tools, Inc.)


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


                          (in thousands except shares)





Note 22--Commitments and Contingencies


         The Company had outstanding documentary letters of credit totaling $1.7
million at September 30, 2002, respectively, related primarily to inventory
purchases from suppliers in the Far East.




                                      F-26