SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 20-F
(Mark One)

[ ]  REGISTRATION  STATEMENT  PURSUANT  TO  SECTION  12(b)  OR  12(g)  OF THE
     SECURITIES EXCHANGE ACT OF 1934 [Fee Required]

     ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934 [Fee Required]

                   For the Fiscal Year Ended December 31, 2001

[ ]  TRANSITION  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
     EXCHANGE ACT OF 1934 [No Fee Required]

        For the transition period from ______________ to _______________.

                           Commission File No. 0-25108

                               IWI HOLDING LIMITED
              ----------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

                             British Virgin Islands
                  ---------------------------------------------
                 (Jurisdiction of Incorporation or Organization)

   P.O. Box 3340, Dawson Building, Road Town, Tortola, British Virgin Islands
   ---------------------------------------------------------------------------
                     Address of Principal Executive Offices


Securities Registered Pursuant to Section 12(b) of the Act:

          Title of Each Class         Name of Each Exchange on Which Registered
                None                                  None

Securities Registered Pursuant to Section 12(g) of the Act:

                           Common Stock, no par value
                           --------------------------
                                (Title of Class)

Securities for which there is a reporting  obligation  pursuant to Section 15(d)
of the Act:

                                      None
                                -----------------
                                (Title of Class)

     As of April 1, 2002,  the Registrant had  outstanding  2,554,700  shares of
Common Stock and 3,644,880 shares of Preferred Stock.

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Exchange Act during the past
twelve (12) months (or for such shorter  period that the registrant was required
to file such reports);  and (2) has been subject to such filing requirements for
the past ninety (90) days. Yes X No ___

         Indicate by check mark which  financial  statement  item the registrant
has elected to follow.

         Item 17      Item 18   X
                 ----         ------

<PAGE>


                                TABLE OF CONTENTS

                                                                            Page
PART I

         ITEM 1.  DESCRIPTION OF BUSINESS...................................  3
         ITEM 2.  DESCRIPTION OF PROPERTY...................................  5
         ITEM 3.  LEGAL PROCEEDINGS ........................................  6
         ITEM 4.  CONTROL OF REGISTRANT.....................................  6
         ITEM 5.  NATURE OF TRADING MARKET..................................  7
         ITEM 6.  EXCHANGE CONTROLS AND OTHER
                  LIMITATIONS AFFECTING SECURITY
                  HOLDERS...................................................  7
         ITEM 7.  TAXATION..................................................  7
         ITEM 8.  SELECTED CONSOLIDATED FINANCIAL DATA......................  8
         ITEM 9.  MANAGEMENT'S DISCUSSION AND ANALYSIS
                  OF FINANCIAL CONDITION AND RESULTS OF
                  OPERATIONS................................................  9
         ITEM 10. DIRECTORS AND OFFICERS OF REGISTRANT...................... 12
         ITEM 11. COMPENSATION OF DIRECTORS AND OFFICERS.................... 13
         ITEM 12. OPTIONS TO PURCHASE SECURITIES FROM
                  REGISTRANT OR SUBSIDIARIES................................ 14
         ITEM 13. INTEREST OF MANAGEMENT IN CERTAIN
                  TRANSACTIONS.............................................. 14

PART II

         ITEM 14.DESCRIPTION OF SECURITIES TO BE REGISTERED................. 14


PART III

         ITEM 15.DEFAULTS UPON SENIOR SECURITIES............................ 15
         ITEM 16.CHANGES IN SECURITIES AND CHANGES IN
                 SECURITY FOR REGISTERED SECURITIES......................... 15

PART IV

         ITEM 17.FINANCIAL STATEMENTS....................................... 15
         ITEM 18.FINANCIAL STATEMENTS....................................... 15
         ITEM 19.FINANCIAL STATEMENTS AND EXHIBITS.......................... 16

SIGNATURES.................................................................. 21


<PAGE>

                                     PART I


ITEM 1.  DESCRIPTION OF BUSINESS

         This report contains  forward-looking  statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of Securities Exchange
Act of 1934.  Actual results could differ materially from those projected in the
forward-looking  statements  as a result of the risks which the  Company  cannot
foresee.  Such  risks  include,  but are not  limited to an  economic  turndown,
changes in government  policies,  financial  difficulty  with or loss of a major
customer or interruption in supplies.

General

         The Company, through its wholly-owned subsidiary,  Imperial World, Inc.
("Imperial"),  is engaged in the design,  assembly,  merchandising and wholesale
distribution  of  jewelry.  The Company  provides a broad  range of  fashionable
jewelry targeted at consumers who seek fine jewelry at moderate prices for every
day wear. These customers are likely to purchase  jewelry at frequent  intervals
as fashions and styles  change.  The majority of the  Company's  U.S.  sales are
under the trade name of "World  Pacific  Jewelry".  Customers of the Company are
principally large retail  establishments with jewelry departments and mass media
marketers.

Products and Pricing


         The  Company's  principal  products  are  rings,  earrings,   pendants,
bracelets  and necklaces  made of diamonds,  precious or  semi-precious  stones,
pearls,  silver and gold in  addition  to the more  moderately  priced  gold and
silver jewelry.  The Company's  products are currently sold in over 7,000 retail
outlets.  For  the  majority  of  products,   the  average  wholesale  price  is
approximately $65 with the prices ranging from approximately $20 to $500.

Purchasing

         The Company  imports most of its jewelry from the People's  Republic of
China ("PRC") and Hong Kong.  Approximately  25% of the  Company's  products are
sourced in the U.S.  Fresh water and cultured  pearls are imported  from the PRC
and Hong Kong.  The  imported  pearls are  assembled by the Company into various
pearl jewelry products. The Company purchases jewelry from a number of suppliers
based on quality, pricing and available quantities.

         Although  purchases of material are made from a relatively small number
of suppliers,  the Company believes there are numerous  alternative  sources for
all materials,  and that the failure of any principal  supplier would not have a
material adverse effect on operations or the Company's financial condition.  The
Company  believes it has good relations  with its  suppliers,  most of whom have
supplied  the  Company  for many years.  The  Company  has not  experienced  any
difficulty in securing product.

Manufacturing and Assembly


         Since the Company  imports  most of its jewelry in an  assembled  state
from suppliers in the PRC and Hong Kong,  manufacturing and assembly  operations
conducted by the Company are primarily limited to designing jewelry and assembly
of pearl products. Upon completing a design, the Company provides such design to
its  suppliers,  who will purchase the raw  materials,  such as diamonds,  other
precious stones, gold and silver, and manufacture the product or subcontract for
its  manufacture.  The use of third party  manufacturers  enables the Company to
shift the risk and capital cost of manufacturing.
                                       3
<PAGE>

         The Company maintains a light  manufacturing and assembly  operation in
the United  States for the  stringing  of pearls.  This  enables  the Company to
assemble pearls  specifically  to customer order and to provide  shipment within
two days of the order date.

Marketing

         The primary  marketing  efforts are product design and customer support
services.  The products are sold, for the most part,  through  independent sales
representatives  on a commission  basis and by in house sales  personnel.  While
such independent  representatives may also sell other products, they do not sell
products  which  compete  with those of the  Company.  The Company  supports the
independent  representatives  with internal account  executives who have selling
and account management responsibilities.

Customers

         The  Company's   customers  consist  of  jewelry  retail  stores,  mass
merchandisers,  such as Wal-Mart Stores,  Inc.,  department stores, such as J.C.
Penney Company,  Inc.,  national jewelry chains,  catalog  showrooms and various
specialty markets including The Home Shopping Network,  Inc. The Company derived
approximately  38%,  21% and 18% of its net sales  from three  customers  during
2001. The Company has no long-term  contracts with any customers,  however,  the
core of each of its large volume  purchasers  have been  customers  for at least
five years.  The following  table sets forth the  approximate  percentage of net
sales for the major market segments for the periods indicated.

                                                  Year Ended December 31,

                                            1999         2000        2001
                                            ----         ----       ------

Jewelry retail stores.................       5.8  %       5.2  %      3.2  %
Specialty markets.....................      11.2         20.9        22.1
Mass merchandisers....................       4.0          8.0        22.3
Department stores.....................      57.5         49.8        41.7
National jewelry chains...............      20.7         14.9         9.9
Catalog showrooms.....................       0.8          1.2         0.8
                                            ----          ---        ----
      Total...........................     100.0  %     100.0  %    100.0  %
                                           =====        =====       =====

Competition

         The jewelry  industry in the United States is highly  fragmented,  with
little  significant  brand name  recognition or consumer  loyalty.  Selection is
generally  a function  of design  appeal,  perceived  high value and  quality in
relation to price.

         Jewelry  stores alone  account for an  estimated  $25 billion in annual
sales in the United States. Retail jewelry sales have historically  increased at
a  rate  in  excess  of  the  inflation   rate.  This  increase  is  principally
attributable  to the growth in the number of dual  working  households  which in
turn has increased the amount of disposable  income for women, the largest group
of jewelry  purchasers.  The rise in number of women in the workforce as well as
strong  economic  conditions  have  increased  the demand for  women's  business
attire, including jewelry.

         While  many  competitors  may have a wider  selection  of  products  or
greater financial  resources,  the Company believes its competitive  position is
enhanced by its information system,  performance and its close relationship with
its customers and vendors.  Therefore,  although the competition is intense, the
Company believes it is well positioned in the jewelry industry.

Employees

As of March 1,  2002,  the  Company  had 52  employees,  including  2  executive
officers, 5 persons in sales and merchandising, 35 persons in operations, and 10
persons in  administrative  and  support  functions.  None of the  employees  is
governed by a collective  bargaining  agreement  and the Company  considers  its
relations with its employees to be satisfactory.

                                       4
<PAGE>

ITEM 2.  DESCRIPTION OF PROPERTY

         The Company  maintains its  registered  offices in the BVI; the Company
leases  approximately  13,000  square  feet of space  for  operations  and pearl
assembly  in  Westmont,  Illinois.  Under the 10 year lease which  commenced  in
November,  1993,  and modified in November  1998,  future  minimum  annual lease
payments range from approximately $125,000 to $133,000. At the expiration of the
lease,  the Company has the option to renew for an  additional  five years.  The
facility, which provides state of the art security, was designed to maximize the
efficiency of the Company's current  operations and to provide for the Company's
anticipated growth.

ITEM 3.  LEGAL PROCEEDINGS

         In September 1996,  Robert J. Rosen filed a class action lawsuit in the
Supreme  Court  in  the  state  of  New  York  alleging   claims  of  fraudulent
misrepresentations by IWI Holding Limited and some Company officers, accountants
and lawyers in connection with the Company's initial public offering on December
16, 1994, and in connection with the  dissemination of financial data therafter.
The Plaintiff  claims  damages on behalf of the class in excess of  $11,000,000,
which  allegedly  resulted  from a decline of the market value of the  Company's
common stock after the initial public offering.

         The parties reached an agreement in principal to settle the claim for a
significantly  lesser  amount,  which was accrued as of December 31,  1999.  The
settlement agreement is subject to court approval and the Company may decline to
proceed with the agreement if a significant number of class members "opt out" of
the settlement.

ITEM 4.  CONTROL OF REGISTRANT


         The  following  table is  furnished  as of April 1, 2002,  to  indicate
beneficial ownership of shares of the Company's Common Stock and Preferred Stock
by (1) each  shareholder  of the  Company  who is known by the  Company  to be a
beneficial  owner of more than 10% of the  Company's  Common  Stock or Preferred
Stock  and (2) all  officers  and  directors  of the  Company  as a  group.  The
information in the following table was provided by such persons.
<TABLE>

Name and Address                  Amount and Nature of      Title of      Percent of     Percent of
of Beneficial Owner              Beneficial Ownership (1)     Class         Class       Voting Power
-------------------              ------------------------     -----         -----       ------------
<S>                              <C>                       <C>            <C>            <C>

Bamberg Company Ltd.                       918,750            Common       35.96  %         20.99  %
Bamberg company Ltd.                     3,644,880           Preferred    100.00  %         41.64  %
Joseph K. Lau                               15,000            Common        0.59  %          0.34  %
Richard J. Mick                             50,000            Common        1.96  %          1.14  %
Joseph A. Benjamin                          10,000            Common        0.39  %          0.23  %
Norman Chui                                  5,000            Common        0.20  %          0.11  %
All executive officers and directors
      As a  group (4 persons)               80,000            Common        3.13  %          1.83  %
</TABLE>


Compliance with Section 16(a) of Exchange Act

      Under the securities laws of the United States,  the Company's  directors,
its  executive  officers,  and any persons  holding more than ten percent of the
Company's  Common Stock are required to report  their  initial  ownership of the
Company's common stock and any subsequent changes in ownership to the Securities
and  Exchange  Commission.  Specific  due  dates  for  these  reports  have been
established  and the Company is required to disclose in this Proxy Statement any
failure to file by these dates during 2001. All of the filing  requirements were
satisfied on a timely basis in 2001.  In making these  disclosures,  the Company
has relied soley on written statements of its directors,  executive officers and
shareholders and copies of the reports that were filed with the Commission.

                                       5
<PAGE>

ITEM 5.           NATURE OF TRADING MARKET

There is no non-U.S.  trading market for the Common Stock of the Company. Within
the United States, the Company's Common Stock is traded in the  over-the-counter
market.  The  Company's  Common  Stock is quoted on the OTCBB  under the  symbol
"JEWLF".

      The  following  table  sets forth the high and low bid price per share for
the Company's Common Stock for each quarterly period for the past two years.

                                      2001                       2000
                               -------------------      ------------------------
                               High          Low           High          Low
                               ----          ---           ----          ---
First Quarter                 $.1500      $ .0600        $.4380       $.0800
Second Quarter                 .1200        .0600         .4000        .2810
Third Quarter                  .1200        .0800         .3130        .2800
Fourth Quarter                 .0950        .0700         .2800        .0900

         The quotations reflect  inter-dealer prices without mark-up,  mark-down
or commission and may not represent actual transactions.

         At April 1, 2002, the bid price at the Common Stock was $.30.

         As of April 1, 2002, there were approximately 245 beneficial holders of
the Common Stock of the  Company,  nearly all of which are believed to be in the
United States.

ITEM 6.  EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY-HOLDERS

         The  Company  is not  subject  to any  governmental  laws,  decrees  or
regulations in the BVI which restrict the export or import of capital, including
any foreign  exchange  controls,  or which affect the  remittance  of dividends,
interest  or other  payments to  non-resident  holders of the  Company's  Common
Stock.

         Additionally,  neither  the laws of the BVI nor the  Company's  Charter
impose any  limitations on the right of  non-resident  foreign owners to hold or
vote the Common Stock of the Company.

ITEM 7.  TAXATION

         The BVI imposes no  withholding  taxes and holders of Common  Stock who
are not  resident  in the BVI will not be  subject  to BVI tax on any  dividends
received from the Company or on gains realized from a sale or other  disposition
of the Common Stock. The United States does not have a tax treaty with the BVI.


ITEM. 8  SELECTED CONSOLIDATED FINANCIAL DATA
<TABLE>

(In thousands, except share data)
                                                           Year Ended December 31,
                                             ----------------------------------------------------
                                             1997       1998         1999       2000         2001
                                             ----       ----         ----       ----         ----
<S>                                       <C>         <C>          <C>         <C>         <C>

Statement of Income Data:

Net Sales................................ $25,523     $16,337     $16,800     $19,028     $23,280
Cost of sales............................  24,018      12,650      11,549      13,999      17,751
                                           ------      -------     -------      ------      ------
Gross profit.............................   1,505       3,687       5,251       5,029       5,529
Operating expenses.......................  10,821       6,033       4,969       4,612       5,011
                                           ------      -------     -------      ------      ------
Income (loss) from operations before the.
   Gain on Trade Settlement..............  (9,316)     (2,346)       (282)        417         518
Gain on Trade Settlement.................                                                   1,141
Other income (expense) - net.............    (832)       (430)       (225)       (305)       (306)
                                           ------      -------     -------      ------      ------
Income (loss) before income taxes........ (10,148)     (2,776)         57         112       1,353
Income data:
   Income taxes (benefit)................     (14)        (67)          -           -        (120)
                                           ------      -------     -------      ------      ------
   Net income (loss).....................$(10,134)   $ (2,709)       $ 57      $  112      $1,473
                                          =======      =======     =======      ======      ======
   Net income (loss) per common share ...$  (3.96)   $  (1.06)      $ .02       $ .04      $  .58
                                          ========     =======     =======      ======      ======
Cash distributions per common share......$      -    $      -      $    -      $    -      $    -
                                          ========     =======     =======      ======      ======
Weighted average number of common
    shares outstanding ..................2,625,873  2,558,217   2,554,700   2,554,700   2,554,700
                                         ==========  =========   =========   =========   =========
</TABLE>


                                             Year Ended December 31,
                                 ---------------------------------------------
                                 1997     1998        1999     2000       2001
                                 ----     ----        ----     ----       ----
Balance Sheet Data:

Working capital..............$ 2,926     $  470     $  584    $  915    $ 2,569
Total assets................. 11,155      6,569      8,713    10,670     11,625
Long-term debt...............      0          0          0         0          0
Shareholders' equity.........  4,124      1,415      1,472     1,584      3,057


ITEM 9. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

Results of Operations

         The  following  table sets forth,  for the periods  indicated,  certain
information  derived from the Consolidated  Statements of Income of the Company.
All dollar and share amounts are set forth in thousands, except per share data.
<TABLE>


                                     1999                       2000                        2001
                           Amount   Sales%  Change%    Amount  Sales%  Change%    Amount   Sales%  Change%
                           ------   ------  -------    ------  ------  -------    ------   ------  -------
<S>                        <C>      <C>     <C>        <C>     <C>     <C>       <C>       <C>     <C>

Net sales................  $16,800  100.0      2.8    $19,028   100.0    13.3     $23,280  100.0     22.4
Gross Profit.............    5,251   31.3      2.4      5,029    26.4    -4.2       5,529   23.8      9.9
Operating
   expenses..............    4,969   29.6   - 17.6      4,612    24.2   -17.6       5,011   21.5      8.7
Income (loss) from
    operations before the
    gain on trade settlement   282    1.5      n/a        417     2.2    47.9         518    2.2     24.2
Other Income (expense)...     (225)   1.3      n/a       (305)    1.6    35.6         835    3.5      n/a
Income (loss) before
    income taxes.........       57    0.3      n/a        112     0.6    96.5        1353    5.8   1108.0
Income taxes
    (benefit)............        -      -      n/a          -       -     n/a        (120)   0.5      n/a
Net income (loss)........       57    0.3      n/a        112     0.6    96.5        1473    6.3   1215.2
Net income (loss)
    per common
    share................   $  .02                      $ .04                        $.58
Weighted
    average number
    of shares
    outstanding..........    2,555                      2,555                       2,555
</TABLE>


<PAGE>


         The Company's  sales are generated  through the  wholesaling of jewelry
products to the following groups:

                                   1997        1998     1999     2000     2001
                                   ----        ----     ----     ----    -----

Jewelry retail stores........      12.0 %      9.8 %     5.8 %    5.2 %    3.2 %
Specialty markets............       7.1        4.6      11.2     20.9     22.1
Mass merchandisers...........       5.2       21.3       4.0      8.0     22.3
Department stores............      64.6       55.1      57.5     49.8     41.7
National Jewelry Chains......      10.6        7.9      20.7     14.9      9.9
Catalog showrooms............      (0.5)       1.2       0.8      1.2      0.8
                                 -------   -------    -------  ------   -------
Total........................     100.0 %    100.0 %   100.0 %  100.0 %  100.0 %


Year Ended December 31, 2001 Compared to Year Ended December 31, 2000


             Net Sales.  Net sales increased by $4.3 million,  or 22.3% to $23.3
million in 2001,  from $19.0 million in 2000. This increase  primarily  reflects
increased  sales to established  customers.  While the Company feels it has been
somewhat  successful in broadening its overall customer base, the impact in 2001
was not significant

          Gross  Profit.  Gross  profit  increased  .5 million,  or 9.9% to $5.5
million in 2001.  While gross profit  increased  in 2001 gross margin  decreased
2.7% and  reflects  the  impact  in both  customer  and  product  mix as well as
increased  provisions for future  liquidations of excess inventories of $556,000
representing an increase of $312,000 from levels recorded in 2000.

        Income  from  Operations.  Income  from  operations  was $.5  million an
increased of $101,000 or 24.2% in 2001 from $417,000 in 2000.  Selling,  General
and  Administative  expenses  increased  $399,000 or 8.8% in 2001 and  primarily
reflect increased sales related costs.

        Net  Income.  The net income  for 2001 of $1.5  million  increased  $1.4
million  from the 2000 net income of  $112,000.  The  increase in net income for
2001 was  primarily  attributable  to the  increase  in  sales,  a gain on trade
settlement  of $1.2  million  (see note 11  contained  in the Audit  Report) and
recording of a tax benefit of $120,000. Interest expense remained flat from year
to year and reflects the decrease in overall  market  interest  rates as well as
decreased interest rates due to the Company's  refinancing of financing facility
in September of 2001 offset by increased borrowing  requirement  associated with
the increase in sales volume.

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999


           Net Sales.  Net sales  increased by $2.2  million,  or 13.3% to $19.0
million in 2000,  from $16.8 million in 1999. This increase  primarily  reflects
increased  sales  to our  base  customers.  While a  broadening  of our  overall
customer base continued in 2000, the impact was not significant.

          Gross  Profit.  Gross profit  decreased  $.2 million,  or 4.2% to $5.0
million in 2000 and reflects the impact in both customer and product mix and was
partially  offset by reduced  sales costs.  In addition,  provisions  for future
liquidations  of excess  inventory  were  recorded  during 2000 in the amount of
$244,000.

        Income from Operations. Income from operations increased by $135,000, or
96.5% to $417,000 in 2000 from $282,000 in 1999 and reflects reduced general and
administrative costs as well as certain sales related costs.

         Net Income. The net income for 2000 of $112,000 reflects an increase of
$55,000  from the 1999 net income of  $57,000.  This  increase in net income for
2000  was  primarily  attributable  to the  increase  in sales  combined  with a
decrease in operating costs.  Interest expense  increased by $80,000  reflecting
increased financing requirements associated with the increase in sales volume.
<PAGE>

Analysis of Financial Position, Liquidity and Capital Resources

         The Company's primary  liquidity needs are to fund accounts  receivable
and  inventories.  The Company has  historically  financed  its working  capital
requirements  through a combination  of internally  generated  cash,  short-term
borrowings under bank lines of credit. The Company's working capital at December
31, 2001 was $2.6 million as compared to $.9 million at December 31, 2000.

         On September 12, 2001 the Company entered into a credit  agreement with
a new financial institution,  whereby the Company can borrow up to $3.5 million,
plus the seasonal  over-line amount of $1 million,  payable on demand. The total
credit  facility is governed by a formula,  as defined in the  agreement,  based
principally  on  accounts   receivable  and  inventory  levels.  This  agreement
provides,  among other things,  that the credit facilities are collateralized by
substantially  all the assets of the  Company.  Under this  borrowing  facility,
interest is calculated at 1.5% over prime with respect to the revolving loan and
1.75% over prime for the portion  attributable to the seasonal over-line amount.
The agreement  contains  certain  reporting and financial  covenants,  which the
Company is required to maintain.  The Company can terminate  the agreement  with
repayment  of the loan plus  termination  fees,  or by the lender  upon  certain
events as  specified  in the loan  agreement.  An  officer  of the  Company  has
personally guaranteed up to $1,000,000 of the borrowing. As of December 31,2001,
borrowings under this credit agreement were approximately $4,066,000.

         The following table summarizes cash provided by (used in) the Company's
business activities for the past three years:

                                                   1999       2000       2001
                                                   ----       ----       ----
(Dollars in thousands)

Operating activities........................    $  (797)    $ (574)    $ (976)
Investing activities........................       (240)       (19)       (10)
Financing activities........................      1,037        652       1045
Increase (decrease) in cash.................          -         59         59

     Operating  Activities.  The net use of cash in 2001 was  principally due to
the  increase in  accounts  receivable  of $.9 million and  decrease in accounts
payable of $1.8  million.  The  increase  in  accounts  receivable  reflect  the
increased sales levels  particularly in the fourth quarter where the decrease in
accounts payable  represents the combination of trade settlement,  $1.2 million,
and increased supplier payments as a result of increased financing activity.

     Investing  Activities.  Cash  uses in 2001 were  minimal  and  reflect  the
upgrade of computer and related systems and minor building renovations.

     Financing  Activities.  During  2001,  the  Company  increased  the amounts
outstanding under its line of credit by $1.0 million to $4.1 million at December
31, 2001. Notes payable to employees decreased by $150,000.

     During the coming  twelve  months,  the  Company  does not  anticipate  any
significant capital expenditures.

Seasonality

     The jewelry business is highly seasonal,  with the fourth calendar quarter,
which includes the Christmas  shopping  season,  historically  contributing  the
highest sales of any quarter during the year.  Seaonality cannot be predicted or
counted  upon,  and the  results  of any  interim  period  are  not  necessarily
indicative of the results that might be expected during a full fiscal year.
<PAGE>

         The following  table sets forth the  Company's  unaudited net sales for
the periods indicated (dollar amounts are in thousands):

                                     Year Ended December 31,
                    -----------------------------------------------------------
                         1999                  2000                 2001
                         ----                  ----                 ----
                    Amount     %        Amount         %     Amount           %
                    ------     -        ------         -     ------           -
First Quarter      $ 2,819    16.8     $ 4,711      24.7     $ 5,230       22.5
Second Quarter       2,886    17.2       4,031      21.2       5,803       24.9
Third Quarter        3,413    20.3       2,827      14.9       4,258       18.3
Fourth Quarter       7,682    45.7       7,459      39.2       7,989       34.3
                     -----    ----       -----      ----       -----       ----
Total              $16,800   100.0     $19,028     100.0     $23,280      100.0
                   =======   =====     =======     =====     =======      =====

Inflation

         Inflation has  historically  not had a material effect on the Company's
operations. When the price of gold or precious stones has increased, these costs
historically  have been  passed on to the  customer.  Furthermore,  because  the
Company does not have either long-term  supply contracts or long-term  contracts
with  customers,   prices  are  quoted  based  on  the  prevailing   prices  for
semi-precious  gemstones  or metals.  Accordingly,  the Company does not believe
inflation will have a material effect on its future operations.

ITEM 10. DIRECTORS AND OFFICERS OF REGISTRANT

Directors and Executive Officers

         The  following  table sets  forth  certain  information  as of the date
hereof with respect to the directors and executive officers of the Company.

Name                            Age        Position
----                            ---        --------

Joseph K. Lau                   54         Chairman of the Board of Directors:
                                           President of IWI Holding Limited,
Principal Financial Officer
Richard J. Mick                 61         Vice President - Sales and Director
Norman S.W. Chui                30         Director
Connie S. Yui                   51         Inventory Manager and Director
Joseph A. Benjamin              59         Director
Samuel H. Lou                   48         Director

     Each director is serving a one-year term that expires after the next annual
meeting of the Company's shareholders, or until their successors are elected and
qualified.  Executive  officers  of the Company are elected by, and serve at the
discretion of, the Board of Directors.

     Joseph K. Lau and Connie Yui are brother  and sister.  Norman S. W. Chui is
the nephew of Joseph K. Lau.

     Joseph K. Lau joined the Company in November,  1982 and was elected  Senior
Vice  President,  Chief Operating  Officer,  Secretary and Director in February,
1986 and Chairman of the Board, President and Chief Executive Officer in August,
1998.  For the 11 years  prior to  joining  the  Company,  he held a  management
position in the restaurant industry and owned a trading company in Hong Kong.

     Richard J. Mick joined the Company in  February,  1996 as Vice  President -
Sales and Director. For 6 years prior to joining the Company he was President of
a sales and marketing firm selling jewelry and related products.  Prior thereto,
Mr. Mick was employed by J.C. Penney Company, Inc. for 26 years.

     Norman  S.  W.  Chui  joined  the  Company  in  December,  1997  as  Senior
Manager/Secretary  and  Director.  Prior to joining the Company,  Mr. Chui was a
consultant with Eclipse  Information  Systems of Darien, IL and prior to thereto
was a consultant for Arthur Andersen & Co., which he joined following graduation
from the  University of Illinois in 1994.  Mr. Chui resigned from the Company in
January, 2000 but remains active as a member of the Board.
<PAGE>

     Connie S. Yui  joined  the  Company  in March,  1985 and has  served as the
Product  Development  Manager and is responsible for inventory control and pearl
assembly.

     Joseph A Benjamin has served as a Director of the Company  since  December,
1997.  Mr.  Benjamin  is a CPA  and  is  the  Managing  Partner  of  Benjamin  &
Birkenstein, P.C., a business and tax consulting firm in Chicago, Illinois.

     Samuel H. Lou has served as a Director of the Company since December, 1997.
Mr. Lou is a business consultant with his own firm in Chicago, Illinois.

Committees and Attendance of the Board of Directors Meetings

         The  Board  of  Directors  has  a  standing   audit   committee  and  a
compensation  committee.  Each  committee  has two  members,  Messrs.  Joseph A.
Benjamin  and Samuel H. Lou Each  Committee  had one formal  meeting  during the
year.

         During the year ended  December 31, 2001,  the Board of Directors  held
one formal meeting. Each director attended that meeting.


Employment Contracts

         The  Company  has an  employment  contract  with  Joseph  K. Lau who is
employed by Imperial  pursuant to a contract  expiring July,  2006. The contract
provides for at a base salary of $271,000 in 2002,  and bonuses as determined by
the Compensation Committee of the Board of Directors.

ITEM 11. COMPENSATION OF DIRECTORS AND OFFICERS

         The aggregate  cash  compensation  paid by the Company to all directors
and  officers  as a group  during  2001 was  approximately  $500,000.  Due to an
extensive  travel  schedule,  one of the officers of the Company  resides in New
York.  Because of this,  the Company  also  provides  locally an  apartment  and
related  costs of  approximately  $15,600 for this  individual  in lieu of motel
accomodations and incurs an estimated $6,300 a year in airfare costs.

         Certain  officers of the Company  will be entitled to bonuses  from the
Company based on  performance  criteria to be  established  by the  Compensation
Committee of the Board of Directors of the Company.  Additionally,  in December,
1993, the Company  adopted a Stock Option Plan (the "Option Plan") to assist the
Company and its  subsidiaries  in  retaining  the service of current  employees,
motivating selected key management  personnel,  and attracting new management by
providing the opportunity  for such personnel to acquire a proprietary  interest
in the Company and thereby share in its growth and success. Participation in the
Option Plan and the  granting  of options  under the Option Plan are made by the
Compensation Committee of the Board of Directors, subject to ratification by the
Board.  Pursuant to the Option Plan,  a total of 150,000  shares of Common Stock
are reserved for issuance.  The Option Plan requires that the exercise  price of
the option be the fair market  value of the  Company's  stock on the date of the
grant of the option but not less than $8.50 per share. The fair market value for
purposes  of the  Option  Plan is for so long as  Common  Stock is quoted on the
NASDAQ  Small Cap,  the final  closing  sales price per share on the date of the
grant. The exercise price with respect to any option must be paid in cash. As of
the date  hereof,  there are no  options  to  purchase  shares  of Common  Stock
outstanding under the Option Plan.

         The Company,  during 1995,  also adopted a  Non-Qualified  Stock Option
Plan (the  "Non-Qualified  Plan").  A total of 600,000  shares are  reserved for
issuance  under the  Non-Qualified  Plan.  The  Non-Qualified  Stock Option Plan
provides  for  the  granting  of  options  and  stock  appreciation   rights  to
non-employee  directors,   key  management  employees  and  consultants  and  is
administered  by the  Compensation  Committee.  The terms of any options  and/or
stock  appreciation  rights  granted  under  the  Non-Qualified  Plan  shall  be
determined  by the  Compensation  Committee  provided  that  options  may not be
exercisable  for a term  longer than ten years and may not be  exercisable  at a
price  less than the  stated  value of the  Common  Stock.  No  options or stock
appreciation  rights had been granted under the Non-Qualified  Stock Option Plan
as of December 31, 2001.
<PAGE>

In addition,  the Company maintains a defined contribution plan which has both a
profit  sharing  feature and a 401(k)  savings  feature (the "Plan").  Under the
profit sharing portion of the Plan,  contributions  are an amount  determined by
the Company's  Board of Directors.  Subject to certain  limitations  required by
law, the Company's contribution is allocated to each participant who is employed
by the  Company  at the end of the Plan  year in the  proportion  that the total
compensation  paid by the  Company to each  participant  bears to the  aggregate
compensation  paid by the  Company to all  participants  during  such Plan year.
Under the 401(k)  savin gs feature,  eligible  employees  may elect,  subject to
certain  limitations  required  by law,  to defer  payment of up to 15% of their
compensation.  The Plan provides that if an employee defers payment, the Company
will contribute 50% of the first 6% of compensation  deferred,  by making a cash
payment to the Plan on behalf of such participant.  Contributions by the Company
to the profit sharing feature of the plan, and earnings  thereon,  vest based on
the participant's years of service with the Company,  vesting 20% per year after
one year of service and being fully vested after six years of service.  Employee
contributions are always 100% vested. Contributions by the Company to the 401(k)
savings feature vest on the employees first day of employment. All contributions
vest,  regardless of years of service,  upon termination of employment by reason
of death of  disability,  attainment of age 62 or the  termination  of the Plan.
After  termination  of  employment,  an  employee  is  entitled  to receive  the
distribution  of his or her entire vested interest in the Plan in a lump sum, in
installments  for a specific period of time, or an annuity for life. The amounts
held  under  the  Plan  are  invested  according  to  the  instructions  of  the
participant  in  investment  funds  designated  by the plan  administrator.  The
Company  made  contributions  to the Plan  during  2001 and 2000 of $51,000  and
$47,000, respectively.

ITEM 12. OPTIONS TO PURCHASE SECURITIES FROM REGISTRANT OR SUBSIDIARIES

         The Company presently has no outstanding incentive stock options.

ITEM 13. INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS

         All  transactions  between  the  Company,   its  officers,   directors,
principal  shareholder or affiliates,  whether presently existing are, or in the
future will be, in the belief of  management,  on terms no less favorable to the
Company than may be obtained from unaffiliated third parties.

         Rhine Jewellery  Limited  (Rhine),  located in Hong Kong and one of the
Company's  principal  suppliers  through  1997, is a subsidiary of Rhine Holding
Limited,  a former controlling  stockholder of the Company.  For the years ended
December 31, 1999,  1998,  and 1997,  the  Company's  purchases of products from
Rhine were approximately $0, $900,000 and $ 4,200,000 respectively. During 1998,
Rhine Holding Limited filed for bankruptcy in Hong Kong and purchases from Rhine
ceased.

         Since  1998,  some of the  Company's  products  were  purchased  from a
manufacturer  in Hong Kong,  which is managed by a relative of an officer of the
Company.  For the years ended  December 31, 2001,  2000 and 1999,  the Company's
purchases from this manufacturer were approximately  $7,337,000,  $6,205,000 and
$5,000,000 respectively.

                                     PART II

ITEM 14. DESCRIPTION OF SECURITIES TO BE REGISTERED

                  Not applicable.
<PAGE>

                                    PART III

ITEM 15. DEFAULTS UPON SENIOR SECURITIES

                  None reportable.

ITEM 16. CHANGES IN SECURITIES AND CHANGES IN SECURITY FOR REGISTERED SECURITIES

                  None reportable.

                                     PART IV

ITEM 17. FINANCIAL STATEMENTS

                Not applicable.

ITEM 18. FINANCIAL STATEMENTS

         Reference is made to the index to Consolidated  Financial Statements of
the Company, and notes thereto, appearing under Item 19 below, together with the
report of Blackman Kallick Bartelstein, LLP thereon.


<PAGE>

ITEM 19. FINANCIAL STATEMENTS AND EXHIBITS

  (a)  Financial Statements  Page

       Report of Independent Auditors...................................     F-1
       Consolidated Balance Sheets as of  December 31, 2001 and 2000....     F-2
       Consolidated Statements of Operations of Each of the Years
           in the Three-Year Period Ended December 31, 2001.............     F-3
       Consolidated Statements of Shareholders' Equity for Each of the
           Years in the Three-Year Period Ended December 31, 2001.......     F-4
       Consolidated Statements of Cash Flows for Each of the Years in
           the Three-Year Period Ended December 31, 2001................     F-5
       Notes to Consolidated Financial Statements.......................     F-7

                    Financial Statement Schedules (1)...................

           I - Condensed Financial Information of Registrant............    F-25
           II - Valuation and Qualifying Accounts.......................    F-28


(1) All other  schedules  are  omitted  since the  required  information  is not
present or is not present in amounts  sufficient  to require  submission  of the
schedule.

   (b)      Exhibits

Exhibit
Number                                      Description

2.1*     Bill of Sale dated February 4, 1995 re: acquisition of assets of
         Ullenberg Corporation (1)
2.2*     Stock Purchase Agreement relating to DACO Manufacturing Ltd. (3)
3.1*     Amended and Restated Memorandum of Association and Articles of
         Association of IWI Holding Limited (2)
4.1*     Specimen Form of Common Stock certificate (2)
10.1*    Lease Agreement  between Imperial World,  Inc. and American  National
         Bank and Trust Company of Chicago dated October 15,
1993     for the site in Westmont, Illinois (2)
10.2*    Stock Option Plan (2)
10.3*    Amended and Restated  Credit  Agreement  dated June, 1996 between Rhode
         Island Hospital Trust National Bank and Imperial World, Inc. (2)
10.4*    Indemnity Agreement (2)
10.5*    Profit Sharing Plan (2)
10.6*    Territorial Agreement (2)
10.8*    IWI Holding Limited 1995 Non-Qualified Stock Option Plan (4)
10.10*   Employment Contract with Joseph K. Lau
10.11*   Financing Agreement with Business Alliance Capital Corp.
10.12*   Settlement Agreement with Richard W. Sigman
10.13*   Settlement Agreement with Bruce W. Anderson
10.14*   Amended Lease Agreement
10.15*   DACO Sales Agreement


(1)      Incorporated by reference to the Company's Report on Form 6-K for the
         month of February, 1995.
(2)      Incorporated  by  reference  to the  Company's  Registration  Statement
         on Form F-1 (File No.  33-78904) declared effective December 13, 1994).
(3)      Incorporated by reference to the Company's Report on Form 6-K for the
         month of August, 1995.
(4)      Incorporated by reference to the Company's Form 20-F for the year-ended
         December 31, 1995.


<PAGE>
                                   SIGNATURES

         Pursuant to the  requirements of Section 12 of the Securities  Exchange
Act of 1934, the registrant  certifies that it meets all of the requirements for
filing on Form 20-F and has duly caused  this annual  report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                                            IWI HOLDINGS LIMITED


                                           By: /s/ Jospeh K. Lau
                                              -----------------------
                                               Joseph K. Lau
                                               Chairman - President

     Dated: April 30, 2002

         In accordance  with the Exchange Act, this report has been signed below
by the following  persons on behalf of the  Registrant and in the capacities and
on the dates indicated.


    Name                  Title                                       Date
   -------               -------                                     ------

/s/ Joseph K. Lau      Chairman, President                       April 30, 2002
-----------------
Joseph K. Lau


/s/ Richard Mick       Vice President - Sales and  Director      April 30, 2002
----------------
Richard Mick


/s/ Connie S. Yui      Inventory Manager and Director            April 30, 2002
-----------------
Connie S. Yui


/s/ Norman S.W. Chui   Director                                  April 30, 2002
--------------------
Norman S.W. Chui


/s/ Joseph A. Benjamin Director                                  April 30, 2002
----------------------
Joseph A. Benjamin


/s/ Samuel H. Lou      Director                                  April 30, 2002
-----------------
Samuel H. Lou

<PAGE>



                               IWI Holding Limited

                  Years Ended December 31, 2001, 2000 and 1999
================================================================================

                                 C o n t e n t s


                                                       Reference       Page

Independent Auditor's Report                                              1

Consolidated Balance Sheets                            Exhibit A        2-3

Consolidated Statements of Operations                  Exhibit B          4

Consolidated Statements of Stockholders' Equity        Exhibit C        5-6

Consolidated Statements of Cash Flows                  Exhibit D          7

Notes to Consolidated Financial Statements                             8-17

Condensed Financial Information of Registrant          Schedule I     18-19
  Balance Sheets
  Statements of Income and Accumulated Deficit

Note to Condensed Financial Statements                                   20

Valuation and Qualifying Accounts                      Schedule II    21-22


<PAGE>


                          Independent Auditor's Report




The Board of Directors
IWI Holding Limited
Westmont, Illinois




We have  audited the  accompanying  consolidated  balance  sheets of IWI Holding
Limited  as of  December  31,  2001  and  2000,  and  the  related  consolidated
statements of  operations,  stockholders'  equity and cash flows for each of the
three years in the period ended  December 31, 2001. Our audits also included the
financial statement schedules listed in the index at item 19(a). These financial
statements and schedules are the responsibility of the Company's management. Our
responsibility  is to  express  an opinion  on these  financial  statements  and
schedules based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  consolidated  financial  position  of IWI Holding
Limited as of December 31, 2001 and 2000,  and the  consolidated  results of its
operations  and its cash flows for each of the three  years in the period  ended
December 31, 2001, in conformity with accounting  principles  generally accepted
in the United  States of America.  In  addition,  the  information  set forth in
schedules  listed in the index at item 19(a) is fairly  stated,  in all material
respects, in relation to the consolidated financial statements from which it has
been derived.






s/Blackman Kallick Bartelstein, LLP
Chicago, Illinois
January 24, 2002


<PAGE>

                               IWI Holding Limited

                           Consolidated Balance Sheets
                        (In Thousands, Except Share Data)

                           December 31, 2001 and 2000

================================================================================

                                Assets
                                                  2001            2002
Current Assets
        Cash                                     $ 200          $  141
        Accounts Receivable, less allowance
        for doubtful accounts of $546 in 2001
         and $550 in 2000                        4,440           3,670
        Inventories                              6,188           6,065
        Deferred income taxes                      120               -
        Prepaid expenses                           189             125
                                                --------       ----------
                Total Current Assets            11,137          10,001
                                                ========       ==========

Property and Equipment                           2,891           2,881
   Less accumulated depreciation                (2,403)         (2,212)
                                               ---------       ----------
        Property and Equipment, net                488             669
                                               ---------       ----------
                                              $ 11,625        $ 10,670
                                               =========       ==========


        The accompanying notes are an integral part of the consolidated
                              financial statements
<PAGE>

                                                                       Exhibit A

Liabilities and Stockholders Equity

                                                      2001              2000
Current liabilities
        Line of credit                              $ 4,066           $ 2,871
        Notes payable                                    10               160
        Accounts payable
                Trade                                 2,390             2,340
                Affiliated companies                    588             2,414
        Accrued advertising                             693               462
        Accrued liabilities                             821               839
                                                    ---------        -----------
                Total Current liabilities             8,568             9,086

Stockholders equity (Deficit)
        Preferred stock - $1 par value; authorized-
        5,000,0000 shares; issued and outstanding-
        3,644,880 shares                              3,645             3,645
        Common stock - no par value; authorized-
        10,000,000 shares; issued and outstanding-
        2,554,770 shares                                  -                 -
        Additional paid in capital                   12,446            12,446
        Accumulated deficit                         (13,034)          (14,507)
                                                  -----------       ------------
                Total stockholders' equity            3,057             1,584
                                                  -----------       ------------
                                                   $ 11,625         $  10,670
                                                  ===========       ============
<PAGE>

                               IWI Holding Limited

                      Consolidated Statements of Operations
                        (In Thousands, Except Share Data)

                  Years Ended December 31, 2001, 2000 and 1999

================================================================================
<TABLE>

                                                    2001        2000        1999
<S>                                            <C>           <C>           <C>

Net sales                                       $ 23,280     $ 19,028      $16,800

Cost of sales                                     17,751       13,999       11,549
                                                ---------    ---------    ---------
Gross Profit                                       5,529        5,029        5,251

Selling, General and Administrative expenses,
excluding the gain on trade settlement             5,011        4,612        4,969
                                                --------     ---------    ---------
Income from operations before the
gain on trade settlement                            518           417          282

Gain on trade settlement                          1,141             -            -

Interest expense                                  (306)          (305)        (225)
                                                --------     ---------    ---------
Income before income taxes                       1,353            112           57

Income tax benefit                                 120              -            -
                                                ---------    ---------    ---------
Net income                                     $ 1,473           $112          $57
                                                =========    =========    =========
Net income per common share                     $ 0.58          $0.04        $0.02

Weighted average number of common shares
 outstanding                                 2,554,700      2,554,700    2,554,700
                                             ============   ==========   ==========
</TABLE>



<PAGE>

                               IWI Holding Limited

                 Consolidated Statements of Stockholders' Equity
                        (In Thousands, Except Share Data)

                  Years Ended December 31, 2001, 2000 and 1999

================================================================================

                                Preferred Stock                 Common Stock
                              Number of                      Number of
                              Shares       Amount            Shares      Amount
                             -----------  ---------         ----------- --------
Balance, January 1, 1999      3,644,880   $ 3,645            2,554,700   $   -

Net loss                              -         -                    -       -
                               --------    -------           ---------    ------
Balance, December 31, 1999    3,644,880     3,645            2,554,700       -

Net income                            -         -                    -       -
                               --------    -------           ---------    ------
Balance, December 31, 2000    3,644,880     3,645            2,554,700       -

Net income                            -         -                    -       -
                               --------    -------           ---------    ------
Balance, December 31, 2001    3,644,880   $ 3,645            2,554,700    $  -
                               ========    =======           =========    ======

<PAGE>

Additional
Paid-in         Accumulated
Capital         Deficit         Total
-----------     ------------    ------

$ 12,446        $ (14,676)     $1,415
       -               57          57
---------        ---------     --------
  12,446        $ (14,619)     $1,472
       -              112         112
---------        ---------     --------
  12,446          (14,507)      1,584
---------        ---------     --------
       -            1,473       1,473
---------        ---------     --------
$ 12,446        $ (13,034)     $3,057
=========        =========     ========

<PAGE>



                               IWI Holding Limited

                      Consolidated Statements of Cash Flows
                                 (In Thousands)

================================================================================

                                           2001        2000          1999

Cash flows from operating activities
        Net income                      $ 1,473        $112           $57
        Adjustments to reconcile net
        income to net cash used in
        operating activities
        Depreciation and amortization      191         237            297
        Provision for doubtful accounts    120         244            125
        (Increase) decrease in
        Accounts receivable               (890)     (1,074)        (1,215)
        Inventories                       (123)     (1,265)        (1,114)
        Deferred income taxes             (120)          -              -
        Prepaid expenses                   (64)        (21)             3
     Increase (decrease) in
        Accounts payable - Trade            50         482            203
        Accounts payable to affiliated
        companies                       (1,826)        628            363
        Accrued liabilities                213          83            484
                                       ---------     --------      --------
                Net cash used in
                operating activities      (976)       (574)          (797)
                                       ---------     --------      --------
Net cash used in investing activities-
purchases of property and equipment        (10)        (19)          (240)
                                       ---------     --------      --------
Cash flows from financing activities
   (Payments on) borrowings from notes
    payable to employees                $ (150)     $  100          $ (65)
Borrowings from lines of credit, net     1,195         552          1,102
                                       ---------     --------      --------
                Net cash provided by
                financing activities     1,045         652          1,037
                                      ---------     --------      --------
Net increase in cash                        59          59              -

Cash, beginning of year                    141          82             82
                                      ---------     --------      --------
Cash, end of year                      $  200       $  141         $   82
                                      =========     ========      ========


<PAGE>


                               IWI Holding Limited

                   Notes to Consolidated Financial Statements

================================================================================
                  Years Ended December 31, 2001, 2000 and 1999


Note 1 - Description of Business and Acquisitions

IWI Holding Limited  (Holding) was incorporated in the British Virgin Islands on
February  22,  1993.  Holding and its wholly  owned  subsidiary  (together,  the
Company) import, manufacture, and distribute wholesale fine jewelry. The Company
also imports pearls for assembly and resale through its wholly owned subsidiary,
Imperial World, Inc. (Imperial).


Note 2 - Summary of Significant Accounting Policies
                                                   -
Consolidation

All significant intercompany transactions have been eliminated.

Inventories

Inventories,  primarily consisting of finished goods, are stated at the lower of
first-in, first-out (FIFO) cost or market.

As of December 31, 2000, the inventory  valuation  reserve was  $1,200,000.  The
Company  recorded  an expense of $244,000  during  2000 to adjust the  inventory
value to lower of cost or market and to provide for future liquidations.

As of December 31, 2001, the inventory  valuation  reserve was  $1,067,000.  The
Company  recorded  an expense of $556,000  during  2001 to adjust the  inventory
value to lower of cost or market and to provide for future liquidations.

Depreciation

Property and equipment are stated at historical cost and  depreciated  primarily
on a straight-line  basis over their estimated useful lives.  Useful lives range
from three to ten years for machinery, equipment and leasehold improvements.

Income Taxes

Deferred  tax assets and  liabilities  are  determined  based on the  difference
between the financial  reporting and tax bases of assets and  liabilities  using
the  enacted  tax rates in  effect  for the year in which  the  differences  are
expected to reverse.


<PAGE>





Note 2 - Summary of Significant Accounting Policies (Continued)

Fair Value of Financial Instruments

The  Company's  financial  instruments  include  accounts  receivable,  accounts
payable, accrued liabilities and notes payable. The fair values of all financial
instruments were not materially different than their carrying values.

Accounting Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires Company  management
to make  estimates  and  assumptions  that  affect the  amounts  reported in the
financial  statements and accompanying  notes.  Actual results could differ from
those estimates.

Stock-Based Compensation

The Company has granted  stock options for a fixed number of shares to employees
with an  exercise  price  equal to the fair  value of the  shares at the date of
grant.  The Company  accounts for stock  option  grants in  accordance  with APB
Opinion No. 25,  "Accounting  for Stock Issued to Employees"  and,  accordingly,
recognizes no compensation expense for the stock option grants.

Advertising Costs

The Company expenses all advertising  costs as incurred.  Advertising costs were
approximately  $670,000,   $617,000  and  $672,000  for  2001,  2000  and  1999,
respectively.

Foreign Currency

The functional currency of the Company is the U.S. dollar.  Transactions arising
in foreign  currencies  have been  translated at rates in effect at the dates of
the  transactions.  The  gains or losses  during  the  years  presented  are not
significant.

Income Per Common Share

The Company has adopted the  provisions  of FASB No. 128,  "Earnings Per Share."
Income  per  common   share  is  computed   by   dividing   net  income  by  the
weighted-average  number of common shares  outstanding  during the period.  When
dilutive, stock options and warrants are included as share equivalents using the
treasury stock method in the  calculation of diluted  earnings per share.  Basic
and diluted net income per common share is the same for the years ended December
2001 and 2000. Common stock equivalents of the Company were not material for the
year ended  December 31, 1999 and  nonexistent  for the years ended December 31,
2000 and 2001.


<PAGE>


Note 2 - Summary of Significant Accounting Policies (Continued)

Segment Information

The Company has adopted  Statement of Financial  Accounting  Standards  No. 131,
"Disclosures  about  Segments of an Enterprise  and Related  Information."  This
statement  supercedes  Statement  of  Financial  Accounting  Standards  No.  14,
"Financial  Reporting  for  Segments of a Business  Enterprise,"  replacing  the
"industry  segment"  approach with the  "management"  approach.  The  management
approach designates the internal reporting that is used by management for making
operating  decisions  and assessing  performance  as the source of the Company's
reportable  segments.  This statement requires disclosure of certain information
by reportable segment, geographic area and major customer.

The Company imports, manufactures,  distributes and wholesales fine jewelry. All
the  Company's  sales are within the United  States.  The Company  operates this
product  line as one  operating  segment,  which is deemed to be one  reportable
segment for purposes of this disclosure.

Comprehensive Income

As of January 1, 1998,  the Company  adopted  Statement of Financial  Accounting
Standards (SFAS) No. 130,  "Reporting  Comprehensive  Income," which establishes
standards for the reporting and display of  comprehensive  income (loss) and its
components  in the financial  statements.  Components  of  comprehensive  income
(loss)  include  amounts  that,   under  SFAS  No.  130,  are  included  in  the
comprehensive  income (loss) but are excluded from net income (loss). There were
no significant  differences  between the Company's net income and  comprehensive
income.

New Accounting Pronouncements

In June 1998,  the  Financial  Accounting  Standards  Board issued SFAS No. 133,
"Accounting for Derivative  Instrument and Hedging  Activities." SFAS No. 133 is
effective  for the fiscal  years  beginning  after June 15,  2000.  SFAS No. 133
requires  that all  derivative  instruments  be recorded on the balance sheet at
their fair market value.  Changes in the fair value of derivatives  are recorded
each  period  in the  current  earnings  or other  comprehensive  income  (loss)
depending  on whether a  derivative  is designed as part of a hedge  transaction
and, if so, the type of hedge transaction involved. The adoption of SFAS No. 133
did not have an impact on its  consolidated  financial  position  or  results of
operation,  as the Company  does not  currently  hold any  derivative  financial
instruments.

In December 1999,  the SEC issued Staff  Accounting  Bulletin No. 101,  "Revenue
Recognition in Financial  Statements"  subsequently  updated by SAB 101A and SAB
101B ("SAB  101").  SAB 101  summarizes  certain of the SEC's  views in applying
accounting  principles  generally  accepted  in the United  States of America to
revenue recognition in financial  statements.  The Company was required to adopt
SAB 101 no later than the fourth quarter of calendar 2000. The Company  believes
that its revenue recognition practices are in compliance with SAB 101.


<PAGE>





Note 2 - Summary of Significant Accounting Policies

New Accounting Pronouncements (Continued)
-----------------------------

In June 2001, the FASB issued SFAS No. 141, "Business Combinations" and SFAS No.
142, "Goodwill and Other Intangible Assets," effective for years beginning after
December 15, 2001. Under the new rule, goodwill will no longer be amortized, but
will be subject to annual  impairment  tests in accordance  with the Statements.
Other  intangible  assets will continue to be amortized over their useful lives.
The pooling of interest method is no longer permitted for business  combinations
after June 30, 2001. Early adoption is permitted for companies with fiscal years
beginning  after March 15, 2001  provided  that their  first  quarter  financial
statements  have not been issued.  The Company is not required to adopt this new
standard until fiscal year ended December 31, 2002. The adoption of SFAS No. 141
will not have an impact on its  consolidated  financial  position  or results of
operation,  as the  Company  does  not  currently  hold  any  goodwill  or other
intangibles.

In August 2001, the FASB issued SFAS No. 144, " Accounting for the Impairment or
Disposal of Long-Lived Assets", effective for years beginning after December 15,
2001.  The new rules for  long-lived  assets to be disposed by sale excludes the
allocation of goodwill to be tested for impairment of such assets, establishes a
primary  asset  approach to be used for the  estimation of future cash flows and
allows for  probability-weighted  future  cash flow  estimation  for  impairment
testing. The Company is not required to adopt this new standard until its fiscal
year ended December 31, 2002, and is currently evaluating the standard's impact.


Note 3 - Credit Arrangements

On September 12, 2001,  the Company  entered into a credit  agreement with a new
financial institution,  whereby Imperial can borrow up to $3.5 million, plus the
seasonal  over-line  amount of $1 million,  payable on demand.  The total credit
facility  is  governed  by  a  formula,  as  defined  in  the  agreement,  based
principally  on  accounts   receivable  and  inventory  levels.  This  agreement
provides,  among other things,  that the credit facilities are collateralized by
substantially  all the  assets  of  Imperial.  Under  this  borrowing  facility,
interest is calculated at 1.5% over prime with respect to the revolving loan and
1.75% over prime for the portion  attributable to the seasonal over-line amount.
An  officer  of  the  Company  personally  guarantees  up to  $1,000,000  of the
borrowings.  The agreement  contains certain reporting and financial  covenants,
which the Company is  required  to  maintain.  The  Company  can  terminate  the
agreement  with repayment of the loan plus  termination  fees, or the lender can
terminate the agreement upon certain events as specified in the loan  agreement.
As  of  December  31,  2001,   borrowings   under  this  credit  agreement  were
approximately $4,066,000.


<PAGE>





Note 3 - Credit Arrangements (Continued)

Under  the  prior  credit  agreement  with a  different  financial  institution,
Imperial  could  borrow up to $2.5 million  payable on demand.  The total credit
facility  was  governed  by a  formula,  as  defined  in  the  agreement,  based
principally  on  accounts   receivable  and  inventory  levels.  This  agreement
provided,  among other things, that the credit facilities were collateralized by
substantially all the assets of Imperial.  Under this demand facility,  interest
was calculated at 3% over prime. The agreement  contained  certain reporting and
financial covenants,  which the Company was required to maintain.  The agreement
could be terminated by the Company with 60 days' written  notice,  or the lender
can  terminate  the  agreement  upon  certain  events as  specified  in the loan
agreement.  An officer of the Company had personally guaranteed up to $1,000,000
of the  borrowing.  On November 9, 2000,  this agreement was amended to increase
the  borrowing  limit up to $3.5  million.  As of  December  31,  2000 and 1999,
borrowings  under  this  credit  agreement  were  approximately  $2,871,000  and
$2,319,000, respectively.


Note 4 - Preferred Stock

The 3,644,880  issued  preferred  shares are redeemable at the Company's  option
after March 21, 1997,  at an amount not to exceed 50% of net income in excess of
$15 million for the preceding year. If not redeemed,  the preferred  shares will
begin to accrue a 4%  noncumulative  dividend at that date. The preferred shares
have voting  rights  equivalent  to  one-half  vote per share and a $1 per share
liquidation preference.


Note 5 - Stock Option Plans

The Company has 150,000 shares of common stock  reserved for options,  which may
be granted to directors,  officers and key  employees  under a stock option plan
adopted in 1994.  The exercise  price of the options  shall not be less than the
greater of $8.50 per share or the fair market value of the stock on the date the
option  is  granted.  As  of  December  31,  1999,  there  were  20,000  options
outstanding  that were cancelled  during the following  year. As of December 31,
2000 and 2001, there were no options outstanding.

During 1995, the Company  adopted a  nonqualified  stock option plan under which
600,000  shares of common stock have been  reserved  for  options,  which may be
granted to key employees and  third-party  consultants  at an option price to be
determined by the Compensation  Committee of the Board of Directors.  No options
have been granted under this plan.

The Company has elected to follow  Accounting  Principles  Board Opinion No. 25,
"Accounting for Stock Issued to Employees" (APB 25), and related interpretations
in accounting for its employee stock options  because,  as discussed  below, the
alternative  fair  value  accounting  provided  for under  Financial  Accounting
Standards  Board Statement No. 123,  "Accounting  for Stock-Based  Compensation"
(FASB 123),  requires use of option valuation models that were not developed for
use in valuing employee stock options.


<PAGE>





Note 5 - Stock Option Plans (Continued)

Under APB 25, since the exercise  price of the Company's  employee  stock option
grants has equaled the estimated fair value of the underlying  stock on the date
of grant, no compensation expense is recognized. Pro forma information regarding
net  income  and  earnings  per share is  required  under  FASB 123 and has been
determined  as if the  Company  had  accounted  for its  stock  options  granted
subsequent  to December 31, 1994 under the fair value method of that  Statement.
The fair value for these  options was  estimated  at the date of grant using the
Black-Scholes   option   pricing  model  with  the  following   weighted-average
assumptions:  risk-free interest rate of 7.8%; a dividend yield of zero percent;
and a weighted-average  expected life of the options of five to seven years. The
volatility  factor of the expected market price of the Company's common stock is
1.2.

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options,  which have no vesting  restrictions and are fully
transferable.  In addition,  option valuation models require the input of highly
subjective  input  assumptions  including the expected  stock price  volatility.
Because the Company's employee stock options have characteristics  significantly
different from those of traded  options,  and because  changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion,  the  existing  models do not  necessarily  provide a  reliable  single
measure of the fair value of its employee stock options.

For purposes of pro forma  disclosures,  the estimated fair value of the options
is amortized to expense over the vesting  period of the respective  option.  All
remaining  outstanding  stock  options  expired  during  fiscal  year 2000.  The
Company's pro forma net income and pro forma net income per share, respectively,
for the year ended December 31, 1999 would be $13,000 and $.01.

The  weighted-average  exercise price of options  outstanding as of December 31,
1999 was $8.50.


Note 6 - Related Party Transactions

Since 1998, some of the Company's products were purchased from a manufacturer in
Hong Kong, which is managed by a relative of an officer of the Company. The same
relative  was an officer in the former  vendor  company  prior to the filing for
bankruptcy in Hong Kong in 1998.  See Note 11. For the years ended  December 31,
2001,  2000 and  1999,  the  Company's  purchases  from this  manufacturer  were
approximately $7,337,000, $6,205,000 and $5,000,000, respectively.


<PAGE>

Note 7 - Income Taxes

The following table summarizes income taxes (benefits):

                                               Year Ended December 31
                                        2001         2000              1999
Current
        U.S. federal                    $   -       $   -             $   -
        U.S. state                          -           -                 -
                                        -------     -------           -------
                                            -           -                 -
                                        -------     -------           -------
Deferred
        U.S. federal                     (120)          -                 -
        U.S. state                          -           -                 -
                                        -------     -------           -------
                                         (120)          -                 -
                                        -------     -------           -------
Income tax benefit                      $(120)      $   -             $   -
                                        =======     =======           =======



The differences  between the U.S.  federal  statutory tax rate and the Company's
effective tax rate are as follows:

                                                Year Ended December 31
                                             2001        2000         1999

U.S. federal statutory tax rate             (34.0)%     (34.0)%       (34.0)
State income taxes (net of U.S.
federal income tax benefit)                     -           -             -
Change in valuation allowance                33.1         34.0         34.0
                                            --------    --------      --------
Consolidated effective tax rate               (.9)%          -%           -%


<PAGE>





Note 7 - Income Taxes (Continued)

The components of deferred income taxes are as follows as of December 31:


                                                2001          2000
                                                 (In thousands)

Deferred tax assets
        Net operating and capital loss
       carryforward                           $ 2,976       $3,289
        Accounts receivable                       213          215
        Inventories                               461          534
        Property and equipment                    117           51
        Other                                      28           29
                                              ---------     --------
                                                3,795        4,118
        Less: valuation allowance              (3,675)      (4,118)
                                              ---------     --------
        Net deferred tax assets               $   120        $   -
                                              =========     ========

In  accordance  with the  provisions  of  Internal  Revenue  Code  Section  382,
utilization of the Company's net operating loss  carryforward is estimated to be
limited to  approximately  $111,000  per year  because of a change in  corporate
ownership.  However,  because  some of the net  operating  losses were  incurred
during part of fiscal year 1998 and all of 1999 when the Section 382  limitation
did not apply,  the Company has  approximately  $4,600,000 of net operating loss
carryforward available for immediate use as of December 31, 2001. Because of the
Section 382  limitation,  the portion of the Company's  total net operating loss
carryforward  that  may  be  utilized  through  expiration  is  estimated  to be
approximately  $6,500,000.  This net  operating  loss  carryforward  will expire
through 2018. The Company also has a capital loss  carryforward of approximately
$2,300,000,  which  expires  in  2003.  The  utilization  of  the  capital  loss
carryforward is also subject to Section 382 limitations.


Note 8 - Supplemental Cash Flow Information

                                                Year Ended December 31,
                                              2001       2000       1999
                                                      (In thousands)

Cash paid for interest                       $  332     $  286      $ 207
                                             ======      =====       ======


<PAGE>



Note 9 - Employee Benefit Plan

The Company sponsors a defined-contribution  profit-sharing plan (Plan) covering
substantially  all full-time  employees who have  completed one year of service.
Company contributions to the Plan are discretionary,  determined by the Board of
Directors and fully vest to employees  upon  completion of six years of service.
The Plan has a voluntary 401(k) savings feature.  Participants may contribute up
to 15% of their  compensation  to the Plan.  As of July 1,  1998,  the  matching
portion was increased to 50% of the first 6% of compensation  that a participant
contributes.  The matching is discretionary and decided annually by the Board of
Directors.  Participant and employer-matched  contributions to the Plan are 100%
vested. Company contributions were approximately $51,000, $47,000 and $36,000 in
2001, 2000 and 1999, respectively.


Note 10 - Significant Customers

The  Company  derived,  38%,  21% and 18% of its net sales from three  customers
during 2001. The Company derived 34% and 17% of its net sales from two customers
during 2000 and 44%, 18% and 12% from three  customers in 1999.  The  receivable
balances for significant customers were $4,058,500 and $3,123,000 as of December
31, 2001 and 2000, respectively.


Note 11 - Commitments and Contingencies

Litigation

The Company is a codefendant in a class action lawsuit  brought by a stockholder
in 1996 who alleges the Company misrepresented its financial position in interim
financial  statements.  The stockholder is seeking  damages of $11 million.  The
Company  disputes the  stockholder's  allegations  and  believes  that they will
ultimately  prevail in the  litigation.  The  parties  reached an  agreement  in
principal  to settle  the claim for a  significantly  lesser  amount,  which was
accrued as of December 31, 1999. The  settlement  agreement was subject to court
approval  and the  Company  may  decline  to  proceed  with the  agreement  if a
significant number of class members "opt out" of the settlement.

Gain on Trade Settlement

One of the Company's former vendors filed for bankruptcy in Hong Kong in 1998. A
relative to an officer of the Company  managed  this  vendor.  See Note 6. As of
December 31, 1999 and 2000, the Company had a liability  recorded to this vendor
relating to inventory purchases of approximately  $1,211,000.  In addition,  the
Company had royalties  receivable from the vendor, which had been fully reserved
by the  Company as of December  31,  1998,  due to the  bankruptcy  filing.  The
Company wrote off this receivable in 1999.  During fiscal year 2000, the Company
offered and the former  vendor  conditionally  accepted to settle the matter for
$70,000.  In fiscal year 2001,  the  bankruptcy  court of Hong Kong approved the
settlement and the Company recognized $1,141,000 of income,  recorded as a trade
settlement in the accompanying statement of operations.


<PAGE>


Note 11 - Commitments and Contingencies (Continued)

Operating Lease

Imperial  is  obligated  under a lease on its  operating  facility,  located  in
Westmont,  Illinois,  for minimum rentals as well as real estate taxes and other
operating  expenses  through October 2003, with an option for an additional five
years.

The future minimum lease  payments  required under this lease as of December 31,
2001, is as follows (in thousands):

                Year ended December 31,
                               2002             $ 133
                               2003               125
                                                 -----
                Total minimum lease payments    $ 258
                                                 =====
Rent expense included in the accompanying  statements of operations  amounted to
$187,000, $179,000 and $174,000 for 2001, 2000 and 1999, respectively.

Employment Agreements

The Company has an  employment  agreement  with an officer  expiring on July 31,
2006. The agreement includes provisions for severance payments for the longer of
one  additional  year or any period for which the  employee is  required  not to
compete.

The future minimum annual compensation  payments as required under the agreement
as of December 31, 2001, approximated the following (in thousands):

                                2002                    $  271
                                2003                       288
                                2004                       310
                                2005                       335
                                2006                       204
                                                        --------
                                                        $ 1,408
                                                        ========

<PAGE>




                               IWI Holding Limited

                  Condensed Financial Information of Registrant

                                 Balance Sheets

                           December 31, 2001 and 2000

================================================================================
Assets
                                                     2001                 2000
Cash                                              $  1,000             $  1,000
Due from affiliate                                 500,000              500,000
Investments in wholly owned subsidiaries         2,556,000            1,083,000

        Total assets                           $ 3,057,000           $1,584,000

Stockholders' equity

Preferred stock-$1 par value; authorized-
 5,000,000 shares; issued and outstanding-
3,644,880 shares                                $ 3,644,880        $ 3,644,880

Common stock - no par value; authorized -
10,000,000 shares; issued and outstanding-
2,554,700 shares                                          -                  -

Additional paid in capital                       12,446,120         12,446,120

Accumulated deficit                             (13,034,000)       (14,507,000)
                                                ------------        -----------
                                                $ 3,057,000        $ 1,584,000
                                                ============        ===========


                The accompanying note is an integral part of the
                        condensed financial statements.

<PAGE>

                              IWI Holding Limited

                  Condensed Financial Information of Registrant

                  Statements of Income and Accumulated Deficit

                     Years Ended December 31, 2001 and 2000

================================================================================

                                                        2001         2000

Equity in net income of subsidiries                $ 1,473,000     $ 112,000

Accumulated deficit, beginning of year             (14,507,000)  (14,619,000)
                                                   -----------    -----------
Accumulated defitic, end of year                   $13,034,000  $(14,507,000)
                                                   ===========    ===========


<PAGE>
                               IWI Holding Limited

                  Condensed Financial Information of Registrant

                     Note to Condensed Financial Statements

                     Years Ended December 31, 2001 and 2000

================================================================================



Note 1 - Basis of Presentation

The Company's  share of net income of its  unconsolidated  subsidiaries,  all of
which are wholly  owned,  is  included  in net income  using the equity  method.
Parent-company-only  financial statements should be read in conjunction with the
Company's consolidated financial statements.



<PAGE>
<TABLE>

                               IWI Holding Limited

                        Valuation and Qualifying Accounts

                  Years Ended December 31, 2001, 2000 and 1999
================================================================================

                                           Additions         Additions
                        Balance at         Charged to       Charged to                        Balance
                        Beginning          Costs and         Other                            At End
Description             of Period          Expenses         Accounts       Deductions         of Period
------------           ------------       -------------    ------------    -----------        ----------
<S>                    <C>                <C>              <C>             <C>                <C>

Year ended
December 31, 1999

Allowance for
doubtful accounts     $ 5,957,000         125,000            220,000         5,677,000  (1)    $ 625,000

Inventory valuation
allowance             $ 1,778,000               -                  -           338,000  (2)   $1,440,000

Deferred income
tax valuation          $4,135,000          28,000                  -                 -  (3)   $4,163,000
allowance

Year ended
December 31, 2000

Allowance for
doubtful accounts        $625,000         244,000                  -           319,000         $550,000

Inventory valuation
allowance              $1,440,000         244,000                  -           484,000  (2)  $1,200,000

Deferred income
tax valuation
allowance              $4,163,000               -                  -            45,000  (3)  $4,118,000

</TABLE>

<PAGE>
<TABLE>

                              IWI Holding Limited

                        Valuation and Qualifying Accounts

                  Years Ended December 31, 2001, 2000 and 1999
================================================================================

                                           Additions         Additions
                        Balance at         Charged to       Charged to                        Balance
                        Beginning          Costs and         Other                            At End
Description             of Period          Expenses         Accounts       Deductions         of Period
------------           ------------       -------------    ------------    -----------        ----------
<S>                    <C>                <C>              <C>             <C>                <C>

Year ended
December 31, 2001

Allowance for
doubtful accounts        $550,000             120,000             -          124,000  (1)        $ 546,000

Inventory valuation
allowance              $1,200,000             556,000             -          689,000  (2)       $1,067,000

Deferred income
tax valuation
allowance             $ 4,118,000                   -             -          443,000  (3)       $3,675,000

(1) write-off of uncollectible accounts
(2) inventory losses realized
(3) decreases in deferred tax assets
</TABLE>