PEAC EJ APANHARMO NY

ANNUAL REPORT 1999
For the year ended March 31,1999

S UM

阪和興業 株式会社

About the CoverContents

The Chinese character for the syllable wa ofHanwa’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.

Corporate Profile & Financial Highlights .................. 1
President’s Message ........................................................ 2
Review of Operations ..................................................... 4
Topics ................................................................................... 8
Financial Section ............................................................... 9
Network of Hanwa Co., Ltd. ....................................... 23
Directors and Statutory Auditors ................................ 24

Corporate Profile

Since its establishment in 1947, Hanwa has contributed to the development of theJapanese 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 and warehouse transportation facilities as well as complete
processing sites that enable us to both handle large quantities purchased from major
steel manufacturers and to cater to the special 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 for amusement parks, and nonferrous metal recycling. We have creatednumerous businesses in these fields that command the top market share. The basic
strategies underlying such success 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 to develop new products, as well as coordinate ventures among
businesses. As a trading company with such operating skills at our disposal, we willcontinue to develop new unique businesses.

HANWA CO., LTD. AND CONSOLIDATED SUBSIDIARIES

Financial Highlights
For the years ended March 31

Thousands of
U.S. dollars

Millions of yen

1999

Net sales
Operating income
Net loss

1998¥ 598,568
5,325
(435)

1999

¥ 664,261 $4,965,309 $5,510,253
6,456
44,17353,555(5,388)(3,608)(44,695)

Note: The U.S. dollar amounts represent translations, for convenience only, of yen amounts at the rate of ¥120.55=$1.00.

1

1998

President’s Message

In this fiscal year, ended March 31, 1999,

The percentage decrease in sales of the nonferrous

consecutive failures of large financial institutions

division was larger than that of the steel division. It

added further instability to the ailing banking

declined by 26.6% to ¥43,999 million, because of

system, and credit contraction spread more widely.

low demand and less quantity sold at lower prices.

For fear of uncertainty of the future and loss of

One bright spot was the foods division. Sales were

employment, personal consumption and capital¥110,910 million, a 9.9% increase. New imported

investment remained low. The Japanese economy

items played a big role in this increase both in the

did not show any sign of recovery despite therevenue and quantity.
Because of the decrease in total sales,

biggest ever comprehensive stimulus packages by

operating income was ¥5,325 million (a 17.5%

the government.

decrease). As an extraordinary loss, we recorded a

To cope with this market condition, we paid ourutmost attention to control of credit. By adhering¥1,936 million write-down of securities and also

to strict credit control and collecting thorough¥389 million as a loss on closing of Southwest

information to avoid risks, we did our best to

Steel Supply Co., U.S.A., a subsidiary in the U.S.A.

develop new items and new customers. However,

The net loss for this period was ¥435 million.

total sales of our company dropped to ¥598,568

The Japanese economy will gradually go backmillion, a 9.9% decrease from the previous year.

to normal, thanks to various governmental policies
which so far have resulted in a successful

The steel division’s sales were ¥380,178 million,a decrease of 13.1%. As a result of pump-priming

adjustment of inventories, decrease inmeasures, public works increased but because ofbankruptcies supported by expanded government

the credit crunch, housing starts and capitalguarantees and an increase of investment in theinvestment by the private sector decreased. The

public sector. Still, however, there remains theautomobile industry and the electric appliance

unemployment problem, and personal

industry remained sluggish. Steel prices fell sharply.

consumption and capital investment are bothhovering at low levels. To stir demand, further
measures are awaited.

2

Meanwhile, the American economy is quite
robust with the booming stock market. Personal
consumption is expanding steadily and there is no
inflation. Asian economies are recovering fasterthan expected, and European economies are
firming due to easy money policy. Thus as a whole,
the world economy is becoming stable. To avoid
credit contraction on a world scale, every country
must take joint measures to ease money, and ourcountry must quickly stabilize the banking systemand take some additional measures to realize fullrecovery.
We, on our part, continue to concentrate ourefforts to establish much more efficiency in ourmanagement and stick to a steadiness-first policy.
Positive expansion of sales in overseas trade andimprovement of the capital structure are our next
targets.

Shuji Kita
President & C.E.O.
Hanwa Co., Ltd.
June 30, 1999

3

Review of Operations

Net Sales by Product (Billions of Yen)

Machinery, petroleum, chemicals,
lumber, and other ¥64 (10.6%)
Foods

Steel bars and shapes¥111 (18.5%)

Non-ferrous metals¥44 (7.4%)

Net sales¥599(100%)¥148 (24.8%)

Steel plates and sheets ¥173 (28.8%)
Special steels,
wire products, steel pipes, andsteelmaking raw materials ¥59 (9.9%)

Year ended March 31, 1999

Steel related¥380 (63.5%)

Steel bars and shapes¥167 (25.1%)

Machinery, petroleum, chemicals,
lumber, and other ¥66 (10.0%)
Foods¥101 (15.2%)

Non-ferrous metals¥60 (9.0%)

Net sales¥664(100%)

Steel plates and sheets ¥196 (29.5%)
Special steels,
wire products, steel pipes, andsteelmaking raw materials ¥74 (11.2%)

Year ended March 31, 1998

Steel related

4¥437 (65.8%)

Steel Bars and Shapes
The total quantity produced in Japan fellby about 10%, but we sold a similar
quantity to that of the previous year,
due to a big increase in the export ofH-beams to the U.S.A. However, the total
sales amount was 13% lower due tohistorically low prices of steel scrap. Steelbars recorded good profits but shapes,
for which inventories are a necessity,
had a very hard time.
We foresee that the new fiscal year of2000 will not be a good one in general,and that construction will be more
gloomy. However, prices of bars andshapes will be going up because thesteel scrap prices are firming and mills
are curtailing production to raise prices
of products. Since we hold a big market
share, we hope we can attain a better
result in the new fiscal year.

Steel Plates and Sheets
In such a severe recession where theJapanese economy has experienced
minus growth for two years now, pricesof steel plates and sheets went down
continuously, burdened with large
inventories despite mills’ strenuous
production curtailment. Total production
decreased by 15% and our handlingvolume was 11% less than the previous
year. Fortunately, aided by better
relationships established during this year,
we expanded the sales of steel pipes andfabricated products.
For fiscal 2000, we foresee thefollowing.
Demand will stay at almost the samelevel and so suppliers must continue
curtailment. Imports will decrease. Prices
will hit bottom during the first half ofthe year and some items will be priced
higher in the July – September period. A
new distribution system will be
introduced and reshuffling in the market
will be inevitable.
To cope with the situation, we will pay
attention to;
A. Utilizing our inventory facility andfinancial ability
B. Strengthening relationships between
our customers, suppliers and ourselves
for mutual benefits
C. Using our distribution centers more
efficiently
We will further pursue our goals of
expanding sales of value-added products
such as special steel plates andprocessed items, and also sales of pipes
and stainless steel products. Obtaining
new end users is also our target. We will
do our best to achieve sales of ¥180,000
million, a 4% increase in this new year.

Wire Products and Special Steels
All the related fields from construction tomachine tools have sunk in the recession
and demand for our line fell to a very low
level. The total quantity sold by us was
330,000 tons (a 20% decrease) and sales
were ¥21,000 million (a 26% decrease).
In the first half of fiscal 2000, ourcustomers will experience a further dipof the market. But adjustments ofinventory have been completed and they
are now placing orders based on theiractual use. Therefore, we are now
expecting some recovery in our business.
We also expect synergism by the mergerof the Wire Products Department andthe Special Steels Department. We
streamlined sales routes and are now
trying to increase new items by using
combined knowledge. With enlarged
sales power, our sales of both finishedproducts and materials for them will
increase. More imports for new and oldcustomers and aggressive sales in new
areas are our targets.
Learning the needs of customers, andworking out solutions for them, we will
do our best to attain an 8% increase insales quantity and 4% in sales amount.

5

Steelmaking Raw Materials
Our main customers, electric furnacemills, were hardest hit in this recession.
They suffered from less quantity sold atcheaper prices. Reshuffling in theindustry will be inevitable. Steel scrap
recorded its lowest prices ever since theend of the war; 34% less than that ofthe previous year. We barely sold
750,000 tons, (a 15% decrease) and¥14,200 million (a 27% decrease). Of
note this year, were the export of billets
to Taiwan, Korea and Malaysia totaling
45,000 tons and an increase of sales offerro-alloy and light metals imported
from China.
In the new fiscal year, curtailment of
production by the electric furnace mills
will continue. By doubling our efforts to
expand the export of scrap and billet, wemust maintain the level of 750,000 tons
with sales amount of ¥15,500 million.

Non-ferrous Metals
During the first half of fiscal 1999, theAsian recession pulled the world markets
downward despite strong demand in the
U.S.A. and EU. In the latter half, theappreciation of the yen further hurt theJapanese economy. Almost all prices of
items we handle hit historically low
points and we did have a very hard time.
We sold 360,000 tons (a 15% decrease)and sales were ¥44,000 million (a 26%
decrease).
In the new fiscal year, we cannot
expect a sudden recovery in demand,but the worst is over and now we can
expect at least a 10% improvement overthe previous year. The main targets are
expansion of the recycling of aluminum
cans, which will support the future ofthis division, and also promotion of
direct business with mine-operators inAustralia for import of nickel, based on
our investments in their new projects.

Food Products
Positive sales efforts brought us goodresults. We sold 165,000 tons (imports
were 151,000 tons, 4.9% share in Japan)or ¥109,100 million (a 12% increase) insuch a severe market of depressed
consumption and low prices. Relatively
new items, Chinese eel, Moroccan
octopus, and Chilean salmon played very
important roles for this increase of sales.
On the other hand, sales of shrimp fell,
experiencing ups and downs in market
prices due to less supply and fluctuationof the yen. As a whole, we achieved
profit as expected. Profits from all items
except shrimp brought us this result.
In fiscal 2000, we are going to face amuch more severe situation where
demand in Japan will be slack, andsupply is going to be limited because
other consuming countries can pay
higher prices, while resources in theworld are shrinking. Watching changes insupply and demand, and also the trendof the yen, we will try to increase sales of
all items based on a “sale-first” policy. As
to the processed items, we will expand
this line by handling more value-added
and unique items. Our sales goal is¥120,000 million.

6

MachinerySales of amusement rides were a mere¥400 million (a 70% decrease). Becauseof the recession, purse strings weretightened and also new competition
from different types of leisure came into
the picture. The market was very poorand there were a few theme parks thatwent out of business.
Sales of industrial machines were¥2,100 million (a 4% increase).
Continuing sales of pipe cutting
machines, installation of equipment forcold storage and a new sales of laser die
sinking machine contributed to theincrease.
In the new fiscal year, we expect salesof amusement rides will be about¥2,500 million because of Twin Mercury
in Space World, Inc., and the export of
30 rides from a closed park. Sales ofindustrial machines will be ¥2,300
million, consisting of a power-up project
for CO2 lasers in Nippon Steel’s Oita
plant, a laser cutting plate machine, andother steel processing equipment.
Demand for machines is quite scarce,
but we must accomplish our above plan.

Petroleum & Chemicals
The price of crude oil dipped under
U.S. $10 during the latter half of fiscal
1999. Prices of all kinds of oil products
continuously declined. To keep market
share, refineries increased production.
Supply always surpassed demand andthe market remained slack. Under thesecircumstances, we increased sales
quantity by 20% to 2,217,000 kl, but
the sales amount decreased by 6% to¥30,081 million due to low prices.
We expanded sales of chemicals byoverseas trades and sales of paper byobtaining new supply sources.
The total sales of petroleum andchemicals were ¥33,265 million (a 6%decrease).
For the new fiscal year, our aim is forsales of ¥33,900 million (2% increase).
Our policy is “profit-first” and “positive
attack to new products.” Adapting torapid changes both in the domestic andoverseas markets, we must reach out for
new business opportunities.

Lumber
The total quantity sold was 420,000 m3,
a 20% increase over the previous year,
but the sales amount was ¥17,500
million (only a 4% increase). Sales of
U.S. lumber were 183,000 m3 (14%increase), Northern European lumber
sales were 106,000 m3 (6% increase)and plywood and veneer sales were131,000 m3 (a major increase of 46%).
The reasons for this success were:
A. Sales of Northern European lumber
have expanded steadily with ouraccumulated experience. We enjoyeda good profit.
B. Because the sole importer ofIndonesian veneer lost steam after thecollapse of the Suharto regime, westarted handling Indonesian plywood.
The big expansion in sales of plywood
and veneer was a result of this new
business.
C. Fortunately, we were not involved inany bankruptcy of customers.
D. Our competitors’ presence dwindled
in this business, and we increased oursales by 4%, although prices were
30% lower than those of theprevious year.

7

In fiscal 2000, housing starts will
increase by 10 – 15% to 1.2 – 1.3 million.
We will continue to take an aggressive
stance in purchases and sales and haveset a sales goal of ¥24,000 million, a
37% increase.

Topics

By this, we expect we can firmly
establish our-selves as a leading trading
firm who can assume full responsibility
in supervising such aspects of theconstruction business as the supply of
quality materials, punctual delivery ofeach section, and safety in erection andso on.This may be an additional service
to our general contractor customers.
Ningbo Baoxin Stainless Steel Co., Ltd.
Ningbo Baoxin Stainless Steel Co., Ltd.,in China, our joint venture with Nisshin
Steel and Shanghai Baosteel Group
Corporation, started rolling stainlesssteel cold sheets. This is the first mill of
this kind in China with the state-of-theart equipment. Our total investment
amounted to ¥1,023 million.In the firstyear, estimated production will be
80,000 tons and within 4 – 5 years, itwill be increased to 160,000 tons after
completion of the second stage of the
expansion program.
By serving the needs of end-users of
stainless steel sheet in China withquality products at competitive prices,
we expect we can further strengthen
our sales of stainless steel products.
Hanwa Safety Conference
Our Tokyo and Osaka Head Offices andNagoya Branch Office formed “Hanwa
Safety Conference”, individually with

their respective steel fabricators withthe aim of realizing a safer work
environment at each construction site.

8

The Year 2000 Problem
This is a serious problem and we haveestablished a special meeting
consisting of representatives from all
our offices over the world. We can
now say that all basic problems havebeen solved and by the end of
September 1999, we can complete allnecessary adjustments. A manual has
been worked out to cope with thisproblem, and a group of troubleshooters are ready to react to any
unforeseeable situation.

Financial Section

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

HANWA CO., LTD. AND CONSOLIDATED SUBSIDIARIES

Consolidated Balance Sheets
March 31, 1999 and 1998

Thousands of
U.S. dollars (Note 1)

Millions of yen

Assets1999

Current assets:
Cash and cash equivalents
Marketable securities (Notes 3 and 5)
Receivables:
Trade notes and accounts:
Unconsolidated subsidiaries and affiliates
Other
Loans:
Unconsolidated subsidiaries and affiliates
Other
Allowance for doubtful receivables
Inventories
Other current assets
Total current assets

1998

1999

1998

¥ 42,898
7,805¥ 32,352 $ 355,852 $ 268,370
15,08564,745125,135947
129,378630
143,618

7,856
1,073,231

5,226
1,191,356

3,497
146
(484)
31,42723,015
238,629

349
3,536(1,233)36,79724,150255,284

29,0091,211(4,015)
260,697
190,916
1,979,502

2,895
29,332(10,228)
305,243
200,332
2,117,661

Investments and non-current receivables:
Investment securities (Note 5):
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

809
63,144566
78,0106,711
523,799

4,695
647,117

1,428
7,359
17,874(1,511)
89,103837
7,669
18,902(1,081)
104,903

11,846
61,045148,270(12,534)
739,137

6,943
63,617
156,798(8,967)870,203

Property and equipment (Note 5):Land
Buildings and structures
Other
Accumulated depreciation
Total property and equipment

13,18622,351
8,555(14,348)
29,744

13,21022,3688,112(13,241)
30,449109,382
185,40970,966(119,021)
246,736

109,581
185,550
67,291(109,838)
252,584

Intangibles and other assets
Foreign exchange adjustments

32
3,036
¥ 360,544

See accompanying Notes to Consolidated Financial Statements.

10

30
265
249
1,731
25,185
14,359¥ 392,397 $2,990,825 $3,255,056

Thousands of
U.S. dollars (Note 1)

Millions of yen

Liabilities and Stockholders’ Equity

1999

Current liabilities:
Bank loans (Note 4)Long-term debt due within one year (Note 4)
Trade notes and accounts payable:
Unconsolidated subsidiaries and affiliates
Other
Accrued bonuses to employees
Other current liabilities
Total current liabilities
Non-current liabilities:
Long-term debt due after one year (Note 4)
Retirement benefits
Other non-current liabilities
Total non-current liabilities
Minority interest

1998

1999

1998

¥ 118,908
2,472¥ 129,789 $ 986,379 $1,076,640
52,10820,506432,252

161
102,882
1,097
10,591
236,111103
118,261
1,276
9,035
310,572

1,336
853,438
9,100
87,856
1,958,615

855
981,012
10,58574,9482,576,292

81,0591,184
771
83,01437,671
1,184
896
39,751

672,4109,821
6,396
688,627

312,4939,822
7,432
329,747

—

220

—

1,825

Contingent liabilities (Note 6)
Stockholders’ equity (Note 7):
Common stock, par value ¥50 per share
Authorized:650,000,000 shares
Issued: 291,663,200 shares
Additional paid-in capital
Undisposed deficit
Less treasury stock, at cost: 1,941 shares (789 in 1998)
Total stockholders’ equity

113,883
3,590(76,054)—
41,419¥ 360,544

11

113,883
944,695
944,695
9,571
29,78079,394(81,600)(630,892)(676,897)———
41,854
343,583
347,192¥ 392,397 $2,990,825 $3,255,056

HANWA CO., LTD. AND CONSOLIDATED SUBSIDIARIES

Consolidated Statements of Operations
For the years ended March 31, 1999 and 1998

Thousands of
U.S. dollars (Note 1)

Millions of yen

1999

1998

1999

1998

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income¥ 598,568
573,717
24,851
19,526
5,325¥ 664,261 $ 4,965,309 $ 5,510,253
638,188 4,759,162
5,293,969
26,073
206,147
216,284
19,617
161,974
162,7296,456
44,17353,555

Other income (expenses):
Interest and dividend income
Interest expense
Gain on sale of property and equipment
Reversal of allowance for doubtful receivables
Loss on write-down of securities
Loss on discontinued operations of foreign subsidiary
Loss on loans receivable
Other, net
Loss before income taxes
Income taxes
Minority interest in income of consolidated subsidiaries
Net loss

8,662(12,540)101
246(1,936)
(389)
—
454
(77)
358
—
¥
(435)

7,917
71,854(9,610)(104,023)
—
838
—
2,041
(4,946)(16,060)—(3,227)(4,646)
—
(351)
3,766
(5,180)
(638)
207
2,970
(1)
—
¥ (5,388) $(3,608) $

Yen

1999

Net loss per share¥

See accompanying Notes to Consolidated Financial Statements.

12(1.49)

65,674(79,718)——(41,029)—(38,540)(2,912)(42,970)1,717(8)(44,695)

U.S. dollars (Note 1)

1998¥ (14.45) $1999(0.012) $1998(0.120)HANWA CO., LTD. AND CONSOLIDATED SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity
For the years ended March 31, 1999 and 1998

Millions of yen

1999

Common stock:
Opening balance
Shares purchased and retired
Closing balance

1998

Thousands of
U.S. dollars (Note 1)

1999

1998

¥ 113,883—¥ 113,883¥ 152,929(39,046)¥ 113,883$ 944,695 $1,268,594—(323,899)$ 944,695 $ 944,695

¥

9,571
—
(5,981)¥ 3,590¥—
12,733(3,162)¥ 9,571$ 79,394 $——
105,624(49,614)(26,230)$ 29,780 $ 79,394

Undisposed deficit:
Opening balance
Transfer from additional paid-in capital
Net loss
Closing balance¥ (81,600)
5,981
(435)
¥ (76,054)¥ (79,374)
3,162(5,388)¥ (81,600)$(676,898) $ (658,432)
49,614
26,230(3,608)(44,695)$(630,892) $ (676,897)

Number of shares of common stock issued (thousands):
Opening balance
Shares purchased and retired
Closing balance

291,663—291,663391,663(100,000)
291,663

Additional paid-in capital:
Opening balance
Shares purchased and retired
Transfer to undisposed deficit
Closing balance

See accompanying Notes to Consolidated Financial Statements.

13

HANWA CO., LTD. AND CONSOLIDATED SUBSIDIARIES

Consolidated Statements of Cash Flows
For the years ended March 31, 1999 and 1998

Thousands of
U.S. dollars (Note 1)

Millions of yen

1999

Cash flows from operating activities:
Net loss
Adjustments to reconcile net loss to net cash
provided by operating activities
Depreciation
Gain on sale of property and equipment
Loss on write-down of securities
Loss on loans receivable
Decrease in trade receivables
Decrease in inventories
Decrease in other current assets
Decrease in trade notes and accounts payable
Increase (decrease) in other current liabilities
Decrease in allowance for doubtful receivables
Other, net
Net cash provided by operating activities

¥

1998

1999

1998

(435)

¥ (5,388) $(3,608) $ (44,695)

1,443
(101)
1,936
—
13,9475,370
1,135(15,321)
1,463
(320)
(1,143)
7,974

1,217
—
4,946
4,646
20,919216
2,291(9,215)(3,384)(331)
92
16,00911,970(838)
16,060—115,695
44,546
9,415(127,092)
12,136(2,655)(9,482)
66,147

10,095—41,02938,540173,530
1,792
19,004(76,441)(28,071)(2,746)763
132,800

Cash flows from investing activities:
Additions to property and equipment
Proceeds from sale of property and equipment
Additions to securities
Proceeds from sale of securities
Additions to loans receivable
Repayment of loans receivable
Other, net
Net cash provided by investing activities

(994)
272
(1,939)22,721(4,438)4,358
1,026
21,006(1,407)359(2,134)35,312(39,509)
49,0782,557
44,256(8,246)2,256(16,085)
188,478(36,815)
36,151
8,511
174,250(11,671)
2,978(17,702)292,924(327,740)
407,117
21,211
367,117

Cash flows from financing activities:
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(10,881)
47,968(54,216)—(17,129)(70,625)
25,350(11,232)(26,313)(82,820)(90,261)
397,910(449,739)—(142,090)(585,856)
210,286(93,173)(218,275)(687,018)

Effect of foreign exchange adjustments
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

(1,305)
10,54632,352¥ 42,898

2,587(10,825)
21,460(19,968)
87,482(165,641)
52,320268,370434,011¥ 32,352 $ 355,852 $ 268,370

Supplemental cash flow information
Cash paid during the year for:
Interest
Income taxes¥ 12,682(691)¥

See accompanying Notes to Consolidated Financial Statements.

14

9,303
826

$ 105,201 $ 77,171(5,732)6,852

HANWA CO., LTD. AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements

1. Basis of financial statements
The Company, a Japanese corporation, maintains its records
and prepares its financial statements in Japanese yen. The
accompanying consolidated financial statements have beentranslated from the financial statements that are prepared inJapanese, in accordance with the provisions of the Securities
and Exchange Law of Japan and filed with the Minister ofFinance of Japan and stock exchanges in Japan. Certain
modifications, including presentation of the statements ofstockholders’ equity and cash flows, have been made in theaccompanying financial statements and notes to facilitate
understanding by non-Japanese readers. No change has been
made in the application of accounting policies.

The financial statements are stated in Japanese yen. The
translations of the Japanese yen amounts into U.S. dollars areincluded solely for the convenience of the reader, using theprevailing exchange rate at March 31, 1999, which was¥120.55 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 ofexchange.

2. Significant accounting policies
Consolidation — The consolidated financial statements
include the accounts of the Company and its four (five in 1998)
significant subsidiaries. The accounts of three foreignsubsidiaries are included at their respective fiscal years ending
the last day of February. Necessary adjustments for significant
transactions occuring between the last day of February andMarch 31 have been made in the preparation of theconsolidated financial statements.
Intercompany transactions and accounts have been
eliminated. The difference between the cost of investments inconsolidated subsidiaries and the equity in their net assets at
dates of acquisition is amortized over five years.
Allowance for doubtful receivables — The allowance for
doubtful receivables of the Company and its domestic
consolidated subsidiary is provided in amounts sufficient tocover possible losses on collection. Pursuant to the change in the
Corporation Tax Law effective from the year ended March 31,
1999, the Company and its domestic consolidated subsidiary
adopted the policy of providing the allowance for doubtfulreceivables in an amount sufficient to cover possible losses oncollection by estimating individually uncollectible amounts andapplying a percentage based on collection experience to theremaining accounts. The Company and its domestic
consolidated subsidiary previously provided the allowance using
the formula provided by the Corporation Tax Law.
The effect of this change was to decrease loss before
income taxes by ¥470 million ($3,899 thousand). The allowancefor doubtful receivables of foreign consolidated subsidiaries isdetermined based upon estimates of management in amounts
sufficient to cover possible collection losses.
Cash and cash equivalents — The Company considers cash
and time deposits (with maturities of one year or less) to be
cash and cash equivalents. Such time deposits may be
withdrawn on demand without diminution of principal.

Securities — Marketable equity securities in both current
assets and investments are stated at the lower of moving
average cost or market value. Commencing with the year
ended March 31, 1999, the Company and its domestic
consolidated subsidiary record recoveries of write-downs of
securities in accordance with a revision in the Corporation Tax
Law. There was no effect on net income resulting fromadopting this accounting policy. Cost and market value arecompared on an item-by-item basis. Other securities, including
investments in unconsolidated subsidiaries and affiliates, arestated at moving average cost. If the value of any such security
declines below carrying value and the decline is judged to bematerial and other than temporary, the book value of suchsecurity is written down.
Dividend income is recognized when declared. Interest
income is recognized on an accrual basis.
Inventories — Inventories are principally stated at the lower ofcost or market value. Cost is principally determined by the lastin, first-out method.
Property and equipment — Property and equipment are
carried at cost. Depreciation is principally provided on the
declining balance method over estimated useful lives. Effective
April 1, 1998, in accordance with revisions of the Corporation
Tax Law, the Company and its domestic consolidated subsidiary
shortened the estimated useful lives of buildings, excluding
building fixtures. The effect of this change was to increase loss
before income taxes by ¥95 million ($788 thousand). Major
renewals and improvements are capitalized. Maintenance,
repairs and minor renewals are expensed as incurred.

15

Bonuses — The Company and its domestic consolidated
subsidiary follow the Japanese practice of paying bonuses to
employees in June and December. As at the balance sheet date,the bonus 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 — Income taxes are provided for on the basis ofamounts currently payable for each period. Deferred income
taxes pertaining to timing differences between financial and tax
reporting purposes are not recognized.
Retirement benefits — Substantially all employees of theCompany and its domestic consolidated subsidiary are coveredby qualified funded pension plans. The amount of the retirement benefit is, in general, based on length of service, basesalary at the time of retirement, and cause of retirement.
Annual contributions, which consist of normal cost and amortization of prior service cost are charged to income when paid.

Translation of foreign currencies — Cash and cash
equivalents, current receivables, and current payables,
denominated in foreign currencies, are translated at year-end
rates except for those covered by forward exchange contracts
and those for which the Company has a firm intention tocontinue to use to offset the effect of foreign currency
fluctuations on non-current items.
Other foreign currency assets and liabilities are translated athistorical rates except for the recognition of material unrealized
losses.
Foreign currency financial statements are translated at yearend rates, except for certain intercompany accounts for which
the rate used by the Company is applied. Resulting translation
adjustments are reflected in the consolidated financial
statements as “Foreign exchange adjustments.”
Finance leases — Finance leases which do not transfer ownership and do not have bargain purchase provisions are accounted for in the same manner as operating leases in accordancewith generally accepted accounting principles in Japan.
Net loss per share — Computations of net loss per share ofcommon stock are based on the weighted average number ofshares outstanding during each period.

Directors and statutory auditors are not covered by theseplans. 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
to directors and statutory auditors upon retirement are subject
to the approval of stockholders.
Foreign consolidated subsidiaries of the Company havefunded pension plans providing basically lump-sum payments.

16

3. Marketable securities
Marketable securities at March 31, 1999 and 1998, were as follows:
Thousands of
U.S. dollars

Millions of yen

Marketable equity securities
Bonds and other securities

1999

1998

1999

1998

¥ 6,105
1,700¥ 7,805¥ 9,212
5,873¥ 15,085$ 50,643
14,102$ 64,745$ 76,417
48,718$ 125,135

4. Bank loans and long-term debt
0.68% to 6.19% and from 1.10% to 7.17%, respectively.

Bank loans at March 31, 1999 and 1998, were represented
principally by short-term notes bearing interest at rates from

Long-term debt at March 31, 1999 and 1998, consisted of the following:Thousands of
U.S. dollars

Millions of yen

SFr. floating rate bonds due 2000
Loans from banks and insurance companies, bearing interest,
at March 31, 1999 and 1998, from 0.80% to 7.65% andfrom 1.36% to 7.65%, respectively,
maturing serially through 2004
Less amounts due within one year

The SFr. floating rate bonds due 2000 bear interest at 1⁄8%over the six-month Swiss Franc LIBOR determined semi-annuallyand payable semi-annually in arrears. The rate of interest of thebonds at March 31, 1999, is 3% per annum. In no event shallthe rate of interest be less than 3% or more than 8% perannum. The bonds are redeemable, commencing on September
12, 1990, at the option of the Company at prices ranging from
101% to 100% of the principal amount.

1999

1998

1999

1998

¥ 12,806¥ 12,806$ 106,230$ 106,230

70,72583,531
2,472¥ 81,059

76,97389,77952,108¥ 37,671

586,686
692,916
20,506$ 672,410

638,515
744,745432,252$ 312,493

The annual maturities of long-term debt outstanding at
March 31, 1999, were as follows:

Years ending March 31
Millions of yen

2000
2001
2002
2003
2004

17

¥ 2,472
77,727
1,692
1,120
520
¥ 83,531

Thousands of
U.S. dollars$ 20,506
644,770
14,0369,291
4,313$ 692,916

5. Assets pledged as collateral
At March 31, 1999 and 1998, assets pledged as collateral for
short-term bank loans of ¥— million ($— thousand) and¥10,692 million ($88,693 thousand) and long-term bank loansof ¥41,600 million ($345,085 thousand) and ¥47,600 million($394,857 thousand) respectively, and guarantees were as
follows:
Thousands of
U.S. dollars

Millions of yen

Marketable securities
Investment securities
Property and equipment, net of accumulated depreciation

1999

1998

¥ 5,283—
13,824¥ 19,107¥ 5,684
14,512
14,472¥ 34,668

1999

1998

$ 43,824—
114,674$ 158,498$ 47,150
120,382
120,050$ 287,582

6. Contingent liabilities
At March 31, 1999 and 1998, the Company and its consolidated subsidiaries were contingently liable as follows:
Thousands of
U.S. dollars

Millions of yen

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

1999

1998

1999

1998

¥ 2,710
4,081¥ 8,300
4,293$ 22,480
33,853$ 68,851
35,612

7. Stockholders’ equity
Common stock — The Company reduced its capital by¥39,046 million ($323,899 thousand) by purchasing andretiring 100 million shares of common stock of the Company
on January 23, 1998. The capital reduction was approved at an
extraordinary general meeting of shareholders of the Company
held on December 15, 1997.
Additional paid-in capital — The Commercial Code of Japan
provides that the entire issue price of shares must be credited

to common 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
to at 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 tocommon stock by resolution of the Board of Directors, but is
not available for distribution as dividends.

18

8. Leases
Finance leases
As lessee
Total lease payments, including financing charges, under financeleases that do not transfer ownership of the leased property to
the Company for the years ended March 31, 1999 and 1998

were ¥628 million ($5,209 thousand) and ¥633 million ($5,251
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

Acquisition
cost

Other property and equipment
Other investments
Total¥ 2,89196¥ 2,987

do not transfer ownership of the leased property to the lessee on
an “as if capitalized” basis for the year ended March 31, 1999
were as follows:
Millions of yen
Accumulated
depreciation¥ 1,28523¥ 1,308

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

Net leased
property¥ 1,60673¥ 1,679

Acquisitioncost$ 23,982
796$ 24,778

Thousands of U.S. dollars
Accumulated
depreciation$ 10,659
191$ 10,850

Net leased
property$ 13,323
605$ 13,928

was ¥563 million ($4,670 thousand) for the year ended of March
31, 1999.

Obligations, excluding financing charges, under such non-capitalized finance leases as of March 31, 1999 and 1998 were as follows:
Thousands of
U.S. dollars

Millions of yen

Due within one year
Due after one year

1999

1998

1999

1998

¥

¥

$ 4,264
10,253$ 14,517$ 4,521
14,409$ 18,930

514
1,236¥ 1,750545
1,737¥ 2,282

As lessor
Lease payments, excluding financing charges, to be received under finance leases as of March 31, 1999 and 1998 were as follows:
Thousands of
U.S. dollars

Millions of yen

1999

Due within one year
Due after one year

¥
¥

1998

37
159
196

¥
¥

33
208
241

1999

1998

$

$

307
1,319
$ 1,626

274
1,725$ 1,999

Operating leases
Obligations under operating leases as of March 31, 1999 and 1998 were as follows:
Thousands of
U.S. dollars

Millions of yen

1999

Due within one year
Due after one year

¥
¥

19

1998

35
188
223

¥
¥

35
238
273

1999

1998

$

$

290
1,560
$ 1,850290
1,974$ 2,264

9. Segment information
Industry segment information
The Company’s and its subsidiaries’ operations are classified
into four 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
Other business: Machinery, petroleum and chemicals, lumber
and other

Segment information by business category for the years ended March 31, 1999 and 1998, is as follows:Year ended March 31, 1999
Steel

Non-ferrous
metalsFoods

Millions of yen
Otherbusiness

Total

Corporate

Consolidated

Net sales
Costs and expenses
Operating income¥ 380,178
374,316¥ 5,862¥ 43,999
43,145¥854¥ 110,910
109,819¥ 1,091¥ 63,481
61,889¥ 1,592¥ 598,568
589,169¥ 9,399¥—
4,074¥ (4,074)¥ 598,568
593,243¥ 5,325

AssetsDepreciation
Capital expenditure¥ 142,815
1,217
847

¥ 10,661
46
44¥ 29,782
37
32¥ 16,738
45
39¥ 199,996
1,345
962

¥ 160,548
98
82¥ 360,544
1,443
1,044

Total

Corporate

Consolidated

Year ended March 31, 1999

Thousands of U.S. dollars
Other
business

Steel

Non-ferrous
metalsFoods

Net sales
Costs and expenses
Operating income$ 3,153,696
3,105,068$ 48,628$ 364,985
357,901$ 7,084$ 920,033
910,983$ 9,050$ 526,595 $ 4,965,309 $
513,389 4,887,341$ 13,206 $ 77,968 $AssetsDepreciation
Capital expenditure$ 1,184,695
10,095
7,026$ 88,436
382
365$ 247,051
307
265$ 138,847 $ 1,659,029 $ 1,331,796 $ 2,990,825
373
11,157813
11,970
324
7,980
680
8,660

20

— $ 4,965,309
33,795 4,921,136(33,795) $ 44,173

Year ended March 31, 1998
Steel

Non-ferrous
metalsMillions of yen
Otherbusiness

Foods

Total

Corporate

Consolidated

Net sales
Costs and expenses
Operating income¥ 437,303
431,165¥ 6,138¥ 59,913
58,842¥ 1,071¥ 100,881
97,916¥ 2,965¥ 66,164
65,220¥ 944¥ 664,261
653,143¥ 11,118

¥

—
4,662
¥ (4,662)¥ 664,261
657,805¥ 6,456

AssetsDepreciation
Capital expenditure¥ 162,421
1,044
1,118

¥ 13,815
31
111¥ 27,427
32
83¥ 13,324
43
90¥ 216,987
1,150
1,402

¥ 175,410
67
185¥ 392,397
1,217
1,587

Total

Corporate

Consolidated

Year ended March 31, 1998
Steel

Non-ferrous
metalsThousands of U.S. dollars
Other
business

Foods

Net sales
Costs and expenses
Operating income$ 3,627,565
3,576,648$ 50,917$496,997
488,113$ 8,884$ 836,840
812,244$ 24,596$548,851 $ 5,510,253 $541,020 5,418,025$ 7,831 $ 92,228 $— $ 5,510,253
38,673 5,456,698(38,673) $ 53,555

AssetsDepreciation
Capital expenditure$ 1,347,333
8,660
9,274

$114,600
257
921$ 227,515
265
688$110,527 $ 1,799,975 $1,455,081 $ 3,255,056
357
9,539
556
10,095747
11,630
1,535
13,165

Corporate costs and expenses mainly consist of expenses of
the administrative department.

Corporate assets mainly consist of marketable securities,
investment securities and assets of administrative departments.

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, 1999
Asia

Overseas net sales
Percentage of consolidated net sales¥ 49,874
8.3%

Year ended March 31, 1998
Asia

Overseas net sales
Percentage of consolidated net sales¥ 63,302
9.5%

Millions of yen
Other
areas

¥ 36,487
6.1%
Millions of yen
Other
areas

¥ 19,096
2.9%

Total

¥ 86,361
14.4%

Total

¥ 82,398
12.4%

Asia

Thousands of U.S. dollars
Other
areas

Total

$ 413,720$ 302,671$ 716,391

Asia

Thousands of U.S. dollars
Other
areas

Total

$ 525,110$ 158,407$ 683,517“Asia” consists principally of sales to China and Thailand.
“Other areas” consist principally of sales to U.S.A. and Saudi Arabia.

10. Subsequent event
On June 29, 1999, the Company’s shareholders approved theacquisition and retirement of up to 80 million outstanding

shares of its common stock for a total amount not to exceed¥31,237 million ($259,121 thousand).

21

Report of Independent Public Accountants

To the Shareholders 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, 1999 and 1998, and the related
consolidated statements of operations, shareholders’ equity and cash flows for the years
then ended, expressed in Japanese yen. Our audits were made in accordance with generally
accepted auditing standards 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, 1999
and 1998, and the consolidated results of their operations and their cash flows for the years
then ended in conformity with accounting principles generally accepted in Japan applied ona consistent basis.
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 29, 1999

(Member Firm of Andersen Worldwide SC)

Statement on Accounting Principles and Auditing Standards
This statement is to remind users that accounting principles and auditing standards andtheir application in practice may vary among nations and therefore could affect, possibly
materially, the reported financial position and results of operations. The accompanying
financial statements are prepared based on accounting principles generally accepted inJapan, and the auditing standards and their application in practice are those generally
accepted in Japan. Accordingly, the accompanying financial statements and the auditors’
report presented above are for users familiar with Japanese accounting principles, auditing
standards and their application in practice.

22

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
BeijingShanghai
Guangzhou
DongguanTaipei
Kaohsiung
Hong Kong
Bangkok
Kuala Lumpur
Singapore
Tawau
JakartaBombayTehranKuwaitRiyadhJeddahLas 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
37, Santa Comba Irvine,California 92606 U.S.A.
1-949-552-6209
1-949-552-6031
Suite 1002, 777 West Broadway Vancouver, British Columbia, V5Z4J7, Canada
1-604-876-1175
1-604-876-1085
Carrera 11 No. 86-32, Oficina 604 Apartado Aereo No. 093260 Santafe De 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 905/906,Aetna Tower,No.107 Zhunyi Road, Shanghai 200335, P.R.China
86-21-6237-5260/5265~7 86-21-6237-5268/5269
Unit 1709,17th Floor, Peace World Plaza, 362-366 Huan Shi Road East, Guangzhou,510060,P.R. China
86-20-8384-3885
86-20-8384-8875
Longxi Industrial Zone,Zhouxi Management Area,Huangcun District,Dongguan City,Guangdong Province P.R.China 511715
86-769-240-6428
86-769-240-6448
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
Unit 3201-3 32nd Floor, Vicwood Plaza, 199 Des Voeux Road Central, Hong Kong852-25450110
852-25422544
19th 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
60-3-238-2311
60-3-238-2380
20 Cecil Street, #11-02 The 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, Bombay 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.
44-171-839-4448
44-171-839-3994●London●Vancouver
Seattle ●●Teheran●Las Palmas●Kuwait●Riyadh●JeddahBeijing ●Guangzhou
Dongguan●Bombay●

California ●Shanghai●●●●●Taipei●Kaohsiung●Bangkok

Kuala Lumpur ●Singapore ●●New York

Seoul●HoustonHong Kong●Tawau●Bogota●Jakarta

23

Directors and Statutory Auditors

President

Shuji Kita

北

修爾

新谷

洋

中林

満之

嘉本

隆行

休井

匡

Senior Managing Director

Hiroshi Shintani
Managing Directors

Mitsuyuki Nakabayashi
Takayuki Kamoto
Takashi Kyui
Shozaburo Bando
Kunio Matsuda

坂東祥三郎
松田

邦雄

北

二郎

増田

実

熊谷

勝年

加地

一道

横田

和夫

天尾

正臣

山崎

達之

大本

博

花房

伯行

古川

弘成

北村

信輔

喜福

稔

Directors

Jiro Kita
Minoru Masuda
Katsutoshi Kumagai
Kazumichi Kaji
Kazuo Yokota
Masaomi Amao
Tatsuyuki Yamasaki
Hiroshi Omoto
Noriyuki Hanafusa
Hironari Furukawa
Shinsuke Kitamura
Statutory Auditors

Minoru Kifuku
Tomotaro Kaneko
Kazushi Higashida
Takao Ikematsu

金子知太郎
東田

和四

池松

孝雄

24

Investor Information(As of March 31, 1999)

Company Name
Hanwa Co., Ltd.

阪和興業株式会社

Date of Establishment
April 1947
Stated Capital¥113,883 million ($944,695 thousand)Number of Shares of Common Stock Issued
291,663,200 shares
Number of Shareholders
28,932
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
1,219http: // www.hanwa.co.jp

Printed in Japan