Dear Friends, In the past few yearss, the diamond industry has undergone changes that people have not witnessed in probably two decades. Sudden emergence of abundant quality diamond rough from the mines of Canada, boycott of diamond rough from several civil war-torn countries; De Beers alliance with Louis Vitton to market its own line of signature diamonds and diamond jewelry; De Beers dropping of some twenty percent of its sight holders and put in place its Supplier of Choice program… In short, the industry is going through a vertical integration where some will thrive which many will disintegrate. To keep pace with the changing industry and growing need to integrate we too have taken steps to strengthen our position in the industry. TACHÉ ALLIANCE Since September of 2002 we joined the Tachè alliance. Tachè NV of Belgium is a 47 year old diamond manufacturing company and a DTC sight holder since 1972. Tache has diamond cutting factories in Russia, China and now in India with our association. This not only enables us to have access to immense polished diamonds from Russia and China, it also assures a constant flow of non-conflict diamond rough for our factory in India. We have focused the area of our interest in colorless to I+ rounds in VVS to I2 clarities. The alliance also gives us an opportunity to procure rough precisely for various programs our retail clients wish to offer to their customers. MODERNIZATION OF THE CUTTING FACTORY While Tachès factories in Russia and China are installed with the latest automatic cutting and polishing facilities, we too have synchronized our Indian factory on the same line, installing laser techniques and computerized planning machines to cut stones with maximum brilliance and minimal weight loss. DIRECT MARKETING AND JEWELRY PROGRAMS In time with the guidelines provided by DTC we have launched various jewelry lines such as The Orange Juice Collection (for studs and solitaires), The Party Collection (for three stone jewelry), and many more. We have secured the exclusive rights to market a very high end jewelry collection manufactured by Mirage Jewels of Belgium. Their line consists of high end chandelier earrings and pendants designed with colorless and VS rounds and fancy cut diamonds. Finally, we believe that our enterprising and pro-competitive approach to our business represents a great opportunity for us and our customers for many years to come. What all these positive changes have in common, is a commitment to driving demand for diamonds, the passion for protecting the integrity of our rare product, a common vision regarding the future of our industry and a track record of achievement. SHARE OUR VISION AND EXPERIENCE THE DIFFERENCE!