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


                                  FORM 10-KSB/A/2


(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 [X] No [ ]


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,
$87,970,000.


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. $ $57,936,652 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.


EXPLANATORY NOTE

On January 13, 2003, Spear & Jackson Inc. ("the Company") filed its annual
report on Form 10-KSB for the fiscal year ended September 30, 2002. On May 28,
2003 the Company filed Amendment No. 1 to the Annual Report on Form 10-KSB for
the fiscal year ended September 30, 2002. The amendment restated the original
Form 10-KSB in order to re-present the acquisition of Spear & Jackson plc and
Bowers Group plc by Megapro Tools, Inc. as a reverse takeover.

This Amendment No. 2 to the Annual Report on Form 10-KSB for the year to
September 30, 2002 is being filed in order to restate the consolidated financial
statements and supplemental disclosures as follows:

<PAGE>

A        Financial Statements

1.       The presentation of the Company's UK defined benefit pension plan has
         been restated. The adjustments arise from errors and omissions in the
         calculations prepared by the Company's actuaries for both the 2002 and
         2001 fiscal years to derive the pension plan disclosures that were
         included in Amendment 1 to Form 10-KSB. The errors and omissions
         comprise:

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

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


         c)       The pension disclosures at September 30, 2001 have also been
                  reconsidered as a resutlt of the above errors and omissions in
                  the calculations and an additional minimum pension liability
                  has been recognized in respect of that year also.

         Item (a) impacts the previously reported figure for SGA expenses and
         also on the tax charge for the year. Item (b) results in the previously
         disclosed pension asset of $14,962 now being presented as a pension
         liability of $20,442 with corresponding debit entries to deferred
         taxation of $10,621 and shareholders' equity of $24,343. The 2001 ABO
         pension adjustments, item (c), are reflected in the consolidated
         statement of changes in shareholders' equity for the year ended
         September 30, 2001. They also impact on the SFAS 87 charges for 2002
         and subsequent years.

2.       The fair value of the consideration for the deemed acquisition of
         Megapro Tools, Inc. has been revised. This has resulted in goodwill of
         $1,138 being recognized which has subsequently been written off
         following a goodwill impairment review. In relation to the acquisition,
         proforma income statement disclosures required by paragraphs 54-57 of
         SFAS141 are also now included in the notes to the financial statements.

3.       Sales rebates totaling (pound) 3,009 which were previously presented as
         a component of SG and A expense have been reanalyzed and are now shown
         as a reduction to sales.

4.       The revenue recognition policy footnote disclosure has been expanded to
         discuss the accounting for customer rebates and dealer incentives.

5.       Additional information is now provided on the Company's investments and
         associates.

6.       Expanded disclosures in other comprehensive income together with an
         additional footnote to the financial statements have been included to
         provide the quantified disclosures required by paragraphs 45-47 of
         SFAS133.

7.       Other minor adjustments have been made to expand disclosures in certain
         footnotes to enhance their presentation and to ensure consistency with
         the footnotes to be included in the financial statements for the year
         ended September 30, 2003 which are to be included in Form 10-KSB to be
         submitted in January 2004.

                                       3

<PAGE>

B.       Supplemental Disclosures

PART 11- Item 6

Management's Discussion and Analysis or Plan of Operation has been extended to
include :

(a)  a discussion of critical accounting policies;

(b)  a reconciliation of the 2002 consolidated statement of operations with
     proforma 2002 statements of operations included in the Company's Form 8K/A
     filed on March 14, 2003;

(c)  additional narrative discussion concerning the disposal of subsidiary
     companies in the year ended September 30, 2001.

The remaining disclosoures contained within this Amendment consist of all other
disclosures originally contained in the Company's Annual Report on Form 10-KSB
for the year ended September 30, 2002 in the form filed with the Securities and
Exchange Commission ("SEC") on January 13, 2003, as amended by Amendment No. 1
to the Annual Report on Form 10-K for the fiscal year ended September 30, 2002
as filed with the SEC on May 28, 2003.

These other disclosures as originally included in the Company's Annual Report on
Form 10-K and Amendment No. 1 to the Company's Annual Report on Form 10-KSB are
not amended hereby, but are included for the convenience of the reader. In order
to preserve the nature and character of the disclosures set forth in the
Company's Annual Report on Form 10-K for the fiscal year ended September 30,
2002, as originally filed, except as expressly noted herein, this report speaks
as of the date of the original filing, and we have not updated the disclosures
in this report to speak as of a later date.

While this report primarily relates to the historical periods covered, events
may have taken place since the original filing that might have been reflected in
this report if they had taken place prior to the original filing. All
information contained in this Amendment No. 2 is subject to updating and
supplementing as provided in our reports filed with the Securities and Exchange
Commission subsequent to the date of the original filing of the Annual Report on
Form 10-KSB.

                                       4

<PAGE>

         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.

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.

                                       5

<PAGE>

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.

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.

                                       6

<PAGE>

(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:

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.

                                       7

<PAGE>

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.

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.

                                       8

<PAGE>

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.

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.

                                       9

<PAGE>

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.

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.

                                       10

<PAGE>

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.

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:

Quarter                                          High              Low

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

                                       11

<PAGE>

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.

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.

Equity Plan Compensation Information
<TABLE>
<CAPTION>

                                                                                                 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>




                                       12

<PAGE>

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


DISCUSSION OF CRITICAL ACCOUNTING POLICIES

We prepare our consolidated financial statements in accordance with accounting
principles generally accepted in the United States. As such, we are required to
make certain estimates, judgements and assumptions that we believe are
reasonable based upon the information available. These estimates and assumptions
affect the reported amounts of assets and liabilities as of the date of the
consolidated financial statements and the reported amounts of revenues and
expenses during the periods presented. Actual results could differ significantly
from those estimates under different assumptions and conditions. We believe that
the following discussion addresses our most critical accounting policies, which
are those that are most important to the portrayal of our financial condition
and results of operations and which require our most difficult and subjective
judgements, often as a result of the need to make estimates about the effect of
matters that are inherently uncertain. Note 2 to the accompanying consolidated
financial statements includes a summary of the significant accounting policies
used in the preparation of the consolidated financial statements.

INVENTORY VALUATION

Inventories are stated at the lower of cost and net realizable value. Cost
includes all costs incurred in bringing each product to its present location and
condition, as follows:

Raw materials, consumables and goods for resale - principally valued at cost
determined on a first in, first out basis although in certain subsidiaries,
inventories are valued using a cost determined on a weighted average basis.

Work in progress and finished goods - cost of direct materials and labor plus
attributable overheads based on a normal level of activity. As above, in certain
subsidiaries, inventories of factored products are valued at average cost.

Provisions in respect of net realizable value and obsolescence are applied to
the gross value of the inventory. Net realizable value is based on estimated
selling price less any further costs expected to be incurred to completion and
disposal. Provision is made for slow moving or defective items by comparing
inventories on hand to future projected demand. Provision is made where
inventories held are in excess of 1 year's budgeted future sales as follows:

       Inventory in excess of 1 to 2 years' sales:      provision of 25% of cost
       Inventory in excess of 2 to 3 years' sales:      provision of 50% of cost
       Inventory in excess of 3 to 5 years' sales:      provision of 75% of cost
       Inventory in excess of 5 years' sales:           provision of 95% of cost

Obsolete inventories are subject to a 100% provision. This provisioning
methodology has been consistently applied by management over a number of years.
Management believes that this approach is both prudent and provides an accurate
and efficient manner for making suitable provision against slow moving and
obsolete inventory lines.


                                       13

<PAGE>
<TABLE>
<CAPTION>
       Comparable stock values are as follows:-
<S>                                                                  <C>             <C>
                                                                     09.30.02        09.30.01
                                                                       $'000            $'000
---------------------------------------------------------------------------------------------
       Gross Stock
       -     raw materials and consumables                              4,978           5,083
       -     work in progress                                           4,140           4,892
       -     finished goods                                            16,380          15,486

       Less
       -     slow moving, obsolete and net
             realizable value provisions                               (5,839)         (5,980)
                                                                       ------          ------
       Net Stock Valuation                                             19,659          19,481
                                                                       ======          ======

Activity on the inventory reserve in the above years can be summarized as:

                                                             2002          2001        Notes

Balance brought forward                                      5,980         5,226
Provisions released following
  disposal of inventory                                       (982)         (340)       (a)
Additional provisions made                                     451         2,190        (b)
Inventory reserves relating to group
  companies purchased/(sold) in the year                        37        (1,092)
Exchange movements                                             353            (4)
                                                             ---------------------
Balance carried forward                                      5,839         5,980
                                                             =====         ======
</TABLE>

(a)    A UK stock reduction program was initiated in the final quarter of 2001
       and completed during 2002. As part of this exercise, a significant amount
       of old inventory was sold at discounted prices to release warehouse space
       and to liquidate heavily provisioned slow moving inventory lines.

(b)    The additional provisions made in 2001 relate to the increased provisions
       necessary to bring the stock provisioning policy of certain overseas
       distribution subsidiaries and the recently acquired metrology business
       into line with that used by the rest of the group.

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.
Most of the Company's major customers have provision for sales rebates in their
trading terms. The levels of rebates are individually negotiated with each
customer and are unique to that customer. Typically, a series of escalating
targets are set for purchases from Spear & Jackson, Inc. and, on reaching each
target, a rebate, usually paid in the form of credit note but occasionally in
cash, is triggered e.g.

                                       14

<PAGE>

                         Sales            Rebate           Rebate
                         Turnover
                         $'000            %                $'000

Target        1           500              5.0              25
              2           750              7.5              56
              3          1000             10.0             100
              4          1250             12.0             150

The turnover targets are set on a twelve-month basis, however these sales
targets period ends are not necessarily coterminous with the accounting period
end of Spear & Jackson, Inc. At any point in time, the rebate liability is
calculated by estimating the annual sales value for each customer (in order to
ascertain the rebate % the customer is likely to achieve), applying the relevant
% to the actual sales achieved to date, and then deducting any interim rebates
already paid.

The rebates charge is netted against gross sales in the profit and loss account.
Rebates are paid to customers per their individual agreements. Typically
payments are made semi-annually or annually, however there are agreements in
place in which rebates are paid monthly and quarterly.

Generally there is no provision for customers to return products they cannot
sell. However, a small number of customers have negotiated a return clause in
their trading agreements. There is a time limit for these returns, which vary
from customer to customer, none of which exceed 12 months from the original
invoice date. The amount of mutual returns made in the year ended September 30,
2002 was $66k.

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 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.

                                       15

<PAGE>

The US$ Balance sheet and income statement financial data could therefore be
subject to material fluctuation year on year as a result of significant
movements in the cross rate between the US$ and the various source functional
rates used in the consolidation.

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.

PENSION AND POST-RETIREMENT BENEFIT OBLIGATIONS

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

This discussion addresses the sensitivities in assumptions that could impact the
plan disclosures in the company's consolidated balance sheet and income
statement and also their effect on ongoing employer contribution payments and
the company's liquidity.

EMPLOYEE BENEFIT OBLIGATIONS

The principal assumptions used to determine Spear & Jackson plc's pension
benefit costs are the discount rate, the rate of compensation increase and the
expected return on plan assets.

The discount rate used to determine the present value of future pension payments
is based on the yields on high-quality, fixed-income investments (typically
A-rated corporate bonds and government gilts). The present values of the
Company's future pension and other post-retirement obligations were determined
using discount rates of 5.75% at September 30, 2002, and 6.25% at September 30,
2001,

The expected rate of return on assets is set in the light of long term
expectations for returns on the assets held by the plan. The start point for the
derivation of the rate is the return on gilts of appropriate term compared to
the plan liabilities. To reflect the fact that a significant part of the plan's
assets are invested in asset classes, such as equities and corporate bonds, that
are expected to produce higher returns than gilts, the overall rate of return on
assets has been adjusted to take account of these higher yields.

                                       16

<PAGE>

The rate of compensation increase and the expected return on plan assets were
assumed to be 2.25% and 7.5% in the year ended September 30, 2002 and 3.25% and
7.5% respectively, in the year ended September 30, 2001. The following table
illustrates the sensitivity to a change in certain of the key assumptions used
in calculating the assets and liabilities of the pension plan:
<TABLE>
<CAPTION>

                                   Impact on 2003          Impact on            Impact on
                                   Pre-Tax Pension         September 30,        September 30,
Change in Assumption               Expense                 2002                 2002 Equity
                                                           PBO                  (Net of tax)
--------------------------------------------------------------------------------------------
25 basis point
<S>                              <C>                     <C>                  <C>
decrease in discount rate       +$0.464 million         +$5.449 million      -$3.719 million

25 basis point
increase in discount rate       -$0.671 million         -$6.307 million      +$4.302 million

25 basis point
decrease in expected
return on assets                +$0.310 million         -                    -

25 basis point
increase in expected
return on assets                -$1.309 million         -                    -
</TABLE>

Using the assumptions referred to above, the funded status of the plan under FAS
87 at September 30, 2002 and September 30, 2001 was as follows:

                                                 9/30/02              9/30/01
                                               (pound)'000          (pound)'000

       Projected benefit obligation              (132,953)            (116,083)
       Fair value of plan assets                  109,141              106,649
       Projected benefit obligation in
         excess of plan assets                    (23,812)             (9,434)
       Unrecognized actuarial loss                 38,146               19,869
       Net amount recognised                      (14,334)              10,435

In both years the projected benefit obligation is in excess of plan assets. The
impact of this underfunding has not been recognized in its entirety but has,
instead, been deferred or spread over the assumed future working lifetime of 13
years for active plan members based on actuarial expectation of a substantial
future increase in the value of plan assets.

The majority of the unrecognized actuarial loss has arisen as a result of
significant asset losses, and significant liability increases due to a
continuing reduction in the discount rate. The impact of the reduction in the
discount rate has been particularly severe for the Plan given that the
membership profile of the scheme is relatively mature (with over 50% of the Plan
members being pensioners) and that a significant proportion of pensions increase
at a fixed 5% when in payment.

                                       17

<PAGE>

Due to the lower discount rate and a decline in the fair market value of plan
assets during 2001 and 2002, the accumulated benefit obligation at September 30,
2001 and September 30, 2002 exceeded the fair value of plan assets by $4.7
million and $20.4 million, respectively. Consequently, a net of tax
comprehensive loss of $10.6 million was charged against shareholders' equity in
2001 and a loss of $13.2 million was charged in 2002. Amounts recognized in the
consolidated balance sheet at September 30, 2001 and September 30, 2002 are
therefore as follows:

                                                           2002         2001
                                                           $'000        $'000

       Accrued pension (liability)/asset
         (disclosed in other liabilities)                (20,442)      (4,668)
       Other comprehensive income
         (disclosed in shareholders' equity)              34,776       15,103
                                                         ---------------------
       Net amount recognized                              14,334       10,435
                                                         ---------------------

Assuming only modest recoveries in the fair market value of plan assets in 2003
and the application of a reduced discount rate it is anticipated that the
accumulated benefit obligation at September 30, 2003 will again exceed the fair
value of plan assets.

The overall funding objective of the scheme is to hold assets which are
sufficient to cover the plan's past service ongoing liabilities. These
liabilities form the "funding target" and include an allowance for expected
future increases to the pensionable earnings of active members so that the cost
of the plan's benefits is considered over the longer term.

The last full actuarial valuation of the scheme was carried out at April 5,
2002. This showed the following:

                                                                         $M
       Value of past service ongoing liabilities                      (128.4)
       Market value of assets                                          120.3
                                                                      -------
       Past service deficit                                             (8.1)
                                                                      =======
       Funding ratio                                                      94%


Under the United Kingdom Pensions Act 1995, schemes must satisfy a minimum
funding test known as the Minimum Funding Requirement (MFR). This is based on
the benefits which would be paid if the active members had left the plan on the
valuation date. The ratio of the market value of the plan's assets to its MFR
liabilities is known as the MFR funding ratio. At the valuation date the MFR
funding ratio was also 94%.

As at September 30, 2002 because of falls in stock markets in the period from
April 5, 2002 to that date and adverse movements in gilt yields, the base
funding ratio had fallen to approximately 78% and the MFR funding ratio to
circa. 91%.

                                       18

<PAGE>

Company pension contributions are determined by the Trustees of the plan with
the agreement of the principal employer and after consultation with the actuary
with the intention of eliminating the past service deficit in the long term and
ensuring that the MFR funding ratio is restored to 100% within 10 years.

With effect from November 1, 2002 the actuary recommended that the Company
should change its rate of contributions to 21.2%.

Based on the funding position of the plan at the valuation date and applying his
long term assumptions, the actuary confirmed that contributing at such a rate
would be sufficient to bring the plan's assets into line with its funding
target. Further, in current investment market conditions, contributions at the
rate of 21.2% rising to 24.2% with effect from November 1, 2007 would be
sufficient to meet the MFR requirements.

Contributions at a rate of 21.2% equate to a cash cost to the Company of
approximately $2.7m. The Company believes that these payments will be adequately
funded from operating cash generated in the year. It is not currently
anticipated that this rate of contribution will increase when the next actuarial
review of contribution levels is completed in December 2003.

In the period from August 1, 2001 to October 30, 2002 the Company contribution
rate was 24.8%, from June 1, 2000 to July 31, 2001 the rate was 28.5% and prior
to that the level of employer contributions was set at 5%.

Employer contributions paid in the year to September 30, 2002 amounted to $3.4
and $11.2 million in the year ended September 30, 2001. The latter figure
included a one-off special contribution payment of $7.4 million which was made
to reduce the funding deficit.



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.

                                       19

<PAGE>


Reconciliation of 2002 Results with Proforma 8k Disclosures

As a result of the above acquisition, on March 14, 2003 the company filed form
8K-A which included detailed consolidated financial statements in respect of the
combined operations of Spear & Jackson plc and Bowers Group plc for the year
ended September 30, 2001 and the period from October 1, 2001 to September 6,
2002. The financial statements are presented under UK GAAP with detailed
reconciliations to US GAAP and other proforma disclosures.

Included in these disclosures was a proforma consolidated income statement for
Spear & Jackson plc, Bowers Group plc and Megapro Tools, Inc for the year ended
September 30, 2002. This showed a net loss for the year, under US GAAP, of $151.
To assist users of the accounts, given below is a reconciliation of the above
net loss to the loss of $3,771 reported in the consolidated income statement for
the year ended September 30, 2002 included in this amended 10-KSB
<TABLE>
<CAPTION>

                                                                    Notes       $'000       $'000

<S>                     <C>  <C>   <C> <C>                          <C>          <C>          <C>
Net loss for the period 10/1/02 to 9/6/02                                                    (151)
per note 25(b) of 8-K/A

a)    Add trading results of Spear & Jackson plc                    (1)            281
      and Bowers Group plc for the period from
      9/7/2002 to 9/30/2002

b)    Provisions made for relocation of manufacturing               (2)         (3,113)
      operations and other reorganization, restructuring
      and termination costs and one-off credits

c)    Remove Megapro trading results for the period                 (1)            297
      from 10/1/2001 to 30/9/2002 and replace with
      post acquisition results from 9/7/2002 to 9/30/2002                          (27)

d)    Remove negative goodwill amortization                         (1)           (189)

e)    Remove full year's interest on promissory                     (1)             19
      notes issued as part of purchase consideration

f)    Insert goodwill impairment                                    (1)         (1,138)

g)    Exchange rate and other sundry movements                      (3)            182

h)    Tax impact of (a), (b), (c), (d), (g)                         (4)            706

i)    Valuation and other deferred tax issues                       (4)           (379)
                                                                                           (3,361)
      Net loss per 2002 income statement of 10KSB/A                                        (3,512)
---------------------------------------------------------------------------------------------------
</TABLE>

                                       20

<PAGE>

Notes

(1)   The 8K/A financial statements and US GAAP reconciliations were prepared on
      the basis that the consoldiation would mirror the form of the legal
      structure of the acquisition with Megapro Tools, Inc being treated as the
      acquiring entity. The 10-KSB/A has now been restated to show the
      acquisition as a reverse takeover. This impacts on the reconciliation as
      follows:

i)    Goodwill

      Under the legal structure basis of consolidation, negative goodwill arose
      which was being amortized over 20 years. Under reverse takeover accounting
      negative goodwill does not arise and the amortization credit has therefore
      been reversed. Instead, positive goodwill results from the deemed
      acquisition of Megapro Tools, Inc. by Spear & Jackson/Bowers. This
      goodwill has subsequently been written off following a goodwill impairment
      review.

ii) Incorporation of results of acquired entities

      The 8K assumes Megapro Tools, Inc. to be the acquirer of Spear & Jackson
      and Bowers on September 6, 2002. The 8K 2002 income statement proforma
      therefore comprises the results of the relevant entities as follows:-

      Megapro - twelve months ended 9/30/2002
      Spear & Jackson/Bowers Group - period from October 1, 2001 to September 6,
      2002

      In comparison, the 10KSB/A income statement, prepared on the basis of a
      reverse takeover,  comprises the following:-

      Spear & Jackson/Bowers Group - twelve months ended 9/30/2002

      Megapro - period from deemed date of acquisition (9/6/2002) to 9/30/2002

iii) Promissory note interest

      The 8K proforma assumes that the date of acquisition is backdated to the
      start of the accounting period (ie 10/1/2001). This means that a full
      year's interest charge is debited in respect of the 6% promissory notes
      issued as part of the Megapro purchase consideration.

      In the 10-KSB/A the income statement is debited with promissory note
      interest only from their formal date of issue (9/6/2002) to the year end.

(2)   These restructuring costs represent items paid and provided in respect of
      Spear & Jackson plc in the period from 9/6/2002 to 9/30/2002. As noted in
      (1) above, the 8K income statement proforma includes none of the Spear &
      Jackson results in the 24 day period. All such one-off costs therefore
      represent reconciling items between the 8K and 10KSB income statements.

                                       21

<PAGE>

(3)   The principal item is an exchange difference attributable to the differing
      US$ cross rates used to translate the 8K income statement (composite
      average rate) and the 10KSB income statement (weighted monthly average).

(4)   The taxation adjustments relate to the impact of the various reconciling
      items on the tax charge of the period. Additionally, a number of valuation
      allowance amendments and other tax write offs were incorporated in the
      10KSB/A filing which were not included in the 8K/A submission.

Note that the financial statements for the year ended September 30, 2002 now
include, under note 4, supplemental proforma disclosures which show the impact
that the reverse takeover of Megapro Tools, Inc. would have had on the income
statements for the years ended September 30, 2001 and September 30, 2002 had
that acquisition been completed on October 1, 2000.


OVERVIEW

Net revenues decreased by  $7,492 ( 8.0%) from $ 95,462 in the year ended
September 30, 2001 to $ 87,970 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 $ 333. 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:

Neill Tools


Revenues for the twelve months ended September 30, 2002 were $ 1.3 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 and increases in sales and marketing rebates but margins were
maintained at their budgeted levels by resisting price reductions.

                                       22

<PAGE>

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.

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.

                                       23

<PAGE>

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 $ 2.3 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.

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.

                                       24

<PAGE>

Spear & Jackson Australia and Spear & Jackson New Zealand

S&J Australia and S&J New Zealand 2002 revenues were over $2.8 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.


OTHER INCOME AND EXPENSE

Selling, general and administration expenses were $ $27,292 for the year ended
September 30, 2002 and $$27,375 for the year ended September 30,2001.

This decrease is attributable to increased one-off 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
offset by reductions in the 2002 FAS87 pension charge. Significant cost savings
from these initiatives are expected to benefit earnings in 2003. The 2001 costs
also include overheads attributable to the Industrial Saws Division up to the
date of its disposal. No comparable costs therefore arise in 2002.

Other income and expenses reduced from a net expense of $13,788 in the year
ended September 30, 2001 to a net expense of $ 1,236 in the year ended September
30, 2002. Reasons for this decrease are set out below.

The 2002 expense includes a $1,138 goodwill impairment write down recognized
following a review of future earnings and cash flows of the Company's
subsidiary, Megapro Tools Inc. which was acquired during the year.

Additionally 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.

The sale of the Industrial Saws Division was initiated following a strategic
review of the business. The division, whose principal activity is the
manufacture and sale of circular saws, had been loss making for a number of
years as a result of a highly competitive market sector and inefficient
manufacturing process. Significant capital and reorganisation expenditures were
required to potentially restore the business to profit. The Company determined
that the costs of repositioning the division were prohibitive and the business
was accordingly put up for sale. The disposal of the division, via a management
buy-out, was concluded in March 2001.

                                       25

<PAGE>

Results of the Industrial Saws Division are included in the Company's
consolidated statement of operations for the year ended September 30, 2001 for
the period from October 1, 2000 to the date of the division's disposal. These
results comprise sales of $7,825, an operating loss of $(687) and a net loss
after taxation of $(734).

True Temper Ireland Limited, a manufacturer of garden tools, was purchased by
Spear & Jackson plc in March 1999 and was a wholly owned subsidiary.

Although wholly owned, True Temper Ireland was never consolidated by Spear &
Jackson plc since:

a)     Effective control did not rest with the direct majority owner (Spear &
       Jackson plc) but rather with the ultimate parent, Jacuzzi Brands, Inc.
       (formerly US Industries, Inc). Spear & Jackson had no executive
       participation in the board and had no influence on voting matters over
       the conduct of day to day business activities.

b)     Control was regarded as temporary following the ultimate parent's
       decision to sell the company because of its non-core, loss making
       activities.

c)     No financial information was provided to Spear & Jackson in respect of
       True Temper Ireland and decisions concerning the company's strategic
       direction and its ultimate sale were all dealt with by officers of US
       Industries, Inc.

       For those reasons the company was neither included in the consolidation
       nor dealt with via equity accounting. Instead, the investment in the
       company has been included in the balance sheet, since acquisition, at
       cost (subject to any appraisal write-downs) and any dividend income has
       been credited to the profit and loss account when received. No dividends
       were received in the years ended September 30, 2002 and September 30,
       2001 and no other income of expenditure relating to True Temper Ireland
       has been included in the Spear & Jackson profit and loss accounts for
       those periods.

The sale of True Temper Ireland Limited was completed in January 2002 and the
loss on disposal recognized in the Company's financial statements for the year
ended September 30, 2001 represents the write down of the carrying amount of the
Company's investment to its net realizable value.

As stated above, the sale was initiated and concluded by officers of the, then,
ultimate parent company of Spear & Jackson plc, Jacuzzi Brands, Inc. (formerly
US Industries, Inc.).

Spear & Jackson, Inc. has no other majority owned investments that are not
consolidated.


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.

                                       26

<PAGE>

INCOME BEFORE INCOME TAXES


Our loss before income taxes in the year to September 30, 2002 amounted to $
$2,564. This compares to a loss before income tax for the year ended September
30, 2001 of $13,750. Excluding the impact of losses arising on the disposal of
businesses in 2001, and the goodwill impairment write-down in 2002 the Company
incurred a loss before income taxes of $ $1,426 in the year ended September 30,
2002 compared to a loss of $216 in the twelve months ended September 30, 2001.
The decrease in profitability is primarily attributable to the incidence of
quarter 4 one-time reorganization and severance costs, mitigated by pension
charge reductions, and the cost benefits derived from the disposal of loss
making subsidiaries as described in the "Expenses" section above.

INCOME TAX

The provision for income taxes was $ $948 in the year to September 30, 2002
compared to a $ $226 income tax benefit in the period to December 31, 2001.

Income taxes were 36.97% of the loss before tax in 2002 as opposed to 104.63% 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. (For example goodwill impairment write downs in
2002 and capital losses arising on the disposal of subsidiaries in 2001) 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 $3,512 for the year to September 30, 2002.
This compares to a loss after income taxes of $13,524 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
$29304 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 $ 3,957 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.

                                       27

<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.

                                       28

<PAGE>


                          INDEX TO FINANCIAL STATEMENTS
                                                                     Page

Audited Financial Statements for the Years Ended
September 30, 2002 and  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 6-33




<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.


The financial statements for the years ended September 30, 2002 and 2001 have
been restated (see Note __).

/s/Sherb & Co., LLP
-------------------
Certified Public Accountants
New York, New York
May 23, 2003
Except fo Note 27
as of December 24, 2003


                                       F 1

<PAGE>

BDO Dunwoody LLP                            220-19916 - 64th Avenue
Chartered Accountants                       Langley BC Canada V2Y 1A2
and Consultants                             Telephone: (604) 534-8691
                                            Telefax: (604) 534-8900
                                            www.bdo.ca

Independent Auditors' Report

To the Board of Directors and Stockholders of MegaPro Tools, Inc.

We have audited the consolidated balance sheets of MegaPro Tools, Inc. as at
December 31, 2001 and 2000 and the consolidated statements of operations,
changes in stockholders' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Company as at December 31, 2001
and 2000 and the results of its operations and its cash flows for the years then
ended in conformity with United States generally accepted accounting principles.

Chartered Accountants /s/
BDO Dunwoody, LLP Langley, Canada
March 1, 2002

                                      F-1

<PAGE>

ITEM 7.  FINANCIAL STATEMENTS.



                             SPEAR & JACKSON, INC.


                         (Formerly Megapro Tools, Inc.)

                           CONSOLIDATED BALANCE SHEET
                                 (in thousands)


                                                            At September 30,
                                                                   2002
                                                                (Restated)
                                                          --------------------
                              ASSETS
Current assets:
Cash and cash equivalents                                 $            6,486
Trade receivables, net                                                17,516
Income taxes refundable                                                   18
Inventories                                                           19,659
Other current assets                                                   1,307
                                                          --------------------
Total current assets                                                  44,986

Property, plant and equipment, net                                    18,852
Deferred taxation                                                      9,944
Investments                                                              138
                                                          --------------------
Total assets                                              $           73,920
                                                          ====================


                                 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
Pension liability                                                     20,442
                                                          --------------------
Total liabilities                                                     44,616
                                                          --------------------
Stockholders' equity:
Common stock                                                              12
Additional paid in capital                                            51,590
Accumulated other comprehensive income:
    Pension additional minimum liability                             (24,343)
    Foreign currency translation adjustment                            3,056
    Unrealized gain on derivative instruments                              2
Accumulated deficit                                                   (1,013)
                                                          --------------------
                                                          $           29,304
                                                          --------------------

Total stockholders' equity                                            73,920
                                                          ====================



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)



<TABLE>
<CAPTION>
                                                               For the Fiscal Years Ended
                                                             September 30,       September 30,
                                                                  2002               2001
                                                               (Restated)         (Restated)
                                                            -----------------   ----------------
<S>                                                          <C>                <C>
Net sales                                                    $        87,970    $        95,462
Cost of goods sold                                                    62,006             68,049
                                                            -----------------   ----------------
Gross profit                                                          25,964             27,413

Operating costs and expenses:
Selling, general and administrative expenses                          27,292             27,375
                                                            -----------------   ----------------
Operating (loss) income                                               (1,328)                38

Other income (expense)
Royalties (net)                                                           13                  -
Rental income                                                            125                 61
Loss on sale of businesses                                                 -            (13,534)
Interest and bank charges (net)                                         (236)              (315)
       Goodwill impairment loss                                       (1,138)                 -
                                                            -----------------   ----------------
Loss before income taxes                                              (2,564)           (13,750)
(Provision) benefit for income taxes                                    (948)               226
                                                            -----------------   ----------------
Net loss                                                     $        (3,512)   $       (13,524)
                                                            =================   ================
 Basic and diluted loss per share                                     ($0.86)            ($3.82)
                                                            =================   ================
 Weighted average shares outstanding                                4,100,071          3,543,281
                                                            =================   ================


</TABLE>


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

                                      F-3

<PAGE>

<PAGE>

                              SPEAR & JACKSON, INC.


                         (Formerly Megapro Tools, Inc.)

           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>


                                                              ------------------------------------
                                                Additional     Pension   Foreign     Derivative
                                Common Stock     Paid in       Minimum   Currency    Financial   Retained   Total
                             Number    Amount    capital      Liability Translation Instruments  Earnings
                                               (Restated)                                       (Restated) (Restated)
                            ---------- ------ ------------- ----------- ----------- ------------ --------- ---------
<S>                                    <C>    <C>           <C>         <C>         <C>          <C>       <C>
                                       $ 000  $     000     $      000  $     000   $       000  $    000  $    000


Balance October 1, 2000      3,543,281     3        48,428           0         235            0    16,023    64,689
                            ========== ====== ============= =========== =========== ============ ========= =========

Foreign currency adjustment                                                   (206)                            (206)
Net loss for the year                                                                             (13,524)  (13,524)
Additional minimum pension                                     (10,572)                                     (10,572)
liability (net of tax of
$4,531)
Unrealized holding                                                                           65                  65
gain arising in the year
                            ---------- ------ ------------- ----------- ----------- ------------ --------- ---------
Comprehensive loss for
 the year                            0      0            0     (10,572)       (206)          65   (13,524)  (24,237)
                            ========== ====== ============= =========== =========== ============ ========= =========

Balance September 30, 2001   3,543,281      3       48,428     (10,572)         29           65     2,499    40,452
                            ========== ====== ============= =========== =========== ============ ========= =========


Balance October 1, 2002      3,543,281      3       48,428     (10,572)         29           65     2,499    40,452
Shares issued less
cancellations                8,467,841      9        3,162                                                    3,171
                            ---------- ------ ------------- ----------- ----------- ------------ --------- ---------
                            12,011,122     12       51,590     (10,572)         29           65     2,499    43,623
                            ========== ====== ============= =========== =========== ============ ========= =========


Foreign currency adjustment                                       (560)      3,027                            2,467
Net loss for the year                                                                              (3,512)   (3,512)
Additional minimum pension                                     (13,211)                                     (13,211)
liability (net of tax of
$5,662)
Reclassification adjustment                                                                 (65)                (65)
for gains included in net
income
Unrealised holding gain                                                                       2                   2
arising in the year
                            ---------- ------ ------------- ----------- ----------- ------------ --------- ---------
Comprehensive loss for the
year                                 0      0            0     (13,771)      3,027          (63)   (3,512)  (14,319)
                            ========== ====== ============= =========== =========== ============ ========= =========

Balance September 30, 2002  12,011,122     12       51,590     (24,343)      3,056            2    (1,013)   29,304
                            ========== ====== ============= =========== =========== ============ ========= =========

</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)
<TABLE>
<CAPTION>

                                                                           For the Fiscal Years Ended
                                                                         September 30,   September 30,
                                                                             2002            2001
                                                                          (Restated)      (Restated)
                                                                         --------------  --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                      <C>             <C>
Net loss                                                                 $      (3,512)  $     (13,524)
Adjustments to reconcile net loss to net cash (used in)
provided by operating activities:
Depreciation                                                                     3,211           4,245
Goodwill impairment loss                                                         1,138            -
Loss on sale of businesses                                                        -             13,534
Loss (profit) on sale of fixed assets                                               95            (247)
            Deferred income taxes                                                  835            (408)
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
Contributions paid to pension plan                                              (3,175)        (11,162)
Decrease in other non-current assets                                                19           1,067
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  (USED IN) PROVIDED BY OPERATING ACTIVITIES                              (983)          3,957
                                                                         --------------  --------------

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)
                                                                         --------------  --------------

FINANCING ACTIVITIES:
Repayment of long-term debt                                                         (9)            (66)
Net repayments 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
                                                                         ==============  ==============

</TABLE>

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

                                      F-5

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                          (in thousands except shares)

Note 1--Basis of Presentation

These consolidated  financial  statements are expressed in U.S. dollars and have
been prepared in accordance with accounting principles generally accepted in the
United States.  The consolidated  financial  statements  include the accounts of
Spear & Jackson Inc. (the Company) and its wholly owned subsidiaries, Mega Tools
Ltd.,  Mega Tools USA,  Inc.,  Megapro Tools,  Inc., S and J Acquisition  Corp.,
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 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>

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 or 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>

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 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.


Goodwill, Goodwill Impairment, Intangible and Other Assets: Goodwill represents
the excess of the cost over the fair value of net assets acquired in business
combinations. Goodwill and other "indefinite-lived" assets are not amortized and
are subject to the impairment rules of Statement of Financial Accounting
Standards No. 142 (SFAS 142) which the Company adopted effective as of October
1, 2001. Goodwill is tested for impairment on an annual basis or upon the
occurrence of certain circumstances or events. The Company determines the fair
market value of its reporting unit using quoted market rates and cash flow
techniques. The fair market value of the reporting unit is compared to the
carrying value of the reporting unit to determine if an impairment loss should
be calculated. If the book value of the reporting unit exceeds the fair value of
the reporting unit, an impairment loss is indicated. The loss is calculated by
comparing the fair value of the goodwill to the book value of the goodwill. If
the book value of the goodwill exceeds the fair value of goodwill, an impairment
loss is recorded. Fair value of goodwill is determined by subtracting the fair
value of the identifiable assets of a reporting unit from the fair value of the
reporting unit.


                                      F-8

<PAGE>

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.


Most of the company's  major customers have provision for sales rebates in their
trading  terms.  The  level of  rebates  is  individually  negotiated  with each
customer  and is  unique to that  customer.  Typically,  a series of  escalating
targets is set for purchases  from Spear & Jackson and, on reaching each target,
a rebate,  usually paid in the form of credit note but  occasionally in cash, is
triggered e.g.

                             Sales               Rebate               Rebate
                             Turnover
                                $                 %                     $
 Target        1              500k                5.0                  25k
               2              750k                7.5                  56k
               3             1,000k              10.0                 100k
               4             1,250k              12.0                 150k

The  turnover  targets  are set on a  twelve-month  basis,  however  these sales
targets period ends are not necessarily  coterminous with the accounting  period
end of Spear &  Jackson,  Inc.  At any point in time,  the rebate  liability  is
calculated by  estimating  the annual sales value for each customer (in order to
ascertain the rebate % the customer is likely to achieve), applying the relevant
% to the actual sales achieved to date,  and then deducting any interim  rebates
already paid.

The  rebate  charge  is taken as a  reduction  to sales in the  profit  and loss
account.  Rebates  are  paid  to  customers  per  their  individual  agreements.
Typically payments are made half yearly or yearly,  however there are agreements
in place in which rebates are paid monthly and quarterly.

Generally  there is no provision  for  customers to return  products they cannot
sell.  However,  a small number of customers have  negotiated a return clause in
their trading  agreements.  There is a time limit for these returns which varies
from  customer to  customer,  none of which  exceed 12 months from the  original
invoice date. The amount of mutual returns made in the year to September 30,
2002 was $66,000 (September, 30, 2001 $65,000).

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.


PENSION AND POST-RETIREMENT BENEFIT OBLIGATIONS

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

This discussion addresses the sensitivities in assumptions that could impact the
plan disclosures in the company's consolidated balance sheet and income
statement and also their effect on ongoing employer contribution payments and
the company's liquidity.

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.

                                      F-9

<PAGE>

Note 2--Accounting Policies - continued

New Accounting Pronouncements - continued

In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No.
143, Accounting for Asset Retirement Obligations, which addresses financial
accounting and reporting for obligations associated with the retirement of
tangible long-lived assets and the associated asset retirement costs. The
standard applies to legal obligations associated with the retirement of
long-lived assets that result from the acquisition, construction, development
and/or normal use of the asset. SFAS No. 143 requires that the fair value of a
liability for an asset retirement obligation be recognized in the period in
which it is incurred if a reasonable estimate of fair value can be made. The
fair value of the liability is added to the carrying amount of the associated
asset and this additional carrying amount is depreciated over the life of the
asset. The liability is accreted at the end of each period through charges to
operating expense. If the obligation is settled for the other than the carrying
amount of the liability, a gain or loss is recognized on settlement. The
provisions of this statement are effective for fiscal years beginning after June
15, 2002. The Company believes that the adoption of SFAS No. 143 will not have
an impact on the results of operation or financial position.

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.

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.

                                      F-10

<PAGE>

Note 2--Accounting Policies - continued

New Accounting Pronouncements - continued

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.

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 23) 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, Australasia, 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>

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
shares 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 a 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 $1,443, 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                                       (180)
Property, plant and equipment                                           202
Deferred and current income taxes                                        62
Director and shareholder loans                                         (160)
Cash and cash equivalents                                                46
Bank indebtedness                                                       (31)
        Goodwill (note 5)                                             1,138
                                                               --------------
                                                               $      1,443
                                                               ==============

The following unaudited pro forma data summarizes the combined results of
operations of the Company for the periods indicated as if the acquisition of
Megapro Tools, Inc. had been completed on October 1, 2000. The pro forma data
gives effect to the actual operating results prior to the acquisition, goodwill
impairments and income taxes. The pro forma amounts do not purport to be
indicative of the results that would have actually been obtained if the
acquisition had occurred on October 1, 2000, or that may be obtained in the
future.

                                      F-12

<PAGE>

Note 4--Acquisitions and Dispositions of Businesses

         (a) Acquisitions - continued

          Proforma Consolidated Income Statement

Fiscal Year Ended September 30, 2001
<TABLE>
<CAPTION>
                                           Spear & Jackson     Megapro    Adjustments   Cosolidated
                                               & Bowers      Tools, Inc.  (see notes)      Total
                                           ---------------   -----------  -----------   ------------


<S>                                         <C>                   <C>         <C>       <C>
Net sales                                   $      95,462         1,444                $     96,906
Cost of goods sold                                 68,049           999                      69,048
                                           ---------------   -----------  -----------   ------------
Gross profit                                       27,413           445          -           27,858

Operating costs and expenses:
Selling, general and administrative
 expenses                                          27,375           547                      27,922

                                           ---------------   -----------  -----------   ------------
Operating income (loss)                                38          (102)         -              (64)

Other income (expense)
Royalties (net)                                      -               51                          51
Rental income                                          61            10                          71
Loss on sale of businesses                        (13,534)         -                        (13,534)
Interest and bank charges (net)                      (315)          (12)         (13)(a)       (340)
        Goodwill impairment loss                     -             -          (1,138)(b)     (1,138)
                                           ---------------   -----------  -----------   ------------

Loss before income taxes                          (13,750)          (53)      (1,151)       (14,954)
Benefit (provision) for income taxes                  226           (34)           4            196
                                           ---------------   -----------  -----------   ------------


Net loss                                          (13,524)          (87)      (1,147)       (14,758)
                                           ===============   ===========  ===========   ============


Basic and diluted loss per share                   ($1.13)       ($0.01)      ($0.10)        ($1.23)
                                           ===============   ===========  ===========   ============

Weighted average shares outstanding            12,011,122    12,011,122   12,011,122     12,011,122
                                           ===============   ===========  ===========   ============
</TABLE>


         Notes:

         Adjustments comprise:
(a)           Full year's interest on (pound)150,000 6% promissory notes issued
              as part of the purchase consideration for Megapro Tools, Inc.
(b)           Goodwill impairment write down of the investment in Megapro Tools,
              Inc. backdated to October 1, 2000.

                                      F-13

<PAGE>

Note 4--Acquisitions and Dispositions of Businesses

(a)      Acquisitions - continued

          Proforma Consolidated Income Statement

Fiscal Year Ended September 30, 2002

<TABLE>
<CAPTION>
                                           Spear & Jackson     Megapro    Adjustments  Cosolidated
                                               & Bowers      Tools, Inc.  (see notes)     Total
                                           ---------------   -----------  -----------   ------------

<S>                                         <C>                                <C>      <C>
Net sales                                   $      87,899    $    1,138                 $    89,037
Cost of goods sold                                 61,954           771                      62,725
                                           ---------------   -----------  -----------   ------------
Gross profit                                       25,945           367            0         263128

Operating costs and expenses:
Selling, general and administrative
 expenses                                          27,375           745         (159)(a)     27,821
                                           ---------------  ------------  -----------   ------------
Operating income (loss)                            (1,290)         (378)         159        (1,509)

Other income (expense)
Royalties (net)                                                      10                          10
Rental income                                         125          -                            125
Interest and bank charges (net)                      (234)          (11)         (13)(b)       (258)
                                           ---------------  ------------  -----------   ------------

Loss before income taxes                           (1,399)         (379)         146         (1,632)
Benefit (provision) for income taxes                 (948)           82          (44)          (910)
                                           ---------------  ------------  -----------   ------------

Net loss                                           (2,347)         (297)         102         (2,542)
                                           ===============  ============  ===========   ============


Basic and diluted loss per share                   ($0.20)       ($0.02)       $0.01         ($0.21)
                                           ===============  ============  ===========   ============

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

</TABLE>

         Notes:

         Adjustments comprise:
(a)           Deletion from the base Megapro results of the annual amortization
              of certain consultancy costs that were fully written off, on
              consolidation, as part of the purchase accounting exercise carried
              out on acquisition.
(b)           Full year's interest on (pound)150,000 6% promissory notes issued
              as part of the purchase consideration for Megapro Tools, Inc.

                                      F-14

<PAGE>

Note 4--Acquisitions and Dispositions of Businesses - continued

         (b) Dispositions
          The loss on disposal of businesses comprises:
                                                           Fiscal Year Ended
                                                          --------------------
                                                           September 30,2001
                                                          --------------------
                                                             ( 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 resulting in a loss of $6.994 million.

         Spear & Jackson plc's principal trading activity is the manufacture and
sale of a wide range of hand and garden tools, measuring instruments and
magnetic products. One of the Company's principal product ranges is saws. The
saws product range originally comprised both hand saws and industrial circular
saws. Following a strategic review, the Company decided that it would remain in
the saw business but that it would exit that element relating to its manufacture
and sale of circular saws. This decision arose from the significant losses
arising from increased competition and uncompetitive manufacturing processes
within its circular saws unit. Because the industrial saws business is part of a
larger component of the business and not a component on its own, the losses of
the Industrial saws division have not been reported as a discontinued operation.

         Results of the Industrial Saws Division are included in the Company's
consolidated statement of operations for the year ended September 30, 2001 for
the period from October 1, 2000 to the date of the Division's disposal. These
results comprise sales of $7,825, an operating loss of $(687) and a net loss
after taxation of $734. Further financial information in respect of the Division
is given in note 24 of these financial statements, Segment Data.



(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 and control was therefore temporary. In addition, effective control
did not rest with the direct majority owner (Spear & Jackson plc) but rather
with the ultimate parent, US Industries, Inc. (now Jacuzzi Brands, Inc.). All
decisions concerning the company's strategic direction and its ultimate sale
were dealt with by officers of US Industries, Inc.

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 - Goodwill:

As disclosed in note 4, above, goodwill of $1,138 was recognized on the deemed
acquisition of Megapro Tools, Inc. ("Megapro"). Due to deteriorating earnings
projections and cash flow forecasts of Megapro, the company decided that
goodwill impairment existed at September 30, 2002. As a result, Spear & Jackson,
Inc. recorded a goodwill impairment charge of $1,138 thereby eliminating all
recorded goodwill in respect of the Megapro acquisition.

                                      F-15

<PAGE>

Note 6 - 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 7 - 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
                                                            ==================

Note 8 - 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
with a net book value 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.

                                      F-16

<PAGE>


Note 9 - Investments
Investments comprise the following:
                                                           At September 30,
                                                          ------------------
                                                     Note           2002
                                                             (in thousands)

30% investment in Bipico Industries Private limited   (a)  $             58
30% investment in  Bowers Metrologie SA               (a)                59
Other investments in equity securities                (b)                21
                                                           -----------------
                                                            $           138
                                                           =================

 Investments comprise the following:


(a) With regard to the investments in Bipico Industries Private Limited and
Bowers Metrologie SA, the Company does not have the ability or right to appoint
any directors to the boards of either company. The majority ownership in the
companies is held by a small group of shareholders and Spear & Jackson, Inc. is
therefore unable to exercise significant influence over the operating and
financial decisions of these companies. Accordingly, Spear & Jackson, Inc.
accounts for these investments on the basis of historical cost less provision
for any permanent diminution in value.
(b) These investments represent equity investments classified as
available-for-sale. It is the Company's intention to hold these for longer than
one year. The investments are shown at cost which the Company's directors
estimate to be equivalent to their fair value.


Note 10--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,          September 30,
                                            ------------------------------------
                                               2002                     2001
                                            -----------------  -----------------
                                                         (in thousands)


Current tax charge                          $           (113)  $           (182)
Deferred tax (charge) credit                            (835)               408
                                            -----------------  -----------------
                                            $           (948)  $            226
                                            =================  =================

                                      F-17

<PAGE>

Note 10--Income Taxes - continued


         A reconciliation of the provision for income taxes compared with the
amounts provided at the US federal rate is as follows:

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

Tax at US federal statutory income tax rate $            897    $         4,812
Overseas tax at rates different to
 effective rate                                         (129)              (687)
Permanent timing differences                             (62)               (90)
Impairment loss not giving rise to tax
 credits                                                (341)
Company disposals not giving rise to
 income tax  benefits (see note below)                 -                 (4,060)
Valuation allowance                                   (1,216)               (89)
Miscellaneous                                            (97)               340
                                             ----------------  -----------------
                                             $          (948)   $           226
                                             ================  =================

Under United Kingdom tax legislation, the losses arising on the disposal of the
Industrial Saws Division and True temper Ireland Limited are regarded as capital
items. Such losses can only be relieved against excess trading income in the
year in which the losses occur or against future years' capital profits. In the
period ended September 30, 2001 there was insufficient trading income to absorb
the losses and no capital profits, against which the losses could be offset,
arose in that year or are anticipated to arise in future years. For these
reasons no recognition of the loss is made in the deferred tax computation.

Deferred income tax assets and liabilities for 2002 reflect the impact of
temporary differences between the book values of assets, liabilities and equity
for financial reporting purposes and the bases of such assets, liabilities and
equity as measured by applicable tax regulations, as well as tax loss and tax
credit carryforwards.

                                      F-18

<PAGE>

Note 10--Income Taxes - continued


The temporary differences and carry forwards that give rise to deferred assets
and liabilities at September 30, 2002 comprise:

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

Deferred tax liabilities:
Property, plant and equipment                           $             (143)
                                                       ---------------------
Total deferred tax liabilities                                        (143)
                                                       ---------------------

Deferred tax assets:

    Pension benefit plan                                             7,356
Accruals and allowances                                              2,674
Inventory                                                               57
Tax loss carry forwards and other tax credits                       16,810
                                                        ---------------------
Total deferred tax assets                                           26,897
Valuation allowance                                                (16,810)
                                                        ---------------------
Net deferred tax assets                                             10,087
                                                        ---------------------

Deferred tax asset, net                                 $            9,944
                                                        =====================


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.

                                      F-19

<PAGE>

Note 11--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 12 - 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-20

<PAGE>

Note 13 - Accrued Expenses and Other Liabilities

                                                           At September 30,
                                                          -----------------
                                                                 2002
                                                           ---------------
                                                           (in thousands)
Compensation related                                       $        3,945
Rebates/dealer incentives                                           1,704
Sales taxes payable                                                   910
Finance lease - current portion                                       654
Property rentals                                                      391
Audit and accountancy costs                                           205
Commissions                                                           566
Promissory notes                                                      234
Provisions                                                          2,141
Other                                                               2,719
                                                           ---------------
                                                           $       13,469
                                                           ===============


Accrued expenses and other liabilities consist of the following:

Note 14 - 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 (September 30, 2001 $20). During the year
the director made a further advance of $100 and the company repaid $20. There
was no material difference between the accounts carrying value of this loan and
its fair market value.



Note 15 - Other Liabilities
Other liabilities comprise:
                                                            At September 30,
                                                           ------------------
                                                                   2002
                                                             ---------------
                                                             (in thousands)
Finance lease liabilities - non current portion              $          262
Property rentals                                                        560
Governments grants received                                             155
                                                             ---------------
                                                             $          977
                                                             ===============

                                      F-21

<PAGE>

Note 16--Pension Plan

         The Company operates a contributory defined benefit plan covering
certain of its employees in the United Kingdom based subsidiaries of Spear &
Jackson plc. The benefits provided by the plan are based on years of service and
compensation history. Pension plan assets are primarily invested in equities,
fixed income securities and Government stocks.

        The Company's funding policy with respect to the plan is to contribute
annually not less than the minimum required by applicable UK law and pension
regulations. In the year ended September 30, 2002 contributions amounted to $3.4
million and in the year to September 30, 2001 contributions totaled $11.2
million. The 2001 total includes a one-off special contribution of $7.4 million
which was made to reduce to reduce the funding deficit

        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                         $      116,083
Service cost                                                              1,647
Interest cost                                                             7,444
Employee contributions                                                      995
Foreign currency exchange rate changes                                    6,150
Actuarial loss                                                            6,779
Benefits paid                                                            (6,145)
                                                                 ---------------

   Projected benefit obligation at September 30, 2002            $      132,953
                                                                 ===============

Change in fair value of plan assets:
Fair value of plan assets at September 30, 2001                  $      106,649
Actual return on plan assets                                             (1,380)
Foreign currency exchange rate changes                                    5,650
Employer contributions                                                    3,372
Employee contributions                                                      995
Benefits paid                                                            (6,145)
                                                                 ---------------

   Fair value of plan assets at September 30, 2002               $      109,141
                                                                 ===============

Funded status of plan:
Projected benefit obligation in excess of plan assets            $      (23,812)
Unrecognized net actuarial loss                                          38,146
                                                                 ---------------
Net amount recognized                                            $       14,334
                                                                 ===============

Amounts recognized in the balance sheet consist of:
Accrued pension liability                                        $      (20,442)
    Other comprehensive income                                   $       34,776
                                                                 ---------------
    Net amount recognised                                        $       14,334
                                                                 ===============

                                      F-22

<PAGE>

Note 16--Pension Plan (continued)

         The accumulated benefit obligation of the plan is in excess of its
assets. The projected benefit obligation of the plan, its accumulated benefit
obligation and the fair value of its assets were $132.9 million, $129.6 million
and $109.1 million, respectively.

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

                                                            2002         2001
                                                        ------------ -----------
Weighted average assumptions as of September 30, 2002
Discount rate                                                 5.75%       6.25%
Rate of compensation increase                                 2.25%       3.25%
Expected return on assets                                     7.50%       7.50%
    Fixed pension increase                                    5.00%       5.00%
    LPI pension increase                                      2.25%       2.50%
    Post 1988 GMP increase                                    1.85%       2.00%

                                                            2002          2001
                                                        ------------ -----------
Components of net periodic benefit cost Defined benefit
plans:
Service cost                                            $     1,647   $   2,823
Interest cost                                                 7,442       7,142
Expected return on plan assets                               (9,064)     (8,730)
                                                        ------------ -----------
Net periodic cost                                       $        25   $   1,235
                                                        ============ ===========



         The tables above set forth the historical components of net periodic
pension cost 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.

         The valuation results are sensitive to the choice of key financial
assumptions. These assumptions are based on analyses and evaluation performed by
our actuaries and thereafter presented to the Company for confirmation. The
major financial assumptions have been derived as follows:

         The discount rate assumption is set annually for the retirement benefit
plan at its respective measurement date to reflect the yield of high quality
fixed-income corporate bonds.

         The Company's expected return on assets assumption is set in the light
of an actuarial analysis of the long term return expectations for the assets
held by the plan. The start point for the derivation of the rate is the return
on UK government stocks with maturity dates matching the crystallization of the
plan's liabilities. To reflect the fact that a significant part of the plan's
assets are invested in asset classes such as equities and corporate bonds that
are expected to produce higher returns than the government bonds, the overall
rate of return on assets has been adjusted to take account of these higher
yields.

         Price inflation is determined with reference to the difference in yield
between fixed interest and index-linked government bonds as adjusted to take
account of a higher perceived demand for index-linked bonds.

                                      F-23

<PAGE>

Note 16--Pension Plan (continued)


         The following table illustrates the sensitivity to a change in certain
of the key assumptions used in calculating the assets and liabilities of the
pension plan:




                                Impact on 2003     Impact on      Impact on
                               Pre-Tax Pension   September 30,  September 30,
Change in Assumption             Expense             2002        2002 Equity
                                                      PBO       (Net of tax)

25 basis point
decrease in discount          +$0.464 million  +$5.449 million  -$3.719 million
rate

25 basis point
increase in discount          -$0.671 million  -$6.307 million  +$4.302 million
rate

25 basis point
decrease in expected          +$0.310 million      -               -
return on assets

25 basis point
increase in expected          -$0.309 million      -               -
return on assets




Note 17--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-24

<PAGE>

Note 17--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 18 - Common Stock

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

Note 19 - 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 20 - 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-25

<PAGE>

Note 20 - 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            $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 21 - 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-26

<PAGE>

Note 22 - 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
                                                 ==============    =============

These balances are interest-free, due on demand and have arisen from the
interest expense referred to above.


Note 23 - 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-27

<PAGE>

Note 23 - 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 24--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-28

<PAGE>

Note 24--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              $ 65,940         $ 62,113              $ 6,638          $ 9,909
  Metrology tools                    13,684           15,537                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                         $ 87,970         $ 95,462             $ 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               $ 2,952          $ 2,494               $ (358)          $ (304)
  Metrology tools                        91              598                  (17)             (23)
  Magnetic products                  (1,214)             709                   (8)             (13)
  Screwdrivers                          (23)               -                   (2)
  Corporate                          (3,134)          (3,126)                 149              122
  Industrial saws                         -             (637)                                  (97)
                               -------------  ---------------         ------------   --------------
     Total                         $ (1,328)            $ 38               $ (236)          $ (315)
                               =============  ===============         ============   ==============

</TABLE>


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

                                      F-29

<PAGE>

Note 24--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                 $ 40,814        $ 45,991             $ 17,047        $ 20,911
  Europe                           15,439          18,644                1,135           1,126
  Australasia                      16,136          12,133                  463             427
  North America                     7,390           9,265                  207               -
  Other                             8,191           9,429                    -               -
                             ------------- ---------------         ------------   -------------
     Total                       $ 87,970        $ 95,462             $ 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                 $ (1,415)          $ 388                 $ 58            $ 27
  Europe                             (251)            (90)                (166)           (285)
  Australasia                         376            (358)                (126)            (67)
  North America                       (38)             98                   (2)             10
                             ------------- ---------------         ------------   -------------
     Total                       $ (1,328)           $ 38               $ (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-30


<PAGE>
Note 27--Restatement of Previously Issued Financial Statements

On January 13, 2003, Spear & Jackson Inc. ("the Company") filed its annual
report on Form 10-KSB for the fiscal year ended September 30, 2002. On May 28,
2003 the Company filed Amendment No. 1 to the Annual Report on Form 10-KSB for
the fiscal year ended September 30, 2002. The amendment restated the original
Form 10-KSB in order to re-present the acquisition of Spear & Jackson plc and
Bowers Group plc by Megapro Tools, Inc. as a reverse takeover.

This Amendment No. 2 to the Annual Report on Form 10-KSB for the year ended
September 30, 2002 is being filed in order to amend and restate the consolidated
financial statements as follows:

1.       The presentation of the Company's UK defined benefit pension plan has
         been restated. The adjustments required arise from errors and omissions
         in the calculations that were prepared by the Company's actuaries in
         order to derive the pension plan disclosures that were originally
         included in Amendment 1 to Form 10-KSB. The errors and omissions
         comprise:

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

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

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

         Item (a) impacts the previously reported figure for SGA expenses and
         also on the tax charge for the year. Item (b) results in the previously
         disclosed pension asset of $14,962 now being presented as a pension
         liability of $20,442 with corresponding debit entries to deferred
         taxation of $10,621 and shareholders' equity of $24,343. The 2001 ABO
         pension adjustments, item (c), are reflected in the consolidated
         statement of changes in shareholders' equity for the year ended
         September 30, 2001. They also impact on the SFAS 87 charges for 2002
         and subsequent years.

2.       The fair value of the consideration for the deemed acquisition of
         Megapro Tools, Inc. has been revised. This has resulted in goodwill of
         $1,138 being recognized which has subsequently been written off
         following a goodwill impairment review. In relation to the acquisition,
         proforma income statement disclosures required by paragraphs 54-57 of
         SFAS141 are also now included in the notes to the financial statements.

3.       Sales rebates totaling (pound)3,009 in 2002 and (pound)2,409 in 2001,
         which were previously presented as a component of SG and A expense,
         have been reanalyzed and are now shown as a reduction to sales.

4.       The revenue recognition policy footnote disclosure has been expanded to
         discuss the accounting for customer rebates and dealer incentives.

5.       Additional information is now provided on the Company's investments and
         associates.

6.       Expanded disclosures in other comprehensive income in respect of
         unrealized gains and losses on derivative instruments, together with an
         additional footnote to the financial statements, have been included to
         provide the quantified disclosures required by paragraphs 45-47 of SFAS
         133.

7.       Other minor adjustments have been made to expand disclosures in certain
         footnotes. This has been done to enhance their presentation and to
         ensure consistency with the footnotes to be included in the financial
         statements for the year ended September 30, 2003 which are to be
         included in Form 10-KSB to be submitted in January 2004.

The following tables present the consolidated statements of operations for the
years ended September 30, 2002 and 2001 together with the consolidated balance
sheet at September 30, 2002 as previously reported and as restated. The
financial information is presented in thousands, except for per share data.

                                      F-31
<PAGE>



Note 25--Financial instruments

         In the normal course of its business, the Company invests in various
  financial assets and incurs various financial liabilities. The Company also
  enters into agreements for derivative financial instruments to manage its
  exposure to fluctuations in foreign currency exchange rates. The fair value
  estimates of financial instruments presented below are not necessarily
  indicative of the amounts the Company might pay or receive from actual market
  transactions. The Company had the following financial assets and liabilities
  at September 30, 2002 and 2001.

         Financial Assets and Liabilities
         Cash and cash equivalents, accounts receivable, short-term borrowings,
  notes and accounts payable and long-term debt. In respect of these items fair
  value approximates to the carrying amounts indicated in the balance sheets at
  both September 30, 2002 and September 30, 2001.

           Forward Exchange Contracts
         The Company had $870 and $1,675 in respect of forward exchange
contracts outstanding as of September 30, 2002 and September 30, 2001,
respectively, in order to hedge the foreign currency risk of certain accounts
receivable and accounts payable transactions. These transactions are expected to
crystallize within five months of the period end. The estimated fair values of
the Company's forward exchange contracts at September 30, 2002 and September 30,
2001, which equal the carrying amounts of the related accounts receivable and
accounts payable balances were $872 and $1,740. Changes in the fair value of
forward exchange contracts designated and qualifying as cash flow hedges are
reported in accumulated other comprehensive income (loss). These amounts are
subsequently reclassified into earnings through other income (expenses) in the
same period that the hedged items affect earnings. Most reclassifications occur
when the products related to a hedged transaction are sold to customers or
purchased from suppliers. Substantially all unrealized losses on derivatives
included in accumulated other comprehensive income (loss) at the end of the year
are expected to be recognized in earnings within the next five months.



Note 26--Commitments and Contingencies


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


         The Company's bank accounts held with the HSBC Bank plc by UK
subsidiaries of Spear & Jackson plc and Bowers Group plc form a pooled fund. As
part of this arrangement the companies involved have entered into a cross
guarantee with HSBC Bank plc to guarantee any bank overdraft of the entities in
the pool. At September 30, 2002 the extent of this guarantee relating to gross
bank overdrafts was $22.0 million (September 30, 2001 $21.1 million). The
overall pooled balance of the bank accounts within the pool at September 30,
2002 was a net cash in hand balance of $2.0 million (September 30, 2001 $3.2
million).

         The bank overdraft and other facilities of Spear & Jackson Australia
Pty. Limited have been guaranteed by its immediate parent, James Neill Holdings
Limited and the bank overdraft and other facilities of Spear & Jackson France SA
have been guaranteed by Spear & Jackson plc.

         Commitments under non-cancelable operating leases are disclosed in note
17.

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

                                      F-31

<PAGE>
Consolidated Statements of Operations

<TABLE>
<CAPTION>
                        For the Fiscal Year Ended        For the Fiscal Year Ended
                           September 30, 2002                September 30, 2001
                   As Previously        As Restated   As Previously        As Restated
                     Reported                          Reported
                  ---------------      ------------   --------------      -------------
<S>                <C>                 <C>            <C>                  <C>
Net sales          $   90,979          $  87,970      $   97,871           $  95,462
Cost of goods sold     62,006             62,006          68,049              68,049
                  ---------------      ------------   --------------      -------------
Gross profit           28,973             25,964          29,822              27,413

Operating costs
 and expenses:

Selling, general
and administrative
expenses               30,355             27,292          29,436              27,375
                  ---------------      ------------   --------------      -------------
Operating (loss)
income                 (1,382)            (1,328)            386                  38

Other income
(expense)

Royalties (net)            13                 13            -                   -
Rental income             125                125              61                  61
Loss on sale of
 businesses              -                  -            (13,534)            (13,534)
Interest and bank
 charges (net)           (236)              (236)           (315)               (315)
Goodwill impairment
 loss                    -                (1,138)           -                   -
                  ---------------      ------------   --------------      -------------
Loss before
income taxes           (1,480)            (2,564)        (13,402)            (13,750)
Provision for
 income taxes            (931)              (948)            122                 226
                  ---------------      ------------   --------------      -------------
Net loss           $   (2,411)         $  (3,512)     $  (13,280)          $ (13,524)
                  ===============      ============   ==============      =============
Basic and diluted
 loss per share        ($0.59)            ($0.86)         ($3.75)             ($3.82)
                  ===============      ============   ==============      =============
Weighted average
shares outstanding  4,100,071          4,100,071       3,543,281           3,543,281
                  ===============      ============   ==============      =============

                                      F-32

<PAGE>

Consolidated Balance Sheet

                                     At September 30, 2002
                                As Previously        As Restated
                                 Reported
                                -------------        -------------

                     ASSETS

Current assets:
Cash and cash equivalents        $    6,486          $   6,486
Trade receivables, net               17,516             17,516
Income taxes refundable                  18                 18
Inventories                          19,659             19,659
Other current assets                  1,305              1,307
                                  ---------           --------
Total current assets                 44,984             44,986

Property, plant and
 equipment, net                      18,852             18,852
Pension asset                        14,962               -
Deferred taxation                       -                9,944
Investments                             138                138
                                  ---------           --------
Total assets                     $   78,936          $  73,920
                                  ========            ========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Notes payable                    $    1,253          $   1,253
Short term debt                          60                 60
Trade accounts payable                8,258              8,258
Accrued expenses and other
 liabilities                         13,469             13,469
Director's loan payable                 100                100
Foreign taxes payable                    57                 57
                                  ---------           --------
Total current liabilities            23,197             23,197
Other liabilities                       977                977
Pension liability                      -                20,442
Deferred income taxes                  677                -
                                  ---------           --------
Total liabilities                   24,851              44,616
                                  ---------           --------
Stockholders' equity:
Common stock                            12                  12
Additional paid in capital          50,452              51,590
Accumulated other comprehensive
 income:
 Pension additional minimum
 liability                            -                (24,343)
 Foreign currency translation
 adjustment                          3,056               3,056
 Unrealized gain on derivative
 instruments                          -                      2
Accumulated deficit                    565              (1,013)
                                  ---------           --------
                                    54,085              29,304
                                  ---------           --------
Total stockholders' equity       $  78,936           $  73,920
                                  ========            ========

</TABLE>
                                      F-33
<PAGE>


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.

                                       29

<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:

Directors:

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

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.

                                       30

<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)
--------------------------- --------- ----------- --------- ---------- ----------- ---------- ---------- ----------
<S>                             <C>       <C>        <C>        <C>        <C>         <C>         <C>        <C>
Dennis Crowley
Chief  Executive  Officer,
President,  Secretary  and
Chairman of the Board**     2002           -          -          -          -           -          -          -
--------------------------- --------- ----------- --------- ---------- ----------- ---------- ---------- ----------
--------------------------- --------- ----------- --------- ---------- ----------- ---------- ---------- ----------
                                      146,485        -          -          -           -          -          -
Neil Morgan*                2002
--------------------------- --------- ----------- --------- ---------- ----------- ---------- ---------- ----------
--------------------------- --------- ----------- --------- ---------- ----------- ---------- ---------- ----------
                            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>

                                       31

<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.

                                       32

<PAGE>

                                                             Percent of Shares
Name and Address              Shares Beneficially Owned         Outstanding

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.

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.

                                       33

<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.

                                       34

<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.

                                       35

<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.

                                       36

<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)
31.1         Certification of Principal Executive Officer
31.1         Certification of Principal Fimamcial and Accounting Officer
32.1         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)
31.2         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)

                                       37

<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.



                                       38

<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: December 29, 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: December 29, 2003                    By: /s/ Dennis Crowley
                                                -----------------------------
                                                    Dennis Crowley
                                                    Chief Executive Officer,
                                                    President, and a Director
                                                    (Prinipal Executive Officer)

Dated: December 29, 2003                    By: /s/  William Fletcher
                                                -----------------------------
                                                     William Fletcher
                                                     Chief Financial Officer
                                                     (Principal Financial and
                                                     Accounting Officer)

Dated: December 29, 2003                    By: /s/ Joseph Piscitelli
                                                -----------------------------
                                                    Joseph Piscitelli
                                                    Director

Dated: December 29, 2003                    By: /s/ John Harrington Jr.
                                                -----------------------------
                                                    John Harrington Jr.
                                                    Director

Dated: December 29, 2003                    By: /s/ Robert Dinerman
                                                -----------------------------
                                                    Robert Dinerman
                                                    Director