On 5^th August the Supervisory Board of ALROSA Co. Ltd. met for the first time after its election at the 2004 annual shareholders’ meeting.

The Board elected its Chairman - RF Finance Minister Alexei Kudrin and its Vice-Chairman - president of ALROSA Vladimir Kalitin.

The Supervisory Board also approved the Management of the Company.

The Board considered adjustments in the Company’s 2004 production plan and budget proposed by the Management in view of changes in the current economic situation and new trends in the diamond rough and polished market, in particular growing prices for rough diamonds and stronger ruble against the US dollar.

The above proposals amended by the Board and basic production targets for 2004 were approved.

The Board also endorsed a comprehensive package of measures aimed to attain higher efficiency, increased profitability and lower costs. Specifically these include restructuring of the company’s construction divisions with a view to achieve specialization in principal or contractor functions, and further transformation of those divisions into an engineering structure. Among other measures there is development of a new concept for the housing and communal services reform; new exploration in the areas around the existent mines; reduced material, fuel and energy consumption rates; increased mining equipment and transportation use ratio; higher labour productivity; optimization of the existent managerial structure and personnel.