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Iwi Holding Ltd · 20-F · For 12/31/97

Filed On 7/14/98 · SEC File 0-25108 · Accession Number 1026700-98-58

  As Of               Filer                 Filing     On/For/As Docs:Pgs              Issuer               Agent

 7/14/98  Iwi Holding Ltd                   20-F       12/31/97    1:47                                     Vanderkam & Sanders

Annual Report of a Foreign Private Issuer · Form 20-F
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 20-F        Annual Report of a Foreign Private Issuer             47    199K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (RTF, XML, et al.) Changes in Securities and Changes in Security for Registered Securities Compensation of Directors and Officers Control of Registrant Defaults Upon Senior Securities Description of Business Description of Property Description of Securities to Be Registered Directors and Officers of Registrant Financial Statements Financial Statements and Exhibits Interest of Management in Certain Transactions Legal Proceedings Management's Discussion and Analysis of Financial Condition and Results of Operations Nature of Trading Market Notes to Consolidated Financial Statements Options to Purchase Securities From Registrant or Subsidiaries Report of Independent Auditors Signatures Taxation
1	1st Page
3	Item 1. Description of Business
6	Item 2. Description of Property
"	Item 3. Legal Proceedings
"	Item 4. Control of Registrant
7	Item 5. Nature of Trading Market
8	Item 7. Taxation
9	Item 9. Management's Discussion and Analysis of Financial Condition and Results of Operations
13	Item 10. Directors and Officers of Registrant
15	Item 11. Compensation of Directors and Officers
16	Item 12. Options to Purchase Securities From Registrant or Subsidiaries
17	Item 13. Interest of Management in Certain Transactions
"	Item 14. Description of Securities to Be Registered
"	Item 15. Defaults Upon Senior Securities
"	Item 16. Changes in Securities and Changes in Security for Registered Securities
"	Item 17. Financial Statements
18	Item 19. Financial Statements and Exhibits
20	Signatures
21	Report of Independent Auditors
27	Notes to Consolidated Financial Statements

20-F 1st Page of 47 TOC Top Previous Next Bottom Just 1st
 Sponsored Ads...







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]                        

[X]  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, 1997

[  ] 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 June 26, 1997,  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                                      
-----       ------          

1 

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 TABLE OF CONTENTS

                                                                          Page
                                                                         -------
PART I                                                                          

 ITEM 1.    DESCRIPTION OF BUSINESS..................................    3
 ITEM 2.    DESCRIPTION OF PROPERTY..................................    6
 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...................    8
 ITEM 7.    TAXATION.................................................    8
 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.....................   13
 ITEM 11.   COMPENSATION OF DIRECTORS AND OFFICERS...................   15
ITEM 12.   OPTIONS TO PURCHASE SECURITIES FROM                          
            REGISTRANT OR SUBSIDIARIES...............................   16
ITEM 13.   INTEREST OF MANAGEMENT IN CERTAIN                            
            TRANSACTIONS.............................................   17
PART II                                                                         

 ITEM 14.   DESCRIPTION OF SECURITIES TO BE REGISTERED...............   17

PART III                                                                        

 ITEM 15.   DEFAULTS UPON SENIOR SECURITIES..........................   17
ITEM 16.   CHANGES IN SECURITIES AND CHANGES IN                         
            SECURITY FOR REGISTERED SECURITIES.......................   17

PART IV                                                                         

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

            SIGNATURES...............................................   20

2 

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PART I

     This release  contains  forward  looking  statements  within the meaning of
Section  27A of the  Securities  Act of 1933,  as amended and Section 21E of the
Securities Exchange Act of 1934, as amended.  The Company's actual results could
differ  materially from those set forth on the forward  looking  statements as a
result of the risks set forth herein,  changes in general  economic  conditions,
and changes in the assumptions used in making such forward looking statements.  

ITEM 1. DESCRIPTION OF BUSINESS                                                 

General                                                                         

     The Company,  through its wholly-owned  subsidiaries,  Imperial World, Inc.
("Imperial") and DACO  Manufacturing  Ltd.  ("DACO"),  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 and costume  jewelry 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 made under the trade
name of "World Pacific Jewelry" through  Imperial,  while DACO sells principally
in Canada under its own name or through the  manufacturing  and  distribution of
licensed  products.  Customers  of the  Company  are  principally  large  retail
establishments  with jewelry  departments and mass media marketers.  Despite the
recent downturn in its U.S. sales, the Company believes that it is competitively
positioned in the jewelry industry.                                             

     In connection with management's plan to increase liquidity,  the Company is
actively  pursuing the divestiture of DACO. The Company  anticipates  completing
these  divestiture  efforts in the third quarter of 1998.  The carrying value of
the net assets of DACO have been reduced to fair value (approximately  $363,000)
based on an estimate of the selling value less costs to sell.  The selling value
has been determined  based on a written offer received and accepted in principal
by the Company on June 26, 1998.                                                

Products and Pricing                                                            

     The Company's principal products are rings, pendants, earrings,  bracelets,
necklaces,  pins and brooches made of diamonds,  other precious or semi-precious
stones,  pearls, silver and gold in addition to the more moderately priced gold,
silver and costume  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  $60 with the prices ranging from  approximately  $35 to $450.
DACO's  products begin as low as $3 with an average  wholesale  selling price of
approximately $15.                                                              

Purchasing                                                                      

     The Company imports the majority of its jewelry from the People's  Republic
of China  ("PRC"),  Hong Kong and  Thailand.  Cultured  pearls are imported from
Japan,  the PRC and Hong Kong and  freshwater  pearls are imported from the PRC.
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.  Rhine Jewellery, an affiliate of the
Company,  supplied  approximately  $4.2 million of the Company's  purchases,  or
approximately  23%, for the fiscal year ended  December  31,  1997.  The Company
believes  it has  good  relationships  with  its  suppliers,  most of whom  have
supplied the Company for many years.                                            

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     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 has not experienced any difficulty in securing product.                 

     The Company engages in limited hedging  activities with respect to possible
fluctuations in the price of precious,  semi-precious  gemstones or metals.  The
Company  believes the risk of not engaging in such activities is minimal,  since
historically the Company has been able to adjust prices as material fluctuations
have  occurred.  The  Company  believes  that a downward  trend in the prices of
stones or metals  would have  little,  if any,  impact on the  valuation  of the
Company's inventories.                                                          

Manufacturing and Assembly                                                      

     DACO  manufactures most of their costume jewelry and some of their precious
jewelry in a 40,000 square foot capacity  outside of Toronto,  Ontario,  Canada.
DACO makes its own  castings  and has a state of the art plating  facility.  The
Company  manufactures  fashion and value priced gold and silver jewelry with the
Sarah Coventry name under exclusive  licenses for the Canadian and U.S.  market.
The exclusive  licenses to  manufacture  products  under the Sarah Coventry name
will expire on June 6, 1998. However, management feels that this will not have a
material impact on 1998 sales or operations.                                    

     Since  Imperial  imports  most of its  jewelry in an  assembled  state from
suppliers in the PRC, Hong Kong, Thailand and Japan,  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 will
provide such design to its  suppliers,  including  Rhine  Jewellery,  which will
purchase the raw materials,  such as diamonds,  other precious stones,  gold and
silver, and manufacture the product or subcontract for its manufacture. Although
the Company receives  priority in the processing and shipping of its orders,  it
does not  receive  any  price  concessions  from  Rhine  Jewellery,  but  rather
purchases  on the same basis as other third party  purchasers.  The use of third
party  manufacturers  enables the Company to shift the risk and capital  cost of
manufacturing.                                                                  

     Imperial  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. While such  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.    

4 

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     The Company has an agreement with its affiliates to market in non-competing
geographic areas.                                                               

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., catalog showrooms and various specialty markets including
The Home  Shopping  Network,  Inc.  J.C.  Penney  Company,  Inc.  accounted  for
approximately  21% of net sales in 1997. The Company has no long-term  contracts
with any  customers,  however,  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,

                                           1995         1996        1997
                                           ------       ------      ------
Jewelry retail stores                         12.3 %       15.9 %      20.8 % 
Specialty markets                             37.0         20.2        21.6   
Mass merchandisers                            14.4         22.6        22.7   
Department stores                             25.3         35.2        33.1   
Catalog showrooms                             11.0          6.1         1.8   
                                            -------      -------     -------
    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 $20 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  has  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 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 May 31, 1998,  the Company had 145  employees,  including 5 executive
officers, 13 persons in sales and merchandising,  104 persons in operations, and
23 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.                                

5 

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ITEM 2. DESCRIPTION OF PROPERTY                                                 

     The Company  maintains is registered  offices in the BVI;  Imperial  leases
approximately  25,000 square feet of space for  operations and pearl assembly in
Westmont,  Illinois;  and  DACO  leases  approximately  40,000  square  feet for
manufacturing and distribution near Toronto,  Ontario, Canada. Under the 10 year
lease which  commenced in November,  1993,  future minimum annual lease payments
with  respect  to  the  Company's  Westmont,   Illinois  facilities  range  from
approximately  $260,000 to $300,000. 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, has, in the opinion of management,  capacity
to more then double the current  sales  volume.  It was designed to maximize the
efficiency of the Company's current  operations and to provide for the Company's
anticipated  growth.  The  Company  hopes to  sublease  a  portion  of the space
beginning in 1998.                                                              

     The DACO  facilities are leased through July,  2002 with an option to renew
for an additional  five years.  Future  minimum  annual  rentals under the lease
range from  $120,000  to  $127,000.  Management  believes  such  facilities  are
adequate to meet the needs of DACO for the foreseeable future.                  

ITEM 3. LEGAL PROCEEDINGS                                                       

     The Company is a  codefendant  in a lawsuit  brought by a  shareholder  who
alleges the Company  misrepresented  its financial position in interim financial
statements.  The  shareholder  has filed for class actions status and is seeking
damages of  approximately  $11 million.  The Company  believes the allegation is
without merit and intends to vigorously defend the claim.                       

     On December 10, 1997 Imperial  World,  Inc.  filed a Petition in the United
States Tax Court seeking a  redetermination  of the  deficiency in income tax of
$9,659,799 plus statutory additions.  It is the Company's belief that the entire
assessment  is  without  merit  and was made  without  examination  (a  jeopardy
assessment) because the Statute of Limitations was expiring.                    

ITEM 4. CONTROL OF REGISTRANT                                                   

     The  following  table  is  furnished  as of  June  25,  1998,  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.                

                                                        · Enlarge/Download Table

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

David Chui (2)                 368,643  (3)        Common        14.43 %      8.4 %   
Lillian Chui (2)               368,643  (3)        Common        14.43 %      8.4 %   
Norman S.W. Chui               368,643  (3)        Common        14.43 %      8.4 %   
Rhine Investment Holdings                                                             
   Company Limited (2)         918,750  (3)        Common        36.0  %     21.0 %   
Rhine Jewellery Limited (2)  3,644,880  (3)        Preferred    100.0  %     41.6 %   
White Angel Holdings Ltd. (2)  368,643  (3)        Common        14.43 %      8.4 %   
All executive officers         490,243             Common        16.0  %      9.3 %   
and directors                                                                         
as a group (9 persons)         525,956             Preferred     14.4  %     12.0 %   
----------------                                                                      


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(1)  The persons named in the table have sole voting and  investment  power with
     respect  to all  shares  of  Common  Stock  and  Preferred  Stock  shown as
     beneficially  owned by them,  subject to  community  property  laws,  where
  applicable, and the information contained in the footnotes to the table.

(2)  Address is Room 1016,  North Tower Concordia  Plaza, 1 Science Museum Road,
Taim Sha, Tsui East Kowloon, Hong Kong.                               

(3)  All shares of Common Stock and Preferred Stock indicated are held of record
     by Rhine Investment  Holdings Company Limited and Rhine Jewellery  Limited,
     respectively. Rhine Jewellery Limited is a wholly owned subsidiary of Rhine
     Investment  Holdings  Company Limited.  Rhine  Investment  Holdings Company
     Limited is wholly owned by Rhine Holdings Limited which is owned in part by
     a series of  trusts,  including  a trust  for the  benefit  of David  Chui,
     Lillian  Chui and their  children  which owns  approximately  14.43% of the
     outstanding securities of Rhine Holdings Limited. White Angel Holdings Ltd.
     Has the power to vote and dispose of the shares held by these trusts. David
     Chui,  Lillian Chui and Norman S.W. Chui may be deemed to hold,  but hereby
     disclaim,  beneficial  ownership of all  securities  of the Company held by
Rhine Investment Holdings Company Limited and Rhine Jewellery Limited.

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 on the NASDAQ
Small Cap Market,  although notice has been given to the Company that its shares
will be  delisted  for  failure to  maintain  a $1.00  minimum  bid  price.  The
Company's Common Stock is quoted 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 prior two years.       

                          1997                              1996
                           --------------------             --------------------
                           High           Low               High           Low
                           ------        ------             ------        ------
First Quarter              $1.046        $ .812             $3.250        $2.250
Second Quarter               .781          .437              2.625         1.000
Third Quarter                .500          .250              1.625          .500
Fourth Quarter               .437          .094              1.875          .500

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

At June 25, 1998, the bid price of the Common Stock was $0.125.       

     As of June 25, 1998, there were  approximately  1,512 beneficial holders of
the Common Stock of the  Company,  nearly all of which are believed to be in the
United States.                                                                  

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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                                    

(In thousands, except share data)                                               

                                                        · Enlarge/Download Table

                                                            Year Ended December 31,             
                                         ----------------------------------------------------   
                                         1993       1994         1995        1996        1997   
                                         ----       ----         ----        ----        ----   
                                                                                                

Statement of Income Data:                                                                       

Net Sales                             $35,616     $41,902      $41,710      $30,840     $25,523 
Cost of sales                          27,643      32,725       34,024       25,809      24,018 
                                      -------     -------      -------      -------     ------- 
Gross profit                            7,973       9,177        7,686        5,031       1,505 
Operating expenses                      5,120       5,831        8,798       10,221      10,821 
                                      -------     -------      -------      -------     ------- 
Income (loss) from operations           2,853       3,346       (1,112)      (5,190)     (9,316)
Other income (expense) - net             (579)       (267)        (901)      (1,053)       (832)
                                      -------     -------      -------      -------     ------- 
Income (loss) before income taxes       2,274       3,079       (2,013)      (6,243)    (10,148)

Income taxes (benefit)                    767         788         (629)       (307)         (14)
                                      -------     -------      --------     -------     --------
Net income (loss)                      $1,507      $2,291      $(1,384)    $(5,936)    $(10,134)
                                      =======     =======      ========     =======     ========
Net income (loss) per common share (1) $ 1.65      $ 2.34      $  (.53)    $ (2.25)    $  (3.96)
                                      =======     =======      ========     =======     ========
Weighted average number of common                                                               
shares outstanding (1)                911,400     980,394    2,625,873   2,625,873    2,558,217 
                                      =======     =======    ==========  ==========   ==========

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                           Year Ended December 31,
                            ----------------------------------------------------
                             1993       1994         1995       1996        1997
                            ------    -------       ------     ------     ------
Balance Sheet Data:                                                             

Working capital           $ 7,341    $ 16,064    $ 16,064    $ 12,038    $ 2,926
Total assets               19,652      31,695      44,137      29,768     11,155
Long-term debt              3,645           0         556         204          0
Shareholders' equity        4,205      20,035      20,288      14,287      4,124

(1)  Per share amounts  reflect  retroactively  for the periods  indicated,  the
     March 21, 1994  reorganization  involving  an exchange of  1,225,000  newly
     issued Common Shares for the previously  issued share of $1U.S.  Common and
  the return and retirement of 306,250 of such shares on October 27, 1994.

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. 

                                                        · Enlarge/Download Table

                                     1995                       1996                       1997          
                           ------------------------  ------------------------   -------------------------
                           Amount%  Sales%  Change    Amount%  Sales%  Change    Amount%  Sales%  Change 
                           -------  ------  -------  --------- ------  ------   --------- ------  ------ 
                                                                                                         

Net sales                 $41,710   100.0    -0.5    $30,840    100.0   -26.1    $25,523   100.0   - 17.2
Gross Profit                7,686    18.4   -16.2      5,031     16.3   -34.2      1,505     5.9   - 70.1
Operating                                                                                                
   expenses                 8,798    21.1   +50.9     10,221     33.1   +16.2     10,821    42.4      5.9
Income (loss) from                                                                                       
 operations                (1,112)   (2.7) -133.2    (5,190)    (16.8) -366.7     (9,316)  (36.5)   -79.5
Income (loss) before                                                                                     
 income taxes              (2,013)   (4.8) -165.4    (6,243)    (20.2)  -10.1    (10,148)  (39.8)   -62.6
Income taxes                                                                                             
  (benefit)                  (629)   (1.5) -179.8      (307)    ( 1.0)  -51.2        (14)   ____    -95.4
    Net income (loss)      (1,384)   (3.3) -160.4    (5,936)    (19.2) -328.9    (10,134)  (39.7)   -70.7

Net income (loss)                                                                                        
    per common                                                                                           
   share                   $(.53)                    $(2.25)                      $(3.96)                
                            =====                     =====                        =====                 
Weighted                                                                                                 
    average number                                                                                       
    of shares                                                                                            
      outstanding      2,625,873                  2,625,873                    2,558,217                 
                       =========                  =========                    =========                 
--------------------                                                                                     

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     The  Company's  operating  results  during  1995  and 1996  were  adversely
impacted  by a weak  jewelry  market,  particularly  for  semi-precious  colored
stones, which resulted in sales that were much lower than anticipated.  1997 saw
continued  softness  in the  market.  Sales  were also  negatively  impacted  by
Management's  decision to limit sales tied to liberal  return  privileges  or at
margins below newly established minimum margin levels.                          

     At December 31, 1995,  management  determined that the Company's  inventory
was in excess of its requirements measured by its existing and anticipated level
of sales and a reserve of $1.5  million  was  recorded  for  anticipated  losses
required  to reduce  inventories  to desired  levels  over the near  term.  This
inventory reduction plan was substantially completed as anticipated.            

     Net  sales  during  1996  continued  at a lower  level  than  expected.  An
aggressive  inventory  reduction  plan was  initiated to maintain  liquidity and
reduce  inventory  to desired  levels.  Approximately  $3 million of losses were
recorded during 1996 from the reduction of inventory under this plan,  including
$1.6 million in reserves for the completion of the plan during 1997.            

     Net sales in 1997 also  continued at a lower than  anticipated  level.  The
aggressive  inventory  reduction initiated in 1996 continued in 1997 to maintain
the  Companies  liquidity and further  reduce  inventories  to a more  desirable
level.  Approximately  $ 3.6  million  of  losses  were  recorded  in 1997  from
continuation of this plan, including $ 1.8 million in reserves for completion of
the plan in 1998.                                                               

     The Company  incurred  significant  operating  losses during 1996 and 1997,
principally from the reduction of inventories. The Company has reduced operating
expenses and continues to aggressively reduce inventory.  Management is actively
seeking to obtain a commitment for continuation of its bank operating facilities
for at least another year,  and/or  alternative  financing  options.  Management
expects that these efforts will result in  maintaining  liquidity.  However,  no
assurance  can be given that the Company  will be  successful  in  accomplishing
these  objectives  or that the Company  will again  achieve  profitability.  The
Company's  continuation  as a going concern is dependent upon  attaining  future
profitable  operations  and upon its  ability to obtain  adequate  financing  or
capital.                                                                        

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

               1993      1994      1995      1996       1997
               ----      ----      ----      ----       ----
Jewelry retail stores    17.4 %    17.7 %    12.3 %    15.9 %     20.8 %        
Specialty markets        40.1      25.6      37.0      20.2       21.6          
Mass merchandisers       16.2      24.2      14.4      22.6       22.7          
Department stores        19.1      26.4      25.3      35.2       33.1          
Catalog showrooms         7.2       6.1      11.0       6.1        1.8          
              -----     -----     -----     -----      -----
Total                  100.0 %   100.0 %   100.0 %   100.0 %    100.0 %       

     The Company raised approximately $11.5 million of net proceeds from its IPO
in December of 1994 and January,  1995. The proceeds were utilized primarily for
acquisitions  and internal  expansion.  Certain assets of Ullenberg  Corp.  were
acquired in February of 1995 for approximately $300,000. Effective July 1, 1995,
the Company completed the acquisition of DACO for approximately $500,000 in cash
and notes payable of $1,435,000.  DACO  manufactures and distributes  moderately
priced gold, silver and costume jewelry in Canada.                              

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Year Ended December 31, 1997 Compared to Year Ended December 31, 1996           

     Net Sales.  Net sales decreased by $5.3 million,  or 17.2% to $25.5 million
in 1997. Of this decrease,  all but $.1 million represents lower sales levels in
the domestic market. This decrease of $5.2 million relates to a general decrease
in sales at all targeted  markets with the  exception of jewelry  retail  stores
which increased slightly during 1997.                                           

     Gross  Profit.  Gross  profit  decreased by $3.5 million to $1.5 million in
1997.  The  1997  level  reflects  a  combination  of  lower  sales  volume  and
approximately  $3.6 million in losses from the inventory  reduction  plan.  (See
Note 3 of the Consolidated  Financial  Statements) Gross profit  attributable to
DACO increased in 1997 $.3 million.                                             

     Loss from Operations. The loss from operations increased by $2.8 million to
a loss of $9.3  million in 1997.  This amount  includes  $0.9  million  from the
provision  for bad  debts  (principally  Montgomery  Ward and  Company)  and the
recording  of a loss on assets  held for  disposal of $2.3  million  against the
assets of it' Canadian  operations.  (See Note 4 of the Consolidated  Financial 
Statements)  Total  operating  costs,  excluding  the  loss of  assets  held for
disposal,  decreased $1.7 million as management implemented cuts to more closely
match the Company' current operating level.                                     

     Net Loss. The net loss for 1997 was $10.1 million  compared to $5.9 million
in 1996.  The increase in the 1997 net loss was  primarily  attributable  to the
decrease in gross profit levels and increased loss from  operations as described
above.  The  interest  expense  for 1997  decreased  $.4  million to $.8 million
reflecting  reduced  financing  requirements.  This  however,  was  offset  by a
reduction in tax benefit from $.3 million in 1996 to $14 Thousand in 1997.      

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995           

     Net Sales. Net sales decreased by $10.9 million,  or 26.1% to $30.8 million
in 1996, $1.8 million of the decline in net sales was  attributable to DACO. The
return of in excess of $1 million of  inventory  by a Canadian  customer  facing
bankruptcy, contributed to the low volume. The decline in domestic sales of $9.1
million  related   primarily  to  a  decrease  in  sales  to  specialty  markets
(principally military and television).                                          

     Gross Profit. Gross profit decreased by $2.7 million to $5 million in 1996.
The 1996 level  reflects a lower  sales  volume and  includes  approximately  $3
million of losses from an aggressive inventory reduction plan.                  

     Loss from Operations. The loss from operations increased by $4.1 million to
a loss of $5.2 million in 1996. In addition to the decline in gross profit, 1996
includes  a full year of  DACO's  operating  expenses,  or an  increase  of $1.4
million  over the amount  included in 1995  operations.  The Company has reduced
operating expenses to more closely match its current operating level.           

     Net  Loss.  The net loss for 1996 was  $5.9  million  as  compared  to $1.4
million in 1995. The increase in the 1996 net loss was principally  attributable
to the increased  operating loss described  above. In addition,  the increase of
$0.1  million in  interest  expense is the  result of  including  a full year of
DACO'  interest  expense  in 1996.  Earnings  attributable  to Haupia  its Sino 
foreign joint venture were  approximately $0.2 million in both 1995 and 1996. In
August,  1996,  the  Company  exercised  its put  option  to sell its  remaining
interest in Haupia to Rhine Holdings.                                           

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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,  loans from  affiliates  and in 1994 and
1995,  the proceeds from an IPO. The Company's  working  capital at December 31,
1997 was $4.2 million as compared to $12.0 million at December 31, 1996.        

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

                      1995       1996         1997
                      ------     ------       ------
(Dollars in thousands)                                                          

Operating activities              $(6,713)     $6,773       $4,137              
Investing activities               (2,883)          -         (605)             
Financing activities                9,357      (6,763)      (3,700)             
Increase (decrease) in cash          (239)         10         (168)             

     Operating Activities. The net cash generated in 1997 was principally due to
the  decrease in accounts  receivable  of $3.3 million and  inventories  of $4.8
million, offset in part by the loss from operations net of non cash items.      

     Investing  Activities.  Cash used in 1997 for capital  expenditures of $0.6
million reflects primarily the purchase of display cases at DACO.               

     Financing Activities.  During 1997, the Company reduced amounts outstanding
under its lines of credit by $3.7  million to $5.1 million at December 31, 1997.
Notes payable from the 1995  acquisition of DACO were reduced by $0.7 million to
$0.2 million. In addition,  the Company repurchased and retired 28,200 shares of
common stock at a cost of $29 thousand.                                         

     Imperial has an agreement with a bank,  through various credit  facilities,
whereby  Imperial  can borrow up to $10  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.  The credit facilities
are  collaterized by  substantially  all assets of Imperial and bore interest at
11.25% at December 31, 1997,  2.75% over the bank'  reference  rate.  As of the 
date of this Form 20-F, the Company was not in compliance with certain reporting
covenants  of  the  agreement.  The  Company  is  presently  operating  under  a
forbearance agreement which expired May 31, 1998 and which limited the borrowing
to $2.5 million. As of June 25, 1998, the Company has no assurance that the bank
will not exercise its rights to withdraw financial support.                     

    At December 31, 1997, total borrowings under Imperial's credit  facilities
were $2.7 million.                                                              

     DACO entered into a similar credit  agreement to Imperial's with a Canadian
bank. DACO can borrow up to approximately  $6.5 million in United States dollars
through similar credit facilities.  The line of credit bears interest at 6.0% at
December 31, 1997 (0.25% over the bank's prime rate) and precious  metals bear a
consignment  fee of 3.35%.  The  agreement  is secured by  substantially  all of
DACO's assets and is guaranteed by the Company.  This agreement expired on April
30, 1997.                                                                       

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     Management is actively  seeking to obtain a commitment for  continuation of
its bank operating  facilities for at least another year, as well as considering
other refinancing alternatives.                                                 

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.  Net sales in the third and forth
quarter of 1995 include the results from DACO which was acquired  effective July
1, 1995. Seasonality 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.                                             

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

                       Year Ended December 31,
                       ---------------------------------------------
                       1995                1996                 1997
                       ----                ----                 ----
                    Amount        %       Amount        %     Amount         %
                    -------       ----     ------       ----   ------       ----
First Quarter      $ 7,877        18.9    $ 8,415      27.3    $ 6,051     23.7 
Second Quarter       8,093        19.4      7,286      23.6      5,329     20.9 
Third Quarter       12,686        30.4      4,085      13.3      5,955     23.3 
Fourth Quarter      13,054        31.3     11,054      35.8      8,188     32.1 
                    ------       ------    ------     ------    ------    ------
Total              $41,710       100.0    $30,840     100.0    $25,523    100.0 
                    ======       ======    ======     ======    ======    ======
Inflation                                                                       

    Inflation  has  historically  not had a  material  effect on the  Company'
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                                 
---------------       ------     ----------                                     
David F. Chui           57       Chairman of the Board of Directors             
Bruce W. Anderson       46       President and Chief Executive Officer          
Norman S.W. Chui        26       Director                                       
Richard J. Mick         56       Vice President - Sales and Director            
Joseph K. Lau           50       Senior Vice President, Chief Operating Officer,
                               Chief Financial Officer and Acting Treasurer,
        Secretary and Director
Connie S. Yui           47       Director                                       
Joseph A. Benjamin      55       Director                                       
James W. Pierpont       54       Director                                       
Samuel Lou              44       Director                                       

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     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.                                         

     David F. Chui and Joseph K. Lau are  brothers-in-law.  Norman S.W.  Chui is
the son of David F. Chui. Connie Yui is the sister of Joseph K. Lau.            

     David F. Chui co-founded  Imperial World in 1975 and has served as Chairman
of the  Board  of  Directors  since  inception.  Mr.  Chui  has over 30 years of
experience  in the jewelry  industry and is presently the Chairman and President
of Rhine  Holdings.  He was the  associate  chairman of the Hong Kong  Jewellery
Manufacturers  Association  for  1992/1993  and  was  awarded  with  a  National
Entrepreneur   of  the  Year  Award  in  1990  by  the   Institute  of  American
Entrepreneurs.                                                                  

     Bruce W.  Anderson  joined the Company in July 1996 as President  and Chief
Executive Officer. Prior to joining the Company, Mr. Anderson was Vice President
of  marketing  for  Donald  Bruce & Co., a  wholesale  jewelry  manufacturer  in
Chicago, Illinois.                                                              

     Norman S.W. Chui joined the Company in December 1997.  Prior to joining the
Company,  Mr. Chui was a consultant with Eclipse  Information Systems of Darien,
IL and prior thereto was a consultant for Arthur  Andersen & Co. which he joined
following graduation from the University of Illinois in 1994.                   

     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.                

     Joseph K. Lau joined the Company in November,  1982 and was elected  Senior
Vice  President,  Chief Operating  Officer,  Secretary and Director in February,
1986 in December,  1998 he also assumed the responsiblities of Acting Treasurer.
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.               

     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 was elected to the Board of Directors in December  1997.
Mr. Benjamin is a CPA with his own accounting firm in Chicago, Illinois.        

     James W. Pierpont has served as a Director of the Company since May,  1995.
Mr. Pierpont is Managing Director and Group Vice President for ABN AMRO bank.   

     Samuel Lou was elected to the Board of Directors in December  1997. Mr. Lou
is a business consultant with his own firm in Chicago, Illinois.                

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     For the period of three (3) years after the date of the Company's  IPO, the
Company has agreed to use its best efforts to cause one  (1)individual  selected
by Sands Brothers & Co., Ltd., the  underwriter of its IPO, to be elected to the
Board,  if requested by Sands  Brothers,  which  individual  shall be reasonably
acceptable to the Board. Such individual may be a director, officer, employee or
affiliate of Sands Brothers.                                                    

Key Managers                                                                    

     Stephen  E.  Klopp  joined  the  Company  in  March,  1989  as the  Product
Development  Manager.  Prior to joining the Company, Mr. Klopp had nine years of
experience in jewelry buying and merchandising.                                 

     Ted Woyslaw  joined the Company  effective  July,  1995.  Mr. Woyslaw was a
prior  shareholder  and officer of DACO and  continues  to serve as President of
DACO.                                                                           

     David Wong joined the Company  effective  July,  1995. Mr. Wong was a prior
shareholder  and officer of DACO and  continues to serve as a Vice  President of
DACO.                                                                           

Employment Contracts                                                            

     The Company has  employment  contracts with one officer of Imperial and two
officers of DACO.                                                               

     Bruce W. Anderson is employed by Imperial  pursuant to a five year contract
expiring  June 30,  2001 at a base salary of $300,000  per year,  an  automobile
allowance  of $1,000 per month and  bonuses as  determined  by the  Compensation
Committee of the Board of Directors.                                            

     Ted Woyslaw is employed by DACO pursuant to a three year contract  expiring
August 31 1998. The contract  provides for a base salary of $250,000  (Canadian)
(approximately  US$183,825),  a commission of one and one-half percent (1.5%) of
sales of DACO in excess of $22,000,000  (Canadian),  an automobile  allowance of
$900 (U.S.) per month and bonuses as determined by the Board of Directors.      

     David Wong is employed by DACO pursuant to a three year  contract  expiring
August 31, 1998. The contract provides for a base salary of $130,000  (Canadian)
(approximately  US$95,600), an automobile allowance of $900 (U.S.) per month and
bonuses as determined by 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 1997 was approximately $1,020,000.                   

     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,  options to purchase  80,000  shares of Common  Stock had been
granted under the Option Plan.                                                  

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     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, 1997.                        

     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)  savings  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 2% 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  1997 and 1996 of $15,000  and
$10,000, respectively.                                                          

ITEM 12. OPTIONS TO PURCHASE SECURITIES FROM REGISTRANT OR SUBSIDIARIES         

     Pursuant  to  the  Company's   Option  Plan,  the  Company   presently  has
outstanding  incentive  stock options to purchase 80,000 shares of the Company's
Common Stock,  of which options to purchase 60,000 shares are held by an officer
of the  Company,  are  exercisable  at $8.50 per share and  expire in January of
2000.                                                                           

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ITEM 13. INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS                         

     The Company  purchases  products from an affiliate,  Rhine  Jewellery ($4.2
million  in 1997 and $4.6  million  in 1996).  The  Company  believes  that such
transactions  are on  terms  at  least  as  favorable  as  those  obtained  from
unaffiliated third parties.  Additionally,  Rhine Jewellery, a corporation under
common control, holds 3,644,880 shares of Preferred Stock of the Company.       

     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.                                

     The Company and certain of its Hong Kong  affiliates  engage in overlapping
businesses.  The Company and the other members of the Rhine Holdings  affiliated
group have  entered  into an  agreement  to market in  non-competing  geographic
areas.                                                                          

     There  is a family  relationship  existing  among  the  management  and key
personnel of the Company.  David F. Chui is the brother in law of Joseph K. Lau.
Norman S.W. Chui is the son of David Chui and Connie Yui is the sister of Joseph
K. Lau.  Although  these  persons  owe a  fiduciary  duty to the Company and its
shareholders,   there  can  be  no  assurance  that  family   relationships  and
considerations  will not at times take precedence over the Company's  interests.
Any such actions, however, would likely constitute a breach of fiduciary duty.  

 PART II

ITEM 14. DESCRIPTION OF SECURITIES TO BE REGISTERED                             

Not applicable.                                             

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.                                             

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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 Ernst & Young, LLP thereon.                                           

ITEM 19. FINANCIAL STATEMENTS AND EXHIBITS                                      

    (a) Financial Statements                                              Page
        --------------------                                              ----

      Report of Independent Auditors...................................... F-1
      Consolidated Balance Sheets as of  December 31, 1997 and 1996....... F-2
Consolidated Statements of Operations For Each of the Years       
          in the Three-Year Period Ended December 31, 1997................ F-3
Consolidated Statements of Shareholders' Equity for Each of the   
          Years in the Three-Year Period Ended December 31, 1997.......... F-4
Consolidated Statements of Cash Flows for Each of the Years in    
          the Three-Year Period Ended December 31, 1997................... 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)                                            

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10.8 *     IWI Holding Limited 1995 Non-Qualified Stock Option Plan (4)         
10.9 *     Lease Agreement relating to facilities of DACO Manufacturing (4)     
10.10*     Employment Contract with Bruce Anderson                              

*        Previously filed                                                       

(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.                                                    

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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 HOLDING LIMITED

         By:
                                              ----------------------------------
                        David Chui
                      Chairman

Dated: July  , 1998                                                             

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Report of Independent Auditors

The Board of Directors                                                          
IWI Holding Limited                                                             

We have  audited the  accompanying  consolidated  balance  sheets of IWI Holding
Limited  as  of  December 31,  1997  and  1996,  and  the  related  consolidated
statements of operations,  shareholders  equity, and cash flows for each of the 
years in the three-year period ended December 31, 1997. 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  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
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  at  December 31,  1997 and 1996,  and the  consolidated  results of its
operations  and its cash  flows for each of the years in the  three-year  period
ended  December 31,  1997,  in conformity  with  generally  accepted  accounting
principles.  Also, in our opinion,  the related financial  statement  schedules,
when considered in relation to the basic financial  statements taken as a whole,
present fairly in all material respects the information set forth therein.      

The accompanying  financial  statements have been prepared  assuming IWI Holding
Limited will continue as a going concern. As more fully described in Note 2, the
Company has incurred  operating losses in 1996 and 1997 and has no commitment to
ongoing financing.  These conditions raise substantial doubt about the Company's
ability to continue as a going concern.  The financial statements do not include
any adjustments to reflect the possible future effects on the recoverability and
classification of assets and the amounts and  classification of liabilities that
may result from the outcome of this uncertainty.                                

                             s/Ernst & Young LLP

Chicago, Illinois                                                               
February 20, 1998,                                                              

except for Note 4 and paragraph 1 of Note 6, as to which the date is            
June 26, 1998                                                                   

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 IWI Holding Limited

 Consolidated Balance Sheets
 (In Thousands, Except Share Data)

                                                        · Enlarge/Download Table
                                                                                  December 31        
                                                                            1997              1996   
                                                                         -----------       ----------
                                                                                                     
Assets                                                                                               
Current assets:                                                                                      
Cash                                                                    $     38         $     206   
Accounts receivable, less allowance for doubtful accounts of $642 in                                 
1997 and $694 in 1996                                                      3,358            10,236   
Accounts receivable from affiliated company                                    -             1,905   
Inventories                                                                6,053            14,122   
Refundable income taxes                                                        -               432   
Prepaid expenses                                                             145               414   
Assets held for disposal                                                     363                 -   
                                                                         --------          -------   
Total current assets                                                       9,957            27,315   

Property and equipment                                                     2,637             3,858   
Less:  Accumulated depreciation                                           (1,439)           (1,405)  
                                                                        ---------          -------   
  Property and equipment Net                                               1,198             2,453   
                                                                        ---------          -------   
                                                                         $11,155           $29,768   
                                                                        =========          =======   
Liabilities and shareholders' equity                                                                 
Current liabilities:                                                                                 
Lines of credit                                                        $  2,720           $  8,049   
Notes payable                                                                 -                689   
Accounts payable, trade                                                   2,167              3,441   
Accounts payable to affiliated company                                    1,236              1,381   
Accrued liabilities                                                         908              1,717   
                                                                        --------           -------   
Total current liabilities                                                 7,031             15,277   

Notes payable                                                                 -               204    
Commitments and contingency                                                                          

Shareholders' equity:                                                                                
Preferred stock, $1 par value; 5,000,000 shares authorized; 3,644,880                                
shares issued and outstanding                                             3,645             3,645    
Common stock, no par value; 10,000,000 shares authorized; 2,554,700                                  
shares issued and outstanding                                                                        
(2,582,900 shares in 1996)                                                    -                 -    
Additional paid-in capital                                               12,446            12,475    
Retained earnings (deficit)                                             (11,967)           (1,833)   
                                                                       ---------          -------    
Total shareholders' equity                                                4,124            14,287    
                                                                       ---------          -------    
                                                                        $11,155           $29,768    
                                                                       =========          =======    

See notes to consolidated financial statements. 

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 IWI Holding Limited

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

                                                        · Enlarge/Download Table
                                                                  Year ended December 31           
                                                           1997             1996            1995   
                                                        ----------       ---------        ---------
                                                                                                   

Net sales                                                $ 25,523        $30,840          $41,710  
Cost of sales                                              24,018         25,809           34,024  
                                                      ------------     ----------        ----------
Gross profit                                                1,505          5,031            7,686  
Selling, general, and administrative expenses                                                      
                                                            8,521         10,221            8,798  
Loss on assets held for disposal                            2,300              -                -  
                                                      ------------     ----------        ----------
Loss from operations                                       (9,316)        (5,190)          (1,112) 

Other income (expense):                                                                            
Interest expense                                             (832)        (1,225)          (1,089) 
Equity in joint venture                                         -            172              188  
                                                      ------------     ----------        ----------
Other expense  Net                                          (832)        (1,053)            (901)  
                                                      ------------     ----------        ----------
Loss before income taxes                                  (10,148)        (6,243)          (2,013) 
Income taxes (benefit)                                        (14)          (307)            (629) 
                                                      ------------     ----------        ----------
Net loss                                                 $(10,134)      $ (5,936)        $ (1,384) 
                                                      ============     ==========        ==========

Net loss per common share                                $  (3.96)      $  (2.25)       $    (.53) 
                                                      ============     ==========        ==========

Weighted-average number of common shares outstanding                                               
                                                         2,558,217      2,635,830         2,625,873
                                                      ============     ==========        ==========


See notes to consolidated financial statements. 

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 IWI Holding Limited
 Consolidated Statements of Shareholders' Equity
 (In Thousands, Except Share Data)

                                                        · Enlarge/Download Table

                                          Preferred Stock                  Common Stock             Additional       Retained     
                                  ----------------------------------------------------------------                                
                                  Number of Shares              Number of                Paid-in Capital   Earnings               
                                                     Amount      Shares        Amount                     (Deficit)         Total 
                                  ------------------------------------------------------------------------------------------------
                                                                                                                                  

Balance at January 1, 1995           3,644,880     $3,645       2,418,750    $     -        $10,903       $  5,487       $20,035  
Issuance of common stock, net of                                                                                                  
issuance costs                               -          -                                                                         
                                                                  225,000          -          1,637              -         1,637  
Net loss                                     -          -               -          -              -         (1,384)       (1,384) 
                                  ------------------------------------------------------------------------------------------------
Balance at December 31, 1995         3,644,880      3,645        2,643,750         -         12,540          4,103        20,288  
Repurchase of common stock                   -          -          (60,850)        -            (65)             -           (65) 
Net loss                                     -          -                -         -              -         (5,936)       (5,936) 
                                  ------------------------------------------------------------------------------------------------
Balance at December 31, 1996         3,644,880      3,645        2,582,900         -         12,475         (1,833)       14,287  
Repurchase of common stock                   -          -          (28,200)        -            (29)             -           (29) 
Net loss                                     -          -                -         -              -        (10,134)      (10,134) 
                                  ================================================================================================
Balance at December 31, 1997         3,644,880     $3,645        2,554,700    $    -        $12,446       $(11,967)     $  4,124  
                                  ================================================================================================


 See notes to consolidated financial statements.

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 IWI Holding Limited
 Consolidated Statements of Cash Flows
(In Thousands)

                                                        · Enlarge/Download Table

                                                                 Year ended December 31            
                                                         1997             1996              1995   
                                                     -----------       ----------        ----------
                                                                                                   

Operating activities                                                                               
Net loss                                              $(10,134)         $(5,936)         $(1,384)  
Adjustments to reconcile net income (loss) to net                                                  
cash used in operating activities:                                                                 
Depreciation and amortization                              955              479              367   
Equity in joint venture                                      -             (172)            (188)  
Provision for doubtful accounts                            865              736              313   
Deferred income taxes                                       46              404              (63)  
Loss on assets held for disposal                         2,300                -                -   
Changes in operating assets and liabilities:                                                       
Accounts receivable                                      3,335            8,071           (1,049)  
Accounts receivable from affiliated company                                                        
                                                             -              899              842   
Inventories                                              4,837            3,938           (5,001)  
Refundable income taxes                                    432               41             (473)  
Prepaid expenses                                           (58)             (17)              56   
Straight acceptances payable                                 -             (216)            (149)  
Accounts payable, trade                                   (100)            (580)             368   
Accounts payable to affiliated company                                                             
                                                         1,760             (408)             (77)  
Accrued liabilities                                       (101)            (243)             247   
Income taxes payable                                         -             (223)            (522)  
                                                      ----------        ---------        --------- 

Net cash provided by (used in) operating activities                                                
                                                         4,137            6,773           (6,713)  

Investing activities                                                                               
Purchases of property and equipment                      (605)             (212)            (380)  
Proceeds from sale of equipment                             -               212                -   
Business acquisitions, net of cash acquired                 -                 -           (2,503)  
                                                      ----------        ---------        --------- 
Net cash used in investing activities                    (605)                -           (2,883)  


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 IWI Holding Limited

 Consolidated Statements of Cash Flows (continued)
(In Thousands)

                                                        · Enlarge/Download Table

                                                                  Year ended December 31           
                                                          1997             1996              1995  
                                                       ----------       ---------         ---------
                                                                                                   

Financing activities                                                                               
Proceeds from bank for consigned gold                  $     -           $    -            $  173  
Net proceeds from issuance of common stock                                                         
                                                             -                -             1,637  
Proceeds from (payments on) lines of credit, net                                                   
                                                        (2,964)          (6,156)            7,547  
Payments on notes payable to shareholders and                                                      
payable to affiliate                                      (707)            (542)                -  
Repurchase of common stock                                 (29)             (65)                -  
                                                     ----------        ---------        ---------  
Net cash provided by (used in) financing activities                                                
                                                        (3,700)          (6,763)            9,357  
                                                     ----------        ---------        ---------  
Net increase (decrease) in cash                           (168)              10              (239) 
Cash at beginning of year                                  206              196               435  
                                                     ==========        =========        =========  
Cash at end of year                                  $      38          $   206          $    196  
                                                     ==========        =========        =========  


See notes to consolidated financial statements. 

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 IWI Holding Limited

Notes to Consolidated Financial Statements

 Years ended December 31, 1997, 1996, and 1995

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  subsidiaries  (together,  the
Company)  import,  manufacture,  and wholesale  fine  jewelry.  The Company also
imports  pearls for  assembly  and resale  through its wholly  owned  subsidiary
Imperial World,  Inc.  (Imperial).  Substantially all of the Company's sales are
made in the United States and Canada.                                           

In February  1995,  the Company  purchased the corporate  name, all trade names,
customer lists,  other  intangibles,  and all active dies and molds of Ullenberg
Corp., a distributor of jewelry in the United States for $304,000.              

Effective June 30, 1995, the Company  acquired all the outstanding  common stock
of Daco  Manufacturing,  Ltd.,  J.B.  Manufacturing,  and J and B  Manufacturing
Company  (collectively  Daco, a Canadian jewelry  manufacturer and distributor).
The total purchase price consisted of cash of  approximately  $500,000 and notes
payable of $1,435,000 (Note 10).                                                

Each  acquisition  was accounted for as a purchase,  and the purchase  price was
allocated to assets  acquired and  liabilities  assumed based on their estimated
fair  market  value at the date of  acquisition.  Operating  results  have  been
included since the effective date of the acquisition.                           

Based on  unaudited  data,  the  following  table  presents  selected  financial
information for the Company and its subsidiaries on a pro forma basis,  assuming
the acquired  companies had been consolidated  since January 1, 1995 (dollars in
thousands,   except   per  share   amounts):                                    

                    Year ended
                     December 31
                    1995
                     ---------------

Net sales                                      $46,040                        
Net income (loss)                               (1,423)                       
Net income (loss) per share                       (.54)                       

The pro forma results are not necessarily indicative of future operations or the
actual  results that would have  occurred had the  acquisitions  been made as of
January 1, 1995.                                                                

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 IWI Holding Limited

Notes to Consolidated Financial Statements (continued)

2.   Going Concern                                                              

The accompanying  consolidated  financial  statements are prepared in accordance
with generally  accepted  accounting  principles on a going-concern  basis which
contemplates  that the company will be able to realize its assets and  discharge
its liabilities in the normal course of business for the foreseeable future.    

The Company has  incurred  significant  operating  losses since 1995 and, in the
opinion of management, has inventory in excess of desired levels at December 31,
1997. The Company's  principal  lenders have not committed to ongoing  financing
for 1998 (Note 6).                                                              

The Company has reduced monthly  operating  expenses and continues an aggressive
inventory  reduction plan to maintain  liquidity and reduce inventory to desired
levels (Note 3).  Management is actively seeking to refinance its bank operating
facilities for at least another year. Management expects that these efforts will
result in  maintaining  the  liquidity  necessary  for the  foreseeable  future.
However,  no  assurances  can be given that the Company  will be  successful  in
accomplishing  these  objectives.  Further,  there can be no assurance  that the
Company  will  achieve  profitability.  The  Company's  continuation  as a going
concern is dependent upon attaining  future  profitable  operations and upon its
ability to obtain adequate financing or capital. The financial statements do not
include  any   adjustments  to  reflect  the  possible  future  effects  on  the
recoverability and classification of assets and the amounts and  classifications
of liabilities that may result from the outcome of this uncertainty.            

3.   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.                                      

At  December 31,  1995  and  1996,  management  determined  that  the  Company's
inventory  was in  excess  of its  requirements  measured  by its  existing  and
anticipated  level  of  sales.   Accordingly,   based  on  the  existing  market
conditions,   inventory   valuation   reserves  of  $1,600,000  and  $1,500,000,
respectively, were recorded at December 31, 1996 and 1995,                      

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IWI Holding Limited 

Notes to Consolidated Financial Statements (continued)

3.   Summary of Significant Accounting Policies (continued)                     

for the  anticipated  losses  from the  completion  of the  plans  initiated  to
maintain  liquidity  and reduce  inventory to desired  levels.  These  inventory
reduction plans were substantially completed as anticipated.                    

Net sales  during  1997  continued  at a level much lower than  anticipated  and
management  initiated another inventory  reduction plan. An inventory  valuation
reserve of $1,800,000 was recorded at  December 31,  1997,  for the  anticipated
losses from the completion of the plan during 1998,  which  management  believes
will be sufficient to provide for such losses.  However, it is possible that the
inventory  reduction  plan will not be  successful  or that  losses in excess of
those  recorded in the  financial  statements  will be  incurred.  Approximately
$3.6 million of losses were recorded during 1997 from the reduction of inventory
under these plans.                                                              

Property and Equipment                                                          

Property and equipment are stated at historical  cost.  Depreciation is computed
over the estimated  useful lives of the related  assets using the  straight-line
method.                                                                         

Impairment of Long-Lived Assets                                                 

In 1995, the Company  adopted  Statement of Financial  Accounting  Standards No.
121,  Accounting  for the  Impairment  of Long-Lived  Assets and for  Long-Lived
Assets to be Disposed Of. Under the  provisions of this  statement,  the Company
has evaluated its long-lived assets for financial impairment,  and will continue
to  evaluate  them as events  or  changes  in  circumstances  indicate  that the
carrying amount of such assets may not be fully recoverable.                    

The Company evaluates the  recoverability of long-lived assets not held for sale
by  measuring  the  carrying   amount  of  the  assets   against  the  estimated
undiscounted   future  cash  flows  associated  with  them.  At  the  time  such
evaluations  indicate  that  the  future  undiscounted  cash  flows  of  certain
long-lived  assets are not  sufficient  to recover  the  carrying  value of such
assets,  the assets are adjusted to their fair values. The Company evaluates the
recoverability  of  long-lived  assets  held for sale by  comparing  the asset's
carrying amount with its fair value less cost to sell (Note 4).                 

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IWI Holding Limited 

Notes to Consolidated Financial Statements (continued)

3.   Summary of Significant Accounting Policies (continued)                     

Joint Venture                                                                   

The Company used the equity method of accounting for the investment in the joint
venture (Note 5).                                                               

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.                                                            

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 generally  accepted
accounting   principles  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  $658,000;  $814,000;  and  $809,000  in  1997,  1996,  and  1995,
respectively.                                                                   

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IWI Holding Limited 

Notes to Consolidated Financial Statements (continued)

3.   Summary of Significant Accounting Policies (continued)                     

Foreign Currency Translation                                                    

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.  Gain or losses  during  the year have been  included  in net
income (loss).  Assets and  liabilities of Daco have been  translated at current
exchange rates,  and revenue and expense  accounts are translated at the average
rates during the period. Related translation  adjustments have not been material
to the financial statements.                                                    

Net Income (Loss) Per Common Share                                              

Effective  in 1997,  the  Company has  adopted  the  provisions  of FASB No. 128
"Earnings Per Share". Net income (loss) 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 loss per common share are the same for
all years  presented as the common  stock  equivalents  of the Company  would be
antidilutive.                                                                   

Segment Reporting                                                               

In June 1997,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards  No.  131,  Disclosures  about  Segments  of an
Enterprise and Related Information (Statement 131), which is effective for years
beginning after December 15, 1997.  Statement 131 establishes  standards for the
way that public business enterprises report information about operating segments
in annual  financial  statements  and  requires  that those  enterprises  report
selected  information about operating segments in interim financial reports.  It
also establishes  standards for related disclosures about products and services,
geographic areas, and major customers.  Statement 131 is effective for financial
statements for fiscal years beginning after December 15, 1997, and therefore the
Company will adopt the new requirements  retroactively in 1998.  Management does
not  anticipate  that the  adoption of this  statement  will have a  significant
effect on the Company's reported segments.                                      

4. Loss on Assets Held for Disposal                                             

In connection with management's plan to increase liquidity (Note 2), the Company
is actively pursuing the divestiture of Daco. The Company anticipates completing
these  divestiture  efforts in the third quarter of 1998.  The carrying value of
the net assets of Daco have been reduced to fair value (approximately  $363,000)
based on an estimate of the selling value less costs to sell.  The selling value
has been determined  based on a written offer received and accepted in principal
by the Company on June 26, 1998.                                                

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The  following  details the net assets of Daco at December 31, 1997  (dollars in
thousands):                                                                     

Accounts receivable                                   $2,678  
Inventory                                              3,232  
Prepaid expenses                                          39  
Property and equipment                                 1,111  
Deferred charges                                          82  
Notes payable                                           (186) 
Line of credit                                        (2,365) 
Accounts payable trade                                (1,174) 
Accrued liabilities                                     (708) 
Deferred income taxes                                    (46) 
                                                     ---------
                                                     2,663
Loss on assets held for disposal                       2,300  
                                                     =========
Assets held for disposal                              $  363  
                                                     =========

However,  it is possible that the plan to dispose of Daco will not be successful
or that losses in excess of those recorded in the financial  statements  will be
incurred.  Daco had net sales of approximately $10.4 million,  $8.9 million, and
$10.7 million in 1997,  1996, and 1995,  respectively and contributed a net loss
of $26,000 and $607,000 in 1997 and 1996, respectively and net income of $538 in
1995.                                                                           

5. Equity in Joint Venture                                                      

On October 27,  1994, the Company acquired a 50% interest in Haupia  Corporation
(Haupia), effective September 1, 1994, for $2 million. Previously,  Haupia was a
wholly owned subsidiary of Rhine Holdings Limited (RHL), an affiliated  company.
Haupia had entered  into  management  contracts  with  companies in the People's
Republic of China for the operation of retail jewelry stores. Under the terms of
the  joint  venture  agreement,  the  Company  had  the  option,  under  certain
conditions,  to sell its  interest in Haupia to RHL for an amount at least equal
to its total capital contributions plus a guaranteed return.                    

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IWI Holding Limited 

Notes to Consolidated Financial Statements (continued)

5.   Equity in Joint Venture (continued)                                        

On  December 29,  1995,  the  Company  exercised  its put  option for 50% of its
investment.  In  accordance  with the  joint  venture  agreement,  RHL  issued a
promissory note for $1,402,000  representing  one-half of the Company's  initial
interest in Haupia plus the allocable  share of earnings of Haupia subject to an
18% minimum  annual return  through  December 31,  1995.  The note which accrued
interest at prime was paid in four quarterly  installments ranging from $200,000
to $502,000 commencing April 1, 1996.                                           

On August 15,  1996,  the  Company  exercised  its option to sell its  remaining
interest  to RHL for  $1,402,000  payable  in  four  quarterly  installments  of
approximately   $350,000  plus  interest,   commencing  February  1,  1997.  The
receivable  and related  interest  were settled in 1997 through the reduction of
the payable to RHL.                                                             

The following table  summarizes the condensed  financial data of Haupia (dollars
in thousands):                                                                  

                                                      Year ended
                                                      December 31 1995
                                                        ----------------------

Management fee income                                 $   419 
Net income                                                 32 

                                                       December 31
                                                      1995
                                                        ----------------------

Current assets                                       $4,997   
Current liabilities                                     530   
Shareholders' equity                                  4,540   

6.   Credit Arrangements                                                        

Imperial has an agreement with a bank through various credit facilities, whereby
Imperial can borrow up to $10 million,  payable on demand.  The agreement can be
terminated without cause by the Company or the bank with 90 days written notice.
The total credit facility is governed by a formula, as defined in the agreement,
based  principally on accounts  receivable and inventory  levels.  The agreement
provides,  among other things,  that the credit facilities are collateralized by
substantially all assets of Imperial.  The agreement  contains certain reporting
and financial covenants which the Company is required to maintain. Under current
covenants,  Imperial may not declare or pay dividends, or make loans or advances
to Holding.  As of June 1, 1998,  the Company is not in compliance  with certain
reporting covenants of this agreement and has been operating under a forbearance
agreement  with the bank which expired May 31, 1998,  and limited  borrowings to
$2.5  million.  As of June 1, 1998,  the Company has no assurance  that the bank
will not exercise its right to withdraw financial support.  At December 31, 1997
and 1996,  respectively,  the amount of  restricted  net assets of Imperial  was
approximately $5.7 and $10.3 million.                                           

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The following summarizes the terms of these facilities:                         

Line of Credit                                                                  

Under the  demand  facility,  interest  is  calculated  at 2.75% over the bank's
reference rate. The line of credit bore interest at 11.25% at December 31, 1997,
and 10.25% at  December 31,  1996 (0.75% over the bank's  reference  rate),  and
borrowings at December 31, 1997, were $2,719,917.                               

Consigned Gold                                                                  

The  Company  had an  agreement  with the  bank,  whereby  Imperial  transferred
ownership  of gold  content in its  inventory  at fair market value to the bank.
Simultaneously, the bank consigned the gold back to Imperial. This agreement was
terminated  in September  1997 at which time Imperial  repurchased  the gold and
recognized a gain of approximately $144,000.                                    

Daco Credit Arrangements                                                        

Daco has a credit  agreement  with a Canadian bank whereby Daco can borrow up to
Canadian  $5  million  (approximately  U.S.  $3.5  million)  under an  operating
facility, which is payable upon demand, at the bank's prime rate plus .25% (6.0%
at December  31,  1997).  Borrowings  under this  facility are limited to 80% of
acceptable  accounts  receivable  plus  35%  of  certain  inventories.  Canadian
$3,378,000  was payable under this facility at December 31, 1997  (approximately
U.S. $2,365,000).                                                               

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IWI Holding Limited 

Notes to Consolidated Financial Statements (continued)

6.   Credit Arrangements (continued)                                            

Also under this credit agreement, Daco can borrow up to U.S. $3 million for gold
loans  (10,000  ounces at December 31, 1997) and U.S.  $200  thousand for silver
loans (33,000  ounces at December 31, 1997).  These precious metal loans are due
on demand at a fixed interest rate of 3.35% per annum.  Approximately $1,406,000
was payable under this facility at December 31, 1997,  representing 4,481 ounces
of gold and  18,322  ounces of silver.  The loans are  valued  based on gold and
silver market prices at December 31, 1997.  Daco's policy is to exclude the gold
held on consignment from inventory.                                             

The credit agreement is collateralized by substantially all of Daco's assets and
guaranteed  by Holding and Imperial.  The  agreement  expired on April 30, 1997.
Subsequent to that date,  the bank has continued to extend the credit  agreement
on a day-to-day basis and has retained its right to withdraw  financial  support
at any time.                                                                    

The  agreement  contains  certain  restrictive  covenants  with  respect  to the
maintenance of certain  financial  ratios and use of funds.  As of  December 31,
1997,  Daco was in violation of a covenant  relating to interest  coverage.  The
bank waived this violation at December 31,  1997; however, there is no assurance
that a waiver will be provided with respect to future violations.               

7.  Shareholders' Equity                                                        

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.  The preferred shares have voting
rights  equivalent  to one-half vote per share,  and a $1 per share  liquidation
preference.                                                                     

On December 16, 1994, the Company issued 1,500,000 shares of its common stock at
$8.50 per share in an initial public offering (IPO). The proceeds received,  net
of commissions and other related expenses, were approximately $9.9 million.     

The Company  granted an option to purchase  225,000 shares of common stock at an
exercise  price of $8.50 to the  underwriters.  This  option  was  exercised  on
January 30,  1995,  with the Company  receiving  net  proceeds of  approximately
$1.6 million.  In conjunction with the IPO, warrants to purchase an aggregate of
150,000  shares of common  stock at an exercise  price of $14.025 were issued to
the  representative of the underwriters of the IPO. The warrants are exercisable
for a period of four years beginning December 16, 1995.                         

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IWI Holding Limited 

Notes to Consolidated Financial Statements (continued)

7.  Shareholders' Equity (continued)                                            

In February 1996, the Company's Board of Directors  authorized the repurchase of
up to 350,000 shares of its common stock. As of December 31, 1997, 89,050 common
shares had been repurchased and retired.                                        

8.  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.  The only options  outstanding were options for 80,000 shares
at an exercise price of $8.50 per share granted in 1995.                        

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.                                                 

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 a
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.                                                                            

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IWI Holding Limited 

Notes to Consolidated Financial Statements (continued)

8.  Stock Option Plans (continued)                                              

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.  The
Company's  pro forma net loss and pro  forma net loss per  share,  respectively,
would be $8,985,000 and $3.42, $6,028,000 and $2.29, and $1,452,000 and $.55 for
the  years  ended  1997,  1996,  and  1995,  respectively.  Because  FASB 123 is
applicable  only to options  granted  subsequent  to December 31, 1994,  its pro
forma impact will not be fully reflected until 1999.                            

The weighted-average  exercise price of options outstanding at December 31, 1997
and 1996, is $8.50. The weighted-average  remaining  contractual life of options
outstanding at December 31, 1997, was 3.5 years. The weighted-average fair value
of options granted in 1995 was $7.70.                                           

9.  Related Party Transactions                                                  

Rhine Jewelry Limited (Rhine),  located in Hong Kong and the Company's principal
supplier,  is also a subsidiary  of RHL. For the years ended  December 31, 1997,
1996,  and 1995,  the Company's  purchases  from Rhine were  approximately  $4.2
million, $4.6 million, and $7.5 million, respectively.                          

10.  Notes Payable                                                              

In conjunction with the Daco  acquisition,  Daco issued  promissory notes to the
former shareholders (some of whom are officers). The amounts payable to officers
are due in eight quarterly  installments of approximately  $68,000 plus interest
at  the  Canadian  bank's  prime  rate  (5%  at  December 31,  1996)  commencing
November 30,  1996  through  August  1998.  The  remainder of the notes were due
February 28, 1997, and bore interest at 12%.                                    

Subsequent to December 31, 1996, the terms of these notes were renegotiated. One
half of the  principal  was paid when due, and the balance  ($209,000)  was paid
June 30, 1997.                                                                  

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IWI Holding Limited 

Notes to Consolidated Financial Statements (continued)

10.  Notes Payable (continued)                                                  

All of the notes are  collateralized  by a general  security  agreement over all
assets of Daco,  subordinate to security granted to the bank, and are guaranteed
by Holding.                                                                     

11.  Income Taxes                                                               

The following table summarizes income taxes (benefits):                         

                                                                · Download Table

                                                Year ended December 31           
                                       1997             1996              1995   
                                     ---------       ----------        ----------
                                                                                 

                                                   (In Thousands)                
Current:                                                                         
U.S. federal                          $    -         $    (48)         $   (782) 
U.S. state                               (90)               -              (176) 
Other                                     30             (259)              392  
                                     ---------        ----------        ---------
                                         (60)            (307)             (566) 
Deferred:                                                                        
U.S. federal                               -                -               (51) 
U.S. state                                 -                -               (12) 
Other                                     46                -                 -  
                                     ---------        ----------        ---------
                                          46                -                (63)
                                     ---------        ----------        ---------
Income taxes                         $   (14)       $    (307)         $    (629)
                                     =========        ==========        =========

Income (loss) before income taxes:                                               
United States                        $(7,898)       $  (5,818)         $  (3,848)
Other                                 (2,250)            (425)             1,835 
                                     ---------        ----------        ---------
                                    $(10,148)       $  (6,243)         $  (2,013)
                                     =========        ==========        =========

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

                                                        · Enlarge/Download Table
                                                     Year ended December 31           
                                             1997             1996              1995  
                                          ----------       ----------       ----------
                                                                                      

U.S. federal statutory tax rate            (34.0)%           (34.0)%          (34.0)% 
Excess foreign income taxes (benefit)        1.0              (1.8)           (13.1)  
State income taxes (net of U.S. federal                                               
income tax benefit)                            -              (1.0)            (5.8)  
Change in valuation allowance               31.0              30.0             24.6   
Other                                        2.0               1.9             (2.9)  
                                         ---------         ---------       -----------

Consolidated effective tax rate               -%              (4.9)%          (31.2)% 
                                         =========         =========       ===========

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IWI Holding Limited 

Notes to Consolidated Financial Statements (continued)

11.  Income Taxes (continued)                                                   

The components of deferred income taxes are as follows:                         

                                             December 31
                                           1997                   1996
                                             -----------           -------------
                                            (In Thousands)
Deferred tax assets (liabilities):                                              
Net operating loss carryforward              $  4,385               $  1,872    
Accounts receivable                               251                    906    
Inventories                                       672                     64    
Property and equipment                           (128)                  (131)   
Other                                              (5)                    23    
                                             ----------            -------------
                                            5,175                  2,734
Less:  Valuation allowance                     (5,221)                (2,734)   
                                             ==========            =============
Net deferred tax liability                   $    (46)            $        -    
                                             ==========            =============

The valuation  allowance  increased in 1997 primarily due to the increase in the
net operating loss carryforward.  For income tax purposes, the Company has a net
operating  loss  carryforward  of  approximately  $11.3  million,  which expires
through 2012.                                                                   

12.  Supplemental Cash Flow Information                                         

                                                        · Enlarge/Download Table

                                                                  Year ended December 31          
                                                          1997             1996             1995  
                                                        --------        ----------        --------
                                                                      (In Thousands)              
                                                                                                  

Cash paid for income taxes                           $   11           $      -            $   380 
Cash paid for interest                                  867              1,302              1,027 

Noncash investing and financing activities:                                                       
Receivable from affiliate for sale of investment in                                               
joint venture                                             -              1,402              1,402 


13.  Employee Benefit Plan                                                      

Imperial 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)                                                 

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IWI Holding Limited 

Notes to Consolidated Financial Statements (continued)

13.  Employee Benefit Plan (continued)                                          

savings feature.  Participants may contribute up to 15% of their compensation to
the  Plan.  Imperial  matches  50%  of  the  first  2% of  compensation  that  a
participant contributes.  Participant and employer-matched  contributions to the
Plan are 100% vested. Company contributions were approximately $15,000, $10,000,
and $16,000, respectively, in 1997, 1996, and 1995.                             

14.  Significant Customers                                                      

Significant  customers are those  accounting  for at least 10% of net sales in a
calendar year.  During 1997,  the Company  derived 21% of its net sales from one
customer.  In 1996, the Company  derived 19% of its net sales from one customer,
and in 1995, the Company derived 45% of its sales from three customers.         

15.  Commitments and Contingency                                                

Litigation                                                                      

The Company is a codefendant in a lawsuit  brought by a shareholder  who alleges
the  Company   misrepresented   its  financial  position  in  interim  financial
statements.  The  shareholder  has filed for class action  status and is seeking
damages of $11 million. The Company believes the allegation is without merit and
intends to vigorously defend the claim.                                         

Futures Contracts                                                               

At December 31, 1997, the Company had futures contracts  outstanding  obligating
them to purchase 600 ounces of gold at $314.50 per ounce in December  1998.  The
Company  also had forward  contracts  obligating  them to purchase 500 ounces of
gold at $317.16  per ounce in April  1998 and 400 ounces of gold at $308.34  per
ounce in December  1998.  The Company  also has  futures  contracts  outstanding
obligating them to purchase Canadian $300,000 at U.S. $0.7166 in March 1998.    

Operating Leases                                                                

Imperial  is  obligated  under a lease on its  operating  facility  for  minimum
rentals  as well as real  estate  taxes and  other  operating  expenses  through
October  2003,  with an option for an  additional  five years.  Daco has a lease
obligation  with similar  provisions  through  July 2002,  with an option for an
additional five years.                                                          

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IWI Holding Limited 

Notes to Consolidated Financial Statements (continued)

15.  Commitments and Contingency (continued)                                    

The future minimum lease payments required under these leases as of December 31,
1997, approximated the following (in thousands):                                

 1998                                        $   380,000
 1999                                            388,000
 2000                                            402,000
 2001                                            410,000
 2002                                            366,000
 Thereafter                                      250,000
                                                 ===========
 Total minimum lease payments                $ 2,196,000
                                                 ===========

Rent expense included in the accompanying  statements of operations  amounted to
$463,000, $470,000 and $384,000, for 1997, 1996, and 1995, respectively.        

Employment Agreements                                                           

The Company has various  employment  agreements  with  certain  officers and key
employees  expiring at various dates through July 2001. The  agreements  include
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 agreements
as of December 31, 1997, approximated the following (in thousands):             

1998                                                $   486       
1999                                                    300       
2000                                                    300       
2001                                                    150       
                                                   ===========
                                              $1,236
                                                   ===========

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IWI Holding Limited 

Notes to Consolidated Financial Statements (continued)

16.  Geographic Segment Information                                             

The Company's  operations in 1994 were conducted primarily in the United States.
Financial information as of and for the years ended December 31,  1997 and 1996,
summarized by geographic area, is as follows:                                   

                                                        · Enlarge/Download Table

                                   United                                                           
1997                               States          Canada        Eliminations      Consolidated     
                               ---------------  -------------- ------------------ ------------------
                                                                                                    

Total revenues                                                                                      
Unaffiliated customers          $15,540          $10,395           $   (412)        $ 25,523        
Interarea transfers                   -                -                  -                -        
                                ==========     ============        ============    ============     
Total revenues                  $15,540          $10,395           $   (412)        $ 25,523        
                                ==========     ============        ============    ============     

Income (loss) from operations                                                                       
                                $(7,314)        $ (2,002)          $      -         $ (9,316)       
                                ==========     ============        ============    ============     

Assets                                                                                              
Identifiable assets             $13,550          $  5,272          $(3,188)         $ 11,155        
Corporate assets                      -                 -                -                 -        
                                ==========     ============        ============    ============     
Total assets                    $13,550          $  5,272          $(3,188)         $ 11,155        
                                ==========     ============        ============    ============     

                                   United                                                           
1996                               States         Canada           Eliminations      Consolidated   
                                -----------    -------------       -------------   ---------------  
Total revenues                                                                                      
Unaffiliated customers          $21,945          $  8,895          $     -          $ 30,840        
Interarea transfers                   -                 -                -                 -        
                                ===========    ==============      =============   ===============  
Total revenues                  $21,945          $  8,895          $      -         $ 30,840        
                                ===========    ==============      =============   ===============  

Income (loss) from operations                                                                       
                                $(4,828)         $   (488)         $    126         $ (5,190)       
                                ===========    ==============      ==============  ===============  

Assets                                                                                              
Identifiable assets             $24,376          $  8,360          $ (2,968)        $ 29,768        
Corporate assets                      -                 -                 -                -        
                                ===========    ==============      ==============  ===============  
Total assets                    $24,376          $  8,360          $ (2,968)        $ 29,768        
                                ===========    ==============      ==============  ===============  


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16.  Geographic Segment Information (continued)                                 

                                                        · Enlarge/Download Table

                                    United                                                         
1995                                States         Canada        Eliminations      Consolidated    
                               --------------   ------------  -----------------  ----------------  
                                                                                                   

Total revenues                                                                                     
Unaffiliated customers         $   31,005         $10,705         $     -            $41,710       
Interarea transfers                 5,065               -          (5,065)                 -       
                               ==============  =============  =================  ================  
Total revenues                 $   36,070         $10,705         $(5,065)           $41,710       
                               ==============  =============  =================  ================  

Income (loss) from operations                                                                      
                               $  (1,991)         $1,005          $  (126)           $(1,112)      
                               =============   =============  =================  ================= 

Assets                                                                                             
Identifiable assets            $ 37,123          $13,086          $(7,302)          $42,907        
Corporate assets                  1,230                -                -             1,230        
                               =============   ============   =================  ==================
Total assets                   $ 38,353          $13,086          $(7,302)          $44,137        
                               =============   ============   ================== ==================


Interarea transfers primarily represent shipments of finished goods inventory to
Canada.  These interarea shipments are made at transfer prices which approximate
prices  charged  to  unaffiliated   customers  and  have  been  eliminated  from
consolidated  net  revenues.  Corporate  assets  consist of  investment in joint
venture (Note 4).                                                               

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 IWI HOLDING LIMITED

Schedule I - Condensed Financial Information of Registrant

Balance Sheets

                                                  December 31,
                                                 ---------------
                                                 1997                   1996
                                                 ------                 ------
Assets:                                                                         

Cash                                         $     1,000            $     1,000 

Due from affiliate                               500,000                500,000 

Investments in wholly owned subsidiaries       3,623,000             13,786,000 
                                              ---------             ----------
    Total Assets                            $ 4,124,000           $ 14,287,000
                                              =========             ==========
Shareholders' Equity:                                                           

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

Common stock, no par value, 10,000,000                                          
shares authorized; 2,554,700 shares                                       
issued and outstanding (2,582,900 shares                                    
in 1996)                                                                    

Additional paid-in capital                    14,325,722             14,354,722 

Retained earnings (deficit)                  (13,846,602)            (3,712,602)
                                             ------------            -----------
                                           $  4,124,000           $ 14,287,000
                                             ============            ===========

See note to condensed financial statements. 

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IWI HOLDING LIMITED 

Schedule I - Condensed Financial Information of Registrant

Statements of Income (Loss) and Retained Earnings (Deficit) 

                                                                · Download Table

                                           For the Year Ended    For the Year Ended 
                                           December 31, 1997     December 31, 1996  
                                           ------------------    -------------------
                                                                                    

Equity in net income (loss) of                                                      
   subsidiaries                            $  (10,134,000)     $   (5,936,000)      

Retained earnings (deficit) beginning                                               
of period                                      (3,712,602)          2,223,398       
                                              ------------        ------------      
Retained earnings (deficit) end of period  $  (13,846,602)     $   (3,712,602)      
                                              ============        ============      


See note to condensed financial statements. 

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IWI HOLDING LIMITED 

Schedule I - Condensed Financial Information of Registrant

Note to Condensed Financial Statements

For the Years Ended December 31, 1997 and 1996

1.   Basis of Presentation                                                      

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

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IWI HOLDING LIMITED 

Schedule II - Valuation and Qualifying Accounts 

                                                        · Enlarge/Download Table

                                   Additions      Additions                                 
                   Balance at      Charged to     Charged to                                
                  Beginning of     Costs and        Other                    Balance at End 
Description         Period         Expenses       Accounts     Deductions        of Period  
-----------      -------------     ----------    -----------   ----------    ---------------
                                                                                            

Year Ended                                                                                  
Decmber 31, 1994                                                                            

Allowance for                                                                               
Doubtful Accts      $   100,000  $   184,000   $        --    $    34,000(1)   $   250,000  

Year Ended                                                                                  
Decmber 31, 1995                                                                            

Allowance for                                                                               
Doubtful Accts      $   250,000  $   313,000   $        --    $   109,000(1)   $   454,000  

Inventory Valuation                                                                         
Allowance           $        --  $ 1,500,000   $        --    $        --      $ 1,500,000  

Deferred Income Tax                                                                         
Valuation                                                                                   
Allowance           $        --  $   495,000   $        --    $        --      $   495,000  

Year Ended                                                                                  
December 31, 1996                                                                           

Allowance for                                                                               
Doubtful Accts      $   454,000  $   736,000   $        --    $   496,000(1)   $   694,000  

Inventory Valuation                                                                         
Allowance           $ 1,500,000  $ 2,953,000   $        --    $ 2,853,000(2)   $ 1,600,000  

Deferred Income Tax                                                                         
Valuation                                                                                   
Allowance           $   495,000  $ 2,239,000   $        --    $        --      $ 2,734,000  

Year Ended                                                                                  
December 31, 1997                                                                           

Allowance for                                                                               
Doubtful Accts      $   694,000  $   865,000   $        --    $   917,000(1)   $   642,000  

Inventory Valuation                                                                         
Allowance           $ 1,600,000  $ 3,642,000   $          --  $ 3,442,000(2)   $ 1,800,000  

Deferred Income Tax                                                                         
Valuation                                                                                   
Allowance           $ 2,734,000  $ 2,487,000   $          --  $        --      $ 5,221,000  


(1)      Writeoff of uncollectible accounts                                     
(2)      Inventory losses realized

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Dates Referenced Herein and Documents Incorporated By Reference

		Referenced-On Page
This 20-F Filing	Date	First	Last	Other Filings

	2/22/93	27
	10/15/93	18
	3/21/94	9
	9/1/94	32
	10/27/94	9	32
	12/13/94	19
	12/16/94	35
	12/31/94	36	37
	1/1/95	27
	1/30/95	35
	2/4/95	18
	6/30/95	27
	7/1/95	10	13
	12/16/95	35
	12/29/95	33
	12/31/95	10	37	20-F, NTN 20F
	4/1/96	33
	8/15/96	33
	11/30/96	37
	12/31/96	11	47	20-F
	2/1/97	33
	2/28/97	37
	3/21/97	35
	4/30/97	12	35
	6/26/97	1
	6/30/97	37		20-F
	12/10/97	6
	12/15/97	31
For The Period Ended	12/31/97	1	47	NT 20-F
	2/20/98	21
	5/31/98	5	33
	6/1/98	33
	6/6/98	4
	6/25/98	6	12
	6/26/98	3	31
Filed On / Filed As Of	7/14/98
	8/31/98	15
	6/30/1	15		6-K

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Filing Submission - Alternative Formats (Word / Rich Text, HTML, Plain Text, SGML, XML, et al.)

Iwi Holding Ltd · 20-F · For 12/31/97

Filed On 7/14/98 · SEC File 0-25108 · Accession Number 1026700-98-58

Annual Report of a Foreign Private Issuer · Form 20-FFiling Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated By Reference

Annual Report of a Foreign Private Issuer · Form 20-F
Filing Table of Contents