First of all I would like to thank all our shareholders for their kind support. The 41st term became the first year when our company launched a diamond business.
As we have already reported before starting a new business we managed to solve the debt problem, to revise the work of all subdivisions and find the answers to the questions that were unsolved in the past with the kind assistance of our partners in Japan and abroad. To solve the problems mentioned above in this term the reduction of the company's capital was undertaken. The liquidation of cumulative losses resulted in 5,7 billion yen of fixed capital, 96% of the equity capital. Besides that we succeeded in switching to the "no-debt" management. In the first half of the term we managed to carry out the obligations we had towards the companies with which we had continuous business relations. Though by all these measures we managed to bring our company's management into a healthy state, still it does not mean that we have already taken the road of the diamond business.As I have already mentioned the task for this term is to maintain a basis for a stable development of the diamond business.
Namely, while the work of subdivisions was ordered in better way, some problems still have to be solved inside the jewelry division (main division). In the middle of the term this task should be accomplished, too. Basically, this year we plan to revise the business we did in the past and reconstruct the whole company making the diamond business its core.
The brief report on the 1st half of the term 1. To make "Sakha Diamond, Corp." known better on the 25th of April we opened a showroom on the 1st floor of Sakha Diamond building. The showroom also provides information about the Republic of Sakha (Yakutia) of the Russian Federation. We welcome all shareholders to visit our showroom. 2. We opened our office in Moscow. While the diamond production cycle is conducted in Yakutsk city, the Republic of Sakha (Yakutia), it became necessary to have a branch in Moscow to carry on business negotiations and transactions, to collect related information and proceed with the export formalities, etc. Finally, we created a route for selling diamonds: Yakutsk - Moscow - Antwerp (Belgium). 3. Maximum of efforts were put into opening a setting shop (wholesaling for jewelry salesmen), which, as we consider, can enjoy a sustainable growth in the future. For that reason the setting shop was opened closed to JR Okachimachi station. In our small shop "by the piece" sale is carried out as well. Whenever our clients come we always have some new items to offer. 4. It was decided to reduce considerably the volume of jewelry wholesaling though its contribution to the company's profit was overwhelming. This decision was made because we consider that the jewelry wholesaling has rather low prospects in the future. However, the process of reducing will be carried out gradually in order to complete transactions that we started a long while ago. The plan of the reduction will be presented by the end of this term, while the final measures will be taken in the forthcoming term. 5. The retail sale has been started. The route of selling polished diamonds in Belgium turned out to be effective, and we managed to launch retail in Japan, as well. In the first half of this term we made a tentative sale of engagement rings and decided to continue it with the full power. The retail is going to be a challenge for our company as we did not have such experience in the past. We will need some time to proceed the preparations and we plan to complete them in the middle of the second half of the year. 6. As soon as somebody starts the retail it is very important to create a good image of his company. Taking this fact into consideration we decided first to change our company's logo. Depending on the logo the image of the company can change drastically, that is why we created a mark that shows the role of diamonds for our company. The new logo will be officially presented on the 4th of Dec.

Further, I would like to say some words about the company's management.

We have declared our goal to become the number one in selling diamonds in Japan. Eventually, some people from the jewelry business sphere expressed their opinion concerning our declaration. "How can it possibly happen if the president Mr. Konno is an amateur in diamond business?" If we are to speak the sales figures, then on the first year (this year) the sales should reach 4,8 billion yen, 10 billion yen on the second year and 20 billion yen on the 3rd year correspondingly, which means we should double the volume of sales every year. Actually, it is not impossible to reach this level in sales. Diamonds are international goods, and if the quality is good and the price is reasonable you can sell them wherever in the world. ther we can produce enough polished diamonds so that all divisions of the company are able to meet the market needs. Though it sounds quite easy, in reality it is not. There are loads of tasks that we have to solve, for example, to secure a sufficient supply of rough stones, to hire and train workers in order to ensure a sufficient number of personnel working in polishing division and others. However, I would like to assure our shareholders that all employees are putting all their efforts to achieve the new goals being aware that the old style of work should be left in the past. In addition, I would like to mention that our company, as a unique Japanese enterprise, which has the strong ties with the Republic of Sakha (Yakutia) enjoys a plenty of business chances in the Republic. We offer our assistance to all Japanese companies interested in creating the joint ventures in the Republic. In conclusion, I am pleased to say that we entered the next stage of reforms this year and we are looking forward to the new challenges. We will do our best to follow the advices on the company's reforming that our shareholders and other people involved have kindly given us.