The Directors have pleasure in submitting to shareholders the 19th Annual Report and audited accounts of the Company for the year ended 30 June 2006.

BUSINESS ACTIVITIES
The group's sole business activities during the 2005/06 financial year continued to be jewellery retailing and manufacturing.

CONSOLIDATED FINANCIAL RESULTS
The Group has recorded a tax paid profit of $15,774,000 for the year ended 30 June 2006 (2005 - $16,442,000). This profit was achieved on total group revenue of $306,374,000 (2005 $273,151,000). The Group adopted New Zealand International Financial Reporting Standards (NZIFRS) from 1 July 2005. This resulted in restating June 2005 comparatives.

The accounts for the year ended 30 June 2006 have been presented in accordance with the accounting principles and policies detailed on pages 37 to 43 of this report.

SHAREHOLDERS' FUNDS/RESERVES
Total Shareholders' Funds of the Group now stand at $74,759,000 - an increase of $13,679,000 over the previous year.

The Group's reserves at 30 June 2006 totalled $60,901,000.

ACCOUNTING POLICIES
There have been no changes in accounting policies during the year with the exception of the adoption of NZIFRS.

DIVIDENDS
Your Directors paid an interim dividend of 9 cents per share, with full imputation credits and franking credits attached on the 3rd April 2006. Overseas shareholders were also paid a supplementary dividend. On the 23rd August 2006, your Directors declared a final dividend of 14 cents per share payable on the 16th October 2006. The share register will close at 5:00pm on the 6th October 2006 for the purpose of determining entitlement to the final dividend. Overseas shareholders will also be entitled to a supplementary payment on the final dividend.

The total ordinary dividend for the year was 23 cents (fully imputed), the same as the previous year. The payout represents 57.2% of the tax paid profit of the group.

DIRECTORS
M.R.Parsell and M.R.Doyle retire by rotation and being eligible offer themselves for re-election.

DIRECTORS' REMUNERATION
Directors remuneration and all other benefits received, or due and receivable during the year was as follows:

*Note - Executive Directors do not receive Director's fees. Executive remuneration includes salary, superannuation, bonus payments, retirement allowances and provision of a vehicle received in their capacity as employees.

REMUNERATION OF EMPLOYEES
The number of employees (not including Directors) whose remuneration exceeded $100,000 is as follows:

Australian remuneration has been converted into New Zealand designed last year's report dollars at the exchange rate used for translating the Australian profits into New Zealand dollars, 0.89 (2005 - 0.92).Canadian remuneration on the same basis at 0.78 (2005 - 0.87).

INFORMATION ON DIRECTORS
The qualifications and experience of the Directors are shown on page 27 of the hard copy of the annual report 2006.

The Directors are responsible for the preparation of the financial statements and other information included in this Annual Report. The financial statements have been prepared in conformity with generally accepted accounting principles to give a true and fair view of the financial position of the Company and Group and the results of their operations and cash flows.

The Company appoints independent chartered accountants to audit the Financial Statements prepared by the Directors and to express an opinion on these Financial Statements. The independent auditors report, which sets out their opinion and the basis of that opinion is set out on page 30 of the hard copy of the annual report 2006.

DONATIONS
The total of donations made during the year amounted to $51,000.

INTERESTS REGISTER
The following new entry was made in the Interests Register during the year:
Murray Doyle - Director of Aspiring Asset Management

ANNUAL REPORT AWARDS
The Company was awarded a silver medal for the fourth consecutive year in the Australasian Reporting Awards, which covers all companies in both Australia and New Zealand. The Board again extends its congratulations to the dedicated team who compiled and designed last years report

On behalf of the Directors,

R. M. Hill

M. R. Parsell