ANSELL HEALTHCARE INC, S-1, 1999-12-22

ANSELL HEALTHCARE INC
S-1, 1999-12-22

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 22, 1999
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------------
ANSELL HEALTHCARE INCORPORATED

(Exact Name of Registrant as Specified in its Charter)

<TABLE>
<S> <C> <C>
DELAWARE 3069 22-3686084
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>

200 SCHULZ DRIVE
RED BANK, NEW JERSEY 07701
(732) 345-5400
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive office)
----------------------
HARRY BOON
CHIEF EXECUTIVE OFFICER
ANSELL HEALTHCARE INCORPORATED
200 SCHULZ DRIVE
RED BANK, NEW JERSEY 07701
(732) 345-5400
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
----------------------
COPIES TO:

<TABLE>
<S> <C>
ROBERT J. WILCZEK RICHARD B. VILSOET
GARDNER, CARTON & DOUGLAS SHEARMAN & STERLING
321 NORTH CLARK STREET, SUITE 3400 599 LEXINGTON AVENUE
CHICAGO, ILLINOIS 60610 NEW YORK, NEW YORK 10022
(312) 644-3000 (212) 848-4000
</TABLE>

----------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
----------------------
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ] _______________ .

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] _______________ .

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] _______________ .

If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] _______________ .

If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM AGGREGATE
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED OFFERING PRICE(1) AMOUNT OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock, par value $0.01 per share........ $175,000,000 $46,200
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Estimated solely for purpose of determining the amount of the registration
fee, in accordance with Rule 457(o) under the Securities Act.
----------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2

The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with
Securities and Exchange Commission is effective. This prospectus is not
an offer to sell these securities and it is not soliciting an offer to
buy these securities in any state where the offer or sale is not
permitted.

SUBJECT TO COMPLETION

PRELIMINARY PROSPECTUS DATED , 2000

PROSPECTUS
SHARES
ANSELL HEALTHCARE INCORPORATED
COMMON STOCK
----------------------

PD International Pty. Limited, a wholly owned indirect subsidiary of
Pacific Dunlop Limited, is selling shares of Ansell Healthcare
Incorporated's common stock. This is the initial public offering of Ansell's
common stock. Ansell will not receive any proceeds from the offering.

We expect the public offering price to be between $ and $ per
share. Currently, no public market exists for the shares. After pricing of the
offering, we expect that the shares of common stock will trade on the New York
Stock Exchange under the symbol "AHX."

Prior to the offering, Pacific Dunlop Limited indirectly owned beneficially
all of our common stock. Following the offering, Pacific Dunlop Limited will
indirectly beneficially own at least 80% of our common stock.

INVESTING IN THE COMMON STOCK INVOLVES RISKS THAT ARE DESCRIBED IN THE
"RISK FACTORS" SECTION BEGINNING ON PAGE 6 OF THIS PROSPECTUS.
----------------------

<TABLE>
<CAPTION>
PER SHARE TOTAL
--------- --------
<S> <C> <C>
Public offering price........................... $ $
Underwriting discount........................... $ $
Proceeds, before expenses, to the selling
stockholder................................... $ $
</TABLE>

The underwriters may also purchase up to an additional shares of
common stock at the public offering price, less the underwriting discount,
within 30 days from the date of this prospectus to cover over-allotments. Ansell
will not receive any proceeds from the sale of the additional shares by PD
International Pty. Limited.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

The shares of common stock will be ready for delivery in New York, New York
on or about , 2000.
----------------------

MERRILL LYNCH & CO.
BEAR, STEARNS & CO. INC.
J.P. MORGAN & CO.
----------------------
The date of this prospectus is , 2000
<PAGE> 3

[Insert "Ansell Healthcare Incorporated" as graphics text]

[Photos/Graphics: 1 medical glove; 1 glove from occupational healthcare segment;
packaging for condoms].

[Graphics: map of the world noting the location of every manufacturing plant and
regional data for sales, production, employees for the Americas, Europe and Asia
Pacific]
<PAGE> 4

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.......................................... 1
Risk Factors................................................ 6
Forward-Looking Statements.................................. 15
Capitalization.............................................. 15
The Reorganization.......................................... 16
Use of Proceeds............................................. 16
Dividend Policy............................................. 16
Selected Combined Financial Data............................ 17
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 20
Business.................................................... 32
Management.................................................. 51
Relationship and Agreements with the Pacific Dunlop Group... 56
Principal and Selling Stockholders.......................... 61
Description of Capital Stock................................ 61
Shares Eligible for Future Sale............................. 63
Certain United States Federal Tax Considerations for
Non-United States Holders................................. 64
Underwriting................................................ 67
Legal Matters............................................... 69
Experts..................................................... 70
Where to Find More Information.............................. 70
Index to Financial Statements............................... F-1
Unaudited Pro Forma Condensed Combined Financial
Statements................................................ P-1
</TABLE>

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

You should rely only on the information contained in this prospectus. We
have not, and the underwriters have not, authorized any other person to provide
you with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not, and the
underwriters are not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in this prospectus is accurate only as of the date on
the front cover of this prospectus. Our business, financial condition, results
of operations and prospects may have changed since that date.
<PAGE> 5

PROSPECTUS SUMMARY

This is a summary and does not contain all the information that may be
important to you. You should read the more detailed information included
elsewhere in this prospectus. Except as otherwise noted, the information
contained in this prospectus assumes that the underwriters will not exercise the
over-allotment option and that our reorganization has been completed.

Ansell Healthcare Incorporated and its subsidiaries are referred to in this
prospectus as "Ansell," "we," "our" or "us." References to "Ansell Group" mean
the businesses that are included in the Ansell segment data as historically
reported by Pacific Dunlop Limited and that have been reorganized into Ansell.
"Pacific Dunlop Group" refers to Pacific Dunlop Limited and its direct and
indirect subsidiaries. We call those companies in the Pacific Dunlop Group that
will own our shares after completion of this offering the "Pacific Dunlop
Stockholders." Our fiscal year ends on June 30 of each year, so that references
to fiscal 1999 and the like are to the year ended June 30 of the referenced
year. All financial information presented in this prospectus is in U.S. dollars
and is presented in accordance with U.S. GAAP.

Certain market size information and other statements relating to our
position relative to our competitors are not based entirely on published
statistical data or information obtained from independent third parties, but
reflect our best estimates. We have based these estimates on third party reports
and on information obtained from our customers, competitors, distributors, trade
and business organizations and associations and other contacts in our industry.

ANSELL HEALTHCARE INCORPORATED

We are a global leader in the design, development, manufacture and
marketing of protective gloves and condoms. Our operations are organized into
three business segments:

- Professional Healthcare, which consists of medical examination and
surgical gloves,

- Occupational Healthcare, which consists of industrial and consumer
gloves, and

- Personal Healthcare, which consists of condoms.

We compete in the worldwide protective glove and condom markets that we
estimated to be $5.8 billion in 1998. We believe that we have the leading global
market share in, and the broadest product range of, protective gloves serving
the healthcare and occupational sectors of the protective barrier market. We
also believe that we are the world's second largest manufacturer and marketer of
condoms. In fiscal 1999, we generated $738 million in net sales of which our
Professional Healthcare, Occupational Healthcare and Personal Healthcare
divisions contributed 36%, 51% and 13%, respectively. During fiscal 1999, we
sold products into more than 100 countries, and the Americas, Europe and Asia
Pacific accounted for approximately 56%, 32% and 12%, respectively, of our net
sales.

We are an innovator in the design and manufacture of protective gloves and
condoms. In each of the past three years more than 15% of our sales have come
from products that have been on the market for three years or less and that we
have developed internally.

We have been an active acquiror of businesses within the protective barrier
products industry. We have pursued acquisitions to expand and augment our main
product lines, provide additional distribution channels, add new technologies,
enhance our manufacturing capabilities and enter new geographic markets. We are
in the process of acquiring, for approximately $97.6 million, the medical glove
business of Johnson & Johnson which will enable us to further our leadership
position in the medical glove market and obtain a modern manufacturing facility
in Malaysia. This acquisition is expected to close in early 2000.

We currently operate 31 facilities in 16 countries. The majority of our
manufacturing facilities are located in Southeast Asia in close proximity to the
rubber tree plantations that serve as our source of natural latex. Our products
are made predominantly of natural and synthetic latex, which share common
manufacturing processes and polymer dipping technologies. Our proprietary
formulations and related manufacturing processes enable us to produce many
different types and styles of high quality gloves and

1
<PAGE> 6

condoms. We maintain a flexible supply and logistics infrastructure that allows
us to switch production between various products based on market demand. We
believe that we are well positioned to capitalize on the technology transfer
opportunities that exist among our three business divisions, our recent
acquisitions and our manufacturing facilities.

We believe that we have some of the most recognizable brands in the
protective glove and condom markets. Our medical gloves are marketed principally
under the umbrella brands of Ansell and Ansell Perry. Specific product brands
include: Gammex, Conform, Encore, NuTex, MicrOptic, X-AM, Synsation, DermaClean
and Nitra-Touch. Through our pending acquisition of the medical glove business
of Johnson & Johnson, we will acquire the brands Micro-Touch, Maxxus, Neutralon,
Ultralon, Surgikos, Dispos-a-Glove and Allergard. Our Occupational Healthcare
gloves are principally branded Ansell Edmont. Specific product brands include:
Ansell, Nitrilite, Solvex, Hynit, Touch'n Tuff, Duratouch, Hycron, Golden
Needles and Hyflex. Our condoms are principally branded LifeStyles, Mates,
Manix, Contempo, Primex, Chekmate and KamaSutra, as well as Benetton, which is
sold under license.

We intend to be the leading designer, developer, manufacturer and marketer
of protective gloves, condoms and other healthcare barrier products worldwide.
In order to achieve our objective, we will continue to:

- offer a broad range of products and brands,

- focus on value added, higher margin branded products,

- leverage research and development,

- augment internal growth with acquisitions,

- leverage manufacturing where we have a technological advantage, and

- focus on customer service.

RELATIONSHIP WITH THE PACIFIC DUNLOP GROUP

We were founded in 1905 by Eric Ansell in Melbourne, Australia and acquired
by Dunlop Australia Limited (now Pacific Dunlop Limited) in 1969. Pacific Dunlop
Limited is a diversified multinational marketer and manufacturer of consumer and
industrial products based in Australia. In 1997, we relocated our executive
offices from Melbourne, Australia to Red Bank, New Jersey.

Prior to this offering, Pacific Dunlop Limited indirectly owned 100% of our
common stock. After completion of this offering, the Pacific Dunlop Stockholders
will own at least 80% of our common stock. We believe that the Pacific Dunlop
Stockholders will continue to exercise influence and control over us and
currently intend to retain at least 80% of our common stock, so that we remain a
part of the Pacific Dunlop Group's U.S. federal income tax consolidated group.

CORPORATE INFORMATION

We were incorporated in Delaware in 1999. Our executive offices are located
at 200 Schulz Drive, Red Bank, New Jersey 07701 and our telephone number is
(732)345-5400. We maintain websites at www.ansell.com, www.anselledmont.com,
www.ansellhealthcare.com, www.safetynews.com/ansell and www.lifestyles.com.
Information contained on our websites is not part of this prospectus.

2
<PAGE> 7

THE OFFERING

Common stock offered by the selling
stockholder...................... shares

Common stock outstanding after the
offering........................... shares

Use of proceeds.................... We will not receive any of the proceeds
from the offering.

Dividend policy.................... We do not anticipate paying any dividends
in the foreseeable future. See "Dividend
Policy."

Risk factors....................... See "Risk Factors" and other information
included in this prospectus for a
discussion of factors you should
carefully consider before deciding to
invest in shares of our common stock.

New York Stock Exchange symbol..... "AHX"

Ownership by the Pacific Dunlop
Group.............................. We are currently wholly owned by
companies in the Pacific Dunlop Group.
After the offering, the Pacific Dunlop
Stockholders will beneficially own at
least 80% of our common stock.

3
<PAGE> 8

SUMMARY COMBINED FINANCIAL DATA
(IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

The following table presents summary combined historical financial data of
Ansell Group and pro forma financial data.

The pro forma data set forth below is derived from the Unaudited Pro Forma
Condensed Combined Financial Statements included elsewhere in this prospectus
and gives effect to:

- the reorganization of Ansell Group into Ansell Healthcare Incorporated,
including the elimination of a substantial portion of debt owed to
affiliates and cash, and

- the sale of up to 20% of Ansell Healthcare Incorporated by the selling
stockholder which results in the transfer of Ansell Group's U.S. tax net
operating loss carryforwards to other members of the Pacific Dunlop
Group.

The reorganization and the offering have been recorded as if they had
actually occurred on the first day of our 1999 and 2000 fiscal years with
respect to the pro forma statement of operations data for the fiscal year ended
June 30, 1999 and the quarter ended September 30, 1999, respectively, and on
September 30, 1999 with respect to pro forma balance sheet data. The pro forma
data does not necessarily represent what our financial position or results of
operations would have been had such transactions been completed on such dates,
nor does it give effect to any events other than those discussed in the notes to
the Unaudited Pro Forma Condensed Combined Financial Statements. The pro forma
data also does not project our financial position or results of operations as of
any future date or for any future period.

You should also refer to the more complete information contained in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," the audited Combined Financial Statements of the Ansell Group and
the Unaudited Pro Forma Condensed Combined Financial Statements which are
included elsewhere in this prospectus.
<TABLE>
<CAPTION>

FISCAL YEARS ENDED JUNE 30,
STATEMENT OF OPERATIONS DATA: ------------------------------------------------------------------
1999
1995 1996 1997 1998 1999 PRO FORMA
-------- -------- -------- -------- -------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net sales.......................... $534,366 $627,004 $669,749 $735,263 $738,382 $738,382
Cost of goods sold................. 354,514 413,965 452,529 487,785 483,464 483,464
-------- -------- -------- -------- -------- --------
Gross profit....................... 179,852 213,039 217,220 247,478 254,918 254,918
Costs and expenses:
Selling, general and
administrative.................. 93,652 127,035 125,760 138,501 149,621 150,621
Research and development.......... 3,426 4,550 10,435 8,824 8,315 8,315
Restructuring charges(1).......... -- 5,258 -- -- 1,298 1,298
Amortization of intangibles....... 4,344 5,412 5,877 7,127 8,786 8,786
-------- -------- -------- -------- -------- --------
Income from operations............. 78,430 70,784 75,148 93,026 86,898 85,898
Interest expense, net.............. 26,990 25,735 25,055 21,054 21,128 16,172
Foreign currency transactions and
other, net........................ (78) (2,991) 1,216 (4,441) (1,284) (1,284)
Income taxes....................... 10,758 8,998 10,026 9,202 10,967 12,470
Minority interests................. 3,795 3,111 3,085 4,343 3,468 3,468
-------- -------- -------- -------- -------- --------
Net income before cumulative effect
of accounting change.............. 36,965 35,931 35,766 62,868 52,619 55,072
Cumulative effect of accounting
change, net of income tax(2)...... 3,538 -- -- -- -- --
-------- -------- -------- -------- -------- --------
Net income......................... $33,427 $35,931 $35,766 $62,868 $52,619 $55,072
======== ======== ======== ======== ======== ========
Pro forma basic and diluted net
income per share(3)............... $1.10
========
Weighted avg. shares
outstanding(3).................... 50,000

OTHER DATA:
EBITDA(4)......................... $101,429 $101,648 $100,829 $119,155 $118,710 $116,412

<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
STATEMENT OF OPERATIONS DATA: ---------------------------------------
1999
1998 1999 PRO FORMA
----------- ----------- -----------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
Net sales.......................... $173,005 $173,847 $173,847
Cost of goods sold................. 113,274 113,378 113,378
-------- -------- --------
Gross profit....................... 59,731 60,469 60,469
Costs and expenses:
Selling, general and
administrative.................. 34,637 39,054 39,304
Research and development.......... 2,034 2,205 2,205
Restructuring charges(1).......... 1,046 -- --
Amortization of intangibles....... 2,131 2,228 2,228
-------- -------- --------
Income from operations............. 19,883 16,982 16,732
Interest expense, net.............. 4,841 6,095 4,043
Foreign currency transactions and
other, net........................ (112) (1,201) (1,201)
Income taxes....................... 2,453 2,450 3,240
Minority interests................. 1,587 658 658
-------- -------- --------
Net income before cumulative effect
of accounting change.............. 11,114 8,980 9,992
Cumulative effect of accounting
change, net of income tax(2)...... -- -- --
-------- -------- --------
Net income......................... $11,114 $8,980 $9,992
======== ======== ========
Pro forma basic and diluted net
income per share(3)............... $0.20
========
Weighted avg. shares
outstanding(3).................... 50,000
OTHER DATA:
EBITDA(4)......................... $28,222 $25,276 $25,026
</TABLE>

footnotes on following page

4
<PAGE> 9

SUMMARY COMBINED FINANCIAL DATA -- (CONTINUED)
(IN THOUSANDS, UNLESS OTHERWISE STATED)

<TABLE>
<CAPTION>
JUNE 30, SEPTEMBER 30, 1999
--------------------------------------------------------- ---------------------
1995 1996 1997 1998 1999 ACTUAL PRO FORMA
--------- --------- --------- --------- --------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents........... $54,838 $23,197 $28,242 $53,668 $59,132 $84,775 $10,000
Working capital (deficit)........... (141,626) (169,208) (166,884) (100,027) (146,394) (145,844) 15,184
Total assets........................ 770,172 718,672 817,962 755,923 836,394 875,577 800,802
Total debt(5)....................... 375,437 373,048 361,820 349,885 408,671 445,803 210,000
Total liabilities................... 506,088 491,823 532,464 460,836 525,740 566,648 345,745
Stockholder's equity(6)............. 264,083 218,129 275,529 287,779 301,530 299,144 445,272
</TABLE>

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

(1) Restructuring charges consist of the costs related to the closure of Ansell
Group's balloon production and marketing operations in 1996, and the
severance costs and the writedown to net realizable value of equipment
related to the restructuring of two manufacturing facilities and certain
administrative functions in 1999.
(2) In 1995 the method of amortizing goodwill was changed to straight-line.
(3) The weighted average shares are calculated assuming the shares outstanding
immediately after the reorganization were outstanding for the entire period.
For purposes of the pro forma net income per share data, net interest
expense and income taxes are adjusted to reflect the elimination of $235.8
million of debt owed to affiliates and $74.8 million of cash balances as
part of the reorganization, and $1.0 million and $0.3 million in additional
costs were added to selling, general and administrative expenses for fiscal
1999 and the quarter ended September 30, 1999, respectively.
(4) "EBITDA" represents net income before net interest expense, income taxes,
depreciation and amortization, restructuring charges, other income
(expense), net, minority interest, and cumulative effect of accounting
change, net of income tax. EBITDA is not intended to represent and should
not be considered more meaningful than, or an alternative to, net income,
cash flow or other performance measures in accordance with generally
accepted accounting principles.
(5) Total debt includes intercompany debt payable to Pacific Dunlop Group and
debt payable to third parties.
(6) Stockholder's equity consists of the combined net assets of the Ansell Group
prior to the offering.

5
<PAGE> 10

RISK FACTORS

You should carefully consider the risks and uncertainties described below
and other information in this prospectus before deciding to invest in our common
stock.

We have separated the risks and uncertainties into three categories:

- risks relating to our company and our industry,

- risks relating to our relationship and agreements with the Pacific Dunlop
Group, and

- risks relating to this offering and our common stock.

These are not the only risks and uncertainties that we face. Additional
risks and uncertainties that we do not currently know about or that we currently
believe are immaterial may also harm our business, results of operations and
financial condition. If any of these risks or uncertainties occurs, it could
have a material adverse effect on our business, the trading price of our common
stock could decline and you could lose all or part of your investment.

RISKS RELATING TO OUR COMPANY AND OUR INDUSTRY

A SUBSTANTIAL PORTION OF OUR COSTS AND NET SALES ARE INCURRED AND REALIZED IN
CURRENCIES OTHER THAN U.S. DOLLARS, WHICH EXPOSES THE VALUE OF OUR ASSETS AND
OUR FUTURE RESULTS OF OPERATIONS TO THE RISKS OF CURRENCY EXCHANGE RATE
FLUCTUATIONS.

Due to the worldwide locations of many of our manufacturing facilities, a
substantial portion of our costs are incurred in currencies other than U.S.
dollars, primarily currencies of various Southeast Asian countries. In fiscal
1997, 1998, 1999 and in the quarter ended September 30, 1999, approximately 46%,
43%, 42% and 42%, respectively, of our costs were denominated in currencies
other than U.S. dollars.

Similarly, due to the worldwide presence of our customer base, a
substantial portion of our net sales are realized in various currencies other
than U.S. dollars, primarily the euro and to a lesser extent U.K. sterling,
Canadian dollars, Australian dollars and several other currencies. In fiscal
1997, 1998, 1999 and in the quarter ended September 30, 1999, approximately 43%,
38%, 36% and 36%, respectively, of our net sales were denominated in currencies
other than U.S. dollars. Our net sales and costs are not well aligned in certain
regions, which limits natural currency hedges.

We expect that a large part of our costs and sales will continue to be in
non-U.S. currencies. As a result, fluctuations in currency exchange rates,
particularly of various Southeast Asian currencies and the euro relative to the
U.S. dollar, could have a material positive or negative effect on our results of
operations.

We have at various times over the last several years taken hedging
positions against the Australian dollar, the currency in which we historically
reported our results of operations. We will report our results of future
operations in U.S. dollars after the reorganization. Currency and hedging
strategies will be determined by our board of directors. If the board of
directors adopts a policy that calls for us to hedge our currency exposure,
implementation of that policy should reduce but not eliminate the risks of
currency exchange rate fluctuations and will result in transaction costs
associated with those hedging transactions.

WE DEPEND ON CONTRACTS WITH A SMALL NUMBER OF GROUP PURCHASING ORGANIZATIONS
(WHICH WE CALL GPOS) FOR A LARGE PORTION OF OUR SALES OF PROFESSIONAL HEALTHCARE
PRODUCTS IN THE UNITED STATES.

Many existing and potential U.S. customers for our medical examination and
surgical gloves have affiliation or membership contracts with GPOs that
influence or mandate a substantial portion of their purchasing decisions and
often include formal compliance thresholds. GPOs with whom we have contracts
often select only a few suppliers as preferred vendors to their members and
provide incentives or require their members to purchase products or categories
of products from selected suppliers. This selection

6
<PAGE> 11

process typically involves competitive bidding and the award of a contract to a
limited number of selected suppliers. These contracts are typically two to five
years in duration but can be terminated on short notice, typically 30 to 60
days, at the sole discretion of the GPOs.

In fiscal 1997, 1998 and 1999 and in the quarter ended September 30, 1999,
the top three GPOs with whom we contract, Premier Purchasing Partners, L.P.,
Novation, LLC and AmeriNet, Inc., together, accounted for approximately 3.3%,
7.0%, 7.4% and 7.4%, of our net sales for each period, respectively, and for
approximately 8.7%, 20.1%, 20.6% and 19.5%, of our net sales in the Professional
Healthcare segment for each period, respectively.

In March 1999, Premier announced its intention to reconfigure its medical
glove contract portfolio prior to termination of the existing contract and
requested the submission of new bids. There can be no assurance that we will be
one of the suppliers ultimately selected by Premier.

If one or more of these agreements is terminated, not renewed or renewed
with less favorable terms, our sales of medical gloves could be materially
adversely affected.

WE DEPEND UPON DISTRIBUTORS, INCLUDING ONE THAT IS ALSO A COMPETITOR OF OURS IN
CERTAIN BUSINESSES, TO DISTRIBUTE OUR MEDICAL GLOVES.

Substantially all U.S. sales of our medical gloves are made through
independent distributors selected by our customers. In fiscal 1997, 1998 and
1999 and in the quarter ended September 30, 1999, the three largest distributors
selected by our customers, Owens & Minor, Inc., Allegiance and General Medical
Co. together accounted for approximately 7.7%, 10.4%, 10.5% and 12.0% of our net
sales for each period, respectively, and for 20.2%, 29.6%, 29.5% and 31.8% of
our net sales in the Professional Healthcare segment for each period,
respectively. Allegiance is also one of our direct competitors with respect to
the sale of some medical gloves.

Our dependence on these distributors to distribute our medical gloves makes
us susceptible to price fluctuations, service disruptions and cancellations that
are outside our control. Also, if the efforts of any of our distributors prove
unsuccessful, if any distributor abandons or limits its distribution of our
products or if any distributor encounters serious financial difficulties, our
results of operations and financial condition could be materially adversely
affected.

OUR MANUFACTURING OPERATIONS ARE BASED, AND OUR REVENUES ORIGINATE, IN MANY
DIFFERENT COUNTRIES AND ARE SUBJECT TO INSTABILITY AND FLUCTUATION IN POLITICAL,
DIPLOMATIC AND ECONOMIC CONDITIONS, INCLUDING CHANGES IN POLICIES REGARDING
TAXATION.

In fiscal 1999, approximately 50% of our manufacturing operations, measured
in terms of cost of production, and approximately 51% of our net sales were
outside the United States. As a company with worldwide presence, we are subject
to economic, political and diplomatic factors in countries where we have
operations that could adversely affect our financial results, restrict our
ability to expand or limit our current operations.

Our latex product factories and latex concentrate manufacturing and
processing plants outside the United States are located in Malaysia, Thailand,
Sri Lanka and India, as are those of most of our competitors. As a result, we
are directly affected by the political and economic conditions that exist in
those parts of the world. Any political or economic instability, a significant
increase in the rate of corporate taxation, a discontinuance or reduction in
export tax rebates or any other change in a country's policies regarding foreign
ownership of manufacturing facilities could have significant adverse effects on
our business, financial condition and results of operations. We expect that
non-U.S. expenses will continue to represent the major portion of our expenses.
We also expect that we will be subject to the risks of

7
<PAGE> 12

conducting business internationally, including foreign currency exchange rate
fluctuations, unexpected changes in regulatory requirements, tariffs and other
barriers. We cannot assure you that our financial condition or results of
operations will not be adversely affected by these factors. See "Business --
Manufacturing" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations."

WE, AND OTHER COMPANIES IN OUR INDUSTRY, ARE CURRENTLY DEFENDANTS IN NUMEROUS
PRODUCT LIABILITY LAWSUITS ALLEGING FAULT FOR ALLERGIC REACTIONS TO NATURAL
RUBBER LATEX GLOVES EXPERIENCED BY SOME USERS.

As of October 31, 1999, we were a defendant along with other manufacturers
and distributors of latex gloves in 280 lawsuits filed in the United States and
one in Australia on behalf of individuals alleging wrongful death, personal
injuries and lost wages as a result of their exposure to natural rubber latex
gloves. The lawsuits allege, among other things, that the defendants were
negligent in the design and manufacture of the gloves and failed to adequately
warn users of the possibility of allergic reactions to latex products. The 280
lawsuits pending against us in the United States represent approximately 49% of
the total number of lawsuits filed in the United States which allege allergic
reactions to latex gloves. We are unable to anticipate how many additional
plaintiffs may file similar lawsuits and we do not know how many lawsuits may be
filed in other countries.

All of the latex glove cases are in the discovery phase of litigation. As a
result of the early stage of this litigation, together with the uncertainty
created by the multiple defendants in these cases, the difficulty of
establishing whose natural rubber latex gloves were used by particular
plaintiffs and the need to determine whether latex gloves were the cause of any
particular injury, our liability, if any, in relation to these claims cannot be
quantified. We cannot assure you that the outcome of these proceedings will not
have an adverse effect on our future financial condition or results of
operations. Additionally, we are incurring expenses in defending these
proceedings and expect to incur additional expenses in the future.

IF WE ARE UNABLE TO IMPLEMENT OUR ACQUISITION STRATEGY SUCCESSFULLY AND PROPERLY
INTEGRATE ACQUIRED BUSINESSES, OUR ABILITY TO EXPAND OUR PRODUCT OFFERINGS AND
GROW OUR CUSTOMER BASE MAY BE LIMITED.

We have historically made acquisitions to augment and expand our
technology, manufacturing, product lines and geographic coverage. Our
acquisition of the medical glove business of Johnson & Johnson is pending. Our
strategic transactions over the last three fiscal years include the acquisitions
of Suretex Limited (Thailand) and Kemwell International Limited (India) in
fiscal 1999, our joint venture with Raymond Limited for what is now known as JK
Ansell, Ltd. (India) in fiscal 1998 and the acquisition of Golden Needles
Knitting, Inc. (United States) in fiscal 1997. In order to expand our product
offerings and to grow our business by reaching new customers, we anticipate that
we will continue to acquire businesses that we believe are complementary. The
successful implementation of this strategy depends on our ability to identify
suitable acquisition candidates, to acquire companies on acceptable terms, to
integrate their operations and technology successfully with our own and to
maintain the goodwill of the acquired business.

Acquisitions involve numerous risks, including the integration of the
operations, services, products and personnel of the acquired company, the
diversion of management's attention from other business concerns, the loss of
key employees, key customers and distributors and the inability to maintain the
goodwill of the acquired businesses. We are unable to predict whether or when
any prospective acquisition candidate will become available or the likelihood
that any proposed acquisition will be completed. Moreover, in pursuing
acquisition opportunities, we may compete for acquisition targets with other
companies with similar growth strategies. Some of these competitors may be
larger and may have greater financial and other resources than we do. We cannot
assure you that our future acquisition strategy will be successful or that
acquisitions will not be more costly in the future due to increased competition
in our industry for acquisition targets and strategic relationships.

8
<PAGE> 13

WE DO NOT HAVE AN OPERATING HISTORY AS A PUBLIC COMPANY.

While we have been profitable on an operating basis as part of the Pacific
Dunlop Group, there is no assurance that operating profits will continue at the
same level or at all when we are a public company. Moreover, prior to the
completion of this offering, we will enter into a Services Agreement with
Pacific Dunlop Limited pursuant to which it will continue to provide us with
certain corporate services. Pacific Dunlop Limited will have no obligation to
provide assistance to us, except as provided in the Services Agreement.

We cannot assure you that we will be viable as a public company or that
this change from a wholly owned subsidiary to a public company will not have an
adverse effect on us and lead to a partial or complete loss of your investment
in our common stock. Because the financial information included in this
prospectus relates to periods during which we were wholly owned by the Pacific
Dunlop Group, it is not necessarily indicative of our future results of
operations, financial position and cash flows.

WE ARE SUBJECT TO REGULATION BY GOVERNMENTS AROUND THE WORLD, AND IF WE DO NOT
COMPLY WITH THESE REGULATIONS, OUR EXISTING AND FUTURE OPERATIONS MAY BE
CURTAILED, AND WE COULD BE SUBJECT TO LIABILITY.

The design, development, manufacturing, marketing and labeling of our
products are subject to regulation by governmental authorities in the United
States, Europe and other countries, including the Food and Drug Administration
and the European Committee for Standardization, known as the FDA and CEN,
respectively. In addition, all of the areas and product segments within Europe
in which we currently operate are subject to Directives issued by the European
Commission. These are mandatory safety requirements that must be verified by an
independent testing firm before products are sold in the European Economic Area
(which are the fifteen states of the European Union plus Iceland, Norway and
Liechtenstein), and products or their packaging must display a CE mark to show
compliance with these requirements. The regulatory process can result in
required modification or withdrawal of existing products and a substantial delay
in the introduction of new products. Also, there can be no assurance that
regulatory approval will be obtained for a new product.

Periodic testing by the FDA of shipments to the United States of medical
gloves and condoms has resulted in the past, and may in the future, in the
temporary detention of shipments, required destruction or re-export of defective
products and delays in the recognition of income by us for the period during
which the FDA tests are being conducted and the results reviewed for compliance
with FDA standards. Similar delays may also be encountered in other countries.
Further, our products and manufacturing facilities are subject to continual
review and periodic inspection. The discovery of previously unknown problems
with a product or facility may result in regulatory restrictions on the product
or manufacturing facility, including the withdrawal of the product from the
market.

In response to allegations of allergic reactions experienced by some users
of natural rubber latex gloves, the FDA has investigated the use of latex and
related chemical processes and responded with proposed regulations published on
July 30, 1999. These regulations, if adopted as proposed, would reclassify
medical examination and surgical gloves as Class II medical devices and impose
new labeling statements for powder and protein levels. While we anticipate that
we will be successful in meeting these requirements, if adopted as proposed, we
cannot provide assurances that these, or any future regulatory changes may not
have significant adverse effects on our business, financial condition and
results of operations.

Our Dothan, Alabama manufacturing facility was recently inspected by the
FDA and a number of observations regarding manufacturing processes were made
with respect to lack of compliance with certain QSR/GMP requirements. We and our
consultants have met with the FDA and have outlined a strategy for responding to
those observations.

9
<PAGE> 14

injunctions, civil penalties, fines based on the equitable remedy of
disgorgement, adverse publicity issued by the FDA and criminal prosecutions. See
"Business -- Government Regulation and Quality Control."

WE OPERATE IN COMPETITIVE MARKETS.

We compete with many other companies, including several large companies
that have greater financial, management and marketing resources than we do.
There can be no assurance that our competitors or others will not develop
products that are substantially equivalent or superior to our products.
Additionally, our competitors may develop manufacturing processes or new
technologies that would render our products obsolete or not competitive or that
would be more cost effective or more efficient than our processes and
technologies. Furthermore, our competitors may be able to leverage their market
positions in related industry segments and business relationships to obtain
preferred contracts or pricing positions with GPOs, distributors, customers or
vendors. Such competition could have a material adverse effect on our business,
financial condition and results of operations. See "Business -- Competition."

WE ARE HEAVILY DEPENDENT UPON THE RUBBER CROP AND THE AVAILABILITY OF LATEX
CONCENTRATE.

We accounted for approximately 5% of worldwide liquid natural latex
consumption in fiscal 1999. Our ability to produce natural latex products is
heavily dependent upon the regular availability of raw rubber harvested by
independent growers in Southeast Asia and processed into latex concentrate. A
material disruption in the regular supply of rubber for latex concentrate due to
weather or other natural phenomena, labor or transportation stoppages or
shortages, political unrest or otherwise, would cause significant adverse
effects to our business, financial condition and results of operations. In
addition, rubber is a commodity traded on world commodities exchanges and is
subject to price fluctuations driven by changing market conditions. Increases in
the price of latex concentrate could cause a significant adverse effect on our
results of operations.

NOT ALL OF OUR PRODUCTS AND PROPRIETARY TECHNOLOGIES AND PROCESSES ARE
PROTECTED.

We believe that innovation and development of proprietary technologies and
processes are essential to our business. In addition to our range of patents, we
rely upon copyright, trade secrets and contract law to protect our proprietary
technologies and processes. The laws of some countries in which we have
operations, however, may not protect our proprietary rights to the same extent
as do the laws of the United States. As a result, our competitors may be able to
create substantially similar or duplicate products. We cannot assure you that we
will be able to prevent misappropriation of our processes or that these means of
protecting our rights will provide us with effective legal remedies in all
jurisdictions where misappropriation may occur.

WE ARE SUBJECT TO ENVIRONMENTAL LAWS AND REGULATIONS IN THE UNITED STATES AND
ABROAD.

Our operations are subject to numerous environmental laws and regulations
in the United States and abroad, including laws and regulations governing
emissions into the air, discharges into water, the use, handling and disposal of
hazardous substances, waste disposal and the remediation of soil and groundwater
contamination. While we believe that our operations comply, in all material
respects, with applicable environmental laws and regulations, we are presently
undertaking, and in the future may be required to undertake, work to correct
instances of noncompliance with environmental laws and regulations and to
address contamination at our facilities. Although, based on information
currently available, we do not expect our environmental exposure to have a
material effect upon our capital expenditures, earnings or competitive
positions, there can be no assurance that the development or discovery of facts
or conditions will not result in environmental liabilities that have such a
material effect.

10
<PAGE> 15

YEAR 2000 PROBLEMS MAY ADVERSELY AFFECT US.

Based upon our assessment to date, we believe that we are Year 2000
compliant. We may, however, discover Year 2000 compliance problems that will
require substantial revisions to our systems, products or services. In addition,
third-party software, hardware or services that we rely on may need to be
revised or replaced, all of which could be time consuming and expensive. Any
failure to address on a timely basis any problems that may arise could result in
lost revenue, increased operating costs, the loss of customers and other
business interruptions. As of September 30, 1999, we had incurred cumulative
costs that we believe are allocable to the Year 2000 problem of approximately
$1.1 million.

RISKS RELATING TO OUR RELATIONSHIP AND AGREEMENTS WITH THE PACIFIC DUNLOP GROUP

THE PACIFIC DUNLOP STOCKHOLDERS WILL BENEFICIALLY OWN A MAJORITY OF OUR
OUTSTANDING VOTING SECURITIES AND MAY HAVE INTERESTS THAT ARE ADVERSE TO YOURS.

Stockholder and Board of Director Control. After completion of this
offering, the Pacific Dunlop Stockholders will own at least 80% of our common
stock. Our certificate of incorporation provides, among other things, that as
long as Pacific Dunlop Limited owns, directly or indirectly, at least 50% of our
voting securities, our board of directors will consist of at least two directors
who may not be affiliated with Pacific Dunlop Limited (other than as a director
of Ansell) or us, and one director who will be an executive officer of Ansell.
Up to four directors (excluding the executive officer of Ansell) may be
executive officers or employees of members of, or otherwise affiliated with,
Pacific Dunlop Group. We believe that the Pacific Dunlop Stockholders intend to
continue to allow our current management to conduct our business and operations
as such management has done in the past. However, we cannot guarantee that the
Pacific Dunlop Stockholders will not cause us to institute a new business plan
or change our management team in the future. The interests of the Pacific Dunlop
Stockholders may conflict with the interests of other holders of our common
stock. In addition, the Pacific Dunlop Stockholders have the ability to change
the size and composition of our board of directors and its committees. As
majority stockholders, the Pacific Dunlop Stockholders have the voting power to
control the outcome of actions requiring approval of our stockholders,
including:

- the election of our entire board of directors,

- determinations with respect to mergers, other business combinations, or
the acquisition or disposition of material assets,

- the amendment of our certificate of incorporation,

- the power to determine all matters submitted to a vote of stockholders,
and

- the power to delay, defer or prevent a change in control.

Services Agreement. We have entered into a Services Agreement with Pacific
Dunlop Limited under which Pacific Dunlop Limited will continue to provide the
following services for us:

- assistance, on an as requested basis, in planning, negotiating and
completing acquisitions,

- insurance services,

- assistance with media management and coordination of investor relations,

- treasury, including coordination and implementation of internal and
external borrowing, cash management, hedging currency and commodity
exposure and interest rate management,

- income tax return preparation and review and technical advice,

- assistance, on an as requested basis, in reviewing manufacturing
practices, costing systems, inventory management systems and site
location,

11
<PAGE> 16

- legal services, including coordination of protection of trademark
portfolio, provision and maintenance of trademark management
infrastructure and assistance with litigation management, and

- information technology and telecommunication services in Australia and
New Zealand.

There is no assurance that the foregoing services will be provided on terms
that are as favorable to us as terms that we could receive from unaffiliated
third parties. In addition, Pacific Dunlop Limited may be unwilling or unable to
amend the Services Agreement to accommodate our future operating needs. When the
Services Agreement with Pacific Dunlop Limited expires, is not renewed or is
terminated, it may be more expensive for us to provide these services internally
or to obtain them from other third parties. Any such increased expense could
negatively affect our results of operations.

In connection with hedging currency and commodity transactions for us,
Pacific Dunlop Limited will act as a counterparty to us and set terms that it
believes are terms that would be available to us in the open market. As a
counterparty in hedging transactions, Pacific Dunlop Limited may enjoy better
terms in offsetting transactions than the terms it gives us or may make money by
not engaging in offsetting transactions.

Credit Agreement. Pacific Dunlop Limited will enter into a revolving credit
agreement with us under which it will loan us up to $200 million in two tranches
and charge us interest either at the prime rate or 90-day LIBOR plus 0.75%
depending on which tranche we choose. This agreement permits us to maintain cash
balances with Pacific Dunlop Limited on which it will pay us interest equal to
the federal funds rate and provides that we will repay borrowings with excess
cash flow.

Tax Sharing Agreement. Under the Tax Sharing Agreement among us and other
U.S.-domiciled members of the Pacific Dunlop Group, we will compute our U.S.
federal income tax liability as if we filed on a separate income tax return
basis (treating us and our subsidiaries as a single company) and remit payment
of such liability (including quarterly estimates) to the Pacific Dunlop Group.
The Tax Sharing Agreement provides that we will not be permitted to reduce
future tax liability by using carryforward tax benefits that were attributable
to periods when we were wholly owned by members of the Pacific Dunlop Group.
Accordingly, upon completion of this offering, the U.S. carryforward tax
benefits attributable to us and reflected on the historical financial statements
of the Ansell Group included in this prospectus, will not be available to reduce
future income tax liabilities that we incur.

In any fiscal year in which we become no longer eligible to be part of the
Pacific Dunlop Group's U.S. consolidated federal income tax group, all unexpired
carryforward tax benefits attributable to us under the Internal Revenue Code of
1986, as amended, and the Treasury Regulations issued thereunder, and not
already used by the Pacific Dunlop Group to reduce the Pacific Dunlop Group's
U.S. consolidated tax liability, would revert to us, as provided by law,
including any such carryforward tax benefits that were attributable to us prior
to this offering. Accordingly, as long as the Pacific Dunlop Group continues to
maintain unused carryforward tax benefits attributable to us, the Pacific Dunlop
Group has an incentive not to reduce its ownership below 80%, the percentage
ownership necessary to retain us as a member of the Pacific Dunlop Group's U.S.
consolidated federal income tax group.

As long as we are a member of the Pacific Dunlop Group's U.S. consolidated
income tax group we will be severally liable for the federal and, in certain
instances, state income tax liability of the group. Accordingly, although the
Tax Sharing Agreement determines tax liabilities between Ansell and the Pacific
Dunlop Group, during the period in which we are included in the Pacific Dunlop
Group's consolidated federal and state income tax group, we could be liable in
the event that any federal or state tax liability is incurred by the
consolidated group but is not discharged by the Pacific Dunlop Group. See
"Relationship and Agreements with the Pacific Dunlop Group -- Tax Sharing
Agreement."

Registration Rights and Ownership Maintenance Agreement. The Pacific Dunlop
Stockholders have a right to require us to register additional shares of our
common stock for sale by them. In addition, in order to preserve our status as a
member of Pacific Dunlop Group's consolidated U.S. income tax group and to

12
<PAGE> 17

enable the Pacific Dunlop Stockholders to maintain their majority ownership of
our common stock, we have an agreement with the Pacific Dunlop Stockholders that
permits them to maintain their percentage ownership interest in our common stock
at their sole discretion. These provisions may limit our ability to use our
common stock as consideration for acquisitions and may prevent others from
making or proceeding with takeover offers for our company. See "Relationship and
Agreements with the Pacific Dunlop Group -- Registration Rights and Ownership
Maintenance Agreement."

IF WE EXPERIENCE CONFLICTS OF INTEREST WITH THE PACIFIC DUNLOP GROUP, WE CANNOT
ASSURE YOU THAT THEY WILL BE RESOLVED IN OUR FAVOR, WHICH COULD HAVE A MATERIAL
ADVERSE EFFECT ON OUR BUSINESS.

The majority of our directors may have conflicts of interest in certain
transactions that may affect us, such as transactions involving business
dealings between our company and members of the Pacific Dunlop Group,
acquisition opportunities, the issuance of additional shares of common stock,
tax planning and other matters involving conflicts which cannot now be foreseen.
Because the other businesses of the Pacific Dunlop Group are diverse and
unrelated to our business, we do not expect conflicts to arise over the
allocation of corporate opportunities and have not adopted policies relating to
the allocation of corporate opportunities. We do have a policy that requires our
independent directors to approve future transactions and agreements with the
Pacific Dunlop Group. This policy, however, is subject to change by the Pacific
Dunlop Group.

The level of ownership of our outstanding common stock by Pacific Dunlop
Stockholders may have the effect of preventing, without their support, a proxy
contest, a merger involving our company, a tender offer, an open-market purchase
program or other purchase of our common stock that could give our stockholders
the opportunity to realize a premium over the then prevailing market price of
our common stock. Officers and directors of our company also beneficially own
and have been granted options to purchase shares of Pacific Dunlop Limited
common stock.

CERTAIN CREDIT AGREEMENTS TO WHICH MEMBERS OF THE PACIFIC DUNLOP GROUP ARE
PARTIES IMPOSE RESTRICTIONS ON OUR ABILITY TO BORROW MONEY AND TAKE CERTAIN
OTHER ACTIONS.

The Pacific Dunlop Group's credit agreements may limit our ability to
borrow money and restrict the way in which we structure our borrowings. Under
such agreements, Pacific Dunlop Limited is obligated to cause its principal
subsidiaries, including us, to comply with various covenants. These covenants
may not always be in our best interests and may limit our future growth
prospects. For example, these covenants limit our ability to sell our common
stock and the stock of our subsidiaries. Additionally, we may not borrow under a
secured credit agreement without providing the same security arrangement for
borrowings by the Pacific Dunlop Group under its existing credit agreements with
third parties. The covenants may also restrict the ability of the Pacific Dunlop
Stockholders to sell additional shares of our common stock. Pacific Dunlop
Limited may enter into credit agreements in the future that would impose similar
or greater restrictions on us. For more information regarding potential
conflicts with Pacific Dunlop Group, see "Relationship and Agreements with the
Pacific Dunlop Group."

RISKS RELATING TO THIS OFFERING AND OUR COMMON STOCK

THE PUBLIC MARKET FOR OUR COMMON STOCK MAY FLUCTUATE AND THE LIQUIDITY OF THAT
MARKET COULD BE ADVERSELY AFFECTED BY PURCHASES OF OUR COMMON STOCK BY MEMBERS
OF THE PACIFIC DUNLOP GROUP.

Prior to this offering, there has been no public market for our common
stock. We cannot guarantee that an active trading market will develop or be
sustained or that the market price of our common stock

13
<PAGE> 18

will not decline. Even if an active trading market develops, the market price of
our common stock could fluctuate significantly in response to various factors,
including:

- actual or anticipated variations in our quarterly operating results,
including currency translation,

- announcements of technological innovations or new services or products by
us or our competitors,

- the operating and stock price performance of other comparable companies,

- timeliness of our introductions of new products,

- changes in financial estimates by securities analysts,

- changes in expectations as to our future financial performance,

- changes in our expected capital needs,

- announcements relating to strategic relationships, mergers or
consolidations by us or our competitors,

- announcements of claims or judgments against us or our competitors
concerning latex allergies, and

- general market conditions.

In addition, the stock markets have experienced extreme price and volume
fluctuations that have affected the market prices of equity securities. These
fluctuations have often been unrelated or disproportionate to operating
performance. These broad market factors may materially affect the trading price
of our common stock. General economic, political and market conditions, like
recessions and interest rate fluctuations, may also have an adverse effect on
the market price of our common stock. In the past, following periods of
volatility in the market price for a company's securities, stockholders have
often initiated securities class action litigation. Any securities class action
litigation could result in substantial costs and the diversion of management's
attention and resources.

After completion of the offering, the Pacific Dunlop Stockholders will own
at least 80% of our common stock. The liquidity of an investment in our common
stock could be adversely affected by repurchases of outstanding common stock by
us and other members of the Pacific Dunlop Group.

FUTURE SALES BY PACIFIC DUNLOP STOCKHOLDERS COULD CAUSE THE PRICE OF OUR COMMON
STOCK TO DECLINE.

After completion of the offering, there will be approximately [ ]
million shares of our common stock outstanding, of which approximately [ ]
million shares will be held by the Pacific Dunlop Stockholders ([ ] million
shares if the underwriters exercise their over-allotment option in full).
Pacific Dunlop Stockholders will be able to sell these shares in the public
markets from time to time, subject to certain limitations on the timing, amount
and method of such sales imposed by SEC regulations. We have entered into a
Registration Rights and Ownership Maintenance Agreement with the Pacific Dunlop
Stockholders which enables the Pacific Dunlop Stockholders to require us in
their sole discretion to register shares of our common stock owned by them. If
Pacific Dunlop Stockholders were to sell a large number of shares following this
offering, the market price of our common stock could decline significantly.
Moreover, the perception in the public markets that such sales by Pacific Dunlop
Stockholders might occur could also adversely affect the market price of our
common stock. For more information, see "Shares Eligible for Future Sale."

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<PAGE> 19

FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve risks and
uncertainties, including those discussed above and elsewhere in this prospectus.
We develop forward-looking statements by combining currently available
information with our beliefs and assumptions. These statements often contain
words like believe, expect, anticipate, intend, contemplate, seek, plan,
estimate or similar expressions. Forward-looking statements do not guarantee
future performance. Recognize these statements for what they are and do not rely
on them as facts.

CAPITALIZATION

The following table shows (1) the actual capitalization of Ansell Group as
of September 30, 1999 and (2) the capitalization of Ansell Group on a pro forma
basis giving effect to the following:

- the reorganization of Ansell Group into Ansell Healthcare Incorporated,
including the elimination of a substantial portion of debt owed to
affiliates and cash, and

- the sale of up to 20% of Ansell Healthcare Incorporated by the selling
stockholder, which results in the transfer of Ansell Group's U.S. tax net
operating loss carryforwards to other members of the Pacific Dunlop
Group.

The table below should be read in conjunction with the audited Combined
Financial Statements of Ansell Group and Notes thereto and the Unaudited Pro
Forma Condensed Combined Financial Statements, included elsewhere in this
prospectus.

<TABLE>
<CAPTION>
SEPTEMBER 30, 1999
(IN THOUSANDS)
--------------------
ACTUAL PRO FORMA
-------- ---------
<S> <C> <C>
Cash and cash equivalents................................... $84,775 $10,000
======== =========
Revolving lines of credit due to affiliates................. $410,189 $174,386
Current portion of long-term debt........................... 33,821 33,821
-------- ---------
Total short-term debt............................. 444,010 208,207
Long-term debt.............................................. 1,793 1,793
-------- ---------
Total debt........................................ 445,803 210,000
Minority interest........................................... 9,785 9,785
Stockholders' equity:
Net assets -- capital employed.............................. 365,428 --
Common shares: $0.01 par value, 50,000,000 shares
authorized, no shares issued, actual; 50,000,000 shares
authorized and issued, pro forma.......................... -- 500
Preferred shares: $0.01 par value, 1,000,000 shares
authorized, none issued actual and pro forma.............. -- --
Additional paid-in capital.................................. -- 511,056
Accumulated other comprehensive income foreign currency
translation adjustment.................................... (66,284) (66,284)
-------- ---------
Total stockholders' equity........................ 299,144 445,272
-------- ---------
Total capitalization.............................. $754,732 $665,057
======== =========
</TABLE>

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<PAGE> 20

THE REORGANIZATION

Ansell Healthcare Incorporated, the issuer of the common stock offered by
this prospectus, was formed on October 5, 1999 in contemplation of this offering
and the reorganization of Ansell Group. Prior to the reorganization, Ansell
Healthcare Incorporated conducted no business and has $1,000 cash and no
operations.

Before the reorganization, our businesses were owned and conducted by
various companies in the Pacific Dunlop Group. By the closing of this offering,
these operations will be substantially reorganized, and companies' assets,
liabilities and related operations will be transferred to us by the Pacific
Dunlop Group so that all of the assets and liabilities related to our business
operations that were part of the Pacific Dunlop Group will be owned or leased by
companies that are directly or indirectly owned by us.

As part of this reorganization, all of the shares of common stock of the
United States and Mexican companies that were owned by members of the Pacific
Dunlop Group were transferred to us. We also acquired the shares and/or assets
of entities owned by various other members of the Pacific Dunlop Group that were
related to our operations in Malaysia, the United Kingdom, France, Canada,
Belgium, Sri Lanka, Thailand, India, Mauritius, South Africa, Germany, Japan,
Australia and New Zealand. Cash, loans payable and/or shares of common stock
were issued by us to the owners of these various entities and assets as payment
for the acquisitions.

In connection with the reorganization, we have agreed to indemnify the
members of the Pacific Dunlop Group that sold us operating assets for any
contingent liabilities arising out of, or relating to, the ownership of the
assets sold, the operation of the transferred business or our breach of the
terms of the agreement transferring such assets or business. See "Relationship
and Agreements with the Pacific Dunlop Group."

USE OF PROCEEDS

We will not receive any of the net proceeds from this offering.

DIVIDEND POLICY

We were incorporated in October 1999 and have not yet paid dividends. We
currently intend to retain any future earnings to fund the development and
growth of our business and do not anticipate paying any dividends in the
foreseeable future.

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<PAGE> 21

SELECTED COMBINED FINANCIAL DATA

The following selected combined financial data should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations," the audited Combined Financial Statements of Ansell
Group and the accompanying Notes thereto and the Unaudited Pro Forma Condensed
Combined Financial Statements which are included elsewhere in this prospectus.
The financial information for the fiscal years ended June 30, 1997, 1998 and
1999 has been derived from, and is qualified completely by reference to, the
audited Combined Financial Statements of Ansell Group appearing elsewhere in
this prospectus. The financial information of Ansell Group for the three months
ended September 30, 1998 and 1999 and balance sheet data as of September 30,
1999 are unaudited. The unaudited data, in the opinion of management, accurately
reflects all adjustments (which are of a recurring nature) necessary to present
fairly the information set forth herein and are not necessarily indicative of
results for the full year.

The pro forma data set forth below is derived from the Unaudited Pro Forma
Condensed Combined Financial Statements included elsewhere in this prospectus.
The Unaudited Pro Forma Condensed Combined Financial Statements give effect to
(1) the reorganization of Ansell Group into Ansell, including the elimination of
a substantial portion of debt with affiliates and cash and (2) this offering,
which results in the transfer to the other members of the Pacific Dunlop Group
of U.S. tax net operating loss carryforwards. These transactions have been
recorded as if they had actually occurred on the first day of our 1999 and 2000
fiscal years with respect to the pro forma statement of operations data and on
September 30, 1999 with respect to pro forma balance sheet data. The pro forma
data does not necessarily represent what our financial position or results of
operations would have been had such transactions been completed on such dates,
nor does it give effect to any events other than those discussed in the notes to
the Unaudited Pro Forma Condensed Combined Financial Statements. The pro forma
data also does not project our financial position or results of operations as of
any future date or for any future period.

17
<PAGE> 22

SELECTED COMBINED FINANCIAL DATA
(IN THOUSANDS, UNLESS OTHERWISE STATED)
<TABLE>
<CAPTION>

FISCAL YEARS ENDED JUNE 30,
------------------------------------------------------------------
1999
1995 1996 1997 1998 1999 PRO FORMA
-------- -------- -------- -------- -------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales.......................... $534,366 $627,004 $669,749 $735,263 $738,382 $738,382
Cost of goods sold................. 354,514 413,965 452,529 487,785 483,464 483,464
-------- -------- -------- -------- -------- --------
Gross profit....................... 179,852 213,039 217,220 247,478 254,918 254,918
Costs and expenses:
Selling, general and
administrative.................. 93,652 127,035 125,760 138,501 149,621 150,621
Research and development.......... 3,426 4,550 10,435 8,824 8,315 8,315
Restructuring charges(1).......... -- 5,258 -- -- 1,298 1,298
Amortization of intangibles....... 4,344 5,412 5,877 7,127 8,786 8,786
-------- -------- -------- -------- -------- --------
Income from operations............. 78,430 70,784 75,148 93,026 86,898 85,898
Interest expense, net.............. 26,990 25,735 25,055 21,054 21,128 16,172
Foreign currency transactions and
other, net........................ (78) (2,991) 1,216 (4,441) (1,284) (1,284)
Income taxes....................... 10,758 8,998 10,026 9,202 10,967 12,470
Minority interests................. 3,795 3,111 3,085 4,343 3,468 3,468
-------- -------- -------- -------- -------- --------
Net income before cumulative effect
of accounting change.............. 36,965 35,931 35,766 62,868 52,619 55,072
Cumulative effect of accounting
change, net of income tax(2)...... 3,538 -- -- -- -- --
-------- -------- -------- -------- -------- --------
Net income......................... $33,427 $35,931 $35,766 $62,868 $52,619 $55,072
======== ======== ======== ======== ======== ========
Pro forma basic and diluted net
income per share(3)............... $1.10
========
Weighted average shares
outstanding(3).................... 50,000

OTHER DATA:
EBITDA(4)......................... $101,429 $101,648 $100,829 $119,155 $118,710 $116,412

<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
---------------------------------------
1999
1998 1999 PRO FORMA
----------- ----------- -----------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales.......................... $173,005 $173,847 $173,847
Cost of goods sold................. 113,274 113,378 113,378
-------- -------- --------
Gross profit....................... 59,731 60,469 60,469
Costs and expenses:
Selling, general and
administrative.................. 34,637 39,054 39,304
Research and development.......... 2,034 2,205 2,205
Restructuring charges(1).......... 1,046 -- --
Amortization of intangibles....... 2,131 2,228 2,228
-------- -------- --------
Income from operations............. 19,883 16,982 16,732
Interest expense, net.............. 4,841 6,095 4,043
Foreign currency transactions and
other, net........................ (112) (1,201) (1,201)
Income taxes....................... 2,453 2,450 3,240
Minority interests................. 1,587 658 658
-------- -------- --------
Net income before cumulative effect
of accounting change.............. 11,114 8,980 9,992
Cumulative effect of accounting
change, net of income tax(2)...... -- -- --
-------- -------- --------
Net income......................... $11,114 $8,980 $9,992
======== ======== ========
Pro forma basic and diluted net
income per share(3)............... $0.20
========
Weighted average shares
outstanding(3).................... 50,000
OTHER DATA:
EBITDA(4)......................... $28,222 $25,276 $25,026
</TABLE>

footnotes on following page

18
<PAGE> 23

SELECTED COMBINED FINANCIAL DATA -- (CONTINUED)
(IN THOUSANDS, UNLESS OTHERWISE STATED)

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

19
<PAGE> 24

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis together with Ansell
Group's historical combined financial statements and related notes included in
this prospectus. This discussion contains certain forward-looking statements
that involve risks, uncertainties and assumptions. You should read the
cautionary statements made in this prospectus as applying to related
forward-looking statements wherever they appear in this prospectus. Our actual
results may be materially different from the results we discuss in the
forward-looking statements due to certain factors, including those discussed in
"Risk Factors" and elsewhere in this prospectus.

BASIS OF PRESENTATION AND THE REORGANIZATION

This prospectus contains the combined historical financial statements of
Ansell Group which, prior to the reorganization described below, consisted of
separate subsidiaries and operating divisions of the Pacific Dunlop Group and
whose financial results were reported as a separate segment in the consolidated
financial statements of Pacific Dunlop Limited. In conjunction with this
offering, Ansell Group has been reorganized as Ansell Healthcare Incorporated
and its subsidiaries. Future financial results and other financial information
regarding Ansell Group will be reflected in the consolidated financial
statements of Ansell Healthcare Incorporated and will continue to be reported as
a separate segment in the consolidated financial statements of Pacific Dunlop
Limited. Ansell Group's historical net income and cash flows as a wholly owned
operation of the Pacific Dunlop Group are not necessarily indicative of the net
income and cash flows it might have realized as an independent entity.

Prior to the reorganization, Ansell Group recorded substantial levels of
intercompany debt and cash. As a part of the reorganization, $235.8 million of
the intercompany debt, including $100.7 million of non-interest bearing debt due
to affiliates, will be exchanged by the Pacific Dunlop Group for our common
stock and cash will be reduced by $74.8 million. If such debt and cash had been
transferred at the beginning of fiscal 1999, net interest expense of Ansell
Group would have been reduced by $6.3 million in fiscal 1999 and $1.6 million
for the quarter ended September 30, 1999 on a pro forma basis. After this
offering, approximately $87.8 million of Ansell Group's U.S. net operating
losses (which we call NOLs) will not be available to us to reduce our liability
for taxes under the Tax Sharing Agreement among us and other U.S.-domiciled
members of the Pacific Dunlop Group. If the Tax Sharing Agreement were in effect
beginning with fiscal 1999, the amount of cash we would have paid for taxes
would have increased by $3.1 million and $0, on a pro forma basis, for fiscal
1999 and the quarter ended September 30, 1999, respectively, because we could
not use existing NOLs to reduce our tax liability. See "Relationship and
Agreements with the Pacific Dunlop Group -- Intercompany Agreements" and
"Unaudited Pro Forma Condensed Combined Financial Statements."

After the reorganization and this offering we estimate that we will incur
approximately $1 million annually in additional selling, general and
administrative expenses as a result of being a public company.

Prior to this offering the businesses to be owned and operated by us after
the reorganization were indirectly owned 100% by Pacific Dunlop Limited, and the
financial information for those businesses was reported in Australian dollars
and in accordance with Australian generally accepted accounting principles
(which we call Australian GAAP). Pacific Dunlop Limited will continue to report
its financial information in the United States, including Ansell Healthcare
segment data, in Australian dollars and in Australian GAAP, with a
reconciliation to U.S. GAAP.

REVENUES AND EXPENSES

Net sales represent the sale of finished products, less contractual
allowable rebates, incentives, fees and allowance for estimated returns. These
rebates are provided to distributors for the resale of products in specific
volumes to specified end-user customers, and fees are provided to GPOs based on
sales made to their members. An allowance is established for estimated returns
based on historical return patterns and estimated future returns. Cost of goods
sold includes all costs to manufacture or purchase finished
20
<PAGE> 25

products, plus related costs associated with freight to the primary distribution
facility and customs duty. Selling, general and administrative expenses include
salaries for sales and marketing staffs, and other related expenses such as
sales commissions and costs associated with travel, trade show participation and
advertising, salaries for administrative and information technology staffs, and
related expenses for travel, insurance, facilities, consulting and professional
fees. Corporate administration expenses of Ansell Group are allocated to
business segments using the percentage to sales method, while selling and
general expenses are actual for each segment. Research and development expenses
include salaries for research and development staffs and related expenses for
consulting, product development, testing and travel. The goodwill and brand name
amortization periods range from 20-40 years.

At various times during the last several years Ansell Group entered into
foreign exchange hedge contracts to partially cover the translation of foreign
sales and costs into Australian dollars. These hedging transactions were
designed to hedge exchange rate risk against the Australian dollar, the currency
in which the financial results of Ansell Group were reported. The period of
these contracts have usually spanned 1 to 18 months.

TAXATION

We will be subject to taxation in many jurisdictions throughout the world.
Our effective tax rate and tax liability will be affected by a number of
factors, such as the amount of taxable income in particular jurisdictions, the
tax rates and tax holidays in such jurisdictions, tax treaties between
jurisdictions, the extent to which we transfer funds between jurisdictions and
income is repatriated and future changes in law. Generally, the tax liability
for each legal entity is determined either on a non-consolidated basis or on a
consolidated basis only with other entities incorporated in the same
jurisdiction, in either case without regard to the taxable losses of
non-consolidated affiliated entities.

Ansell Group's tax rate has included, and will continue to include, the
benefit from the location of several manufacturing facilities in countries where
the income generated by such facility receives long-term tax-free or reduced tax
status, including:

- Ansell Group has tax-free status with respect to the surgical and
examination glove facility in Sri Lanka until 2019,

- the Suretex group of companies, which includes facilities located in
Thailand and India, operates on a tax-free status until 2005,

- the condom manufacturing facility in Surat Thani, Thailand has tax-free
status until 2007 and also has a reduced tax rate through 2012, and

- the disposable synthetic gloves production facility located in Bangkok,
Thailand has tax-free status expiring in 2002.

We expect that our overall tax rate will remain below the U.S. statutory
tax rate for the foreseeable future; however, it will be higher than it was for
Ansell Group in fiscal 1999, as we expect proportionately more profits in the
United States than in other lower tax jurisdictions. We estimate that our
effective tax rate will be in the mid-20% range over the next several years.

ACQUISITIONS AND JOINT VENTURES

During the three fiscal years ended June 30, 1997, 1998 and 1999, Ansell
Group made the acquisitions and entered into the joint ventures described below
with funds provided by the Pacific Dunlop Group:

- November 1998, Suretex Limited was acquired for $26.4 million in cash.
Suretex primarily manufactures condoms in facilities located in Thailand
and India.

- September 1998, 74.8% of Kemwell International Limited was acquired for
$7.6 million in cash. Kemwell is a manufacturer of latex gloves located
in India.

21
<PAGE> 26

- September 1997, a joint venture was entered into for 50% of what is now
known as JK Ansell, Ltd. for $2.7 million in cash. JK Ansell manufactures
and markets condoms primarily in India, and

- April 1997, the assets of Golden Needles Knitting, Inc. were acquired for
$81.2 million. Golden Needles primarily manufactures protective gloves,
and its manufacturing facilities are mainly in North Carolina. Of the
purchase price, $71.7 million was paid in cash and the remaining $9.5
million is a note payable on April 23, 2000.

PENDING ACQUISITION

On October 1, 1999, we entered into an agreement to acquire for $97.6
million the medical glove business of Johnson & Johnson. The acquisition
includes patents, know-how, research and development and a modern manufacturing
facility in Shah Alam, Malaysia. Also included in the acquisition are certain
trademarks including, Micro-Touch, Allergard, Surgikos, Maxxus, Dispos-a-Glove,
Neutralon and Ultralon. In addition, a number of existing employees of Johnson &
Johnson are expected to continue as our employees. The funds for this cash
transaction are to be provided by the Pacific Dunlop Group as a capital
contribution. Under the terms of the transaction, Johnson & Johnson is to retain
any liabilities related to latex allergy glove litigation arising from or
related to gloves manufactured or distributed prior to the closing dates with
the exception of inventories acquired at the closing date, for which a sharing
agreement governs. The acquisition is expected to close in early 2000.

We expect to record goodwill and brand name amortization of approximately
$1.6 million annually in connection with the acquisition. Additionally,
approximately $0.3 million will be allocated to the revaluation of inventories
to fair market value and will be charged to cost of sales over the period in
which the inventories are sold, which is expected to be one to two quarters
following the closing.

SEASONALITY

Ansell Group's business has historically experienced a slight amount of
seasonal variation, with sales in the first fiscal quarter slightly lower than
the sales in the other fiscal quarters. This trend has a somewhat greater effect
on net income than on net sales due to the effect of fixed costs.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------------------------------------------------------------------------------
SEPTEMBER 30, DECEMBER 31, MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, MARCH 31,
1997 1997 1998 1998 1998 1998 1999
------------- ------------ --------- -------- ------------- ------------ ---------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales.................... $181.8 $178.9 $188.0 $186.5 $173.0 $185.7 $193.6
Net income................... 15.2 14.0 18.0 15.7 11.1 13.3 13.1
Net income as a percent of
net sales................... 8.4% 7.8% 9.6% 8.4% 6.4% 7.2% 6.8%

<CAPTION>
THREE MONTHS ENDED
------------------------
JUNE 30, SEPTEMBER 30,
1999 1999
-------- -------------
(IN MILLIONS)
<S> <C> <C>
Net sales.................... $186.1 $173.8
Net income................... 15.1 9.0
Net income as a percent of
net sales................... 8.1% 5.2%
</TABLE>

22
<PAGE> 27

RESULTS OF OPERATIONS

The following table sets forth, as a percentage of net sales, certain items
in Ansell Group's statements of operations for the periods indicated:

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEARS ENDED JUNE 30, SEPTEMBER 30,
--------------------------- -------------
1997 1998 1999 1998 1999
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Net sales............................................ 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of goods sold................................... 67.6 66.3 65.5 65.5 65.2
----- ----- ----- ----- -----
Gross profit....................................... 32.4 33.7 34.5 34.5 34.8
Costs and expenses:
Selling, general and administrative expenses......... 18.8 18.8 20.3 20.0 22.5
Research and development expenses.................... 1.6 1.2 1.1 1.2 1.3
Restructuring charges................................ -- -- 0.2 0.6 --
Amortization of intangibles.......................... 0.9 1.0 1.2 1.2 1.3
----- ----- ----- ----- -----
Income from operations............................. 11.2 12.7 11.8 11.5 9.8
Interest expense, net.............................. 3.7 2.9 2.9 2.8 3.5
Foreign currency transactions and other, net....... 0.2 (0.6) (0.2) (0.1) (0.7)
----- ----- ----- ----- -----
3.9 2.3 2.7 2.7 2.8
----- ----- ----- ----- -----
Income before taxes and minority interest.......... 7.3 10.4 9.1 8.8 7.0
Income taxes......................................... 1.5 1.3 1.5 1.4 1.4
Minority interests................................... 0.5 0.6 0.5 0.9 0.4
----- ----- ----- ----- -----
Net income......................................... 5.3% 8.6% 7.1% 6.4% 5.2%
===== ===== ===== ===== =====
</TABLE>

QUARTER ENDED SEPTEMBER 30, 1999 COMPARED TO QUARTER ENDED SEPTEMBER 30, 1998

Net Sales. Net sales for the quarter ended September 30, 1999 were $173.8
million compared to $173.0 million in the quarter ended September 30, 1998.
Increases in net sales in the Professional and Personal Healthcare segments were
offset by the impact of foreign currency adjustments resulting from the weakness
of the euro compared to the U.S. dollar.

In the Professional Healthcare segment, net sales increased 5.1% to $65.6
million for the quarter ended September 30, 1999 from $62.4 million for the
quarter ended September 30, 1998, with the growth primarily attributed to sales
generated from new products, offset by lower average selling prices on medical
examination gloves in response to lower priced competitive products and the
impact of foreign currency adjustments resulting from the weakness of the euro
compared to the U.S. dollar.

In the Occupational Healthcare segment, net sales decreased 3.9% to $87.4
million for the quarter ended September 30, 1999 from $90.9 million for the
quarter ended September 30, 1998, primarily due to an increase in sales in
non-U.S. currencies, primarily the euro, being more than offset by the impact of
the translation of such sales into the U.S. dollar.

In the Personal Healthcare segment, net sales increased 5.6% to $20.8
million for the quarter ended September 30, 1999 from $19.7 million for the
quarter ended September 30, 1998, primarily due to the growth in sales in Europe
offset in part by the impact of foreign currency adjustments resulting from the
weakness of the euro compared to the U.S. dollar.

Gross Profit. Gross profit was $60.5 million for the quarter ended
September 30, 1999 compared to $59.7 million for the quarter ended September 30,
1998.

In the Professional Healthcare segment, gross profit margins increased due
primarily to manufacturing efficiency and productivity gains, sales of higher
margin new products, and the increasing amount of sales of powder-free as
compared to powdered surgical and examination gloves. Ansell Group also
experienced a

23
<PAGE> 28

reduction in the average selling price of medical examination gloves in response
to lower priced competitive products, and the impact of foreign currency
adjustments resulting from the weakness of the euro compared to the U.S. dollar.

In the Occupational Healthcare segment, gross profit margins fell primarily
due to the impact of foreign currency adjustments resulting from the weakness of
the euro compared to the U.S. dollar.

In the Personal Healthcare segment gross profit margins fell due to higher
costs associated with outsourcing product while production is being transferred
from our facility in Dothan, Alabama to our facility in Surat Thani, Thailand
and the impact of foreign currency adjustments resulting from the weakness of
the euro compared to the U.S. dollar.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased 12.8% to $39.1 million for the quarter ended
September 30, 1999 from $34.6 million for the quarter ended September 30, 1998
primarily due to the increase in European distribution costs associated with the
relocation of our Professional Healthcare European distribution operation from
Germany to France, relocation costs of executives to the Paris office and legal
defense costs of the latex allergy product liability cases.

Research and Development Expenses. Research and development (which we call
science and technology in "Business") expenses were $2.2 million for the quarter
ended September 30, 1999 compared to $2.0 million for the quarter ended
September 30, 1998.

Amortization of Intangibles. Amortization of intangibles was $2.2 million
for the quarter ended September 30, 1999 compared to $2.1 million for the
quarter ended September 30, 1998.

Income from Operations. As a result of the above, income from operations
fell 14.6% to $17.0 million for the quarter ended September 30, 1999 from $19.9
million for the quarter ended September 30, 1998. Income from operations for the
Professional Healthcare segment, the Occupational Healthcare segment and the
Personal Healthcare segment were $9.5 million, $7.5 million and $0 in the
quarter ended September 30, 1999, respectively and $10.4 million, $8.0 million
and $1.5 million in the quarter ended September 30, 1998, respectively.

Net Interest Expense. Net interest expense increased to $6.1 million for
the quarter ended September 30, 1999 from $4.8 million for the quarter ended
September 30, 1998, due to greater levels of debt as a result of the fiscal 1999
acquisitions of Kemwell and Suretex. The weighted average balances of
non-interest bearing debt owed to affiliates that was outstanding during the
quarters ended September 30, 1998 and 1999 were $104.3 million and $100.7
million, respectively. If these balances bore interest at the average rate
charged to us by the Pacific Dunlop Group, net interest expense would have
increased by $1.9 million in each year. Additional intercompany debt was also
incurred in connection with the payment of dividends to the Pacific Dunlop Group
in the latter half of fiscal 1999.

Foreign Currency Transactions, net. Foreign currency transaction gains on
a pre tax basis of $1.2 million were recorded for the quarter ended September
30, 1999 compared to $0.1 for the quarter ended September 30, 1998. These gains
primarily related to the net effect of Ansell Group's foreign currency hedge
positions throughout the period. These hedging transactions were designed to
hedge exchange rate risk against the Australian dollar, the currency in which
the financial results of Ansell Group were previously reported.

Income Taxes. Ansell Group's effective tax rate was 20.3% for the quarter
ended September 30, 1999 compared to 16.2% for the quarter ended September 30,
1998, due to the resumption of tax payments in Malaysia, after a
government-sanctioned pause in the prior year.

FISCAL 1999 COMPARED TO FISCAL 1998

Net Sales. Net sales in fiscal 1999 remained essentially flat at $738.4
million compared to $735.3 million in fiscal 1998. Increases in net sales in our
Professional Healthcare and Personal Healthcare

24
<PAGE> 29

segments were offset by a decline in net sales in our Occupational Healthcare
segment. Significant contributors to the performance of fiscal 1999 from fiscal
1998 were acquisitions and new product introductions, offset by the loss of two
major customers, discontinuation of non-core lower margin parts of the business,
price reductions and currency fluctuations.

In the Professional Healthcare segment, net sales increased 2.8% to $264.2
million in fiscal 1999 from $257.1 million in fiscal 1998, principally as a
result of acquired businesses and new product introductions. Of the increase,
$6.7 million was attributable to net sales added as a result of the acquisition
in September 1998 of the Kemwell surgical gloves business. Ansell Group also
experienced growth from the introduction of new products and from increased
sales to our existing customer base. During 1999 these improvements were offset
in part by a reduction in the average selling price of medical examination
gloves in response to lower priced competitive products.

In the Occupational Healthcare segment, net sales decreased 6.0% to $377.5
million in fiscal 1999 from $401.8 million in fiscal 1998, primarily due to
lower sales in the emerging markets in Eastern Europe and Latin America and,
with respect to the acquisition of the Golden Needles knitting operations in
April 1997, the earlier than expected loss of two major customers and
discontinuation of non-core, lower margin parts of the acquired business.

In the Personal Healthcare segment, net sales increased 26.5% to $96.6
million in fiscal 1999 from $76.4 million in fiscal 1998. Of this increase,
$16.2 million was due to the acquisition in November 1998 of Suretex, with the
remainder attributable to the introduction of new products, primarily the full
year effect of the LifeStyles XtraPleasure condom and the LifeStyles Discs
packaging, as well as the continued penetration of new markets, particularly in
Europe.

Gross Profit. Gross profit increased 3.0% to $254.9 million in fiscal 1999
from $247.5 million in fiscal 1998, increasing to 34.5% of net sales in fiscal
1999 compared to 33.7% of net sales in fiscal 1998.

This increase was due primarily to the increasing margins in the
Professional Healthcare segment associated with new products and the increasing
sales of higher margin powder-free as compared to powdered surgical and
examination gloves. Partially offsetting these increases was a reduction in the
average selling price of our medical examination glove products in response to
lower-priced competitive products.

In the Occupational Healthcare segment the fiscal 1999 gross profit margins
were in line with the fiscal 1998 gross profit margins.

In the Personal Healthcare segment, gross profit margins were adversely
affected by the lower margins attributable to the acquired Suretex business.
This business participates in the low margin, public bid and tender business
operated by government departments and multinational public sector organizations
in developing countries. Ansell Group also incurred the increased costs in the
Personal Healthcare segment that it had anticipated due to outsourcing
production during the transition from U.S. manufactured product to the
lower-cost Thailand manufactured product at the facility in Surat Thani,
Thailand obtained with the acquisition of Suretex.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased 8.0% to $149.6 million in fiscal 1999 from
$138.5 million in fiscal 1998. Sales, general and administrative expenses were
20.3% of net sales in fiscal 1999 compared to 18.8% of net sales in fiscal 1998.

In the Professional Healthcare segment, selling, general and administrative
expenses increased from 17.2% to 20.2% of net sales, as a result of the
expansion of our global work force and the costs incurred in centralizing our
European operations in France. Ansell Group also incurred increased costs
relating to an increase in activity of latex litigation defense cases and in
updating global information technology systems.

In the Occupational Healthcare segment, selling, general and administrative
expenses increased from 15.9% to 16.8% of net sales, due to the expenses of
closing owned and managed warehousing facilities in Ohio and the transfer to a
third party managed facility. Additional costs were incurred during fiscal 1999
in updating global information technology systems.

25
<PAGE> 30

In the Personal Healthcare segment, selling, general and administrative
expenses were 38.5% of net sales in fiscal 1999, in line with such expenses in
fiscal 1998.

Research and Development Expenses. Research and development expenses
decreased 5.8% to $8.3 million in fiscal 1999 from $8.8 million in fiscal 1998.
As a percentage of net sales, research and development expenses were 1.1% in
fiscal 1999 compared to 1.2% in fiscal 1998.

Restructuring Charges. Restructuring charges of $1.3 million were incurred
in fiscal 1999 as a result of employee severance costs and related expenses
associated with implementing a manufacturing expansion and reconfiguration plan
and reorganization of certain administrative functions. See "-- Restructuring."

Amortization of Intangibles. Amortization of intangibles increased to $8.8
million in fiscal 1999 from $7.1 million in fiscal 1998 due to a full year of
amortization charges associated with the acquisitions of Kemwell and Suretex.

Income from Operations. Income from operations for the Professional
Healthcare segment, the Occupational Healthcare segment and the Personal
Healthcare segment were $46.9 million, $34.6 million and $5.4 million,
respectively, in fiscal 1999, respectively and $47.3 million, $37.8 million and
$7.9 million, respectively, in fiscal 1998, respectively.

Net Interest Expense. Interest expense remained steady at $23.9 million in
fiscal 1999 compared to $23.4 million in fiscal 1998. Interest expense was
offset by interest income of $2.8 million in 1999 and $2.4 million in 1998. We
had outstanding debt of $408.7 million at June 30, 1999 compared to $349.9
million at June 30, 1998, which principally increased in June 1999. The weighted
average balances of non-interest bearing debt owed to affiliates that was
outstanding during fiscal 1998 and 1999 was $106.0 million and $100.7 million.
If these balances bore interest at the average rate charged to us by the Pacific
Dunlop Group, net interest expense would have increased by $7.8 million and $7.5
million, respectively. Net interest expense was flat at $21.1 million in fiscal
1999 and 1998.

Foreign Currency Transactions, net. Foreign currency transaction gains on a
pre-tax basis were $2.0 million in fiscal 1999 and $4.4 million in fiscal 1998.
These gains primarily related to the net effect of Ansell Group's foreign
currency hedge positions throughout the period. These hedging transactions were
designed to hedge exchange rate risk against the Australian dollar, the currency
in which the Ansell Group's financial results were reported.

Income Taxes. Income taxes increased to $11.0 million in fiscal 1999 from
$9.2 million in fiscal 1998. Ansell Group's effective tax rate was 16.4% in
fiscal 1999, compared with 12.0% in fiscal 1998. In fiscal 1998 Ansell Group's
foreign operations reinstated the tax benefit of expenses that had previously
not been considered tax deductible. This recovery resulted in decreasing the
effective tax rate in fiscal 1998 by approximately 3.3%. Ansell Group's
effective tax rate was lower than the U.S. federal and state statutory rate, as
its operations have tax-free or reduced tax status in several jurisdictions
overseas.

FISCAL 1998 COMPARED TO FISCAL 1997

Net Sales. Net sales increased 9.8% to $735.3 million in fiscal 1998 from
$669.7 million in fiscal 1997. Significant contributors to the performance of
fiscal 1998 were inclusion of full year sales of Golden Needles, the
introduction of new products and currency fluctuation benefits, offset by our
decision to withdraw from a major Middle East medical glove tender, the
divestiture of our direct sales business in Sweden and the sale of our Mates
condom vending business.

In the Professional Healthcare segment, net sales were relatively stable at
$257.1 million in fiscal 1998 compared with $255.7 million in fiscal 1997.
Increased sales from new products were offset by the decision to exit customer
relationships deemed unprofitable, such as the transfer of the direct sales
business in Sweden to a third party distributor ($3 million), and the decision
to withdraw from a major medical glove tender in the Middle East ($7 million)
due to delayed payments on a previous tender.

In the Occupational Healthcare segment, net sales increased 17.5% to $401.8
million in fiscal 1998 from $342.0 million in fiscal 1997. The net sales
increase was primarily due to the full-year inclusion of

26
<PAGE> 31

the sales of Golden Needles ($55 million), and the introduction of new products,
including Hyflex and Touch 'N Tuff gloves, which offer improved dexterity and
grip in light and heavy duty applications, respectively, and Nitrilite gloves
for product protection in the critical environment market.

In the Personal Healthcare segment, net sales increased 6.2% to $76.4
million in fiscal 1998 from $72.0 million in fiscal 1997. The net sales increase
was primarily due to the introduction of new products including the LifeStyles
XtraPleasure condom and increased sales into Eastern Europe and Latin America,
partially offset by reduced sales as a result of the sale of our Mates condom
vending business.

Gross Profit. Gross profit increased 13.9% to $247.5 million in fiscal 1998
from $217.2 million in fiscal 1997, increasing to 33.7% of net sales in fiscal
1998 compared to 32.4% of net sales in fiscal 1997.

In the Professional Healthcare segment, gross profit margins increased
primarily due to increased sales of higher margin powder-free medical gloves,
the benefit of lower manufacturing costs from automation and process
improvements and the currency weakness throughout Asia.

In the Occupational Healthcare segment, gross profit margins increased
primarily due to the benefit of lower manufacturing costs following the transfer
of certain manufacturing operations from the United States to plants located in
Asia and the currency weakness throughout Asia.

In the Personal Healthcare segment, gross profit margins decreased from
fiscal 1997, reflecting the growth in lower-price sales in Eastern Europe, Latin
America and Asia, as Ansell Group increased sales in these emerging markets.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased 10.1% to $138.5 million in fiscal 1998 from
$125.8 million in fiscal 1997. Selling, general and administrative expenses were
18.8% of net sales in both fiscal 1998 and fiscal 1997.

In the Professional Healthcare segment, selling general and administrative
expenses increased from 17.0% to 18.7% of net sales, as Ansell Group increased
its investment in its global sales force and continued to invest in upgrading
information technology systems and legal defense costs of the latex allergy
product liability cases.

In the Occupational Healthcare segment, selling general and administrative
expenses decreased from 18.5% to 15.9% of net sales, due to substantially lower
administration and management expenses following the closure of the Atlanta
corporate office and relocation to New Jersey.

In the Personal Healthcare segment, selling general and administrative
expenses increased from 35.7% to 38.4% of net sales, primarily due to additional
advertising and promotional expenses in new markets.

Research and Development Expenses. Research and development expenses
decreased 15.4% to $8.8 million in fiscal 1998 from $10.4 million in fiscal
1997. As a percentage of net sales, research and development expenses were 1.2%
in fiscal 1998 and 1.6% in fiscal 1997, reflecting the completion of various
projects in each year.

Amortization of Intangibles. Amortization of intangibles increased to $7.1
million in fiscal 1998 from $5.9 million in fiscal 1997, due to a full year of
amortization charges associated with the acquisition of Golden Needles.

Income from Operations. Income from operations for the Professional
Healthcare segment, the Occupational Healthcare segment and the Personal
Healthcare segment were $47.3 million, $37.8 million and $7.9 million,
respectively, in fiscal 1998, and $41.1 million, $23.6 million and $10.4
million, respectively, in fiscal 1997.

Net Interest Expense. Net interest expense decreased to $21.1 million in
fiscal 1998 from $25.1 million in fiscal 1997 due a change in Pacific Dunlop
Group policy, whereby interest was no longer charged on certain intergroup
funding account balances beginning July 1, 1997. The weighted average balances
of non-interest bearing debt outstanding during fiscal 1997 and during fiscal
1998 were $40.0 million and $106.0 million, respectively. If these balances bore
interest at the average rate charged

27
<PAGE> 32

to us by the Pacific Dunlop Group, net interest expense would have been
increased by $3.0 million and $7.8 million for the respective periods.

Foreign Currency Transactions, net. Foreign currency transactions on a
pre-tax basis were $4.4 million of gains in fiscal 1998 and $1.7 million of
losses in fiscal 1997. These results primarily related to the net effect of
Ansell Group's foreign currency hedge positions throughout the period. These
hedging transactions were designed to hedge exchange rate risk against the
Australian dollar, the currency in which Ansell Group's financial results were
reported.

Income Taxes. Ansell Group's effective tax rate was 12.0% in fiscal 1998,
compared with 20.5% in fiscal 1997. During fiscal 1997, Ansell Group wrote off
tax benefits that management determined would not be recoverable in future
periods. This write-off resulted in increasing the effective tax rate in fiscal
1997 by approximately 8.3%. Ansell Group's effective tax rate was lower than the
U.S. federal and state statutory rate, as its operations had tax-free or reduced
tax status in several jurisdictions overseas.

RESTRUCTURING

In fiscal 1999, Ansell Group undertook a short-term restructuring
initiative regarding the locations of its manufacturing facilities. The
restructuring plan includes the transfer of certain manufacturing activities
from higher cost to lower cost regions, as well as capacity expansion in certain
manufacturing facilities. We expect to complete this initiative in fiscal 2002,
and we anticipate recording $10 million to $20 million in restructuring charges,
of which $1.3 million was recorded in fiscal 1999. The restructuring is intended
to improve our competitive and financial position by increasing our capacity and
automation and reducing unit costs on certain of our products. The
reconfiguration has also been designed to maximize the benefits from some of the
tax holidays in certain Southeast Asian countries.

LIQUIDITY AND CAPITAL RESOURCES

Historically, Ansell Group's cash flow from operations has been used to
repay acquisition indebtedness, fund capital expenditures and working capital
requirements, service debt and pay dividends to the Pacific Dunlop Group.

Net cash provided by operating activities was $91.9 million, $85.9 million
and $87.4 million in fiscal 1997, 1998 and 1999, respectively. Net income plus
non-cash items provided $62.0 million, $100.5 million and $90.3 million to
operating activities in fiscal 1997, 1998, and 1999, respectively, while working
capital provided or (used) $29.9 million, $(14.6) million and $(2.9) million in
fiscal 1997, 1998, and 1999, respectively. For the quarter ended September 30,
1998 net cash provided by operating activities was $9.0 million compared to $3.9
million for the quarter ended September 30, 1999. This reduction was due to
lower net income plus non-cash items of $16.0 million for the quarter ended
September 30, 1999 compared to $18.1 million for the quarter ended September 30,
1998 and, the larger increase in working capital by $12.1 million for the
quarter ended September 30, 1999 compared to $9.1 million for the quarter ended
September 30, 1998.

For fiscal 1997, net cash used in investing activities for capital
expenditures was $31.3 million compared to $34.0 million in fiscal 1998 and
$57.9 million in fiscal 1999. Capital expenditures are primarily for machinery,
equipment and the purchase, modification and expansion of facilities. The
increase in capital expenditures in fiscal 1999 over fiscal 1998 and fiscal 1997
was largely attributed to the restructuring plan, specifically the expansion of
Professional and Occupational Healthcare glove manufacturing capacity and the
commencement of the installation of additional Personal Healthcare condom
manufacturing capacity. We anticipate capital expenditures in the $35 million to
$40 million range per year for the next two fiscal years, which includes
expenditures expected to be incurred in connection with our manufacturing
expansion and facility conversion program.

In addition, the last three fiscal years, Ansell Group made acquisitions
with an aggregate purchase price of $117.9 million, not including the pending
acquisition of the medical glove business of Johnson & Johnson. These
acquisitions were funded by borrowings primarily from the Pacific Dunlop Group.

28
<PAGE> 33

At September 30, 1999, Ansell Group had total borrowings of $445.8 million
and cash and cash equivalents of $84.8 million, representing net borrowings of
$361.0 million. Over 90% of the borrowings at September 30, 1999 were operating
advances from the Pacific Dunlop Group. Included in total borrowings is $9.5
million owing to the seller of the Golden Needles business, which was acquired
in 1997 for $81.2 million. $9.5 million, which bears interest at prime rate, is
payable on April 23, 2000. Also included in total borrowings is a Belgian
revolving line of credit of $15.4 million payable through December 31, 1999 at
an interest rate of 3.75%. The Belgian revolving line of credit is expected to
be renewed on similar terms through December 31, 2000. For fiscal 1997, 1998,
1999 and the quarter ended September 30, 1999, Ansell Group's weighted average
rates of interest on borrowings were 8.9%, 7.5%, 7.4% and 6.8%, respectively.

During fiscal 1999, Ansell Group paid dividends to the Pacific Dunlop Group
totaling $68.2 million compared to $15.0 million and $9.5 million in fiscal 1998
and fiscal 1997, respectively. No dividends were paid in the quarters ended
September 30, 1998 or 1999. The capital contributions from affiliates are made
in connection with Ansell Group acquisitions.

As part of our reorganization, certain members of the Pacific Dunlop Group
will be issued shares of our common stock in consideration for Ansell Group
businesses and to repay borrowings. Therefore, immediately following the
reorganization, after taking into account the $97.6 million capital contribution
by Pacific Dunlop Group to acquire the medical gloves business of Johnson &
Johnson, we expect to have total borrowings of $210 million, including the $9.5
million of debt payable to the seller of the Golden Needles business, and cash
and cash equivalents of $10 million.

Following our reorganization we intend to continue to source our borrowings
primarily from the Pacific Dunlop Group through a new $200 million revolving
credit facility. We estimate $174.4 million of the borrowings referred to above
will be drawn from this facility and $35.6 million will continue to be borrowed
from third party sources. Under the $200 million revolving credit facility, we
can borrow under a prime rate tranche or a LIBOR tranche. The prime rate tranche
bears interest at prime rate as announced by J.P. Morgan and can be prepaid on
any business day. The LIBOR tranche bears interest at the 90 day LIBOR plus
0.75% and can only be prepaid on the last day of a quarter. If we can borrow in
currencies other than U.S. dollars, the interest rates for the different
tranches will be determined by Pacific Dunlop Limited in good faith at rates
equivalent to those described above for the currency that we are borrowing.

Changes in exchange rates between the currencies in which we generate cash
flow and the currencies in which our borrowings are denominated will affect our
liquidity. We will seek to denominate the non-U.S. dollar denominated borrowings
under the credit facility in currencies in which we generate cash flow or
conduct significant operations to lessen the effect of currency exchange rates
on our liquidity and net income.

IMPACT OF ACCOUNTING STANDARDS ISSUED BUT NOT YET ADOPTED

In June 1999, the Statement of Financial Accounting Standards No. 137
("SFAS No. 137"), "Accounting for Derivative Instruments and Hedging
Activities -- Deferral of Effective Date of FASB Statement No. 133", was issued.
This statement amended the effective date of the application of Statement for
"Derivative Instruments and Hedging Activities" to all fiscal quarters of all
fiscal years beginning after June 15, 2000. SFAS No. 133 revises the accounting
for derivative instruments. We have not yet analyzed the impact of this
pronouncement on the combined financial statements.

YEAR 2000

We have established teams to identify and correct Year 2000 issues.
Information technology systems with non-compliant code have been modified or
replaced with systems that are Year 2000 compliant. Similar actions were taken
with respect to systems embedded in manufacturing and other facilities. The
teams are also charged with investigating the Year 2000 readiness of suppliers,
customers and other third parties and with developing contingency plans where
necessary.

29
<PAGE> 34

Key information technology systems and systems embedded in manufacturing
and other facilities have been inventoried and assessed for compliance, and
detailed plans are in place for required system modifications or replacements.
Remediation and testing activities are substantially complete with more than 98%
of the systems already compliant. Independent consultants are monitoring
progress against remediation programs and performing tests at certain key
locations. In addition, the progress of the programs is also monitored by senior
management and the board of directors of Pacific Dunlop Limited.

Our most significant exposure arises from our dependence on high volume
transaction processing systems, particularly for production scheduling,
inventory cost accounting, purchasing, customer billing and collection, and
payroll. Corrective actions to these applications have been completed.

We have identified critical suppliers, customers and other third parties
and have surveyed their Year 2000 remediation programs. Risk assessments and
contingency plans, where necessary have been developed.

Incremental costs directly related to Year 2000 issues are estimated to be
$1.2 million, of which $1.1 million was spent during fiscal 1999. Approximately
75% of the total estimated spending represents costs to modify existing systems.
This estimate assumes that we will not incur any costs on behalf of our
suppliers, customers or other third parties. These costs will not necessarily
increase our normal level of spending on information technology due to the
deferral of other projects to enable us to focus on Year 2000 remediation.

Contingency plans for Year 2000 related interruptions have been developed
and include, but are not be limited to, emergency backup and recovery
procedures, replacement of electronic applications with manual processes,
identification of alternate suppliers and an increase in raw material and
finished goods inventory levels.

Our most likely potential risk is a temporary inability of suppliers to
provide supplies or raw materials or of customers to pay on a timely basis.

Our Year 2000 efforts are ongoing and our overall plan, as well as the
consideration of contingency plans, will continue to evolve as new information
becomes available. While we anticipate no major interruption to our business
activities, that will depend, in part, on the ability of third parties to be
Year 2000 compliant. Although we have implemented the actions described above to
address third party issues, we have no direct ability to ensure compliance
action by such parties. Accordingly, while we believe our actions in this regard
should have the effect of lessening Year 2000 risks, we are unable to eliminate
such risks or to estimate the ultimate effect of Year 2000 risks on our
operating results.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our primary market risks are for foreign currency exchange rates and
commodity prices.

FOREIGN CURRENCY EXCHANGE RATE RISK

We use a variety of strategies, including foreign currency forward
contracts, to minimize or eliminate foreign currency exchange rate risk
associated with substantially all of our foreign currency transactions
denominated in other than U.S. dollars.

We use sensitivity analysis to assess the market risk associated with our
foreign currency transactions. Market risk is defined here as the potential
change in fair value resulting from an adverse movement in foreign currency
exchange rates. A 10% adverse movement in foreign currency rates would result in
a net loss of $19.8 million in fiscal 1999 compared with $2.6 million in fiscal
1998 on our foreign currency forward contracts.

COMMODITY PRICE RISK

We are subject to market risks with respect to commodities because our
ability to recover increased costs through higher pricing may be limited by the
competitive environment in which we operate.
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<PAGE> 35

The two commodities which historically represent our largest raw material
component of cost of goods sold (excluding outsourced commodity products which
we package and resell) are latex and yarn. Latex, including both natural latex
and synthetic latex, and yarn represented approximately 7% and 5%, respectively,
of our cost of goods sold in fiscal 1999.

When we consider it advantageous to do so, we purchase latex in the forward
market by entering fixed price contracts for future supply by growers. These
contracts are typically for physical delivery 6 to 12 months from the date of
entering into the contract. We entered into a forward fixed price contract in
the quarter ended September 30, 1999.

MINORITY INTERESTS

We wholly own all of our worldwide operations with the exception of
operations in India and some of our operations in Malaysia. Listed below are our
subsidiaries where we own less than 100% of the outstanding shares. The other
shareholder in our Malaysian subsidiaries is Permodalan Nasional Berhad, which
is a Malaysian government investment body.

<TABLE>
<CAPTION>
ANSELL THIRD PARTY
OWNERSHIP OWNERSHIP THIRD PARTY SHAREHOLDERS
--------- ----------- --------------------------
<S> <C> <C> <C>
INDIA
Kemwell International Limited............. 74.8% 25.2% Bagaria Group/Bansal Group
JK Ansell Ltd............................. 50.0 50.0 Raymond Limited
MALAYSIA
Ansell Malaysia Sdn Bhd................... 75.0 25.0 Permodalan Nasional Berhad
Ansell Medical Sdn Bhd.................... 75.0 25.0 Permodalan Nasional Berhad
Ansell N.P. Sdn Bhd....................... 75.0 25.0 Permodalan Nasional Berhad
</TABLE>

Minority interests' share of the net income of Ansell Group in fiscal 1997,
1998 and 1999 and the quarter ended September 30, 1999 was $3.1 million, $4.3
million, $3.5 million and $0.7 million, respectively.

31
<PAGE> 36

BUSINESS

OVERVIEW

We are a global leader in the design, development, manufacture and
marketing of protective gloves and condoms. Our operations are organized into
three business segments:

- Professional Healthcare (medical examination and surgical gloves),

- Occupational Healthcare (industrial and consumer gloves), and

- Personal Healthcare (condoms marketed in both retail and public health
channels).

We manufacture our products in Asia, North America and the United Kingdom
and market these products worldwide. In fiscal 1999, we sold products in more
than 100 countries. The Americas, Europe and Asia Pacific accounted for
approximately 56%, 32% and 12%, respectively, of our net sales in fiscal 1999.

We were founded in 1905 by Eric Ansell in Melbourne, Australia and acquired
by Dunlop Australia Limited (now Pacific Dunlop Limited) in 1969. Pacific Dunlop
Limited is a diversified multinational marketer and manufacturer of consumer and
industrial products, based in Australia. In 1997, we relocated our executive
offices from Melbourne, Australia to Red Bank, New Jersey. Prior to this
offering, Pacific Dunlop Limited indirectly owned 100% of our common stock.

We compete in the medical glove, the industrial and consumer glove and the
condom markets which we estimated to be $1.5 billion, $3.6 billion and $750
million on a global basis, respectively, in 1998. We believe that we have the
leading global market share position in, and the broadest product range of,
protective gloves serving the healthcare and occupational sectors of the barrier
protective market. We also believe that we are the world's second largest
manufacturer and marketer of condoms. In fiscal 1999, our net sales in the
Professional Healthcare, Occupational Healthcare and Personal Healthcare
divisions were 36%, 51% and 13%, respectively.

Our products are made predominantly of natural and synthetic latex that
share common manufacturing processes and polymer dipping technologies. We have
developed proprietary formulations and related manufacturing processes that
enable us to produce many different types and styles of high quality gloves and
condoms. We maintain a flexible supply and logistics infrastructure in order to
switch production between various products based on market demand.

We are an innovator in the design and manufacture of protective gloves and
condoms. In each of the past three years more than 15% of our net sales have
come from products that have been on the market for three years or less and that
we developed internally. We believe that we are well positioned to capitalize on
the technology transfer opportunities that exist among our three business
divisions, our recent acquisitions and our manufacturing facilities.

In addition to our success with new product development, we have been an
active acquiror of businesses within the protective barrier products industry.
We have pursued acquisitions in order to expand and augment our main product
lines, provide additional distribution channels, add new technologies to enhance
our manufacturing capabilities and to enter new geographic markets.

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<PAGE> 37

The following table highlights our strategic acquisitions over the last
three years:

<TABLE>
<CAPTION>
BUSINESS ACQUIRED PRIMARY
(DATE) BUSINESS SEGMENT/ MANUFACTURING PRIMARY SALES
(TRANSACTION COST) PRODUCT REGIONS REGIONS TRANSACTION BENEFITS
- ---------------------- ------------------- ------------------- ------------------- -------------------------------
<S> <C> <C> <C> <C>
Medical glove business Professional Malaysia United States - Brand and product expansion
of Johnson & Johnson Healthcare/ Europe - Expanded science and
(expected early 2000) Surgical and Latin America technology capability
($97.6 million) examination gloves - Modern manufacturing facility

Suretex Limited Personal Thailand Developing - Modern manufacturing
(November 1998) Healthcare/ India countries facilities
($26.4 million) Condoms - Low cost export capacity
- Expansion capability for
global production
- Established access to public
sector bid/tender market

Kemwell International Professional India Africa - Low cost export capacity
Limited -- 74.8% Healthcare/ South America - Expansion capability for
(September 1998) Low-cost surgical Europe global production
($7.6 million) gloves Asia - Platform to access the Indian
domestic surgical glove
market

JK Chemicals, Personal India India - Brand expansion with the
Limited -- 50% Healthcare/ addition of KamaSutra
(September 1997) Condoms - Low cost export capacity
($2.7 million) - Established access to Indian
government bid/tender market

Golden Needles Occupational United States United States - Integration of automated
Knitting, Inc. Healthcare/ Europe knitting technology with our
(April 1997) Automated seamless latex dipping technology for
($81.2 million) knitted industrial ergonomic new products
gloves using - U.S. market leading position
engineered yarns in knitted, cut-resistant
gloves
- Platform to expand product
offerings
</TABLE>

STRATEGY

We intend to be the leading designer, developer, manufacturer and marketer
of protective gloves, condoms and other healthcare barrier protective products
worldwide. In order to achieve our objective, we will continue to:

- Offer a Broad Range of Products and Brands. We intend to continue to
expand our product lines and brands across all three of the market
segments in which we operate. We will look for opportunities that will
enable us to leverage our existing manufacturing, technology and
marketing capabilities as we develop new products or acquire new
businesses. We believe that our ability to offer a broad spectrum of
products to our customers affords us a competitive advantage.

- Focus on Value Added, Higher Margin Branded Products. We will continue to
design, develop, manufacture and market premium products that emphasize
comfort, quality and brand recognition. In the Professional Healthcare
glove market we will focus on advanced, form-fitting, powder-free
examination and surgical gloves. In the Occupational Healthcare glove
market we will focus on premium products for the high specification clean
room environment, the food and service industry and the general
manufacturing industry. In the Personal Healthcare market we will focus
on convenient packaging and enhanced pleasure and branded products.

- Leverage Research and Development. We intend to continue to invest in
research and development, which we call science and technology, in order
to augment our product offerings. We

33
<PAGE> 38

have a history of new product development and innovation. We are
currently focusing our product innovation on developing gloves using
non-latex materials for both medical and critical environment (sterile or
clean room) applications, ergonomically designed polymer coated seamless
liner industrial gloves, chlorine and powder-free, low allergenic coated
medical gloves, as well as food-safe gloves. We intend to use our
research and development platform to design and manufacture products
that, with limited modifications, will have application in both our
Professional Healthcare segment and Occupational Healthcare segment and
share common materials and manufacturing technologies.

- Augment Internal Growth with Acquisitions. We intend to continue to
pursue acquisitions in order to expand into related product areas and new
markets. Optimal acquisition candidates would also provide synergy with
our manufacturing, marketing, sales and science and technology
capabilities. Our financial position provides an attractive platform to
grow through strategic transactions.

- Leverage Manufacturing Where We Have a Technological Advantage. We intend
to continue to develop innovative manufacturing processes and facilities
that will improve quality while maintaining and improving efficiency and
safety. We plan to remain flexible in our ability to manufacture multiple
products in the same facilities and selectively outsource certain
products where we can do so more cost effectively than manufacturing them
ourselves or where we have a temporary lack of capacity.

- Focus on Customer Service. We will continue to enhance customer
satisfaction by focusing on and improving customer service. We will
continue to emphasize educational programs and services designed to
assist customers and end users in effective and efficient product
selection. We will continue to work with customers to identify
opportunities for product design improvements and to respond in a timely
manner to customer needs.

INDUSTRY OVERVIEW

We estimate that the aggregate market size for the three business segments
in which we compete was $5.8 billion in 1998. Historically, these business
segments have been characterized by moderate growth, but we believe that there
is higher growth potential in several niche segments and geographic markets. We
believe that we are well positioned to take advantage of these niche
opportunities while remaining competitive in our more mature product lines and
markets.

PROFESSIONAL HEALTHCARE DIVISION

Based on our estimates, we believe that in 1998 the total global market was
$900 million for medical examination gloves and $600 million for surgical
gloves. Based on data from IMS Health Incorporated, Strategic Dental Marketing
Inc. and Healthcare Products Information Systems, Inc., we estimate that in 1998
the total U.S. market was $650 million for medical examination gloves and $220
million for surgical gloves. Sales in the U.S. market are divided between the
hospital and alternate care markets, which we estimate to be approximately 55%
and 45%, respectively, for medical examination and surgical gloves.

The growth in these markets is largely attributable to ongoing concerns
among the general public and healthcare professionals regarding the increased
risk from the transmission of infectious diseases, particularly the human
immunodeficiency virus, or HIV, and the hepatitis B virus. In 1987, the Centers
for Disease Control issued U.S. guidelines that anyone coming into contact with
bodily fluids should use universal precautions, including wearing protective
gloves. Furthermore, since 1991 Occupational Safety and Health Administration
U.S. regulations have required that protective gloves be worn when it can be
reasonably anticipated that an employee will have contact with blood, saliva or
other potentially infectious substances. These workers include hospital, clinic
and dental office employees, persons engaged in paramedic services and those who
work in nursing homes, drug and alcohol treatment facilities and funeral

34
<PAGE> 39

homes. Healthcare professionals routinely wear and frequently replace protective
gloves throughout the day. The growth in this market has also resulted from
general public awareness of such infectious diseases, population growth, as well
as more stringent regulatory requirements and regulations in the medical field.
The increased use of protective gloves has led to greater demand for more
comfortable and higher quality gloves.

The Professional Healthcare market is subject to pricing pressures and the
continual need to innovate and produce higher quality, more comfortable products
in order to maintain market share. Although product volumes in the Professional
Healthcare market have been increasing overall, prices of less
technologically-advanced gloves have been falling, creating modest overall
growth in this market. Pricing of medical examination and surgical gloves may
also be influenced by reimbursement policies and regulations of government
health administration authorities, private health insurers and other
organizations. Such third-party payors are increasingly challenging the price of
medical products and services.

OCCUPATIONAL HEALTHCARE DIVISION

We estimate that in 1998 the total global industrial and consumer glove
market was approximately $3.6 billion. Although we do not participate in the
cotton and leather segment of the global industrial and consumer protective
glove market, many cotton and leather protective gloves are being replaced with
higher value, ergonomically superior industrial and consumer gloves utilizing
synthetic dipped and coated design materials. We estimate that in 1998 the total
U.S. industrial and consumer glove market was $1.3 billion, of which we believe
that the synthetic and seamless knitted segment accounted for $800 million or
approximately 60% of that market.

Significant growth opportunities exist in the critical environment market
sector and food and food service industry. The growth in these markets is
expected to result from increased regulatory legislation around the world
designed to protect workers against occupational hazards and increased concern
for protecting products from contamination by workers and the environment. This
market remains highly fragmented with many suppliers. We believe that many of
these suppliers will be candidates for consolidation in the future.

We estimate the worldwide critical environment market grew at approximately
10% per year between 1996 and 1998, based on units sold, due to growing demand
for improved synthetic dipped gloves among users in the semiconductor,
electronics, biotechnology, pharmaceutical and research segments of the high
technology and scientific markets and specific clean room environments within
general industrial manufacturing. Increasingly, the manufacturing process in
these industries takes place in clean rooms and requires gloves that minimize
the amount of particles on their surfaces to prevent the gloves from
contaminating the product, or the worker from contaminating the work
environment. The increasing demand for micro-electronic components that require
extremely clean manufacturing conditions is expected to continue to drive this
growth.

Like critical environment gloves, products for the food and food service
market are designed to protect both the worker from the product and the product
from worker contamination. Stringent new regulatory requirements in this
industry, particularly in Europe, together with heightened awareness of
contamination of food products by workers, are expected to continue to drive the
growth of this industry and demand for our products.

The growth in demand in the Occupational Healthcare market is expected to
be offset by a number of factors such as increased automation, which decreases
the employed workforce and, therefore, the number of gloves required; multiple
re-use and washing of gloves, which decreases the purchase of new gloves; and
increased globalization of buyers and large specialized buying groups, which
results in price compression.

35
<PAGE> 40

PERSONAL HEALTHCARE DIVISION

We estimate that in 1998 the total global condom market (excluding the
Peoples Republic of China) was approximately $750 million with the U.S. market
accounting for $170 million. We believe that growth in this market will continue
due to ongoing concerns regarding HIV and other sexually transmitted diseases,
unwanted pregnancies and global population control. In addition, the shift in
distribution channels from traditional outlets, such as pharmacies, to mass
merchandisers and convenience stores, as well as the emphasis of marketing
efforts on packaging improvements, the pleasure aspects of sex and increased
brand awareness, are expected to contribute to growth in this market.

PRODUCTS

We are well positioned to address current industry dynamics with our broad
portfolio of products, geographic diversity and product development strategy. We
design, develop, manufacture and market products through our Professional
Healthcare division (medical examination and surgical gloves), Occupational
Healthcare division (industrial and consumer gloves and, to a limited degree,
protective clothing) and Personal Healthcare division (condoms).

The following charts show the relative allocation of net sales and
operating income (calculated as earnings before interest and taxes) for fiscal
1999 from each of our three business segments:

[EDGAR Representation of Pie Charts]

<TABLE>
<CAPTION>
Total Net Sales $738.3 million Total Income from Operations $86.9 million

<S> <C> <C>
$264.2 million Professional Healthcare $34.6 million
35.8% 39.8%

$377.5 million Occupational Healthcare $46.9 million
51.1% 54.0%

$96.2 million Personal Healthcare $5.4 million
13.1% 6.2%
</TABLE>

Net Sales and Operating Income In Fiscal 1999 by Business Segment

PROFESSIONAL HEALTHCARE DIVISION

Net sales of our medical examination gloves accounted for $124 million or
14% of the global medical examination glove market and sales of our surgical
gloves accounted for $140 million or 23% of the global surgical glove market.
Based on our estimates, the size of such markets in 1999 were $900 million and
$600 million, respectively. Our sales of medical examination gloves reflects
limited penetration of the alternate care sector of that market. Historically,
we have not focused on the alternate care sector, which we estimate represents
approximately 45% of the total U.S. medical examination glove market. We are now
pursuing a strategy to gain a greater share of the alternate care market by
leveraging our existing product base through additional distribution channels.

The various styles of surgical gloves that we sell include standard lightly
powdered, latex powder-free, synthetic neoprene and polyurethane powder-free,
orthopedic and micro-optic surgical gloves. Surgical gloves are specifically
developed for use in the operating theater. Most of our surgical gloves are sold
in

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<PAGE> 41

sterilized pairs that are opened immediately prior to use. Our various styles of
medical examination gloves include standard lightly powdered, latex powder-free,
synthetic vinyl, synthetic nitrile and sterile. Most of our examination gloves
are sold in boxes of large quantities of ambidextrous gloves. Examination gloves
are generally less expensive than surgical gloves which require sterile
packaging and have enhanced features. Physicians, dentists, dental hygienists,
nurses and other healthcare professionals typically use and dispose of several
examination gloves each work day to help reduce the risk of cross-infection
during the examination and treatment of patients.

We believe that we are one of the largest manufacturers and marketers of
medical examination and surgical gloves. Our medical examination and surgical
gloves are marketed under the brands of Ansell and Ansell Perry and under
specific product brands such as Gammex, Conform, Encore, NuTex, MicrOptic, X-AM,
Synsation, DermaClean and Nitra-Touch. Through the pending acquisition of the
medical glove business of Johnson & Johnson, we will add the following brand
names: Micro-Touch, Maxxus, Neutralon, Ultralon, Surgikos, Dispos-a-Glove and
Allergard.

We are a premium quality manufacturer and innovator in the medical glove
market with a long history of developing products that use advanced materials to
meet the needs of our customers. The following table illustrates selected
product innovations introduced over the last three years by our Professional
Healthcare division:

<TABLE>
<CAPTION>
BRAND NAME PRODUCT INNOVATION
- ---------- ------- ----------
<S> <C> <C>
1999
Encore Acclaim Latex surgical glove Powder-free, damp-hand donnable, smooth
finish
Nitra-Tex EP Nitrile extra-protection First powder-free, extra long, added
exam glove protection nitrile exam glove
Sterile Synsation Vinyl exam glove Powder-free, sterile, high tensile
Sterile Nitra-Touch Nitrile exam glove Powder-free, sterile, nitrile exam glove
DermaClean PFC Latex exam glove Powder-free, no secondary chlorination,
improved grip
1998
Derma Prene PF Neoprene surgical glove Powder-free, damp-hand donnable
Elite Polyurethane surgical glove First powder-free, polyurethane surgical
glove
Encore MicrOptic Micro-thin surgical glove Powder-free, micro-thin surgical glove
Nitra-Tex Nitrile exam glove Powder-free, textured finish
1997
Encore Orthopedic Latex surgical glove First powder-free, orthopedic glove
Synsation Vinyl exam glove Powder-free, high tensile glove
Nitra-Touch Nitrile exam glove First powder-free, synthetic glove approved
for use with chemotherapy
</TABLE>

OCCUPATIONAL HEALTHCARE DIVISION

As regulations and standards in the Occupational Healthcare segment
intensify, the manufacturing and technological experience and expertise we have
achieved in our Professional Healthcare division has been employed in the design
and manufacture of products for the growth sectors of our Occupational
Healthcare division. We believe that increased regulations and standards in the
Occupational Healthcare division may pose technological barriers to existing
competitors and potential newcomers.

We estimate that in 1998 the total global industrial and consumer glove
market was approximately $3.6 billion. We believe we are the global market
leader in the manufacturing and marketing of synthetic and seamless knitted
gloves portion of the market, servicing the industrial and consumer protective
glove segment of the market in which we participate. Our net sales in this
market accounted for $377.5 million. We also

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<PAGE> 42

have a global leadership position in the manufacturing and marketing of
synthetic dipped and coated protective gloves and seamless automatically knitted
gloves using engineered yarns for use in the industrial glove market. These
gloves are principally branded Ansell Edmont. We also manufacture consumer
gloves for sale primarily in Europe, the United States and Australia under the
Ansell brand, as well as various private labels. As a result of our automated
knitting and dipping processing technologies, we are one of only a few glove
manufacturers capable of developing various types of specialized light,
cut-resistant and ergonomically designed gloves using engineered yarns such as
kevlar and spectra for many kinds of industrial and commercial applications. Our
proprietary seamless knitting technology and engineered yarns know-how enables
us to produce finished high performance industrial gloves and liners for polymer
coated industrial gloves.

We are a premium quality manufacturer and innovator in the Occupational
Healthcare market with a long history of developing innovative products that use
advanced materials to meet the needs of our customers. The following table
illustrates selected product innovations introduced over the last three years by
our Occupational Healthcare division:

<TABLE>
<CAPTION>
BRAND NAME INDUSTRY SECTOR INNOVATION
- ---------- --------------- ----------
<S> <C> <C>
1999
Nitrilite Silky Critical Environment Improved flexible formulation and ergonomic
shape to provide better dexterity and
electrostatic discharge properties
Foam Lined HHG Food and Food Service Foam lining technology provides improved
Consumer Market perspiration absorption and protection
against hot and cold in light duty
applications
ProFood Food and Food Service Range of food-safe gloves designed and
formulated to meet heightened food handling
and processing industry hygiene standards
1998
Hyflex General Manufacturing Light-duty seamless liner dipped in patented
Consumer Market nitrile foam formulation
Bull-hyd General Manufacturing Heavy-duty seamless liner dipped in patented
nitrile foam formulation
1997
Barrier General Manufacturing Highly chemical resistant glove (multi-layer
film with improved ergonomic properties)
that provides better comfort and fit
Thermaprene Food and Food Service Thermal liner, inside a neoprene shell with
heat and liquid-proof resistance
Touch n' Tuff Food and Food Service Thin nitrile technology that provides a
General Manufacturing superior fit for a non-latex glove
</TABLE>

Our protective gloves are sold to occupational safety supply companies,
large industrial supply companies and various governmental agencies principally
in the United States and Europe. The global market for occupational healthcare
gloves is highly fragmented and has many small local competitors. Given the
broad nature of the market, we have developed a focused strategy that
concentrates on the following specific market sectors: critical environment,
food and service, general manufacturing and the consumer market.

Critical Environment

The critical environment market sector includes semiconductor, electronics
and other high technology manufacturers who require a controlled atmosphere or
clean room environment. Our critical environment

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<PAGE> 43

gloves protect the worker from the manufacturing process and protect the
manufactured product from contamination by the worker or the environment. The
rapid growth in demand for micro-electronic components which require extremely
clean manufacturing conditions, as well as the need for non-shedding gloves, are
expected to continue to drive growth in this market. We intend to expand our
efforts to develop new gloves specifically designed for this market, such as our
Nitrilite and Accutech lines.

Food and Food Service

We offer a broad range of food-safe gloves developed exclusively for the
worldwide food processing and food service industries. Participants in this
industry are involved with the packing, processing, preparation and service of
various food products. The products that we market for this industry include the
following brands: ProFood, Duratouch, Versatouch, Conform and Food Mates.

General Manufacturing

The general manufacturing industry requires gloves designed to protect
workers from cuts, bruises, chemicals, temperature extremes and other
occupational hazards encountered in the work environment. The automotive and
durable goods industries are a large part of this market. We combine our
know-how in automatic seamless knitting of engineered yarns with our proprietary
polymer dipping technology to develop lighter, more comfortable and
task-specific gloves that address these industry needs. We manufacture and
market products under the following brand names for this industry: Hynit,
Hycron, Easyflex, Solvex, Bull-hyd and Hyflex.

Consumer Market

Light duty consumer application gloves are sold for both general household
tasks and the Do-It-Yourself market sectors. Gloves for household use are sold
to consumers primarily through traditional retail organizations, such as
supermarkets and drug stores. Gloves for the Do-It-Yourself market are sold
through specialist hardware and home improvement outlets. We view the consumer
glove market as a mature market having relatively low growth potential, with the
exception of the Do-It-Yourself market, which we expect will grow at a faster
rate. Our consumer gloves are sold under the Ansell and Ansell Edmont brands and
under private labels of various marketing organizations and retailers.

PERSONAL HEALTHCARE DIVISION

We estimate that in 1998 the global condom market (excluding the Peoples
Republic of China) was $750 million. Net sales of our condoms accounted for $96
million, or 13% of this market. We are a leading manufacturer and marketer of
branded condoms worldwide with significant presence in the United States,
Western Europe, India and Australia. We also sell branded and unbranded condoms
in the worldwide public sector bid/tender market, where condoms are supplied for
free or subsidized sale by population, health and social welfare programs,
mainly in developing countries. We also participate in the contract market
through sales of our branded condoms to government agencies in the United
States.

We have multiple condom lines in the Personal Healthcare division, with
several different product variations in each line. We continue to add new
products to provide additional options for our customers. We also use innovative
marketing, merchandising and packaging to further differentiate our products
from the competition. We manufacture and market a variety of condoms with
different flavors, colors, lubricants and spermicides, as well as specialized
shapes and textured features. Packaging is another important element in
marketing condoms, which is why we recently introduced Discs for our LifeStyles
brand. Discs is a thermoformed plastic tray with a peel back lid that we call a
"butter-pack." This package is easy to open and also helps ensure that the
condom is put on correctly each time.

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<PAGE> 44

We manufacture and market branded condoms worldwide, and we offer different
brands in various markets including the following:

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
MAIN MARKETS BRAND NAMES
------------ -----------
<S> <C> <C> <C>
United States and Canada.............................. LifeStyles, Contempo
Western Europe........................................ Benetton, LifeStyles, Manix, Primex
Eastern Europe........................................ LifeStyles, KamaSutra
United Kingdom........................................ Mates
Latin America......................................... Prime, Contempo, LifeStyles
Australia............................................. LifeStyles, Chekmate
India and Southeast Asia.............................. KamaSutra
- ----------------------------------------------------------------------------------------------------
</TABLE>

SALES AND MARKETING

Sales and marketing coverage in each of our business segments requires the
use of several channels in order to accommodate customer needs and effectively
cover the diverse industries and geographic regions we serve. We market our
products to wholesale distributors, medical buying groups, governments,
international aid agencies, institutions and retail chains either through our
over 400 person global direct sales force or, in certain countries, through
agents and distributors.

Our sales and marketing strategy across all our business segments is to
market to end-users in targeted market segments, quickly respond to new
opportunities and achieve rapid new product implementation. Our direct,
specialized sales representatives cover key growth segments through consultative
selling. We also conduct comprehensive survey programs to gauge customer
response and reaction to our products.

We participate in various workshops and educational programs relating to
worker protection in order to promote our products and educate healthcare
professionals and counselors in the appropriate use of our products. In
addition, we have clinical consultants in the United States, Canada and
Australia who work with customers and other end-users to provide advice
regarding clinical barrier protection, allergy management, cost reduction and
risk management. Our goal is to educate and provide the most recent information
to consumers of our products.

PROFESSIONAL HEALTHCARE DIVISION

Sales of Professional Healthcare products represented approximately 35.8%
of our net sales for fiscal 1999. Our marketing efforts in the Professional
Healthcare division focus principally on the hospital, medical laboratory and
dental markets. Sales to hospitals represented approximately 80% of the net
sales of our Professional Healthcare division during fiscal 1999, while sales to
medical laboratories, dental offices, veterinary offices and other clinics
accounted for the balance.

Our direct sales forces in the major markets of the United States, Canada,
Germany, the United Kingdom, France and Australia are responsible for sales of
our Professional Healthcare products in those countries. We generally use
regional and local distributors for sales of our medical gloves in countries
where our presence is less significant.

A substantial portion of our U.S. sales of Professional Healthcare products
are made through contracts with GPOs. GPOs accounted for 12.4%, 24.8%, 23.5% and
22.9% of our net sales of the Professional Healthcare segment in fiscal 1997,
1998, and 1999 and the quarter ended September 30, 1999, respectively. GPOs
evaluate and select suppliers based on several criteria, including price,
quality and consistent and reliable service. GPO contracts enable us to be
placed on a list of approved suppliers. Hospitals, clinical laboratories and
other facilities that are members of GPOs are required or, in some cases,
incentivized to purchase particular products from those designated approved
suppliers. We estimate that typical GPO membership compliance rates range
between 80-90% with respect to the purchase of medical gloves from approved
suppliers. We also have contracts with hospital buying groups which are

40
<PAGE> 45

similar to GPOs in that they seek to achieve economies of scale by aggregating
multiple hospitals' purchases from us.

On December 21, 1999, Novation, one of our top three GPOs in fiscal 1999
based on net sales, advised us that our contract for the supply of latex medical
exam gloves has been renewed. Moreover, we will be the only current latex exam
glove contract participant to have their status renewed, and there will be two
vendors on the new contract. The term of the contract is for three years with
two one-year extension options.

Final purchasing decisions by individual hospitals are customarily made by
a hospital staff committee which evaluates products based on quality criteria,
such as effectiveness, durability, comfort and avoidance of allergies, as well
as price and value. Our sales representatives or distributors work with hospital
personnel to ensure that our products are considered in the process and that
their comparative advantages are known by the committee. Our sales staff also
participate in healthcare industry trade shows to introduce prospective
customers to our products and to generate sales orders for distributors. We also
participate in various workshops and educational programs relating to healthcare
worker protection and skin disorders in order to promote our products and
educate the hospital and other personnel utilizing the products.

We plan to focus future marketing efforts on other healthcare professionals
in physicians' offices, nursing homes, outpatient clinics, surgical centers,
blood banks and other areas of the alternate-care market.

OCCUPATIONAL HEALTHCARE DIVISION

Sales of our Occupational Healthcare products represented approximately
51.1% of our net sales during fiscal 1999. We use distributors for virtually all
of our Occupational Healthcare products in all of our markets. In our major
markets, the United States, Canada, Germany, the United Kingdom, France, Italy
and Spain, these distributors are supported by our direct, specialized sales
representatives who are responsible for sales to major end users. We intend to
continue to increase the number of specialized sales representatives serving key
end users in selected markets.

Our specialized sales representatives assist distributors by training and
educating the distributors' sales forces with respect to our Occupational
Healthcare products through specific and proprietary educational programs,
training aids and literature on our products. They also spend a considerable
amount of time helping key end users identify and resolve occupational hazard
problems by conducting plant hand safety surveys and making recommendations for
specific gloves in particular work situations. This consultative and educational
approach reinforces our image of expertise and leadership with key end users and
distributors.

Sales of our consumer and Do-It-Yourself gloves are made directly to
distributors who purchase and brand our products with either an Ansell brand or
their own labels. The distributors then resell to the consumers through
traditional retail organizations such as supermarkets and drug stores. Gloves
for the Do-It-Yourself market are also sold through specialist hardware and home
improvement outlets.

PERSONAL HEALTHCARE DIVISION

Sales of our condoms represented approximately 13.1% of our net sales
during fiscal 1999. Sales of our retail branded condom products in North
America, the United Kingdom, France, Australia, India, Italy, Spain and Germany
are made primarily through our own sales force and, to a lesser extent, through
distributors and commissioned brokers. We use regional and local distributors
for sales of our retail branded condoms in other countries. In several European
countries and the United States, sales of our retail branded condoms are also
made in the public sector bid/tender market, where organizations, such as
Planned Parenthood and various government and non-government agencies, purchase
condoms for subsidized distribution to selected eligible groups within the
community.

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<PAGE> 46

We have had success in introducing our products into non-traditional retail
distribution channels, such as supermarkets, convenience stores, record stores,
vending machines, and through the internet. In the United States, sales of our
condoms are made directly to traditional and non-traditional retailers through
our own sales force, with support from commissioned brokers.

In certain markets where we do not have a leadership position for our
products, we rely on innovative brand strategies, such as the launch in 1998 of
our licensed Benetton brand condom in the European market, to achieve an initial
market position.

As part of our marketing program, we communicate at events throughout the
world with young consumers -- those people most at risk for sexually transmitted
diseases and unintended pregnancies. In the United States, we also offer free
product information and samples through our website at www.lifestyles.com. In
the United States and some other countries we have changed the advertising
emphasis of our branded products from the need for protection to the pleasure
aspects of sex. In many countries, we advertise on television, radio and print
media. We promote our products on college campuses and through educational and
event-type marketing. In Europe, Australia and Asia, we have several brands that
have been established over a number of years. Specific marketing strategies are
developed in other countries, in conjunction with our distributors and the
retail trade, aiming to leverage the same themes and concepts worldwide.

Additional sales of our branded and unbranded condoms are made through
competitive tenders or bids issued by government agencies, multinational public
sector organizations (such as the World Health Organization) and by
non-governmental organizations. The condoms are supplied through population,
health and social welfare programs, mainly in developing countries, and after
being purchased from us are generally distributed free or through subsidized
sale, by the relevant organization.

RESEARCH AND DEVELOPMENT (WHICH WE CALL SCIENCE AND TECHNOLOGY)

Science and technology is a critical component of our focus on product
innovation and manufacturing optimization. Historically, we have spent
approximately 1.1-1.6% of our annual revenues on research and development,
investing $8.3 million in fiscal 1999, $8.8 million in fiscal 1998 and $10.4
million in fiscal 1997. These efforts have resulted in more than 15% of our
sales in each of the last three fiscal years coming from products that we have
developed and that have been on the market for three years or less. Our science
and technology efforts also focus on improving manufacturing techniques, which
have contributed to several major process improvements and automation
efficiencies in our plants. We intend to continue to invest in science and
technology activities to develop additional products that will complement our
glove and condom product lines and define new ways to streamline manufacturing.

We operate two major science and technology centers, one in Malaysia and
one in the United States. Our highly qualified and experienced research staff at
these centers develop new products and test existing products to determine
potential improvements in design and quality. In addition, technical and process
support exists in each of our main manufacturing locations worldwide.

The process of developing, testing and bringing new products to market may
be lengthy, particularly for products that are regulated as medical devices
(such as medical gloves and condoms) and may require notification to, and prior
approval by, the FDA and similar approvals from non-U.S. regulatory agencies. We
currently have a number of projects at varying stages of development. These
range from new product and material concepts to prototype products undergoing
extensive consumer acceptability studies, field trials and consumer training.

Recent examples of successful products derived from our science and
technology function include the:

- Hyflex line of gloves that offer a superior combination of fit, comfort
and dexterity,

- critical environment nitrile glove which we believe is recognized as the
industry quality standard,

- first commercial surgical glove made from polyurethane,

42
<PAGE> 47

- first commercial synthetic neoprene surgical glove, and

- first commercial chlorinated powder-free surgical glove.

We have established relationships with several medical research
institutions such as Georgetown University, Drexel University and Johns Hopkins
University and we have contributed on an annual basis to scientific research
programs at the University of Tampere in Finland and the Medical College of
Wisconsin. Our sponsored research includes, among other things, the
identification and isolation of natural rubber latex proteins which may
contribute to latex allergies in some people. We use the results of this
research to improve our product quality and we encourage the researchers to
publish their findings in scientific journals as part of the AnsellCares
program.

ANSELLCARES

The AnsellCares Scientific Advisory Board, established in 1992, is composed
of some of the leading latex allergy researchers worldwide. The Advisory Board's
charter is to direct research into critical hand barrier protection issues, such
as latex and chemical allergy, factors affecting glove barrier integrity and
development of synthetic glove polymers. Research groups on three continents,
with our support, are responsible for numerous scientific breakthroughs and have
presented their work at many national and international allergy conferences. The
output from our Advisory Board has paved the way for a greater understanding of
these complex issues and, through publication and dissemination, has provided
manufacturers with the tools necessary to reduce the allergenicity of their
products and clinicians with guidelines on how to manage affected healthcare
workers and patients and reduce the risk of sensitization for future
generations. The AnsellCares program includes accredited continuing medical
education programs, video presentations, technical bulletins, newsletters, as
well as periodic lectures and seminars.

We provide pertinent information on a variety of glove related issues to
healthcare professionals. In addition, we offer a number of literature
summaries, along with a complete library of clinical articles. One of our
newsletters, Source to Surgery, is a periodic publication edited by members of
the Advisory Board. The newsletter summarizes developments associated with hand
barrier protection, including natural rubber latex allergy. The newsletters also
offer brief synopses of recently published articles and details regulatory
efforts to address manufacturing and other relevant issues.

In addition, we have designed and implemented comprehensive educational
programs to inform healthcare workers of the latest advances in hand barrier
protection. For example, our Advanced Solutions programs include information
regarding:

<TABLE>
<S> <C>
- - product line selection - glove utilization & management
- - gloving techniques - hand barrier protection
- - latex allergy management - risk management
</TABLE>

MANUFACTURING

We currently manufacture our products at eighteen factories in seven
countries: Malaysia (premium surgical, powder-free examination and
latex-light-duty gloves), Sri Lanka (premium surgical gloves, powder-free
examination gloves and supported dipped synthetic gloves), Thailand (condoms,
powder-free examination gloves, latex light-duty gloves and critical environment
gloves), India (standard surgical gloves and condoms), the United Kingdom
(synthetic dipped gloves), the United States (synthetic dipped, seamless
knitted, premium surgical and critical environment gloves) and Mexico (synthetic
dipped gloves). In addition, we operate packaging and warehouse facilities in
Australia, South Africa, the United Kingdom, France, Belgium and Mexico. The
majority of our factories are located in Southeast Asia in order to be close to
the rubber tree plantations, which are our source of natural latex, as well as
for the favorable cost and availability of labor and favorable tax treatment in
certain countries.

During fiscal 1998 and 1999 and the quarter ended September 30, 1999, we
invested $16 million, $30 million and $11 million, respectively, to increase and
convert production capacity in Thailand,

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<PAGE> 48

Malaysia, Sri Lanka and the United States. This is enabling us to expand
production of powder-free and low allergenic medical examination gloves in our
Southeast Asia facilities, and to relocate all of our condom manufacturing from
Dothan, Alabama to Surat Thani, Thailand. It also is enabling us to expand our
Troy, Alabama critical environment glove plant, and convert our Dothan, Alabama
plant to a synthetic nitrile glove facility capable of producing gloves for both
our Professional and Occupational Healthcare divisions. We plan to continue
installing proprietary automation throughout our operations, including
automation for testing, processing and prepackaging of our products, in order to
reduce manufacturing lead time and costs, while at the same time increasing
product quality and efficiency.

The FDA's Quality System Regulation specifies good manufacturing practices
(known as QSR/GMP requirements) for medical devices. These requirements provide
that, from raw materials through to finished product, our manufacturing process
is designed to be carefully documented and validated, conducted in accordance
with standard operating procedures and routinely assessed by a series of in-
process tests and quality control procedures, designed to help assure that the
company consistently produces high quality products. See "Government Regulation
and Quality Control -- U.S. Government Regulation" for a discussion regarding
the most recent inspection of our manufacturing facility in Dothan, Alabama. Our
manufacturing technology is designed to ensure that the products we produce
provide effective protection and are low in extractable proteins and chemicals.
Our manufacturing capabilities allow us to produce condoms, standard and premium
surgical, medical examination and commercial light and heavy duty gloves, as
well as advanced polymer-coated powder-free gloves, of complex design and
construction.

We have an ongoing commitment to worker safety at our facilities. Over each
of the last three years, we have consistently reduced the number and severity of
work-related injuries. For example, days lost per 100 employees have decreased
from 21 days in fiscal 1997 to 6.2 in fiscal 1999, despite the addition of
several acquired facilities in less-developed countries.

Our major raw materials are natural and synthetic latex, chemicals,
plastics, cotton, synthetic yarns and packaging materials. Natural latex and
other raw materials are generally available from several sources and
distributors, with natural latex production confined largely to countries in
Southeast Asia. We have had no significant raw material supply problems to date.
Although latex is one of our primary raw materials, it only accounted for
approximately 7% of overall cost of goods sold in fiscal 1999.

In fiscal 1999, we outsourced approximately $80 million of finished goods
for resale. We have established accreditation procedures to ensure that the
manufacturing facilities and products that we outsource meet our standards and
those of applicable regulatory agencies. We look to outsource finished goods for
resale when we believe we can acquire the product more efficiently than
manufacturing the product ourselves. This occurs, for example, with products
that are not technologically advanced and that are readily available at a low
cost in the market, such as standard powdered latex examination gloves,
disposable vinyl gloves and lower sales volume products. We also outsource to
fill temporary imbalances between product demand and manufacturing capacity.

GOVERNMENT REGULATION AND QUALITY CONTROL

All of the countries in which we market our products have regulations of
varying degrees affecting quality control requirements for our products. These
regulations have been particularly advanced in the United States, beginning with
the Medical Device Amendments of 1976 and increased by the Safe Medical Devices
Act of 1990; and in Europe, with the completion of the work required by the
Single European Act of 1986 and its on-going implementation. In addition,
harmonization of regulatory requirements on an international basis has led to
the adoption of an international quality management system standard which is
being implemented progressively by various regulatory authorities including the
FDA and the Commission of the European Union.

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<PAGE> 49

U.S. GOVERNMENT REGULATION

In the United States, products offered through our Professional Healthcare
and Personal Healthcare divisions are regulated as medical devices under the
Federal Food, Drug and Cosmetic Act (the FDC Act) by the FDA. We believe that
all of our products regulated by the FDC Act are in compliance in all material
respects with the relevant sections of the FDC Act and the advice and guidance
provided by the FDA.

Medical devices are regulated under the FDC Act in three separate classes
(Class I, Class II and Class III). Class I devices are those considered to
require the least regulation to assure their safety and effectiveness. They are
only subject to general controls under the FDC Act and QSR/GMP requirements and,
unless exempt, premarket notification by 510(k) submission to show that they are
substantially equivalent to previously marketed devices. Class II devices are
those devices considered to require greater regulation to assure their safety
and effectiveness and for which the FDA is authorized to impose "special
controls" in addition to the general controls applicable to all devices. Class
III devices are those for which a demonstration of safety and effectiveness must
be made to the FDA by a premarket approval application before they can be
marketed. We do not currently manufacture or market any Class III devices.
Condoms are generally Class II devices. Medical examination and surgical gloves
are currently Class I devices.

With the growing concerns the FDA has had with quality and allergy issues
with respect to all medical gloves, the FDA has proposed that both surgical
gloves and medical examination gloves be reclassified as Class II devices. This
reclassification, if it occurs, is expected to make entry into this market more
difficult as companies will be required to maintain a suitable infrastructure to
fully document, implement and audit the requirements of the new regulations if
and when they go into effect.

Medical device manufacturers are subject to periodic inspection by the FDA
for compliance with the FDA's current QSR/GMP requirements. The FDA has a number
of compliance and enforcement procedures when deviations from QSR/GMP
requirements are observed during such inspections. Which procedures are used
depends upon the seriousness of the observations as well as the compliance
history of the facility inspected and the company owning it. When the
observations are significant, the FDA will often agree with the company on a
process for resolving those concerns. Such agreements usually involve the use of
expert consultants to achieve and certify substantial compliance and increased
commitment of resources by the company to achieve and maintain compliance. If a
company follows through on such an agreement to the FDA's satisfaction, the
agency's concerns usually can be resolved without formal enforcement action by
the agency. If the FDA finds that a company has not fulfilled its commitment,
further enforcement action as described below is very likely.

Failure to comply with applicable regulatory requirements can result in
informal administrative enforcement, such as warning letters, import alerts,
product bans, field corrections, seizures, recalls, injunctions, civil
penalties, fines based on the equitable remedy of disgorgement, adverse
publicity issued by the FDA and criminal prosecutions.

The FDA has periodically inspected most of our manufacturing facilities,
including our overseas manufacturing facilities and has made observations on how
our manufacturing operations could be improved. In upgrading our manufacturing
facilities to address FDA observations and evolving technology and to otherwise
comply with QSR/GMP requirements, we have and will continue to expend time,
monies and efforts in the areas of product and quality control.

Our Dothan, Alabama manufacturing facility was inspected by the FDA in
August and September 1999 and a number of inspectional observations were made,
including observations with respect to QSR/ GMP requirements. We responded to
these observations and met with the FDA on November 10 and November 22, 1999. We
retained a consulting firm to help us upgrade manufacturing and quality control
procedures with the objective of satisfying the FDA and obtaining certification
that the facility is in compliance with QSR/GMP requirements. We are committed
to meeting this objective.

Currently, new medical examination and surgical gloves and condoms must be
submitted to the FDA for clearance to market by a premarket notification filing
called a 510(k) submission. Although we
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<PAGE> 50

typically have not experienced delays in obtaining FDA approvals in the past, an
adverse determination or request for additional information with respect to a
510(k) submission could have the effect of materially delaying the commencement
of marketing. As part of the FDA process, a company must demonstrate that the
glove or condom complies with the applicable American Society for Testing and
Material testing standards, as well as other requirements promulgated by the
FDA, including both further testing and labeling requirements. We must also
comply with various FDA labeling and postmarket reporting requirements.

Changes in existing requirements or adoption of new requirements could
adversely affect our ability to comply with regulatory requirements. Failure to
comply with regulatory requirements could have a material adverse effect on our
business, financial condition and results of operations.

EUROPEAN GOVERNMENT REGULATION

As part of the process of unification in Europe, the European Community
through the European Committee for Standardization (CEN) has developed common
sets of standards for each of condoms and medical and industrial gloves.

The CEN standards are legally mandatory. Products that are sold in Europe
must be tested to these standards by an independent testing firm, and once
products pass these tests, such products are entitled to display the CE mark to
signify general compliance. There is also a series of standardized pictograms to
identify certain characteristics of the gloves, such as the glove's
effectiveness against physical hazards, chemical hazards, cold or heat
resistance and microorganisms. Gloves which pass the minimum qualifications in
the appropriate tests are entitled to have these pictograms displayed on their
labels.

All of our gloves and condoms sold in Europe now carry the CE mark.
Pictograms and levels of performance are included in our European catalog with
respect to our Occupational Healthcare gloves. We carried out a very extensive
testing program in order to achieve these goals.

The European Community is also having considerable influence on the rest of
the world with respect to standardization. The Vienna Agreement is a formal
statement of joint policy between the CEN and the ISO, the International
Standards Organization. Under this agreement, the two organizations will not
develop competing standards, and standards which are being developed within one
of these organizations will have a fast track for approval by the other.

In connection with the harmonization of market conditions in Europe, all of
the areas and product segments within Europe in which we currently operate are
subject to Directives issued by the European Commission. In addition, the effect
of these legislative controls has been extended into the wider area covered by
the European Economic Area (the fifteen member states of the European Union plus
Iceland, Norway and Liechtenstein).

Condoms and medical gloves are regulated by Directive 93/42/EEC of the
European Commission on medical devices that came into effect on January 1, 1995.
This directive regulates the sale of all medical devices throughout the European
Union and the European Economic Area. Our condoms and medical gloves are in
compliance with the requirements of this directive and all relevant standards
(including rules for the affixing and use of CE conformity marking set forth by
Directive 93/465/EEC of the European Commission) allowing these products to
carry the CE mark and to be sold in all European countries without further
approval.

OTHER GOVERNMENT REGULATION

Whether or not FDA clearance is obtained for a new product, approval or
clearance of a product by regulatory authorities in foreign countries may be
required prior to the commencement of sales of the product in such countries.
The requirements governing product approvals or clearances vary widely from
country to country, and the time required for approval may be longer or shorter
than that required for FDA approval.

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<PAGE> 51

Additionally, we operate plants in the United Kingdom, Malaysia, Sri Lanka,
Thailand, Mexico and India. The occupational, health and safety laws and
regulations vary dramatically within these countries. Our policy is to comply
with all the prescribed regulations and to ensure that an internationally
acceptable work environment is provided for employees. We coordinate our
international occupational health and safety program through our Global Safety,
Health and Environment Director. All plants are required to report on all
occupational health and safety issues on a monthly basis to senior management.

ENVIRONMENTAL MATTERS

We are subject to regulations pertaining to factory discharges and
emissions promulgated by the respective environmental regulatory authorities in
the United States, the United Kingdom, Malaysia, Thailand, Sri Lanka, Mexico and
India, which have enforceable parameters for discharges to air, water and
landfills. Both U.S. and non-U.S. environmental regulatory authorities conduct
random inspections of our facilities for, among other things, compliance with
acceptable noise and dust levels and other environmental regulations.

We seek to ensure that we operate within the recognized international
standards for environmental protection by using water based systems in all of
our manufacturing operations in order to avoid the complication or potential
hazards associated with solvent based systems. We have also embarked on a
program of water and energy conservation by recycling water, installing thermal
insulation and operating energy efficient processes. In addition, we have a
Global Safety, Health and Environment Director whose responsibility is to ensure
that the necessary systems are in place to provide workers in our facilities
with a safe and healthy work environment. The performance of each of our plants
is monitored on a monthly basis by senior management.

While we believe that our operations comply, in all material respects, with
applicable environmental laws and regulations, we are presently undertaking, and
in the future may be required to undertake, work to correct instances of
noncompliance with environmental laws and regulations and to address
contamination at a number of our facilities. Although there can be no assurance
that the development or discovery of facts or conditions will not result in
environmental liabilities that have a material effect upon our capital
expenditures, earnings or competitive position, based on information currently
available, we do not expect our environmental liabilities to have such a
material effect.

COMPETITION

All of the markets in which we operate are competitive. We compete in the
overall medical gloves market on the basis of innovation, product quality, price
and service. The global industrial gloves market is largely fragmented with many
local manufacturers with product customization and customer service providing
the basis for competitive differentiation. Generally, competition in the condom
market is based on perceived brand quality, innovation and customer service, as
well as price in the public bid/tender market.

We face competition with each of our products from a variety of sources,
including international and local producers. Our major international competitors
are SSL International plc (formed by a merger of London International Group and
Seton Scholl Healthcare International), which competes with most of our latex
product range; Cardinal Health Inc., which manufactures and distributes medical
examination and surgical gloves through Allegiance; MAPA, a French company that
primarily produces household and light industrial gloves; Safeskin Corporation,
a U.S. company (which has entered into an agreement to be acquired by Kimberly
Clark) that manufactures and markets disposable latex and synthetic glove
products; and Carter-Wallace Inc., which is our major branded retail condom
competitor in the United States.

The failure to continue to distinguish our products on the basis of
quality, reliability and value could have a material adverse effect on our
business and results of operations. Further, we cannot assure you that our
competitors or others will not develop products, manufacturing processes or new
technologies which would be more cost effective or more efficient than ours.
Such competition could have a material adverse effect on our business, financial
condition and results of operations.
47
<PAGE> 52

INTELLECTUAL PROPERTY

We rely upon a combination of patent, trade secret and trademark law to
protect our intellectual property. We currently hold over 145 patents in the
United States and patents in other countries on some of our significant products
and manufacturing processes. However, we consider that our technological skill,
new product development and frequent product enhancements are essential in
establishing a technological leadership position. Therefore, we believe that the
expiration or loss of any one of our patents would not have a material affect on
our operations.

We rely on trade secrets and continuing technological advancement to
maintain our competitive position. We typically enter into confidentiality
agreements with our employees and consultants that are involved in the
development of our new technologies and manufacturing processes which further
protect our proprietary rights. Nonetheless, unauthorized parties may obtain and
use our proprietary property or develop products with the same functionality as
our products. There can be no assurance, however, that these measures will
prevent unauthorized disclosure or use of our trade secrets and know-how or
obtaining access to our trade secrets, know-how or proprietary technology.
Further, we cannot be certain that we have taken all the steps to prevent the
misappropriation of our proprietary property, particularly in foreign countries
where the laws may not protect rights as fully as do the laws in the United
States.

Our principal trademarks and trade names, which are registered in the
United States and other countries, are Ansell, Edmont, Perry, Golden Needles,
LifeStyles and, after the completion of the pending acquisition of the medical
glove business of Johnson & Johnson, Micro-Touch. These trademarks and trade
names are, individually, of material importance to our business as they have the
effect of developing brand identification and maintaining customer loyalty.

We are not aware of any fact that would negatively impact the continuing
use of any of our patents, trademarks and trade names. We cannot guarantee that
our patents will not be invalidated or that any issued patent will provide
protection that has commercial significance. Litigation may be necessary to
protect our patent position which can be costly and time consuming.

EMPLOYEES

As of June 30, 1999, we employed approximately 12,000 people worldwide, of
whom approximately 91% were employed in manufacturing operations (including
logistics and quality control), 7% in sales and marketing activity, 1% in
administration and 1% in science and technology. Approximately 17% of our
employees are members of recognized trade unions. The length of these union
contracts are typically three year terms. We believe that relations with our
employees are good.

PROPERTIES AND FACILITIES

Our principal executive offices are located in Red Bank, New Jersey, where
we lease 23,000 square feet of office space. In addition, we have sales,
distribution, research and manufacturing operations in various properties and
facilities that we own or lease throughout the world.

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<PAGE> 53

The following table lists our principal facilities:
<TABLE>
<CAPTION>
TYPE OF FACILITY
----------------------------------------
OWNED DISTRIBUTION SALES & SQUARE FEET
OR LEASED MANUFACTURING PACKAGING MARKETING OF BUILDING
----------- ------------- ------------ --------- -----------
<S> <C> <C> <C> <C> <C>
Glen Waverley, Australia Leased X 13,000
Aalst, Belgium Leased X X 71,000
Cowansville, Canada Owned X X 50,000
Cergy, France Leased X X 27,000
Munich, Germany Leased X 8,000
Aurangabad, India Leased X 59,000
Bangalore, India Leased X 43,000
Bangalore, India Leased X 74,000
Melaka, Malaysia Owned X 277,000
Kedah, Malaysia Owned X 204,000
Juarez, Mexico Owned X 97,000
Juarez, Mexico Leased X 50,000
Pietermaritzburg, South
Africa Leased X 12,000
Colombo, Sri Lanka Owned X 430,000
Bangkok, Thailand Owned X 356,000
Surat Thani, Thailand Owned X 233,000
Newark, United Kingdom Leased X 12,000
Redditch, United Kingdom Owned X 30,000
Surbiton, United Kingdom Leased X 4,500
Tamworth, United Kingdom Leased X 25,000
Dothan, Alabama Owned X 141,000
Dothan, Alabama Leased X 102,000
Troy, Alabama Owned X 125,000
Tarboro, North Carolina Owned X 100,000
Thomasville, North Carolina Owned X 88,000
Wilkesboro, North Carolina Owned/Leased X 286,000
Coshocton, Ohio Owned X X X 375,000
Massillon, Ohio Owned X X X 192,000

BUSINESS SEGMENT
--------------------------------------
PROFESSIONAL OCCUPATIONAL PERSONAL
------------ ------------ --------
<S> <C> <C> <C>
Glen Waverley, Australia X X X
Aalst, Belgium X
Cowansville, Canada X X X
Cergy, France X X
Munich, Germany X
Aurangabad, India X
Bangalore, India X
Bangalore, India X
Melaka, Malaysia X
Kedah, Malaysia X X
Juarez, Mexico X
Juarez, Mexico X
Pietermaritzburg, South
Africa X
Colombo, Sri Lanka X X
Bangkok, Thailand X X
Surat Thani, Thailand X
Newark, United Kingdom X
Redditch, United Kingdom X
Surbiton, United Kingdom X X
Tamworth, United Kingdom X X
Dothan, Alabama X X X
Dothan, Alabama X
Troy, Alabama X
Tarboro, North Carolina X
Thomasville, North Carolina X
Wilkesboro, North Carolina X
Coshocton, Ohio X
Massillon, Ohio X
</TABLE>

We operate various of our manufacturing and distribution facilities under
long term leases, the majority of which expire at various dates beginning in
2004. The lease for our manufacturing facility in Wilkesboro, North Carolina
expires in April 2000 and the leases for our distribution and packaging
facilities in Dothan, Alabama and Juarez, Mexico will both expire in November
2000. In addition to these facilities, we rent public warehousing facilities in
the United States, France, Germany and Australia. Our science and technology
activities are principally conducted in our facilities located in Melaka,
Malaysia and Massillon, Ohio.

We consider all of our principal manufacturing facilities and other
principal properties to be in good condition and adequate to meet the current
needs of our operations. As described under "Manufacturing" above, we are
undergoing some facility conversions and moving production among different
manufacturing facilities.

We have a continuing global program for improving our properties, including
the retirement or improvement of older facilities and the construction of new
facilities in order to maintain and achieve world-class status facilities. This
program includes improvement and expansion of manufacturing facilities to enable
production and quality control programs to meet or exceed the current state of
technology and government regulations.

LEGAL PROCEEDINGS

As of October 31, 1999, we (along with a number of other manufacturers and
distributors of latex gloves) were defendants in 280 lawsuits in the U.S. and
one in Australia that have been filed since 1993 on behalf of individuals
alleging wrongful death, personal injuries and lost wages as a result of their
exposure to natural rubber latex gloves. The lawsuits claim among other things
that we and other manufacturers of latex gloves, were negligent in the design
and manufacture of the gloves and failed to give adequate warnings of the
possibility of allergic reactions. As of October 31, 1999, the cases pending

49
<PAGE> 54

against us, represented approximately 49% of latex related cases filed against
all defendants. 181 of the U.S. cases have been consolidated for discovery
pursuant to the rules on multi-district litigation before the U.S. District
Court for the Eastern District of Pennsylvania. The remaining 99 cases are
spread through state courts in 15 states, with the greatest concentration in
California (15 cases).

All of the latex gloves cases are still in the discovery phase of
litigation. As a result of the early stage of this litigation, together with the
uncertainty created by the multiple defendants in these cases, the difficulty of
establishing who manufactured the natural rubber latex gloves which were used by
particular plaintiffs and the need to determine whether latex gloves were the
cause of any particular injury, our liability, if any, in relation to these
claims cannot be quantified.

We are a party to various other non-latex allergy proceedings, including
certain environmental matters, incidental to the normal course of business. We
do not expect that any of such proceedings will have a material adverse effect
on our financial position, results of operations or liquidity.

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<PAGE> 55

MANAGEMENT

DIRECTORS, EXECUTIVE OFFICERS AND KEY EMPLOYEES

The following table contains information about our directors, executive
officers and certain key employees. In addition, after the completion of the
offering, we will add to our board of directors at least two independent
directors, who are unaffiliated with the Pacific Dunlop Group and us. The
independent directors will be the members of our audit committee.

<TABLE>
<CAPTION>
NAME AGE POSITION
- -------------------------------------------- --- -----------------------------------------------
<S> <C> <C>
Harry Boon(1)............................... 51 President, Chief Executive Officer and Director
Yvan Beaudoin............................... 44 Senior Vice-President Global Sales & Marketing,
Occupational Healthcare
Dr. Paul Cacioli............................ 42 Senior Vice-President Science & Technology
Phil Corke.................................. 45 Senior Vice-President Human Resources
Jeffrey Cox................................. 42 Chief Financial Officer and Director
John Gardner................................ 53 Senior Vice-President Global Operations
Roland Nonnenmacher......................... 56 President, Professional and Personal Healthcare
Peter Soszyn................................ 47 Chief Information Officer
Gwynne Woodward............................. 62 Senior Vice-President Mergers, Acquisitions and
Risk Management
Rodney Chadwick(1).......................... 54 Director and Chairman of the Board
Dr. John Eady............................... 54 Director
Philip Gay.................................. 48 Director
</TABLE>

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

(1) Member of Executive Committee

Harry Boon has been with Ansell since 1976, and has been our President,
Chief Executive Officer and Managing Director since February 1989 and one of our
directors since October, 1999. From 1987 until 1989, Mr. Boon was Ansell's
International Marketing Director based in Melbourne, Australia. From 1984 to
1987, Mr. Boon was Regional Director, Europe, based in Munich. From 1982 to
1984, Mr. Boon was Regional Director, Asia Pacific, and from 1980 to 1982 he was
General Manager of Australia and New Zealand. Prior to 1980, Mr. Boon was
located in Toronto, Canada and Bonn, Germany, where he was instrumental in
establishing Ansell's sales and marketing operations.

Yvan Beaudoin has been with Ansell since 1989, following our acquisition of
Edmont Industrial glove business from Becton Dickinson Corporation. Since April
1999, Mr. Beaudoin has been our Senior Vice-President Global Sales & Marketing,
Occupational Healthcare. Mr. Beaudoin was previously the Regional Director,
Europe, Protective Products division from July 1996 to March 1999, based in
Brussels, Belgium. From 1995 to 1996, Mr. Beaudoin was based in Atlanta as
Director of International Sales & Marketing and was Regional Director for
Industrial Gloves for Europe, the Middle East and Africa from 1994 to 1995. Mr.
Beaudoin joined Ansell as General Manager, Canada in 1989. Prior to joining
Ansell, Mr. Beaudoin was General Manager-Canada for the Edmont Division of
Becton Dickinson, and Director of Marketing for Cyanamid Canada Inc.

Dr. Paul Cacioli has been with Ansell since November 1988, and was
appointed our Senior Vice-President Science & Technology in May 1999. He was
Vice President of Research & Development of the Ansell Healthcare division from
1994 to 1999, based in Melaka, Malaysia. From 1992 to 1994, Dr. Cacioli served
as Director of Research & Development and Technical Affairs for the Healthcare
division. Dr. Cacioli joined Ansell as Technical Services manager for Ansell
Melaka (Malaysia) in 1988.

Phil Corke has been with Ansell since April 1998 when he was appointed our
Senior Vice-President Human Resources. Prior to joining Ansell, Mr. Corke was
Vice-President Human Resources of Alpharma Inc. (generic pharmaceuticals) from
1996 to 1997 and was Director of Training & Development & International
Compensation for Textron Inc. from 1994 until 1996. He was hired by
Bristol-Myers in the

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<PAGE> 56

United Kingdom in 1988 as Personnel Director and was transferred to the United
States in September 1990, as Human Resources Director, Europe, for Bristol-Myers
Squibb Pharmaceutical Group.

Jeffrey Cox has been with Pacific Dunlop Limited since 1984, and first
joined Ansell in 1991. Mr. Cox is currently our Chief Financial Officer, a
position he has held since 1995 and has been one of our directors since October
1999. Prior to his current position, Mr. Cox was Chief Financial Officer for
Pacific Dunlop Food Group and from 1991 to 1992 was Vice-President of Finance
for Ansell North America. Mr. Cox has held other financial positions with
different Pacific Dunlop Group companies.

John Gardner has been with Ansell since 1994, and in 1999 became our Senior
Vice-President Global Operations. Before his current position, he was Operations
Director of the Healthcare Division, based in Thailand and Sri Lanka. From 1960
through 1994, Mr. Gardner managed a number of manufacturing facilities with the
South Pacific Tyre Division of Pacific Dunlop Group.

Roland Nonnenmacher has been with Ansell since 1989, following our
acquisition of the Edmont Industrial gloves business from Becton Dickinson
Corporation. He has been our President of the Professional and Personal
Healthcare divisions since 1995, and was previously Senior Vice-President of the
medical division. From 1990 to 1992, Mr. Nonnenmacher served as International
Marketing Director based in Melbourne, Australia. From 1987 to 1990, Mr.
Nonnenmacher was President of Edmont Europe in Brussels, Belgium and had been
with the Becton Dickinson organization since 1979 as International Marketing
Director and Vice-President and General Manager of their drug delivery division.

Peter Soszyn has been with Ansell since 1995, when he was appointed our
Chief Information Officer. Prior to that, Mr. Soszyn was with the Pacific Dunlop
Group as Head of Corporate Information Systems for South Pacific Tyres from 1990
through 1995, and as Manager Information Manufacturing Systems from 1985 to
1996. Prior to joining Pacific Dunlop Limited, Mr. Soszyn served in a number of
manufacturing and systems positions with Leigh Mardon Pty., Ltd. (printing and
packaging), Amatil Pty. Ltd. (conglomerate), and the State Planning Authority of
New South Wales (government agency).

Gwynne Woodward has been with Ansell since 1978, and has been our Senior
Vice President, Mergers, Acquisitions and Risk Management since 1995. From 1994
to 1995, Mr. Woodward was General Manager with specific responsibility for
acquisitions. He was President of the industrial division between 1992 and 1994
and headed up Ansell's manufacturing operations from 1989 until 1992. Mr.
Woodward joined Ansell as Chief Accountant in 1978.

Rodney Chadwick has been our Chairman of the Board and one of our directors
since December 1999. Mr. Chadwick joined the Pacific Dunlop Group in 1970 and is
now the Managing Director and Chief Executive Officer of Pacific Dunlop Limited.
He became an Executive Director of Pacific Dunlop Limited in 1990, and was
appointed Managing Director in 1996. After holding a series of senior
appointments, in 1987, he became the inaugural Chief Executive of South Pacific
Tyres (a partnership between Pacific Dunlop Limited and The Goodyear Tire &
Rubber Company).

Dr. John Eady has been one of our directors since December 1999. Dr. Eady
has been with Pacific Dunlop Limited since 1998 as Executive General Manager,
Manufacturing. Dr. Eady has extensive international experience in implementing
quality and continuous improvement practices. Prior to joining Pacific Dunlop
Limited in 1998, he held senior positions at CRA Limited (mining company) and
its related companies, including Vice-President, Continuous Improvement of CRA
Limited and President of Rio Tinto Japan (mining company).

Philip Gay has been one of our directors since October 1999. Mr. Gay has
been with Pacific Dunlop Limited since January 1970 and has been Chief Financial
Officer of Pacific Dunlop Limited since June 1996. Prior to 1996, Mr. Gay headed
up Pacific Dunlop Limited's Corporate Development Group. Mr. Gay was Managing
Director of Pacific Dunlop Limited's Industrial Foam and Fibre Group from 1992
to 1995. Mr. Gay was General Manager, Finance of South Pacific Tyres from 1987
to 1989, and from 1989 to 1992 was Chief Executive Officer of South Pacific
Tyres, New Zealand.

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<PAGE> 57

COMPOSITION OF BOARD OF DIRECTORS

Our board will consist of seven members. Our certificate of incorporation
provides that at least two directors may not be affiliated with Pacific Dunlop
Limited or us (other than as a director of Ansell) and one is to be an executive
officer of Ansell. Accordingly, up to four directors may be selected by the
Pacific Dunlop Stockholders without restriction and may be executive officers or
employees of members of the Pacific Dunlop Group.

Each director is elected for a one year term or until his or her successor
is elected and qualified. Executive officers are appointed by and serve at the
discretion of the board of directors. There are no family relationships among
any of our directors or executive officers.

COMMITTEES OF THE BOARD OF DIRECTORS

After the offering, we will have two standing committees: an audit
committee and an executive committee.

The functions of the audit committee will include making recommendations to
the board of directors as to the selection of the firm of independent public
accountants to examine our financial statements and books and accounts for each
fiscal year, the proposed engagement arrangements for the independent public
accountants and the advisability of having the independent public accountants
make specified studies and reports regarding auditing matters, accounting
procedures, tax or other matters. The audit committee will also review the
results of the audit for each fiscal year. Furthermore, the audit committee will
be responsible for reviewing all related party transactions and for monitoring
corporate policies and procedures with respect to our ethics and compliance
program. Each member of the audit committee will be an independent director
within the meaning of the rules of the New York Stock Exchange.

The functions of the executive committee will include such functions as may
be delegated by the board of directors from time to time. The members of the
executive committee will be Rodney Chadwick. Harry Boon will chair the executive
committee.

The board of directors may, from time to time, establish other committees
to facilitate its work.

With respect to material transactions between Pacific Dunlop Limited and us
after the offering is completed, our board of directors has a policy that all
such transactions will be submitted for review, approval and authorization to
our directors who are independent directors under the rules of the New York
Stock Exchange. This policy could be changed by the Pacific Dunlop Group in the
future.

COMPENSATION OF DIRECTORS

Our directors not otherwise affiliated with Pacific Dunlop Limited or us
will receive a fee of $[ ] for each board meeting that they attend and
$[ ] for each committee meeting they attend. We will also reimburse all
directors for their travel expenses incurred in connection with board and
committee meetings.

Directors are eligible to receive stock options under our stock incentive
plan. See "-- Executive Compensation -- Ansell Stock Incentive Plan."

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<PAGE> 58

EXECUTIVE COMPENSATION

The following table summarizes the compensation for the named executive
officers for the fiscal year ended June 30, 1999. Named executive officers
include the Chief Executive Officer and the top four executive officers of
Ansell whose salary and bonus earned during fiscal year 1999 exceeded $100,000.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------------------------
OTHER
ANNUAL TOTAL
NAME AND PRINCIPAL POSITION SALARY BONUS COMPENSATION(1) COMPENSATION
- --------------------------- -------- -------- --------------- ------------
<S> <C> <C> <C> <C>
Harry Boon.................................. $460,000 $139,422 $ 34,053 $633,475
Chief Executive Officer
Yvan Beaudoin............................... $154,777 $ 43,235 $141,060 $339,072
Senior Vice-President
Global Sales & Marketing,
Occupational Healthcare
Jeffrey Cox................................. $205,000 $ 69,906 $ 38,893 $313,799
Chief Financial Officer
Roland Nonnenmacher......................... $280,000 $ 95,535 $ 81,863 $457,398
President,
Professional and Personal Healthcare
Peter Soszyn................................ $175,000 $ 52,896 $ 36,788 $264,683
Chief Information Officer
</TABLE>

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

(1) Includes matching payments under our 401(k) Plan and the deferred
compensation plan, relocation expenses and associated tax adjustments, and
other allowances.

ANSELL KEY EXECUTIVE INCENTIVE PLAN

The executives named above participate in our executive bonus plan. Amounts
granted under this plan are based on achievement of certain key financial goals
(such as cash value added, sales growth, expense to sales ratio, average working
capital and earnings before income taxes to sales ratio) and other non-
financial goals. Target incentives range between 45% and 50% of an executive's
base salary. Bonuses under the plan are phased over two years (first year
70%/second year 30%) with payments in the second year subject to additional
performance criteria.

ANSELL STOCK INCENTIVE PLAN

Our stock incentive plan allows our board of directors to grant incentive
and non-qualified stock options, stock appreciation rights, restricted stock,
performance stock and other stock-based awards to our employees and directors.
[ ] shares of our stock are reserved for issuance under our stock
incentive plan and any individual is limited to being granted [ ] shares in
any calendar year. The exercise price of options and stock appreciation rights
is set on the date of grant and may not be less than the fair market value of
our common stock on that date.

PENSION PLANS

Ansell Pension Plan. Some of our executive officers participate in the
Ansell Cash Balance Pension Plan, known as the Ansell Pension Plan. The Ansell
Pension Plan is a defined benefit plan under which

54
<PAGE> 59

benefits are based on Pay-Based Credits, Supplemental Pay-Based Credits and
Interest Credits as described below:

Pay-Based Credits. For each plan year, each participant's account is
credited with pay-based credits equal to a percentage of compensation for the
calendar year ending in that plan year, determined as follows:

- 5% of compensation for the year, plus

- 5% of compensation for the year in excess of the federal social
security taxable wage base in effect that year.

Supplemental Pay-Based Credits. In addition, for each calendar year ending
in each plan year certain individuals who were participants in plans acquired
through some of our acquisitions are entitled to additional "supplemental"
pay-based credits.

For eligible participants, each year's supplemental pay-based credits are
determined as follows:

<TABLE>
<CAPTION>
AGE PLUS TWO TIMES
YEARS OF SERVICE AT EARLIER OF SUPPLEMENTAL PAY-BASED CREDIT
THE END OF A CALENDAR YEAR AS A PERCENTAGE OF COMPENSATION
OR AT TERMINATION FOR SUCH CALENDAR YEAR
------------------------------ -------------------------------
<S> <C>
0-59........................................ 0%
60-69....................................... 2.0%
70-79....................................... 3.0%
80-89....................................... 4.0%
90 or more.................................. 5.0%
</TABLE>

Interest Credits. Each participant's account is automatically increased by
crediting the balance of the account as of the last day of the preceding
calendar year with an interest credit. Interest credits are based on the
interest rate defined in the Ansell Pension Plan. Interest credits continue
after a participant ceases to be an eligible employee. Generally, interest
credits are not made after a participant begins receiving benefits.

As of September 30, 1999, the estimated annual benefits payable under the
Ansell Pension Plan (including amounts payable under the Ansell Cash Balance
Pension Restoration Plan, which is a nonqualified excess pension plan) to each
executive upon retirement at normal retirement age (age 65) is as follows:

<TABLE>
<S> <C>
Yvan Beaudoin............................................. $ 688
Roland Nonnenmacher....................................... $32,415
</TABLE>

Mr. Beaudoin has benefits under Canadian and Belgium government pension
plans.

Pacific Dunlop Executive Superannuation Fund. Messrs. Boon, Cox and Soszyn
are entitled to benefits under the Pacific Dunlop Executive Superannuation Fund.
This is a defined benefit fund under which benefits are determined using a
formula based on the executive's class, length of service in the class and
average final salary. An executive's class is based on the scope of
responsibility and the level of and amount of benefits differs depending on
which class an executive falls in. Participants are not required to, but are
deemed to contribute 5% of their salary. Because the fund is in surplus, no
amounts were required to be paid to the fund in respect of Messrs. Boon, Cox and
Soszyn during fiscal 1999. When the fund is no longer in surplus, we are
required to contribute to the fund on behalf of our executive officers who are
participants.

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<PAGE> 60

As of September 30, 1999, the estimated lump sum benefit payable under the
Pacific Dunlop Executive Superannuation Fund upon retirement at normal
retirement age (age 65) are as follows:

<TABLE>
<S> <C>
Harry Boon..................................... 7 times final salary
Jeffrey Cox.................................... 7 times final salary
Peter Soszyn................................... 6.6 times final salary
</TABLE>

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Our certificate of incorporation provides that each of our directors shall
be indemnified to the fullest extent permitted by Delaware law if they are a
party to any pending or threatened litigation, whether civil, criminal,
administrative or investigative, by reason of the fact that the director is or
was a director of Ansell. Our certificate of incorporation also provides that
the board of directors may indemnify an Ansell officer, employee and agent to
the extent that the board determines the indemnification is appropriate and
permitted under Delaware law.

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RELATIONSHIP AND AGREEMENTS WITH THE PACIFIC DUNLOP GROUP

INTERCOMPANY AGREEMENTS

After this offering, the Pacific Dunlop Stockholders will own at least 80%
of our common stock. Prior to consummation of this offering, we will enter into
a Services Agreement with Pacific Dunlop Limited, a Tax Sharing Agreement among
our company and the U.S.-domiciled members of the Pacific Dunlop Group, a
Registration Rights and Ownership Maintenance Agreement with the Pacific Dunlop
Stockholders and a credit facility with Pacific Dunlop Limited.

These agreements may be modified and additional agreements, arrangements
and transactions may be entered into with the members of the Pacific Dunlop
Group after this offering. We have a policy requiring all agreements and
transactions between us and members of the Pacific Dunlop Group to be submitted
for review, approval and authorization by our directors who are independent
directors under the rules of the New York Stock Exchange. This policy could be
changed by the Pacific Dunlop Group in the future.

The following is a summary of the material provisions of these agreements.
The summaries of each of these agreements are qualified in their entirety by
reference to the full text of such agreement, a copy of which has been filed as
an exhibit to the registration statement of which this prospectus is part.

Services Agreement

Pacific Dunlop Limited will agree to provide certain corporate services to
us under the Services Agreement. The Services Agreement will have an initial
term that expires on June 30, 2001, subject to automatic renewal for additional
one year terms. The annualized charges for these services in Australian dollars
(or A$) are A$550,000 plus charges for acquisition and manufacturing assistance
ranging from A$1,000 to A$2,700 per person per day, depending on the experience
of individuals involved (As of November 30, 1999 the noon buying rate published
by the Federal Reserve Bank of New York was U.S.$0.6371, equivalent to A$1.00.)
We will also reimburse Pacific Dunlop Limited for all out-of-pocket expenses it
incurs in rendering such services.

Services to be provided include the following:

- assistance, on an as requested basis, in planning, negotiating and
completing acquisitions,

- insurance services,

- assistance with media management and coordination of investor relations,

- treasury, including coordination and implementation of internal and
external borrowing, cash management, hedging currency and commodity
exposure and interest rate management,

- income tax return preparation and review and technical advice,

- assistance, on an as requested basis, in reviewing manufacturing
practices, costing systems, inventory management systems and site
location,

- legal services, including coordination of protection of trademark
portfolio, provision and maintenance of trademark management
infrastructure and assistance with litigation management, and

- information technology and telecommunication services in Australia and
New Zealand.

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Registration Rights and Ownership Maintenance Agreement

We will enter into a Registration Rights and Ownership Maintenance
Agreement with the Pacific Dunlop Stockholders, under which we will grant them
demand and "piggyback" registration rights for shares of our common stock that
they own. Under this agreement, the Pacific Dunlop Stockholders will have the
right to require us to file up to three registration statements under the
Securities Act, which may be increased by an unlimited number of registration
statements if effected on Form S-3, covering shares of our common stock owned by
them. The Pacific Dunlop Stockholders will also have the right, if we file a
registration statement, to require us to include their shares in such
registration statement.

Our obligations under the Registration Rights and Ownership Maintenance
Agreement will be subject to certain limitations relating to the minimum amount
of common stock to be included in a registration statement, the timing of the
exercise of registration rights and other similar matters. We will pay all costs
and expenses relating to the exercise of these registration rights, including
all costs associated with preparing and filing a registration statement,
printing fees, filing fees, listing costs and other similar costs and expenses.
The Pacific Dunlop Stockholders are responsible for their own expenses,
including underwriting fees, discounts or commissions and expenses of their
legal counsel.

We and each of the Pacific Dunlop Stockholders will indemnify the other
parties for certain liabilities under the Securities Act, in connection with any
registration under the Registration Rights and Ownership Maintenance Agreement.
The Registration Rights and Ownership Maintenance Agreement will terminate when
the Pacific Dunlop Stockholders own less than 5% of our outstanding common
stock. We, along with the Pacific Dunlop Stockholders, have agreed with the
underwriters, not to sell or otherwise dispose of any of our common stock for a
period of 180 days after the closing of this offering without the prior written
consent of Merrill Lynch & Co. See "Underwriting."

Our agreement with the Pacific Dunlop Stockholders will also contain
provisions that entitle the Pacific Dunlop Stockholders to retain their
percentage ownership interest in us if we issue additional shares of common
stock. Under these provisions, we will be required to establish a program to
repurchase shares of our common stock from our public stockholders. We will be
required to repurchase a sufficient number of shares pursuant to this program to
ensure that, with respect to the issuance of common stock by us in the future
upon exercise of stock options or for other general corporate purposes, the
percentage of our common stock owned by the Pacific Dunlop Stockholders
immediately after such issuance will be no lower than the Pacific Dunlop
Stockholders' lowest percentage ownership of our common stock at any time after
the consummation of this offering and prior to the time of such issuance. We
will be required to provide information to the Pacific Dunlop Stockholders each
month, or more frequently if requested, regarding the status of the repurchase
program and previous and expected future issuances of common stock. We will also
be obligated to notify the Pacific Dunlop Stockholders the day after the number
of shares of common stock issued (including options to purchase common stock
granted otherwise than pursuant to the Ansell Incentive Stock Plan or other
similar compensation options plan) in a month equals or exceeds % of
the shares outstanding after going effect to such issuance. Our obligations with
respect to this stock repurchase program will terminate at such time as Pacific
Dunlop Stockholders own, collectively, less than 40% of our common stock.

The Pacific Dunlop Stockholders also will have (1) a continuing option
(which will be assignable by the Pacific Dunlop Stockholders to any of their
affiliates) to buy from us, prior to the occurrence of any event that could
result in a decrease in the percentage of common stock owned by the Pacific
Dunlop Stockholders and their affiliates, a sufficient amount of common stock to
ensure that the Pacific Dunlop Stockholders and their affiliates maintain the
percentage ownership of our common stock then owned by them, and (2) a
continuing option (which will be assignable by the Pacific Dunlop Stockholders
to any of their affiliates) to buy from us 80% of any class of stock issued by
us other than common stock. In the case where the event causing a decrease in
ownership by the Pacific Dunlop Stockholders is the sale of shares for cash, the
purchase price per share under both the options will be the price per share paid
by a third party purchaser in connection with such sale. In all other cases, the
purchase price per share under each option will be equal to either the average
of the last sale price on each of the five immediately preceding trading days on
a U.S. national securities exchange on which the shares are traded or, if the
sale

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prices are unavailable, the value of the shares determined in accordance with
procedures reasonably satisfactory to the Pacific Dunlop Stockholders and us.
These options will terminate at such time as the Pacific Dunlop Stockholders
own, collectively, less than 50% of our common stock.

These provisions of the Registration Rights and Ownership Maintenance
Agreement may have the effect of limiting our ability to use our capital stock
as consideration for acquisitions.

Ansell Credit Facility

We will have a revolving credit agreement with Pacific Dunlop Limited that
will allow us to borrow up to $200 million for up to three years. We can either
borrow under a prime rate tranche or a LIBOR tranche. The prime rate tranche
bears interest at prime rate as announced by J.P. Morgan and can be prepaid on
any business day. The LIBOR tranche bears interest at the 90-day LIBOR plus
0.75% and can only be prepaid on the last day of a quarter. We can borrow in
currencies other than U.S. dollars and then the interest rates for the different
tranches will be determined by Pacific Dunlop Limited in good faith at rates
equivalent to those described above for the currency we are borrowing. We expect
to have borrowings of approximately $174.4 million under the credit agreement at
the time of the closing of this offering.

The credit agreement also permits us to maintain cash balances with Pacific
Dunlop Limited on which it will pay us interest at the U.S. federal funds rate.
The credit agreement provides that we will repay borrowings with excess cash
flows.

Tax Sharing Agreement

The Ansell Group has been and, after this offering expects to continue to
be, included in the U.S. consolidated federal income tax group of the Pacific
Dunlop Group's U.S. domiciled subsidiaries and our tax liability will therefore
be included in the consolidated federal income tax liability of the Pacific
Dunlop Group. We also will be included with the Pacific Dunlop Group in
consolidated or combined income tax filings for certain state and local tax
jurisdictions.

We and the U.S.-domiciled members of the Pacific Dunlop Group will enter
into a Tax Sharing Agreement. The Tax Sharing Agreement, which will be effective
for the fiscal year ended June 30, 2000, provides that we compute our U.S.
income tax liability as if we filed on a separate income tax return basis and
remit payment of such liability to the Pacific Dunlop Group, including making
appropriate estimated payments quarterly to the Pacific Dunlop Group.

The Tax Sharing Agreement will provide that in determining our future U.S.
tax liability, we cannot reduce our tax liability by using carryforward tax
benefits that were attributable to periods prior to our becoming less than 100%
owned by members of the Pacific Dunlop Group. Accordingly, under the Tax Sharing
Agreement, $87.8 million in U.S. tax net operating loss carryforwards will not
be available to us to reduce future U.S. income tax liabilities we incur.

The amount of any carryforward tax benefits that we generate after this
offering will be available to us to reduce future tax liabilities we may have
under the Tax Sharing Agreement to the same extent such carryforward tax
benefits would have been available to reduce our income tax liabilities if we
were computing and paying taxes on a separate return basis, whether or not the
Pacific Dunlop Group has otherwise used such carryforward tax benefits to reduce
its consolidated tax liability. We will not, however, be compensated by the
Pacific Dunlop Group for the Pacific Dunlop Group's use of carryforward tax
benefits. Under the Tax Sharing Agreement, we will be permitted to carryback tax
benefits to prior years during which we were not 100% owned by members of the
Pacific Dunlop Group.

In the event we are no longer eligible to be part of the Pacific Dunlop
Group's U.S. consolidated federal income tax group, during the fiscal year in
which that were to occur, all unexpired carryforward tax benefits attributable
to us under the Internal Revenue Code of 1986, as amended, and the Treasury
Regulations issued thereunder, and not already used by the Pacific Dunlop Group
to reduce the Pacific Dunlop Group's U.S. consolidated tax liability, would
revert to us, as provided by law, including any such carryforward tax benefits
that were attributable to us prior to this offering. Accordingly, as long as the

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Pacific Dunlop Group continues to maintain unused carryforward tax benefits
attributable to us, the Pacific Dunlop Group has an incentive not to reduce its
ownership of Ansell below 80%, the percentage ownership necessary to retain us
as a member of the Pacific Dunlop Group's U.S. consolidated federal income tax
group, although there is no guarantee this will not occur.

The Tax Sharing Agreement will provide for substantially the same treatment
for computing and paying state income taxes in those states where consolidated
or unitary combined state income tax returns are required or elected as
described above for federal income tax.

It will also provide for the same treatment for all other members of the
consolidated group as described above with respect to Ansell.

Under applicable law and the Tax Sharing Agreement, the Pacific Dunlop
Group will continue to have all of the rights and obligations of a parent of a
consolidated income tax group (and similar rights provided for by applicable
state and local law with respect to a parent of a consolidated or combined
group), including: sole and exclusive responsibility for the preparation and
filing of consolidated federal and consolidated or combined state and local
income tax returns (or amended returns); the power, in the Pacific Dunlop
Group's sole discretion, to contest or compromise any asserted consolidated or
combined tax adjustment or deficiency and to file, litigate or compromise any
claim for refund of a consolidated or combined tax on behalf of us; and the
authority to act as the sole and exclusive agent, for us in any and all other
matters relating to consolidated or combined tax liabilities. However, the
Pacific Dunlop Group and Ansell will agree to cooperate under the Tax Sharing
Agreement to assist in the defense of claims relating to us.

In general, we will be included in the Pacific Dunlop Group's consolidated
group for federal income tax purposes for so long as the Pacific Dunlop Group
beneficially owns at least 80% of the total voting power and value of our
outstanding stock. Each member of a consolidated group is severally liable for
the federal and in certain instances, state income tax liability of the group.
Accordingly, although the Tax Sharing Agreement determines tax liabilities
between Ansell and the Pacific Dunlop Group, during the period in which we are
included in the Pacific Dunlop Group's consolidated federal and state income tax
group, we could be liable in the event that any federal or state tax liability
is incurred by the consolidated group but is not discharged by the Pacific
Dunlop Group. The Pacific Dunlop Group will be required, under the terms of the
Tax Sharing Agreement, to indemnify us for any consolidated or combined group
tax liability of the Pacific Dunlop Group that we must pay to a taxing authority
(including interest and penalties), except to the extent that such tax liability
is attributable (as determined under the principles described above relating to
the computation of tax sharing payments by us to the Pacific Dunlop Group) to us
and we have not yet made a corresponding tax sharing payment to the Pacific
Dunlop Group.

PACIFIC DUNLOP GROUP CREDIT AGREEMENTS

COMPOSITION OF BOARD OF DIRECTORS

Our board will consist of seven members. Our certificate of incorporation
provides that at least two directors may not be affiliated with Pacific Dunlop
Limited (other than as a director of Ansell) or us and that one director is to
be an executive officer of Ansell. Accordingly, up to four directors may be
selected

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by the Pacific Dunlop Stockholders without restriction and may be executive
officers or employees of, or members of, or otherwise affiliated with, the
Pacific Dunlop Group.

REORGANIZATION

In connection with the reorganization, we have agreed to indemnify the
members of the Pacific Dunlop Group that sold us operating assets for any
contingent liabilities arising out of, or relating to, the ownership of the
assets sold, the operation of the transferred business or our breach of the
terms of the agreement transferring such assets or business. See
"Reorganization" and "Index to Financial Statements -- Ansell Healthcare
Incorporated."

MAJORITY OWNERSHIP BY PACIFIC DUNLOP STOCKHOLDERS

After this offering is completed, the Pacific Dunlop Stockholders will own
at least 80% of our common stock. As majority stockholders, the Pacific Dunlop
Stockholders will be able to control our business and affairs, including:

- the election of our entire board of directors,

- determinations with respect to mergers, other business combinations or
the acquisition or disposition of material assets,

- the amendment of our certificate of incorporation,

- the power to determine all matters submitted to a vote of stockholders,

- the power to delay, defer or prevent a change in control, and

- the ability to take other actions that might be favorable to Pacific
Dunlop Stockholders but not to our stockholders generally.

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PRINCIPAL AND SELLING STOCKHOLDERS

All of the shares offered pursuant to this prospectus are being sold by PD
International Pty. Limited, a member of the Pacific Dunlop Group. Before the
offering, we were wholly owned by the Pacific Dunlop Stockholders, each of whom
is a member of the Pacific Dunlop Group. After the completion of the offering,
the Pacific Dunlop Stockholders will own, collectively, [ ]% of our outstanding
common stock and [ ]% if the underwriters exercise the over-allotment option in
full.

The principal executive office of the ultimate parent of the Pacific Dunlop
Stockholders, Pacific Dunlop Limited, is 101 Collins Street, Level 41,
Melbourne, Victoria Australia 3000. We are not aware of any person or group
other than the Pacific Dunlop Stockholders, that will beneficially own more than
5% of the outstanding shares of common stock after the offering.

DESCRIPTION OF CAPITAL STOCK

In this section, we summarize the material provisions of our certificate of
incorporation and bylaws, included as exhibits to our registration statement of
which this prospectus is a part, and filed with the SEC. Please refer to these
exhibits for additional details.

Our authorized capital stock consists of 50,000,000 shares of common stock,
$.01 par value per share, and 1,000,000 shares of preferred stock, $.01 par
value per share. As of December 1, 1999, there were 1,000 shares of common stock
and no shares of preferred stock outstanding. As of the date of this prospectus,
there were three holders of record of common stock. All shares of common stock
are, and the common stock being sold in this offering will be, when issued,
fully paid and non-assessable.

COMMON STOCK

Holders of common stock are entitled to one vote for each share held on all
matters subject to a vote of stockholders, and will not have cumulative voting
rights. Accordingly, holders of a majority of the shares of common stock
entitled to vote in any election of directors may elect all of the directors
standing for election. Holders of common stock will be entitled to receive
ratably any dividends that the board of directors may declare out of funds
legally available therefor, subject to any preferred rights of any outstanding
preferred stock. Upon our liquidation, dissolution or winding up, the holders of
our common stock will be entitled to receive ratably our net assets available
after the payment of all debts and other liabilities subject to any prior
distribution rights and payment of any distributions to holders of outstanding
preferred stock. Holders of common stock will have no preemptive, subscription,
redemption or conversion rights. However, under the Registration Rights and
Ownership Maintenance Agreement that we have entered into with the Pacific
Dunlop Stockholders, the Pacific Dunlop Stockholders will have the right to
retain their percentage ownership of our common stock. See "Relationship and
Agreements with the Pacific Dunlop Group -- Registration Rights and Ownership
Maintenance Agreement".

PREFERRED STOCK

The board of directors has the authority, without further action by the
stockholders, to issue preferred stock in one or more series and to fix the
rights, designation, preferences, privileges, limitations and restrictions
thereof, including dividend rights, conversion rights, terms and rights of
redemption, liquidation preferences and sinking fund terms, any or all of which
may be greater than the rights of the common stock. The board of directors,
without stockholder approval, may issue shares of preferred stock with
conversion, voting and other rights which could adversely affect the rights of
the holders of shares of common stock.

DELAWARE BUSINESS COMBINATION STATUTE

Section 203 of the Delaware General Corporation Law prohibits certain
transactions between a Delaware corporation and an "interested stockholder"
(defined as a person who, together with any affiliates or associates,
beneficially owns, directly or indirectly, 15% or more of the outstanding voting
shares of a Delaware corporation). This provision prohibits certain business
combinations between an interested

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stockholder and a corporation for a period of three years after the date the
interested stockholder becomes an interested stockholder, unless:

- the business combination is approved by the corporation's board of
directors prior to the date the interested stockholder becomes an
interested stockholder,

- the interested stockholder acquired at least 85% of the voting stock of
the corporation (other than stock held by directors who are also officers
or by certain employee stock plans) in the transaction in which it
becomes an interested stockholder, or

- the business combination is approved by a majority of the board of
directors and by the affirmative vote of 66 2/3% of the outstanding
voting stock that is not owned by the interested stockholder.

For this purpose, business combinations include mergers, consolidations,
sales or other dispositions of assets having an aggregate value in excess of 10%
of the consolidated assets of the corporation, and certain transactions that
would increase the interested stockholders' proportionate share ownership in the
corporation. Pacific Dunlop Limited and its subsidiaries will not be deemed
interested stockholders for purposes of Section 203.

LIMITATION ON DIRECTORS' LIABILITIES

Section 102 of the Delaware General Corporation Law permits a Delaware
corporation to include in its certificate of incorporation a provision
eliminating or limiting a director's liability to a corporation or its
stockholders for monetary damages for breaches of fiduciary duty. Delaware
General Corporation Law Section 102 provides, however, that liability for
breaches of the duty of loyalty, acts or omissions not in good faith or
involving intentional misconduct, or knowing violation of the law, and the
unlawful purchase or redemption of stock or payment of unlawful dividends or the
receipt of improper personal benefits cannot be eliminated or limited in this
manner. Our certificate of incorporation includes a provision that eliminates,
to the fullest extent permitted, the personal liability of directors for
monetary damages for breaches of fiduciary duty.

SPECIAL MEETING OF STOCKHOLDERS

Our certificate of incorporation provides that special meetings of our
stockholders may be called only by a majority of the board of directors, the
Chairman or the President. In addition, the certificate of incorporation
provides that, after the date on which Pacific Dunlop Limited no longer owns,
directly or indirectly, at least 50% of our outstanding common stock, our
stockholders will not be allowed to take action by written consent.

ADVANCE NOTICE REQUIREMENTS FOR STOCKHOLDER PROPOSALS AND NOMINATION OF
DIRECTORS

Our bylaws provide that stockholders seeking to bring business before, or
nominate directors at, any annual meeting of stockholders, must provide timely
notice in writing. To be timely, a stockholder's notice must be given in writing
to the Secretary not less than 120 days prior to the anniversary date of the
annual meeting from the prior year. The bylaws also specify requirements for the
proper form of a stockholder's notice.

NUMBER OF DIRECTORS; REMOVAL; VACANCIES

The bylaws provide that we have at least seven directors, with the exact
number fixed by the board of directors. Vacancies on the board of directors may
be filled only by the affirmative vote of the remaining directors then in office
or by a majority of the outstanding stock entitled to vote for directors. The
Delaware General Corporation Law provides that directors may be removed with or
without cause by the holders of a majority of the shares of stock entitled to
vote generally on the election of directors.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the common stock is [ ].

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SHARES ELIGIBLE FOR FUTURE SALE

We will have [ ] shares of common stock outstanding after this
offering. The shares sold in this offering will be freely tradable without
restriction under the Securities Act.

SALE OF SHARES

The [ ] million shares of common stock, ([ ] shares if the
over-allotment option is exercised in full,) that will continue to be owned by
Pacific Dunlop Stockholders will be "restricted securities" within the meaning
of Rule 144, and may not be sold in the absence of registration under the
Securities Act or unless an exemption from registration is available, including
the exemptions contained in Rule 144 and Rule 144A Securities Act. We have an
agreement with the Pacific Dunlop Stockholders that entitles them to request us
to register the shares of our common stock that they hold. The sale of these
shares pursuant to a registration statement would result in the shares becoming
freely tradable. See "Relationship and Agreements with Pacific Dunlop
Group -- Registration Rights and Ownership Maintenance Agreement."

Currently under Rule 144, the Pacific Dunlop Stockholders may sell within
any three-month period a number of restricted shares that does not exceed the
greater of (1) 1% of our then outstanding shares of common stock or (2) the
average weekly trading volume of our common stock during the four calendar weeks
preceding the sale, subject to the filing of a Form 144 with respect to the
sale. Sales under Rule 144 are also subject to requirements concerning manner of
sale, notice and availability of public information about us.

The Pacific Dunlop Stockholders have agreed to a "lock up" at the request
of the underwriters. Under the lock up, with exceptions, they cannot sell or
otherwise dispose of any of our common stock in the public market for a period
of 180 days after the date of this prospectus without first obtaining the
written consent of Merrill Lynch & Co. on behalf of the underwriters. See
"Underwriting -- No Sales of Similar Securities."

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CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS FOR
NON-UNITED STATES HOLDERS

GENERAL

The following is a general discussion of the principal U.S. federal income
and estate tax consequences of the ownership and disposition of our common stock
that may be relevant to you if you are a non-U.S. Holder. For purposes of this
discussion, a non-U.S. Holder is a beneficial owner of common stock that is any
of the following for U.S. federal income tax purposes:

- a nonresident alien individual,

- a foreign corporation,

- a foreign estate or trust, and

- a foreign partnership.

This discussion does not address all aspects of U.S. federal income and
estate taxation that may be relevant to you in light of your particular
circumstances, and does not address any foreign, state or local tax
consequences. Furthermore, this discussion is based on provisions of the
Internal Revenue Code. Treasury regulations and administrative and judicial
interpretations as of the date of this prospectus. All of these are subject to
change, possibly with retroactive effect, or different interpretations. If you
are considering buying common stock you should consult your own tax advisor
about current and possible future tax consequences of holding and disposing of
common stock in your particular situation.

DISTRIBUTIONS

If distributions are paid on the shares of our common stock, these
distributions generally will constitute dividends for U.S. federal income tax
purposes to the extent paid from our current or accumulated earnings and
profits, as determined under U.S. federal income tax principles, and then will
constitute return of capital that is applied against your basis in the common
stock to the extent these distributions exceed those earnings and profits.
Dividends paid to a non-U.S. holder that are not effectively connected with a
U.S. trade or business of the non-U.S. holder will be subject to United States
withholding tax at a 30% rate or, if a tax treaty applies, a lower rate
specified by the treaty. To receive a reduced treaty rate, a non-U.S. holder
must furnish to us or our paying agent a duly completed Form W-8BEN or
substitute form certifying to his qualification for the reduced rate.

Currently, withholding is generally imposed on the gross amount of a
distribution, regardless of whether we have sufficient earnings and profits to
cause the distribution to be a dividend for U.S. federal income tax purposes.
However, withholding on distributions made after December 31, 2000 may be on a
less than the gross amount of the distribution if the distribution exceeds a
reasonable estimate made by us of our accumulated and current earnings and
profits.

Dividends that are effectively connected with the conduct of a trade or
business within the U.S. and, if a tax treaty applies, are attributable to a
U.S. permanent establishment of the non-U.S. holder, are exempt from U.S.
federal withholding tax, provided that the non-U.S. holder furnishes to us or
our paying agent a duly completed Form W-8ECI or substitute form certifying the
exemption. However, dividends exempt from U.S. withholding because they are
effectively connected or they are attributable to a U.S. permanent establishment
are subject to U.S. federal income tax on a net income basis at the regular
graduated U.S. federal income tax rates. Any such effectively connected
dividends received by a foreign corporation may, under certain circumstances, be
subject to an additional "branch profits tax" at a 30% rate or a lower rate
specified by an applicable income tax treaty.

Under certain U.S. Treasury regulations, dividends paid before January 1,
2001 to an address outside the United States are presumed to be paid to a
resident of the country of address for purposes of the withholding discussed
above and for purposes of determining and applicability of a tax treaty rate.

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However, U.S. Treasury regulations applicable to dividends paid after December
31, 2000 eliminate this presumption, subject to transition rules and a non-U.S.
holder who wishes to claim the benefit of an applicable treaty rate, and avoid
back-up withholding, as discussed below, would be required to satisfy applicable
certification and other requirements.

For dividends paid after December 31, 2000, a non-U.S. holder generally
will be subject to U.S. backup withholding tax at a 31% rate under the backup
withholding rules described below, rather than a 30% rate or a reduced rate
under an income tax treaty, as described above, unless the non-U.S. holder
complies with Internal Revenue Service certification procedures or, in the case
of payments made outside the U.S. with respect to an offshore account,
documentary evidence procedures. Further, to claim the benefit of a reduced rate
of withholding under a tax treaty for dividends paid after December 31, 2000, a
non-U.S. holder must comply with modified IRS certification requirements.
Special rules also apply to dividend payments made after December 31, 2000 to
foreign intermediaries. U.S. or foreign wholly owned entities that are
disregarded for U.S. federal income tax purposes and entities that are treated
as fiscally transparent in the U.S., the applicable income tax treaty
jurisdiction, or both. You should consult your own tax advisor concerning the
effect, if any, of the rules affecting post-December 31, 2000 dividends on your
possible investment in common stock.

A non-U.S. holder eligible for a reduced rate of U.S. withholding tax under
an income tax treaty may obtain a refund of any excess amounts withheld by
filing an appropriate claim for refund along with the required information with
the IRS.

GAIN ON DISPOSITION OF COMMON STOCK

A non-U.S. holder generally will not be subject to U.S. federal income tax
with respect to gain recognized on a sale or other disposition of our common
stock unless one of the following applies:

- If the gain is effectively connected with a trade or business of the
non-U.S. holder in the United States and, if a tax treaty applies, the
gain is attributable to a U.S. permanent establishment maintained by the
non-U.S. holder. The non-U.S. holder will, unless an applicable treaty
provides otherwise, be taxed on its net gain derived from the sale under
regular graduated U.S. federal income tax rates. If the non-U.S. holder
is a foreign corporation, it may be subject to an additional branch
profits tax equal to 30% of its effectively connected earnings and
profits within the meaning of the Internal Revenue Code for the taxable
year, as adjusted for specified items, unless it qualifies for a lower
rate under an applicable income tax treaty and duly demonstrates that it
qualifies.

- If a non-U.S. holder who is an individual and holds our common stock as a
capital asset is present in the United States for 183 or more days in the
taxable year of the sale or other disposition, and specified other
conditions are met, the non-U.S. holder will be subject to a flat 30% tax
on the gain derived from the sale, which may be offset by certain U.S.
capital losses, despite the fact that the individual is not considered a
resident of the United States.

- If we are or have been a "U.S. real property holding corporation" for
U.S. federal income tax purposes at any time during the shorter of the
five-year period ending on the date of the disposition or the period
during which the non-U.S. holder held the common stock. We believe that
we never have been and are not currently a U.S. real property holding
corporation for U.S. federal income tax purposes. Although we consider it
unlikely based on our current business plans and operations, we may
become a U.S. real property holding corporation in the future. Even if we
were to become a U.S. real property holding corporation, any gain
recognized by a non-U.S. holder still would not be subject to U.S. tax if
the shares were considered to be "regularly traded on an established
securities market" (publicly traded) and the non-U.S. holder did not own,
actually or constructively, at any time during the shorter of the periods
described above, more than 5% of our common stock. If the stock is not
publicly traded or if you own more than 5% of the common stock and you
are disposing of stock, you may request a statement from the company as
to its status as a U.S. real property holding corporation.

66
<PAGE> 71

FEDERAL ESTATE TAX

Common stock owned by an individual who is not a citizen or resident, as
defined for U.S. estate tax purposes, of the United States at the time of death
will be included in that individual's gross estate for U.S. federal estate tax
purposes, unless an applicable estate tax treaty provides otherwise.

INFORMATION REPORTING AND BACKUP WITHHOLDING TAX

Under U.S. Treasury regulations, we must report annually to the IRS and to
each non-U.S. holder the amount of dividends paid to that holder and the tax
withheld with respect to those dividends. These information reporting
requirements apply even if withholding was not required because the dividends
were effectively connected dividends or withholding was reduced or eliminated by
an applicable income tax treaty. Pursuant to an applicable tax treaty, that
information may also be made available to the tax authorities in the country in
which the non-U.S. holder resides.

United States federal backup withholding generally is a withholding tax
imposed at the rate of 31% on specified payments to persons that fail to furnish
required information under the U.S. information reporting requirements. See the
discussion under "Distributions" above for rules regarding backup withholding on
dividends paid to non-U.S. holders after December 31, 2000.

As a general matter, information reporting and backup withholding will not
apply to a payment by or through a foreign office of a foreign broker of the
proceeds of a sale of our common stock effected outside the U.S. However,
information reporting requirements, but not backup withholding, will apply to a
payment by or through a foreign office of a broker of the proceeds of a sale of
our common stock effected outside the U.S. if that broker:

- is a U.S. person,

- is a foreign person that derives 50% or more of its gross income for
specified periods from the conduct of a trade or business in the United
States,

- is a "controlled foreign corporation" as defined in the formal Internal
Revenue Code, or

- is a foreign partnership with specified U.S. connections for payments
made after December 31, 2000.

Information reporting requirements will not apply in the above cases if the
broker has documentary evidence in its records that the beneficial owner is a
non-U.S. holder and specified conditions are met or the beneficial owner
otherwise establishes an exemption.

Payment by or through a U.S. office of a broker of the proceeds of a sale
of our common stock is subject to both backup withholding and information
reporting unless the holder certifies to the payor in the manner required as to
its non-U.S. status under penalties of perjury or otherwise establishes an
exemption.

Amounts withheld under the backup withholding rules do not constitute a
separate U.S. federal income tax. Rather, any amounts withheld under the backup
withholding rules will be refunded or allowed as a credit against the holder's
U.S. federal income tax liability, if any, provided the required information or
appropriate claim for refund is filed with the IRS.

THE FOREGOING DISCUSSION IS A SUMMARY OF THE PRINCIPAL TAX CONSEQUENCES OF
THE OWNERSHIP, SALE OR OTHER DISPOSITION OF OUR COMMON STOCK BY NON-U.S. HOLDERS
FOR U.S. FEDERAL INCOME AND ESTATE TAX PURPOSES. YOU ARE URGED TO CONSULT YOUR
OWN TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO YOU OF
OWNERSHIP AND DISPOSITION OF OUR COMMON STOCK, INCLUDING THE EFFECT OF ANY
STATE, LOCAL, FOREIGN OR OTHER TAX LAWS.

67
<PAGE> 72

UNDERWRITING

GENERAL

Our common stock will be offered by our selling stockholder through Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Bear, Stearns & Co. Inc. and J.P.
Morgan Securities Inc., as underwriters. Subject to the terms and conditions
described in a purchase agreement among us, the selling stockholder and the
underwriters, the selling stockholder has agreed to sell to the underwriters,
and the underwriters severally have agreed to purchase from the selling
stockholder, the number of shares listed opposite their names below.

<TABLE>
<CAPTION>
NUMBER
UNDERWRITERS OF SHARES
- --------------------------------------------------------- ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................
Bear, Stearns & Co. Inc. ................................
J.P. Morgan Securities Inc. .............................
---------
Total..........................................
=========
</TABLE>

The underwriters have agreed to purchase all of the shares sold under the
purchase agreement if any of the shares are purchased. If an underwriter
defaults, the purchase agreement provides that the purchase commitments of the
nondefaulting underwriters may be increased or the purchase agreement may be
terminated.

We and the selling stockholder have agreed to indemnify the underwriters
against certain liabilities, including liabilities under the Securities Act, and
to contribute to payments the underwriters may be required to make in respect of
those liabilities. Pacific Dunlop Limited has guaranteed the payment by us and
the selling stockholder of certain of these indemnification obligations.

The underwriters are offering the shares, subject to prior sale, when, as
and if issued to and accepted by them, subject to approval of legal matters by
their counsel, including the validity of the shares, and other conditions
contained in the purchase agreement, such as the receipt by the underwriters of
officer's certificates and legal opinions. The underwriters reserve the right to
withdraw, cancel or modify offers to the public and to reject orders in whole or
in part.

COMMISSIONS AND DISCOUNTS

The underwriters have advised us and the selling stockholder that they
propose initially to offer the shares to the public at the initial public
offering price on the cover page of this prospectus and to dealers at that price
less a concession of not in excess of $ per share. The underwriters may allow,
and the dealers may reallow, a discount of $ per share on sales to certain
dealers to other dealers. After the initial public offering, the public offering
price, concession and discount may be changed.

The following table shows the per share and total initial public offering
price, underwriting discount to be paid by the selling stockholder to the
underwriters and the proceeds before expenses to the selling stockholder. This
information assumes either no exercise or full exercise by the underwriters of
their over-allotment option.

<TABLE>
<CAPTION>
PER SHARE WITHOUT OPTION WITH OPTION
--------- -------------- -----------
<S> <C> <C> <C>
Public offering price.................................... $ $ $
Underwriting discount.................................... $ $ $
Proceeds to the selling stockholder...................... $ $ $
</TABLE>

The expenses of the offering, not including the underwriting discount, are
estimated at $ and are payable by the selling stockholder.

68
<PAGE> 73

The shares of common stock are being offered by the several underwriters,
subject to prior sale, when, as and if issued to and accepted by them, subject
to approval of certain legal matters by counsel for the underwriters and certain
other conditions. The underwriters reserve the right to withdraw, cancel or
modify such offer and to reject orders in whole or in part.

OVER-ALLOTMENT OPTION

The selling stockholder has granted an option to the underwriters to
purchase up to [ ] additional shares of common stock at the initial
public offering price, less the underwriting discount. The underwriters may
exercise these options for 30 days from the date of this prospectus solely to
cover over-allotments. If the underwriters exercise this option, each will be
obligated, subject to conditions contained in the purchase agreement, to
purchase a number of additional shares of common stock proportionate to that
underwriter's initial amount reflected in the above table.

RESERVED SHARES

At our request, the underwriters have reserved for sale, at the initial
public offering price, up to [ ] of the shares offered by this
prospectus to be sold to some of our directors, officers and employees of Ansell
and the Pacific Dunlop Group. If these persons purchase reserved shares, this
will reduce the number of shares available for sale to the general public. Any
reserved shares which are not orally confirmed for purchase within one day of
the pricing of this offering will be offered by the underwriters to the general
public on the same terms as the other shares offered by this prospectus.

NO SALES OF SIMILAR SECURITIES

The Pacific Dunlop Stockholders have agreed, with exceptions, not to sell
or transfer any common stock for 180 days after the date of this prospectus
without first obtaining the written consent of Merrill Lynch & Co. Specifically,
the Pacific Dunlop Stockholders have agreed not to directly or indirectly:

- offer, pledge, sell or contract to sell any common stock,

- sell any option or contract to purchase any common stock,

- purchase any option or contract to sell any common stock,

- grant any option, right or warrant for the sale of any common stock,

- lend or otherwise dispose of or transfer any common stock,

- request or demand that we file a registration statement related to the
common stock, or

- enter into any swap or other agreement that transfers, in whole or in
part, the economic consequence of ownership of any common stock whether
any such swap or transaction is to be settled by delivery of our common
stock or other securities, in cash or otherwise.

This lockup provision applies to common stock and to securities convertible
into or exchangeable or exercisable for or repayable with common stock. It also
applies to common stock owned now or acquired later by the person executing the
agreement or for which the person executing the agreement later acquires the
power of disposition.

NEW YORK STOCK EXCHANGE LISTING

We expect the shares to be approved for listing on the New York Stock
Exchange under the symbol "AHX". In order to meet the requirements for listing
our common stock on that exchange, the underwriters have undertaken to sell a
minimum number of shares to a minimum number of beneficial owners as required by
that exchange.

Before this offering, there has been no public market for our common stock.
The initial public offering price will be determined through negotiations among
us, the selling stockholder and the
69
<PAGE> 74

underwriters. The factors considered in determining the initial public offering
price, in addition to prevailing market conditions, are

- the valuation multiples of publicly traded companies that the
underwriters believe to be comparable to us,

- our financial information,

- the history of, and the prospects for, our company and the industry in
which we compete,

- an assessment of our management, our past and present operations, the
prospects for, and timing of, our future revenues,

- our present state of development, and

- the above factors in relation to market values and various valuation
measures of other companies engaged in activities similar to our company.

It is possible that an active trading market for the shares may not
develop. It is also possible that after the offering the shares will not trade
in the public market at or above the initial public offering price.

PRICE STABILIZATION, SHORT POSITIONS AND PENALTY BIDS

Until the distribution of our common stock is completed, SEC rules may
limit underwriters and selling group members from bidding for and purchasing our
common stock. However, the underwriters may engage in bids or purchases that
stabilize the price of our common stock, to peg, fix or maintain that price.

If the underwriters create a short position in the common stock in
connection with the offering, i.e., if they sell more shares than are listed on
the cover of this prospectus, the underwriters may reduce that short position by
purchasing shares in the open market. The underwriters may also elect to reduce
any short position by exercising all or part of the over-allotment option
described above. Purchases of the common stock to stabilize its price or to
reduce a short position may cause the price of the common stock to be higher
than it might be in the absence of such purchases.

The underwriters may also impose a penalty bid on certain underwriters and
selling group members. This means that if the underwriters purchase shares of
our common stock in the open market to reduce the underwriters' short position
or to stabilize the price of our common stock, they may reclaim the amount of
the selling concession from the underwriters and selling group members who sold
those shares. The imposition of a penalty bid may also affect the price of the
shares in that it discourages resales of those shares.

Neither we nor any of the underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of our common stock. In addition, neither
we nor any of the underwriters makes any representation that the underwriters
will engage in the transactions described above or that these transactions, once
commenced, will not be discontinued without notice.

RELATIONSHIPS WITH UNDERWRITERS

Some of the underwriters or their affiliates have engaged in, and may in
the future engage in, investment banking and other commercial dealings in the
ordinary course of business with us and members of the Pacific Dunlop Group.
They have received customary fees and commissions for these transactions.

LEGAL MATTERS

Gardner, Carton & Douglas, Chicago, Illinois, will pass upon the validity
of the common stock offered by this prospectus. Shearman & Sterling, New York,
New York has acted as counsel to the underwriters in connection with certain
legal matters relating to the common stock offered by this prospectus.
70
<PAGE> 75

EXPERTS

The combined financial statements and related combined financial statement
schedule of the Ansell Group as of June 30, 1998 and 1999 and for each of the
years in the three-year period ended June 30, 1999 and the balance sheet of
Ansell Healthcare Incorporated as of December 15, 1999, included in this
prospectus, have been included herein in reliance on the report of KPMG LLP,
independent certified public accountants, appearing elsewhere herein, and upon
the authority of said firm as experts in auditing and accounting.

WHERE TO FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the
Securities Act with respect to the common stock offered by this prospectus. This
prospectus does not contain all of the information that is in the registration
statement and the related exhibits and schedules. For further information with
respect to us and the common stock, you should refer to the registration
statement, including the related exhibits and schedules. The statements
contained in this prospectus as to the contents of any document filed as an
exhibit are of necessity brief descriptions and are not necessarily complete;
each of these statements is qualified in its entirety by reference to the
document.

You may read and copy this registration statement, including the exhibits,
without charge and obtain copies at prescribed rates at the Public Reference
Room of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
regional offices of the SEC located at Seven World Trade Center, Suite 1300, New
York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. You can obtain electronically filed documents,
including registration statements, reports and proxy statements and other
information, from the SEC's Web site at www.sec.gov. In addition, you can obtain
information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330.

As a result of the offering, we will be subject to the requirements of the
Exchange Act, which means that we will file reports, proxy statements and other
information with the SEC on a periodic basis. You can read and copy these
reports, proxy statements and other information we file with the SEC at the
offices of the SEC and at the website listed above.

We intend to furnish our stockholders with annual reports containing
audited financial statements examined by our independent accountants for each
fiscal year.

71
<PAGE> 76

INDEX TO FINANCIAL STATEMENTS

ANSELL GROUP AND ANSELL HEALTHCARE INCORPORATED

<TABLE>
<S> <C>
Ansell Group Combined Financial Statements:
Independent Auditors' Report.............................. F-2
Combined Statements of Net Assets as of June 30, 1998 and
1999 and as of September 30, 1999 (unaudited).......... F-3
Combined Statements of Operations for the years ended June
30, 1997, 1998 and 1999 and for the three months ended
September 30, 1998 and 1999 (unaudited)................ F-4
Combined Statements of Changes in Net Assets and Other
Comprehensive Income for the years ended June 30, 1997,
1998 and 1999 and for the three months ended September
30, 1999 (unaudited)................................... F-5
Combined Statements of Cash Flows for the years ended June
30, 1997, 1998 and 1999 and for the three months ended
September 30, 1998 and 1999 (unaudited)................ F-6
Notes to the Combined Financial Statements for the years
ended June 30, 1997, 1998 and 1999 and for the three
months ended September 30, 1998 and 1999 (unaudited)... F-7

Ansell Healthcare Incorporated:
Independent Auditors' Report.............................. F-28
Balance Sheet as of December 15, 1999..................... F-29
Notes to the Balance Sheet as of December 15, 1999........ F-30
</TABLE>

F-1
<PAGE> 77

INDEPENDENT AUDITORS' REPORT

The Board of Directors
Pacific Dunlop Limited:

We have audited the accompanying combined statements of net assets of
Ansell Group (as defined in Note 1) as of June 30, 1998 and 1999, and the
related combined statements of operations, changes in net assets and other
comprehensive income and cash flows for each of the years in the three-year
period ended June 30, 1999. These combined financial statements are the
responsibility of Ansell Group's management. Our responsibility is to express an
opinion on these combined financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatements. 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 combined financial statements referred to above present
fairly, in all material respects, the combined financial position of Ansell
Group as of June 30, 1998 and 1999, and the combined results of their operations
and their cash flows for each of the fiscal years in the three-year period ended
June 30, 1999 in conformity with generally accepted accounting principles.

/s/ KPMG LLP
- ------------------------------------

Columbus, Ohio
September 10, 1999

F-2
<PAGE> 78

ANSELL GROUP

COMBINED STATEMENTS OF NET ASSETS
(IN THOUSANDS, UNLESS OTHERWISE STATED)

<TABLE>
<CAPTION>
JUNE 30,
------------------- SEPTEMBER 30,
1998 1999 1999
-------- -------- -------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................ $53,668 $59,132 $84,775
Trade accounts receivable, net........................... 133,578 133,351 134,249
Inventories.............................................. 121,254 130,089 141,367
Deferred taxes........................................... 7,203 6,924 8,440
Other current assets..................................... 14,553 20,272 21,229
-------- -------- --------
Total current assets............................. 330,256 349,768 390,060
Property, plant and equipment, net......................... 158,441 211,809 212,918
Intangibles, net........................................... 257,396 265,580 263,794
Deferred taxes............................................. 4,185 -- --
Other assets............................................... 5,645 9,237 8,805
-------- -------- --------
Total assets..................................... $755,923 $836,394 $875,577
======== ======== ========
LIABILITIES AND NET ASSETS
Current liabilities:
Trade accounts payable................................... $63,352 $65,375 $64,393
Accrued and other liabilities............................ 22,943 22,167 21,131
Taxes payable............................................ 4,578 1,760 6,370
Revolving lines of credit due to affiliates.............. 336,301 379,402 410,189
Current portion of long-term debt........................ 3,109 27,458 33,821
-------- -------- --------
Total current liabilities........................ 430,283 496,162 535,904
Long-term debt, net of current portion..................... 10,475 1,811 1,793
Deferred taxes............................................. -- 4,063 3,733
Other long-term liabilities................................ 20,078 23,704 25,218
-------- -------- --------
Total liabilities................................ 460,836 525,740 566,648
-------- -------- --------
Minority interest.......................................... 7,308 9,124 9,785
-------- -------- --------
Net assets:
Capital employed......................................... 358,964 366,278 365,428
Accumulated other comprehensive income -- foreign
currency translation adjustment....................... (71,185) (64,748) (66,284)
-------- -------- --------
Total net assets................................. 287,779 301,530 299,144
-------- -------- --------
Commitments and contingencies
Total liabilities and net assets................. $755,923 $836,394 $875,577
======== ======== ========
</TABLE>

See the accompanying notes to the combined financial statements.

F-3
<PAGE> 79

ANSELL GROUP

COMBINED STATEMENTS OF OPERATIONS
(IN THOUSANDS, UNLESS OTHERWISE STATED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED JUNE 30, SEPTEMBER 30,
-------------------------------- --------------------
1997 1998 1999 1998 1999
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net sales........................... $669,749 $735,263 $738,382 $173,005 $173,847
Cost of goods sold.................. 452,529 487,785 483,464 113,274 113,378
-------- -------- -------- -------- --------
Gross profit...................... 217,220 247,478 254,918 59,731 60,469
Selling, general and administrative
expenses.......................... 125,760 138,501 149,621 34,637 39,054
Research and development expenses... 10,435 8,824 8,315 2,034 2,205
Restructuring charges............... -- -- 1,298 1,046 --
Amortization of intangibles......... 5,877 7,127 8,786 2,131 2,228
-------- -------- -------- -------- --------
Income from operations............ 75,148 93,026 86,898 19,883 16,982
Other (income) expense:
Interest expense, net............. 25,055 21,054 21,128 4,841 6,095
Foreign currency transactions,
net............................ 1,696 (4,438) (2,044) (106) (1,171)
Other............................. (480) (3) 760 (6) (30)
-------- -------- -------- -------- --------
26,271 16,613 19,844 4,729 4,894
-------- -------- -------- -------- --------
Income before taxes and minority
interests...................... 48,877 76,413 67,054 15,154 12,088
Income taxes........................ 10,026 9,202 10,967 2,453 2,450
Minority interests.................. 3,085 4,343 3,468 1,587 658
-------- -------- -------- -------- --------
Net income................ $35,766 $62,868 $52,619 $11,114 $8,980
======== ======== ======== ======== ========
</TABLE>

See the accompanying notes to the combined financial statements.
F-4
<PAGE> 80

ANSELL GROUP

COMBINED STATEMENTS OF CHANGES IN NET ASSETS AND
OTHER COMPREHENSIVE INCOME
(IN THOUSANDS, UNLESS OTHERWISE STATED)

<TABLE>
<CAPTION>
ACCUMULATED
OTHER
CAPITAL COMPREHENSIVE
EMPLOYED INCOME TOTAL
-------- ------------- --------
<S> <C> <C> <C>
NET ASSETS AT JULY 1, 1996............................... $252,973 $(34,844) $218,129
Capital transactions with affiliates..................... 20,429 -- 20,429
Comprehensive income:
Net income............................................. 35,766 -- 35,766
Foreign currency translation adjustment................ -- 1,205 1,205
--------
Total comprehensive income..................... 36,971
-------- -------- --------
NET ASSETS AT JUNE 30, 1997.............................. 309,168 (33,639) 275,529
Capital transactions with affiliates..................... (13,072) -- (13,072)
Comprehensive income:
Net income............................................. 62,868 -- 62,868
Foreign currency translation adjustment................ -- (37,546) (37,546)
--------
Total comprehensive income..................... 25,322
-------- -------- --------
NET ASSETS AT JUNE 30, 1998.............................. 358,964 (71,185) 287,779
Capital transactions with affiliates..................... (45,305) -- (45,305)
Comprehensive income:
Net income............................................. 52,619 -- 52,619
Foreign currency translation adjustment................ -- 6,437 6,437
--------
Total comprehensive income..................... 59,056
-------- -------- --------
NET ASSETS AT JUNE 30, 1999.............................. 366,278 (64,748) 301,530
Capital transactions with affiliates (unaudited)......... (9,830) -- (9,830)
Comprehensive income:
Net income (unaudited)................................. 8,980 -- 8,980
Foreign currency translation adjustment (unaudited).... -- (1,536) (1,536)
--------
Total comprehensive income (unaudited)......... 7,444
-------- -------- --------
NET ASSETS AT SEPTEMBER 30, 1999 (UNAUDITED)............. $365,428 $(66,284) $299,144
======== ======== ========
</TABLE>

See the accompanying notes to the combined financial statements.
F-5
<PAGE> 81

ANSELL GROUP

COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS, UNLESS OTHERWISE STATED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED JUNE 30, SEPTEMBER 30,
---------------------------- ------------------
1997 1998 1999 1998 1999
-------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income........................................... $35,766 $62,868 $52,619 $11,114 $8,980
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation..................................... 19,804 19,002 21,728 5,162 6,066
Amortization of intangibles...................... 5,877 7,127 8,786 2,131 2,228
Deferred income taxes............................ (2,639) 5,024 3,375 (1,913) (1,883)
Loss (gain) on sales of property, plant &
equipment..................................... 101 2,119 385 (17) (31)
Minority interest................................ 3,085 4,343 3,468 1,587 658
Changes in assets and liabilities, net of effects
of acquisitions:
Trade accounts receivable, net................... (7,074) (18,443) 12,648 (4,566) (2,733)
Inventories...................................... 13,328 (5,957) (380) (18,598) (13,038)
Other current assets............................. 3,465 826 (3,523) (10,631) (1,234)
Trade accounts payable........................... 9,896 1,924 (3,317) 3,414 (77)
Accrued and other liabilities.................... 2,995 (2,971) (1,571) 6,626 (727)
Taxes payable.................................... 2,407 (1,634) (3,190) (76) 4,653
Other long-term assets and liabilities........... 4,919 11,633 (3,599) 14,741 1,027
-------- ------- ------- ------- -------
Net cash provided by operating activities..... 91,930 85,861 87,429 8,974 3,889
-------- ------- ------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property, plant and
equipment.......................................... 491 4,838 1,122 329 322
Purchase of property, plant and equipment............ (31,272) (34,049) (57,926) (16,546) (11,743)
Payments for acquisitions, net of cash acquired...... (59,243) (13,083) (33,360) -- --
-------- ------- ------- ------- -------
Net cash used in investing activities......... (90,024) (42,294) (90,164) (16,217) (11,421)
-------- ------- ------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings (repayments) of third party debt.......... (15,746) 5,176 10,718 (6,558) 6,737
Affiliates borrowings (repayments)................... (406) (5,852) 39,003 35,479 27,176
Capital contributions from affiliates................ 29,975 1,931 22,935 -- --
Dividends paid to affiliates......................... (9,546) (15,003) (68,240) -- --
-------- ------- ------- ------- -------
Net cash provided by (used in) financing
activities.................................. 4,277 (13,748) 4,416 28,921 33,913
Effect of exchange rate changes on cash and cash
equivalents.......................................... (1,138) (4,393) 3,783 5,232 (738)
-------- ------- ------- ------- -------
Net increase in cash and cash equivalents.............. 5,045 25,426 5,464 26,910 25,643
Cash and cash equivalents:
Beginning of period.................................. 23,197 28,242 53,668 53,668 59,132
-------- ------- ------- ------- -------
End of period........................................ $28,242 $53,668 $59,132 $80,578 $84,775
======== ======= ======= ======= =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest, net of amounts capitalized............... $27,027 $23,443 $23,883 $5,919 $6,678
Income taxes....................................... 10,764 5,417 4,268 1,018 165
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Payable to seller for acquisition.................... $9,500 -- -- -- --
Reduction in affiliate debt due to transfer of PD
Asia -- AIT to Pacific Dunlop Group................ -- -- -- -- $(8,719)
</TABLE>

See the accompanying notes to the combined financial statements.

F-6
<PAGE> 82

ANSELL GROUP

NOTES TO THE COMBINED FINANCIAL STATEMENTS
(IN THOUSANDS, UNLESS OTHERWISE STATED)

(1) BASIS OF PRESENTATION

The accompanying combined financial statements have been prepared in
accordance with generally accepted accounting principles ("GAAP") on a basis
which reflects the combined assets and liabilities ("net assets") and sales,
costs of sales and other income and expenses ("operations") and cash flows of
the companies constituting Ansell Group ("Ansell Group"). Ansell Group consists
of the entities set forth below and their respective subsidiaries directly or
indirectly owned by Pacific Dunlop Limited ("PDL" which, together with its
subsidiaries, are referred to as the Pacific Dunlop Group)assuming that Ansell
Group was organized as a separate legal entity for all periods presented.
(Ownership percentage is 100% unless otherwise indicated):

<TABLE>
<CAPTION>
JURISDICTION OF
ENTITY ORGANIZATION
- ------ ----------------
<S> <C>
North American companies:
Ansell Services Inc. ....................................... United States
Ansell Protective Products, Inc. ......................... United States
Ansell Healthcare Products Inc. USA....................... United States
Ansell Industrial de Mexico S.A. de C.V................... Mexico
Ansell Perry de Mexico S.A. de C.V........................ Mexico
Ansell Canada Inc. ....................................... Canada
Comercializadona GNK S.A. de C.V.......................... Mexico
Golden Needles de Mexico S.A. de C.V...................... Mexico
European companies:
Ansell GmbH............................................... Germany
Ansell S.A................................................ France
Laboratories Degan S.A................................. France
Ansell UK Ltd............................................. United Kingdom
Mates Vending Ltd...................................... United Kingdom
Ansell Glove Company Ltd.................................. United Kingdom
Golden Needles Knitting and Glove Company Ltd.......... United Kingdom
Ansell Protective Products Europe NV...................... Belgium
Asian and Pacific companies:
Ansell Australian Division................................ Australia
Ansell New Zealand Division............................... New Zealand
Ansell (Thailand) Ltd..................................... Thailand
Suretex Limited........................................... Thailand
STX Prophylactics S.A. (Proprietary) Ltd............... South Africa
Latex Investments Ltd.................................. Thailand
Suretex Prophylactics India Ltd...................... India
Ansell Lanka (Pvt) Ltd.................................... Sri Lanka
PDOCB Pty Ltd............................................. Australia
Ansell Medical Product Pvt Ltd......................... India
Kemwell International Limited (74.8% owned by Ansell India
Group).................................................
JK Ansell Ltd (50% owned by Ansell Group)................. India
Pacific Dunlop Japan KK................................... Japan
</TABLE>

F-7
<PAGE> 83
ANSELL GROUP

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, UNLESS OTHERWISE STATED)

<TABLE>
<CAPTION>
JURISDICTION OF
ENTITY ORGANIZATION
- ------ ----------------
<S> <C>
PD Holdings (Malaysia) Sdn Bhd.............................. Malaysia
Ansell Malaysia Sdn Bhd (75% owned by Ansell Group)....... Malaysia
Ansell Medical Sdn Bhd (75% owned by Ansell Group)........ Malaysia
Ansell NP Sdn Bhd (75% owned by Ansell Group)............. Malaysia
Ansell (Kedah) Sdn Bhd.................................... Malaysia
Ansell Ambi Sdn Bhd....................................... Malaysia
Ansell (Kulim) Sdn Bhd.................................... Malaysia
</TABLE>

PDL has reorganized Ansell Group into Ansell Healthcare Incorporated
("Ansell Healthcare") as more fully described in Note 13 (Subsequent Events). In
the opinion of Ansell Group's management, the accompanying combined financial
statements include all material expenses that Ansell Group would have incurred
had it been operating as an independent entity for all periods presented.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Business

Ansell Group is a designer, developer, manufacturer and marketer of
protective gloves and condoms for use in professional, occupational and personal
healthcare applications. Ansell Group also manufactures and sells certain
related products. Ansell Group's manufacturing facilities are located in the
United States, Malaysia, Thailand, Sri Lanka, India, Mexico and the United
Kingdom. Its principal executive offices are located in Red Bank, New Jersey, in
the United States.

(b) Principles of Combination

The combined financial statements include the entities listed in Note 1.
All transactions and balances between the companies listed in Note 1 have been
eliminated.

The interim combined statement of net assets of Ansell Group as of
September 30, 1999, the statements of operations, changes in net assets and
other comprehensive income, and cash flows for the three months ended September
30, 1998 and 1999 are unaudited. Certain information and note disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. In the opinion of
management, all adjustments, consisting only of normal recurring adjustments,
necessary for the fair presentation of the financial position, results of
operations and cash flows, have been included in such unaudited financial
statements. The result of operations for the three months ended September 30,
1999 are not necessarily indicative of the results to be expected for the entire
year.

(d) Cash and Cash Equivalents

Cash and cash equivalents include highly liquid investments with original
maturity dates of three months or less.

(e) Inventories

Inventories are valued at the lower of cost or market. Cost, which includes
direct materials, labor and overhead plus indirect overhead, is determined using
the first in, first out (FIFO) method.

F-8
<PAGE> 84
ANSELL GROUP

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, UNLESS OTHERWISE STATED)

(f) Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated
depreciation. Ansell Group capitalized interest of approximately $540, $602 and
$1,009 for the fiscal years ended June 30, 1997, 1998 and 1999, respectively.
Depreciation is charged on a straight-line basis over the estimated useful lives
of the assets as follows:

<TABLE>
<S> <C>
Buildings............................... 40 years
Plant and equipment..................... 5 to 10 years
Leasehold improvements.................. Shorter of useful life or lease term
</TABLE>

(g) Goodwill and Brand Names

Goodwill, which represents the excess of purchase price over the fair value
of net assets acquired, is amortized on a straight-line basis over estimated
periods to be benefited (not exceeding 40 years). Brand names are recorded at
cost and are amortized over 40 years, the estimated useful life.

Ansell Group assesses the recoverability of goodwill and brand names by
determining whether the amortization of the respective goodwill and brand names
balance over its remaining life can be recovered from undiscounted future
operating cash flows. The amount of impairment, if any, is measured based on
projected discounted future operating cash flows using a discount rate
reflecting Ansell Group's average cost of funds. The assessment of the
recoverability of goodwill and brand names will be impacted if estimated
undiscounted future operating cash flows are not achieved.

(h) Taxation

Ansell Group files its own tax returns in each jurisdiction in which it
operates, except in certain jurisdictions where it files jointly with other PDL
subsidiaries. Ansell Group has a tax sharing arrangement with those PDL
subsidiaries in these countries to share the tax burden or benefits based upon
each company's results.

Taxes are accounted for under the asset and liability method. Deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases, operating losses
and tax credit carryforwards. Deferred tax assets and liabilities are measured
using enacted tax rates in the respective jurisdictions in which Ansell Group
operates that are expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. The effect
on deferred income tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.

(i) Advertising

Advertising costs are expensed as incurred. Advertising costs are
classified as selling, general and administrative expenses in the combined
statements of operations and amounted to approximately $13,116, $12,889 and
$12,686 during the fiscal years ended June 30, 1997, 1998 and 1999,
respectively.

(j) Currency Translation and Transactions

The reporting currency for the combined financial statements of Ansell
Group is the U.S. dollar. The functional currency for each member of Ansell
Group's operations is generally the applicable local currency. Accordingly, the
assets and liabilities of companies whose functional currency is other than the
U.S. dollar are included in the combination by translating the assets and
liabilities into the reporting

F-9
<PAGE> 85
ANSELL GROUP

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, UNLESS OTHERWISE STATED)

currency at the exchange rates applicable at the end of the reporting year. The
statements of operations and cash flows of such non-U.S. dollar functional
currency operations are translated at the monthly average exchange rates during
the year. Translation gains or losses are accumulated as other comprehensive
income which is a separate component of net assets. Currency transaction gains
or losses arising from transactions of Ansell Group's companies in currencies
other than the functional currency are included in operations at each reporting
period.

(k) Pension and Other Post-Retirement Plans

Ansell Group has defined benefit pension plans covering its U.S.
subsidiaries' employees. The benefits are based either on years of service or
the employee's average compensation during their employment. The cost of these
plans is being funded currently.

Ansell Group also sponsors two defined benefit health care plans which
cover certain retirees and current employees of two U.S. operating units. Ansell
Group pays benefits under the plans when due and does not fund its plan
obligations as they accrue. The net periodic costs are recognized as employees
render the services necessary to earn the post-retirement benefits.

Certain Ansell Group companies sponsor defined contribution plans. Benefits
are determined and funded annually based upon the terms of the plans.
Contributions under these plans amounted to $2,935, $3,353, and $3,166, for the
fiscal years ended June 30, 1997, 1998 and 1999, respectively.

(l) Derivative Financial Instruments

Ansell Group has only limited involvement with derivative financial
instruments and does not use them for trading purposes. These instruments are in
the form of currency and commodity forward/futures contracts and are used as a
hedge against anticipated currency and commodity price exposures. The
transactions which may be covered are future profits on specific sales of
overseas controlled entities and future foreign exchange and commodity
requirements. The transactions do not exceed 18 months duration and hedge future
transactions that will occur within Ansell Group during this time frame. Gains
and losses on derivatives used as hedges are accounted for on the same basis as
the underlying physical exposure they hedge. Accordingly, hedge gains and losses
are included in the combined statement of operations when the gain or loss
arising on the related physical exposures are recognized.

(m) Fair Value of Financial Instruments

The carrying amount of cash and cash equivalents, trade accounts
receivable, other current assets and current liabilities approximates fair
market value because of the short-term maturity of these financial instruments.
It is not practical to determine the fair value of balances with PDL due to the
related party nature of these financial instruments. The carrying of debt
payable to third parties approximates fair value, as the debt was recently
issued. The other financial instruments are not significant to the combined
financial statements.

(n) Concentration of Credit Risk and Commodity Risk

Ansell Group's revenue base is widely diversified by geographic region and
by individual customer. Ansell Group's products are utilized in many different
industries. Ansell Group performs ongoing credit evaluations of its customers'
financial condition and, generally, requires no collateral from its customers.

Ansell Group is subject to risk associated with the consistent availability
of raw rubber harvested from independent growers and processed into latex
concentrate by plant operators in Malaysia and Thailand. Ansell Group enters
into commodity forward contracts to offset Ansell Group's exposure to the
potential
F-10
<PAGE> 86
ANSELL GROUP

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, UNLESS OTHERWISE STATED)

change in prices mainly for raw rubber and latex concentrate used in the
manufacturing of Ansell Group's gloves and condoms.

(o) Revenue Recognition

Revenue is recognized when title to a product has transferred.

(p) Impairment of Long-Lived Assets

Ansell Group accounts for long-lived assets and certain identifiable
intangibles by reviewing for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net undiscounted cash
flows expected to be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceed the fair value of the assets. Assets to be
disposed of are reported at the lower of the carrying amount or fair value less
costs to sell.

(q) Comprehensive Income

Comprehensive income consists of net income and foreign currency
translation adjustments and is presented in the combined statements of changes
in net assets.

(r) Use of Estimates

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

(s) Recent Accounting Pronouncements

In June 1999, SFAS No. 137, Accounting for Derivative Instruments and
Hedging Activities -- Deferral of Effective Date of FASB Statement No. 133, was
issued. This Statement amended the effective date of the application of the SFAS
No. 133, Accounting for Derivatives Instruments and Hedging Activities. SFAS No.
133 establishes accounting and reporting standards for derivative instruments,
including derivative instruments embedded in other contracts, and for hedging
activities. SFAS No. 133 is effective for all fiscal quarters or years beginning
after June 15, 2000. Ansell Group has not yet analyzed the impact of this
pronouncement on its combined financial statements.

(3) ACQUISITIONS

Ansell Group acquired four businesses during the fiscal years ended June
30, 1997, 1998 and 1999. All of these transactions were accounted for under the
purchase method of accounting and the funds for these transactions were provided
by the Pacific Dunlop Group. The following paragraphs summarize these
transactions.

In April 1997, Ansell Group acquired the assets of Golden Needles Knitting,
Inc. (GNK). GNK principally manufactures protective gloves in North Carolina.
The purchase price of $81.2 million of which $71.7 million was paid in cash,
$61.3 million and $10.4 million during the fiscal years ended June 30, 1997 and
1998, respectively, and $9.5 million is a note payable due April 23, 2000. The
purchase price exceeded the fair value of the net assets acquired by
approximately $61.4 million, which was allocated between
F-11
<PAGE> 87
ANSELL GROUP

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, UNLESS OTHERWISE STATED)

goodwill and intangibles. Goodwill and intangibles are being amortized on a
straight-line basis over 40 years.

In September 1997, Ansell Group entered into a joint venture to acquire 50%
of JK Chemicals Limited for $2.7 million in cash. Now known as JK Ansell, Ltd.,
it manufactures and markets condoms in India and other geographical areas. The
purchase price exceeded the fair value of the net assets acquired by
approximately $1.6 million, which is being amortized on a straight-line basis
over 20 years.

In September 1998, Ansell Group acquired 74.8% of Kemwell International
Limited (Kemwell) for $7.6 million in cash. Kemwell is a manufacturer of latex
gloves located in India. The purchase price exceeded the fair value of assets
acquired by approximately $5.1 million, which is being amortized on a
straight-line basis over 20 years.

In November 1998, Ansell Group acquired Suretex Limited (Suretex), a
condom, glove and rubber band manufacturer for $26.4 million in cash. Suretex
has manufacturing facilities in Thailand and India, as well as packaging
facilities in South Africa. The purchase price exceeded the fair value of assets
acquired by approximately $11.6 million, which is being amortized on a
straight-line basis over 20 years.

The results of the above mentioned acquired businesses have been included
in the combined financial statements since the acquisition date.

The following unaudited pro forma information presents a summary of
combined results of operations including the Suretex and Kemwell acquisitions
mentioned above as if the acquisitions had occurred on the first day of the
fiscal year prior to the fiscal year in which the acquisitions had occurred:

<TABLE>
<CAPTION>
1998 1999
-------- --------
(UNAUDITED)
<S> <C> <C>
Net sales................................................... $766,345 $740,822
Net income.................................................. $56,643 $52,388
</TABLE>

These unaudited pro forma results have been prepared for comparative
purposes only and include certain adjustments, such as additional amortization
expense as a result of goodwill and an increased interest expense on acquisition
debt. They do not purport to be indicative of the results of operations that
actually would have resulted had the acquisition occurred on the first day of
the fiscal year prior to the fiscal year in which the acquisitions occurred, or
of future results of operations of the combined entities.

(4) BALANCE SHEET COMPONENTS

(a) Trade Accounts Receivable, Net

Trade accounts receivable, net, consisted of the following at June 30:

<TABLE>
<CAPTION>
1998 1999
-------- --------
<S> <C> <C>
Trade accounts receivable................................... $142,377 $144,084
Allowance for doubtful accounts............................. (2,745) (4,318)
Allowance for rebates and other claims...................... (6,054) (6,415)
-------- --------
$133,578 $133,351
======== ========
</TABLE>

F-12
<PAGE> 88
ANSELL GROUP

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, UNLESS OTHERWISE STATED)

(b) Inventories

Inventories consisted of the following at June 30:

<TABLE>
<CAPTION>
1998 1999
-------- --------
<S> <C> <C>
Raw materials and other..................................... $24,745 $18,619
Work in progress............................................ 14,669 20,204
Finished goods.............................................. 81,840 91,266
-------- --------
$121,254 $130,089
======== ========
</TABLE>

The unaudited September 30, 1999 inventories consisted of: raw materials
and other $28,884, work in progress $31,003, and finished goods $81,480.

Other current assets consisted of the following at June 30:

<TABLE>
<CAPTION>
1998 1999
------- -------
<S> <C> <C>
Prepaid expenses............................................ $2,420 $3,806
Other current assets........................................ 12,133 16,466
------- -------
$14,553 $20,272
======= =======
</TABLE>

(d) Other Assets

Other assets consisted of the following at June 30:

<TABLE>
<CAPTION>
1998 1999
------ ------
<S> <C> <C>
Cash surrender value of life insurance...................... $4,689 $5,484
Other....................................................... 956 3,753
------ ------
$5,645 $9,237
====== ======
</TABLE>

(e) Property, Plant and Equipment, Net

Property, plant and equipment, net, consisted of the following at June 30:

<TABLE>
<CAPTION>
1998 1999
-------- --------
<S> <C> <C>
Land........................................................ $214 $1,635
Buildings and leasehold improvements........................ 40,346 48,759
Plant and equipment......................................... 205,814 249,235
Construction in progress.................................... 19,465 43,621
-------- --------
265,839 343,250
Less accumulated depreciation............................... (107,398) (131,441)
-------- --------
$158,441 $211,809
======== ========
</TABLE>

F-13
<PAGE> 89
ANSELL GROUP

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, UNLESS OTHERWISE STATED)

(f) Intangibles, Net

Intangibles, net, consisted of the following at June 30:

<TABLE>
<CAPTION>
1998 1999
-------- --------
<S> <C> <C>
Goodwill, less accumulated amortization of $50,918 and
$59,845 in 1998 and 1999, respectively.................... $203,578 $214,934
Brand names, less accumulated amortization of $7,161 and
$8,763 in 1998 and 1999, respectively....................... 53,818 50,646
-------- --------
$257,396 $265,580
======== ========
</TABLE>

(g) Accrued and Other Liabilities

Accrued and other liabilities consisted of the following at June 30:

<TABLE>
<CAPTION>
1998 1999
------- -------
<S> <C> <C>
Employee compensation and benefits.......................... $9,540 $7,193
Other....................................................... 13,403 14,974
------- -------
$22,943 $22,167
======= =======
</TABLE>

(h) Other Long-term Liabilities

Other long-term liabilities consisted of the following at June 30:

<TABLE>
<CAPTION>
1998 1999
------- -------
<S> <C> <C>
Employee compensation and benefits.......................... $3,218 $5,142
Pension and other post-retirement benefits.................. 10,299 15,808
Other....................................................... 6,561 2,754
------- -------
$20,078 $23,704
======= =======
</TABLE>

(5) FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISKS

Credit risk on off-balance sheet derivative contracts is minimized as
counterparties to the transactions arranged through PDL are recognized financial
intermediaries with acceptable credit ratings determined by a recognized rating
agency. Ansell Group management believes that exposure to any single
counterparty or group of counterparties is not material. Ansell Group exposure
is first with PDL who initiated the transactions. The table below displays the
face value, credit risk and net fair value of off-balance sheet financial
instruments outstanding at June 30, 1997, 1998 and 1999.

Face Value

This is the contract's value upon which a market rate is applied to produce
a gain or loss that becomes the settlement value of the derivative financial
instrument.

Credit Risk

This is the maximum exposure to Ansell Group in the event that all
counterparties who have amounts outstanding to Ansell Group under derivative
financial instruments, fail to honor their side of the contracts. Ansell Group's
exposure is almost entirely (over 99%) to banks. Amounts owed by Ansell Group
under derivative financial instruments are not included.

F-14
<PAGE> 90
ANSELL GROUP

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, UNLESS OTHERWISE STATED)

Net Fair Value

This is the amount at which the instrument could be extinguished between
willing parties in a normal market in other than a liquidation or forced sale
environment. The net amount owed (to)/from financial institutions under all
derivative financial instruments would have been $15.1 million, $(1.5) million
and $(8.7) million if all contracts were closed out on June 30, 1997, 1998 and
1999, respectively.

<TABLE>
<CAPTION>
FACE VALUE CREDIT RISK NET FAIR VALUE
----------------------- ------------------- ---------------------
1997 1998 1999 1997 1998 1999 1997 1998 1999
------ ----- ------ ----- ---- ---- ----- ----- -----
(MILLIONS) (MILLIONS) (MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOREIGN EXCHANGE
CONTRACTS
Purchase/Sales Contracts
-- U.S. dollars........ $95.7 $2.0 $14.1 $4.0 $0.1 -- $4.0 $0.1 $(1.1)
-- Australian
dollars............. 257.6 3.5 11.3 -- -- -- -- -- --
-- Malaysian dollars... 51.1 1.9 -- 2.1 -- -- 2.1 (0.1) --
-- Belgium francs...... 17.6 -- -- 0.1 -- -- 0.3 -- --
-- Canadian dollars.... 22.9 -- -- 1.0 -- -- 1.0 -- --
-- Deutsche marks...... 42.3 -- -- 0.7 -- -- 0.8 -- --
-- French francs....... 31.6 -- -- 0.5 -- -- 0.6 -- --
-- British pounds...... 43.7 -- 44.6 2.6 -- -- 2.6 -- --
-- Sri Lanka rupees.... -- 15.8 14.7 -- -- -- -- -- --
-- Euro dollars........ -- -- 95.5 -- -- -- -- -- --
-- Other currencies.... 41.7 2.3 17.5 4.2 0.1 -- 3.5 (1.5) (7.6)
COMMODITY CONTRACTS
Commodity Futures
-- U.S. dollars........ -- -- -- -- -- -- -- -- --
-- Other currencies.... 4.2 -- -- 0.2 -- -- 0.2 -- --
------ ----- ------ ----- ---- -- ----- ----- -----
Total.......... $608.4 $25.5 $197.7 $15.4 $0.2 -- $15.1 $(1.5) $(8.7)
====== ===== ====== ===== ==== == ===== ===== =====
</TABLE>

Credit Risk by Maturity

The following table indicates the value of amounts owed by counterparties
with maturity ranges. Based on Ansell Group policy of not having overnight
exposures to an entity rated lower than A- by Standard & Poor's or A3 by Moody's
Investors Service, it is felt the risk to Ansell Group of the counterparty
default loss is not material.

<TABLE>
<CAPTION>
FOREIGN EXCHANGE
RELATED CONTRACTS COMMODITY CONTRACTS TOTAL
-------------------- --------------------- -------------------
1997 1998 1999 1997 1998 1999 1997 1998 1999
----- ---- ----- ----- ----- ----- ----- ---- ----
(MILLIONS) (MILLIONS) (MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TERM
0 to 6 months.................. $8.7 $0.2 -- $0.2 -- -- $8.9 $0.2 --
6 to 12 months................. 6.5 -- -- -- -- -- 6.5 -- --
1 to 2 years................... -- -- -- -- -- -- -- -- --
----- ---- ----- ---- ---- --- ----- ---- ----
Total................ $15.2 $0.2 -- $0.2 -- -- $15.4 $0.2 --
===== ==== ===== ==== ==== === ===== ==== ====
</TABLE>

F-15
<PAGE> 91
ANSELL GROUP

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, UNLESS OTHERWISE STATED)

Market or Liquidity Risk

Ansell Group seeks to reduce the risk of being forced to exit derivative
financial instrument positions at below their real worth or of finding it cannot
exit the position at all, due to lack of liquidity in the market. This is
accomplished by dealing only in liquid contracts dealt by many counterparties;
and by dealing only in large and highly liquid and stable international markets.

Hedges and Anticipated Future Transactions

Ansell Group enters into certain foreign exchange derivative transactions
to hedge anticipated future transactions. At the end of the year, the
transaction gains and (losses), both realized and unrealized, are calculated and
if the future transaction remains assured they are deferred in the statement of
net assets. At June 30, 1997, 1998 and 1999, Ansell Group had deferred gains of
$1.4 million, $0.3 million and $3.5 million, respectively. Terms of anticipated
transaction exposure are less than one year.

(6) REVOLVING LINES OF CREDIT DUE TO AFFILIATES

Certain Ansell Group entities maintain revolving credit agreements with PDL
affiliated entities that are not part of Ansell Group. Interest rates on these
revolving credit agreements due to affiliates varied from 0% to 7.75% in fiscal
1999. Amounts outstanding under these revolving lines of credit due to
affiliates are payable on demand and totaled $336,301 and $379,402 at June 30,
1998 and 1999, respectively.

$40 million of non-interest bearing payables to affiliates are included in
the revolving lines of credit due to affiliate balance at June 30, 1998 and
1999. In addition, for those entities which are divisions, effective July 1,
1997, Pacific Dunlop Group determined that a portion of the debt outstanding
would be treated as permanently invested and bear no interest charge. If all
debt outstanding were interest bearing, such interest (using the weighted
average interest rate charged by PDL during the period) would have increased by
$7.8 million, and $7.5 million during 1998 and 1999, respectively.

(7) DEBT

Long-term debt at June 30, 1998 and 1999 was $10,475 and $1,811,
respectively. Long-term debt consisted of the following at June 30:

<TABLE>
<CAPTION>
DESCRIPTION INTEREST RATE MATURITIES 1998 1999
- -------------------- ------------------------------ ------------------------------- ------- -------
<S> <C> <C> <C> <C>
Bank and other loans Varying interest rates between Varies between October 15, 1999
- -- secured 4.22% and 20.00% and July 2, 2002 $1,411 $3,218
Bank and other loans Varying interest rates between Varies between October 15, 1999
-- unsecured 4.22% and 20.00% and July 2, 2002 142 1,166
Trade bills payable Varies Varies 2,531 --
Belgian revolving
line of credit Interest rate of 3.75% December 31, 1999 -- 15,385
Note payable Interest rate of 7.75% and April 23, 2000 9,500 9,500
8.50% at June 30, 1998 and
1999, respectively.
------- -------
13,584 29,269
Less: current portion (3,109) (27,458)
------- -------
Total long-term debt $10,475 $1,811
======= =======
</TABLE>

F-16
<PAGE> 92
ANSELL GROUP

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, UNLESS OTHERWISE STATED)

Certain borrowings are secured by cash deposits and plant and equipment.

Ansell Protective Products Europe NV maintains a line of credit with
borrowings up to 810 million Belgian francs ($20.8 million). Total borrowings
under this line of credit were 600 million Belgian francs ($15.4 million) at
June 30, 1999.

A portion of the 1997 acquisition of the assets of Golden Needles Knitting,
Inc. was financed through a $9.5 million note payable to the sellers, which
bears interest equal to the prime rate and is due on April 23, 2000.

Debt maturities for each of the next five years are $27,458 in 2000, $571
in 2001, $1,083 in 2002, $157 in 2003 and $0 in 2004.

Interest expense on the revolving lines of credit due to affiliates and
debt consisted of the following for the years ended June 30:

<TABLE>
<CAPTION>
1997 1998 1999
------- ------- -------
<S> <C> <C> <C>
Affiliates............................................ $24,241 $19,382 $19,854
Third-parties......................................... 2,786 4,061 4,029
------- ------- -------
Total interest expense...................... 27,027 23,443 23,883
Interest income....................................... (1,972) (2,389) (2,755)
------- ------- -------
Interest expense, net....................... $25,055 $21,054 $21,128
======= ======= =======
</TABLE>

F-17
<PAGE> 93
ANSELL GROUP

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, UNLESS OTHERWISE STATED)

(8) BENEFIT PLANS

The following table sets forth the funded status and amounts recognized in
the combined financial statements for Ansell Group's defined benefit plans as of
March 31, adjusted for fourth quarter contributions:

<TABLE>
<CAPTION>
1998 1999
------------------------------ ------------------------------
ASSETS EXCEED ACCUMULATED ASSETS EXCEED ACCUMULATED
ACCUMULATED BENEFITS ACCUMULATED BENEFITS
BENEFITS EXCEED ASSETS BENEFITS EXCEED ASSETS
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Change in benefit obligation:
Benefit obligation at beginning
of year..................... $1,833 $35,143 $2,194 $46,647
Service cost................... 19 2,045 19 2,349
Interest cost.................. 148 3,180 152 2,974
Plan amendments................ -- 2,122 -- (3,694)
Actuarial (gain) loss.......... 326 7,294 19 (1,982)
Benefits paid.................. (132) (3,137) (163) (4,988)
------ ------- ------ -------
Benefit obligation at end of
year........................ 2,194 46,647 2,221 41,306
------ ------- ------ -------
Change in plan assets:
Fair value of plan assets at
beginning of year........... 2,134 29,464 2,680 37,888
Actual return on assets........ 676 8,208 277 2,612
Employer contribution.......... -- 3,353 -- 3,166
Benefits paid.................. (130) (3,137) (163) (4,988)
------ ------- ------ -------
Fair value of plan assets at
end of year................. 2,680 37,888 2,794 38,678
------ ------- ------ -------
Funded status.................... 486 (8,759) 573 (2,628)
Unrecognized net actuarial (gain)
loss........................... (426) (756) (481) (2,431)
Unrecognized prior service
cost........................... 95 1,808 88 (1,755)
Unrecognized net transition
obligation..................... -- 40 -- 35
Fourth quarter contributions..... -- 361 -- --
------ ------- ------ -------
Accrued benefit cost........... $155 $(7,306) $180 $(6,779)
====== ======= ====== =======
Amounts recognized in the
statements of net assets
consist of:
Prepaid benefit cost........... $155 -- $180 --
Accrued benefit liability...... -- (7,306) -- (6,779)
------ ------- ------ -------
Net amount
recognized........... $155 $(7,306) $180 $(6,779)
====== ======= ====== =======
</TABLE>

F-18
<PAGE> 94
ANSELL GROUP

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, UNLESS OTHERWISE STATED)

The components of pension cost consisted of the following for the fiscal
years ended June 30:

<TABLE>
<CAPTION>
1997 1998 1999
------ ------ ------
<S> <C> <C> <C>
Service cost............................................. $1,971 $2,064 $2,368
Interest cost............................................ 3,076 3,328 3,126
Estimated return on plan assets.......................... (2,504) (2,561) (3,136)
Amortization of prior service cost....................... 32 125 (123)
Recognized net actuarial loss............................ 52 11 19
------ ------ ------
Net pension cost............................... $2,627 $2,967 $2,254
====== ====== ======
</TABLE>

The following are the actuarial assumptions used in accounting for these
defined benefit plans:

<TABLE>
<CAPTION>
1998 1999
---- ----
<S> <C> <C>
Discount rates.............................................. 7% 7%
Rates of increase in compensation levels.................... 5% 5%
Expected long-term rate of return on plan assets............ 9% 9%
</TABLE>

Effective July 1, 1998, Ansell Group amended its cash balance defined
benefit plan to change the method of applying the projected unit credit
actuarial cost method. Previously the projected unit credit method was applied
by allocating a participant's entire benefit, including transition benefits,
over the participant's entire career. Under the new method the service prior to
the change to a cash balance plan is attributed to the opening cash balance with
all future pay-based credits attributed to service cost after the change. The
plan amendment resulted in a decrease for the fiscal year ended June 30, 1999 in
projected benefit obligation of $3.7 million and a decrease in pension cost of
$0.5 million.

POST-RETIREMENT BENEFITS, OTHER THAN PENSIONS

The following table sets forth the funded status and other amounts
recognized in the combined financial statements for Ansell Group's
post-retirement healthcare plans as of March 31, adjusted for fourth quarter
contributions:

<TABLE>
<CAPTION>
1998 1999
-------- --------
<S> <C> <C>
Change in benefit obligation:
Benefit obligation at beginning of year..................... $8,596 $8,980
Service cost.............................................. 133 140
Interest cost............................................. 676 661
Actuarial gain............................................ 243 3
Benefits paid............................................. (668) (701)
-------- --------
Benefit obligation at end of year........................... $8,980 $9,083
======== ========
Funded status............................................... $(8,980) $(9,083)
Unrecognized net actuarial gain............................. (1,731) (1,664)
Fourth quarter contributions................................ 178 174
-------- --------
Accrued benefit cost.............................. $(10,533) $(10,573)
======== ========
</TABLE>

F-19
<PAGE> 95
ANSELL GROUP

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, UNLESS OTHERWISE STATED)

The components of net periodic post-retirement benefit cost consisted of
the following for the fiscal years ended June 30:

<TABLE>
<CAPTION>
1997 1998 1999
---- ---- ----
<S> <C> <C> <C>
Service cost................................................ $133 $133 $140
Interest cost............................................... 690 676 661
Recognized net actuarial gain............................... (45) (93) (64)
---- ---- ----
$778 $716 $737
==== ==== ====
</TABLE>

At June 30, 1998 and 1999, the weighted-average discount rate used in
determining the accumulated post-retirement benefit obligation was 7%. The
recorded healthcare cost trend rate assumed in measuring the accumulated
post-retirement benefit obligation was 6% in 1999, declining to an ultimate rate
of 5% in 2001 and thereafter. Assumed healthcare cost trend rates have a
significant effect on the amounts reported for the healthcare plan. A
one-percentage point change in assumed healthcare cost trend rates in 1999 would
have the following effects:

<TABLE>
<CAPTION>
1-PERCENTAGE 1-PERCENTAGE
POINT INCREASE POINT DECREASE
-------------- --------------
<S> <C> <C>
Effect on total of service and interest cost
components............................................... $17 $(14)
Effect on post-retirement benefit obligation............. $359 $(322)
</TABLE>

(9) INCOME TAXES

The sources of Ansell Group's income (loss) before taxes and minority
interest were as follows:

<TABLE>
<CAPTION>
1997 1998 1999
------- ------- -------
<S> <C> <C> <C>
United States......................................... $(7,966) $13,134 $7,283
Non-United States..................................... 56,843 63,279 59,771
------- ------- -------
$48,877 $76,413 $67,054
======= ======= =======
</TABLE>

The provision (benefit) for income taxes consisted of:

<TABLE>
<CAPTION>
CURRENT DEFERRED TOTAL
------- -------- -------
<S> <C> <C> <C>
Year ended June 30, 1997
United States....................................... -- $(3,321) $(3,321)
Non-United States................................... $12,665 682 13,347
------- ------- -------
$12,665 $(2,639) $10,026
======= ======= =======
Year ended June 30, 1998
United States....................................... $276 $4,679 $4,955
Non-United States................................... 3,902 345 4,247
------- ------- -------
$4,178 $5,024 $9,202
======= ======= =======
Year ended June 30, 1999
United States....................................... $169 $3,104 $3,273
Non-United States................................... 7,423 271 7,694
------- ------- -------
$7,592 $3,375 $10,967
======= ======= =======
</TABLE>

F-20
<PAGE> 96
ANSELL GROUP

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, UNLESS OTHERWISE STATED)

The provision for tax expense (benefit) for the fiscal years ended June 30,
1997, 1998 and 1999 differed from the amounts computed by applying the United
States federal income tax rate of 35% to income before taxes and minority
interest as a result of the following:

<TABLE>
<CAPTION>
1997 1998 1999
----- ----- -----
<S> <C> <C> <C>
Expected tax................................................ 35.0% 35.0% 35.0%
Non-United States income taxes
Including tax holidays and incentives..................... (23.4) (21.5) (21.9)
Amortization of intangibles................................. 0.4 0.2 0.3
Write-off (recovery) of tax losses.......................... 8.3 (0.2) 3.5
Adjustment to estimated income tax accruals................. 0.3 (0.7) (0.1)
Other, net.................................................. (0.1) (0.8) (0.4)
----- ----- -----
20.5% 12.0% 16.4%
===== ===== =====
</TABLE>

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities consisted of
the following at June 30:

<TABLE>
<CAPTION>
1998 1999
------- -------
<S> <C> <C>
Deferred tax assets:
Trade accounts receivable................................... $1,483 $1,806
Accrued and other liabilities............................. 1,356 188
Inventory................................................. 2,800 3,063
Accrued payroll and benefits.............................. 2,151 1,835
Accrued post-retirement benefit costs..................... 6,933 7,813
Net operating loss carryforwards.......................... 42,628 45,582
Property, plant and equipment............................. 202 234
Other..................................................... 1,663 233
------- -------
Total gross deferred tax assets........................ 59,216 60,754
Less valuation allowance............................... (21,341) (30,403)
------- -------
Gross deferred tax assets less valuation allowance.......... 37,875 30,351
------- -------
Deferred tax liabilities:
Goodwill and brand names amortization..................... (24,746) (27,469)
Property, plant and equipment............................. (1,741) --
Other..................................................... -- (21)
------- -------
Total gross deferred tax liabilities........................ (26,487) (27,490)
------- -------
Net deferred tax asset...................................... $11,388 $2,861
======= =======
</TABLE>

The net change in the total valuation allowance, including changes
resulting from translation of such amounts from the local functional currencies
to the reporting currency for the fiscal years ended June 30, 1997, 1998 and
1999 was an increase of $0, $1,341 and $9,063, respectively. The increases
resulted from foreign tax operating losses and currency adjustments.

At June 30, 1999, Ansell Group had net operating loss carryforwards in the
United States for income tax purposes of $87.8 million expiring in varying
amounts through 2019. See the subsequent events

F-21
<PAGE> 97
ANSELL GROUP

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, UNLESS OTHERWISE STATED)

Note 13(b) for a discussion of the new tax sharing agreement effective July 1,
1999 which would preclude Ansell Group from utilizing such U.S. losses if Ansell
Healthcare is less than 100% owned by PDL.

At June 30, 1999, Ansell Group had net operating loss carryforwards in
various countries other than United States for income tax purposes of $28.4
million. Of this amount, $16.1 million had no expiration date, and $12.3 million
expire in varying amounts through 2007.

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the periods in
which those temporary differences become deductible. Management considered the
scheduled reversal of deferred tax liabilities, projected future taxable income,
and tax planning strategies in making the assessment that it is more likely than
not that the deferred tax asset will be realized.

In Malaysia, various members of Ansell Group have been granted pioneer
status under that country's Promotion of Investment Act of 1986. As a result of
the pioneer status, these members were exempt from paying tax on profit earned
from products manufactured through June 30, 1998. Tax exempt status on corporate
profits earned in Malaysia were further extended through June 30, 1999 and
expired on that date. In accordance with India's Income Tax Act of 1961, Ansell
Group's export business income is tax-exempt. In Sri Lanka, a member of Ansell
Group has been granted exempt status with respect to profit earned from products
manufactured through June 30, 2019. Under Thailand's Investment Promotion Act,
members of Ansell Group have been granted exempt status with respect to profit
earned on various production lines through June 30, 2007, and these members have
also been granted a reduced tax rate through June 30, 2012. Ansell Group is
building new production facilities in Thailand and has received similar tax-free
status for these operations.

(10) RESTRUCTURING

In fiscal 1999, Ansell Group incurred charges for severance expenses
totaling approximately $1.1 million related to reorganizations of two
occupational healthcare manufacturing facilities and certain administrative
functions. Additionally, a charge of approximately $0.2 million was incurred for
write downs to the net realizable value of machinery and equipment not needed in
the restructured manufacturing operations.

(11) COMMITMENTS AND CONTINGENCIES

(a) Operating Leases

Ansell Group leases certain of its buildings and equipment under operating
leases. The future minimum lease payments under non-cancelable operating leases
consisted of the following at June 30:

<TABLE>
<S> <C>
2000....................................................... $2,290
2001....................................................... 1,769
2002....................................................... 1,569
2003....................................................... 1,431
2004....................................................... 998
Thereafter................................................. 2,223
-------
Total...................................................... $10,280
=======
</TABLE>

Rent expense for operating leases amounted to $2,516, $2,830 and $3,239 for
the fiscal years ended June 30, 1997, 1998 and 1999, respectively.

F-22
<PAGE> 98
ANSELL GROUP

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, UNLESS OTHERWISE STATED)

(b) Legal-Latex Allergy Litigation

As of October 31, 1999, certain members of Ansell Group are defendants in
280 lawsuits in the U.S. and one in Australia that have been filed since 1993 on
behalf of individuals alleging wrongful death, personal injuries and lost wages
as a result of their exposure to natural rubber latex gloves. The lawsuits claim
among other things that the named defendants, were negligent in the design and
manufacture of the gloves and failed to give adequate warnings of the
possibility of allergic reactions. 181 of the U.S. cases have been consolidated
for discovery and deposition pursuant to the rules on multi-district litigation
before the United States District Court for the Eastern District of
Pennsylvania. The remaining 99 cases are spread through State Courts in 31
states, with the greatest concentration in California (15 cases).

All of the latex glove cases are in the discovery phase of litigation. As a
result of the early state of this litigation, together with the uncertainty
created by the multiple defendants in these cases and the difficulty of
establishing whose natural rubber latex gloves were used by particular
plaintiffs, and the need to determine whether latex gloves were the cause of any
particular injury, the liability of Ansell Group defendants, if any, in relation
to these claims cannot be quantified.

Ansell Group is party to various other non-latex allergy legal proceedings,
including certain environmental matters, incidental to the normal course of
business. Management does not expect that any of such proceedings will have a
material adverse effect on Ansell Group's financial position, results of
operations or liquidity.

(12) SEGMENT DATA

(a) Description of Segments

Ansell Group provides a broad spectrum of barrier protection products
through three business segments: Professional Healthcare, Occupational
Healthcare and Personal Healthcare.

Ansell Group's Professional Healthcare segment provides a broad range of
surgical and medical examination glove products in the powder, powder-free and
synthetic markets. These products are provided to distributors, group purchasing
organizations and end-users. The products include Nitra-Touch, Derma Prene and
Elite.

The Occupational Healthcare segment provides synthetic and seamless knitted
industrial and consumer gloves and certain related products to semiconductor,
electronic industrial supply and automotive manufacturers, food processors, and
chemical and food service manufacturers and suppliers. These products include
Hynit, Hylite, Hycron, Hyflex, Golden Needles, Polar Bear, Sol-vex, Scorpio and
SolKnit. Products are sold primarily through distributors in each of the
occupational market sectors with no significant percentage of sales going to an
individual customer for the three fiscal years ended June 30, 1997, 1998 and
1999.

The Personal Healthcare segment provides primarily condom products to the
retail and public health markets. The products include LifeStyles, Contempo,
Mates, Primex, KamaSutra, Prime and Manix.

(b) Measurement of Segment Profit or Loss and Segment Assets

Ansell Group evaluates the performance of its operating segments based on
profit or loss from operations before amortization expense, interest and income
taxes. The accounting policies of the reportable segments are substantially
similar to those described in Note 2, "Significant Accounting Policies," except
that the disaggregated financial information has been prepared using certain
management

F-23
<PAGE> 99
ANSELL GROUP

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, UNLESS OTHERWISE STATED)

reports, which by their very nature require estimates. Ansell Group has
intra-segment sales and transfers, which are recorded at cost or, if agreed
upon, a price comparable to unaffiliated customer sales. These intra-segment
sales and related profits are eliminated in consolidation and are not presented
in the segment disclosure. Identifiable assets are those used by each segment in
its operations.

Ansell Group's reportable segments are business units that offer different
products. The reportable segments are each managed separately because they
manufacture and distribute distinct products. Reportable segments were
determined by using a management approach and are consistent with the basis and
manner in which Ansell Group's management internally disaggregates financial
information for the purposes of assisting in making internal operating
decisions.

Operations within segments have been aggregated on the basis of similar
economic characteristics, products or services, purposes or end uses, production
processes, geographic marketing areas, and distribution methods. Due to the
diverse nature of Ansell Group's products, consideration has been given to
ensure that the aggregation of Ansell Group's operations helps users better
understand Ansell Group's performance and assess its future cash flows.

F-24
<PAGE> 100
ANSELL GROUP

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, UNLESS OTHERWISE STATED)

Following is a summary of financial information by business segment for the
fiscal years ended June 30:

<TABLE>
<CAPTION>
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Net sales:
Professional Healthcare.......................... $255,747 $257,114 $264,237
Occupational Healthcare.......................... 342,049 401,765 377,549
Personal Healthcare.............................. 71,953 76,384 96,596
-------- -------- --------
$669,749 $735,263 $738,382
======== ======== ========
Income from operations:
Professional Healthcare.......................... $41,986 $48,336 $48,242
Occupational Healthcare.......................... 28,117 43,330 40,950
Personal Healthcare.............................. 10,922 8,487 6,492
-------- -------- --------
81,025 100,153 95,684
Less: Amortization expense....................... (5,877) (7,127) (8,786)
-------- -------- --------
$75,148 $93,026 $86,898
======== ======== ========
Depreciation expense:
Professional Healthcare.......................... $8,465 $8,247 $9,347
Occupational Healthcare.......................... 9,224 8,591 10,024
Personal Healthcare.............................. 2,115 2,164 2,357
-------- -------- --------
$19,804 $19,002 $21,728
======== ======== ========
Amortization expense:
Professional Healthcare.......................... $852 $1,034 $1,367
Occupational Healthcare.......................... 4,529 5,492 6,333
Personal Healthcare.............................. 496 601 1,086
-------- -------- --------
$5,877 $7,127 $8,786
======== ======== ========
Capital expenditures:
Professional Healthcare.......................... $18,810 $17,421 $15,542
Occupational Healthcare.......................... 10,829 14,313 32,171
Personal Healthcare.............................. 1,633 2,315 10,213
-------- -------- --------
$31,272 $34,049 $57,926
======== ======== ========
</TABLE>

A summary of identifiable assets by segment at June 30:

<TABLE>
<CAPTION>
1998 1999
-------- --------
<S> <C> <C>
Professional Healthcare..................................... $235,828 $259,299
Occupational Healthcare..................................... 468,207 474,863
Personal Healthcare......................................... 51,888 102,232
-------- --------
$755,923 $836,394
======== ========
</TABLE>

F-25
<PAGE> 101
ANSELL GROUP

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, UNLESS OTHERWISE STATED)

Net sales are attributed to countries based on the location of customers.
Sales by geographic region consisted of the following for the fiscal years ended
June 30:

<TABLE>
<CAPTION>
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
United States...................................... $308,357 $369,701 $360,640
Europe............................................. 236,686 240,753 239,940
Asia............................................... 78,726 74,555 88,489
Other Americas..................................... 45,980 50,254 49,313
-------- -------- --------
$669,749 $735,263 $738,382
======== ======== ========
</TABLE>

(d) Major Customers

Revenues from three of the major professional healthcare products
distributors accounted for approximately 7.7%, 10.4%, and 10.5% of Ansell
Group's combined net sales for 1997, 1998, and 1999, respectively.

(13) SUBSEQUENT EVENTS (UNAUDITED)

(a) Reorganization and Initial Public Offering

In December 1999, Ansell Healthcare, the successor to the assets,
liabilities and operations of Ansell Group expects to file a Registration
Statement on Form S-1 with the Securities and Exchange Commission for an initial
public offering ("IPO") of its common stock. After completion of the IPO,
companies in the Pacific Dunlop Group, which currently own 100% of Ansell Group,
will own at least 80% of Ansell Healthcare.

Before the IPO, Ansell Group businesses were owned and conducted by various
Pacific Dunlop Group companies. Prior to the closing of the IPO, the ownership
of the Ansell Group will be reorganized, and companies' assets, liabilities and
related operations will be transferred to Ansell Healthcare so that all of the
assets and liabilities related to Ansell Group business operations will be owned
or leased by companies directly or indirectly owned by Ansell Healthcare.

In connection with the reorganization, Ansell Healthcare has agreed to
indemnify the members of the Pacific Dunlop Group that sold Ansell Healthcare
operating assets of Ansell Group to Ansell Healthcare for any contingent
liabilities arising out of, or relating to, the ownership of the assets sold,
the operation of the transferred business or Ansell Healthcare's breach of the
terms of the agreement transferring such assets or business. In the opinion of
management, this indemnification will not have an adverse effect on Ansell
Healthcare's financial position or results of operations.

(b) Tax Sharing Agreement

Ansell Group has been and, after the proposed IPO, Ansell Healthcare
expects to continue to be, included in the U.S. consolidated federal income tax
return of Pacific Dunlop Group's U.S. domiciled subsidiaries. Additionally,
Ansell Group has been and, after the proposed IPO, Ansell Healthcare expects to
continue to be included in the combined income tax filings of the U.S. domiciled
subsidiaries of the Pacific Dunlop Group for certain state and local tax
jurisdictions. Ansell Healthcare expects to enter into a Tax Sharing Agreement,
which will be effective beginning the fiscal year ending June 30, 2000. The
terms of the proposed Tax Sharing Agreement provide that Ansell Healthcare will
compute its income tax liability as if Ansell Healthcare was filing on a
separate income tax return basis and remit payment of such liability to U.S.
domiciled subsidiaries of the Pacific Dunlop Group.

F-26
<PAGE> 102
ANSELL GROUP

NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, UNLESS OTHERWISE STATED)

In general, Ansell Healthcare will continue to be included in the Pacific
Dunlop Group's consolidated group for U.S. federal income tax purposes for as
long as the Pacific Dunlop Group beneficially owns at least 80% of the value and
voting stock of Ansell Healthcare. The U.S. domiciled subsidiaries of the
Pacific Dunlop Group are required, under the terms of the Tax Sharing Agreement,
to indemnify Ansell Healthcare for any tax liability of such subsidiaries that
Ansell Healthcare must pay to a taxing authority, except to the extent that the
liability is attributable to Ansell Healthcare.

The Tax Sharing Agreement provides that Ansell Healthcare will not be
permitted to reduce future U.S. tax liability by using a U.S. net operating tax
loss carryforward from a period prior to the IPO. Accordingly, upon completion
of the proposed IPO, the U.S. net operating tax loss carryforward at June 30,
1999, amounting to $87.8 million, will not be available to reduce future U.S.
income tax liabilities incurred by Ansell Healthcare. However, in the event
Ansell Healthcare is no longer eligible to be part of the Pacific Dunlop Group's
U.S. consolidated federal income tax group, all unexpired U.S. net operating tax
loss carryforwards attributable to Ansell Healthcare, and not already used by
the U.S. domiciled subsidiaries of the Pacific Dunlop Group would revert back to
Ansell Healthcare, including any tax losses attributable to Ansell Healthcare
for periods prior to the IPO.

On October 1, 1999, Ansell Group signed a definitive agreement to acquire
the medical glove business of Johnson & Johnson for approximately $97.6 million.
The transaction will be accounted for using the purchase method of accounting.
The excess of purchase price over the estimated fair value of net assets
acquired is expected to be approximately $41 million, which will be allocated to
brand names and goodwill and amortized over 40 and 20 years, respectively. The
transaction is subject to regulatory approvals and customary closing conditions.

F-27
<PAGE> 103

INDEPENDENT AUDITORS' REPORT

The Board of Directors
Ansell Healthcare Incorporated:

We have audited the accompanying balance sheet of Ansell Healthcare
Incorporated as of December 15, 1999. The balance sheet is the responsibility of
the Company's management. Our responsibility is to express an opinion on this
balance sheet based on our audit.

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

In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of Ansell Healthcare Incorporated as
of December 15, 1999, in conformity with generally accepted accounting
principles.

/s/ KPMG LLP
- ------------------------------------------------------

Columbus, Ohio
December 15, 1999

F-28
<PAGE> 104

ANSELL HEALTHCARE INCORPORATED

BALANCE SHEET
(IN THOUSANDS, UNLESS OTHERWISE STATED)

<TABLE>
<CAPTION>
DECEMBER 15, 1999
-----------------
<S> <C>
ASSETS
Cash and cash equivalents................................... $1,000
------
Total assets...................................... $1,000
======
STOCKHOLDER'S EQUITY
Common Stock, $.01 par value; 50,000,000 shares authorized;
1,000 shares, issued and outstanding...................... $10
Preferred Stock, $.01 par value; 1,000,000 shares
authorized; no shares issued and outstanding.............. --
Additional paid-in capital.................................. 990
------
Total stockholder's equity........................ $1,000
======
</TABLE>

See the accompanying notes to the balance sheet.

F-29
<PAGE> 105

ANSELL HEALTHCARE INCORPORATED

NOTES TO BALANCE SHEET

(1) BASIS OF PRESENTATION

Ansell Healthcare Incorporated ("Ansell Healthcare") was incorporated under
the laws of the State of Delaware on October 5, 1999 for the purpose of
effecting the acquisition of Ansell Group from Pacific Dunlop Limited ("PDL").
On October 22, 1999, Ansell Healthcare Incorporated sold 1,000 shares of its
common stock to Pacific Dunlop Holdings (USA) Inc. for $1,000. As of December
15, 1999, Ansell Healthcare has not conducted any operations.

Ansell Healthcare's amended certificate of incorporation provides for
authorized capital of 50,000,000 shares of common stock, par value $0.01 per
share and 1,000,000 shares of preferred stock, par value $0.01 per share.
Pacific Dunlop Group intends to retain ownership of at least 80% of the common
stock to allow Ansell Healthcare to remain included in the U.S. federal income
tax consolidated group. None of the preferred shares are issued or outstanding.

(2) REORGANIZATION AND INITIAL PUBLIC OFFERING

In December 1999, Ansell Healthcare expects to file a Registration
Statement on Form S-1 with the Securities and Exchange Commission for an initial
public offering ("IPO") of its common stock. After completion of the IPO, the
Pacific Dunlop Group, which currently indirectly owns 100% of Ansell Healthcare,
will own at least 80%.

Before the IPO, the Ansell Group was owned by various Pacific Dunlop Group
companies. Prior to the closing of the IPO, the ownership will be reorganized,
and companies, assets, liabilities and related operations will be transferred to
Ansell Healthcare so that all of the assets and liabilities related to Ansell
Group business operations are owned or leased by companies that are directly or
indirectly owned by Ansell Healthcare.

The reorganization is expected to be effected as follows: (i) the existing
U.S. companies through which Ansell conducts its U.S. business will be
transferred to Ansell Healthcare and will be directly held wholly owned
subsidiaries of Ansell Healthcare, and (ii) a newly incorporated wholly owned
U.S. subsidiary of Ansell Healthcare, Ansell International Holdings Inc.
("Ansell International") will acquire directly or indirectly the non-U.S. Ansell
companies of the Pacific Dunlop Group through: (a) the direct acquisition of the
companies conducting the Mexican and Canadian Ansell businesses and (b) the
establishment of a newly incorporated wholly owned Luxembourg holding company
which will acquire directly the companies conducting the Ansell businesses in
the United Kingdom, France, Belgium, Germany and Japan and will acquire
indirectly (through two newly incorporated wholly owned Netherlands holding
companies) the companies conducting the Ansell businesses in Malaysia, Thailand,
Australia and New Zealand, India and Sri Lanka. In those countries where the
Ansell companies or assets were owned by Pacific Dunlop Group companies which
also held substantial assets or subsidiaries involved in other businesses, the
relevant Ansell companies or assets will first be transferred to newly
incorporated holding companies established by the Luxembourg or Netherlands
holding companies referred to above. Where an Ansell subsidiary is not wholly
owned by the Pacific Dunlop Group, all of the shares in the relevant subsidiary
which were held by the Pacific Dunlop Group will be held directly or indirectly
by Ansell International with the minority shareholdings in the subsidiary
remaining unchanged. In each case the consideration will consist of loans
payable, cash and/or shares of common stock in Ansell Healthcare.

Members of the Pacific Dunlop Group and Ansell Healthcare will enter into
agreements providing for the separation of the companies and governing various
relationships between Ansell Healthcare and PDL, including a services agreement,
registration rights and ownership maintenance agreement, tax sharing agreement
and credit agreement.

F-30
<PAGE> 106

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

The following unaudited pro forma condensed combined financial statements
of Ansell Group have been prepared to give effect to (1) the reorganization of
Ansell Group into Ansell Healthcare Incorporated, including the elimination of a
substantial portion of debt owed to affiliates and cash, and (2) the sale of
common stock of Ansell Healthcare by PD International Pty. Limited pursuant to
this offering which results in the transfer of Ansell Group's U.S. tax net
operating loss carry forwards to other members of the Pacific Dunlop Group. The
accompanying Unaudited Pro Forma Condensed Combined Statement of Net Assets at
September 30, 1999 has been prepared as if the reorganization and this offering
were consummated as of that date. The accompanying Unaudited Pro Forma Condensed
Combined Statements of Operations for the year ended June 30, 1999 and the three
months ended September 30, 1999 give effect to the reorganization and this
offering as if they occurred at July 1, 1998 and 1999, respectively.

The pro forma condensed combined financial statements have been prepared
based upon the Combined Financial Statements of Ansell Group, included elsewhere
herein and should be read in conjunction with the Combined Financial Statements,
'Management's Discussion and Analysis of Financial Condition and Results of
Operations' and other financial information included elsewhere in this
prospectus. These unaudited pro forma condensed combined financial statements
and related notes are provided for informational purposes only and do not
purport to be indicative of the results that would have actually been obtained
had the reorganization and this offering been completed on the dates indicated
or that may be expected to occur in the future. Ansell Group's historical net
income and cash flows as a wholly owned operation of Pacific Dunlop Group are
not necessarily indicative of the net income and cash flows it might have
realized as an independent entity.

P-1
<PAGE> 107

ANSELL GROUP

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF NET ASSETS
AS OF SEPTEMBER 30, 1999
(IN THOUSANDS, UNLESS OTHERWISE STATED)

<TABLE>
<CAPTION>
ACTUAL ADJUSTMENTS PRO FORMA
-------- ----------- -----------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........................... $84,775 $(74,775)(1b) $10,000
Trade accounts receivable, net...................... 134,249 134,249
Inventories......................................... 141,367 141,367
Deferred taxes...................................... 8,440 8,440
Other current assets................................ 21,229 21,229
-------- --------- ---------
Total current assets........................ 390,060 (74,775) 315,285
Property, plant and equipment, net.................... 212,918 212,918
Intangibles, net...................................... 263,794 263,794
Other assets.......................................... 8,805 8,805
-------- --------- ---------
Total assets................................ $875,577 $(74,775) $800,802
======== ========= =========

LIABILITIES AND NET ASSETS

Current liabilities:
Trade accounts payable.............................. $64,393 $64,393
Accrued and other liabilities....................... 21,131 21,131
Taxes payable....................................... 6,370 6,370
Revolving lines of credit due to affiliates......... 410,189 $(235,803)(1b) 174,386
Current portion of long-term debt................... 33,821 33,821
-------- --------- ---------
Total current liabilities................... 535,904 (235,803) 300,101
Long-term debt, net of current portion................ 1,793 1,793
Deferred taxes........................................ 3,733 14,900(1c) 18,633
Other long-term liabilities........................... 25,218 25,218
-------- --------- ---------
Total liabilities........................... 566,648 (220,903) 345,745
-------- --------- ---------
Minority interest..................................... 9,785 9,785
Net assets:
Common stock........................................ -- 500(1a,b) 500
Preferred stock..................................... -- -- --
Additional paid-in-capital.......................... -- 511,056(1a,b,c) 511,056
Capital employed.................................... 365,428 (365,428)(1a) --
Accumulated other comprehensive income -- foreign
currency translation adjustment.................. (66,284) (66,284)
-------- --------- ---------
Total net assets............................ 299,144 146,128 445,272
-------- --------- ---------
Commitments and contingencies
Total liabilities and net assets............ $875,577 $(74,775) $800,802
======== ========= =========
</TABLE>

See the accompanying notes to the unaudited pro forma condensed combined
financial statements.

P-2
<PAGE> 108

ANSELL GROUP

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1999
(IN THOUSANDS, UNLESS OTHERWISE STATED)

<TABLE>
<CAPTION>
ACTUAL ADJUSTMENTS PRO FORMA
-------- ----------- ---------
<S> <C> <C> <C>
Net sales............................................... $738,382 $738,382
Cost of goods sold...................................... 483,464 483,464
-------- --------
Gross profit.......................................... 254,918 254,918
Selling, general and administrative expenses............ 149,621 $1,000(2a) 150,621
Research and development expenses....................... 8,315 8,315
Restructuring charges................................... 1,298 1,298
Amortization of intangibles............................. 8,786 8,786
-------- ------- --------
Income from operations................................ 86,898 (1,000) 85,898
Other (income) expense:
Interest expense, net................................. 21,128 (4,956)(2b) 16,172
Foreign currency transactions, net.................... (2,044) (2,044)
Other................................................. 760 760
-------- ------- --------
19,844 (4,956) 14,888
-------- ------- --------
Income before taxes and minority interests.... 67,054 3,956 71,010
Income taxes............................................ 10,967 1,503(2c) 12,470
Minority interests...................................... 3,468 3,468
-------- ------- --------
Net income.................................... $52,619 $2,453 $55,072
======== ======= ========
Pro forma basic and fully diluted net income per
share................................................. $1.10
========
Pro forma weighted average number of shares
outstanding........................................... 50,000
========
</TABLE>

See accompanying notes to unaudited pro forma condensed combined financial
statements.

P-3
<PAGE> 109

ANSELL GROUP

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999
(IN THOUSANDS, UNLESS OTHERWISE STATED)

<TABLE>
<CAPTION>
ACTUAL ADJUSTMENTS PRO FORMA
-------- ----------- -----------
<S> <C> <C> <C>
Net sales................................................ $173,847 $173,847
Cost of goods sold....................................... 113,378 113,378
-------- ---------
Gross profit........................................... 60,469 60,469
Selling, general and administrative expenses............. 39,054 $250(2a) 39,304
Research and development expenses........................ 2,205 2,205
Amortization of intangibles.............................. 2,228 2,228
-------- --------- ---------
Income from operations................................. 16,982 (250) 16,732
Other (income) expense:.................................. --
Interest expense, net.................................. 6,095 (2,052)(2b) 4,043
Foreign currency transactions, net..................... (1,171) (1,171)
Other.................................................. (30) (30)
-------- --------- ---------
4,894 (2,052) 2,842
-------- --------- ---------
Income before taxes and minority interests..... 12,088 1,802 13,890
Income taxes............................................. 2,450 790(2c) 3,240
Minority interests....................................... 658 658
-------- --------- ---------
Net income..................................... $8,980 $1,012 $9,992
======== ========= =========
Pro forma basic and fully diluted net income per share... $0.20
=========
Pro forma weighted average number of shares
outstanding............................................ 50,000
=========
</TABLE>

See accompanying notes to unaudited pro forma condensed combined financial
statements.

P-4
<PAGE> 110

ANSELL GROUP

NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS

(1) PRO FORMA ADJUSTMENTS FOR THE CONDENSED COMBINED STATEMENT OF NET ASSETS

(a) In connection with the formation of Ansell Healthcare Incorporated,
Pacific Dunlop Group contributed the Ansell Group businesses to Ansell
Healthcare Incorporated. In exchange for the contribution of Ansell Group
businesses, members of the Pacific Dunlop Group were issued 50 million shares of
common stock, with a par value of $.01 per share. Additionally, one million
shares of preferred stock were authorized, however, no shares were issued.

(b) Reflects the issuance of 50 million shares of common stock, the payment
of all cash in excess of $10 million, the reduction of debt owed to affiliates
by $235.8 million in exchange for Ansell Group businesses. Upon completion of
the reorganization, Ansell Healthcare will have cash of $10 million,
indebtedness of $210 million and 50 million shares of common stock outstanding.
Of the $210 million of indebtedness, $174.4 million will be borrowed pursuant to
a three year revolving credit agreement with PDL.

(c) Reflects the transfer to Pacific Dunlop Group of $87.8 million in U.S.
tax net operating loss carryforwards, ($14.9 million, net of valuation allowance
of $20 million), which will no longer be available to us as a result of being
less than 100% owned by PDL.

(2) PRO FORMA ADJUSTMENTS FOR THE CONDENSED COMBINED STATEMENTS OF OPERATIONS

(a) Reflects the estimated additional general and administrative expenses
of $1 million annually, which would have been incurred if the reorganization had
been consummated at the beginning of the period presented. These costs include
additional treasury, reporting and filing fees, legal, finance and accounting,
Directors and Investor Relation costs.

(b) Reflects a reduction in interest resulting from the net effect of
eliminating the historical interest expense paid to affiliates (resulting from
the reduction of debt due to affiliates of $235.8 million in exchange for the
issuance of shares of common stock to Pacific Dunlop Group) and recording
interest expense on $174.4 million of affiliate debt to be issued and
outstanding following the reorganization under a revolving credit agreement with
PDL, assuming an interest rate of 7.25%. The revolving credit agreement with PDL
will bear interest at either the prime rate or 90-day LIBOR plus 0.75% depending
on which tranche is chosen for obtaining borrowings. For each 0.125% change in
the assumed average interest rate, interest expense would change by
approximately $218,000 for the year ended June 30, 1999 and $55,000 for the
three months ended September 30, 1999. Also reflects a reduction in interest
income as all cash in excess of $10 million will be distributed to the Pacific
Dunlop Group as a dividend prior to the offering. Interest income is included at
5% on the $10 million of cash on hand and is netted against interest expense.

(c) Reflects the estimated tax impact of the pro forma adjustments using an
effective tax rate of 38% for the Ansell Group, which assumes the debt owed to
affiliates that was eliminated in connection with the reorganization was held by
members of the Ansell Group domiciled in the United States.

(d) For purposes of the pro forma net income per share, the weighted
average shares outstanding are assumed to be the outstanding for the entire
period.

P-5
<PAGE> 111

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

THROUGH AND INCLUDING [ ] (THE 25TH DAY AFTER THE DATE OF
THIS PROSPECTUS), ALL DEALERS EFFECTING TRANSACTIONS IN THESE SECURITIES,
WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER A
PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.

ANSELL HEALTHCARE INCORPORATED

COMMON STOCK

[LOGO]

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

PROSPECTUS
----------------------

MERRILL LYNCH & CO.

BEAR, STEARNS & CO. INC.

J.P. MORGAN & CO.

, 2000

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 112

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

PD International Pty. Limited will bear the expenses relating to the
registration of the common stock of Ansell Healthcare Incorporated. The
following expenses, except the Securities and Exchange Commission registration
fee, the National Association of Securities Dealers, Inc. filing fee and the New
York Stock Exchange listing fee, are estimates:

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee....... $46,200
National Association of Securities Dealers, Inc. filing
fee..................................................... $18,000
New York Stock Exchange listing fee....................... $ *
Blue Sky fees and expenses (including fees of counsel).... $ *
Legal fees and expenses................................... $ *
Accountants' fees......................................... $ *
Printing fees............................................. $ *
Transfer agent fees....................................... $ *
Miscellaneous............................................. $ *
-------
Total........................................... $ *
=======
</TABLE>

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

* To be completed by amendment.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Our Certificate of Incorporation and bylaws provide that we shall, subject
to certain limitations, indemnify our directors and officers against expenses
(including attorneys' fees, judgments, fines and certain settlements) actually
and reasonably incurred by them in connection with any suit or proceeding to
which they are a party so long as they acted in good faith and in a manner
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to a criminal action or proceeding, so long as
they had no reasonable cause to believe their conduct to have been unlawful.

Section 102 of the Delaware General Corporation Law permits a Delaware
corporation to include in its certificate of incorporation a provision
eliminating or limiting a director's liability to a corporation or its
stockholders for monetary damages for breaches of fiduciary duty. The enabling
statute provides, however, that liability for breaches of the duty of loyalty,
acts or omissions not in good faith or involving intentional misconduct, or
knowing violation of the law, and the unlawful purchase or redemption of stock
or payment of unlawful dividends or the receipt of improper personal benefits
cannot be eliminated or limited in this manner. Our Certificate of Incorporation
includes a provision that eliminates, to the fullest extent permitted, director
liability for monetary damages for breaches of fiduciary duty.

We have directors and officers liability insurance, which provides coverage
against certain liabilities.

In addition, some of our directors are indemnified against liabilities that
they may incur in their capacities as directors by third parties with which they
are affiliated.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

On October 22, 1999, Ansell Healthcare Incorporated sold 1,000 shares of
its common stock to Pacific Dunlop Holdings (USA) Inc. for $1,000. This
transaction was exempt from the registration requirements of the Securities Act
of 1933, as amended, pursuant to Section 4(2) thereof.

II-1
<PAGE> 113

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits -- See Index to Exhibits.

(b) Financial Statement Schedules
Schedules II -- Valuation and Qualifying Accounts

ITEM 17. UNDERTAKINGS

The undersigned hereby undertakes to provide to the underwriter at the
closing specified in the underwriting agreements, certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

II-2
<PAGE> 114

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Red Bank,
State of New Jersey on the 20th day of December, 1999.

ANSELL HEALTHCARE INCORPORATED
/s/ HARRY BOON
------------------------------------
President

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on the 20th day of December, 1999.

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

/s/ HARRY BOON President (Principal Executive
- ------------------------------------------ Officer) and Director
Harry Boon December 20, 1999

/s/ JEFFREY COX Treasurer (Principal Financial and
- ------------------------------------------ Accounting Officer) and Director
Jeffrey Cox December 20, 1999

* /s/ RODNEY L. CHADWICK Director
- ------------------------------------------
Rodney L. Chadwick December 20, 1999

* /s/ JOHN A. EADY Director
- ------------------------------------------
John A. Eady December 20, 1999

* /s/ PHILIP R. GAY Director
- ------------------------------------------
Philip R. Gay December 20, 1999
</TABLE>

* Harry Boon signs this document pursuant to powers of attorney filed herewith.

/s/ HARRY BOON
--------------------------------------
Harry Boon

II-3
<PAGE> 115

SCHEDULE II

ANSELL GROUP

VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED JUNE 30, 1999, 1998, AND 1997
(IN THOUSANDS)

<TABLE>
<CAPTION>
ADDITIONS
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND CURRENCY END OF
DESCRIPTION YEAR ENDED OF YEAR EXPENSES DEDUCTIONS ADJUSTMENTS YEAR
- ---------------------- ---------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Allowance for Doubtful Accounts(1):
June 30, 1999........................ $2,745 $2,518 $(572) $(372) $4,318
June 30, 1998........................ 1,911 619 (130) 345 2,745
June 30, 1997........................ 2,719 215 (1,067) 44 1,911
Allowance for Customer Rebates and
Other Claims(2):
June 30, 1999........................ $6,054 $26,167 $(25,325) $(481) $6,415
June 30, 1998........................ 5,356 20,450 (20,596) 844 6,054
June 30, 1997........................ 5,190 17,145 (17,078) 99 5,356
Deferred Income Tax Assets Valuation
Allowance(3):
June 30, 1999........................ $21,341 $8,954 $-- $108 $30,403
June 30, 1998........................ 20,000 1,341 -- -- 21,341
June 30, 1997........................ 20,000 -- -- -- 20,000
</TABLE>

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

(1) Offset against trade accounts receivable. Deductions represent write-offs,
net of recoveries.

(2) Customer rebates and other claims are recorded as a direct reduction of
sales.

(3) Offset against non-current deferred income taxes.

II-4
<PAGE> 116

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBITS DESCRIPTION
-------- -----------
<C> <S>
1.1* -- Form of Underwriting Agreement
3.1 -- Certificate of Incorporation
3.2 -- Certificate of Amendment of Certificate of Incorporation
3.2* -- Amended and Restated By-laws
4.1* -- Specimen Common Stock Certificate
5.1* -- Opinion of Gardner, Carton & Douglas
10.1* -- Amended and Restated 1998 Deferred Compensation Plan
10.2* -- Amended and Restated 1998 Cash Balance Restoration Plan
10.3* -- 1997 Non-Qualified U.S. Pension Plan
10.4* -- 1999 Stock Incentive Plan
10.5* -- Services Agreement between the Registrant and Pacific
Dunlop Limited
10.9* -- Registration Rights and Ownership Maintenance Agreement
10.10* -- Tax Sharing Agreement
10.11* -- Loan Facility Agreement between the Registrant and
Pacific Dunlop Limited
10.12* -- Form of Loan Agreement
21.1* -- Subsidiaries of the Company
23.1 -- Consent of KPMG LLP
23.2 -- Consent of KPMG LLP
23.3* -- Consent of Gardner, Carton & Douglas (included in Exhibit
5.1)
24.1 -- Powers of Attorney
27.1 -- Financial Data Schedule
</TABLE>

* To be filed by amendment.

<PAGE> 1
EXHIBIT 3.1

CERTIFICATE OF INCORPORATION

ANSELL HOLDINGS INC.

**************

1. The name of the corporation is

ANSELL HOLDINGS INC.

2. The address of its registered office in the State of Delaware is 1209
Orange Street, in the City of Wilmington, County of New Castle 19801. The name
of its registered agent at such address is The Corporation Trust Company.

3. The nature of the business or purposes to be conducted or promoted is
to engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.

4. The total number of shares of stock which the corporation shall have
authority to issue is One Thousand (1,000) shares of common stock, $.01 par
value per share.

5. The name and mailing address of the sole incorporator is as follows:

NAME MAILING ADDRESS
---- ---------------

Shelley L. Clifford 321 N. Clark Street
Suite 2900
Chicago, Illinois 60610

6. The corporation is to have perpetual existence.

7. In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, alter or repeal
the bylaws of the corporation.

8. Meetings of stockholders may be held within or without the State of
Delaware, as the bylaws may provide. The books of the corporation may be kept
(subject to any provision contained in the bylaws) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the bylaws of the corporation.

<PAGE> 2
Elections of directors need not be by written ballot unless the bylaws of the
corporation shall so provide.

9. The corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by law, and all rights conferred upon the stockholders
herein are granted subject to this reservation.

THE UNDERSIGNED, being the sole incorporator hereinafter named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, does make this Certificate, hereby declaring and certifying
that this is her act and deed and the facts herein stated are true, and
accordingly has set her hand this 5th day of October, 1999.

/s/ Shelley L. Clifford
--------------------------------------
Shelley L. Clifford, Incorporator

<PAGE> 1
EXHIBIT 3.2

CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
***********

Ansell Holdings Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware,

DOES HEREBY CERTIFY:

FIRST: That the Board of Directors of said corporation by unanimous
written consent dated December 8, 1999, adopted a resolution proposing and
declaring advisable the following amendment to the Certificate of Incorporation
of said corporation:

RESOLVED, that Article 1. of the Certificate of Incorporation of the
Corporation be replaced in its entirety to read as follows:

"The name of the corporation is Ansell Healthcare Incorporated."

SECOND: That the Board of Directors of said corporation by unanimous
written consent dated December 8, 1999, adopted a resolution proposing and
declaring advisable the following amendment to the Certificate of Incorporation
of said corporation:

RESOLVED, that Article 4. of the Certificate of Incorporation of the
Corporation be replaced in its entirety to read as follows:

Authorized Shares. The total number of shares of stock of all classes
which the Corporation shall have authority to issue is fifty-one
million (51,000,000), of which one million (1,000,000) shall be shares
of Preferred Stock with a par value of $0.01 per share ("Preferred
Stock"), and fifty million (50,000,000) shall be shares of common
stock with a par value of $0.01 per share ("Common Stock").

Preferred Stock. (a) The Preferred Stock shall be issuable in
series, and in connection with the issuance of any series of Preferred
Stock and to the extent now or hereafter permitted by the laws of the
State of Delaware, the Board of Directors is authorized to fix by
resolution the designation of each series, the stated value of the
shares of each series, the dividend rate or rates of each series
(which rate or rates may be expressed in terms of a formula or
other method by which such rate or rates shall be calculated from time
to time) and the date or dates and other provisions respecting the
payment of dividends, the provisions, if any, for a sinking fund for
the shares of each series, the preferences of the shares of each

<PAGE> 2

series in the event of the liquidation or dissolution of the
Corporation, the provisions, if any, respecting the redemption of the
shares of each series and, subject to requirements of the laws of the
State of Delaware, the voting rights (except that such shares shall
not have more than one vote per share), the terms, if any, upon which
the shares of each series shall be convertible into or exchangeable
for any other shares of stock of the Corporation and any other
relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, of the shares of
each series.

(b) Preferred Stock of any series redeemed, converted, exchanged,
purchased, or otherwise acquired by the Corporation shall constitute
authorized but unissued Preferred Stock.

(c) All shares of any series of Preferred Stock, as between
themselves, shall rank equally and be identical (except that such
shares may have different dividend provisions); and all series of
Preferred Stock, as between themselves, shall rank equally and be
identical except as set forth in resolutions of the Board of Directors
authorizing the issuance of such series.

Common Stock. (a) After dividends to which the holders of Preferred
Stock may then be entitled under the resolutions creating any series
thereof have been declared and after the Corporation shall have set
apart the amounts required pursuant to such resolutions for the
purchase or redemption of any series of Preferred Stock, the holders
of Common Stock shall be entitled to have dividends declared in cash,
property, or other securities of the Corporation out of any net
profits or net assets of the Corporation legally available therefor,
if, as and when such dividends are declared by the Corporation's Board
of Directors.

(b) In the event of the liquidation or dissolution of the
Corporation's business and after the holders of Preferred Stock shall
have received amounts to which they are entitled under the resolutions
creating such series, the holders of Common Stock shall be entitled to
receive ratably the balance of the Corporation's net assets available
for distribution.

(c) Each share of Common Stock shall be entitled to one vote upon all
matters upon which stockholders have the right to vote, but shall not
be entitled to vote for the election of any directors who may be
<PAGE> 3
elected by vote of the Preferred Stock voting as a class if so
provided in the resolution creating such Preferred Stock pursuant to
this Article 4.

THIRD: That the sole stockholder has given written consent to said
amendments in accordance with the provisions of Section 228 of the General
Corporation Law of the State of Delaware.

FOURTH: That the aforesaid amendments were duly adopted in accordance with
the applicable provisions of Sections 141(f), 228 and 242 of the General
Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, said corporation has caused this certificate to be
signed by an authorized officer this 8th day of December, 1999.

ANSELL HOLDINGS INC.

By: /s/ Harry Boon
----------------
Title: President

<PAGE> 1
Exhibit 23.1

INDEPENDENT AUDITORS' REPORT ON SCHEDULE AND CONSENT

The Board of Directors
Pacific Dunlop Limited:

The audits of Ansell Group referred to in our report dated September 10, 1999,
included the related financial statement schedule as of June 30, 1999, and for
each of the fiscal years in the three-year period ended June 30, 1999, included
in the registration statement. This financial statement schedule is the
responsibility of management. Our responsibility is to express an opinion on
this financial statement schedule based on our audits. In our opinion, such
financial statement schedule, when considered in relation to the basic combined
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.

We consent to the use of our report with respect to Ansell Group included
herein and to the reference to our firm under the heading "Experts" in the
Prospectus.

/s/ KPMG LLP

Columbus, Ohio
December 21, 1999

<PAGE> 1
23.2

INDEPENDENT AUDITORS' CONSENT

The Board of Directors
Ansell Healthcare Incorporated:

We consent to the use of our report with respect to Ansell Healthcare
Incorporated included herein and the reference to our firm under the heading
"Experts" in the Prospectus.

/s/ KPMG LLP

Columbus, Ohio
December 21, 1999

<PAGE> 1
Exhibits 24.1

POWER OF ATTORNEY

The person whose signature appears below hereby appoints Harry Boon and
Robert J. Wilczek and each of them, either of whom may act without the joinder
of the other, as such person's attorney-in-fact to sign and file on such
person's behalf individually and in the capacity stated below such registration
statements, pre-effective amendments, post-effective amendments, exhibits,
applications and other documents with the Securities and Exchange Commission or
any other regulatory authority as may be desirable or necessary in connection
with the public offering of shares of Ansell Healthcare Incorporated.

Signature Title Date
- --------- ----- ----
<S> <C> <C>

/s/ HARRY BOON Chief Executive Officer December 16, 1999
- -------------- and Director

</TABLE>
<PAGE> 2

POWER OF ATTORNEY

The person whose signature appears below hereby appoints HARRY BOON and
ROBERT J WILCZEK and each of them, either of whom may act without the joinder
of the other, as such person's attorney-in-fact to sign and file on such
person's behalf individually and in the capacity stated below such registration
statements, pre-effective amendments, post-effective amendments, exhibits,
applications and other documents with the Securities and Exchange Commission or
any other regulatory authority as may be desirable or necessary in connection
with the public offering of shares of Ansell Healthcare Incorporated.

Signature Title Date
- --------- ----- ----
<S> <C> <C>

/s/ RODNEY L. CHADWICK Director 19/11/1999
- ----------------------- Ansell Healthcare Inc (November 19, 1999)
Rodney Leonard Chadwick

</TABLE>
<PAGE> 3

POWER OF ATTORNEY

Signature Title Date
- --------- ----- ----
<S> <C> <C>

/s/ JOHN A. EADY Director 19/11/1999
- ---------------- Ansell Healthcare Inc (November 19, 1999)
John Alan Eady

</TABLE>
<PAGE> 4

POWER OF ATTORNEY

Signature Title Date
- --------- ----- ----
<S> <C> <C>

/s/ JEFFREY COX Principal Financial December 16, 1999
- --------------- Officer and Director

</TABLE>
<PAGE> 5

POWER OF ATTORNEY

The person whose signature appears below hereby appoints HARRY BOON and
ROBERT J WILCZEK and each of them, either of whom may act without the joinder of
the other, as such person's attorney-in-fact to sign and file on such person's
behalf individually and in the capacity stated below such registration
statements, pre-effective amendments, post-effective amendments, exhibits,
applications and other documents with the Securities and Exchange Commission or
any other regulatory authority as may be desirable or necessary in connection
with the public offering of shares of Ansell Healthcare Incorporated.

Signature Title Date
- --------- ----- ----
<S> <C> <C>

/s/ PHILIP R. GAY Director 18/11/1999
- ----------------- Ansell Healthcare Inc (November 18, 1999)
Philip Roy Gay

</TABLE>

<ARTICLE> 5
<CIK> 0001099827
<NAME> ANSELL HEALTH CARE INC

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> JUN-30-1999
<CASH> 59,132,000
<SECURITIES> 0
<RECEIVABLES> 137,669,000
<ALLOWANCES> (4,318,000)
<INVENTORY> 130,089,000
<CURRENT-ASSETS> 349,768,000
<PP&E> 211,809,000
<DEPRECIATION> (131,441,000)
<TOTAL-ASSETS> 836,394,000
<CURRENT-LIABILITIES> 496,162,000
<BONDS> 408,671,000
0
0
<COMMON> 0
<OTHER-SE> 299,144,000
<TOTAL-LIABILITY-AND-EQUITY> 836,394,000
<SALES> 738,382,000
<TOTAL-REVENUES> 738,382,000
<CGS> 483,464,000
<TOTAL-COSTS> 168,020,000
<OTHER-EXPENSES> (1,284,000)
<LOSS-PROVISION> 1,946,000
<INTEREST-EXPENSE> 21,128,000
<INCOME-PRETAX> 67,054,000
<INCOME-TAX> 10,967,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 52,619,000
<EPS-BASIC> 0
<EPS-DILUTED> 0

</TABLE>