P EACEJAPANHA RMO N Y

ANNUAL REPORT 2001
For the year ended March 31, 2001

S UM

阪和興業 株式会社

Corporate Profile

Since its establishment in 1947, Hanwa has contributed to the development of the Japanese
economy as a trading company handling industrial materials, such as steel — the company’s
leading product — and nonferrous metals, food products, lumber, machinery, petroleum,chemical products, and cement. Our steel division in particular is equipped with quay andwarehouse transportation facilities as well as complete processing sites that enable us toboth handle large quantities purchased from major steel manufacturers and to cater to thespecial needs of our customers. This is why we have long been known in Japan as a “steel
trading company.”
Recently, with the changes and diversification of the domestic market, we havedemonstrated new capabilities as a trading company by handling seafood products, rides foramusement parks, and nonferrous metal recycling. We have created numerous businesses inthese fields that command the top market share. The basic strategies underlying suchsuccess are internationalization, business diversification, and value enhancement.
Hanwa’s ideal function as a trading company is to be more than just a distributor. Based on
our insight of the international market and information-gathering capabilities, we aim todevelop new products, as well as coordinate ventures among businesses. As a trading company
with such operating skills at our disposal, we will continue to develop new unique businesses.

About the CoverContents

The Chinese character for the syllable wa
of Hanwa’s name has four meanings inJapanese: Japan, harmony, sum (as inaddition) and peace.
These key words capture the essence ofHanwa’s ideals: to trade products that meetthe needs of customers through a business
relationship with the countries of the world,
incorporating new ideas into the products tobring peace and harmony to people’s lives.

Financial Highlights ......................................................... 1
President’s Message ........................................................ 2
Review of Operations ..................................................... 4
Topics ................................................................................... 8
Financial Section ............................................................... 9
Network of Hanwa Co., Ltd. ....................................... 28
Directors and Statutory Auditors ................................ 29

HANWA CO., LTD., AND CONSOLIDATED SUBSIDIARIES

Financial Highlights
For the years ended March 31, 2001 and 2000

Thousands of
U.S. dollars

Millions of yen

2001

Net sales
Operating income
Net income

2000¥ 689,106
10,283
1,945

2001

2000

¥ 629,717 $5,561,792 $5,082,462
8,727
82,99470,436595
15,6984,802Note: The U.S. dollar amounts represent translations, for convenience only, of yen amounts at the rate of ¥123.90=$1.00.

Net sales

Operating income

Net income (loss)(Millions of yen)

(Millions of yen)

(Millions of yen)

689,106
700,000

11,000629,717

10,283

1,945

2,000

10,000598,568

8,727

5,325
5,000

595

0

0

’99

’00

’01

0

’99

’00

’01

’00

’01

(435)
’99

The company’s fiscal year begins on April 1 and ends on March 31 of the following year.
For example,
fiscal year 2000 began on April 1, 1999 and ended on March 31, 2000; andfiscal year 2001 began on April 1, 2000 and ended on March 31, 2001.

1

President’s Message

At the beginning of our fiscal year 2001 ended March
31, 2001, Japan’s economy was expected to makea rebound for better as there were some signs ofsignificant increase in the private investments andexport sectors. Brisk investments in the IT industries
and the increased export of raw materials and the semifinished products to the industrializing countries could
have boosted our economy. As the year went by,
however, consumer spending started to decline for fearof reduced income and possible unemployment as aresult of corporate restructurings widely undertaken
in Japan. Toward the end of the fiscal year 2001, theslowing down of U.S. economy affected the Japanesestock market, recording its historic low. This has led theworld to believe that the Japanese depressed economy
will take longer time to recover.
Despite the adverse circumstances, Hanwa Co., Ltd.
and its consolidated subsidiaries achieved the sales of¥689,106 million, up by 9.4% from the previous year.
This has been brought about by concentrating its
capital and human resources on the development of
new businesses and new customers while prudently
avoiding credit risks. This achievement, however, could
not have been possible without the strengthened
relationships with our old clients and suppliers.
We have had our transactions reviewed continuously
during the year in an effort to maximize profit margins
and cost reductions. As a result, the operating incomeof Hanwa Co., Ltd. and its consolidated subsidiaries hasrecorded ¥10,283 million, an increase by 17.8% overthe previous year. Profit of ¥4,315 million from the saleof the land in Sakurajima contributed to the gain ofother income.
However, in compliance with the new Japanese
accounting standard, the followings were entered asother losses:¥2,100 million for Provision for doubtful receivables,¥1,525 million for loss on loans receivable,¥1,755 million for loss on sale and write-down ofsecurities, etc. and ¥495 million for net transition
obligation of retirement plans.

Consequently, the net income for the fiscal year
2001 was ¥1,945 million, a remarkable increase of
227.4% over the previous year.
The performance in each segment of our businessis stated below:.
The Steel Division’s sales were ¥372,443 million, up
3.6% from the previous year, with an operating incomeof ¥6,143 million, up 4.6% from the previous year.
Although the steel market in general weakened toward
the end of the fiscal year due to swollen inventories,
the domestic markets of structural bars, beams andplates stood firm and export to the Asian market wascomparatively busy especially in the first half of the
fiscal year.
In the Non-ferrous Division, the promotion of ourrecycling business for materials including aluminum
cans, combined with the world-wide price hike of nickel
and other precious metals helped push up the sales
to ¥63,235 million, an increase of 22.5% over theprevious year, with an operating income amounting
to ¥1,822 million, up 23.2% from the previous year.
In the Food Division, the consumers’ choice forcomparatively low priced foods affected its sales
volume, resulting in the 4.0% decrease to ¥100,019
million. Despite the slightly decreased sales, the efforts
to reduce cost of sales resulted in an operating incomeof ¥2,223 million, up by 12.5% from the previous year.
In the Petroleum and Chemicals Division, sales
jumped to ¥109,009 million, an increase of 44.8% overthe previous year, with its operating income almost
doubled to ¥1,182 million, up 91.1% from the previous
year. In addition to the world-wide price hike of crudeoil, the development of relationships with new clients
contributed to the remarkable operating income
increase.
Sales for other divisions amounted to ¥44,400
million, up 13.4% from the previous year, and theoperating income was ¥2,964 million, up 14.2% fromthe previous year. Among other things, an increasing
demand for machine-dried lumber coupled with theLumber Division’s timely diversification of supply2

sources contributed to the increase.
Given the increasing trend toward a global andborderless economy, our Group companies wish to takeaction appropriate to our status as a major influence inthe distribution sector. We are determined to achieve
this by strengthening our force in offices anddistribution and processing systems on top ofdeveloping new and peripheral ventures.
To strengthen our competitiveness, we will
accelerate the decision-making process and corporate
activities, and will establish a corporate structure thatmakes use of “checks-and-balances.” Moreover, we
will operate the business with an emphasis on
maximized profit to improve the return on equity.
In order to pursue the maximum efficiency in overallbusiness including capital and human resources andalso ensure our shareholders the resumption ofdividend payments in the coming fiscal year, we haveworked out the “Medium-Term Business Plan.” The firststep is the rationalization and the reinforcement of oursteel distribution systems which were in operation at
Tokyo, Osaka and Nagoya as a 100% owned subsidiaryof Hanwa Co., Ltd., namely, Hanwa Ryutsu Center Co.,
Ltd. We merged this company with Hanwa Co., Ltd. on
April 1, 2001 and its assets and liabilities have beenabsorbed. In turn, we established three new subsidiaries
wholly owned by Hanwa Co., Ltd., namely, Hanwa
Logistics Tokyo, Co., Ltd., Hanwa Logistics Osaka Co.,
Ltd. and Hanwa Logistics Nagoya Co., Ltd., respectively.
The operations and the facilities of Hanwa Ryutsu
Center Co., Ltd. were transferred to the respective newcompanies. These measures were taken for the purposeof improving their financial strength and have themgrow into an independent major influence at theirrespective locations.
We will further improve the quality of e-commerce
trading system which was successfully employed in thisfiscal year. We will also strive to strengthen our client
relationships, expand our customer base, and create
new value-added products. As a result, we areconvinced that, by the end of the “Medium-TermBusiness Plan,” we will have achieved the status as amajor influence in the distribution sector with afinancial strength incomparable with other firms of thesame trade.
If the reduction of paid-in capital and the write-off
of undisposed deficit from the consolidated balance
sheet is approved at the general stockholder’s meetingon June 28, 2001, we feel confident that Hanwa Co.,
Ltd. and its consolidated subsidiaries would become afinancially slim, but strong group of companies andcould resume the dividend payment in the end of the
fiscal year 2002 ending March 31, 2002.

Shuji Kita
President & C.E.O.
Hanwa Co., Ltd.
北 修爾
取締役社長
阪和興業株式会社

3

Review of Operations

Net Sales by Product (Billions of yen)
Lumber, machinery, and other¥45 (6.4%)

Petroleum and chemicals ¥109 (15.8%)

Foods

Steel bars and shapes

Net sales¥689(100%)¥100 (14.5%)

Non-ferrous metals¥134 (19.5%)

Steel plates and sheets ¥166 (24.1%)
Special steels,
wire products, steel pipes, andsteelmaking raw materials ¥72 (10.5%)¥63 (9.2%)

Steel related products

Year ended March 31, 2001

¥372 (54.1%)

¥689
45

Lumber, machinery, and other

¥630
¥599
29

39

10

9
Petroleum and chemicals

75

35
11

1
4
10

44

0
Foods

63
52

59
68
17

10

72

Non-ferrous metals
Special steels,
wire products, steel pipes, andsteelmaking raw materials

3
16

2

16

6

Steel plates and sheets

14

8
13

0

13

4
Steel bars and shapes

’99

4

’00

’01

Steel (Domestic)
Review of the fiscal year 2001:
In the fiscal year 2001, the total steel
production in Japan increased byapproximately 8% over the previous
year. In parallel with this, the Division’s
handling volume was also up by 2%
over the previous year. The sales value
showed an increase of 3% over theprevious year thanks to the slightrecovery of domestic demands.
Steel Bars and Shapes
Demands from public-works projects
bolstered the steel bar market.
Construction businesses in the private
sector were active because of brisk
investments in the IT industries as well as
the housing development. All in all, we
enjoyed comparatively good sale of bar
and shape products.
Sheet Products and Special SteelThe automobile industry and electric
appliance industry remained firm. Our
sales to the manufacturers were better
than to the distributors, resulting in amutually profitable relationship with
manufacturers.

Steel (Overseas)
Outlook for the fiscal year 2002:
In the fiscal year 2002, we expect thatthe Domestic Steel Division will maintainits sales at the same level. Prices of steel
bars will remain unchanged, but sheet
products other than steel plates will see
a decline in prices. The automobile andshipbuilding industries are expected tobe active, while the electric home
appliances and construction material
sectors may see some decline. The
over-capacity of Japanese blast furnacemills overshadows the steel market ingeneral. We see no impending sign of
upturn in the Japanese economy in the
coming fiscal year.
Logistics systems based on our
distribution network and processing
capability are our stronghold. We will
upgrade them in both capacity andefficiency. We will further build up our
e-commerce, “hanwa-steel.com,” which
was successfully introduced in theprevious year. While maintaining thebasic steel businesses that are already inplace, we will diversify into new items
such as steel houses, steel pallets, leasing
business of steel construction materials.

5

Review of the fiscal year 2001:
In the fiscal year 2001, the Division
exported 738,688 tons of steel, 3%
decrease in volume from the previous
year. The export of steel to China wasvery brisk in the first half of the FY 2001,
but suddenly plummeted in the second
half of the year, following China’s
imposition of Anti-Dumping Import
Duties together with the change in her
import licensing policy. A huge volumeof steel products was directed from theAnti-Dumping-guarded U.S. Market to
the Asian Markets. This in turn led thebuyers to taking a wait-and-see attitude.
The sales, however, went up by 3% inamount to ¥50,307 million. The
worldwide price increase of steel
products started in 1999 and reached its
peak in the first half of the FY 2001. The
weaker Japanese yen helped push up
the sales amount.
Outlook for the fiscal year 2002:
We will focus on China and the ASEAN
markets. China’s import restriction on
ordinary steel products may continue.
We will diversify into more value-added
products, such as stainless steel, alloysteel and surface-treated steel sheets,and semi-finished products.
We will reinforce our staff in theoverseas offices, particularly in China,
Thailand and Vietnam.

Non-ferrous Metals

Food Products

Petroleum and Chemicals

Review of the fiscal year 2001:
In the first half of the fiscal year 2001,
we enjoyed comparatively good businessthanks to the brisk demand from the
IT industries, but the demand shrunk
abruptly in the second half. The Divisionattained its annual sale of ¥63,203
million. Both aluminum scrap andcopper scrap showed an increaseof 10% in volume and 15% in value,
respectively. Aluminum beverage-canrecycling has grown into one of theDivision’s main businesses as well as
copper scrap, precious metals scrap
and stainless steel scrap.

Review of the fiscal year 2001:
The total national import of seafood toJapan in the calendar year 2000 went up
by 4% to 3.54 million tons, the second
highest after 3.58 million tons recorded
in 1995. The import showed an increasein volume for the second consecutive
year, but a slight decrease in value to¥1,733.8 billion, down by 0.3% fromthe previous year.
Our sales volume in the fiscal year
2001 also showed an increase by 1%
over the previous year to 184,000 tons,
but the value decreased by 4% to¥100,019 million due to the declined
market prices. Salmons, flounders,
herrings and other processed seafood
contributed to the increased sales,
whereas sales of octopuses, squids,
pollack roe, horse mackerels and eelswere down.

Review of the fiscal year 2001:
Throughout the fiscal year 2001, pricesof petroleum and its downstream
products kept on rising as the crude oil
price was sustained at a very high level
until the OPEC’s announcement of its
new policy to increase the oil supply
at the end of the year 2000. Despite
the adverse economic circumstances,
we achieved the highest sales in the
Division’s history, a 14% increase to
4.14 million KL in volume, and a 45%
hike to ¥109,008 million in value overthe previous year, respectively.

Outlook for the fiscal year 2002:
The Division has set a modest sales
target for the fiscal year 2002. Amid theworldwide economic slowdown, we will
intensify our international businessnetwork and build up a more integrated
recycling system of non-ferrous metals
and stainless steel. By the end of thecoming fiscal year 2002, we will have
put two additional lines of business into
our major operations, namely, aluminum
sash recycling and silicon materials forphotovoltaic industries.

Outlook for the fiscal year 2002:
Personal consumption will remain
depressed for the coming FY 2002.
Consumer’s choice for lower priced
foods will continue. In addition to thesales promotion of raw materials to thelarge processors and wholesalers, we will
try to expand our business to the retailers
by offering the foodstuff alreadyprocessed or finished in China andThailand. We will maintain the same levelof sales for the FY 2002 as the FY 2001.

6

Outlook for the fiscal year 2002:
We intend to maintain the sales of morethan 4 million KL in volume and at least¥92,000 million in value for the coming
fiscal year, given the possible stabilizationof crude oil price in the second half ofthe coming year.

Lumber

Machinery

Review of the fiscal year 2001:
The sales of Lumber in the FY 2001 were¥29,197 million, up by 18% over theprevious year. The volume of 750,000
cubic meters exceeded our forecast andshowed an increase of 26% over theprevious year. The Indonesian veneer
business started in April 1998 reacheda successful expansion in its 3rd year,
faster than expected. Sales of Russian
and Chinese lumber also increased. Sales
of U.S. lumber and Scandinavian lumber
showed a slight increase in value thanks
to the volume increase by 9% and 5%
respectively over previous year despite
the overall price drop by about 5%.
Besides, we were not subjected to any
customer bankruptcies.

Review of the fiscal year 2001:
Sales of amusement rides plummeted
and declined by 50% over the previous
year. But the highlight of sales was anelectro decorated 100M Ferris wheel
to Space World, Inc. Most minor
amusement parks were tentative in newinvestments, and took a wait-and-see
attitude facing the opening of the majorparks, such as Universal Studios, Japan,
which opened in March 2001 andDisney Sea, which will open in
September 2001.
Amid the prevailing postponement
and cancellation of capital investment in
the heavy industries, sales of industrial
machinery maintained the same level of¥1,700 million as previous year. Amongthe major items sold were a Direct
Diode Laser to Toyota Motor Co., pipe
cutting machines to pipe manufacturers,
crushers and press machines toenvironmental industries, steel
processing equipment to steel
distributors and fabricators, and diesel
marine engines and pumps for export.

Outlook for the fiscal year 2002:
Japanese new housing starts for the
FY 2002 are expected to be 1.05 to 1.10
million, a drop by 10% from the previous
year. We will overcome the adverse
circumstances and aim to achieve a saleof over ¥30,000 million by aggressive
penetration into the new market while
prudently avoiding credit risks.

7

Outlook for the fiscal year 2002:
We expect to achieve ¥1,000 million in
the sales of amusement rides, especiallywater rides, to the financially stronger
amusement parks in the Kanto andChubu Districts of Japan. Sales ofindustrial machinery for the FY 2002
will be targeted at ¥2,000 million, withthe combined sale of machinery for theenvironmental industries, steel mills, andsteel processing industries.

Topics

1. Medium-term business plan
We had worked out and posted in
January 2001 the “Medium-TermBusiness Plan” for the next 3 years
beginning from April 2001 and endingin March 2004.
The plan includes the following
programs:(1) A resumption of dividend payment:
By the merger of the old distribution
subsidiary and the write-off ofundisposed deficit from the consolidatedbalance sheet with the reduction ofpaid-in capital, Hanwa Co., Ltd., and its
consolidated subsidiaries would becomea financially slim but strong group ofcompanies who are potential to resume
the payment of dividend in the end of
the fiscal year 2002 ending March 31,
2002.

(2) A rationalization of steel distribution
and processing systems:
The rationalization of our steel
distribution subsidiaries and theemployment of a unique electroniccommerce system known as “hanwasteel.com” would definitely enhance theefficiency and competitiveness of ourdistribution systems.
(3) A diversification of business lines:
We will diversify our business into moreconsumer-oriented goods such as
finished chemical products, processed
foodstuff and machine dried lumbers etc.
Environment-related business in line with
the ISO14001 Certificate, which we were
granted in last year, is another target we
aim at. That includes recycling businessof non-ferrous and precious metals.

(4) An enhancement of office efficiency:
We will keep on upgrading the expertiseof our sales persons and office staffs
through our personnel education andevaluation program. We will also pursue
the maximum efficiency of office andadministration by letting a part of routine
jobs out to less costly outside sources.
By putting all the above programs into
practice, we will have achieved the salesof ¥740,000 million and a net profit of¥6,800 million in the end of the Term,
March 2004.

2. Rationalization of steel distribution and processing systems
We established three new distribution
subsidiaries wholly owned by Hanwa
Co., Ltd., namely, Hanwa Logistics Tokyo
Co., Ltd., Hanwa Logistics Osaka Co.,
Ltd., and Hanwa Logistics Nagoya Co.,
Ltd., respectively. We had our own steel
distribution company, Hanwa Ryutsu
Center Co. Ltd., also a 100% owned
subsidiary of Hanwa Co., Ltd., which
was in operation at Tokyo, Osaka andNagoya. Hanwa Ryutsu Center Co., Ltd.

was merged to Hanwa Co., Ltd. on April
1, 2001 and its operations wastransferred to the respective newcompanies. These measures were taken

Hanwa Logistics Tokyo Co., Ltd.

for the purpose of improving the newcompanies’ financial strength and havethem grow into an independent major
influence at their respective locations.

Hanwa Logistics Osaka Co., Ltd.

Hanwa Logistics Nagoya Co., Ltd.

3. “hanwa-steel.com”
We employed a unique system ofelectronic commerce known as “hanwasteel.com” in October 2000 and it
successfully penetrated the market in the
Capital City Area and Northern part ofJapan. We expanded its service areas of“hanwa-steel.com” to Mid Japan in
March 2001. We are further planning to
expand the service to Kansai andWestern part of Japan in June 2001. This

Internet website will handle every aspectof sales, from receipt of orders to
distribution by means of e-commerceusing our abundant inventory andsuperlative distribution system. The new
website will offer such functions as onestop shopping for steel materials, 24hour order acceptance, and next-day
delivery. We will also provide a variety of
information services relating to steel

8materials. We have transacted over
65,000 tons through “hanwasteel.com” by the end of May 2001,
faster than expected.
In addition, we have newly organizeda Logistics Team whose function is to coordinate between related divisions andset-up a new distribution model.

Financial Section

Contents
Consolidated Balance Sheets .......................................... 10
Consolidated Statements of Income ............................ 12
Consolidated Statements of Stockholders’ Equity ... 13
Consolidated Statements of Cash Flows ..................... 14
Notes to Consolidated Financial Statements ............. 15
Report of Independent Public Accountants ............... 27
9

HANWA CO., LTD. AND CONSOLIDATED SUBSIDIARIES

Consolidated Balance Sheets
As at March 31, 2001 and 2000

Thousands of
U.S. dollars (Note 1)

Millions of yen

Assets2001

Current assets:
Cash and cash equivalents
Marketable securities (Notes 4 and 6)
Receivables:
Trade notes and accounts:
Unconsolidated subsidiaries and affiliates
Other
Loans:
Unconsolidated subsidiaries and affiliates
Other
Allowance for doubtful receivables
Inventories (Note 3)
Deferred income taxes (Note 9)
Other current assets (Note 6)
Total current assets

2000

2001

2000

¥ 27,701
6,185¥ 34,435 $ 223,575 $ 277,926
41,35049,919333,737

2,542
148,608

1,715
136,661

20,517
1,199,419

13,842
1,102,994

1,735
66
(479)
33,81937
13,811
234,025

1,950
75
(511)
34,54637
17,162
267,420

14,003533(3,866)272,954299
111,469
1,888,822

15,738605(4,124)
278,821299
138,515
2,158,353

Investments and non-current receivables:
Investment securities (Notes 4 and 6):
Unconsolidated subsidiaries and affiliates
Other
Loans receivable:
Unconsolidated subsidiaries and affiliates
Other
Other investments and non-current receivables
Allowance for doubtful receivables
Total investments and non-current receivables

1,527
12,277

1,697
10,922

12,324
99,088

13,69688,152

191
1,274
13,765(3,855)25,179866
5,546
15,511(4,306)30,236

1,542
10,282
111,098(31,114)203,220

6,990
44,762
125,190(34,754)244,036

Property and equipment (Note 6):Land
Buildings and structures
Other
Accumulated depreciation
Total property and equipment

13,89822,165
5,882(13,332)
28,613

13,97722,743
8,502(15,547)
29,675

112,171
178,894
47,474(107,603)
230,936

112,809
183,559
68,620(125,480)
239,508

Deferred income taxes — noncurrent (Note 9)
Intangibles and other assets
Foreign currency translation adjustments
Total

8
350
—
¥ 288,175

See accompanying Notes to Consolidated Financial Statements.

10

50
65
404
139
2,825
1,122
4,652
—
37,546¥ 332,172 $2,325,868 $2,680,969

Thousands of
U.S. dollars (Note 1)

Millions of yen

Liabilities and Stockholders’ Equity

2001

Current liabilities:
Bank loans (Note 7)Long-term debt due within one year (Note 7)
Trade notes and accounts payable:
Unconsolidated subsidiaries and affiliates
Other
Accrued bonuses to employees
Income taxes payable
Deferred income taxes (Note 9)
Other current liabilities
Total current liabilities
Non-current liabilities:
Long-term debt due after one year (Note 7)
Employees’ retirement benefits (Note 8)
Directors’ retirement benefits
Deferred income taxes (Note 9)
Other non-current liabilities
Total non-current liabilities
Minority interest

2000

2001

2000

¥ 108,545
4,769¥ 120,749 $ 876,069 $ 974,568
75,17838,491
606,764311
101,099
1,247
269
—
9,836
226,076

221
95,353
1,174
834
28
6,677
300,2142,510
815,973
10,0652,171—
79,386
1,824,665

1,784
769,597
9,475
6,731
226
53,8902,423,035

34,315
759
314
34
1,229
36,651

3,792
4
272
—
799
4,867

276,957
6,126
2,534
275
9,919
295,81130,605
32
2,196
—
6,449
39,282

—

55

—

444

Contingent liabilities (Note 13)
Stockholders’ equity (Note 10):
Common stock, par value ¥50 per share
Authorized: 570,000,000 shares
Issued: 211,663,200 shares
Additional paid-in capital
Undisposed deficit
Foreign currency translation adjustments
Less treasury stock, at cost: 3,723 shares (434 in 2000)
Total stockholders’ equity
Total

82,646
19,227(72,892)(3,533)—25,448¥ 288,175

11

82,646
667,038
667,038
19,227
155,182
155,182(74,837)(588,314)(604,012)—(28,514)————
27,036205,392
218,208¥ 332,172 $2,325,868 $2,680,969

HANWA CO., LTD. AND CONSOLIDATED SUBSIDIARIES

Consolidated Statements of Income
For the years ended March 31, 2001 and 2000

Thousands of
U.S. dollars (Note 1)

Millions of yen

2001

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income

2000¥ 689,106
659,044
30,062
19,77910,283

2001

2000¥ 629,717 $ 5,561,792 $ 5,082,462
601,590 5,319,161
4,855,448
28,127
242,631
227,014
19,400159,637
156,578
8,727
82,99470,436

Other income (expenses):
Interest and dividend income
Interest expense
Foreign exchange gains
Loss on write-down of marketable securities
Loss on currency swaps
Bad debts recovered
Reversal of allowance for retirement benefits
Gain on sale of land
Provision for doubtful receivables
Loss on loans receivable
Loss on write-down of investment securities
Loss on sale of investment securities
Loss on write-down of investment
Loss on write-down of golf club memberships
Loss on sale of golf club memberships
Net transition obligation of retirement plans (Note 8)
Other, net

2,931(7,428)2,179—(2,267)——4,315(2,100)(1,525)
(836)
(591)
(115)
(163)
(50)
(495)
(1,808)

3,694(6,948)—(1,748)
—
1,542
871
—
(2,632)——(157)—(1,639)——(327)

23,656(59,952)
17,587—(18,297)——
34,826(16,949)(12,308)(6,747)(4,770)(928)(1,316)(403)(3,995)(14,593)

29,814(56,078)—(14,108)—
12,445
7,030—(21,243)——(1,267)—(13,228)——(2,639)

Income before income taxes

2,330

1,383

18,805

11,162

338
47
385

661
139
800

2,728
379
3,107

5,335
1,122
6,457

12
595 $

—
15,698 $97
4,802

Income taxes (Note 9)
Current
Deferred

Minority interest in loss of consolidated subsidiaries
Net income

¥

—
1,945

¥

Yen

U.S. dollars (Note 1)

2001

Net income per share¥

See accompanying Notes to Consolidated Financial Statements.

12

9.19

2000

¥

2.48 $

2001

0.074 $

2000

0.020

HANWA CO., LTD. AND CONSOLIDATED SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity
For the years ended March 31, 2001 and 2000

Thousands

Millions of yen

Number of shareof common stock

Foreign currencytranslation
adjustments

Common stock

Additional
paid-in capital

291,663(80,000)¥ 113,883(31,237)¥ 3,590—¥ (76,054)———

15,637

—

—

—

—
—
—
—

—
—
—
—

—
—
—
—

197
425
595
—

—
—
—
—

—
—
—
—

Balance at March 31, 2000
211,663
Net income—
Adjustments from translation of foreign
currency financial statements—
Less treasury stock—

82,646—

19,227—(74,837)
1,945

—
—

—
—

—
—

—
—

—
—

(3,533)———¥ 82,646¥ 19,227¥ (72,892)¥ (3,533)

Common stockThousands of U.S. dollars (Note 1)
Foreign currency
Additionaltranslation
paid-in capital
Undisposed deficit
adjustments$ 919,153(252,115)—$ 28,975—
126,207$ (613,834)
—
—

—
—
—
—

—
—
—
—

1,590
3,430
4,802
—

—
—
—
—

—
—
—
—

667,038—

155,182—(604,012)
15,698

—
—

—
—

—
—

—
—

—
—

(28,514)———$ 667,038$ 155,182$ (588,314)$ (28,514)

Balance at March 31, 1999
Shares purchased and retired (Note 10)
Gain on shares purchased and retired(Note 10)
Cumulative effect of adopting deferredincome tax accounting
Effect of subsidiaries newly consolidated
Net income
Less treasury stock

Balance at March 31, 2001

Balance at March 31, 1999
Shares purchased and retired
Gain on shares purchased and retired
Cumulative effect of adopting deferredincome tax accounting
Effect of subsidiaries newly consolidated
Net income
Less treasury stock
Balance at March 31, 2000
Net income
Adjustments from translation of foreign
currency financial statements
Less treasury stock
Balance at March 31, 2001

211,663

See accompanying Notes to Consolidated Financial Statements.

13

Undisposed deficit

¥

$

—
—

—
—
—

Less treasury stock

¥

¥

—
—

—

Less treasury stock

$

$

—
—
—

—

HANWA CO., LTD. AND CONSOLIDATED SUBSIDIARIES

Consolidated Statements of Cash Flows
For the years ended March 31, 2001 and 2000

Thousands of
U.S. dollars (Note 1)

Millions of yen

2001

Cash flows from operating activities:
Income before income taxes
Adjustments to reconcile income before income taxes to net cash
provided by operating activities
Depreciation
Increase (decrease) in allowance for doubtful receivables
Reversal of allowance for retirement benefits
Interest and dividend income
Interest expense
Foreign exchange gains
Loss on currency swaps
Loss on write-down of marketable securities
Gain on sale of land
Bad debts recovered
Loss on loans receivable
Loss on write-down of investment securities
Loss on sale of investment securities
Loss on write-down of investment
Loss on write-down of golf culb memberships
Loss on sale of golf culb memberships
Net transition obligation of retirement plans
Increase in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade notes and accounts payable
Other, net
Sub total
Cash flows during the year for:
Interest and dividends received
Interest paid
Income taxes paid
Net cash provided (used in) by operating activities
Cash flows from investing activities:
Additions to securities
Proceeds from redemption and sale of securities
Additions to property and equipment
Proceeds from sale of property and equipment
Additions to investment securities
Proceeds from redemption and sale of investment securities
Additions to loans receivable
Repayment of loans receivable
Other, net
Net cash provided by investing activities
Cash flows from financing activities:
Increase (decrease) in bank loans, net
Proceeds from long-term debt
Repayments of long-term debt
Common stock purchased and retired
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

¥

2,330

14

¥

1,383

2001

$

2000

18,805$ 11,162

1,547
(604)
—
(2,931)
7,428(2,179)2,267—(4,315)
—
1,525
836
591
115
163
50
495
(13,150)
727
5,975
7,760
8,630

1,514
2,819
(871)
(3,694)
6,948
—
—
1,748
—
(1,542)
—
—
157
—
1,639
—
—
(7,560)(3,052)(7,751)
1,724(6,538)12,486(4,875)—(23,656)
59,952(17,587)
18,297—(34,826)—
12,308
6,747
4,770
928
1,316
403
3,995
(106,134)
5,868
48,22562,631
69,653

12,22022,752(7,030)(29,814)56,078——
14,108—(12,445)
—
—
1,267
—
13,228——(61,017)(24,633)(62,558)
13,914(52,768)

2,887(7,883)
(903)
2,731

4,069
(6,935)(311)(9,715)23,301(63,624)(7,288)22,042

32,841(55,973)(2,510)(78,410)(9,688)39,531(836)
4,950(2,186)
6,447(1,388)6,276(1,471)
41,635(1,023)
1,996
(747)
606
(1,016)
16,461
(637)
4,633
2,516
22,789(78,192)
319,055(6,747)39,951(17,643)
52,034(11,203)50,654(11,872)
336,037(8,257)
16,110(6,029)4,891(8,200)132,857(5,141)37,393
20,307
183,931(12,321)49,400(89,287)—(52,208)385
598(5,765)(15,600)(20,382)(99,443)
398,709(720,638)—(421,372)

3,107
4,826
(46,529)(125,908)(164,504)(1,386)
8,942(8,694)(54,351)
43,129277,926¥ 34,435 $ 223,575(11,186)(70,169)
348,095$ 277,926

1,108(6,734)34,435¥ 27,701

See accompanying Notes to Consolidated Financial Statements.

2000

HANWA CO., LTD. AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements

1. Basis of presenting consolidated financial
statements
Hanwa Co.,Ltd. (the “Company”) and its consolidated domestic
subsidiaries maintain their accounts and records in accordance withthe provisions set forth in the Japanese Commercial Code and the
Securities and Exchange Law and in conformity with accounting
principles and practices generally accepted in Japan (“Japanese
GAAP”), which are different from the accounting and disclosure
requirements of International Accounting Standards. The accountsof overseas consolidated subsidiaries are based on their accounting
records maintained in conformity with generally accepted
accounting principles and practices prevailing in the respective
countries of domicile.
The accompanying consolidated financial statements are atranslation of the audited consolidated financial statements of theCompany which were prepared in accordance with Japanese GAAP
and were filed with the appropriate Local Finance Bureau of the
Ministry of Finance as required by the Securities and Exchange Law.

In preparing the accompanying consolidated financial
statements, certain reclassifications have been made in the
consolidated financial statements issued domestically in order topresent them in a form which is more familiar to readers outside
Japan. The consolidated statements of stockholders’ equity for2001 and 2000 have been prepared for the purpose of inclusion in
the accompanying consolidated financial statements, althoughsuch statements were not required for domestic purposes and were
not filed with the regulatory authorities.
The translation of the Japanese yen amounts into U.S. dollars
are included solely for the convenience of readers, using theprevailing exchange rate at March 31, 2001, which was ¥123.90 to
U.S.$1.00. The convenience translations should not be construed
as representations that the Japanese yen amounts have been, could
have been, or could in the future be, converted into U.S. dollars at
this or any other rate of exchange.

2. Significant accounting policies
Consolidation — The Company prepared the consolidated
financial statements for the years ended March 31, 2001 and 2000
in accordance with the revised Accounting Principles for
Consolidated Financial Statements effective from the year ended
March 31, 2000. The consolidated financial statements include theaccounts of the Company and its nine (six in 2000) significant
subsidiaries. The accounts of three foreign subsidiaries are included
at their respective fiscal years ending the last day of February.
Necessary adjustments for significant transactions occurring
between the last day of February and March 31 have been made in
the preparation of the consolidated financial statements.
Intercompany transactions and accounts have been eliminated.
The Company doesn’t apply the equity method, because nonconsolidated subsidiaries and affiliated companies are immaterial.
Consolidated Statements of Cash Flows — In preparing theconsolidated statements of cash flows, cash on hand, readilyavailable deposits and short-term highly liquid investments withmaturities of not exceeding three months at the time of purchaseare considered to be cash and cash equivalents.
Allowance for doubtful receivables — The allowance for
doubtful receivables is provided to cover possible losses oncollection. With respect to normal trade accounts receivable, it isstated at an amount based on the actual rate of historical bad
debts, and for certain doubtful receivables, the uncollectible
amount has been individually estimated.
The allowance for doubtful receivables of overseas consolidated
subsidiaries is determined by estimates of management.
Securities — Prior to April 1, 2000, marketable equity securities
were stated at the lower of moving average cost or market value.
Other securities were stated at moving average cost.
Effective April 1, 2000, the Company and its consolidated
subsidiaries adopted the new Japanese accounting standard forfinancial instruments (“Opinion Concerning Establishment of
Accounting Standard for Financial Instruments” issued by theBusiness Accounting Deliberation Council on January 22, 1999).
Upon applying the new accounting standard, all companies are
required to examine the intent of holding each security and classify
those securities as (a) securities held for trading purposes(hereafter, “trading securities”), (b) debt securities intended to beheld to maturity (hereafter, “held-to-maturity debt securities”), (c)equity securities issued by subsidiaries and affiliated companies,and (d) for all other securities that are not classified in any of theabove categories (hereafter, “available-for-sale securities”).
The Company and its consolidated subsidiaries do not holdtrading securities and held-to-maturity debt securities. Equity
securities issued by subsidiaries and affiliated companies are notconsolidated or accounted for using the equity method are statedat moving-average cost. Available-for-sale securities with available
fair market values are to be stated at fair market value. Unrealized
gains and unrealized losses on these securities are to be reported,
net of applicable income taxes, as a separate component ofstockholders’ equity. Realized gains on sale of such securities arecomputed using moving-average cost.
However, available-for-sale securities with available fair market
values are not stated at fair market value as the new standard
allows one year grace period for implementation provided thefollowing information is disclosed. Book value, fair value, net
unrealized holding losses and deferred tax assets for thesesecurities on March 31, 2001 were as follows:
Millions of yen

Book value
Fair value
Net unrealized holding losses on
securities, net of tax
Deferred tax assets
15

Thousands of
U.S. dollars¥ 17,400
16,674$ 140,436
134,576

700
26

5,650
210

As a result of adopting the new accounting standard forfinancial instruments, operating income increased by ¥2,014
million ($16,255 thousand) and income before income taxes
decreased by ¥1,247 million ($10,065 thousand), including theeffect of the new accounting policy for derivative transactions andgolf club memberships.
And upon applying the new standard, the Company and its
consolidated subsidiaries examined the intent of holding eachsecurity at the beginning of the period and classified available-forsale securities with maturities of one year or less as marketablesecurities and the other securities as investment securities. As aresult, securities included in the current assets decreased by ¥5,085
million ($41,041 thousand) and investment securities increased by
the same amount.
Inventories — Inventories are principally stated at the lower of costor market value. Cost is determined by the moving average cost
method or the specific identification cost method.
Property and equipment — Property and equipment are carried atcost. Depreciation is principally provided on the declining balancemethod over estimated useful lives. Major renewals andimprovements are capitalized. Maintenance, repairs and minor
renewals are expensed as incurred.
Software costs — The Company and its consolidated subsidiaries
account for software, in accordance with the provisional rule of the
JICPA’s Accounting Committee Report No.12 “Practical Guidance
for Accounting for Research and Development Costs, etc.” (the“Report”). Pursuant to the Report, the Company and its
consolidated subsidiaries included software in intangible and otherassets in 2001 and 2000, and depreciated it using the straight-line
method over the estimated useful lives (five years).
Bonuses — The Company and its domestic consolidated
subsidiaries follow the Japanese practice of paying bonuses to
employees in June and December. As at the balance sheet date, thebonus liabilities are estimated and accounted for on an accrual basis.
Bonuses to directors and statutory auditors, which are subject
to approval at the stockholders’ meeting, are accounted for as an
appropriation of retained earnings.
Income taxes — The Company and its consolidated subsidiaries
provided income taxes at the amounts currently payable for theyears ended March 31, 1999. Effective April 1, 1999, the Company
and its consolidated subsidiaries adopted the new accounting
standard, which recognizes tax effects of temporary differences
between the carrying amounts of assets and liabilities for tax andfinancial reporting. The asset and liability approach is used torecognize deferred tax assets and liabilities for the expected future
tax consequences of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes.
The amount of deferred income taxes attributable to the net
tax effects of the temporary differences at April 1, 1999, isreflected as an adjustment to the retained earnings brought
forward from the previous year.
The cumulative effect of adopting the new accounting
standard is ¥197 million ($1,590 thousand), which is directly
subtracted from the undisposed deficit brought forward fromMarch 31, 1999. The effect for the year ended March 31, 2000,
was to decrease net income by ¥139 million ($1,122 thousand).
Retirement benefits — Substantially all employees of theCompany and its consolidated subsidiaries are covered by qualified
funded pension plans. The amount of the retirement benefit is, ingeneral, based on length of service, base salary at the time ofretirement, and cause of retirement. Annual contributions, which
consist of normal cost and amortization of prior service cost are
charged to income when paid.
Effective April 1, 2000, the Company and its consolidated
subsidiaries adopted the new accounting standard, “Opinion on
Setting Accounting Standard for Employees’ Severance and Pension
Benefits,” issued by the Business Accounting Deliberation Council
on June 16,1998 (the “New Accounting Standard”).
Under the New Accounting Standard, the liabilities andexpenses for severance and retirement benefits are determinedbased on the amounts actuarially calculated using certain
assumptions.
The Company and its consolidated subsidiaries provided for
employees’ severance and retirement benefits at March 31,2001
based on the estimated amounts of projected benefit obligationand the fair value of the plan assets at that date.
The net transition obligation at the adoption of the new
accounting standards amounting ¥495 million ($3,995 thousand),
which mainly consisted of the actuarial losses for the prior year,
was fully expensed for the year ended of March 31, 2001.
As a result of the adopting the new accounting standard, in theyear ended March 31,2001,severance and retirement benefit expenses
decreased by ¥101 million ($815 thousand), operating income
increased by the same amount and income before income taxes
decreased by ¥394 million ($3,180 thousand) compared with what
would have been recorded under the previous accounting standard.
Directors and statutory auditors are not covered by these plans.
However, the liability for retirement benefits represents
management’s estimate of the amounts payable to them at thebalance sheet date if they retired at that date. Amounts payable todirectors and statutory auditors upon retirement are subject to theapproval of stockholders.
Translation of foreign currencies — Short-term receivables andpayables denominated in foreign currencies are translated into
Japanese yen at the year-end rates. Prior to April 1, 2000, longterm receivables and payables denominated in foreign currencies
were translated at historical rates.
Effective April 1, 2000, the Company and its consolidated
subsidiaries adopted the revised accounting standard for foreign
currency translation, “Opinion Concerning Revision of AccountingStandard for Foreign Currency Translation,” issued by the BusinessAccounting Deliberation Council on October 22, 1999 (the “Revised
Accounting Standard”). Under the Revised Accounting Standard,
long-term receivables and payables denominated in foreign
currencies are also translated into Japanese yen at the year-end rate.
As a result of adopting the revised accounting standard,
operating income decreased by ¥1,505 million ($12,147 thousand)and income before income taxes decreased by ¥574 million($4,633 thousand).

16

instruments at fair value and to recognize changes in the fair value
as gains or losses unless derivative financial instruments are used
for hedging purposes.
If derivative financial instruments are used as hedges and meetcertain hedging criteria, the Company defers recognition of gains
or losses resulting from changes in fair value of derivative financial
instruments until the related losses or gains on the hedged items
are recognized.
Also, if interest rate swap agreements are used as hedges andmeet certain hedging criteria, the net amount to be paid or
received under the interest rate swap agreement is added to or
deducted from the interest on the assets or liabilities for which theswap agreement was executed.
Net income per share — Computations of net income per shareof common stock are based on the weighted average number ofshares outstanding during each period.

Balance sheets of consolidated overseas subsidiaries aretranslated into Japanese yen at the year-end rates except for
stockholders’ equity accounts, which are translated at the historicalrates. Income statements of consolidated overseas subsidiaries aretranslated at average rates except for transactions with theCompany, which are translated at the rates used by the Company.
Due to the adoption of the Revised Accounting Standard, theCompany and its domestic subsidiaries report foreign currencytranslation adjustments in the stockholders’ equity. The prior year’s
amount, which is included in assets, has not been reclassified.
Finance leases — Finance leases which do not transfer ownershipand do not have bargain purchase provisions are accounted for in
the same manner as operating leases in accordance with generally
accepted accounting principles in Japan.
Derivative transactions and hedge accounting — The new
accounting standard for financial instruments, effective April 1,
2000, requires the Company to state derivative financial

3. Change in accounting policy
Inventories
Inventories are principally stated at the lower of cost or market
value. Effective April 1, 1999, the Company changed the methodof accounting for inventories from the last-in, first-out cost method
to the moving average cost method or the specific identification
cost method. This change was made to more appropriately state

current costs of inventory of steel on the moving average cost
method and foods, lumber and scrap, etc., on the identification
cost method. The effect of this change for the year ended March
31, 2000 was to increase inventories, operating income, andincome before income taxes by ¥642 million ($5,182 thousand).

4. Securities
The following table summarizes book values of securities whose fair values are not determinable as of March 31, 2001:

Available-for-sale securities
Unlisted stocks (excluding over-the-counter securities)
Other
Total

Millions of yen

Thousands of
U.S. dollars

Book value

Book value¥ 1,04616¥ 1,062$ 8,442129$ 8,571

Available-for-sale securities with maturities will mature as follows:

Within one year

Government and municipal bonds
Corporate bonds
Other
Total

Millions of yen
Over one year but
within five years

Over five years but
within ten years¥ 1,959
1,667—¥ 3,626¥ 1,714595—¥ 2,309¥ 1,607
4,713
338¥ 6,658

Total sales of available-for-sale securities sold in the year ended
March 31,2001 amounted to ¥6,906 million ($55,738 thousand) andthe net losses amounted to ¥416 million ($3,358 thousand).

17

Within one year

$ 12,970
38,0392,728$ 53,737

Thousands of U.S. dollars
Over one year but
Over five years but
within five years
within ten years$ 15,811
13,454—$ 29,265$ 13,834
4,802—$ 18,636

5. Derivatives
The Company enters into foreign exchange forward contracts, in its
normal business, to hedge foreign exchange risk associated withcertain assets and liabilities denominated in foreign currencies. The
Company enters into foreign exchange forward contracts, foreign
currency swap agreements, and interest rate swap agreements ashedges against bonds and loans denominated in foreign currencies.
And the Company enters into commodity futures contracts as ameans of hedging risks associated with certain inventories andcommitments.
It is the Company’s policy to use derivatives only for the purposeof reducing market risks associated with assets and liabilities.
Derivatives are subject to market risk and credit risk. Since thepurpose of using derivatives is to reduce market risks associatedwith assets and liabilities, market risks of the derivatives are
effectively offset. And, as the counterparties to those derivatives
are limited to major financial institutions, the Company does not
anticipate any losses arising from credit risk.
Derivatives transactions entered into by the Company havebeen made in accordance with internal policies which regulate theauthorization and credit limit amount. Each derivative transaction isperiodically reported to the management, where evaluation andanalysis of derivatives are made.
The contracts or notional amounts of derivatives which are
shown in the following table do not represent the amounts
exchanged by the parties and do not measure the Company’s
exposure to credit or market risks.
The following summarizes hedging derivative financial
instruments used by the Company and items hedged:
Hedging instruments:
Interest rate swap agreements
Commodity futures contracts
Hedged items:
Interest expense on borrowings
Inventories and commitments
The Company evaluates hedge effectiveness by comparing the
cumulative changes in cash flows or the changes in fair value ofhedged items and the corresponding changes in the hedging
derivative instruments.

The following tables summarize market value information as of March 31, 2001 and 2000, of derivative transaction for which hedge accounting
has not been applied:Year ended March 31, 2001
Currency related

Millions of yen
Contract ornotional amount

Forward exchange contracts:
Selling
U.S. dollars
Other currencies
BuyingU.S. dollars
Other currencies
Currency swap agreements:
Japanese yen received for U.S. dollars
Total

Contract ornotional amount

Fair value

Net recognized
gains (losses)¥ 19,855
12¥ 22,28612¥ (2,431)—$ 160,250
97$ 179,871
97$ (19,621)—

43,5162,804

47,527
2,862

4,011
58

351,219
22,631

383,592
23,09932,373468

14,162(2,267)(2,267)(629)

114,302(18,297)(18,297)$ (5,077)¥

Commodity related

Millions of yen
Contract ornotional amount

Futures:Petroleum
Selling
Buying
Total

Fair value

Thousands of U.S. dollars
Net recognized
gains (losses)

¥

966
1,002

Fair value

¥

977
1,112

Thousands of U.S. dollars
Net recognized
gains (losses)

¥
¥

18

(11)
110
99

Contract ornotional amount

$

7,797
8,087

Fair value

$

7,886
8,975

Net recognized
gains (losses)

$
$

(89)
888
799

Year ended March 31, 2000
Currency related

Millions of yen
Contract ornotional amount

Forward exchange contracts:
Selling
U.S. dollars
Other currencies
BuyingU.S. dollars
Other currencies
Currency swap agreements:
Selling
U.S. dollars
Total

Thousands of U.S. dollars
Net unrealized
gains (losses)

Fair value

Contract ornotional amount

Fair value

Net unrealized
gains (losses)¥ 25,890
13¥ 24,684
14¥ 1,206(1)$ 208,959
105$ 199,225
113

$

9,734
(8)

49,757
1,671

49,857
1,609

100
(62)

401,590
13,486402,397
12,986

807
(500)

8,500

7,903

597
¥ 1,840

68,60363,785

4,818$ 14,851

Foreign currency contracts which are used to hedge associated assets
and liabilities and reflected on the balance sheet at year-end rates are
not disclosed above.

Interest rate related

Millions of yen
Contract ornotional amountInterest rate swaps:
Floating rate received for
floating rate
Fixed rate received for
floating rate
Floating rate received for
fixed rate
Swaption:
BuyingFloating rate received for
fixed rate
Option premium
Total¥ 60,406

Fair value

¥

(817)

¥

Contract ornotional amountNet unrealized
lossesFair value(817)$ 487,538$ (6,594)$ (6,594)

2,395

(296)

(296)

19,330(2,389)(2,389)

9,300

(60)

(60)

75,061

(484)

(484)

4,000
67

1

(66)
¥ (1,239)

32,284
541

8

(533)
$ (10,000)

Commodity related

Millions of yen
Contract ornotional amount

Futures:Non-ferrous Metals
Selling
BuyingPetroleum
Selling
BuyingTotal

Thousands of U.S. dollars
Net unrealized
lossesFair value¥ 4,157249¥ 4,271
249

33
408

33
422

Thousands of U.S. dollars
Net unrealized
gains (losses)

¥

¥

19

Contract ornotional amount

Fair value

(114)
—

$ 33,551
2,010$ 34,471
2,010

—
14
(100)

266
3,293

266
3,406

Net unrealized
gains (losses)

$

$

(920)
—
—
113
(807)

6. Assets pledged as collateral
At March 31, 2001 and 2000, assets pledged as collateral for long-term bank loans of ¥25,000 million ($201,776 thousand) and ¥38,637
million ($311,840 thousand) respectively, and guarantees were as follows:
Thousands of
U.S. dollars

Millions of yen

Marketable securities
Other current assets
Investment securities
Property and equipment, net of accumulated depreciation

2001

2000

¥

¥ 4,818
10—
13,196¥ 18,024

—
10
1,356
11,097¥ 12,463

2001

2000

—
81
10,94489,564$ 100,589$ 38,886
81—
106,505$ 145,472$

7. Bank loans and long-term debt
Bank loans at March 31, 2001 and 2000, were represented
principally by short-term notes bearing interest at rates from 0.72%
to 6.33% and from 0.64% to 6.94%, respectively.
Long-term debt at March 31, 2001 and 2000, consisted of the following:Thousands of
U.S. dollars

Millions of yen

2001

SFr. floating rate bonds due 2000
Loans from banks and insurance companies, bearing interest,
at March 31, 2001 and 2000, from 0.73% to 1.76% andfrom 0.75% to 7.65%, respectively,
maturing serially through 2006¥

Less amounts due within one year

The annual maturities of long-term debt outstanding at March
31, 2001, were as follows:

Years ending March 31
Millions of yen

2002
2003
2004
2005
2006

¥ 4,769
2,337
28,9781,000
2,000¥ 39,084

Thousands of
U.S. dollars$ 38,491
18,862233,882
8,071
16,142$ 315,448

20

2000

2001

2000

—

¥ 13,112$—$ 105,827

39,08439,0844,769¥ 34,315

65,85878,97075,178¥ 3,792

315,448
315,448
38,491$ 276,957

531,542
637,369
606,764$ 30,605

8. Employees’ retirement benefits
As explained in Note 2. Significant accounting policies, effective
April 1, 2000, the Company and its consolidated subsidiaries
adopted the new accounting standard for employees’ severance

and retirement benefits, under which the liabilities and expenses
for severance and retirement benefits are determined based on theamounts obtained by actuarial calculations.

The liabilities for severance and retirement benefits included in the liability section of the consolidated balance sheet as of March 31, 2001
consists of the following:

Projected benefit obligation
Less fair value of pension assets
Unrecognized actuarial differences
Prepaid pension cost
Liability for severance and retirement benefits

Millions of yen

Thousands of
U.S. dollars¥ 16,874(13,087)(3,387)359¥
759$ 136,190(105,625)(27,336)
2,897$ 6,126

Included in the consolidated statement of income for the year ended March 31, 2001 are severance and retirement benefit expenses
comprised of the following:
Millions of yen

Service costs -benefits earned during the year
Interest cost on projected benefit obligation
Expected return on plan assets
Net transition obligation of retirement plans
Premium retirement benefit
Severance and retirement benefit expenses

¥

721
449
(651)
495
176
¥ 1,190

Thousands of
U.S. dollars

$

5,819
3,624
(5,254)
3,995
1,421$ 9,605equally to each service year using the estimated number of total
service years.
Actuarial losses are recognized in income statement using thestraight-line method over 14 years.

The discount rate and the rate of expected return on plan assets
used by the Company and its consolidated subsidiaries are 3.0%
and 4.5%,respectively. The estimated amount of all retirement
benefits to be paid at the future retirement dates is allocated219. Income taxes
The Company is subject to a number of taxes based on income,which, in the aggregate, indicate statutory rates in Japan ofapproximately 42.1% for the years ended March 31, 2001 and2000.

The following table summarizes the significant differences between the statutory tax rate and the Company’s effective tax rates forfinancial statement purposes for the years ended March 31, 2001 and 2000:

Statutory tax rate
Tax effect of permanent differences
Valuation allowance recognized for deferred tax assets
Tax effect of unrealized intercompany profit
Difference of tax rates for consolidated subsidiaries
Other
Effective tax rate

2001

2000

42.1%
7.9
(26.7)
(4.3)
(2.7)
0.2
16.5%

42.1%
12.5
14.4
(8.0)
(4.4)
1.3
57.9%

Significant components of the Company’s and its consolidated subsidiaries’ deferred tax assets and liabilities as of March 31, 2001 and 2000
are as follows:
Thousands of
U.S. dollars

Millions of yen

Deferred tax assets:
Net operating loss carryforwards
Loss on loans receivable
Temporary differences pertaining to investments
in consolidated companies
Loss on write-down of golf club memberships
Other
Total deferred tax assets
Valuation allowance
Net deferred tax assets
Deferred tax liabilities
Net deferred tax assets

2001

2000

2001

2000

¥ 47,357
4,228¥ 64,897
8,769$ 382,220
34,124$ 523,786
70,77525,469451
1,309
78,814(78,761)
53

1,133
691
859
76,349(76,212)137

205,561
3,640
10,565636,110(635,682)
428

9,145
5,577
6,933
616,216(615,109)
1,107

¥

42
11

¥

78
59

$

339
89

$

630
477

10. Stockholders’ equity
Common stock — The Company reduced its capital by ¥31,237
million ($252,115 thousand) by purchasing and retiring 80 million
shares of common stock of the Company on August 7, 1999 for¥15,600 million ($125,908 thousand). The difference between thecapital reduction amount and cost was credited to additional paidin capital. The capital reduction was approved at an ordinary
general meeting of shareholders of the Company held on June 29,
1999.

Additional paid-in capital — The Commercial Code of Japan
provides that the entire issue price of shares must be credited tocommon stock, provided that, by resolution of the Board of
Directors, up to one-half of such issue price may be credited toadditional paid-in capital so long as the common stock is equal toat least the aggregate par value of the shares issued. The
additional paid-in capital may be used to reduce a deficit byresolution of the stockholders or may be transferred to common
stock by resolution of the Board of Directors, but is not available
for distribution as dividends.

2211. Leases
Finance leases
As lessee
Total lease payments, including financing charges, under financeleases that do not transfer ownership of the leased property to theCompany and its consolidated subsidiaries for the years ended March

31, 2001 and 2000, were ¥630 million ($5,085 thousand) and ¥666
million ($5,375 thousand), respectively.

Pro forma information of leased property such as acquisition cost, accumulated depreciation, obligations under finance leases, depreciation
expense and interest expense of finance leases that do not transfer ownership of the leased property to the leasee on an “as if capitalized” basis
for the year ended March 31, 2001, were as follows:
Acquisition
cost

Other property and equipment
Other investments
Total¥ 2,767103¥ 2,870

Millions of yen
Accumulated
depreciation¥ 1,65361¥ 1,714

Depreciation expense, which is not reflected in the accompanying
statements of income, computed by the straight-line method was

Net leased
property

Acquisitioncost¥ 1,11442¥ 1,156$ 22,333
831$ 23,164

Thousands of U.S. dollars
Accumulated
depreciation$ 13,342
492$ 13,834

Net leased
property$ 8,991339$ 9,330¥566 million ($4,568 thousand) and ¥575 million ($4,641 thousand)for the years ended of March 31, 2001 and 2000, respectively.

Obligations, excluding financing charges, under such non-capitalized finance leases as of March 31, 2001 and 2000, were as follows:
Thousands of
U.S. dollars

Millions of yen

Due within one year
Due after one year
Total

2001

2000

2001

2000

¥

¥

$ 3,003
6,747$ 9,750$ 4,278
8,103$ 12,381

372
836¥ 1,208530
1,004¥ 1,534

As lessor
Lease payments, excluding financing charges, to be received under finance leases as of March 31, 2001 and 2000, were as follows:
Thousands of
U.S. dollars

Millions of yen

2001

Due within one year
Due after one year
Total

¥
¥

2000

14
42
56

¥
¥

39
120
159

2001

2000

$

$

$

113
339
452

315
968
$ 1,283

Operating leases
As Lessee
Obligations under operating leases as of March 31, 2001 and 2000, were as follows:
Thousands of
U.S. dollars

Millions of yen

2001

Due within one year
Due after one year
Total

¥
¥

23

2000

36
117
153

¥
¥

36
137
173

2001

2000

$

$

291
944
$ 1,235291
1,105$ 1,39612. Segment information
Industry segment information
The Company’s and its subsidiaries’ operations are classified into
five industry segments as follows:
Steel: Steel bars and shapes, steel plates and sheets, special steels,
wire products, steel pipes, and steelmaking raw materials

Non-ferrous metals: Nickel, copper, aluminium, lead, zinc, tin,
antimony, and other alloys
Foods: Frozen seafoods and meat products
Petroleum and chemicals: Petroleum products, chemical products,
and other
Other business: Machinery, lumber, and other.

Segment information by business category for the years ended March 31, 2001 and 2000, is as follows:Year ended March 31, 2001
Steel

Non-ferrous
metalsFoods

Millions of yen
Petroleum
Other
and chemicals
business

Total

Corporate

Consolidated

Net sales
Costs and expenses
Operating income¥ 372,443
366,300¥ 6,143¥ 63,235
61,413¥ 1,822¥ 100,019
97,796¥ 2,223¥ 109,009
107,827¥ 1,182¥ 44,400
41,436¥ 2,964¥ 689,106
674,772¥ 14,334

¥

—
4,051
¥ (4,051)¥ 689,106
678,823¥ 10,283

AssetsDepreciation
Capital expenditure¥ 141,239
1,087
569

¥ 14,891
75
40¥ 28,986
39
74¥ 18,985
22
24¥ 17,585
242
263¥ 221,686
1,465
970

¥ 66,489
82
108¥ 288,175
1,547
1,078

Corporate

Consolidated

Year ended March 31, 2001

Thousands of U.S. dollars
Petroleum
Other
and chemicals
business

Steel

Non-ferrous
metalsFoods

Net sales
Costs and expenses
Operating income$ 3,005,997
2,956,417$
49,580$ 510,371
495,666$ 14,705$ 807,256
789,314$ 17,942$ 879,814
870,274$ 9,540$ 358,354 $ 5,561,792
334,4315,446,102$ 23,923 $ 115,690$

AssetsDepreciation
Capital expenditure$ 1,139,944
8,773
4,592

$ 120,186
605
323$ 233,947
315
597$ 153,228
178
194$ 141,929 $ 1,789,234
1,953
11,824
2,123
7,829$ 536,634 $ 2,325,868
662
12,486
872
8,701

24

Total

— $ 5,561,792
32,696
5,478,798$ (32,696) $ 82,994

Year ended March 31, 2000
Steel

Non-ferrous
metalsFoods

Millions of yen
Petroleum
Other
and chemicals
business

Total

Corporate

Consolidated

Net sales
Costs and expenses
Operating income¥ 359,444
353,573¥ 5,871¥ 51,616
50,137¥ 1,479¥ 104,229
102,253¥ 1,976¥ 75,269
74,651¥ 618¥ 39,159
36,563¥ 2,596¥ 629,717
617,177¥ 12,540

¥

—
3,813
¥ (3,813)¥ 629,717
620,990¥ 8,727

AssetsDepreciation
Capital expenditure¥ 139,746
1,115
219

¥ 16,005
71
50¥ 26,804
34
13¥ 13,773
20
5¥ 13,931
199
472¥ 210,259
1,439
759

¥ 121,913
75
41¥ 332,172
1,514
800

Total

Corporate

Consolidated

Year ended March 31, 2000

Thousands of U.S. dollars
Petroleum
Other
and chemicals
business

Steel

Non-ferrous
metalsFoods

Net sales
Costs and expenses
Operating income$ 2,901,082
2,853,697$ 47,385$ 416,594
404,657$ 11,937$ 841,235
825,287$ 15,948$ 607,498
602,510$ 4,988$ 316,053 $ 5,082,462 $
295,100
4,981,251$ 20,953 $ 101,211 $— $ 5,082,462
30,7755,012,026(30,775) $ 70,436

AssetsDepreciation
Capital expenditure$ 1,127,893
8,999
1,768

$ 129,177
573
403$ 216,336
275
105$ 111,162
161
40$ 112,438 $ 1,697,006 $
1,606
11,6143,810
6,126

983,963 $ 2,680,969
606
12,220331
6,457($97 thousand) in steel, ¥1 million ($8 thousand) in non-ferrous
metals, ¥1,859 million ($15,004 thousand) in foods, ¥103 million($831 thousand) in petroleum and chemicals and ¥39 million ($315
thousand) in other business. Assets increased by ¥13 million ($105
thousand) in steel, ¥41 million ($331 thousand) in non-ferrous metals,¥1,859 million ($15,004 thousand) in foods, ¥103 million ($831
thousand) in petroleum and chemicals and ¥39 million ($315
thousand) in other business, decreased by ¥649 million ($5,238
thousand) in corporate.
As explained in Note 2, effective April 1, 2000, the Company andits consolidated subsidiaries adopted the revised accounting standards
for foreign currency translation. As a result of the revised accounting
standard, operating income decreased by ¥9 million ($73 thousand) insteel, ¥1,495 million ($12,066 thousand) in foods, ¥2 million ($16
thousand) in other business. Assets increased by ¥969 million ($7,821
thousand) in corporate.

Corporate costs and expenses mainly consist of expenses ofadministrative departments.
Corporate assets mainly consist of marketable securities,
investment securities and assets of administrative departments.
As explained in Note 2, effective April 1, 2000, the Company
and its consolidated subsidiaries adopted the new accounting
standards for employees’ retirement benefits. As a result of the new
accounting standard, operating income increased by ¥58 million($468 thousand) in steel, ¥6 million ($48 thousand) in non-ferrous
metals, ¥8 million ($65 thousand) in foods, ¥5 million ($40
thousand) in petroleum and chemicals, ¥7 million ($57 thousand) inother business and ¥17 million ($137 thousand) in corporate. Assets
increased by ¥359 million ($2,897 thousand) in corporate.
As explained in Note 2, effective April 1, 2000, the Company
and its consolidated subsidiaries adopted the new accounting
standards for financial instruments. As a result of the new
accounting standard, operating income increased by ¥12 million

25

Overseas net sales
Overseas net sales include exports and offshore sales by theCompany and its consolidated subsidiaries, excluding sales byforeign subsidiaries to Japan.
Overseas net sales of the Companies are as follows:Year ended March 31, 2001
Asia

Overseas net sales
Percentage of consolidated net sales¥ 77,729
11.3%

Year ended March 31, 2000
Asia

Overseas net sales
Percentage of consolidated net sales¥ 67,215
10.7%

Millions of yen
Other
areas

¥ 10,786
1.5%

Millions of yen
Other
areas

¥ 11,170
1.8%

Total

Asia

¥ 88,515
12.8%$ 627,353

Total

Asia

¥ 78,385
12.5%

Thousands of U.S. dollars
Other
areas

$ 87,054

Total$ 714,407

Thousands of U.S. dollars
Other
areas

$ 542,494$ 90,153

Total$ 632,647“Asia” consists principally of sales to China, South Korea and Thailand.
“Other areas” consist principally of sales to U.S.A. and Saudi Arabia.

13. Contingent liabilities
At March 31, 2001 and 2000, the Company and its consolidated subsidiaries were contingently liable as follows:
Thousands of
U.S. dollars

Millions of yen

As endorsers of export letters of credit and notes discounted
As guarantors of indebtedness

2001

2000

2001

2000

¥ 4,498
1,295¥ 4,079
1,497$ 36,303
10,452$ 32,922
12,082

14. Subsequent events
1. Merger
On January 26, 2001, the Company entered into an agreement tomerge with Hanwa Ryutsu Center Co., Ltd., a wholly owned
consolidated subsidiary of the Company. The merger was effective
April 1, 2001. Hanwa Ryutsu Center Co., Ltd. was adsorbed into
the Company and dissolved. There was no issuance of shares orincrease in common stock due to the merger. The Company took
over all rights and duties of Hanwa Ryutsu Center Co., Ltd.

2. Common stock reduction
The Company reduced the amount of common stock by ¥36,995
million ($298,588 thousand). The capital reduction amount wascredited to additional paid-in capital. At the ordinary general
meeting of stockholders of the Company held on June 28, 2001,
stockholders approved the capital reduction and the use ofadditional paid-in capital to reduce the undisposed deficit.

The assets and liabilities of Hanwa Ryutsu Center Co., Ltd. which
the Company took over at April 1, 2001, were as follows:
Millions of yen

AssetsLiabilities
Net assets¥ 30,995
30,748¥ 247

Thousands of
U.S. dollars$ 250,162
248,168$ 1,994

26

Report of Independent Public Accountants

To the Stockholders and the Board of Directors of
Hanwa Co., Ltd.:We have audited the accompanying consolidated balance sheets of Hanwa Co., Ltd. (aJapanese corporation) and subsidiaries as of March 31, 2001 and 2000, and the related
consolidated statements of income, stockholders’ equity and cash flows for the years thenended, expressed in Japanese yen. Our audits were made in accordance with generally
accepted auditing standards in Japan and, accordingly, included such tests of the accounting
records and such other auditing procedures as we considered necessary in the circumstances.
In our opinion, the consolidated financial statements referred to above present fairly the
consolidated financial position of Hanwa Co., Ltd. and subsidiaries as of March 31, 2001 and
2000, and the consolidated results of their operations and their cash flows for the years thenended in conformity with accounting principles generally accepted in Japan applied on aconsistent basis during the periods, except for the new accounting policies and change inaccounting policy, with which we concur, in the following paragraphs.
As explained in Note 2, in the year ended March 31, 2001, Hanwa Co., Ltd., and subsidiaries
prospectively adopted new Japanese accounting standards for retirement benefits, financial
insturuments and foreign currency translation.
As explained in Note 2, in the year ended March 31, 2000, Hanwa Co., Ltd., and subsidiaries
prospectively adopted new Japanese accounting standards for consolidation, income taxes andsoftware costs. Also, Hanwa Co., Ltd. changed the method of accounting for inventories,
effective April 1, 1999, as referred to in Note 3.
Also, in our opinion, the U.S. dollar amounts in the accompanying consolidated financial
statements have been translated from Japanese yen on the basis set forth in Note 1.

Osaka, Japan
June 28, 2001

(A Member Firm of Arthur Andersen)Statement on Accounting Principles and Auditing Standards
This statement is to remind users that accounting principles and auditing standards and theirapplication in practice may vary among nations and therefore could affect, possibly materially, thereported financial position and results of operations. The accompanying financial statements areprepared based on accounting principles generally accepted in Japan, and the auditing standards andtheir application in practice are those generally accepted in Japan. Accordingly, the accompanying
consolidated financial statements and the auditors’ report presented above are for users familiar withJapanese accounting principles, auditing standards and their application in practice.

27

Network of Hanwa Co., Ltd.

Domestic Offices
OFFICE
Osaka
Tokyo
NagoyaTohokuKyushuADDRESS
Hanwa Bldg., 4-3-9 Fushimi-machi, Chuo-ku, Osaka 541-8585, Japan
New Hanwa Bldg., 1-13-10 Tsukiji, Chuo-ku, Tokyo 104-8429, Japan
Chunichi Bldg., 4-1-1 Sakae, Naka-ku, Nagoya 460-8441, Japan
Sendai Daiichi Seimei Tower Bldg., 4-6-1 Ichiban-cho, Aoba-ku, Sendai 980-0811, Japan
Nihon Seimei Hakataekimae 2nd Bldg., 4-1-1, Hakataekimae, Hakata-ku, Fukuoka 812-0011, JapanTELEPHONE
06-6206-3270
03-3544-2171
052-262-2371
022-227-7981
092-471-7121

FAX
06-6206-3371
03-3544-2351
052-262-8819
022-227-7969
092-471-7060

Overseas Offices
OFFICENew York
SeattleHoustonCalifornia
Vancouver
BogotaSeoul
Beijing
Qingdao
DalianShanghaiFuzhouGuangzhou
DongguanZhongshan
Hong Kong
Taipei
Kaohsiung
Bangkok
Kuala Lumpur
Singapore
Tawau
Jakarta
Mumbai
TehranKuwaitRiyadhJeddahLas Palmas
LondonADDRESSTELEPHONE
FAX
Parker Plaza, 6th Floor, 400 Kelby Street, Fort Lee, New Jersey 07024, U.S.A.
1-201-363-4500
1-201-346-9890
900 4th Avenue, Suite 1640, Seattle, Washington 98164, U.S.A.
1-206-622-2102
1-206-622-6464
Suite 515, 9800 Richmond Avenue, Houston, Texas 77042, U.S.A.
1-713-978-7904
1-713-978-7790
18300 Vonkarman Avenue, Suite 405, Irvine, California 92612, U.S.A.
1-949-955-2780/2781
1-949-955-2785
Suite 502, 1001 West Broadway Vancouver, British Columbia, V6H 4B1, Canada
1-604-876-1175
1-604-876-1085
Carrera 11 No. 86-32, Oficina 604 Apartado Aereo No. 093260 Bogota, D.E. Colombia
57-1-218-3814/8406
57-1-256-0064
Room 2501-1, Korea World Trade Center Bldg., 159-1, Samsung-Dong, Kangnam-ku, Seoul, 135-729, R.O.Korea
82-2-551-5387
82-2-551-5575
Room 801, Beijing Fortune Building, 5 Dong San Huan Bei-lu, Chaoyang District, Beijing 100004, P.R.China 86-10-6590-8331~33
86-10-6590-8340
Room B309, Full Hope Plaza, 12 HongKong Middle Road, Qingdao, Shangdon Province 266071, P.R.China
86-532-5026141~45
86-532-5026013
Senmao Bldg., 13F, 147 Zhongshan Street, Dalian, Liaoning Province 116011, P.R.China
86-411-368-6954
86-411-368-6934
Room 905/906, Aetna Tower,No.107 Zhunyi Road, Shanghai 200335, P.R.China
86-21-6237-5260/5265~7 86-21-6237-5268/5269
Room 2501, Lippo Tianma Plaza, No.1 Wu Yi Road, Fuzhou City, Fujian Province, P.R. China
86-591-3354165
86-591-3345202
Unit 3006-3007,30th Floor, Dong Shan Plaza, 69 Xian Lie Zhong Road, Guangzhou City,
86-20-8732-0451
86-20-8732-0402
Guangdong Province 510095, P.R. China
Longxi Industrial Zone, Zhouxi Management Area, Huangcun District, Dongguan, Guangdong Province 511715 P.R.China
86-769-240-6428
86-769-240-6448
Unit 1909-1910, 19th Floor, Bank Of China Tower, 18 Zhongshan 3rd Road, Zhongshan, Guangdong Province P.R.China
86-760-332-0706
86-760-332-0696
Unit 3201-3 32nd Floor, Vicwood Plaza, 199 Des Voeux Road Central, Hong Kong852-25450110
852-25422544
Room 303 3rd Floor. No. 79, Chung Shan North Road Sec.2, Taipei, Taiwan, R.O.C.
886-2-2560-2214~17886-2-2571-0693
Room B, 15th Floor, No.7 Su-Wei 4th Road, Kaohsiung, Taiwan, R.O.C.
886-7-338-5508~10
886-7-338-5433
17th Floor, Vorawat Bldg., 849 Silom Road, Bangrak, Bangkok, 10500 Thailand
66-2-635-1230
66-2-635-1220/1221
Suite 8-12B-3, Level 14 (12B), Menara Olympia 8, Jalan Raja Chulan, 50200 Kuala Lumpur, Malaysia
60-3-2078-2311
60-3-2078-2380
20 Cecil Street, #11-02 SINGAPORE EXCHANGE, Singapore, 049705
65-536-7822
65-536-7855
P.O. Box 1231 91037 Tawau, Sabah, Malaysia
60-89-750016~7
60-89-750019
Menara Cakrawala 5th Floor Jalan M.H. Thamrin 9, Jakarta, 10340 Indonesia
62-21-3902293
62-21-3902294
c/o M.D. Jagat A/5 Kamdar Building, Gokhale Road South, Dadar, Mumbai 400 028, India
91-22-4305083
91-22-4308531
6th Floor, Building, No.10 8th Street, Mirzaye-Shirazi Avenue, Tehran 15967, Iran
98-21-890-3537
98-21-890-4723
c/o Al-Sabih Engineering & Trading Co. P.O. Box No. 1366, Safat 13014, Kuwait
965-243-7259
965-243-7263
Room 24, 6th Floor, Danat Trading Center, Abdullah Al-Ahmad Street, Sharq, Kuwait
P.O. Box 68974, Riyadh 11537, Saudi Arabia
966-1-478-3022
966-1-479-2459
c/o Office No. 219, Kaki Center P.O. Box 1224, Jeddah 21431, Saudi Arabia
966-2-661-0796
966-2-661-0796
C/Luis Morote, NO.6-3F , Edf. Catalunia 35007-Las Palmas De Gran Canaria, Spain
34-928-270894
34-928-275735
5th Floor, Finland House, 56 Haymarket, London, SW1Y 4RN. U.K.
44-20-7839-4448
44-20-7839-3994●LondonDalianBeijing●Teheran●Las Palmas●Kuwait●Riyadh●Jeddah●Vancouver
Seattle ●●New York● Seoul●●Qingdao●●Shanghai
Guangzhou
FuzhouDongguan● ●●Taipei
Zhongshan●● ●Kaohsiung●●MumbaiHong Kong●Bangkok

Kuala Lumpur ●Singapore ●●TawauCalifornia●●Houston●Bogota●Jakarta

28

Directors and Statutory Auditors

Investor Information(As of March 31, 2001)

President and C.E.O.

Shuji Kita

北Company Name
Hanwa Co., Ltd.

修爾

Address
Hanwa Bldg., 4-3-9 Fushimi-machi,
Chuo-ku, Osaka 541-8585, Japan

Senior Managing Director

Mitsuyuki Nakabayashi

中林満之

Managing Directors

Takayuki Kamoto
Takashi Kyui
Shozaburo Bando
Kunio Matsuda
Noriyuki Hanafusa

嘉本

隆行

休井

匡

Date of Establishment
April 1947
Stated Capital¥82,646 million ($667,038 thousand)

坂東祥三郎
松田

邦雄

花房

伯行

増田

実

横田

和夫

天尾

正臣

山崎

達之

大本

博

古川

弘成

北村

信輔

阪和興業株式会社

Number of Shares of Common Stock Issued
211,663,200 shares

Directors

Minoru Masuda
Kazuo Yokota
Masaomi Amao
Tatsuyuki Yamasaki
Hiroshi Omoto
Hironari Furukawa
Shinsuke Kitamura
Satoru Hara
Tetsuro Akimoto
Yoshifumi Nishi
Takuji Kita

原

惺

秋元

哲郎

西

吉史

北

卓治

Number of Shareholders
26,137
Stock Exchange Listings
The First Section of the Tokyo Stock Exchange
The First Section of the Osaka Stock Exchange
Transfer Agent
The Sumitomo Trust and Banking Co., Ltd.
AuditorAsahi & Co.
Number of Employees
865

Statutory Auditors

Minoru Kifuku
Kazushi Higashida
Takao Ikematsu
Hironari Masago

喜福

稔

東田

和四

池松

孝雄

真砂

博成

29

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Printed in Japan