Issue of Debt

Maruwa Co Ld
28 September 2001

                                                  September 28th, 2001

                                                    MARUWA CO., LTD.
                                               (Kabushiki Kaisha MARUWA)


Notice Concerning Issue of Bonds with Warrants for the Purpose of an Incentive  
          Plan for Directors and Employees of the Company

This is to notify that on September 28th, 2001, the Board of Directors of MARUWA
CO., LTD. ('MARUWA') has resolved the issuance of Unsecured Bonds with Warrants 
in Japan for the purpose of granting Warrants to certain members of directors 
and employees of MARUWA and its subsidiaries.

1.  Purpose of the issue

    Such incentive plan is to be conducted for further improvement of
    MARUWA'S  business results.
    MARUWA believes that granting Warrants to directors and employees will      
    contribute to increase of profit for the shareholders by bringing together  
    the interests of the directors and employees.  As improvement in the        
    Company's business results gets reflected on one's compensation through     
    share price, it becomes a further incentive for directors and employees to  
    improve business results and increase enterprise value.

2.  Members subject to grant and method of acquisition

    Members subject to grant are certain directors and employees of MARUWA.     
    MARUWA will invite purchase of the Warrants to the members, and the Warrants
    shall be sold to those who apply for purchase accordingly.
    The Warrants may be executed after share price appreciates above certain    
    standard.  The Company shares may be acquired and sold at the stock market  
    to obtain profit from sales.  However, profit will not be obtainable unless 
    the share price does not appreciate.

Following is the summary of terms for the issuance of Bonds with Warrants.

             Summary of Issuance of Bonds with Warrants of
                    MARUWA CO., LTD. - First Series

1.  Name of Bonds:                      Unsecured Bonds with Warrants of MARUWA 
                                        CO., LTD. - First Series.

2. Total amount of Bonds:               JPY 360,000,000

3. Denomination of each Bond:           A single denomination of JPY 360,000,000

4. Form of Bonds                        Bearer Bonds

5. Issue price:                         For the principal amount of JPY 100, the
                                        issue price of the Bonds shall be JPY   
                                        103.  (The amount breakdown is JPY 100  
                                        for the issuance of Bond and JPY 3 for  
                                        the issuance of a Warrant.) 

6. Interest rate:                       2.00% per annum.

7. Redemption price:                    JPY 100 for the principle amount of JPY 
                                        100.

8. Maturity date:                       October 31st, 2005

9. Offering period:                     October 9th, 2001 through October 12th, 
                                        2001

10.Payment Date:                        October 15th, 2001

11.Method of Offering:                  Subscription of the aggregate amount by 
                                        Daiwa Securities SMBC Co. Ltd.

12.Security or guarantee:               The Bonds are not secured by any        
                                        security over any assets, nor           
                                        guaranteed.  There are no assets        
                                        reserved as security for the Bonds.

13.Special covenants:                   The Bonds are subject to the negative   
                                        pledge clause.

14.Redemption prior to maturity:        At any time after the issue of the      
                                        Bonds, MARUWA may purchase or cancel any
                                        of the Bonds; provided, however, that no
                                        such cancellation shall cause the       
                                        aggregate principal amount of all Bonds 
                                        thereafter remaining outstanding to be  
                                        less than the aggregate amount of issue 
                                        price of the shares to be issued upon   
                                        exercise of all Warrants then remaining 
                                        unexercised.

15.Interest payment dates:              Each year on April 30th and October     
                                        31st.

16.Place of principle and interest payment:    MARUWA head office.

17.Underwriter:                         Daiwa Securities SMBC Co., Ltd.

18.Matters concerning Warrants

   (1)  Proportion of the amount of Warrants to the principal amount of Bonds:

        100%. For Bonds of par value JPY 360,000,000, Warrants of 1,500 shall be
        issued.  Each Warrant represents the right to subscribe shares          
        equivalent to aggregate amount of issue price of JPY 240,000            
        (Denomination Amount).

   (2)  Aggregate amount of issue price of the shares to be issued upon exercise
        of the Warrants:

                  JPY 360,000,000

   (3)  Shares to be issued upon exercise of the Warrants:

        Par value shares of common stock of MARUWA (par value being JPY 50 per  
        share, the 'shares').  However, in case MARUWA decides to issue non-par 
        value shares of common stock of MARUWA, shares shall be non-par value   
        shares of common stock of MARUWA.


   (4)  Condition to exercise the Warrants:

        The issue price ('Exercise Price') of Shares to be issued upon exercise 
        of the Warrants shall be JPY 2,400.
        The number of Shares to be issued upon exercise of the Warrants shall be
        as follows:

                                     Aggregate Denominated Amount of the
                                     Warrants to be presented for the purpose
        Number of Shares =                         of exercise

                                                   Exercise Price

        Any fraction of a share arising upon exercise of Warrants shall be      
        disregarded.  Adjustment of the Exercise Price shall follow the Market  
        Price method.

   (5)  Period during which the Warrants may be exercised:

        From December 3rd, 2001 to October 28th, 2005; provided, however, that  
        the Warrants cease to be exercisable when the Bonds become due and      
        payable.

   (6)  Partial exercise of a Warrant:

        No Warrant may be exercised in part.

   (7)  Transfer of the Warrants

        The Warrants alone may be transferred separately from the Bonds;
        however, as a general rule, certain directors and employees of MARUWA   
        specified in the following item 19 are unable to transfer the Warrants  
        pursuant to the agreement with MARUWA.

   (8)  The portion of the Exercise Price which shall not be accounted for as   
        stated capital:

        The portion of the Exercise Price which shall not be accounted for as   
        stated capital shall be the amount of such Exercise Price as adjusted   
        less the amount which will be accounted for as stated capital.  The     
        amount to be accounted for as stated capital shall be one-half of such  
        Exercise Price and any fraction less than one yen resulting from such   
        calculation shall be rounded up to the nearest yen; provided, however,  
        that if the shares to be issued shall be par value shares of common     
        stock of MARUWA and the amount to be accounted for as stated capital    
        resulting from above calculation shall be less than the par value of the
        par value shares, the amount to be accounted for as stated capital shall
        be the par value of the par values shares of common stock of MARUWA.

   (9)  Payment Handling Place for the Warrants which applications of exercise  
        were made:

        The Toyo Trust and Banking Company Limited, Nagoya Branch

  (10)  Place where applications for exercise of the Warrants may be made:

        Head office of Daiwa Securities SMBC Co., Ltd.

19.All warrants shall be repurchased by MARUWA on the payment date, and all     
   shall be sold to certain directors and employees of MARUWA.

20.The above items shall be contingent upon effect of notification as provided  
   by the Securities and Exchange Law of Japan.

(For reference)
In connection with the issue of the Bonds with Warrants, stabilizing 
transactions provided for under Paragraph 1, Article 20 of the Enforcement Order
of the Securities and Exchange Law of Japan will not be effected.