<PAGE>
<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 2, 1997
----------
THE COOPER COMPANIES, INC.
(Exact name of registrant as specified in its charter)
----------
Delaware 1-8597 94-2657368
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
6140 Stoneridge Mall Road, Suite 590, Pleasanton, California 94588
(Address of principal executive offices)
(510) 460-3600
(Registrant's telephone number, including area code)
================================================================================
<PAGE>
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements.
(1) Audited Financial Statements for Contact Lens Technologies Limited for
the year ended 31 March 1997.
(2) Audited Financial Statements for New Focus Health Care Limited for the
Year ended 31 March 1997.
(3) Audited Financial Statements for Contact Lens Technologies Limited for
the period 1 April 1997 to 31 October 1997.
(4) Audited Financial Statements for New Focus Health Care Limited for the
period 1 April 1997 to 31 October 1997.
(5) Unaudited Financial Statements for Contact Lens Technologies Limited for
the period 1 April 1996 to 31 October 1996.
(6) Unaudited Financial Statements for New Focus Health Care Limited for the
period 1 April 1996 to 31 October 1996.
(b) Pro forma financial information.
(1) Unaudited pro forma financial information for The Cooper Companies, Inc.
for the year ended October 31, 1997.
<PAGE>
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE COOPER COMPANIES, INC.
By /s/ Stephen C. Whiteford
_________________________________
Stephen C. Whiteford
Vice President and
Corporate Controller
(Principal Accounting Officer)
Dated: February 13, 1998
<PAGE>
<PAGE>
CONTACT LENS TECHNOLOGIES LIMITED
REPORTS AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 1997
DIRECTORS
A D Galley
I R Bussey
G Fryling
SECRETARY
I R Bussey
COMPANY NUMBER 02908056
REGISTERED OFFICE
Unit 2, Southpoint, Hamble, Southampton, Hampshire, S03 5RF
<TABLE>
<CAPTION>
CONTENTS PAGES
- ---------------------------------------------------------------------------------------------------- -----
<S> <C>
Directors' Report................................................................................... 1
Auditors' Report.................................................................................... 2
Profit and Loss Account............................................................................. 3
Cash Flow Statement................................................................................. 4
Balance Sheet....................................................................................... 5
Notes to the Financial Statements................................................................... 6-13
</TABLE>
<PAGE>
<PAGE>
CONTACT LENS TECHNOLOGIES LIMITED
DIRECTORS' REPORT
The directors present their report and the financial statements for the
year ended 31 March 1997.
PRINCIPAL ACTIVITIES
The company's principal activity continues to be that of contact lens
technology, manufacture of machinery and wholesaling of contact lenses.
On 3 December 1997 Coopervision Inc., took over Contact Lens Technologies
Limited.
DIRECTORS
The directors who served during the year and their beneficial interests in
the company's issued ordinary share capital were:
<TABLE>
<CAPTION>
NUMBER OF SHARES
--------------------
1997 1996
---- ----
<S> <C> <C>
G H Galley (Resigned 02-12-97) 400 400
A D Galley 350 350
B Bevis (Resigned 02-12-97) 200 200
</TABLE>
In addition I R Bussey and G Fryling were appointed directors of the
company on 2 December 1997.
DIRECTORS' RESPONSIBILITIES
Company law requires the directors to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the
company and of the profit or loss of the company for that period. In preparing
those financial statements, the directors are required to
-- select suitable accounting policies and then apply them
consistently;
-- make judgements and estimates that are reasonable and prudent;
-- prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the company will continue in
business.
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company and to enable them to ensure that the financial statements comply with
the Companies Act 1985. They are also responsible for safeguarding the assets of
the company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
AUDITORS
The existing auditors, Leonard Gold Chartered Accountants, will be replaced
by KPMG in accordance with section 388 of the Companies Act 1985.
This report was approved by the board on 10 February 1998 in accordance
with the provisions of Part VII of the Companies Act 1985, as amended, relating
to small companies.
Signed by order of the board of directors.
/s/ I R BUSSEY
- -----------------
I R Bussey
SECRETARY
10 FEBRUARY 1998
1
<PAGE>
<PAGE>
INDEPENDENT AUDITOR'S REPORT TO THE BOARD OF DIRECTORS AND SHAREHOLDERS
CONTACT LENS TECHNOLOGIES LIMITED
We have audited the financial statements of Contact Lens Technologies
Limited. These financial statements are the responsibility of Contact Lens
Technologies Limited's management. Our responsibility is to express an opinion
on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards in the United Kingdom, which are substantially consistent with those
of the United States. These standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
from material misstatement. An audit includes examining on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion the financial statements referred to above present fairly,
in all material respects, the financial position of Contact Lens Technologies
Limited at 31 March 1997 and 1996, and the results of their operations and their
cash flows for each of the years in the three-year period ended 31 March 1997,
in conformity with generally accepted accounting principles in the United
Kingdom.
Generally accepted accounting principles in the United Kingdom vary in
certain significant respects from generally accepted accounting principles in
the United States. Application of generally accepted accepted accounting
principles in the United States would have affected results of operations for
each of the years in the three year period ended 31 March 1997 and shareholders'
equity as at 31 March 1997 and 1996, to the extent summarised in note 19 to the
financial statements.
/s/ LEONARD GOLD
- ---------------------
LEONARD GOLD
CHARTERED ACCOUNTANTS
Registered Auditors
24 Landport Terrace
Portsmouth
Hampshire
PO1 2RG
10 FEBRUARY 1998
2
<PAGE>
<PAGE>
CONTACT LENS TECHNOLOGIES LIMITED
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 1997
<TABLE>
<CAPTION>
NOTES 1997 1996 1995
----- --------- -------- ----
'L' 'L' 'L'
<S> <C> <C> <C> <C>
TURNOVER................................................................. 1,251,124 415,777 --
COST OF SALES............................................................ (930,357) (314,781) --
--------- -------- ---------
GROSS PROFIT............................................................. 320,767 100,996 --
ADMINISTRATIVE EXPENSES.................................................. (306,671) (148,821) --
--------- -------- ---------
14,096 (47,825) --
OTHER OPERATING INCOME................................................... 3 347,245 186,206 --
--------- -------- ---------
OPERATING PROFIT......................................................... 361,341 138,381 --
PROFIT ON SALE OF FIXED ASSETS........................................... 16,475 -- --
--------- -------- ---------
PROFIT ON ORDINARY ACTIVITIES BEFORE INTEREST............................ 377,816 138,381 --
INTEREST PAYABLE......................................................... (67,266) (13,345) --
--------- -------- ---------
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION............................ 310,550 125,036 --
TAX ON PROFIT ON ORDINARY ACTIVITIES..................................... 4 (110,477) (35,750) --
--------- -------- ---------
RETAINED PROFIT FOR THE YEAR............................................. 11 'L'200,073 'L'89,286 'L' --
========= ======== ==========
</TABLE>
The results in the profit and loss account relate to continuing operations.
There were no recognised gains or losses other than those included in the
profit and loss account.
The notes on pages 6 to 13 form part of these financial statements.
3
<PAGE>
<PAGE>
CONTACT LENS TECHNOLOGIES LIMITED
BALANCE SHEET AS AT 31 MARCH 1997
<TABLE>
<CAPTION>
NOTES 1997 1996
----- -------- --------
'L' 'L'
<S> <C> <C> <C>
FIXED ASSETS
Tangible assets................................................................... 5 909,743 860,769
-------- --------
CURRENT ASSETS
Stocks............................................................................ 6 237,298 44,223
Debtors........................................................................... 7 386,516 283,593
Cash at bank...................................................................... 2,114 --
-------- --------
625,928 327,816
CREDITORS:
Amounts falling due within one year.......................................... 8 (943,447) (747,091)
-------- --------
Net current liabilities........................................................... (317,519) (419,275)
-------- --------
TOTAL ASSETS LESS CURRENT LIABILITIES............................................. 592,224 441,494
CREDITORS:
Amounts falling due after more than one year................................. 8 (301,865) (325,458)
PROVISION FOR LIABILITIES AND CHARGES
Deferred taxation............................................................ 9 -- (25,750)
-------- --------
NET ASSETS........................................................................ 'L'290,359 'L'90,286
========= ========
CAPITAL AND RESERVES
Called up share capital..................................................... 10 1,000 1,000
Profit and loss account...................................................... 11 289,359 89,286
-------- --------
Shareholders' Funds............................................................... 12 'L'290,359 'L'90,286
========= ========
</TABLE>
Approved by the board of directors on 10 February, 1998 and signed on its
behalf. These accounts are prepared in accordance with the provisions of Part
VII of the Companies Act 1985, as amended, relating to small companies.
/S/ A D GALLEY
.....................................
A D Galley
Director
/S/ I R BUSSEY
.....................................
I R Bussey
Director
The notes on pages 6 to 13 form part of these financial statements.
4
<PAGE>
<PAGE>
CONTACT LENS TECHNOLOGIES LIMITED
CASH FLOW STATEMENTS FOR THE YEAR ENDED 31 MARCH 1997
<TABLE>
<CAPTION>
NOTE 1997 1996 1995
---- ---- ---- ----
'L' 'L' 'L' 'L' 'L' 'L'
<S> <C> <C> <C> <C> <C> <C> <C>
NET CASH INFLOW FROM OPERATIONS
ACTIVITIES....................... 16 372,193 42,575 209,481
RETURNS ON INVESTMENT AND SERVICING
OF FINANCE
Interest paid............... (72,822) (4,366) --
TAXATION
Corporation tax paid............. (9,822) -- --
CAPITAL EXPENDITURE AND FINANCIAL
INVESTMENTS
Payments to acquire tangible
fixed assets................... (193,679) (884,612) (209,481)
Receipts from sale of tangible
fixed assets................... 62,000 221,446 --
--------- -------- ---------
NET CASH OUTFLOW FROM CAPITAL
EXPENDITURE...................... (131,679) (663,166) (209,481)
FINANCING
Issue of ordinary share
capital.......................... -- 600 --
Bank loan advance.................. -- 365,000 --
Bank loan repayments............... (29,093) (3,042) --
--------- --------- --------
NET CASH (OUTFLOW)/INFLOW FROM
FINANCING........................ (29,093) 362,558 --
-------- -------- --------
INCREASE/(DECREASE) IN CASH........ 17 'L'128,777 'L'(262,399) 'L' --
========== =========== ========
</TABLE>
The notes on pages 6 to 13 form part of these financial statements.
5
<PAGE>
<PAGE>
CONTACT LENS TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 1997
1. ACCOUNTING POLICIES
BASIS OF PREPARATION OF ACCOUNTS
The financial statements are prepared under the historical cost convention
and incorporate the results of the principal activity which is described in the
directors' report and which is continuing.
TURNOVER
Turnover comprises the invoiced value of goods and services supplied by the
company, net of Value Added Tax and trade discounts.
TANGIBLE FIXED ASSETS AND DEPRECIATION
Tangible fixed assets are stated at cost less depreciation.
Depreciation is provided at rates calculated to write off the cost of fixed
assets, less their estimated residual value, over their expected useful lives on
the following bases:
<TABLE>
<S> <C>
Improvements to property................................... 20% per annum straight line
Plant and equipment........................................ 15% per annum straight line
Purpose built equipment.................................... 15% per annum straight line
Fixtures and fittings...................................... 15% per annum straight line
Computer equipment......................................... 33% per annum straight line
</TABLE>
The freehold property is maintained as a matter of company policy, by a
continual repair programme, such that the residual value of the property is at
least equal to its book value.
STOCKS
Stocks are valued at the lower of cost and net realisable value after
making due allowance for obsolete and slow moving items. Cost includes all
direct costs and an appropriate proportion of fixed and variable overheads.
FOREIGN CURRENCIES
Assets and liabilities in foreign currencies are translated into sterling
at the rates of exchange ruling at the balance sheet date. Translation in
foreign currencies are translated into sterling at the rate ruling on the date
of the transaction. Exchange differences are taken into account in arriving at
the operating result.
DEFERRED TAXATION
Provision is made for taxation deferred as a result of material timing
differences between the incidence of income and expenditure for taxation and
accounts purposes using the liability method, only to the extent that, in the
opinion of the directors, there is a reasonable probability that a liability or
asset will crystallise in the near future.
6
<PAGE>
<PAGE>
CONTACT LENS TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 1997
2. OPERATING PROFIT
The operating profit is stated after charging:
<TABLE>
<CAPTION>
1997 1996 1995
------ ------ ------
'L' 'L' 'L'
<S> <C> <C> <C>
Depreciation of tangible fixed assets -- owned by the company.............. 99,180 11,878 --
Directors' emoluments -- remuneration...................................... 35,000 15,000 --
Equipment hire............................................................. -- 12,796 --
Auditors' remuneration..................................................... 2,040 2,405 --
====== ====== ======
</TABLE>
3. OTHER OPERATING INCOME
<TABLE>
<CAPTION>
1997 1996 1995
-------- -------- --------
'L' 'L' 'L'
<S> <C> <C> <C>
Rent received...................................................... 52,000 13,000 --
Hire of equipment.................................................. 120,000 18,206 --
Technology licence................................................. 100,000 150,000 --
Optical Sciences Inc. settlement................................... 65,195 -- --
Commission received................................................ 10,051 -- --
-------- -------- --------
'L'347,245 'L'181,206 'L' --
======== ======== ========
</TABLE>
4. TAXATION
<TABLE>
<CAPTION>
1997 1996 1995
-------- -------- --------
'L' 'L' 'L'
<S> <C> <C> <C>
UK current year taxation
UK corporation tax at 33%.......................................... 116,000 10,000 --
(1996 -- 25%)................................................. --
Deferred........................................................... (25,750) 25,750 --
-------- -------- --------
90,250 35,750 --
Prior years
Corporation Tax.................................................... 20,227 -- --
-------- -------- --------
'L'110,477 'L'35,750 'L' --
======== ========= ========
</TABLE>
7
<PAGE>
<PAGE>
CONTACT LENS TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 1997
5. TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
FREEHOLD IMPROVEMENTS PLANT AND
PROPERTY TO PROPERTY EQUIPMENT
--------------- ------------ --------------
'L' 'L' 'L'
<S> <C> <C> <C>
COST
At 1 April 1996...................................................... 365,000 5,000 42,539
--------------- ------------- --------------
DEPRECIATION
At 1 April 1996...................................................... -- 249 4,753
Charge for year...................................................... -- 996 6,384
--------------- ------------- --------------
-- 1,245 11,137
--------------- ------------- --------------
NET BOOK VALUES
At 31 March 1996..................................................... 'L'365,000 'L'4,751 'L'37,786
At 31 March 1997..................................................... 'L'365,000 'L'3,755 'L'31,402
================ ============= ==============
</TABLE>
<TABLE>
<CAPTION>
PURPOSE FIXTURES
BUILT AND COMPUTER
EQUIPMENT FITTINGS EQUIPMENT TOTALS
--------------- ------------- ------------- --------------
'L' 'L' 'L' 'L'
<S> <C> <C> <C> <C>
COST
At 1 April 1996........................................ 457,288 -- 2,820 872,677
Additions.............................................. 185,297 5,051 3,331 193,679
Disposals.............................................. (45,525) -- -- (45,525)
--------------- ------------- ------------- ---------------
597,060 5,051 6,151 1,020,801
--------------- ------------- ------------- ---------------
DEPRECIATION
At 1 April 1996........................................ 6,492 -- 384 11,878
Charge for year........................................ 89,640 420 1,740 99,180
--------------- ------------- ------------- --------------
96,132 420 2,124 111,058
--------------- ------------- ------------- --------------
NET BOOK VALUES
At 31 March 1996....................................... 'L'450,796 -- 'L'2,436 'L'860,769
At 31 March 1997....................................... 'L'500,928 'L'4,631 'L'4,027 'L'909,743
=============== ============== ============ ==============
</TABLE>
8
<PAGE>
<PAGE>
CONTACT LENS TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 1997
6. STOCKS
1997 1996
--------------- --------------
'L' 'L'
Contact lenses............................. 223,008 35,067
Packing and labels......................... 14,290 9,156
--------------- --------------
'L'237,298 'L' 44,223
=============== ===============
7. DEBTORS
1997 1996
---- ----
'L' 'L'
Due within one year:
Value added tax...................... -- 153,541
Trade debtors........................ 309,895 127,652
Other debtors........................ 76,621 2,400
---------- ----------
'L'386,516 'L'283,593
========== ==========
There were no amounts falling due after more than one year.
8. CREDITORS
<TABLE>
<CAPTION>
AMOUNTS FALLING AMOUNTS FALLING
DUE WITHIN DUE AFTER MORE
ONE YEAR THAN ONE YEAR
---------------------------------- -----------------------------
1997 1996 1997 1996
--------------- --------------- -------------- ------------
'L' 'L' 'L' 'L'
<S> <C> <C> <C> <C>
Bank loans and overdraft (secured).......... 166,736 298,899 301,865 325,458
Corporation tax............................. 136,405 10,000 -- --
Director's current account.................. 73 148,857 -- --
Trade creditors............................. 9,471 107,745 -- --
Accruals.................................... 139,601 27,937 -- --
Other taxes and social security............. 42,703 950 -- --
Other creditors............................. -- 70,000 -- --
Due to related company...................... 448,458 82,703 -- --
--------------- --------------- --------------- -----------
'L'943,447 'L'747,091 'L'301,865 'L'325,458
=============== =============== =============== ============
</TABLE>
The bank loan is repayable by equal monthly instalments over 10 years
commencing February 1995 with 'L'149,735 being due after five years.
Of the creditors 'L'468,601 are secured.
9
<PAGE>
<PAGE>
CONTACT LENS TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 1997
9. DEFERRED TAXATION
<TABLE>
<CAPTION>
PROVIDED FOR NOT PROVIDED FOR
1997 1996 1997 1996
--------------- -------------- -------------- --------------
'L' 'L' 'L' 'L'
<S> <C> <C> <C> <C>
Depreciation of fixed assets............................ 43,000 31,000 -- --
Accrued royalties and interest.......................... (43,000) (5,250) -- --
--------------- -------------- -------------- --------------
'L' -- 'L'25,750 'L' -- 'L' --
=============== ============== ============== ===============
</TABLE>
10. CALLED UP SHARE CAPITAL
<TABLE>
<CAPTION>
1997 1996
----------------- -----------------
<S> <C> <C>
Authorised
Ordinary shares of 'L'1 each......................................... 'L'5,000,000 'L'5,000,000
----------------- -----------------
Ordinary shares of 'L'1 each......................................... 'L' 1,000 'L' 1,000
================= =================
</TABLE>
11. PROFIT AND LOSS ACCOUNT
<TABLE>
<CAPTION>
1997 1996
----------------- -----------------
'L' 'L'
<S> <C> <C>
Balance at 1 April 1996............................................... 89,286 --
Retained profit for the year.......................................... 200,073 89,286
----------------- -----------------
Balance at 31 March 1997.............................................. 'L'289,359 'L' 89,286
================= =================
</TABLE>
12. RECONCILIATION AND MOVEMENT IN SHAREHOLDERS FUNDS
<TABLE>
<CAPTION>
1997 1996
----------------- -----------------
'L' 'L'
<S> <C> <C>
Profit for the year........................................................ 200,073 89,286
New shares issued during the year.......................................... -- 998
----------------- -----------------
New additions during the year.............................................. 200,073 90,284
Shareholders funds at 1 April 1996......................................... 90,286 2
----------------- -----------------
Shareholders funds at 31 March 1997........................................ 'L' 290,359 'L' 90,286
================= ==================
</TABLE>
10
<PAGE>
<PAGE>
CONTACT LENS TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 1997
13. RELATED PARTY TRANSACTIONS
During the year the company acquired 'L'1,001,473 (1996: 'L'233,601) of
contact lenses from Aspect Vision Care Limited. It also received rent of
'L'52,000 (1996: 'L'13,000) and equipment rentals of 'L'120,000 (1996:
'L'18,206). Aspect Vision Care Limited is controlled by common directors, G H
and A D Galley, and of which B Bevis is also a director.
14. CONTROLLING PARTY
The directors as disclosed in the directors' report are the controlling
party by virtue of their 95% holding in the equity share capital of the
company on 31 March 1997.
15. POST BALANCE SHEET EVENTS
The financial statements take into consideration events occurring between
31 March 1997 and the date of their approval by the board of directors.
16. RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING
ACTIVITIES
<TABLE>
<CAPTION>
1997 1996 1995
---------------- ---------------- ---------------
'L' 'L' 'L'
<S> <C> <C> <C>
Operating profit................................. 361,341 138,381 --
Depreciation charges............................. 99,180 11,878 --
Increase in stocks............................... (193,075) (44,223) --
Increase in debtors.............................. (102,923) (283,192) --
Increase in creditors............................ 207,670 219,731 209,481
---------------- ---------------- ---------------
Net cash inflow from operating activities........ 'L' 372,193 'L' 42,575 'L'209,481
================ ================ ================
</TABLE>
17. ANALYSIS OF CHANGES IN NET DEBT
<TABLE>
<CAPTION>
AT CASH OTHER AT CASH OTHER AT
31.3.95 FLOWS CHARGES 31.3.96 FLOWS CHARGES 31.3.97
----------- ----------- ------------ ------------ ------------ ----------- ------------
'L' 'L' 'L' 'L' 'L' 'L' 'L'
<S> <C> <C> <C> <C> <C> <C> <C>
Cash in hand and at bank -- -- -- -- 2,114 -- 2,114
Bank overdraft -- (262,399) -- (262,399) 126,663 -- (135,736)
----------- ----------- ------------ ------------ ------------ ----------- ------------
-- (262,399) -- (262,399) 128,777 -- (133,622)
Bank loans -- 3,042 (365,000) (361,958) 29,093 -- (332,865)
----------- ----------- ------------ ------------ ------------ ----------- ------------
TOTAL 'L' -- 'L'(259,357) 'L'(365,000) 'L'(624,357) 'L'157,870 'L' -- 'L' (466,487)
=========== ============ ============ =========== ============ =========== ============
</TABLE>
11
<PAGE>
<PAGE>
CONTACT LENS TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 1997
18. RECONCILIATION OF NET CASH FLOWS TO MOVEMENT IN NET DEBT
<TABLE>
<CAPTION>
1997 1996 1995
------------------- ------------------ ------------------
'L' 'L' 'L' 'L' 'L' 'L'
<S> <C> <C> <C> <C> <C> <C>
Increase/(decrease) in cash
in the period..................... 128,777 (262,399) --
Cash outflow from repayment
of bank loans..................... 29,093 3,042 --
---------- --------- -------
157,870 (259,357) --
New bank loan..................... -- (365,000) --
---------- --------- -------
Movement in net debt
in the year....................... 157,870 (624,357) --
Net debt at 1 April 1996.......... (624,357) -- --
---------- --------- -------
Net debt at 31 March 1997......... 'L'(466,487) 'L'(624,357) 'L'--
=========== =========== ========
</TABLE>
19a. SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN UK AND US GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES
The Company's financial statements are prepared in accordance with
generally accepted accounting principles applicable in the United Kingdom (UK
GAAP), which differ in cerain significant respects from those applicable in the
United States (US GAAP). The following are the main differences which are
relevant to the Company's financial statements.
CAPITALISATION OF INTEREST
Interest incurred as part of the cost of contructing fixed assets is
capitalised and amortised over the life of the asset under UK GAAP. In
accordance with common UK practice, the company does not capitalise such
interest in its financial statements.
FREEHOLD PROPERTY DEPRECIATION
Under certain circumstances UK GAAP does not require freehold properties to
be depreciated. US GAAP requires that freehold properties must be depreciated
over their useful economic lives.
DEFERRED TAXATION
Under UK GAAP deferred taxes are accounted for to the extent that it is
considered probable that a liability or asset will crystallise in the
foreseeable future. Under US GAAP, deferred taxes are accounted for on all
timing differences and a valuation allowance is established in respect of those
deferred tax assets where it is more likely than not that some portion will
remain unrealised.
12
<PAGE>
<PAGE>
CONTACT LENS TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 1997
b. ADJUSTMENT TO UK PROFITS AND SHAREHOLDERS EQUITY FOR US GAAP
Approximate effect on profit after taxation of significant differences
between UK GAAP and US GAAP
<TABLE>
<CAPTION>
31 MARCH, 31 MARCH 31 MARCH
1997 1996 1995
---- ---- ----
'L' 'L' 'L'
<S> <C> <C> <C>
Profit after taxation under UK GAAP................... 200,073 89,286 --
US GAAP adjustments:
Capitalisation of interest....................... -- 13,345 --
Depreciation on interest capitalised............. (2,002) -- --
Freehold property depreciation................... (9,125) (1,521) --
Tax effect on the foregoing adjustments.......... 661 (4,404) --
Deferred tax..................................... (3,047) (2,759) --
----------- --------- ---------
Profit after tax under US GAAP........................ 'L'186,560 'L'93,947 'L'--
=========== ========= =========
</TABLE>
Approximate effect on profit after taxation of significant differences
between UK GAAP and US GAAP.
<TABLE>
<CAPTION>
31 MARCH 31 MARCH
1997 1996
---- ----
'L' 'L'
<S> <C> <C>
Shareholders' equity under UK GAAP.................... 290,359 90,286
US GAAP adjustments:
Capitalisation of interest....................... 13,345 13,345
Depreciation on interest capitalised............. (2,002) --
Freehold property depreciation................... (10,646) (1,521)
Tax effect on the foregoing adjustments.......... (3,743) (4,404)
Deferred tax..................................... (5,806) (2,759)
---------- ---------
Shareholders' equity under US GAAP.................... 'L'281,507 'L'94,947
========== =========
</TABLE>
C. BASIS OF PREPARATION OF CASH FLOW STATEMENT
The company's cash flow statement is prepared in accordance with UK
Financial Reporting Standard No 1 (Revised) 'Cash Flow Statements' (FRS
1-Revised), the objectives and principles of which are similar to those set out
in Statement of Financial Accounting Standards 95, 'Statement of Cash Flows'
(SFAS 95) under US GAAP. The principal differences between FRS 1 (Revised) and
SFAS 95 relate to classification. Under FRS 1 (Revised), the company presents
its cash flows for (a) operating activities; (b) returns on investment and
servicing of finance; (c) taxation; (d) capital expenditure and financial
investment; and (e) financing activities. SFAS 95 requires only three categories
of cash flow activity (a) operating; (b) investing; and (c) financing.
Cash flows from taxation and returns on investment and servicing of finance
under FRS 1 (Revised) would be included as operating activities under SFAS 95.
Under FRS 1 (Revised) cash includes only cash in hand plus deposits repayable on
demand, less overdrafts repayable on demand. Under SFAS 95 cash and cash
equivalents include all highly liquid short term investments with original
maturities of three months or less.
13
<PAGE>
<PAGE>
<ftnote>
<list>
NEW FOCUS HEALTH CARE LIMITED
REPORTS AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 1997
DIRECTORS
A D Galley
I R Bussey
G Fryling
SECRETARY
I R Bussey
COMPANY NUMBER 01847802
REGISTERED OFFICE
Unit 2, South Point, Hamble, Southampton, Hampshire, S031 4RF
<TABLE>
<CAPTION>
CONTENTS Pages
- -------- -----
<S> <C>
Directors' Report 1-2
Auditors' Report 3
Consolidated Profit and Loss Account 4
Consolidated Balance Sheet 5
Company Balance Sheet 6
Consolidated Cashflow Statement 7
Notes to the Financial Statements 8-21
</TABLE>
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
DIRECTORS' REPORT
- --------------------------------------------------------------------------------
The directors present their report and the financial statements for the
year ended 31 March 1997.
PRINCIPAL ACTIVITIES AND BUSINESS REVIEW
The group's principal activities and those of its trading subsidiaries
continues to be those of manufacturers and wholesalers of contact lenses. The
directors are satisfied with the results of the group for the year and expect
further growth and increasing profits in the coming year.
The performance of the three trading subsidiaries, Aspect Vision Care
Limited, Aspect Speciality Limited and Aspect Vision Italia SRL is also
considered satisfactory with all three operating profitably during the year.
Aspect Speciality Limited has since the year end transferred its trade to Aspect
Vision Care Limited and ceased trading.
On 3 December 1997 CooperVision Inc. took over New Focus Health Care
Limited.
RESULTS AND DIVIDENDS
The consolidated profit for the year, after taxation and minority interest,
amounted to 'L'2,120,139. The directors recommend that no dividend be paid and
that the balance be carried forward.
FIXED ASSETS
The movement in fixed assets during the year are set out in notes 10 and 11
to the financial statements. In addition the Aspect Vision Care Limited
purchased a freehold property for 'L'783,350 on 2 June 1997.
DIRECTORS
The directors who served during the year and their beneficial interests in
the company's issued ordinary share capital were:
<TABLE>
<CAPTION>
Number of Shares
------------------------
1997 1996
------- --------
<S> <C> <C>
G H Galley (resigned 2 December 1997) 241,303 241,303
W T Brooker (resigned 2 December 1997) 241,303 241,303
A D Galley 241,302 241,302
</TABLE>
In addition I R Bussey and G Fryling were appointed directors of the
company on 2 December 1997.
DIRECTORS' RESPONSIBILITIES
Company law requires the directors to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the
company and the group and of the profit or loss of the group for that period. In
preparing those financial statements, the directors are required to
- select suitable accounting policies and then apply them consistently;
- make judgements and estimates that are reasonable and prudent;
- state whether applicable accounting standards have been followed,
subject to any material departures disclosed and explained in the
financial statements;
- prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the company will continue in
business.
1
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
DIRECTORS' REPORT (CONTINUED)
- --------------------------------------------------------------------------------
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company and to enable them to ensure that the financial statements comply with
the Companies Act 1985. They are also responsible for safeguarding the assets of
the group and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
EMPLOYEES
The group is committed to communication with employees throughout the group
by its system of keeping employees informed of developments and progress through
briefings by management and widely distributed news and information bulletins.
The group's aim is to meet the obligations of the code of good practice on
the employment of disabled people. Full and fair consideration is given to
disabled applicants for employment and training, and career development is
encouraged on the basis of their aptitude and abilities.
POLICY ON PAYMENT OF CREDITORS
It is group policy not to follow a particular code but, in respect of all
of its suppliers to settle the terms of payment when agreeing each transaction;
to ensure that suppliers are made aware of the terms of payment; and to abide by
those terms.
TAXATION STATUS OF THE COMPANY
The company is a close company within the provisions of Section 414, Income
and Corporation Taxes Act 1988.
AUDITORS
The auditors, Leonard Gold Chartered Accountants, will be proposed for
reappointment in accordance with section 385 of the Companies Act 1985.
Signed by order of the board of directors,
/s/ I R BUSSEY
- -----------------
I R BUSSEY
SECRETARY
10 FEBRUARY 1998
2
<PAGE>
<PAGE>
INDEPENDENT AUDITOR'S REPORT TO THE BOARD OF DIRECTORS AND SHAREHOLDERS
NEW FOCUS HEALTH CARE LIMITED
- --------------------------------------------------------------------------------
We have audited the financial statements of New Focus Health Care Limited
and subsidiaries. These consolidated financial statements are the responsibility
of New Focus Health Care Limited's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards in the United Kingdom, which are substantially consistent with those
of the United States. These standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
from material misstatement. An audit includes examining on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of New Focus
Health Care Limited at 31 March 1997 and 1996, and the results of their
operations and their cash flows for each of the years in the three-year period
ended 31 March 1997, in conformity with generally accepted accounting
principles in the United Kingdom.
Generally accepted accounting principles in the United Kingdom vary in
certain significant respects from generally accepted accounting principles in
the United States. Application of generally accepted accounting principles in
the United States would have affected results of operations for each of the
years in the three year period ended 31 March 1997 and shareholders' equity as
at 31 March 1997 and 1996, to the extent summarised in note 29 to the
consolidated financial statements.
/s/ LEONARD GOLD
Leonard Gold Chartered Accountants
Registered Auditors
24 Landport Terrace
Portsmouth
Hampshire
P01 2RG
10 FEBRUARY 1998
3
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Notes 1997 1996 1995
----- -------- -------- --------
'L' 'L' 'L'
<S> <C> <C> <C> <C>
TURNOVER 2 16,929,483 10,533,835 6,257,844
COST OF SALES (7,525,409) (5,910,462) (3,384,325)
---------- ---------- ---------
GROSS PROFIT 9,404,074 4,623,373 2,873,519
DISTRIBUTION COSTS (689,844) (561,201) (332,617)
ADMINISTRATIVE EXPENSES (5,667,807) (4,301,036) (2,183,442)
---------- ---------- ----------
3,046,423 (238,864) 357,460
OTHER OPERATING INCOME 4 154,378 99,636 35,382
--------- --------- ---------
OPERATING PROFIT/(LOSS) 3,200,801 (139,228) 392,842
EXCEPTIONAL ITEM 7 2,176,229 755,733 -
INTEREST RECEIVABLE 994 8,270 1,835
INTEREST PAYABLE 5 (428,092) (307,572) (109,700)
---------- ---------- ----------
PROFIT ON ORDINARY ACTIVITIES BEFORE
TAXATION 4,949,932 317,203 284,977
TAX ON PROFIT ON ORDINARY
ACTIVITIES 8 (1,703,398) (182,841) (97,024)
--------- ----------- ---------
PROFIT FOR THE FINANCIAL YEAR 3,246,534 134,362 187,953
MINORITY INTEREST (1,126,395) (165,065) (42,094)
--------- ----------- ---------
RETAINED PROFIT/(LOSS) FOR
THE YEAR 17 'L'2,120,139 'L'(30,703) 'L'145,859
============ ============ ===========
</TABLE>
The results in the profit and loss account relate to continuing operations.
There were no recognised gains or losses other than those included in the profit
and loss account.
The notes on pages 8 to 21 form part of these financial statements.
4
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Notes 1997 1996
----- --------- ---------
'L' 'L'
<S> <C> <C> <C>
FIXED ASSETS
Tangible Assets 10 4,043,222 1,693,840
---------- ----------
CURRENT ASSETS
Stocks 12 3,701,011 1,546,883
Debtors 13 6,415,593 3,713,260
Cash at Bank and In Hand 476,584 173,798
---------- ----------
10,593,188 5,433,941
CREDITORS:
Amounts falling due within one year 14 (9,177,340) (5,327,241)
---------- ----------
NET CURRENT ASSETS 1,415,848 106,700
---------- ----------
TOTAL ASSETS LESS CURRENT LIABILITIES 5,459,070 1,800,540
CREDITORS:
Amounts falling due after more than
one year 14 (1,456,018) (994,987)
---------- ----------
NET ASSETS 'L'4,003,052 'L'805,553
============ ==========
CAPITAL AND RESERVES
Called up Share Capital 15 7,239 7,239
Share Premium Account 16 317,761 317,761
Profit and Loss Account 17 2,350,851 230,712
---------- ----------
Shareholders' Funds 18 2,675,851 555,712
Minority Interest 1,327,201 249,841
---------- ----------
'L'4,003,052 'L'805,553
============ ===========
</TABLE>
APPROVED BY THE BOARD ON 10 FEBRUARY 1998
/s/ A D GALLEY
_________________________________
A D GALLEY -- DIRECTOR
/s/ I R BUSSEY
__________________________________
I R BUSSEY -- DIRECTOR
The notes on pages 8 to 21 form part of these financial statements.
5
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
COMPANY BALANCE SHEET AS AT 31 MARCH 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Notes 1997 1996
----- ----------------- ---------
'L' 'L'
<S> <C> <C> <C>
FIXED ASSETS
Investments 11 1,118,556 1,118,556
------------ ------------
CURRENT ASSETS
Debtors 13 284,059 286,176
CREDITORS:
Amounts falling due within one year 14 (1,450) (41,710)
------------ ------------
NET CURRENT ASSETS 282,609 244,466
------------ ------------
NET ASSETS 'L'1,401,165 'L'1,363,022
============ ============
CAPITAL AND RESERVES
Called up Share Capital 15 7,239 7,239
Share Premium 16 317,761 317,761
Profit and Loss Account 17 1,076,165 1,038,022
------------ ------------
Shareholders' Funds 18 'L'1,401,165 'L'1,363,022
============ ============
</TABLE>
APPROVED BY THE BOARD ON 10 FEBRUARY 1998
/s/ A D GALLEY
__________________________________
A D GALLEY -- DIRECTOR
/s/ I R BUSSEY
__________________________________
I R BUSSEY -- DIRECTOR
The notes on pages 8 to 21 form part of these financial statements.
6
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Notes 1997 1996 1995
----- ---- ----- ----
'L' 'L' 'L' 'L' 'L' 'L'
<S> <C> <C> <C> <C>
NET CASH INFLOW FROM
OPERATING ACTIVITIES 26 2,481,228 1,469,815 490,159
RETURNS ON INVESTMENTS AND
SERVICING OF FINANCE
Interest Received 994 8,270 1,835
Interest Paid (202,969) (165,787) (88,817)
Interest Element of Finance
Lease Rental Payments (73,489) (29,794) (20,883)
----------- ---------- ---------
NET CASH OUTFLOW FROM RETURNS
ON INVESTMENTS AND SERVICING
OF FINANCE (275,464) (187,311) (107,865)
TAXATION
Corporation Tax Paid (107,864) (98,987) (5,108)
ACT Received 412 - -
----------- ---------- ---------
TAX PAID (107,452) (98,987) (5,108)
CAPITAL EXPENDITURE AND
FINANCIAL INVESTMENT
Payment/(Receipts) to Acquire
Minority Interest (49,035) 74,093 -
Payments to acquire Tangible
Fixed Assets (2,438,726) (803,165) (657,541)
Receipts from Sales of Tangible
Fixed Assets 37,318 71,390 14,750
Purchase of Subsidiary
Fixed Assets - (36,976) -
----------- ---------- ---------
NET CASH OUTFLOW FROM CAPITAL
EXPENDITURE (2,450,443) (694,658) (642,791)
FINANCING
Bank Loan Advance 665,000 - 500,000
Bank Loan Repayment (116,495) (76,786) (10,180)
Finance Lease and Hire
Purchase Repayment (345,621) (187,499) (158,908)
----------- ---------- ---------
NET CASH INFLOW/(OUTFLOW)
FROM FINANCING 202,884 (264,285) 330,912
---------- ---------- ---------
(DECREASE)/INCREASE IN CASH 27 'L'(149,247) 'L'224,574 'L'65,307
========== ========== =========
</TABLE>
The notes on pages 8 to 21 form part of these financial statements.
7
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 1997
- --------------------------------------------------------------------------------
1. ACCOUNTING POLICIES
BASIS OF PREPARATION OF ACCOUNTS
The financial statements are prepared in accordance with applicable
accounting standards, and incorporate the results of the principal
activities which are described in the directors' report and which are
continuing. There have been no changes in accounting policies during
the year.
CONSOLIDATION
The consolidated financial statements include the results of New Focus
Health Care Limited and its subsidiary undertakings drawn up to 31
March 1997. No profit and loss account for the company has been
presented for New Focus Health Care Limited as permitted by Section 230
of the Companies Act 4985.
TURNOVER
Turnover comprises the invoiced value of goods and services sold
exclusive of Value Added Tax.
TANGIBLE FIXED ASSETS AND DEPRECIATION
Tangible fixed assets are stated at cost less depreciation.
Depreciation is provided at rates calculated to write off the cost of
fixed assets, less their estimated residual value, over their expected
useful lives on the following bases:
Short Leasehold Properties - over the term of the lease
Plant, Equipment and Fittings - 3-7 years
Motor Vehicles - 4 years
The freehold property is maintained as a matter of company policy, by a
continual repair programme, such that the residual value of the
property is at least equal to its book value.
Goodwill on Consolidation
The excess of the cost of acquisition over the fair value of the
underlying net assets is written off to profit and loss account in the
year in which it arises.
Stocks
Stocks are valued at the lower of cost, based on normal levels of
activity, and net realisable value, (inclusive of a proportion of
appropriate overheads).
8
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 1997
- --------------------------------------------------------------------------------
1. ACCOUNTING POLICIES (CONTINUED)
DEFERRED TAXATION
Provision is made for taxation deferred as a result of material timing
differences between the incidence of income and expenditure for
taxation and accounts purposes using the liability method, only to the
extent that, in the opinion of the directors, there is a reasonable
probability that a liability or asset will crystallise in the near
future.
RESEARCH AND DEVELOPMENT
Expenditure on research and development is written off against profits
in the period in which it is incurred.
FOREIGN CURRENCIES
Assets and liabilities in foreign currencies are translated into
sterling at the rates of exchange ruling at the balance sheet date.
Transactions in foreign currencies are translated into sterling at the
rate ruling on the date of the transactions. Exchange differences are
taken into account in arriving at the operating results.
The profit and loss accounts of overseas operations are translated into
sterling at the average rate. The balance sheet of the overseas
operation is translated into sterling at the closing rate.
Exchange differences arising from the translation of the results of
overseas operations are recorded in the profit and loss account.
LEASING AND HIRE PURCHASE
Assets obtained under hire purchase contracts and finance leases are
capitalised as tangible fixed assets and depreciated over their useful
lives. Finance leases are those where substantially all of the benefits
and risks of ownership are assumed by the company. Obligations under
such agreements are included in creditors net of the finance charge
allocated to future periods.
Rentals paid under operating teases are charged to the profit and loss
account as incurred.
PENSION SCHEME
The group operates group personal pension schemes for the benefit of
the employees, and the pension charge represents the amounts payable by
the group to the schemes in respect of the year.
2. TURNOVER BY GEOGRAPHICAL REGION
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
'L' 'L' 'L'
<S> <C> <C> <C>
United Kingdom 9,066,178 6,080,426 3,837,984
Europe 5,979,053 3,708,049 2,238,520
Rest of the World 1,884,252 745,360 181,340
------------- ------------- ------------
'L'16,929,483 'L'10,533,835 'L'6,257,844
============= ============= ============
</TABLE>
9
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 1997
- --------------------------------------------------------------------------------
3. OPERATING PROFIT
The operating profit/(loss) is stated after charging:
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
'L' 'L' 'L'
<S> <C> <C> <C>
Goodwill written off 210,965 658,741 --
Depreciation of tangible fixed assets
- owned by the company 405,359 200,217 103,181
- under hire purchase and finance
lease contracts 255,134 131,551 75,579
- Loss/(Profit) on disposal of
fixed assets 3,427 (14,730) (3,985)
Hire of Equipment 59,400 50,569 31,309
Other Operating Lease Rentals 142,687 156,218 99,052
Auditors' remuneration 39,679 41,389 13,682
======= ======= =======
</TABLE>
4. OTHER OPERATING INCOME
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
'L' 'L' 'L'
<S> <C> <C> <C>
Sale of Business 6,800 2,109 --
Commission 144,703 81,390 35,382
Postage and Freight 2,875 -- --
Royalties -- 16,000 --
Sundry Receipts -- 137 --
---------- --------- ---------
'L'154,378 'L'99,636 'L'35,382
========== ========= =========
</TABLE>
5. INTEREST PAYABLE
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- -----
'L' 'L' 'L'
<S> <C> <C> <C>
On Bank Loans, Overdrafts and Other Loans
- - repayable within five years, by
instalments (8,922) 3,447 -
- - repayable within five years, not by
instalments 301,130 218,721 74,655
- - repayable wholly or partly in more
than five years 66,256 56,705 14,162
- - on hire purchase and finance lease
charges 69,628 28,699 20,883
---------- ---------- ----------
'L'428,092 'L'307,572 'L'109,700
========== ========== ==========
</TABLE>
10
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 1997
- --------------------------------------------------------------------------------
6. STAFF COSTS
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- -----
'L' 'L' 'L'
<S> <C> <C> <C>
The average weekly number of employees, including
directors, during the year was:
Manufacturing 344 199 98
Sales 73 54 41
Directors 5 5 5
--------- --------- ---------
422 258 144
========= ========= =========
STAFF COSTS (FOR THE ABOVE PERSONS):
Directors' Remuneration 194,120 198,086 140,076
Directors' Benefits in Kind 28,415 29,141 22,416
Directors' Social Security Costs 19,830 19,023 14,288
Directors' Pension Contributions 16,229 13,044 8,441
Other Wages and Salaries (including
social security costs) 6,797,548 3,927,409 1,857,282
Other Pension Costs 107,344 68,347 32,998
------------ ------------- -------------
'L'7,163,486 'L'4,255,050 'L'2,075,501
============ ============= ============
</TABLE>
Of the above directors' remuneration 'L'182,120 (1996: 'L'186,086 and 1995:
'L'80,076) was paid by a subsidiary undertaking.
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- -----
'L' 'L' 'L'
<S> <C> <C> <C>
Directors' Emoluments
Aggregate Emoluments 222,099 227,227 162,492
Company Pension Contributions to
Money Purchase Schemes 16,229 13,044 8,441
---------- ---------- ----------
'L'238,328 'L'240,271 'L'170,933
========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Number Number Number
------ ------ ------
<S> <C> <C> <C>
Number of Directors who are members of a
Money Purchase Scheme 3 3 1
====== ====== ======
<CAPTION>
1997 1996 1995
---- ---- ----
'L' 'L' 'L'
Emoluments of Highest Paid Director
- - Aggregate Emoluments 81,639 79,429 70,943
- - Company Pension Contributions to
Money Purchase Scheme 6,120 7,434 --
====== ====== ======
</TABLE>
11
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 1997
- --------------------------------------------------------------------------------
7. EXCEPTIONAL ITEMS
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- -----
<S> <C> <C> <C>
Settlement of Trade Dispute 'L'2,125,406 'L'755,733 'L' -
============ ========== ==========
</TABLE>
8. TAXATION
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- -----
'L' 'L' 'L'
<S> <C> <C> <C>
UK CURRENT YEAR TAXATION
UK CORPORATION TAX AT 33% 1,900,800 534,266 97,000
DEFERRED (201,000) (353,000) --
---------- ---------- ---------
1,699,800 181,266 97,000
PRIOR YEARS
Corporation Tax 3,598 1,575 24
---------- ---------- ---------
'L'1,703,398 'L'182,841 'L'97,024
============ ========== =========
</TABLE>
9. PROFIT ATTRIBUTABLE TO THE MEMBERS OF THE PARENT COMPANY
The profit dealt with in the accounts of the parent company amounted to
'L'38,143 (1996: 'L'311,048 profit and 1995: 'L'71,298 loss).
10. TANGIBLE FIXED ASSETS - GROUP
<TABLE>
<CAPTION>
Short Plant,
Freehold Leasehold Equipment Motor
Property Property & Fittings Vehicles Totals
-------- -------- ---------- -------- ------
'L' 'L' 'L' 'L' 'L'
<S> <C> <C> <C> <C> <C>
COST
At 1 April 1996 -- 309,761 2,121,391 341,431 2,772,583
Additions 950,000 317,450 1,766,180 19,990 3,053,620
Disposals -- -- (547,865) (36,375) (584,240)
---------- ---------- ---------- ---------- ----------
950,000 627,211 3,339,706 325,046 5,241,963
---------- ---------- ---------- ---------- ----------
DEPRECIATION
At 1 April 1996 -- 55,341 907,183 116,219 1,078,743
Charge for Year -- 80,519 493,783 86,197 660,493
Disposals -- -- (522,197) (18,298) (540,495)
---------- ---------- ---------- ---------- ----------
-- 135,854 878,769 184,118 1,198,741
---------- ---------- ---------- ---------- ----------
NET BOOK VALUES
At 31 March 1997 'L'950,000 'L'491,357 'L'2,460,937 'L'140,928 'L'4,043,222
At 31 March 1996 -- 'L'254,420 'L'1,214,208 'L'225,212 'L'1,693,840
========== ========== ============ ========== ============
</TABLE>
The net book value of tangible fixed assets include an amount of
'L'820,618 (1996:'L'471,331) in respect of assets held under finance
leases and hire purchase contracts. Depreciation charged on these
assets during the period amounted to'L'255,134 (1996: 'L'131,551).
At the balance sheet date the group had capital commitments amounting
to 'L'264,733 (1996: 'L'505,934) in respect of contracts approved by
the board and contracted for.
12
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 1997
- --------------------------------------------------------------------------------
10. TANGIBLE FIXED ASSETS - GROUP (CONTINUED)
Included within fixed assets are fully depreciated assets with cost as
follows:-
<TABLE>
<CAPTION>
1997 1996
---- ----
'L' 'L'
<S> <C> <C>
Plant, Equipment and Fittings 89,623 562,687
Motor Vehicles 35,000 -
---------- ---------
'L'124,623 'L'562,687
========== =========
</TABLE>
11. INVESTMENTS - COMPANY
Investments in Subsidiary Undertakings:
<TABLE>
<CAPTION>
1997 1996
---- ----
'L' 'L'
<S> <C> <C>
Cost at 1 April 1997 1,118,556 1,118,556
Provisions as at 1 April 1996 - (577,735)
------------ ------------
1,118,556 540,821
Movement on Provisions - 577,735
------------ ------------
Cost at 31 March 1997 'L'1,118,556 'L'1,118,556
============ ============
</TABLE>
<TABLE>
<CAPTION>
Country of Country of
Name Holding % Incorporation Registration
- ---- --------- ------------- ------------
<S> <C> <C> <C>
Aspect Vision Care Limited - Contact
lens manufacture and distribution 65.8% England Great Britain
Aspect Vision Italia SRL - Contact
lens distribution 70% Italy Italy
Aspect Speciality Limited - Contact
lens distribution 75.5% England Great Britain
Focus Solutions Limited
- Dormant 100% England Great Britain
Aspect Contact Lenses Limited
- Dormant 100% England Great Britain
Averlan Company Limited
- Dormant 100% England Great Britain
</TABLE>
12. STOCKS - GROUP
<TABLE>
<CAPTION>
1997 1996
---- ----
'L' 'L'
<S> <C> <C>
Lenses 2,836,727 1,223,734
Materials 256,771 96,333
Packaging and Labels 164,576 99,037
Moulds 353,058 80,978
Work in Progress 86,879 46,801
Plant Stock 3,000 -
------------ ------------
'L'3,701,011 'L'1,546,883
============ ============
</TABLE>
13
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 1997
- --------------------------------------------------------------------------------
13. DEBTORS - GROUP
<TABLE>
<CAPTION>
1997 1996
---- ----
'L' 'L'
<S> <C> <C>
Trade Debtors 3,502,689 2,473,120
Amounts due from Related Company 448,458 82,703
Prepayments 180,515 318,576
Other Debtors 1,729,931 273,436
Deferred Taxation (Note 19} 554,000 353,000
------------ ------------
'L'6,415,593 'L'3,500,835
============ ============
</TABLE>
There were no amounts falling due after more than one year.
DEBTORS - COMPANY
<TABLE>
<CAPTION>
1997 1996
---- -----
'L' 'L'
<S> <C> <C>
Due within one year:
Dividend Receivable - 286,176
Amounts Due from Group Undertakings 284,059 -
---------- ----------
'L'284,059 'L'286,176
========== ==========
</TABLE>
There were no amounts falling due after more than one year.
14. CREDITORS - GROUP
<TABLE>
<CAPTION>
Amounts falling Amounts falling
due within due after more
one year than one year
------------ ---------------
1997 1996 1997 1996
---- ---- ---- ----
'L' 'L' 'L' 'L'
<S> <C> <C> <C> <C>
Bank Loan and Overdraft 917,510 423,625 797,527 290,874
Net obligations Under Finance
Leases & Hire Purchase
Contracts 275,079 197,512 289,546 97,840
Corporation Tax 2,330,800 534,266 -- --
Directors' Loan and Current
Accounts 75,442 88,397 -- --
Factoring Creditor 755,617 398,065 -- --
Trade Creditors 1,743,644 1,815,831 -- --
Accruals 2,296,903 1,393,593 -- --
Other Taxes & Social Security 431,822 190,224 -- --
Other Creditors 205,523 128,376 368,945 170,300
Patent Holders Loan -- -- -- 435,973
Pension Loan 145,000 157,352 -- --
--------- --------- --------- ---------
'L'9,177,340 'L'5,327,241 'L'1,456,018 'L'994,987
============ ============ ============ ==========
</TABLE>
14
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 1997
- --------------------------------------------------------------------------------
14. CREDITORS - GROUP (CONTINUED)
The bank loan, overdrafts and directors' loan are secured by fixed and
floating charges over the assets of the company.
The factoring account is secured by a floating charge over the
company's sales ledger.
The finance leases and hire purchase contracts are all repayable within
five years and are secured on the assets concerned. Bank loan
repayments totalling 'L'381,284 are due after five years. The bank
loans of 'L'639,905 and 'L'321,634 are repayable by instalments of
'L'8,130.64 and 'L'10,180 respectively to achieve repayment by
September 2006 and February 2000.
Of the creditors 'L'3,035,279 (1996: 'L'1,407,916) are secured.
CREDITORS - COMPANY
<TABLE>
<CAPTION>
Amounts falling
due within
one year
--------
1997 1996
---- ----
'L' 'L'
<S> <C> <C>
Accruals and Deferred Income 1,450 2,668
Amounts Due to Group Companies - 39,042
-------- ---------
'L'1,450 'L'41,710
======== ==========
</TABLE>
There were no amounts falling due after more than one year.
15. CALLED UP SHARE CAPITAL
<TABLE>
<CAPTION>
1997 1996
---- ----
Issued Issued
and Fully and Fully
Authorised Paid Authorised Paid
---------- ----- ---------- ----
'L' 'L' 'L' 'L'
<S> <C> <C> <C> <C>
Ordinary Shares of 'L'0.01 500,000 7,239 500,000 7,239
Convertible Redeemable
Preferred Ordinary Shares
of 'L'0.01 900,000 -- 900,000 --
Preferred Ordinary Shares
of 'L'0.01 1,600,000 -- 1,600,000 --
--------- --------- --------- ---------
'L'3,000,000 'L'7,239 'L'3,000,000 'L'7,239
============ ======== ============ ========
</TABLE>
16. SHARE PREMIUM ACCOUNT
There was no movement in the share premium account during the year.
15
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 1997
- --------------------------------------------------------------------------------
17. PROFIT AND LOSS ACCOUNT
<TABLE>
<CAPTION>
Group Company
----- -------
'L' 'L'
<S> <C> <C>
Balance at 1 April 1996 230,712 1,038,022
Retained Profit For The Year 2,120,139 38,143
------------ -------------
Balance at 31 March 1997 'L'2,350,851 'L'1,076,165
============ =============
</TABLE>
18. RECONCILIATION OF MOVEMENT IN SHAREHOLDERS FUNDS
There was no movement in the shareholders' funds during the year except
for the profit as set out in note 17.
19. DEFERRED TAX - GROUP
<TABLE>
<CAPTION>
Unprovided Provided
---------- --------
1997 1996 1997 1996
---- ---- ---- ----
'L' 'L' 'L' 'L'
<S> <C> <C> <C> <C>
Accelerated Capital Allowance - 27,000 50,000 3,000
Finance Lease Payments - 35,000 54,000 -
Short Term Timing Difference - - (658,000) (356,000)
------- ---------- ----------- -----------
'L' - 'L'62,000 'L'(554,000) 'L'(353,000)
======= ========== =========== ============
</TABLE>
20. OPERATING LEASES - GROUP
At 31 March 1997 the group had the following commitments under
non-cancellable operating leases as follows:-
<TABLE>
<CAPTION>
1997 1996
---- ----
Land and Building Other Land and Building Other
----------------- ----- ----------------- -----
'L' 'L' 'L' 'L'
<S> <C> <C> <C> <C>
Expiry Date:
Within one year 43,500 53,015 6,000 -
Between two and five years 40,800 200,879 135,500 83,058
After more than five years 30,000 - 30,000 -
====== ======= ======= =======
</TABLE>
21. CONTROLLING PARTY
The directors of the company, as disclosed in the Directors' Report,
are the controlling party of New Focus Health Care Limited by virtue of
their 100% holding in the equity share capital of the company on 31
March 1997.
16
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 1997
- --------------------------------------------------------------------------------
22. RELATED PARTY TRANSACTIONS - GROUP
The group had the following transactions with Contact Lens Technologies
Limited, a company of which G H Galley, A D Galley and B Bevis
(directors of Aspect Vision Care Limited) are directors.
<TABLE>
<CAPTION>
1997 1996
---- ----
'L' 'L'
<S> <C> <C>
Sale of Contact Lenses 1,001,473 233,601
Rent of Property 52,000 13,000
Rent of Equipment 120,000 18,206
========= =======
</TABLE>
In addition the company's directors own the patent rights along with B
Bevis, I Atkinson and A Morland to the company's manufacturing process.
Royalties of lOp per finished lens and 7p per finished mould are
charged by the patent holders for their rights.
23. CONTINGENT LIABILITIES - GROUP
Guarantees for deferred duty totalling 'L'60,000 have been given to H M
Customs & Excise.
CONTINGENT LIABILITIES - COMPANY
The company has provided unlimited guarantees in respect of bank
borrowings of certain subsidiary undertakings. At 31 March 1997 this
liability amounted to 'L'1,375,624 (1996: 'L'615,245).
24. PENSION COMMITMENTS - GROUP
The group administers group personal pension schemes for its employees.
The assets of the schemes are held separately from those of the group
in independently administered funds.
25. POST BALANCE SHEET EVENTS
The financial statements take into consideration events occurring
between 31 March 1997 and the date of their approval by the board of
directors. A subsidiary undertaking purchased the freehold of the
Thermo King premises in Hamble for 'L'783,350 on 2 June 1997.
17
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 1997
- --------------------------------------------------------------------------------
26. RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING
ACTIVITIES
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
'L' 'L' 'L'
<S> <C> <C> <C>
Operating Profit/(Loss) 3,200,801 (139,228) 392,842
Depreciation Charge 660,493 331,768 178,760
Loss/(Profit) on Disposal of Tangible
Fixed Assets 3,427 (14,730) (3,985)
Exceptional Item - Settlement of Trade
Dispute 2,176,229 755,733 --
(Increase)/Decrease in Stocks (2,151,128) 127,585 (792,477)
Increase in Debtors (2,501,745) (1,411,818) (232,803)
Increase in Creditors 1,093,151 1,820,505 947,822
------------ ----------- ----------
NET CASH INFLOW FROM OPERATING ACTIVITIES 'L'2,481,228 'L'1,469,815 'L'490,159
============ ============ ==========
</TABLE>
27. ANALYSIS OF CHANGES IN NET DEBT
<TABLE>
<CAPTION>
At Cash Other At Cash Other At Cash
1.4.94 Flows Changes 31.3.95 Flows Changes 31.3.96 Flows
------ ----- -------- ------- ----- ------- ------- -----
'L' 'L' 'L' 'L' 'L' 'L' 'L' 'L'
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cash in Hand and
at Bank 87 1,227 - 1,314 172,484 - 173,798 302,786
Bank Overdraft (417,635) 64,080 - (353,555) 52,090 - (301,465) (452,033)
---------- ---------- ----------
65,307 224,574 (149,247)
Bank Loans - 10,180 (500,000) (489,820) 76,786 - (413,034) 116,495
Hire Purchase
and Finance
Lease (28,950) 158,908 (480,590) (350,632) 187,499 (132,219) (295,352) 345,621
----------- ---------- ----------- ------------- ---------- ----------- ----------- ----------
TOTAL 'L'(446,498) 'L'234,395 'L'(980,590) 'L'(1,192,693) 'L'488,859 'L'(132,219) 'L'(836,053) 'L'312,869
=========== ========== =========== ============= ========== =========== =========== ==========
<CAPTION>
Other At
Changes 31.3.97
------- -------
'L' 'L'
<S> <C> <C>
Cash in Hand and
at Bank - 476,564
Bank Overdraft - (753,498)
Bank Loans (665,000) (961,539)
Hire Purchase
and Finance
Lease (614,894) (564,625)
------------- -------------
TOTAL 'L'(1,279,894) 'L'(1,803,078)
============= =============
</TABLE>
18
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 1997
- --------------------------------------------------------------------------------
28. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT (NOTE 27)
<TABLE>
<CAPTION>
1997 1996 1995
------------ ------------ ------------
'L' 'L' 'L' 'L' 'L' 'L'
<S> <C> <C> <C> <C> <C> <C>
(Decrease) Increase in
cash in the Period (149,247) 224,574 65,307
Cash Outflow from Repayment
of Bank Loans 116,495 76,786 10,180
Cash Outflow from Repayment
of Hire Purchase and
Finance Leases 345,621 187,499 158,908
-------- ------- -------
312,869 488,859 234,395
New Bank Loan (65,000) -- (500,000)
New Hire Purchase and
Finance Leases (614,894) (132,219) (480,590)
----------- --------- ----------
(1,279,894) (132,219) (980,590)
------------- ----------- -------------
Movement in Net Debt in the Year (967,025) 356,640 (746,195)
Net Debt at 1 April 1996 (836,053) (1,192,693) (446,498)
------------- ----------- -------------
Net Debt at 31 March 1997 'L' (1,803,078) 'L'(836,053) 'L'(1,192,693)
============= =========== =============
</TABLE>
19
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 1997
- --------------------------------------------------------------------------------
29A. SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN UK AND US GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES
The Group's financial statements are prepared in accordance with
generally accepted accounting principles applicable in the United
Kingdom (UK GAAP), which differ in certain significant respects from
those applicable in the United States (US GAAP). The following are the
main differences which are relevant to the Company's financial
statements.
Goodwill
Under US GAAP goodwill arising on acquisitions accounted for under the
purchase method is capitalised and amortized over its estimated useful
life. Goodwill is amortized using the straight line method over periods
up to 40 years. Under UK GAAP goodwill, the excess cost of acquisition
over the fair value of the underlying net assets, may be written off to
the profit and loss account in the year in which it arises.
DEFERRED TAXATION
Under UK GAAP deferred taxes are accounted for to the extent that it is
considered probable that a liability or asset will crystallise in the
foreseeable future. Under US GAAP, deferred taxes are accounted for on
all timing differences and a valuation allowance is established in
respect of those deferred tax assets where it is more likely than not
that some portion will remain unrealised.
b. ADJUSTMENT TO UK PROFITS AND SHAREHOLDERS EQUITY FOR US GAAP
Approximate effect on profit after taxation of significant differences
between UK GAAP and US GAAP:
<TABLE>
<CAPTION>
31 March 31 March 31 March
1997 1996 1995
---- ---- ----
'L' 'L' 'L'
<S> <C> <C> <C>
Profit/(Loss) after taxation under
UK GAAP 2,120,139 (30,703) 145,859
US GAAP adjustments:
Capitalisation of goodwill 210,965 658,741 --
Amortisation of goodwill (65,874) (34,922) --
Deferred tax 35,000 (101,000) (11,000)
Minority Interest on the foregoing
adjustments (61,491) (178,629) 3,758
------------ ---------- ----------
Profit after tax under US GAAP 'L'2,238,739 'L'313,487 'L'138,617
============ ========== ==========
</TABLE>
20
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 1997
- --------------------------------------------------------------------------------
Approximate cumulative effect on shareholders' equity of significant
differences between UK GAAP and US GAAP:
<TABLE>
<CAPTION>
31 March 31 March
1997 1996
---- ----
'L' 'L'
<S> <C> <C>
Shareholders' equity under UK GAAP 2,675,851 555,712
US GAAP adjustments:
Capitalisation of goodwill 869,706 658,741
Amortisation of goodwill (100,796) (34,922)
Deferred tax (10,000) (45,000)
Minority Interest on the foregoing
adjustments (259,254) (197,763)
------------ ----------
Shareholders' equity under US GAAP 'L'3,175,507 'L'936,768
============ ==========
</TABLE>
c. BASIS OF PREPARATION OF CASH FLOW STATEMENT
The group's statement of cash flows is prepared in accordance with UK
Financial Reporting Standard No 1 (Revised) "Cash Flow Statements" (FRS
1-Revised), the objectives and principles of which are similar to those
set out in Statement of Financial Accounting Standards 95, "Statement
of Cash Flows" (SFAS 95) under US GAAP. The principal differences
between FRS 1 (Revised) and SFAS 95 relate to classification. Under FRS
1 (Revised), the company presents its cash flows for (a) operating
activities; (b) returns on investment and servicing of finance; (c)
taxation; (d) capital expenditure and financial investment; and (e)
financing activities. SFAS 95 requires only three categories of cash
flow activity (a) operating; (b) investing; and (c) financing.
Cash flows from taxation and returns on investment and servicing of
finance under FRS 1 (Revised) would be included as operating activities
under SFAS 95. Under FRS 1 (Revised) cash includes only cash in hand
plus deposits repayable on demand, less overdrafts repayable on demand.
Under SFAS 95 cash and cash equivalents include all highly liquid short
term investments with original maturities of three months or less. In
addition, under SFAS 95 changes in minority interests would be
presented as a cash flow from operating activities.
21
<PAGE>
<PAGE>
REPORT OF THE DIRECTORS AND
FINANCIAL STATEMENTS FOR THE PERIOD 1 APRIL 1997 TO 31 OCTOBER 1997
FOR
CONTACT LENS TECHNOLOGIES LIMITED
<PAGE>
<PAGE>
CONTACT LENS TECHNOLOGIES LIMITED
INDEX TO THE FINANCIAL STATEMENTS
FOR THE PERIOD 1 APRIL 1997 TO 31 OCTOBER 1997
PAGE
----
Company Information..................................................... 1
Report of the Directors................................................. 2
Report of the Auditors.................................................. 3
Profit and Loss Account................................................. 4
Balance Sheet........................................................... 5
Cash Flow Statement..................................................... 6
Notes to the Financial Statements....................................... 7
<PAGE>
<PAGE>
CONTACT LENS TECHNOLOGIES LIMITED
COMPANY INFORMATION
FOR THE PERIOD 1 APRIL 1997 TO 31 OCTOBER 1997
DIRECTORS: A Galley
G Fryling
I R Bussey
SECRETARY: I R Bussey
REGISTERED OFFICE: Unit 2
South Point
Hamble
Southhampton
Hampshire
SO31 4RF
REGISTERED NUMBER: 02908056 (England and Wales)
AUDITORS: Leonard Gold Chartered Accountants
Registered Auditors
24 Landport Terrace
Portsmouth
Hampshire
PO1 2RG
Page 1
<PAGE>
<PAGE>
CONTACT LENS TECHNOLOGIES LIMITED
REPORT OF THE DIRECTORS
FOR THE PERIOD 1 APRIL 1997 TO 31 OCTOBER 1997
The directors present their report with the financial statements of the
company for the period 1 April 1997 to 31 October 1997.
PRINCIPAL ACTIVITY
The principal activity, of the company in the period under review was that
of contact lens technology, manufacture of machinery and wholesaling of contact
lenses.
On 3 December 1997 Coopervision Inc took over the company.
DIRECTORS
The directors during the period under review were:
G H Galley (Resigned 2.12.97)
A Galley
B Bevis (Resigned 2.12.97)
In addition G Fryling and I R Bussey were appointed directors on 2 December
1997.
The beneficial interests of the directors holding office on 31 October 1997
in the issued share capital of the company were as follows:
<TABLE>
<CAPTION>
31.10.97 1.4.97
<S> <C> <C>
Ordinary I shares
G H Galley 400 400
A Galley 350 350
B Bevis 200 200
</TABLE>
STATEMENT OF DIRECTORS' RESPONSIBILITIES
Company law requires the directors to prepare financial period which give a
true and fair view of the state of affairs of the company and of the profit or
loss of the company for that period. In preparing those financial statements,
the directors are required to
- select suitable accounting policies and then apply them consistently:
- make judgments and estimates that are reasonable and prudent:
- prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the company will continue in business.
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company and to enable them to ensure that the financial statements comply with
the Companies Act 1985. They are also responsible for safeguarding the assets of
the company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
AUDITORS
The existing auditors, Leonard Gold Chartered Accountants, will be replaced
by KPMG in accordance with Section 388 of the Companies Act 1985.
This report has been prepared in accordance with the special provisions of
Part VII of the Companies Act 1985, as amended, relating to small companies.
ON BEHALF OF THE BOARD:
/s/ I R BUSSEY
- -------------------
I R Bussey
SECRETARY
Dated: 10 February 1998
Page 2
<PAGE>
<PAGE>
CONTACT LENS TECHNOLOGIES LIMITED
REPORT OF THE AUDITORS TO THE SHAREHOLDERS OF
CONTACT LENS TECHNOLOGIES LIMITED
We have audited the financial statements on pages four to thirteen which
have been prepared under the historical cost convention and the accounting
policies set out on page seven.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
As described on page two the company's directors are responsible for the
preparation of financial statements. It is our responsibility to form an
independent opinion, based on our audit, on those statements and to report our
opinion to you.
BASIS OF OPINION
We conducted our audit in accordance with Auditing Standards issued by the
Auditing Practices Board. An audit includes examination, on a test basis, of
evidence relevant to the amounts and disclosures in the financial statements. It
also includes an assessment of the significant estimates and judgments made by
the directors in the preparation of the financial statements, and of whether the
accounting policies are appropriate to the company's circumstances, consistently
applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the fianancial statements.
OPINION
In our opinion the financial statements give a true and fair view of the
state of the company's affairs as at 31 October 1997 and of its profit for the
period then ended and have been properly prepared in accordance with the
Companies Act 1985, as amended.
/s/ LEONARD GOLD
- ---------------------
Leonard Gold
Chartered Accountants
Registered Auditors
24 Landport Terrace
Portsmouth
Hampshire
PO1 2RG
Dated: 10 FEBRUARY 1998
Page 3
<PAGE>
<PAGE>
CONTACT LENS TECHNOLOGIES LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE PERIOD 1 APRIL 1997 TO 31 OCTOBER 1997
<TABLE>
<CAPTION>
PERIOD
1.4.97
TO YEAR ENDED
31.10.97 31.3.97
------------ ------------
'L' 'L'
Notes
<S> <C> <C> <C>
TURNOVER.............................. 2 2,727,904 1,251,124
Cost of sales......................... 1,966,748 930,357
---------- ----------
GROSS PROFIT.......................... 761,156 320,767
Administrative expenses............... 462,257 290,196
---------- ----------
298,899 30,571
Other operating income................ 281,346 347,245
---------- ----------
OPERATING PROFIT...................... 3 580,245 377,816
Interest payable and
similar charges..................... 40,110 67,266
---------- ----------
PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION..................... 540,135 310,550
Tax on profit on ordinary
activities.......................... 4 172,282 110,477
---------- ----------
PROFIT FOR THE FINANCIAL PERIOD
AFTER TAXATION........................ 367,853 200,073
Retained profit brought forward....... 289,359 89,286
---------- ----------
RETAINED PROFIT CARRIED FORWARD....... 'L'657,212 'L'289,359
========== ==========
</TABLE>
CONTINUING OPERATIONS
None of the company's activities were acquired or discontinued during the
current period or previous year.
TOTAL RECOGNISED GAINS AND LOSSES
The company has no recognised gains or losses other than the profits for
the current period or previous year.
Page 4
<PAGE>
<PAGE>
CONTACT LENS TECHNOLOGIES LIMITED
BALANCE SHEET
31 OCTOBER 1997
<TABLE>
<CAPTION>
31.10.97 31.3.97
-------------- ---------------
Notes 'L' 'L' 'L' 'L'
<S> <C> <C> <C> <C> <C>
FIXED ASSETS:
Tangible assets................... 5 853,475 909,743
CURRENT ASSETS:
Stocks............................ 6 295,597 237,298
Debtors........................... 7 1,665,124 386,516
Cash at bank...................... -- 2,114
---------- --------
1,960,721 625,928
CREDITORS: Amounts falling
due within one year............. 8 (1,876,860) (943,447)
---------- --------
NET CURRENT ASSETS/(LIABILITIES): 83,861 (317,519)
---------- ----------
TOTAL ASSETS LESS CURRENT
LIABILITIES..................... 937,336 592,224
CREDITORS: Amounts falling
due after more than one year.... 9 (279,124) (301,865)
---------- ----------
'L'658,212 'L'290,359
========== ==========
CAPITAL AND RESERVES:
Called up share capital.......... 14 1,000 1,000
Profit and loss account.......... 657,212 289,359
---------- ----------
Shareholders' funds 16 'L'658,212 'L'290,359
========== ===========
</TABLE>
These financial statements have been prepared in accordance with the special
provisions of Part VII of the Companies Act 1985, as amended, relating to small
companies.
ON BEHALF OF THE BOARD:
/s/ A GALLEY
- -------------------------
A Galley - DIRECTOR
/s/ I R BUSSEY
- -------------------------
I R BUSSEY - DIRECTOR
Approved by the Board on 10 February 1998
Page 5
<PAGE>
<PAGE>
CONTACT LENS TECHNOLOGIES LIMITED
CASH FLOW STATEMENT
FOR THE PERIOD 1 APRIL 1997 TO 31 OCTOBER 1997
<TABLE>
<CAPTION>
PERIOD
1.4.97
TO YEAR ENDED
31.10.97 31.3.97
--------------- ---------------
NOTES 'L' 'L' 'L' 'L'
<S> <C> <C> <C> <C>
Net cash inflow from operating activities.................. 18 49,175 372,193
Returns on investment and servicing of finance
Interest paid.............................................. (27,646) (72,822)
Taxation
Corporation tax paid....................................... (9,822)
Capital expenditure and financial investments --
Payments to acquire tangible fixed assets.................. (1,746) (193,679)
Receipts from sale of tangible fixed assets................ -- 62,000
-------- ---------
Net cash outflow from capital expenditure.................. (1,746) (131,679)
Financing
Bank loan repayments....................................... (20,725) (29,093)
-------- ---------
Net cash outflow from financing............................ (20,725) (29,093)
-------- ---------
(Decrease)/increase in cash................................ 19 'L'(942) 'L'128,777
======== ==========
</TABLE>
Page 6
<PAGE>
<PAGE>
CONTACT LENS TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD 1 APRIL 1997 TO 31 OCTOBER 1997
1. ACCOUNTING POLICIES
ACCOUNTING CONVENTION
The financial statements have been prepared under the historical cost
convention.
TURNOVER
Turnover represents net invoiced sales of goods, excluding value added tax.
TANGIBLE FIXED ASSETS
Depreciation is provided at the following annual rates in order to write
off each asset over its estimated useful life.
<TABLE>
<S> <C>
Improvement to property............................. -20% on cost
Plant and equipment................................. -15% on cost
Purpose built equipment............................. -15% on cost
Computer equipment.................................. -33% on cost
Fixtures and fittings............................... -15% on cost
</TABLE>
The freehold property is maintained as a matter of company policy, by a
continual repair programme, such that the residual value of the property is at
least equal to its book value.
STOCKS
Stock is valued at the lower of cost and net realisable value, after making
due allowance for obsolete and slow moving items.
DEFERRED TAXATION
Provision is made at current rates for taxation deferred in respect of all
material timing differences except to the extent that, in the opinion of the
directors, there is reasonable probability that the liability will not arise in
the foreseeable future.
OPERATING LEASES
Rentals paid under operating leases are charged to the profit and loss
account as incurred.
ROYALTIES
The company pays royalties to certain patent holders on a contractually
agreed basis. Royalties are charged to the profit and loss account on an
accruals basis in line with those contracts.
2. TURNOVER
The turnover and profit before taxation are attributable to the one
principal activity of the company.
Page 7
<PAGE>
<PAGE>
CONTACT LENS TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD 1 APRIL 1997 TO 31 OCTOBER 1997
3. OPERATING PROFIT
The operating profit is stated after charging/(crediting):
<TABLE>
<CAPTION>
PERIOD
1.4.97
TO YEAR ENDED
31.10.97 31.3.97
'L' 'L'
<S> <C> <C>
Depreciation-owned assets........................................................ 58,014 99,180
Profit on disposal of fixed assets............................................... -- (16,475)
Auditors' remuneration........................................................... 5,788 2,040
Operating lease -- plant and machinery........................................... 31,819 54,548
-------- ----------
Directors' emoluments and other benefits etc..................................... 20,417 35,000
======== ===========
</TABLE>
4. TAXATION
The tax charge on the profit on ordinary activities for the period was as
follows:
<TABLE>
<CAPTION>
PERIOD
1.4.97
TO YEAR ENDED
31.10.97 31.3.97
'L' 'L'
<S> <C> <C>
UK Corporation tax.............................................................. 243,000 116,000
Under provision re prior years.................................................. -- 30,227
Deferred taxation............................................................... (70,718) (25,750)
-------- ----------
172,282 110,477
========= ===========
</TABLE>
UK Corporation Tax has been charged at 31% (Year ended 31 March,
1997 -- 33%).
Page 8
<PAGE>
<PAGE>
CONTACT LENS TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD 1 APRIL 1997 TO 31 OCTOBER 1997
5. TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
FREEHOLD IMPROVEMENTS PLANT AND
PROPERTY TO PROPERTY EQUIPMENT
-------- ------------ ---------
`L' `L' `L'
<S> <C> <C> <C>
COST:
At 1 April 1997 365,000 5,000 42,539
-------- ------ ---------
At 31 October 1997 365,000 5,000 42,539
-------- ------ ---------
DEPRECIATION:
At 1 April 1997 -- 1,245 11,137
Charge for period -- 394 3,724
-------- ------ ---------
At 31 October 1997 -- 1,539 14,861
-------- ------ ---------
NET BOOK VALUE:
At 31 October 1997 365,000 3,461 27,678
======== ====== ========
At 31 March 1997 365,000 3,755 31,402
========= ======== ==========
</TABLE>
<TABLE>
<CAPTION>
PURPOSE FIXTURES
BUILT AND COMPUTER
EQUIPMENT FITTINGS EQUIPMENT TOTALS
--------- -------- --------- -------
`L' `L' `L' `L'
<S> <C> <C> <C> <C>
COST:
At 1 April 1997 597,060 5,051 6,151 1,020,801
Additions -- -- 1,746 1,746
--------- -------- --------- ---------
At 31 October 1997 597,060 5,051 7,897 1,022,547
--------- -------- --------- ---------
DEPRECIATION:
At 1 April 1997 96,132 420 2,124 111,058
Charge for period 52,255 441 1,300 58,014
--------- -------- --------- ---------
At 31 October 1997 148,387 861 3,424 169,072
--------- -------- --------- ---------
NET BOOK VALUE:
At 31 October 1997 448,673 4,190 4,473 853,475
======== ======== ========= =========
At 31 March 1997 500,928 4,631 4,027 909,743
========= ======== ========= =========
</TABLE>
Page 9
<PAGE>
<PAGE>
CONTACT LENS TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD 1 APRIL 1997 TO 31 OCTOBER 1997
6. STOCKS
<TABLE>
<CAPTION>
31.10.97 31.3.97
-------- -------
'L' 'L'
<S> <C> <C>
Contact lenses 273,048 223,008
Packaging and labels 22,549 14,290
-------- -------
295,597 237,298
======== =======
</TABLE>
7. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
<TABLE>
<CAPTION>
31.10.97 31.3.97
--------- -------
'L' 'L'
<S> <C> <C>
Trade debtors 1,506,291 309,895
Other debtors 60,907 76,621
Prepayments and accrued income 9,091 --
Directors' current accounts 18,117 --
Deferred tax (note 13) 70,718 --
--------- -------
1,665,124 386,516
========= ========
</TABLE>
The company made the following loans to a director during the period:
<TABLE>
<CAPTION>
HIGHEST
BALANCE
BALANCE DURING
AT THE
31.10.97 PERIOD
--------- ---------
<S> <C> <C>
G H Galley 'L'18,117 'L'18,117
========= =========
</TABLE>
The loan has been repaid since the period end.
8. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
<TABLE>
<CAPTION>
31.10.97 31.3.97
---------- --------
'L' 'L'
<S> <C> <C>
Bank loans and overdrafts (see
note 10) 167,580 166,736
Trade creditors 26,729 9,471
Accruals 400,596 139,601
Due to related company 901,086 448,458
Directors' current accounts -- 73
Social security and other taxes 1,464 42,703
Corporation tax 379,405 136,405
---------- --------
1,876,860 943,447
========== ========
</TABLE>
9. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
<TABLE>
<CAPTION>
31.10.97 31.3.97
--------- ---------
'L' 'L'
<S> <C> <C>
Bank loans (see note 10) 279,124 301,865
========= ========
</TABLE>
Page 10
<PAGE>
<PAGE>
CONTACT LENS TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD 1 APRIL 1997 TO 31 OCTOBER 1997
10. LOANS AND OVERDRAFTS
An analysis of the maturity of loans and overdrafts is given below:
<TABLE>
<CAPTION>
31.10.97 31.3.97
--------- ---------
'L' 'L'
<S> <C> <C>
Amounts falling due within one year
or on demand:
Bank overdrafts 134,564 135,736
Bank loans 33,016 31,000
--------- ---------
167,580 166,736
========= =========
Amounts falling due between one and
two years:
Bank loans 35,016 33,016
========= =========
Amounts falling due between two and
five years:
Bank loans 117,048 118,048
========= ========
Amounts falling due in more than
five years:
Repayable by instalments
Bank loans 127,060 150,801
========= ========
</TABLE>
11. OBLIGATIONS UNDER LEASING AGREEMENTS
The following payments are committed to be paid within one year:
<TABLE>
<CAPTION>
OPERATING LEASES
31.10.97 31.3.97
--------- ---------
'L' 'L'
<S> <C> <C>
Expiring:
Between one and five years 54,548 54,548
========= ========
</TABLE>
12. SECURED DEBTS
The following secured debts are included within creditors:
<TABLE>
<CAPTION>
31.10.97 31.3.97
--------- ---------
'L' 'L'
<S> <C> <C>
Bank overdrafts 134,564 135,736
Bank loans 312,140 332,865
--------- ---------
446,704 468,601
========= =========
</TABLE>
Page 11
<PAGE>
<PAGE>
CONTACT LENS TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD 1 APRIL 1997 TO 31 OCTOBER 1997
13. DEFERRED TAXATION
Deferred taxation for which provision has been made in the financial statements
and the amounts for which no provision has been made, are as follows:
<TABLE>
<CAPTION>
PROVIDED NOT PROVIDED
31.10.97 31.3.97 31.10.97 31.3.97
--------- -------- --------- -------
'L' 'L' 'L' 'L'
<S> <C> <C> <C> <C>
Depreciation of fixed assets 51,365 41,490 -- 5,454
Less: Accrued interest and
royalties (122,083) (41,490) -- --
---------- --------- --------- -------
(70,718) -- -- 5,454
========== ========= ========= =======
</TABLE>
14. CALLED UP SHARE CAPITAL
<TABLE>
<CAPTION>
AUTHORISED: NOMINAL
NUMBER: CLASS: VALUE: 31.10.97 31.3.97
- ----------- -------- ------- ------- --------
<S> <C> <C> <C> <C>
5,000,000 Ordinary 1 5,000,000 5,000,000
========= =========
<CAPTION>
Allotted, issued and fully paid:
NOMINAL
NUMBER: CLASS: VALUE: 31.10.97 31.3.97
- ----------- -------- ------- -------- -------
'L' 'L'
<S> <C> <C> <C> <C>
1,000 Ordinary 1 1,000 1,000
======= =====
</TABLE>
15. RELATED PARTY DISCLOSURES
During the period the company acquired 'L'1,909,565 (year ended 31 March 1997:
'L'1,001,473) of contact lenses from Aspect Vision Care Limited. It also
received rent of 'L'30,333 (year ended 31 March 1997: 'L'52,000) and equipment
rentals of 'L'70,000 (year ended 31 March 1997: 'L'120,000). Aspect Vision Care
Limited is controlled by common directors, G H Galley and A D Galley, and of
which B Bavis is also a director.
16. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
<TABLE>
<CAPTION>
31.10.97 31.3.97
--------- ---------
'L' 'L'
<S> <C> <C>
Profit for the financial period 367,853 200,073
--------- ---------
NET ADDITION TO SHAREHOLDERS' FUNDS 367,853 200,073
Opening shareholders' funds 290,359 90,286
--------- ---------
CLOSING SHAREHOLDERS' FUNDS 658,212 290,359
========= =========
Equity interests 658,212 290,359
========= =========
</TABLE>
17. CONTROLLING PARTY
The directors as disclosed in the directors' report are the controlling party by
virtue of their 95% holding in the equity share capital of the company as at 31
October 1997.
Page 12
<PAGE>
<PAGE>
CONTACT LENS TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD 1 APRIL 1997 TO 31 OCTOBER 1997
18. RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING
ACTIVITIES
<TABLE>
<CAPTION>
PERIOD
1.4.97
TO YEAR ENDED
31.10.97 31.3.97
------------ ----------
'L' 'L'
<S> <C> <C>
Operating Profit 580,245 377,816
Depreciation Charges 58,014 99,180
Profit on Disposal of Fixed Assets -- (16,475)
Increase in Stocks (58,299) (193,075)
Increase in Debtors (1,207,890) (102,923)
Increase in Creditors 677,105 207,670
------------ ----------
NET CASH INFLOW FROM OPERATING
ACTIVITIES 'L'49,175 'L'372,193
============ ==========
</TABLE>
19. ANALYSIS OF CHANGES IN NET DEBT
<TABLE>
<CAPTION>
AT CASH AT CASH AT
31.3.96 FLOWS 31.3.97 FLOWS 31.10.97
----------- ---------- ----------- --------- -----------
'L' 'L' 'L' 'L' 'L'
<S> <C> <C> <C> <C> <C>
Cash in Hand and at Bank -- 2,114 2,114 (2,114) --
Bank Overdraft (262,399) 126,663 (135,736) 1,172 (134,564)
---------- --------
128,777 (942)
Bank Loans (361,958) 29,093 (332,865) 20,725 (312,140)
----------- ---------- ----------- --------- -----------
TOTAL 'L'(624,357) 'L'157,870 'L'(466,487) 'L'19,783 'L'(446,704)
=========== ========== =========== ========= ===========
</TABLE>
20. RECONCILIATION OF NET CASH FLOWS TO MOVEMENT IN NET DEBT
<TABLE>
<CAPTION>
PERIOD 1.4.97 YEAR ENDED
TO 31.10.97 31.3.97
------------- ----------
'L' 'L' 'L' 'L'
<S> <C> <C>
(Decrease)/Increase in Cash
in the Period (942) 128,777
Cash Outflow from Repayment
of Bank Loans 20,725 29,093
----------- -----------
Movement in Net Debt in the
Period 19,783 157,870
Net Debt at 1 April 1997 (466,487) (624,357)
----------- ----------
Net Debt at 31 October 1997 'L'(446,704) 'L'(466,487)
=========== ==========
</TABLE>
Page 13
<PAGE>
<PAGE>
Contact Lens Technologies Limited
Selected Notes for Period Ended 31 October 1997
21. SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN UK AND US GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES - (UNAUDITED)
The significant differences between UK GAAP and US GAAP are explained in Note 19
to the Company's financial report for the year ended 31 March 1997 included
elsewhere in this Form 8-K filing.
Approximate effect on profit after taxation of significant differences between
UK GAAP and US GAAP.
7 months ended
31 October 1997
---------------
'L'
Profit/(Loss) after taxation under UK GAAP 367,853
US GAAP adjustments:
Capitalisation of Interest 0
Depreciation on Interest Capitalised -1,168
Freehold Property Depreciation -5,323
Tax effect on the foregoing adjustments 589
Deferred tax 5,806
-------
Profit/(Loss) after taxation under US GAAP 367,757
=======
Approximate cumulative effect on shareholders equity of significant differences
between UK GAAP and US GAAP
31 October 1997
---------------
'L'
Shareholders' equity under UK GAAP 658,212
US GAAP adjustments:
Capitalisation of Interest 13,345
Depreciation on Interest Capitalised -3,170
Freehold Property Depreciation -15,969
Tax effect on the foregoing adjustments -3,154
Deferred tax
-------
Shareholders Equity under US GAAP 649,264
=======
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
REPORTS AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 OCTOBER 1997
DIRECTORS
A D Galley
I R Bussey
G Fryling
SECRETARY
I R Bussey
COMPANY NUMBER 01847802
REGISTERED OFFICE
Unit 2, South Point, Ramble, Southampton, Hampshire, SO31 4RF
CONTENTS Pages
Directors Report 1 - 2
Auditors' Report 3
Consolidated Profit and Loss Account 4
Consolidated Balance Sheet 5
Company Balance Sheet 6
Consolidated Cashflow Statement 7
Notes to the Financial Statements 8 - 19
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
DIRECTORS' REPORT
The directors present their report and the financial statements for the period
ended 31 October 1997.
PRINCIPAL ACTIVITIES AND BUSINESS REVIEW
The group's principal activities and those of its trading subsidiaries continues
to be those of manufacturers and wholesalers of contact lenses. The directors
are satisfied with the results of the group for the period and expect further
growth and increasing profits in the coming year.
The performance of the trading subsidiaries, Aspect Vision Care Limited and
Aspect Vision Italia SRL is also considered satisfactory with both operating
profitably during the period. Aspect Speciality Limited ceased trading on 31 May
1997 and transferred its trade to Aspect Vision Care Limited.
On 3 December 1997 CooperVision Inc. took over New Focus Health care Limited.
RESULTS AND DIVIDENDS
The consolidated profit for the year, after taxation and minority interest,
amounted to 'L'350,226. The directors recommend that no dividend be paid and
that the balance be carried forward.
FIXED ASSETS
The movement in fixed assets during the period are set out in notes 10 to 12 to
the financial statements. In particular Aspect Vision Care Limited purchased a
freehold property for 'L'789,090 on 2 June 1997.
DIRECTORS
The directors who served during the period and their beneficial interests in the
company's issued ordinary share capital were:
Number Of Shares
----------------
31 October 1997 31 March 1997
--------------- -------------
G H Galley (Resigned 02.12.97) 221,303 241,303
W T Brooker (Resigned 02.12.97) 241,303 241,303
A D Galley 261,302 241,302
In addition I R Bussey and G Fryling were appointed directors on 2 December
1997.
DIRECTORS' RESPONSIBILITIES
Company law requires the directors to prepare financial statements for each
financial period which give a true and fair view of the state of affairs of the
company and the group and of the profit or loss of the group for that period. In
preparing those financial statements, the directors are required to
- select suitable accounting policies and then apply them consistently;
- make judgements and estimates that are reasonable and prudent;
- state whether applicable accounting standards have been followed, subject
to any material departures disclosed and explained in the financial
statements;
- prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the company will continue in business.
1
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
DIRECTORS' REPORT (CONTINUED)
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company and to enable them to ensure that the financial statements comply with
the Companies Act 1985. They are also responsible for safeguarding the assets of
the group and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
EMPLOYEES
The group is committed to communication with employees throughout the group by
its system of keeping employees informed of developments and progress through
briefings by management and widely distributed news and information bulletins.
The group's aim is to meet the obligations of the code of good practice on the
employment of disabled people. Full and fair consideration is given to disabled
applicants for employment and training, and career development is encouraged on
the basis of their aptitude and abilities.
POLICY ON PAYMENT OF CREDITORS
It is group policy not to follow a particular code but, in respect of all of its
suppliers to settle the terms of payment when agreeing each transaction; to
ensure that suppliers are made aware of the terms of payment; and to abide by
those terms.
TAXATION STATUS OF THE COMPANY
The company is a close company within the provisions of Section 414, Income and
Corporation Taxes Act 1988.
AUDITORS
The existing auditors, Leonard Gold Chartered Accountants, will be replaced by
KPMG in accordance with section 388 of the Companies Act 1985.
Signed by order of the board of directors,
/s/ I R Bussey
- -------------------------------------
I R BUSSEY
SECRETARY
10 FEBRUARY 1998
2
<PAGE>
<PAGE>
REPORT OF THE AUDITORS TO THE MEMBERS OF
NEW FOCUS HEALTH CARE LIMITED
We have audited the financial statements on pages 4 to 20 which have been
prepared under the historical cost convention, and the accounting policies set
out on pages 8 and 9
Respective Responsibilities of Directors and Auditors:
As described on pages 1 and 2 the company's directors are responsible for the
preparation of the financial statements. It is our responsibility to form an
independent opinion, based on our audit, on those statements and report our
opinion to you.
Basis of Opinion:
We conducted our audit in accordance with Auditing standards issued by the
Auditing Practices Board. An audit includes examination, on a test basis, of
evidence relevant to the amounts and disclosures in the financial statements, It
also includes an assessment of the significant estimates and judgements made by
the directors in the preparation of the financial statements, and of whether the
accounting policies are appropriate to the company's circumstances, consistently
applied and adequately disclosed,
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
Opinion:
In our opinion the financial statements give a true and fair view of the state
of affairs of the company and group at 31 October 1997 and of the profit of the
group for the period then ended and have been properly prepared in accordance
with the provisions of the Companies Act 1985.
/s/ Leonard Gold
- -------------------------------------
LEONARD GOLD CHARTERED ACCOUNTANTS
Registered Auditor
24 Landport Terrace
Portsmouth
Hampshire
PO1 2RG
10 FEBRUARY 1998
3
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE PERIOD ENDED 31 OCTOBER 1997
<TABLE>
<CAPTION>
7 months ended 12 months ended
Notes 31 October 1997 31 March 1997
----- --------------- ---------------
'L' 'L'
<S> <C> <C> <C>
TURNOVER 2 13,023,482 16,929,483
COST OF SALES (7,627,213) (7,525,409)
---------- -----------
GROSS PROFIT 5,396,269 9,404,074
DISTRIBUTION COSTS (418,255) (689,844)
ADMINISTRATIVE EXPENSES (3,754,666) (5,667,807)
---------- -----------
1,223,348 3,046,423
OPHER OPERATING INCOME 4 171,242 154,378
OPERATING PROFIT 1,394,590 3,200,801
EXCEPTIONAL ITEM 7 (170,000) 2,176,229
INTEREST RECEIVABLE 590 994
INTEREST PAYABLE 5 (367,337) (428,092)
---------- -----------
PROFIT ON ORDINARY ACTIVITIES BEFORE
TAXATION 857,843 4,949,932
TAX ON PROFIT ON ORDINARY
ACTIVITIES 8 (342,000) (1,703,398)
---------- -----------
PROFIT ON ORDINARY ACTIVITIES
AFTER TAXATION 515,843 3,246,534
MINORITY INTEREST - EQUITY INTEREST (165,617) (1,126,395)
---------- -----------
RETAINED PROFIT FOR THE PERIOD 18 'L'350,226 'L'2,120,139
========== ===========
</TABLE>
The results in the profit and loss account relate to continuing operations.
There were no recognised gains or losses other than those included in the
profit and loss account.
The notes on pages 8 to 20 form part of these financial statements,
4
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
CONSOLIDATED BALANCE SHEET AS AT 31 OCTOBER 1997
31 October 31 March
Notes 1997 1997
----- ---- ----
'L' 'L'
FIXED ASSETS
Intangible Assets 10 107,982 -
Tangible Assets 11 6,326,837 4,043,222
------------ ------------
6,434,819 4,043,222
------------ ------------
CURRENT ASSETS
Stocks 13 3,938,066 3,701,011
Debtors 14 6,247,261 6,415,593
Cash at Bank and In Hand 121,644 476,584
------------ ------------
10,306,971 10,593,188
CREDITORS
Amounts falling due within one year 15 (9,887,554) (9,177,340)
------------ ------------
NET CURRENT ASSETS 419,417 1,415,848
------------ ------------
TOTAL ASSETS LESS CURRENT LIABILITIES 6,854,236 5,459,070
CREDITORS
Amounts falling due after
more than one year 15 (2,353,635) (1,456,018)
------------ ------------
NET ASSETS 'L'4,500,601 'L'4,003,052
============ ============
CAPITAL AND RESERVES
Called up Share Capital 16 7,239 7,239
Share Premium Account 17 317,761 317,761
Profit and Loss Account 18 2,701,077 2,350,851
------------ ------------
Shareholders' Funds - Equity Interest 19 3,026,077 2,675,851
Minority Interest - Equity Interest 1,474,524 1,327,201
------------ ------------
'L'4,500,601 'L'4003,052
============ ============
APPROVED BY THE BOARD ON 10 FEBRUARY 1998
/s/ I R Bussey
- --------------------------------
I R BUSSEY - DIRECTOR
/s/ A D Galley
- --------------------------------
A D GALLEY - DIRECTOR
The notes on pages 8 to 20 form part of these financial statements,
5
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
COMPANY BALANCE SHEET AS AT 31 OCTOBER 1997
31 October 31 March
Notes 1997 1997
----- ---- ----
'L' 'L'
FIXED ASSETS
Investments 12 1,118,556 1,118,556
----------- -----------
CURRENT ASSETS
Debtors 14 306,958 284,059
CREDITORS
Amounts falling due within one year 15 (2,000) (1,450)
----------- -----------
NET CURRENT ASSETS 304,958 282,609
----------- -----------
NET ASSETS 'L'1,423,514 'L'1,401,165
=========== ===========
CAPITAL AND RESERVES
Called up Share Capital 16 7,239 7,239
Share Premium 17 317,761 317,761
Profit and Loss Account 18 1,098,514 1,076,165
----------- -----------
Shareholders' Funds - Equity Interest 19 'L'1,423,514 'L'1,401,165
=========== ===========
APPROVED BY THE BOARD ON 10 FEBRUARY 1998
/s/ I R Bussey
- --------------------------------
I R BUSSEY - DIRECTOR
/s/ A D Galley
- --------------------------------
A D GALLEY - DIRECTOR
The notes on pages 8 to 20 form part of these financial statements.
6
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIOD ENDED 31 OCTOBER 1997
<TABLE>
<CAPTION>
7 months ended 12 months ended
Notes 31 October 1997 31 March 1997
----- -------------------- ---------------------
'L' 'L' 'L' 'L'
<S> <C> <C> <C> <C> <C>
NET CASH INFLOW FROM
OPERATING ACTIVITIES 27 2,008,782 2,481,228
RETURNS ON INVESTMENTS AND
SERVICING OF FINANCE
Interest Received 590 994
Interest Paid (225,235) (202,969)
Interest Element of Finance Lease
Rental Payments (61,857) (73,489)
----------- ---------
NET CASH OUTFLOW FROM RETURNS
ON INVESTMENTS AND SERVICING
OF FINANCE (286,502) (275,464)
TAXATION
Corporation Tax Paid (317,369) (107,864)
ACT Received - 412
----------- ---------
TAX PAID (317,369) (107,452)
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Payment to Acquire Minority
Interest (18,294) (49,035)
Payment to Acquire Intangible
Fixed Assets (311,706) -
Payments to Acquire Tangible
Fixed Assets (2,230,228) (2,438,726)
Receipts from Sales of Tangible
Fixed Assets 398,906 37,318
----------- ---------
NET CASH OUTFLOW FROM CAPITAL
EXPENDITURE (2,161,322) (2,450,443)
FINANCING
Bank Loan Advance 630,000 665,000
Bank Loan Repayment (119,225) (116,495)
Finance Lease and Hire Purchase
Repayment (325,877) (345,621)
----------- ---------
NET CASH INFLOW FROM
FINANCING 184,898 202,884
------- --------
DECREASE IN CASH 28 'L'(571,513) 'L'(149,247)
======= ========
</TABLE>
The notes on pages 8 to 20 form part of these financial statements.
7
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 OCTOBER 1997
1. ACCOUNTING POLICIES
Basis Of Preparation Of Accounts
The financial statements are prepared in accordance with applicable
accounting standards, and incorporate the results of the principal
activities which are described in the directors' report and which are
continuing. There have been no changes in accounting policies during the
period
Consolidation
The consolidated financial statements include the results of New Focus
Health Care Limited and its subsidiary undertakings drawn up to 31 October
1997. No profit and loss account for the company has been presented for New
Focus Health Care Limited as permitted by Section 230 of the Companies Act
1985.
Turnover
Turnover comprises the invoiced value of goods and services sold exclusive
of Value Added Tax.
Tangible Fixed Assets And Depreciation
Tangible fixed assets are stated at cost less depreciation.
Depreciation is provided at rates calculated to write off the cost of fixed
assets, less their estimated residual value, over their expected useful
lives on the following bases:
Property Improvements - 10 years
Short Leasehold Properties - over the term of the lease
Plant, Equipment and Fittings - 3-7 years
Motor Vehicles - 4 years
The freehold property is maintained as a matter of company policy, by a
continual repair programme, such that the residual value of the property is
at least equal to its book value.
Goodwill on Consolidation
The excess of the cost of acquisition over the fair value of the underlying
net assets is written off to profit and loss account in the year in which
it arises. However, in the case of the further acquisition of shares in
Aspect Speciality Limited, the purchased goodwill has been capitalised and
is to be amortised over 10 years, which is, in the directors' opinion, its
useful economic life.
Stocks
Stocks are valued at the lower of cost, based on normal levels of activity,
and net realisable value, (inclusive of a proportion of appropriate
overheads).
8
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 OCTOBER 1997
1. ACCOUNTING POLICIES (CONTINUED)
Royalties
The group pays royalties to certain patent holders on a contractually
agreed basis. Royalties are charged to the profit and loss account on an
accrual basis in line with these contracts.
Deferred Taxation
Provision is made for taxation deferred as a result of material timing
differences between the incidence of income and expenditure for taxation
and accounts purposes using the liability method, only to the extent that,
in the opinion of the directors, there is a reasonable probability that a
liability or asset will crystallise in the near future.
Research And Development
Expenditure on research and development is written off against profits in
the period in which it is incurred.
Foreign Currencies
Assets and liabilities in foreign currencies are translated into sterling
at the rates of exchange ruling at the balance sheet date. Transactions in
foreign currencies are translated into sterling at the rate ruling on the
date of the transactions. Exchange differences are taken into account in
arriving at the operating results.
The profit and loss accounts of overseas operations are translated into
sterling at the average rate. The balance sheet of the overseas operation
is translated into sterling at the closing rate.
Exchange differences arising from the translation of the results of
overseas operations are recorded in the profit and loss account.
Leasing And Hire Purchase
Assets obtained under hire purchase contracts and finance leases are
capitalised as tangible fixed assets and depreciated over their useful
lives. Finance leases are those where substantially all of the benefits and
risks of ownership are assumed by the company. Obligations under such
agreements are included in creditors net of the finance charge allocated to
future periods.
Rentals paid under operating leases are charged to the profit and loss
account as incurred.
Pension Scheme
The group operates group personal pension schemes for the benefit of the
employees, and the pension charge represents the amounts payable by the
group to the schemes in respect of the period.
9
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 OCTOBER 1997
2. TURNOVER BY GEOGRAPHICAL REGION
7 months ended 12 months ended
31 October 1997 31 March 1997
--------------- -------------
'L' 'L'
United Kingdom 6,863,871 9,066,178
Europe 4,306,489 5,979,053
Rest of the World 1,853,122 1,884,252
------------- -------------
'L'13,023,482 'L'16,929,483
============= =============
3. OPERATING PROFIT
The operating profit is stated after charging:
7 months ended 12 months ended
31 October 1997 31 March 1997
--------------- -------------
'L' 'L'
Goodwill written off 200,000 210,965
Amortisation of goodwill 3,724 -
Depreciation of tangible fixed assets
- owned by the company 317,631 405,359
- under hire purchase and finance
lease contracts 226,506 255,134
- (Profit)/Loss on disposal of
fixed assets (41,710) 3,427
Hire of Equipment 18,863 59,400
Other Operating Lease Rentals 66,995 142,687
Auditors' remuneration 19,345 39,679
======= =======
4. OTHER OPERATING INCOME
7 months ended 12 months ended
31 October 1997 31 March 1997
--------------- -------------
'L' 'L'
Sale of Business 10,029 6,800
Commission 160,855 144,703
Postage and Freight 358 2,875
--------- ---------
'L'171,242 'L'154,378
========= =========
10
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 OCTOBER 1997
5. INTEREST PAYABLE
7 months ended 12 months ended
31 October 1997 31 March 1997
--------------- -------------
'L' 'L'
On Bank Loans, Overdrafts and Other Loans
- repayable within five years, by
instalments 11,320 (8,922)
- repayable within five years, not by
instalments 211,709 301,130
- repayable wholly or partly in more
than five years 82,451 66,256
- on hire purchase and finance lease
charges 61,857 69,628
--------- ---------
'L'367,337 'L'428,092
========= =========
6. STAFF COSTS
7 months ended 12 months ended
31 October 1997 31 March 1997
--------------- -------------
'L' 'L'
The average weekly number of employees,
including directors, during the period was:
Manufacturing 486 344
Sales 69 75
Directors 3 3
--- ---
558 422
=== ===
Staff Costs (for the above persons):
Directors' Remuneration 114,333 194,120
Directors' Benefits in Kind 18,500 28,415
Directors' Social Security Costs 11,483 19,830
Directors' Pension Contributions 8,013 16,229
Other Wages and Salaries (including
social security costs) 5,642,353 6,797,548
Other Pension Costs 99,618 107,344
----------- -----------
'L'5,894,300 'L'7,163,486
=========== ===========
Of the above directors' remuneration 'L'107,333 (year ended 31 March 1997:
'L'182,120) was paid by a subsidiary undertaking.
7 months ended 12 months ended
31 October 1997 31 March 1997
--------------- -------------
'L' 'L'
Directors' Emoluments
Aggregate Emoluments 132,833 222,535
Company Pension Contributions to
Money Purchase Schemes 8,013 16,229
--------- ---------
'L'140,846 'L'238,764
========= =========
11
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 OCTOBER 1997
6. STAFF COSTS (CONTINUED)
Number Number
Number of Directors who are members of a
Money Purchase Scheme 2 3
=== ===
7 months ended 12 months ended
31 October 1997 31 March 1997
--------------- -------------
'L' 'L'
Emoluments of Highest Paid Director
- Aggregate Emoluments 45,946 81,639
- Company Pension Contributions to
Money Purchase Scheme 4,046 6,120
====== ======
7. EXCEPTIONAL ITEMS
7 months ended 12 months ended
31 October 1997 31 March 1997
--------------- -------------
'L' 'L'
Branch Closure Costs (170,000) -
Settlement of Trade Dispute - 2,176,229
---------- -----------
'L'(170,000) 'L'2,176,229
========== ===========
8. TAXATION
7 months ended 12 months ended
31 October 1997 31 March 1997
--------------- -------------
'L' 'L'
UK Current Year Taxation
UK Corporation Tax at 31%
(year ended 31 March 1997: 33%) 446,000 1,900,800
Deferred (104,000) (201,000)
--------- -----------
342,000 1,699,800
Prior Years
Corporation Tax - 3,598
--------- -----------
'L'342,000 'L'1,703,398
========= ===========
9. PROFIT ATTRIBUTABLE TO THE MEMBERS OF THE PARENT COMPANY
The profit dealt with in the accounts of the parent company for the 7
month period amounted to'L'22,349 (Year ended 31 March 1997:'L'38,143).
12
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 OCTOBER 1997
10. INTANGIBLE FIXED ASSETS - GROUP
Goodwill
--------
'L'
COST
Additions 111,706
---------
AMORTISATION
Charge for Period 3,724
---------
NET BOOK VALUES
At 31 March 1997 -
At 31 October 1997 'L'107,982
=========
11. TANGIBLE FIXED ASSETS - GROUP
<TABLE>
<CAPTION>
Short Plant,
Freehold Property Leasehold Equipment Motor
Property Improvements Property & Fittings Vehicles Totals
-------- ------------ -------- ---------- -------- ------
'L' 'L' 'L' 'L' 'L' 'L'
<S> <C> <C> <C> <C> <C> <C>
COST
At 1 April 1997 950,000 575,864 51,347 3,339,706 325,046 5,241,963
Additions 789,090 174,914 - 2,018,097 202,847 3,184,948
Disposals - - - (362,613) (134,750) (497,363)
----------- --------- -------- ----------- --------- -----------
At 31 October
1997 'L'1,739,090 'L'750,778 'L'51,347 'L'4,995,190 'L'393,143 'L'7,929,548
----------- --------- -------- ----------- --------- -----------
DEPRECIATION
At 1 April 1997 - 110,927 24,927 878,769 184,118 1,198,741
Charge for Period - 38,847 13,551 439,170 52,569 544,137
Disposals - - - (31,830) (108,337) (140,167)
----------- --------- -------- ----------- --------- -----------
At 31 October
1997 - 149,774 38,478 1,286,109 128,350 1,602,711
----------- --------- -------- ----------- --------- -----------
NET BOOK VALUES
At 31 March
1997 'L'950,000 'L'464,937 'L'26,420 'L'2,460,937 'L'140,928 'L'4,043,222
At 31 October
1997 'L'1,739,090 'L'601,004 'L'12,869 'L'3,709,081 'L'264,793 'L'6,326,837
=========== ========== ========= ============ ========== ============
</TABLE>
The net book value of tangible fixed assets include an amount of
'L'1,457,974 (31 March 1997: 'L'820,618) in respect of assets held
under finance leases and hire purchase contracts. Depreciation charged on
these assets during the period amounted to 'L'226,506 (31 March 1997:
'L'255,134).
At the balance sheet date the group had capital commitments amounting to
'L'405,892 (31 March 1997: 'L'264,733) in respect of contracts
approved by the board and contracted for.
13
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 OCTOBER 1997
11. TANGIBLE FIXED ASSETS (CONTINUED) - GROUP
Included within fixed assets are fully depreciated assets with cost as
follows:-
31 October 1997 31 March 1997
--------------- -------------
'L' 'L'
Plant, Equipment and Fittings 118,492 89,623
Motor Vehicles - 35,000
--------- ---------
'L'118,492 'L'124,623
========= =========
12. INVESTMENTS - COMPANY
Investments in Subsidiary Undertakings:
31 October 1997 31 March 1997
--------------- -------------
Cost at 1 April 1997 and
31 October 1997 'L'1,118,556 'L'1,118,556
=========== ===========
<TABLE>
<CAPTION>
Country of Country of
Name Holding % Incorporation Registration
---- --------- ------------- ------------
<S> <C> <C> <C>
Aspect Vision Care Limited - Contact
lens manufacture and distribution 65.8% England Great Britain
Aspect Vision Italia SRL - Contact
lens distribution 70% Italy Italy
Aspect Speciality Limited
- Dormant 89.75% England Great Britain
Focus Solutions Limited
- Dormant 100% England Great Britain
Aspect Contact Lenses Limited
- Dormant 100% England Great Britain
Averlan Company Limited
- Dormant 100% England Great Britain
</TABLE>
All of the above holdings are in ordinary shares.
13. STOCKS - GROUP
31 October 1997 31 March 1997
--------------- -------------
'L' 'L'
Lenses 2,480,064 2,836,727
Materials 306,078 256,771
Packaging and Labels 200,278 164,576
Moulds 443,404 353,058
Work in Progress 507,575 86,879
Plant Stock 667 3,000
----------- -----------
'L'3,938,066 'L'3,701,011
=========== ===========
14
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 OCTOBER 1997
14. DEBTORS - GROUP
31 October 1997 31 March 1997
--------------- -------------
'L' 'L'
Trade Debtors 3,934,685 3,502,689
Amounts due from Related Company 901,086 448,458
Prepayments 338,698 180,515
Other Debtors 243,356 1,729,931
Deferred Taxation (Note 20) 658,000 554,000
Directors' Loan Account 171,436 -
----------- -----------
'L'6,247,261 'L'6,415,593
=========== ===========
There were no amounts falling due after more than one year.
The group made the following loan to a director during the period:-
Balance at Highest Balance
31.10.97 During the Period
-------- -----------------
G H Galley 'L'171,436 'L'171,436
========= =========
The loan has been repaid since the period end.
DEBTORS - COMPANY
31 October 1997 31 March 1997
--------------- -------------
Due within one year:
Amounts Due from Group Undertakings 'L'306,958 'L'284,059
========= =========
There were no amounts falling due after more than one year.
15. CREDITORS - GROUP
<TABLE>
<CAPTION>
Amounts falling Amounts falling
due within due after more
one year than one year
-------- -------------
31 October 31 March 31 October 31 March
1997 1997 1997 1997
---- ---- ---- ----
'L' 'L' 'L' 'L'
<S> <C> <C> <C> <C>
Bank Loan and Overdraft 1,151,064 917,510 1,291,320 797,527
Net Obligations Under Finance
Leases & Hire Purchase
Contracts 468,853 275,079 724,615 289,546
Corporation Tax 2,459,431 2,330,800 - -
Directors' Loan and Current
Accounts 686,981 75,442 - -
Factoring Creditor 827,510 755,617 - -
Trade Creditors 1,051,022 1,743,644 - -
Accruals 2,197,820 2,296,903 - -
Other Taxes & Social Security 258,428 431,822 - -
Other Creditors 641,445 205,523 337,700 368,945
Pension Loan 145,000 145,000 - -
----------- ----------- ----------- -----------
'L'9,887,554 'L'9,177,340 'L'2,353,635 'L'1,456,018
=========== =========== =========== ===========
</TABLE>
15
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 OCTOBER 1997
15. CREDITORS (CONTINUED) - GROUP
The bank loan, overdrafts, directors' loan and pension loan are secured by
fixed and floating charges over the assets of the company concerned.
The factoring account is secured by a floating charge over the sales ledger
of the company concerned.
The finance leases and hire purchase contracts are all repayable within
five years and are secured on the assets concerned. Bank loan repayments
totalling 'L'624,085 are due after five years. The bank loans of
'L'609,781, 'L'599,509 and 'L'263,023 are repayable by monthly
instalments of 'L'8,130.64, 'L'7,622.75 and 'L'10,180 respectively
to achieve repayment by September 2006, June 2007 and February 2000.
Of the creditors 'L'4,665,788 (31 March 1997: 'L'3,255,721) are secured.
CREDITORS - COMPANY
Amounts falling
due within
one year
--------
31 October 31 March
1997 1997
---- ----
Accruals and Deferred Income 'L'2,000 'L'1,450
======== ========
There were no amounts falling due after more than one year.
16. CALLED UP SHARE CAPITAL
<TABLE>
<CAPTION>
31 October 1997 31 March 1997
--------------- -------------
Issued Issued
and Fully and Fully
Authorised Paid Authorised Paid
---------- ---- --------- ----
'L' 'L' 'L' 'L'
<S> <C> <C> <C> <C>
Ordinary Shares of 'L'0.01 500,000 7,239 500,000 7,239
Convertible Redeemable
Preferred Ordinary Shares
of 'L'0.01 900,000 - 900,000 -
Preferred Ordinary Shares
of 'L'0.01 1,600,000 - 1,600,000 -
----------- ------- ----------- -------
'L'3,000,000 'L'7,239 'L'3,000,000 'L'7,239
=========== ======= =========== =======
</TABLE>
17. SHARE PREMIUM ACCOUNT
There was no movement in the share premium account during the period.
16
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 OCTOBER 1997
18. PROFIT AND LOSS ACCOUNT
Group Company
----- -------
'L' 'L'
Balance at 1 April 1997 2,350,851 1,076,165
Retained Profit For The Period 350,226 22,349
----------- -----------
Balance at 31 October 1997 'L'2,701,077 'L'1,098,514
=========== ===========
19. RECONCILIATION OF MOVEMENT IN SHAREHOLDERS FUNDS
There was no movement in the shareholders' funds during the period except
for the profit as set out in note 18.
20. DEFERRED TAX - GROUP
<TABLE>
<CAPTION>
Unprovided Provided
---------- --------
31 October 31 March 31 October 31 March
1997 1997 1997 1997
---- ---- ---- ----
'L' 'L' 'L' 'L'
<S> <C> <C> <C> <C>
Accelerated Capital Allowance - - 84,000 50,000
Finance Lease Payments - - 52,000 54,000
Short Term Timing Difference - - (794,000) (658,000)
---- ---- ---------- ----------
'L' - 'L' - 'L'(658,000) 'L'(554,000)
==== ==== =========== ==========
</TABLE>
21. OPERATING LEASES - GROUP
At 31 October 1997 the group had the following commitments under
non-cancellable operating leases as follows:-
31 October 1997 31 March 1997
----------------- -----------------
Land and Building Land and Building
----------------- -----------------
'L' 'L'
Expiry Date:
Within one year 84,300 43,500
Between two and five years - 40,800
After more than five years 30,000 30,000
====== ======
22. CONTROLLING PARTY
The directors of the Company, as disclosed in the Directors' Report, are
the controlling party of New Focus Health Care Limited by virtue of their
100% holding in the equity share capital of the company at 31 October 1997.
On 3 December 1997 the company was taken over by CooperVision Inc., a
company registered and incorporated in the United States of America.
17
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 OCTOBER 1997
23. RELATED PARTY TRANSACTIONS - GROUP
The group had the following transactions with Contact Lens Technologies
Limited, a company of which G H Galley, A D Galley and B Bevis (directors
of Aspect Vision Care Limited) were directors during the period.
7 months ended 12 months ended
31 October 1997 31 March 1997
--------------- -------------
'L' 'L'
Sale of Contact Lenses 1,933,425 1,001,473
Rent of Property 30,333 52,000
Rent of Equipment 70,000 120,000
========= =========
In addition the company's directors own the patent rights along with B
Bevis, I Atkinson and A Morland to the company's manufacturing process.
Royalties of lOp per finished lens and 7p per finished mould are charged by
the patent holders for their rights.
24. CONTINGENT LIABILITIES - GROUP
Guarantees for deferred duty totalling 'L'60,000 (31 March 1997 'L'60,000)
have been given to H M Customs & Excise.
The group had outstanding forward foreign exchange contracts amounting to
'L'1,153,657 (31 March 1997: 'L'Nil).
CONTINGENT LIABILITIES - COMPANY
The company has provided unlimited guarantees in respect of bank borrowings
of certain subsidiary undertakings. At 31 October 1997 this liability
amounted to 'L'1,997,958 (31 March 1997: 'L'1,375,624).
25. PENSION COMMITMENTS - GROUP
The group administers group personal pension schemes for its employees. The
assets of the schemes are held separately from those of the group in
independently administered funds.
26. POST BALANCE SHEET EVENTS
The financial statements take into consideration events occurring between
31 October 1997 and the date of their approval by the board of directors.
18
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 OCTOBER 1997
27. RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW
FROM OPERATING ACTIVITIES
7 months ended 12 months ended
31 October 1997 31 March 1997
--------------- ---------------
'L' 'L'
Operating Profit 1,394,590 3,200,801
Depreciation Charge 747,861 660,493
(Profit)/Loss on Disposal of Tangible
Fixed Assets (41,710) 3,427
Exceptional Item (170,000) 2,176,229
Increase in Stocks (237,056) (2,151,128)
Increase in Debtors 272,332 (2,501,745)
Increase in Creditors 42,765 1,093,151
----------- -----------
NET CASH INFLOW FROM OPERATING ACTIVITIES 'L'2,008,782 'L'2,481,228
=========== ===========
28. ANALYSIS OF CHANGES IN NET DEBT
<TABLE>
<CAPTION>
At Cash Other At Cash Other At
1.4.96 Flows Changes 31.3.97 Flows Changes 31.10.97
------ ----- ------- ------- ----- ------- --------
'L' 'L' 'L' 'L' 'L' 'L' 'L'
<S> <C> <C> <C> <C> <C> <C> <C>
Cash in Hand
and at Bank 173,798 302,786 - 476,584 (354,940) - 121,644
Bank
Overdraft (301,465) (452,033) - (753,498) (216,573) - (970,071)
--------- ----------
(149,247) (571,513)
Bank Loans (413,034) 116,495 (665,000) (961,539) 119,226 (630,000) (1,472,313)
Hire Purchase
and Finance
Lease (295,352) 345,621 (614,894) (564,625) 325,877 (954,720) (1,193,468)
---------- --------- ------------ ----------- ---------- ------------ ------------
TOTAL 'L'(836,053) 'L'312,869 'L'(1,279,894) 'L'(1,803,078) 'L'(126,410) 'L'(1,584,720) 'L'(3,514,208)
========== ========= ============ ============ ========== ============ ============
</TABLE>
19
<PAGE>
<PAGE>
NEW FOCUS HEALTH CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 OCTOBER 1997
29. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET
DEBT (NOTE 27)
<TABLE>
<CAPTION>
7 months ended 12 months ended
31 October 1997 31 March 1997
--------------- -------------
'L' 'L' 'L' 'L'
<S> <C> <C> <C> <C>
Decrease in Cash in the Period (571,513) (149,247)
Cash Outflow from Repayment of
Bank Loans 119,226 116,495
Cash Outflow from Repayment of
Hire Purchase and Finance Leases 325,877 345,621
-------- --------
(126,410) 312,869
New Bank Loan (630,000) (665,000)
New Hire Purchase and Finance
Leases (954,720) (614,894)
-------- --------
(1,584,720) (1,279,894)
------------ -------------
Movement in Net Debt in the Period (1,711,130) (967,025)
Net Debt at 1 April 1997 (1,803,078) (836,053)
------------ -------------
Net Debt at 31 October 1997 'L'(3,514,208) 'L'(1,803,078)
============ =============
</TABLE>
20
<PAGE>
<PAGE>
New Focus Health Care Limited
Selected Notes for Consolidated Accounts Period Ended 31 October 1997
30. SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN UK AND US GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES - (UNAUDITED)
The significant differences between UK GAAP and US GAAP are explained in Note 29
to the Company's financial report for the year ended 31 March 1997 included
elsewhere in this Form 8-K filing.
Approximate effect on profit after taxation of significant differences between
UK GAAP and US GAAP.
<TABLE>
<CAPTION>
7 months ended
31 October 1997
---------------
'L'
<S> <C>
Profit/(Loss) after taxation under UK GAAP 350,226
US GAAP adjustments:
Capitalisation of Goodwill 200,000
Amortisation of Goodwill -57,399
Deferred tax 10,000
Minority Interest on the foregoing adjustments -52,178
-------
Profit/(Loss) after taxation under US GAAP 450,649
=======
</TABLE>
Approximate cumulative effect on shareholders equity of significant differences
between UK GAAP and US GAAP
<TABLE>
<CAPTION>
31 October 1997
---------------
'L'
<S> <C>
Shareholders' equity under UK GAAP 3,026,077
US GAAP adjustments:
Capitalisation of Goodwill 1,069,706
Amortisation of Goodwill -158,195
Deferred tax 0
Minority Interest on the foregoing adjustments -311,432
---------
Shareholders Equity under US GAAP 3,626,156
=========
</TABLE>
<PAGE>
<PAGE>
Interim Financial Statements (Unaudited)
Contact Lens Technologies Limited
Profit and Loss Account for the 7 months Ended 31 October 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
7 months Ended
31 October 1996
'L'
<S> <C>
Turnover 786,667
Cost of Sales -392,754
--------
Gross Profit 393,913
Distribution Costs 0
Administrative Expenses -228,313
--------
165,600
Other Operating Income 0
--------
Operating Profit 165,600
Exceptional Item 0
Interest Recievable 0
Interest Payable 0
--------
Profit on Ordinary Activites Before Taxation 165,600
Tax on Profit on Ordinary Activites -64,445
--------
Profit for the Financial Period 101,155
Minority Interest 0
--------
Retained Profit for the Period 101,155
========
</TABLE>
The results in the profit and loss account relate to continuing operations.
There were no recognised gains or losses other than those included in the profit
and loss account.
1
<PAGE>
<PAGE>
Balance Sheet as at 31 October 1996
<TABLE>
<CAPTION>
31 October 1996
'L'
<S> <C>
Fixed Assets
Intangible Assets 0
Tangible Assets 932,174
Investments 0
--------
932,174
Current Assets
Stocks 103,894
Debtors 350,079
Cash at Bank and in hand 26,500
--------
480,473
Creditors
Amounts falling due within one year -917,041
--------
Net Current Assets -436,567
--------
Total Assets less Current Liabilities 495,607
Creditors:
Amounts falling due after more than one year -304,167
--------
Net Assets 191,440
========
Capital and Reserves
Called up Share Capital 1,000
Share Premium Account 0
Profit and Loss Account 190,440
--------
Shareholders Funds 191,440
Minority Interest 0
--------
191,440
========
</TABLE>
2
<PAGE>
<PAGE>
Cash Flow Statement for the 7 months Ended 31 October 1996
<TABLE>
<CAPTION>
7 months Ended
31 October 1996
'L'
<S> <C>
NET CASH INFLOW FROM OPERATING ACTIVITIES 443,212
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest Received 0
Interest Paid 0
interest Element of Finance Lease Rental Payments
---------
NET CASH OUTFLOW FROM
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE 0
---------
TAXATION
Corporation Tax Paid (9,822)
ACT Received
---------
TAX PAID (9,822)
---------
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Payment to Acquire Minority Interest 0
Payment to Acquire Intangible Fixed Assets 0
Payment to Acquire Tangible Fixed Assets (189,520)
Receipts from Sales of Tangible Fixed Asssets 62,000
---------
NET CASH OUTFLOW FROM CAPITAL EXPENDITURE (127,520)
---------
FINANCING
Bank Loan Advance 0
Bank Loan Repayment (16,971)
Finance Lease and Hire Purchase Repayment 0
---------
NET CASH INFLOW FROM FINANCING (16,971)
---------
INCREASE/(DECREASE) IN CASH 288,899
=========
</TABLE>
3
<PAGE>
<PAGE>
Notes to the Interim Financial Statements for 7 months to 31 October 1996
Note 1. Basis of preparation of interim financial statements
The accompanying financial statements, which are unaudited, are prepared in
accordance with generally accepted accounting principles in the United Kingdom
(UK GAAP), which differs in certain significant respects from those applicable
in the United States (US GAAP). (See Note 2.) The results for the partial period
reported herein are not necessarily indicative of the results to be expected for
future periods.
In the opinion of the Directors, the accompanying unaudited financial statements
contain all adjustments necessary to present fairly the Company's financial
position, results of operations and cash flows for the period presented. The
accompanying unaudited interim financial statements should be read in
conjunction with the audited financial statements and notes thereto included
elsewhere in this Form 8-K filing.
Note 2. Adjustments to UK Profits and Shareholders Equity for US GAAP
The significant differences between UK GAAP and US GAAP are explained in Note 19
to the Company's financial report for the year ended 31 March 1997 included
elsewhere in this Form 8-K filing.
Approximate effect on profit after taxation of significant differences between
UK GAAP and US GAAP.
<TABLE>
<CAPTION>
7 months Ended
31 October 1996
'L'
<S> <C>
Profit/(Loss) after taxation under UK GAAP 101,155
US GAAP adjustments:
Capitalisation of Interest 0
Depreciation on Interest Capitalised -1,168
Freehold Property Depreciation -5,323
Tax effect on the foregoing adjustments 385
Deferred tax -1,777
-------
Profit/(Loss) after taxation under US GAAP 93,272
=======
</TABLE>
Approximate cumulative effect on shareholders equity of
significant differences between UK GAAP and US GAAP
<TABLE>
<CAPTION>
31 October 1996
'L'
<S> <C>
Shareholders' equity under UK GAAP 191,440
US GAAP adjustments:
Capitalisation of Interest 13,345
Depreciation on Interest Capitalised -1,168
Freehold Property Depreciation -6,844
Tax effect on the foregoing adjustments -4,018
Deferred tax -4,536
-------
Shareholders Equity under US GAAP 188,219
=======
</TABLE>
4
<PAGE>
<PAGE>
Basis of Preparation of Cash Flow Statement
The company's cash flow statement is prepared in accordance with UK Financial
Reporting Standard No. 1 (Revised) "Cash Flow Statements" (FRS 1 - Revised), the
objectives and principles of which are similar to those set out in Statement of
Financial Accounting Standards 95, "Statement of Cash Flows" (SFAS 95) under US
GAAP. The principle differences between FRS 1 (Revised) and SFAS 95 relate to
classification. Under FRS 1 (Revised), the Company presents its cash flows for
(a) operating activities; (b) returns on investment and servicing of
finance;(c) taxation;(d) capital expenditure and financial investment; and (e)
financing activities. SFAS 95 requires only three categories of cash flow
activity (a) operating; (b) investing; and (c) financing.
Cash Flows from taxation and returns on investment and servicing of finance
under FRS 1 (Revised) would be included as operating activities under SFAS 95.
Under FRS 1 (Revised) cash includes only cash in hand plus deposits repayable on
demand, less overdrafts repayable on demand. Under SFAS 95 cash and cash
equivalents include all highly liquid short term investments with original
maturities of three months or less.
<TABLE>
<CAPTION>
7 months Ended
31 October 1996
'L'
<S> <C>
Note 3. Reconciliation of Operating Profit to the Net Cash Inflow from Operating
Activities
Operating Profit 165,600
Depreciation Charge 57,855
(Profit)/Loss on Disposal of Tangible Assets (1,740)
Exceptional Item 0
(Increase)/Decrease in Stocks (59,671)
(Increase)/Decrease in Debtors (66,486)
Increase/(Decrease) in Creditors 347,655
-------
NET CASH INFLOW FROM OPERATING ACTIVITIES 443,212
=======
</TABLE>
<TABLE>
<CAPTION>
31 October 1996
'L'
<S> <C>
Note 4. Stocks
Contact Lenses 86,389
Packaging and Labels 17,505
-------
Total 103,894
-------
</TABLE>
5
<PAGE>
<PAGE>
Interim Financial Statements (Unaudited)
New Focus Health Care Limited
Consolidated Profit and Loss Account for the 7 months Ended 31 October 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
7 months Ended
31 October 1996
'L'
<S> <C>
Turnover 9,936,389
Cost of Sales -5,025,751
----------
Gross Profit 4,910,639
Distribution Costs -290,112
Administrative Expenses -2,619,430
----------
2,001,096
Other Operating Income 0
----------
Operating Profit 2,001,096
Exceptional Item 1,269,333
Interest Recievable 935
Interest Payable -198,472
----------
Profit on Ordinary Activites Before Taxation 3,072,893
Tax on Profit on Ordinary Activities -991,550
----------
Profit for the Financial Period 2,081,343
Minority Interest -710,987
----------
Retained Profit for the Period 1,370,356
==========
</TABLE>
The results in the profit and loss account relate to continuing operations.
There were no recognised gains or losses other than those included in the profit
and loss account.
1
<PAGE>
<PAGE>
Consolidated Balance Sheet as at 31 October 1996
<TABLE>
<CAPTION>
31 October 1996
'L'
<S> <C>
Fixed Assets
Intangible Assets 9,237
Tangible Assets 3,640,718
Investments 0
----------
3,649,955
Current Assets
Stocks 2,898,876
Debtors 6,064,175
Cash at Bank and in hand 11,408
----------
8,974,459
Creditors
Amounts falling due within one year -8,315,964
----------
Net Current Assets 658,495
----------
Total Assets less Current Liabilities 4,308,450
Creditors:
Amounts falling due after more than one year -1,557,557
----------
Net Assets 2,750,894
==========
Capital and Reserves
Called up Share Capital 7,239
Share Premium Account 317,761
Profit and Loss Account 1,465,066
----------
Shareholders Funds 1,790,066
Minority Interest 960,828
----------
2,750,894
==========
</TABLE>
2
<PAGE>
<PAGE>
Consolidated Cash Flow Statement for the 7 months Ended 31 October 1996
<TABLE>
<CAPTION>
7 months Ended
31 October 1996
'L'
<S> <C>
NET CASH INFLOW FROM OPERATING ACTIVITIES 904,139
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest Received 484
Interset Paid (35,614)
----------
NET CASH OUTFLOW FROM
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE (35,130)
----------
TAX PAID 0
----------
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Payment to Acquire Tangible Fixed Assets (1,802,224)
----------
NET CASH OUTFLOW FROM CAPITAL EXPENDITURE (1,802,224)
----------
FINANCING
Bank Loan Advance 665,000
Bank Loan Repayment (42,785)
Finance Lease and Hire Purchase Repayment (224,014)
----------
NET CASH INFLOW FROM FINANCING 398,201
----------
INCREASE/(DECREASE) IN CASH (535,014)
==========
</TABLE>
3
<PAGE>
<PAGE>
Notes to the Interim Financial Statements for 7 months to 31 October 1996
Note 1. Basis of preparation of interim financial statements
The accompanying financial statements, which are unaudited, are prepared in
accordance with generally accepted accounting principles in the United Kingdom
(UK GAAP), which differs in certain significant respects from those applicable
in the United States (US GAAP). (See Note 2.) The results for the partial period
reported herein are not necessarily indicative of the results to be expected for
future periods.
In the opinion of the Directors, the accompanying unaudited financial statements
contain all adjustments necessary to present fairly the Company's financial
position, results of operations and cash flows for the period presented. The
accompanying unaudited interim financial statements should be read in
conjunction with the audited financial statements and notes thereto included
elsewhere in this Form 8-K filing.
Note 2. Adjustments to UK Profits and Sharehodlers Equity for US GAAP
The significant differences between UK GAAP and US GAAP are explained in Note 29
to the Company's financial report for the year ended 31 March 1997 included
elsewhere in this Form 8-K filing.
Approximate effect on profit after taxation of significant differences between
UK GAAP and US GAAP.
<TABLE>
<CAPTION>
7 months Ended
31 October 1996
'L'
<S> <C>
Profit/(Loss) after taxation under UK GAAP 1,370,356
US GAAP adjustments:
Capitalisation of Goodwill 0
Amortisation of Goodwill -38,427
Deferred tax 20,417
Minority Interest on the foregoing adjustments -6,152
---------
Profit/(Loss) after taxation under US GAAP 1,346,194
=========
</TABLE>
Approximate cumulative effect on shareholders equity of
significant differences between UK GAAP and US GAAP
<TABLE>
<CAPTION>
31 October 1996
'L'
<S> <C>
Shareholders' equity under UK GAAP 1,790,066
US GAAP adjustments:
Capitalisation of Goodwill 658,741
Amortisation of Goodwill -73,349
Deferred tax -24,583
Minority Interest on the foregoing adjustments -191,572
---------
Shareholders Equity under US GAAP 2,159,303
=========
</TABLE>
4
<PAGE>
<PAGE>
Basis of Preparation of Cash Flow Statement
The group's cash flow statement is prepared in accordance with UK Financial
Reporting Standard No.1 (Revised) "Cash Flow Statements" (FRS 1 - Revised), the
objectives and principles of which are similar to those set out in Statement of
Financial Accounting Standards 95, "Statement of Cash Flows" (SFAS 95) under US
GAAP. The principle differences between FRS 1(Revised) and SFAS 95 relate to
classification. Under FRS 1(Revised), the Group presents its cash flows for (a)
operating activities; (b) returns on investment and servicing of
finance; (c) taxation; (d) capital expenditure and financial investment; and (e)
financing activities. SFAS 95 requires only three categories of cash flow
activity (a) operating; (b) investing; and (c) financing.
Cash flows from taxation and returns on investment and servicing of finance
under FRS 1 (Revised) would be included as operating activities under SFAS 95.
Under FRS 1 (Revised) cash includes only cash in hand plus deposits repayable on
demand, less overdrafts repayable on demand. Under SFAS 95 cash and cash
equivalents include all highly liquid short term investments with original
maturities of three months or less. In addition, under SFAS 95 changes in
minority interests would be presented as a cash flow from operating activities.
<TABLE>
<CAPTION>
7 months Ended
31 October 1996
'L'
<S> <C>
Note 3. Reconciliation of Operating Profit to the Net Cash Inflow from Operating
Activities
Operating Profit 2,001,096
Depreciation Charge 422,000
(Profit)/Loss on Disposal of Tangible Assets 15,050
Excetional Item 1,269,333
(Increase)/Decrease in Stocks (1,351,993)
(Increase)/Decrease in Debtors (2,350,915)
Increase/(Decrease) in Creditors 899,568
----------
NET CASH INFLOW FROM OPERATING ACTIVITIES 904,139
==========
</TABLE>
<TABLE>
<CAPTION>
31 October 1996
'L'
<S> <C>
Note 4. Stocks
Lenses 2,182,401
Materials 275,480
Packaging & Labels 134,132
Moulds 271,343
Work in Progress 35,520
---------
Total 2,898,876
=========
</TABLE>
5
<PAGE>
<PAGE>
THE COOPER COMPANIES, INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
In December 1997, The Cooper Companies, Inc., a Delaware corporation (the
"Company"), through its wholly owned subsidiary, Aspect Vision Holdings Limited,
an English company ("AVH"), acquired all of the outstanding capital stock of the
following privately held English companies: New Focus Health Care Limited
("NFHC"), Contact Lens Technologies Limited ("CLT") and Aspect Vision Care
Limited ("AVC"). The Company also acquired a majority of the outstanding capital
stock of Aspect Vision Italia S.R.L., a privately held Italian company ("AVI"),
and intends to purchase the remainder of AVI's stock pursuant to certain put and
call option arrangements, at prices to be agreed upon by the parties. NFHC
consolidated financial reports include AVC and AVI. NFHC, AVC, AVI and CLT are
herein collectively referred to as "Aspect." Aspect was a privately-held
manufacturer of high quality contact lenses sold primarily in the United Kingdom
and other European countries.
The Company paid approximately 'L'30 million, or $51.0 million at the date of
the closing in cash ('L'12 million) and 8% five-year notes ('L'18 million), and
will pay an additional amount after approximately 3 years based on performance
of Aspect over that period. The minimum amount of the additional payment will
accrete to 'L'5 million after approximately 3 years, and there is no maximum
limit. The cash payment was partially financed under the Company's $50 million
revolving credit agreement and cash then on hand. The acquisition will be
accounted for under the purchase method. Aspect will operate under its current
name and management as a part of CooperVision, Inc., the Company's contact lens
business.
The following unaudited pro forma consolidated condensed financial statements
have been prepared to illustrate the effect of the acquisition of Aspect, and
include an unaudited pro forma consolidated condensed statement of income for
the year ended October 31, 1997, and an unaudited pro forma consolidated
condensed balance sheet as of October 31, 1997. The unaudited pro forma
financial statements are based on the historical consolidated financial
statements of the Company, NFHC and CLT, prepared in accordance with United
States generally accepted accounting principles. The unaudited pro forma
consolidated condensed financial statements reflect a preliminary allocation of
the purchase price. Management is in the process of obtaining valuations of
the individual assets acquired. Accordingly, the actual purchase price
allocation may differ significantly from the preliminary allocation used herein.
The unaudited pro forma consolidated condensed balance sheet as of October 31,
1997 assumes that the acquisition was consummated on October 31, 1997, and the
unaudited pro forma consolidated condensed statement of income for the year
ended October 31, 1997 assumes that the acquisition had been consummated as of
November 1, 1996.
<PAGE>
<PAGE>
THE COOPER COMPANIES, INC.
Unaudited Pro Forma Consolidated Condensed Statement of Income
(In thousands, except per share figures)
<TABLE>
<CAPTION>
Year Ended October 31, 1997
Historical
---------- Pro forma
TCC Aspect Adjustments Pro forma
--- ------ ----------- ---------
<S> <C> <C> <C> <C>
Net sales of products $ 88,769 $38,002 $ - $126,771
Net service revenue 52,704 - - 52,704
-------- ------- ------- --------
Net operating revenue 141,473 38,002 - 179,475
-------- ------- ------- --------
Cost of products sold 27,325 20,685 - 48,010
Cost of services provided 46,538 - - 46,538
Selling, general and administrative expense 38,337 12,700 - 51,037
Research and development expense 1,739 - - 1,739
Amortization of intangibles 1,745 139 1,202 (a) 3,086
-------- ------- ------- --------
Income from operations 25,789 4,478 (1,202) 29,065
-------- ------- ------- --------
Interest expense 4,214 1,153 3,693 (b) 9,060
Other (loss) income, net 209 1,562 - 1,771
-------- ------- ------- --------
Income from continuing operations before income taxes 21,784 4,887 (4,895) 21,776
(Benefit of) provision for income taxes (26,606) 2,034 (1,278) (c) (25,850)
-------- ------- ------- --------
Income from continuing operations $ 48,390 $ 2,853 $(3,617) $ 47,626
======== ======= ======= ========
Earnings per share from continuing operations $ 3.70 $ 3.63
======== ========
Number of shares used to compute
earnings per share 13,071 13,109
======== ========
</TABLE>
The unaudited pro forma consolidated condensed statement of income has been
prepared to reflect the acquisition of Aspect as if it had occurred on November
1, 1996. The acquisition has been accounted for under the purchase method of
accounting.
The unaudited pro forma consolidated condensed statement of income excludes any
potential benefits that might result from the acquisition due to synergies that
may be derived. The unaudited pro forma consolidated condensed statement of
income does not purport to be indicative of the results that actually would have
occurred if the acquisition had occurred on the date indicated or indicative of
results which may be obtained in the future. The unaudited pro forma
consolidated condensed statement of income should be read in conjunction with
the historical consolidated financial statements and accompanying notes for
Aspect and the Company. The unaudited pro forma consolidated condensed financial
statements reflect a preliminary allocation of the purchase price. Management is
in the process of obtaining valuations of the individual assets acquired.
Accordingly, the actual purchase price allocation may differ significantly from
the preliminary allocation used herein.
The following is a summary of adjustments reflected in the unaudited pro forma
consolidated condensed statements of income:
(a) Adjustment to reflect the annual amortization amount of the
excess of the purchase price over the historical cost basis of
the net assets acquired, subject to allocation, over an estimated
40-year life.
(b) Adjustment to reflect interest expense amounts at an annual rate
of 8%, on the debt to the prior owners ($2.2 million) and
additional borrowings for the acquisition ($1.1 million).
(c) Adjustment for the tax savings related to the additional interest
deduction at the U.K. tax rate of 33%, and also tax savings on
the intangible amortization deduction in the U.S. at 5%.
<PAGE>
<PAGE>
THE COOPER COMPANIES, INC.
Unaudited Pro Forma Consolidated Condensed Balance Sheet
(In thousands)
<TABLE>
<CAPTION>
October 31, 1997
----------------------------------------------
Historical
-------------------- Pro forma
TCC Aspect Adjustments Pro forma
--- ------ ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 18,249 $ 204 $(7,534)(a) $ 10,919
Trade and patient accounts receivable, net 27,469 9,109 - 36,578
Inventories 15,096 7,089 - 22,185
Other current assets 5,021 2,628 - 7,649
-------- ------- ------- --------
Total current assets 65,835 19,030 (7,534) 77,331
-------- ------- ------- --------
Property, plant and equipment at cost 56,578 14,988 - 71,566
Less accumulated depreciation and amortization 17,055 2,967 - 20,022
-------- ------- ------- --------
39,523 12,021 - 51,544
-------- ------- ------- --------
Goodwill and other intangibles, net 36,698 181 48,076 (b) 84,955
Deferred tax and other assets 33,242 - - 33,242
-------- ------- ------- --------
$ 75,298 $31,232 $40,542 $247,072
======== ======= ======= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 438 $ 5,530 $ - $ 5,968
Accounts payable 7,907 1,805 - 9,712
Other current liabilities 16,138 6,099 - 22,237
Accrued income taxes 9,134 4,752 - 13,886
-------- ------- ------- --------
Total current liabilities 33,617 18,186 - 51,803
-------- ------- ------- --------
Long-term debt 9,125 4,408 41,357 (c) 54,890
Other noncurrent liabilities 21,023 - 6,336 (d) 27,359 (d)
-------- ------- ------- --------
Total liabilities 63,765 22,594 47,693 134,052
-------- ------- ------- --------
Stockholders' equity
Common stock 1,480 12 (8)(e) 1,484
Additional paid-in capital 249,213 534 949 (e) 250,696
Other equity (731) - - (731)
Accumulated deficit (138,429) 8,092 (8,092)(e) (138,429)
-------- ------- ------- --------
Stockholders' equity 111,533 8,638 (7,151) 113,020
-------- ------- ------- --------
$175,298 $31,232 $40,542 $247,072
======== ======= ======= ========
</TABLE>
The unaudited pro forma consolidated condensed balance sheet has been prepared
to reflect the acquisition of Aspect as if it occurred on October 31, 1997. The
acquisition has been accounted for under the purchase method of accounting.
The following is a summary of the pro forma adjustments reflected in the
unaudited pro forma consolidated condensed balance sheet:
(a) Represents the cash used from cash and cash equivalents on hand
paid on the acquisition date.
(b) Includes the excess of purchase price over historical cost basis
of net assets acquired, subject to allocation, of $48.1 million
arising from the acquisition of Aspect.
(c) Represents the notes payable to the prior owners ($27.9 million),
and additional borrowings for the acquisition and related
acquisition costs ($900 thousand).
(d) Represents the discounted minimum future payments to the prior
owners of Aspect.
(e) Represents the elimination of the purchased equity of Aspect,
plus $1.5 million in capital stock and additional paid-in capital
for 38 thousand shares of the Company's stock issued at
approximately a fair market value of $39.25 per share as part of
the cost of the acquisition.
STATEMENT OF DIFFERENCES
------------------------
The British pound sterling sign shall be expressed as................. 'L'
<PAGE>
