UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 20-F/A

[ ] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
EXCHANGE ACT OF 1934

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934: For the Fiscal Year Ended March 31, 2005

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED): For the transition period
from______ to ______.

[ ] SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Date of event requiring the shell company report:

Commission File Number: 0-30228

ALLURA INTERNATIONAL INC.
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(Exact name of Registrant as specified in its charter)

N/A
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(Translation of Registrant's name into English)

Canada
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(Jurisdiction of incorporation or organization)

1555 West 8th Avenue, Vancouver, B.C., Canada, V6J 1T5
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(Address of Principal executive office)

Securities registered or to be registered pursuant to Section 12(b) of the Act:
Not Applicable

Securities registered or to be registered pursuant to Section 12(g) of the Act:
Common Shares, Without Par Value

Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act: None

Number of outstanding shares of each of the issuer's classes of capital or
common stock as of March 31, 2005: 15,240,302 Common Shares, Without Par Value

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days: Yes [X] No [ ]

Indicate by check mark which financial statement item the Registrant has elected
to follow:

Item 17 [X] Item 18 [ ]

(APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PAST FIVE YEARS)

Indicate by check mark whether the Registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court: Yes [ ] No [ ]

Page 1 of 75

TABLE OF CONTENTS

Page
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PART I

Item 1. Identity of Directors, Senior Management and Advisers............................ 3
Item 2. Offer Statistics and Expected Timetable.......................................... 3
Item 3. Key Information.................................................................. 3
Item 4. Information on the Company....................................................... 10
Item 5. Operating and Financial Review and Prospects..................................... 20
Item 6. Directors, Senior Management and Employees....................................... 27
Item 7. Major Shareholders and Related Party Transactions................................ 30
Item 8. Financial Information............................................................ 33
Item 9. The Offer and Listing............................................................ 33
Item 10. Additional Information........................................................... 34
Item 11. Quantitative and Qualitative Disclosures about Market Risk....................... 39
Item 12. Description of Securities other than Equity Securities........................... 40

PART II

Item 13. Defaults, Dividend Arrearages and Delinquencies.................................. 40
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds..... 40
Item 15. Controls and Procedures.......................................................... 40
Item 16A. Audit Committee Financial Expert................................................. 42
Item 16B. Code of Ethics................................................................... 42
Item 16C. Principal Accountants Fees and Services.......................................... 43
Item 16D. Exemption from the Listing Standards for Audit Committees........................ 43
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers........... 43
Item 17. Financial Statements............................................................. 43
Item 18. Financial Statements............................................................. 67
Item 19. Exhibits......................................................................... 67
Signatures....................................................................... 68
Index to Exhibits Filed.......................................................... 69

Page 2 of 75

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

This Form 20-F is being filed as an annual report under the Securities
Exchange Act of 1933, and accordingly, the information called for in Item 1 is
not required. Please refer to "Item 6 - Directors, Senior Management and
Employees -Directors and Senior Management".

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

This Form 20-F is being filed as an annual report under the Securities
Exchange Act of 1933, and accordingly, the information called for in Item 2 is
not applicable to this report.

ITEM 3. KEY INFORMATION

A. Selected Financial Data.

The following table sets forth, for the periods and the dates indicated,
selected financial and operating data for Allura International Inc. ("Company"
or "Allura" or "Allura Group"), for the fiscal years ended March 31, 2005, 2004,
2003, 2002 and 2001. This information should be read in conjunction with the
Company's Financial Statements and Notes thereto, and "Operating and Financial
Review and Prospects" included elsewhere herein. The selected financial data
provided below are not necessarily indicative of the future results of
operations or financial performance of the Company. To date, the Company has not
paid any dividends on its common shares. The Company's policy at the present
time is to retain earnings for corporate purposes. The payment of dividends in
the future will depend on the earnings and financial condition of the Company
and such other factors as the Board of Directors of the Company may consider
appropriate. Since the Company is currently in an expansion stage, it is
unlikely that earnings will be available for payment of dividends in the near
future.

The Financial Statements of the Company have been prepared in accordance
with accounting principles generally accepted in Canada ("Canadian GAAP"). There
are no material differences between Canadian GAAP and the accounting principles
that are generally accepted in the United States ("U.S. GAAP") as applied to the
Company, including disclosure items, excepting those disclosed in the financial
statements under note 16.

The following tables set forth information in Canadian dollars.

Page 3 of 75

2005 2004 2003 2002 2001
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Net Sales $18,252,286 $16,114,338 $17,031,485 $14,652,109 $15,411,132
Gross profit $ 5,098,045 $ 3,957,544 $ 4,023,904 $ 3,005,569 $ 3,675,880
Net Income (Loss) $ 322,708 $ 327,681 $ 398,084 $(1,037,146) $ (583,992)
Earnings (Loss) Per Common
Share (a) $ 0.02 $ 0.02 $ 0.03 ($ 0.07) ($ 0.04)
Outstanding shares (a) 15,240,302 15,240,302 15,240,302 15,355,055 15,355,055
Total Assets $16,824,370 $11,539,964 $12,285,925 $13,624,443 $12,644,535
Working Capital $ 2,936,292 $ 2,582,063 $ 2,250,619 $ 1,825,796 $ 1,763,449
Long Term Liabilities -- -- -- --
Total Liabilities $13,689,730 $ 8,728,032 $ 9,752,174 $11,327,737 $ 9,310,683
Non Controlling Interest -- - -- --
Shareholder's Equity $ 3,134,640 $ 2,811,932 $ 2,533,751 $ 2,296,706 $3,333,852
Dividends declared per share -- -- -- -- --

(a) Earnings per share are on basic and fully diluted basis.

The company's consolidated financial statements for the years ended March 31,
2005, 2004 and 2003 have been restated to reflect the following adjustments as
disclosed in Note 3 to the consolidated financial statements:

(1) Due to a change in Canadian generally accepted accounting
principles, the Company has recorded the fair value of a put option
issued in 2000 as a liability rather than as equity as previously
presented.

(2) The Company has presented certain sales discounts as a reduction in
net sales rather than as a selling cost as previously presented.

CURRENCY EXCHANGE RATE INFORMATION

The Company's accounts are maintained in Canadian dollars. In this Annual
Report all dollar amounts are expressed in Canadian dollars except where
otherwise indicated. The rate of exchange means the noon buying rate in New York
City for cable transfer in Canadian dollars as certified for customs purposes by
the Federal Reserve Bank of New York. The average rate means the average of the
exchange rates on the last date of each month during a calendar year. We do not
represent that the Canadian dollar or the US dollar amounts

Page 4 of 75

could be converted into US dollars or Canadian dollars, as the case may be at
any particular rate, the rates set forth below, or at all.

(a) On August 31, 2005, the noon buying rate in New York City for cable
transfers in Canadian dollars as certified for customs purposes by the Federal
Reserve Bank was $1.00 US = $1.1893 Canadian.

(b) The following table sets forth the high and low exchange rates for each
month during the previous six months:

Canadian Dollar/US Dollar

Month Low High

August 2005 $1.1888 $1.2185
July 2005 $1.2048 $1.2365
June 2005 $1.2256 $1.2578
May 2005 $1.2373 $1.2703
April 2005 $1.2146 $1.2568
March 2005 $1.2017 $1.2463

(c) The following table sets forth the average rates for each period,
calculated by using the average of the exchange rates on the last day of each
month during the period:

Canadian Dollar/US Dollar

Fiscal Year Ended Average Rate

March 31, 2005 $1.2735
March 31, 2004 $1.3491
March 31, 2003 $1.5447
March 31, 2002 $1.5638
March 31, 2001 $1.5360

B. Capitalization and Indebtedness.

This Form 20-F is being filed as an annual report under the Securities
Exchange Act of 1933, and accordingly, the information called for in this Item
3.B is not required

C. Reasons for the Offer and Use of Proceeds.

This Form 20-F is being filed as an annual report under the Securities
Exchange Act of 1933, and accordingly, the information called for in Item 3.C is
not applicable to this report.

D. Risk Factors.

Page 5 of 75

The Company's business is subject to a number of risk factors that are set
forth below. Additional risks and uncertainties not now known to us or that we
think are immaterial may also adversely impact or impair our business. If any of
the following risks actually occur, our business, results of operations, or
financial condition would likely suffer.

Outside manufacturers manufacture all of the Company's products, in whole
or in part. These outside manufacturers typically are small to medium-sized,
privately owned companies. During fiscal 2005, the Company purchased gold and
silver products from over 126 suppliers, with the five largest suppliers
accounting for approximately 36% of the Company's total gold and silver
purchases. In the diamond jewelry, loose stone and coloured stone area, the
company purchased products from approximately 101 suppliers, while the five
largest suppliers accounted for 50% of the Company's total purchases in this
area.

Although a substantial portion of the Company's purchases are concentrated
within a small number of suppliers, the Company does not believe the loss of any
one supplier would have a material adverse effect on its business. Alternative
sources of supply for the finished goods purchased by the Company are available.
The Company has no long-term contractual relationship with any of its suppliers.

Risks generally inherent in the use of outside manufacturers include
security at the manufacturer's facility, transport of materials to and from the
manufacturer, theft by the manufacturer or its employees and bankruptcy or other
financial problems of the manufacturer.

Fluctuations in the price of gold and diamonds may affect the Company's
profitability.

Prices for the Company's products generally are determined by reference to
the current market price of gold or diamonds. Consequently, the Company's sales
could be affected by significant increases, decreases or volatility in the price
of gold or diamonds. If the price of gold or diamonds were to move substantially
above or substantially below current price levels and remain at such levels for
a prolonged period of time, such increase or decrease could have an adverse
effect on the Company's results of operations. In addition, the Company's
results of operations may be adversely affected during the periods of extreme
volatility in the price of gold or diamonds since many customers may elect to
defer purchases until the price of gold or diamonds had become relatively
stable.

The Company's business is highly seasonal and accordingly, the Company's
revenues may vary significantly from quarter to quarter.

The Company's business is highly seasonal. The third and fourth calendar
quarters, which include the Christmas shopping season, generally produce the
strongest results, and the second calendar quarter generally produces the
weakest results. The Company's sales and income also may vary from quarter to
quarter as a consequence of general economic and industry conditions that affect
consumer spending and purchases by retailers.

The Company's business may be adversely affected if it were to lose the services
of Mr. Jeremy Bowman and/or other key employees.

The Company's business is substantially dependent on the efforts and
abilities of Jeremy Bowman, its Chief Executive Officer. The loss of Mr.
Bowman's services may have a material adverse effect on the Company's business.
The Company is currently negotiating an employment agreement with Mr. Bowman;
however, it has not yet been finalized. The Company does not maintain any key
man life insurance on Mr. Bowman's life. There are no assurances that the
agreement currently being negotiated will be finalized.

Page 6 of 75

The Company's success will depend upon recruiting and maintaining other
qualified personnel to staff its operations. The Company believes that such
personnel currently are available at reasonable salaries and wages. There can be
no assurance, however, that such personnel will always be available in the
future. In addition, it cannot be predicted whether the Company's work force
will be unionized. The success of the operations and activities of the Company
is dependent to a significant extent on the efforts and abilities of its
management. Although the Company has employment agreements with certain of its
key employees, the loss of services of any of its management personnel could
have a material adverse affect on the Company. See "Directors, Senior Management
and Employees."

The Company faces competition from a number of different companies some of which
have greater financial and other resources than the Company.

The Company's business is highly competitive, and the distribution
channels in which the Company markets its products frequently involve different
competitive factors. Some companies in the jewelry industry may have greater
financial and other resources than the Company. See "Information on the Company-
Business Overview - Competition."

The Company does not have any long-term contracts with its customers.

The Company has no long-term contractual relationships with any of its
customers nor are any of the Company's customers subject to any contractual
provisions or other restrictions, which preclude them from purchasing products
from the Company's competitors. As a gesture of good will the Company provides a
stock balancing service, primarily to large retailers, in order to assist them
with maintaining inventory levels in an efficient way. Stock balancing
transactions involve taking back products for resorting and redistribution to
other stores within the retailers group.

Concentration of ownership among our Directors, Executive Officers, and
Principal Stockholders may prevent new investors from influencing significant
corporate decisions.

Based upon beneficial ownership as of July 18, 2005, the Company's
directors, executive officers, holders of more than 5% of our common stock, and
their affiliates will, in the aggregate, beneficially own approximately 85% of
our outstanding common shares. As a result, these stockholders, subject to any
fiduciary duties owed to our other stockholders under Canadian law, will be able
to exercise a controlling influence over matters requiring stockholder approval,
including the election of directors and approval of significant corporate
transactions, and will have significant control over our management policies.
Some of these persons or entities may have interests that are different from
yours. For example, these stockholders may support proposals and actions with
which you may disagree or which are not in your interests. The concentration of
ownership could delay or prevent a change in control of our company or otherwise
discourage a potential acquirer from attempting to obtain control of our
company, which in turn could reduce the price of our common stock. In addition,
these stockholders, some of whom are directors or who have representatives
sitting on the Company's board of directors, could use their voting influence to
maintain the Company's existing management and directors in office, delay or
prevent changes of control of our company, or support or reject other management
and board proposals that are subject to stockholder approval, such as amendments
to the Company's employee stock plans and approvals of significant financing
transactions.

Stockholders may find it difficult to sell their shares since there is no market
for the Company's Common Stock.

Page 7 of 75

There is no current trading market for the shares of the Company's Common
Stock and there can be no assurance that a trading market will develop, or, if
such a trading market does develop that it will be sustained. The shares of the
Company's Common Stock, to the extent that a market develops for the shares of
the Company's Common Stock at all, of which there can be no assurance, will
likely appear in what is customarily known as the "pink sheets" or on the NASDAQ
Bulletin Board, which may limit the marketability and liquidity of the shares of
the Company's Common Stock. Thus, stockholders may find it difficult to sell
their shares. To date, neither the Company nor anyone acting on its behalf has
taken any affirmative steps to request or encourage any broker/dealer to act as
a market maker for the Company's Common Stock. Further, there have been no
discussions or understandings, preliminary or otherwise, between the Company or
anyone acting on its behalf and any market maker regarding the participation of
any such market maker in the future trading market, if any, for the Company's
Common Stock.

Under Rule 15g-9 of the Exchange Act, a broker or dealer may not sell a
"penny stock" to, or affect the purchase of a penny stock by, any person unless:

(a) such sale or purchase is exempt from Rule 15g-9;

(b) prior to the transaction the broker or dealer has (1) approved the
person's account for transactions in penny stocks in accordance with
Rule 15g-9, and (2) received from the person a written agreement to
the transaction setting forth the identity and quantity of the penny
stock to be purchased; and

The United States Securities and Exchange Commission (the "Commission")
adopted regulations that generally define a penny stock to be any equity
security other than a security excluded from such definition by Rule 3a51-1.
Such exemptions include, but are not limited to (1) an equity security issued by
an issuer that has (i) net tangible assets of at least US$2,000,000, if such
issuer has been in continuous operations for at least three years, (ii) net
tangible assets of at least US$5,000,000, if such issuer has been in continuous
operation for less than three years, or (iii) average revenue of at least
US$6,000,000 for the preceding three years; (2) except for purposes of Section
7(b) of the Exchange Act and Rule 419, any security that has a price of US$5.00
or more; and (3) a security that is authorized or approved for authorization
upon notice of issuance for quotation on the NASDAQ Stock Market, Inc.'s
Automated Quotation System. It is likely that shares of the Company's Common
Stock, assuming a market were to develop therefore, will be subject to the
regulations on penny stocks; consequently, the market liquidity for the
Company's Common Stock may be adversely affected by such regulations limiting
the ability of broker/dealers to sell the Company's Common Stock and the ability
of stockholders to sell their securities in the secondary market.

Moreover, the Company's shares may only be sold or transferred by its
stockholders in those jurisdictions in which an exemption for such "secondary
trading" exists or in which the shares may have been registered.

Assuming a market for the Company's Common Stock was to develop, resales of
issued and outstanding restricted stock pursuant to Rule 144 may adversely
affect the price of the Company's common stock.

There are presently issued and outstanding 15,240,302 shares and an
additional 3,000,000 shares reserved for issuance upon the exercise of 352,500
options; all but 429,868 of which, are "restricted securities" as that term is
defined under the Securities Act of 1933, as amended (the "Act"), and in the
future may be sold in compliance with Rule 144 of the Act, pursuant to an a
Registration Statement filed under the Act, or other applicable exemptions from
registration thereunder. Rule 144 provides, in essence, that a person holding
restricted securities for a period of one year may sell those securities in
unsolicited brokerage transactions or in

Page 8 of 75

transactions with a market maker, in an amount equal to one percent of the
Company's outstanding Common Stock every three months. Additionally, Rule 144
requires that an issuer of securities make available adequate current public
information with respect to the issuer. Such information is deemed available if
the issuer satisfies the reporting requirements of Sections 13 or 15(d) of the
Exchange Act and of Rule 15c2-11 thereunder. Rule 144 also permits, under
certain circumstances, the sale of shares by a person who is not an affiliate of
the Company and who has satisfied a two-year holding period without any quantity
limitation and whether or not there is adequate current public information
available. Investors should be aware that sales under Rule 144, or pursuant to a
Registration Statement filed under the Act, might have a depressive effect on
the market price of the Company's Common Stock in any market that may develop
for such shares.

Since the Company is a Canadian corporation it may be difficult for US
shareholders to effect service of process or to enforce judgments obtained in
the US.

The Company is a Canadian corporation. All of its directors and officers
are residents of jurisdictions other than the United States and a significant
part of its assets are, or will be, located outside of the United States. As a
result, it may be difficult for shareholders resident in the United States to
effect service within the United States upon the Company, and/or such directors
or officers who are not residents of the United States, or to realize in the
United States upon judgments of courts of the United States predicated upon
civil liability of any of the Company, or such directors or officers, under the
United States federal securities laws. The Company has been advised by its
Canadian counsel that there is substantial doubt as to whether Canadian courts
would (i) enforce judgments of the United States courts of competent
jurisdiction obtained against the Company, or such directors or officers,
predicated upon the civil liabilities provisions of such securities laws, or
(ii) impose liabilities in original actions against the Company or its directors
or officers predicated solely upon such securities laws. Accordingly, United
States shareholders may be forced to bring actions against the Company and its
directors and officers under Canadian law and in Canadian courts in order to
enforce any claims that they may have against the Company or its directors or
officers. Subject to necessary registration under applicable provincial
corporate statutes in the case of a corporate shareholder, Canadian courts do
not restrict the ability of non-resident persons to sue in their courts.

The Company's profitability may be affected by currency risk.

The Company is exposed to currency risk as some of its accounts payable
are denominated in currencies other than the Canadian dollar.

The Company earns revenue and incurs operating expenses predominantly in
Canadian dollars. Unfavorable changes in the applicable exchange rates may
result in a decrease or increase in foreign exchange gain or loss.

The Company does not use derivatives to reduce its exposure to foreign
currency risk.

The Company's profitability may be affected by interest rate risks.

The Company's bank indebtedness bears floating interest rates. This
exposes the Company to the risk of changing interest rates that may have a
detrimental affect on its earnings in future periods.

The Company's profitability may be affected by credit risks.

Page 9 of 75

Credit risk arises from the possibility that the entities to which the
Company sells products may experience financial difficulty and be unable to
fulfill their contractual obligations.

The Company's profitability may be affected by commodity price sensitivity.

The future revenue and profitability of the Company will be dependent, to
a significant extent, upon prevailing spot market prices for gold and diamonds.
In the past, gold and diamond prices have been volatile. Prices are subject to
wide fluctuations in response to changes in supply and demand for gold and
diamonds, market uncertainty and a variety of additional factors that are beyond
the control of the Company. The Company does not engage in any hedging
activities.

Recently enacted and proposed changes in securities laws and regulations are
likely to increase our costs.

In July 2002, President Bush signed into law the Sarbanes-Oxley Act of
2002 ("SOX"). The purpose of the SOX is to, among other things, protect
investors by improving the accuracy and reliability of corporate disclosures
made pursuant to the securities laws. We expect these developments to increase
the legal and financial compliance costs, and to make some activities more
difficult. For example, we expect these developments to make it more difficult
and more expensive for public companies to obtain director and officer liability
insurance. These developments could make it more difficult for us to attract and
retain qualified members of our board of directors, particularly to serve on an
audit committee, and qualified executive officers. We are presently evaluating
and monitoring regulatory developments and cannot estimate the timing or
magnitude of additional costs we may incur as a result. Furthermore, proposed
changes in the accounting rules could increase the expenses that we report under
GAAP and adversely affect our operating results. While we will endeavor to
establish the requisite procedures and structure our corporate governance in
accordance with SOX and the rules and regulations thereunder, as issued by the
SEC from time to time, we cannot assure you that we will be successful in this
regard or that the costs we incur in doing so will not prove material and
adversely affect our profitability.

ITEM 4. INFORMATION ON THE COMPANY

A. History, development and organizational structure of the Company.

Corporate Structure

Allura International Inc. (the "Company" or "Allura") was incorporated on
April 13, 1988 under the laws of Canada under the name "IBB International
Bullion and Metal Brokers (Canada) Limited." The Company changed its name to
"Allura International Inc." on April 1, 1999 and simultaneously effected a
corporate restructuring (the "Restructuring") by selling and transferring all of
its assets, other than its 50% interest in Allura Diamonds Limited, a Canadian
corporation ("ADL") to IBB International (Canada) Ltd., a Canadian corporation
("IBB") in exchange for shares of the capital stock of IBB. IBB was newly formed
for the purpose of affecting the Restructuring and as a result of the
Restructuring, became a wholly owned subsidiary of the Company. At the same
time, the Company acquired the balance of the issued and outstanding shares of
capital stock of ADL in exchange for 250,000 shares of the Company's common
stock. During May 2000, the Company incorporated a new company, Bygo Inc.
("Bygo"). Collectively, IBB and ADL are referred to as the "Jewelry Division",
and together with Bygo, as the "Subsidiaries," and together with the Company, as
the "Allura Group."

Page 10 of 75

The Company, through the Jewelry Division, is primarily in the business of
wholesaling gold, sterling silver and diamond jewelry in Canada. Its customer
base is comprised of large national chains as well as independent retailers.
During 2000, the company incorporated a wholly owned subsidiary Bygo. Bygo
currently has business-to-business and business-to-consumer Internet commerce
sites. Since its inception, Bygo has earned minimal revenues as the Company had
intended to primarily devote its efforts and resources to develop the software
and hardware necessary to execute its business plan. However, Bygo's software
development efforts were discontinued in fiscal 2001 and as such there have been
no expenditures relating to development of software. Bygo operates as an on-line
e-commerce facilitator of jewelry, paper goods and giftware distribution.

The Company's head-office is located at 1555 West 8th Avenue, Vancouver,
B.C., V6J 1T5. Its telephone number is (604) 683-5700, and its fax number is
(604) 683-5979. IBB and Bygo operate out of the Vancouver facility, however ADL
has its principal office in Halifax at Unit 104, 276 Bedford Highway, Halifax,
N.S., B3M 2K6. The telephone number for ADL is (902) 457-7654 and the fax number
is (902) 443-8414.

Business History

The Company was initially formed to import European jewelry into Canada.
The objective of the Company has been to be a specialized supplier of gold,
silver and diamond jewelry within the following principal sectors:

Department stores

Catalogue retailers

Mass merchants

Major discounters

Major jewelry retailers

Independent jewelry stores

B. Business Overview

Current Operations

The Company conducts its jewelry wholesaling operations through the
Jewelry Division, and conducts its e-commerce business through Bygo.

The Company's mass marketing jewelry operations are conducted through IBB,
while ADL's primary focus is the independent jewelry sector.

The Activities of IBB

As the "average" Canadian gold importer will normally only buy what is
available from the manufacturers, IBB believes that it is different, in that it
has most of its products manufactured distinctly to its own specifications. IBB
has created a niche for its products through innovative selling and display
techniques and through the use of trade marked names, such as Dreamcatchers(TM),
Little Loves Gold Jewellery(TM), Golden Moments(TM), Earresistables(TM), Tuscany
Gold Collection(TM), and Tuscany Silver(TM).

The range of products that IBB sells consists mainly of chains, bracelets,
bangles, and earrings in 10, 14

Page 11 of 75

and 18 karat gold. IBB also markets silver jewelry to major retailers and
jewelry chains.

IBB's sales are divided approximately 84% to major retail and jewelry
store chains and 16% to independent jewelry stores. IBB has created a strong and
resourceful management team and continues to invest more to develop and improve
on management information systems and computer equipment. This strategy has
built a strong management infrastructure, which is ready to handle possible
expansion throughout the North American markets.

The Activities of ADL

ADL was established in 1994 as a premier diamond house to market finished
diamond jewelry and loose diamonds. ADL currently specializes in finer diamond
jewelry.

ADL sales are divided approximately 27% to major retail and jewelry store
chains and 73% to independent jewelry stores. ADL's lower priced diamond jewelry
to major retailers is marketed through IBB. In 2002, ADL incorporated the
"Canadian Diamond" into its range of products. Then in 2004 ADL introduced a new
"Diamond Collection Certificate" certifying rings within this product category
as a true Canadian made product. This certificate accompanies all products
within the "Hearts and Arrows" and "Ideal Cut Diamond" collections.

The Activities of Bygo

Bygo was established in May 2000 to operate Allura's Internet Commerce
business, which comprises of a business-to-business and business-to-consumer
e-commerce service. Bygo's e-commerce business provides a catalog based web site
for suppliers in the jewelry and giftware industry to facilitate online business
transactions.

Since its inception, Bygo has earned minimal revenues by primarily
devoting its efforts and resources to develop the software and hardware
necessary to execute its business plan. Bygo operates as an on-line e-commerce
facilitator of jewelry, paper goods and giftware distribution.

The Allura Group

The Allura Group offers its customers a large selection of jewelry styles,
consistent product quality, prompt delivery of product orders and provides a
wide range of specialized services. The Company's retail customers include The
Bay, Wal-Mart Canada Corp., Zellers Inc., Sears Canada Ltd., Ben Moss Jewellers
and Charm Diamond Centres. These customers are among the Company's largest
customers, accounting for approximately 62% of the Company's net sales in fiscal
2005, 61% in fiscal 2004 and 58% in fiscal 2003. They are representative of the
customers to which the Jewelry Division's marketing efforts are directed. The
Company continues to expand its customer base.

While the Allura Group focused its primary marketing efforts on a
relatively small number of retailers, in fiscal 2005, sales were made to
approximately 600 customers; with over 1400 retail locations, and with no single
customer accounting for more than approximately 26% of net sales. The Company's
six largest customers accounted for approximately 62% of sales in fiscal 2005,
61% in fiscal 2004 and 58% in fiscal 2003.

The Company does not have any long-term contractual arrangements with any
of its customers; and any of its customers may purchase similar products from
the Company's competitors.

Marketing Philosophy

Page 12 of 75

In implementing its business strategy, the Company originally introduced
the idea of "concept selling," whereby a group of products, effectively a
collection of jewelry, could be offered to a customer as a complete concept,
including a full merchandise package. With a master assortment in place, the
Allura Group, through discussions with the customers regarding their respective
market demographics and prior marketing successes and failures, is able to
tailor a unique collection of merchandise to suit the individual needs of each
customer. As the customer's individualized collection is assembled, the
Company's professional team of experts develops innovative displays together
with complementing marketing material that will assist the retailer to execute
its sales plan. The Allura Group's staff follow up with telephonic and in
persons conferences and discussions, fine tuning and refining the program on a
continuing basis to ensure an ongoing positive relationship with customers.

Industry Background

We obtained statistical data and certain other industry forecasts used
throughout this report from market research, publicly available information and
industry publications. Industry publications generally state that they obtain
their information from sources that they believe to be reliable, but they do not
guarantee the accuracy and completeness of the information. Similarly, while we
believe that the statistical and industry data and forecasts and market research
used herein are reliable, we have not independently verified such data. We have
not sought the consent of the sources to refer to their reports or articles in
this report.

Gold Jewelry

According to the World Gold Council, retail sales of karat jewelry in
North America for 2003 were US$16.3 billion. Dollar sales in 2003 increased by
2.54% from the previous year (2002 US$ 15.9 billion), and by 1.99% from 2001 to
2002 (2001 US$15.6 billion). Unit volume grew by 3.92% to 214,389 million in
2003 from 206,306 million in 2002, and by 3.67% in 2002 from 199,004 million in
2001. Gold jewelry sales have achieved a three-year growth rate of 12.27% in
number of unit terms (from 190,957 million to 214,389 million) and 6.72% in
dollar terms (from 15.3 billion to 16.3 billion) between December 2000 and
December 2003.

In 2003, dollar value growth was up by 2.5% over the previous year with
Non-Store retail leading the way in sales growth (+3.9%), followed by Mass
Merchants (+3.6%), Jewelry Stores (+2.3%) and then Department Stores (+1.3%).
For the year, Jewelry stores accounted for 49.3% of all retail dollar value
sales (US$8,054,530), while Mass Merchandisers were 22.5% (US$3,688,152) and
Department Stores were 19.1% (US$3,120,431).

Diamonds

According to the Diamond Promotion Services 2003 North American (US and
Canada) retail sales of diamond jewelry (defined as jewelry containing at least
one diamond; regardless of size, and including diamond watches) was 29.8
billion. This was a 6.2% increase over the 2002 retail sales number, and an
11.8% increase over the 2001 number.

In volume terms, 44.1 million pieces of diamond jewelry were sold in the
US in 2003, which is a 5.4% increase over 2002 and a 16.6% increase over 2001.
(Note: no volume data is available for Canada)

US sales by outlet. 75% by independent and small chain jewelry stores
(under 30 stores) and by large chain Jewelers (30 plus stores). The remaining
25% is distributed among discounters, department stores (national and regional),
other retail outlets, Internet and TV shopping.

In terms of sales, independent and small chains accounted for almost half
of the value in 2003, however they are loosing their market share to larger
chains. Larger chains experienced an 18% increase in the value of

Page 13 of 75

their market share in 2003 over 2002.

The largest area of growth in terms of style was seen in three-stone
diamond jewelry, with sales up 75% in 2003 over the same period in 2002. Diamond
necklaces also experienced strong growth in 2003, up 14%.

Internet Business to Business

Bygo provides a turnkey service for wholesale suppliers and retailers of
jewelry, giftware, and related product categories. Suppliers will outsource
catalogue creation, order transmission, purchasing facilitation and associated
services to Bygo. This centralization of services will enable suppliers and
retailers, who may not otherwise have the capacity to do so, to participate in
the Internet marketplace and take advantage of the potential benefits offered by
e-commerce.

Business Strategy

The Company expects that its market share of the business generated by
large jewelry retailers will continue to trend upwards as manufacturers and
distributors with the size and sophistication to satisfy the specialized service
needs of these large retailers become increasingly in demand. The specialized
services required by these retailers include bar coding, individualized
packaging, "drop-shipping" to individual locations and the ability to
participate in electronic data interchange ("EDI") programs. The Company
believes these services are not available from all suppliers within the
industry. Currently, the Company has the capability and resources to provide
such services and have done so for customers that have requested for such
services.

The Company believes that in the increasingly competitive environment in
which it operates, the ability to provide specialized customer services, deliver
product in a timely fashion and offer a broad line of moderately priced products
with a perceived high value will become increasingly important marketing
factors. The Company has formulated a business strategy that it believes will
enable it to take advantage of these developing trends in the jewelry industry.
Further, the Company believes that its business strategy will allow it to
leverage the expertise and customer base it has established in the Canadian
market to create future sales in the much larger markets of the United States.

The Company believes that the most important elements of its business
strategy are:

Focused Customer Base. While the Company has developed a broad customer
base, the Company targets its marketing efforts towards large retailers, such as
mass merchandisers, department stores, jewelry retail chains, and other major
discount stores. These customers typically require a high level of service, and
the Company seeks to build long-term relationships by making it convenient and
cost-effective for these customers to rely on the Company for essential services
such as product design, inventory control and on time delivery.

Customer Service. The Company offers prompt and reliable order fulfillment
and a wide range of specialized services, including individualized packaging of
jewelry products, price-tagging, bar coding, delivery to individual customer
locations and computer generated reports which aid customers in inventory
control, purchasing decisions and the identification of market trends. The
Company has also participated in EDI programs with certain customers. The
Company believes these specialized services, which are particularly important in
marketing to large retailers, enhance the Company's ability to attract and
retain customers and serve to differentiate the Company from many of its
competitors.

Successful Product Line Diversification. The Allura Group offers its
customers a large selection of jewelry styles and range of products that include
precious and semi precious stones, gold jewelry and silver jewelry.

Product Diversity, Innovation and Value Pricing. The Company seeks to
provide its customers with a

Page 14 of 75

full line of high quality gold jewelry products that incorporate traditional
styles and designs. While the Company regularly updates its product lines and
offers new products, it seeks to avoid designs incorporating high fashion trends
that are expected to have short life cycles. The Company currently offers
approximately 1,400 styles of chains, earrings, bracelets and rings. The
Company's products are moderately priced, with the majority of its products
retailing at prices between $30 and $800, and the relatively more expensive
product line offered by ADL are intended to appeal to consumers who are
value-conscious as well as fashion-conscious. IBB has made inroads into the
silver jewelry market by securing programs with various customers. The Company
currently offers approximately 54 styles of silver product. A principal focus of
the Company's design program is to maximize the perceived value of the Company's
products through design and manufacturing innovations that enhance the
appearance of its jewelry without corresponding increases in product costs. The
Company also works closely with major customers to develop products, which are
sold exclusively by those customers.

Internet Operations. The Company currently has two Internet web domain
names registered for its jewelry operations, AlluraJewelry.com and ibbgold.com.
Both sites are currently set up for e-commerce order facilitation using the Bygo
web site. The Company has established an e-commerce solution that covers
products in the jewelry, home wares, paper goods and giftware industries, which
operates under bygo.net and bygo.com.

The Company has reserved a number of domain names for use in its Internet
operations including, but not limited to: bygo.com, bygo.net, bygo.ca, bygo.org,
buygo.com, and bygo.biz.

Sales and Marketing

The Company's sales and marketing operations are directed at retail stores
of all types and sizes such as department stores, catalogue retailers, mass
merchants, major discounters, major jewelry retailers and independent jewelry
stores. The Company's retail customers include The Bay, Wal-Mart Canada Corp.,
Zellers Inc., Sears Canada Ltd., Ben Moss Jewellers and Charm Diamond Centres.
These customers are among the Company's largest customers, accounting for
approximately 62% of the Company's net sales in fiscal 2005, 61% in fiscal 2004
and 58% in fiscal 2003. The company had two (2004: three) customers, sales to
each of whom exceeded 10% of the total sales. They are representative of the
customers to which the Jewelry Division's marketing efforts are directed. The
Company continues to expand its customer base.

The Company believes that providing exceptional customer services is a key
element of its marketing program. The Company's marketing efforts emphasize its
ability to fill orders in a prompt and reliable fashion. The Company maintains
an extensive inventory of finished goods, which enable it to rapidly fill
customer orders often within 24 hours of receipt. The Company believes many of
its competitors manufacture products only upon the receipt of customer orders
and generally has only a limited ability to fill orders from existing stock. The
Company has worked hard to build its computer programs to help anticipate
customers' needs.

In addition to prompt and reliable order fulfillment, the Company offers a
wide variety of customer support services designed to meet the individual needs
of its customers. The Company targets large retailers who require a high level
of service, and the Company seeks to build long-term relationships by making it
convenient and cost-effective for customers to rely on the Company for essential
services. For many of these customers, the Company prepackages, price-tags and
bar codes individual pieces of jewelry and then ships an assortment of many
prepackaged items to individual retail locations. Other services provided by the
Company include advertising and merchandising support and, point of sale
displays.

The Company provides computer-generated reports analyzing the customers'
sales and inventory levels by category, style and price point. These reports
assist the Company and its customers to increase sales, manage inventory and
project demand. The Company believes the reports are a valuable marketing tool,
and a substantial portion of the efforts of the Company's marketing staff is
devoted to the review and analysis of the reports with representatives of the
Company's major retail customers. These discussions provide a basis for
subsequent purchasing decisions by customers.

Page 15 of 75

Marketing of the Company's products is conducted through its offices in
Vancouver and Halifax. The Company also has a National Sales Manager for major
accounts in Toronto, a National Independent Sales Manager, and five regional
independent customer service representatives who market to retail customers. In
addition, the Company's products are promoted through the use of the Internet,
brochures and trade show exhibitions. The Company does not advertise its
products directly to consumers.

Prices charged to individual customers vary based on the services required
by the customer and the customer's sales volume. Most sales are made under terms
that require payment to the Company of the full purchase price within 90 days of
the date of invoice. During the Christmas holiday season, payment terms for
certain customers may be extended. The Company also makes sales on a consignment
basis (transactions in which products are delivered to customers for more than
90 days under terms which permit the customer to defer paying for the products
until they are sold to its customers and allows them to return any unsold
product). The amount of consignment sales in the past three fiscal years was
approximately $5.7 million per year.

The Company accepts returns of products with defects in materials or
workmanship. The Company also accepts returns of certain items, primarily from
large retailers, in order to maintain customer goodwill and as part of
promotional programs. Returns of products which are not defective, generally,
are made as part of stock balancing transactions in which the returned products
are replaced with products better suited to the customer's particular market
needs.

While the Company sold its products to approximately 600 customers in
fiscal 2005, sales of the Company's six largest customers accounted for
approximately 62% of sales in fiscal 2005 and 61% in fiscal 2004 and 58% in
fiscal 2003. All of the Company's active customers are Canadian except Zales
Corporation.

Products

The Company seeks to provide its customers with a full line of high
quality 10, 14 and 18 karat gold, silver jewelry and diamond jewelry products
that incorporate traditional styles and designs. While the Company regularly
updates its product lines and offers new products, it seeks to avoid designs
incorporating high fashion trends that are expected to have short life cycles.
The Company currently offers approximately 1,400 styles of chains, earrings,
bracelets and rings. The Company's products are moderately priced, with the
majority of its gold products retailing at prices between $30 and $800 and are
intended to appeal to consumers who are value-conscious as well as
fashion-conscious. Through ADL, the Company sells items of relatively higher
price points, which will extend to an average high of $2,500.

The Company has an extensive selection of products to offer its customers.
Some of these are available exclusively from the Company. These products include
neckwear, chains, bracelets, bangles, earrings, rings, lockets, pendants and
charms. At the same time, through ADL, the Company sells loose diamonds.

The Company works closely with its manufacturers to put together some
product ranges that are exclusive and often unique in design. The Company's
marketing and merchandising staff work in partnership with major customers to
develop products that are sold exclusively by the Company to those customers.

The Company's product line includes approximately 840 karat gold, 350
diamond and colored stone and 54 sterling silver products that are a regular
part of its product line. These products are traditionally designed diamond and
colored stone set items, karat gold and sterling silver chains and other jewelry
products for which there has been consistent demand. The Company continually
strives to update the balance of its product line with innovative, new styles.
New styles primarily are introduced at the beginning of each calendar year, and
replace older styles whose performance has declined. The Company closely
monitors sales of its new styles and promptly discontinues any style that fails
to achieve desired sales levels.

When major customers plan to discontinue items from their programs,
including those that have been on consignment programs, the items agreed to be
discontinued are sold down to minimize the

Page 16 of 75

quantifies returned to the Company. When the items are returned, they are
typically offered to other customers for regular margins. At times during the
year, the Company may offer such discontinued items at discount values to
generate cash flow and these are typically sold at reduced margins.

Styles are discontinued when a supplier or manufacturer has discontinued
an item from their offering and we are unable to replace the product or the
customers' performance for the item has not met their targets.

The Company's experience is that such discontinued products do not have to
be significantly written down as its expected recovery from subsequent sales is
above costs.

Customers selling prices and the Company's price book are updated annually
to ensure prices reflect market conditions and costs of doing business. Certain
customer prices lists are priced to allow for adjustments to gold price
fluctuations. Gold price is monitored on a daily basis to ensure such price
lists are updated to reflect current gold levels.

It is the Company's experience that some items significantly written down
are later sold but these amounts are not material. The Company's estimates that
during fiscal 2005, such sales accounted for $200,000 of the total revenues for
the Company. During fiscal 2005, the Company has written down inventory by an
additional $92,000 to reflect the estimated recovey of discontinued items.

A principal goal of the Company's new product program is to optimize the
perceived value of the Company's products through design and manufacturing
innovations that enhance the appearance of the jewelry without incurring
corresponding increases in product costs.

Service

Bygo provides a turnkey service for suppliers of jewelry, giftware, paper
goods, housewares and related product categories. Suppliers and retailers will
outsource catalogue creation, order transmission, purchasing facilitation and
associated services to Bygo. This centralization of services will enable
suppliers and retailers, who may not otherwise have the capacity to do so, to
participate in the Internet marketplace and take advantage of the potential
benefits offered by e-commerce.

Bygo's all-inclusive e-commerce service will allow suppliers
(manufacturers, wholesalers, or distributors) to place their entire product
range online in a comprehensive, professional, integrated catalogue, and assist
them in selling their goods to their bricks-and-mortar retail customers.
Services will be provided to all members of the distribution channel:
manufacturers, suppliers, sales reps, and retailers.

Purchasing

The Company purchases finished products from suppliers located principally
in North America, the Middle East, the Far East and the European Economic
Community ("EEC"). The principal items purchased by the Company through IBB are
machine and handmade gold and silver chains; other gold and silver items
purchased as finished goods include rings, bracelets, bangles, lockets,
earrings, pendants and charms. The principal items purchased by the Company
through ADL are loose diamond stones and finished goods, including rings,
bracelets, pendants and earrings.

The world's principal sourcing of rough diamonds is through De Beers
Consolidated Mines, Limited ("De Beers"), a South African company. The
continuing availability of diamonds to the jewelry industry is dependent, to
some degree, on a continuous supply from De Beers. While several other countries
are major suppliers of diamonds, in the event of an interruption of supply from
South Africa, the jewelry industry, as a whole, could be adversely affected,
which could impact the supply of diamonds to the Company.

During fiscal 2005, the Company purchased gold and silver jewelry products
from approximately 126

Page 17 of 75

suppliers. The largest supplier accounted for approximately 16% of the Company's
total gold and silver purchases, and the five largest suppliers accounted for
approximately 36%. In the diamond jewelry, loose stone and coloured stone area,
the company purchased products from approximately 101 suppliers. The largest
supplier accounted for approximately 20% of the Company's total purchases in
this area, with the five largest suppliers accounting for 50%.

In order to maintain consistent product quality, the Company carefully
selects its suppliers and continually monitors the quality of their performance.
The Company has strict internal control procedures of all jewelry from
inspecting all materials sent and received from outside suppliers, monitoring
the location and status of all inventory to ensuring government rules and
regulations are followed through the entire purchasing and receiving process. A
complete physical inventory of gold, silver and gemstones is taken at the
Company's distribution and administrative facilities on an annual basis.

The Company does not presently engage in hedging when purchasing gold,
silver or diamonds. The Company believes the risk of price fluctuations can be
mitigated by changes in the prices the Company charges its customers and in the
nature of its contracts negotiated with its largest customers. Increases in the
price of diamonds, silver or gold, however, could adversely affect the profit of
the company. A decrease in the price of gold, silver or diamonds could also have
an adverse affect in the valuation of the Company's inventories.

Competition

The jewelry industry in North America is highly fragmented and
characterized by a large number of small to medium-sized manufacturers,
wholesalers and distributors. The Company's business is highly competitive, and
the Company's competitors include domestic and foreign jewelry manufacturers,
wholesalers and importers who may operate on a national, regional or local
scale.

The Company believes that competition is based primarily on product
availability, timeliness of shipment, customer service, product quality, design
and price. The diverse distribution channels through which the Company markets
its products frequently involve different competitive factors. The ability to
provide specialized services is a particularly important competitive factor in
sales to certain large retailers such as mass merchandisers, discount stores and
catalogue retailers. Product availability and the ability to offer consistent
product quality at competitive prices tend to be the key competitive factors to
key customers that the Company serves. Some of the Company's competitors may
specialize in sales to particular distribution channels and may have
relationships with customers in those distribution channels that make
competition by the Company more difficult. The Company believes that the trend
towards consolidation at the retail level in the jewelry industry will increase
the level of competition in the markets in which the Company competes.

The Company believes its primary competitors for IBB to include PAJ Canada
(Canada and USA), Bel-Oro (Canada and USA), Chateau D'Argent (Canada) and R & B
Manufacturing (Canada and USA), and for ADL to include Corona (Canada and USA),
Master Design (Canada and USA), A & A Jewel Star (Canada and USA), J.S.N (Canada
and USA) and Libman (Canada and USA).

Insurance

The Company maintains primarily all-risk insurance, with limits normally
in excess of the Company's current inventory levels, to cover loss and damage
caused by fire and/or theft of inventory located at the Company's facilities and
insurance on goods in transit. The Company also maintains insurance covering
loss and damage caused by fire and/or theft of inventory located at the premises
of suppliers and while in the

Page 18 of 75

possession of its sales representatives. While the amount of available coverage
generally is in excess of the value held by a particular supplier or sales
representative, at times the amount of value held by a supplier may temporarily
exceed the amount of available coverage. These temporary differences between the
amount of available coverage and the value held have not been material to the
Company's financial condition or results of operations. The Company has fidelity
insurance, which provides a level of coverage against theft or embezzlement by
employees of the Company. The Company has an insurance policy to cover liability
against its directors and officers. Additionally, the Company carries credit
insurance, which covers most of the independent and major customer receivables.

Trademarks

The Company maintains certain Canadian and US registered trademarks. The
level of protection available to the Company for proprietary designs varies
depending on a number of factors, including the degree of originality and the
distinctiveness of the designs. No assurance can be given that the Company's
patent, copyrights and other proprietary rights will preclude competitors from
developing substantially equivalent products.

IBB uses trademarks in the sale of some of its products to further create
an exclusive identity for its customers. The following are some of the Canadian
registered trademarks used: Dreamcatchers(TM), Little Loves Gold Jewellery(TM),
Golden Moments(TM), Earresistables(TM), Tuscany Gold Collection(TM), and Tuscany
Silver(TM).

The Company has registered the trademark name bygo.com for its exclusive
use in Canada: BYGO.COM. The Company is in the process of registering the
following trademark name for its exclusive use in the USA: BYGO.COM.
Additionally, the Company has registered the following trademark names for its
exclusive use in the USA: BYGO and BYGO.NET.

The Company does not have, nor does it rely on patents to establish or
protect its market position.

Employees

At March 31, 2005, the Company employed thirty-three persons on a full
time basis. As at September 15, 2005, there were thirty-two persons employed on
a full time basis. As at September 15, 2005, there are twelve employees in
finance and administration nine in sales and merchandising, and eleven in
inventory warehouse. Five employees are employed in the Halifax office, one is
employed in Toronto, and twenty-six are employed in the Vancouver office. None
of the Company's employees are covered by a collective bargaining agreement. The
Company considers its relations with its employees to be good.

Governmental Regulation

The tax laws of the Federal Government of Canada and the Provinces of
British Columbia and Nova Scotia govern the Company. Specifically, it is bound
by income, custom and excise tax rules and regulations regarding customs, all of
which are regulated by the federal government of Canada. In addition, the
Company is subject to the sales tax and employment laws of the Provinces of
British Columbia, Ontario and Nova Scotia. Changes in the tax rates governed by
these authorities may have a significant impact on the cash flows of the
Company.

The Company is also required to comply with the reporting requirements
under Canadian securities laws and the reporting requirements for foreign
issuers under the securities laws of the United States regulated by the
Securities and Exchange Commission.

C. Organizational Structure

Page 19 of 75

Please refer to "Item 4 - History of the Company - Corporate Structure"
and "Business Overview."

D. Property, plants and equipment.

Real Property

The Company operates from leased premises in Vancouver and Halifax. The
Company's Vancouver office is located on 1555 West 8th Avenue, Vancouver, B.C.,
V6J 1T5, Canada and the Halifax office is located on Unit 104, 276 Bedford
Highway, Halifax, N.S., B3M 2K6, Canada.

The Vancouver premises cover 8,557 square feet and give the Company a
self-contained headquarters building from which to operate. The premises have an
underground parking garage. The premises are leased from a partnership of which
Jeremy Bowman, the Company's President and a stockholder who has significant
influence on operations, is a partner. The Company believes that the terms of
the lease are as favorable as those that could be obtained from an unaffiliated
third party. The Company leases the Vancouver premise for $9,400 per month plus
expenses.

On May 27th, 2002, the Company leased an office in Halifax on a five year
fixed term starting July 1st, 2002 at $1,100 per month plus applicable taxes.
The Halifax lease has a 90-day cancellation provision for the benefit of ADL
only. The premises are leased on commercially agreed terms, from Torrington Bay
Investments Limited, in which Tom Weckman, the President of ADL, has an
interest. The Company believes the terms of this lease are as favorable as could
have been obtained from unaffiliated third parties. The premises in Halifax are
located at Unit 104, 276 Bedford Highway, Halifax, N.S., B3M 2K6 and contain
1,136 square feet of office space.

The Company believes that its current premises are adequate for the
Company's current operating level and presently foreseeable growth.

Property and Equipment

The Company also owns a variety of office equipment consisting of
computers, photocopiers and other office equipment.

The software costs included are for software development and acquisition
costs in the Company's subsidiaries of IBB International (Canada) Ltd. and
Allura Diamonds Limited, not for Bygo Inc. These subsidiaries generate
significant revenues and cash flow from the use of this software in their
operations. The evaluation of impairment was conducted by evaluating these
subsidiaries, not Bygo Inc., and the Company has concluded that there has been
no impairment to the software carrying value.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

This discussion should be read in conjunction with the audited
consolidated financial statements of the Company and related notes thereto
included herein.

A. Operating Results

Fiscal 2005 v. Fiscal 2004

Sales for the fiscal year ended March 31, 2005 ("Fiscal 2005") were
$18,504,616 compared to $16,322,923 for the fiscal year ended March 31, 2004
("Fiscal 2004"), an increase of $2,181,693 or 13.4%. The Fiscal 2005 sales
increase was primarily a result of:

Page 20 of 75

o a new program implemented with a major national retailer generated
approximately $1,000,000 increase in sales from the customer

o and increase of the return of business from a previous large customer
resulted in an additional $1,300,000 in sales.

The Company expects the continuance of these two new programs through the
replenishment of sales of items from the program. However, it does not expect to
see the same rate of increase.

Cost of sales for Fiscal 2005 was $13,154,241 with a gross margin of 28.9%
compared to $12,156,794 with a gross margin of 25.5% for Fiscal 2004. The
increase in cost of sales of $997,447 or 8.20% was a result of increased sales
in Fiscal 2005. Gross margin percentage for the current year has improved from
the prior year. This percentage improved partly as a result of an increase in
gold price, improvement in the level of the Canadian Dollar, and increase in
return on inventory. The Company expects the gold price to continue to increase
into its new fiscal year. However, it does not expect a significant benefit from
customer price increases in relation to gold inventory costs.

Cost of sales includes the cost of inventory sold, inbound freight,
duties, taxes and brokerage, jewelry packaging sold with the product, and the
gain/loss on settlement of inventory purchases as discuss above. The Company's
cost of sales may not be comparable to others as the costs associated with
purchasing and receiving and warehousing are included in our selling, general
and administrative expenses as the amounts are not material. Purchasing and
receiving costs approximate $48,000 (2004: $52,000) and warehousing costs
approximate $16,000 (2004: $16,000).

The Company's gross margin may not be comparable to others as the costs of
freight and shipping are included in our selling, general, and administrative
expenses. Freight and shipping totaled $254,267 compared to $169,806 in the
prior year.

General administrative costs increased by 27.9% or $710,249 from
$2,537,947 in Fiscal 2004 to $3,248,196 in Fiscal 2005. The changes were
primarily a result of:

o Bad Debts - increased $45,539 (47.9%): The current year increase is result
of management's decision to write off the accumulation of small
outstanding balances with major customers as well as a general increase in
the provision for future write downs to reflect increased sales volumes.

o Insurance - increased $127,505 (69.4%): There was an overall increase in
premium rates for the Company's various insurance policies. An increased
sales volume also generated a higher premium for credit insurance, while
higher premiums were paid to underwriters for business interruption and
inventory insurance - during the year, inventory levels increased
significantly which required the Company to increase its sums insured.

o Office and Miscellaneous - increased $168,343 (126.0%): In the current
year, the Company incurred hiring/recruiting agent fees to place
additional personnel into its resource pool. In addition, the Company
contracted out additional programming and consulting work to computer
consultants to improve its computerized systems and also utilized an
external consultant to provide training programs and coaching services to
its employee group.

o Salaries and Wages - increased $408,449 (25.2%): During Fiscal 2005, the
Company increased its staffing resources with additional permanent
employees and also increased its temporary staffing during the fall of
2005 to manage and roll out new programs. Included in salaries and wages
are the labour costs of the purchasing and receiving staff which were
approximately $48,000.

Travel, Meals and Entertainment - increased $46,132 (122.8%): During the year,
the Company's sales team members increased travel to their various sales
territories in order to promote new product lines and meet with customers. The
Company's new national sales manager also travels regularly to each sales
territory to work

Page 21 of 75

with the sales team members and meet with customers in an effort to generate
more business. Selling and delivery expenses increased by $368,796 or 55.2% to
$1,037,506 in Fiscal 2005 from $668,710 in the prior year, as a result of:

o Marketing - increased $65,746 (27.5%): This year the Company paid
additional marketing dollars to its major customers to assist with the
promotion of new programs. Marketing dollars paid to major customers are
contributions towards the customers' annual catalogues. Other forms of
cash discounts and rebates are included as a reduction in sales revenue.

o Freight and Shipping - increased $84,461 (49.7%): An increase in sales
volume for the year resulted in additional shipping costs incurred - in
addition some of the Company's new customers have multiple locations
requiring drop shipments. The company does not charge back the costs of
shipping except for small deliveries. The amount of such charges amount to
less than $15,000 annually.

o Selling Expenses - increased $196,871 (205.5%): The Company invested in
new product displays during the year in order to roll out new programs and
to also refresh the look of existing programsInterest and bank charges for
Fiscal 2005 increased by 13.2% to $562,999 when compared to the Fiscal
2004 figure of $497,534. The Company increased its demand operating line
significantly during the year to finance new consignment programs, new
program roll outs and the general costs associated with an increase in
overall business.

Earnings before tax in Fiscal 2005 was $431,629 compared to $388,567 in
Fiscal 2004. This increase was substantially due to increased sales for the
year.

Tax expense is determined by entity-based results and as such, the
Company's tax consists of corporate income taxes resulting from profitable
operations in IBB and ADL. Allura's and Bygo's e-commerce start-up costs have
created losses that may be used in future periods to reduce taxable income. As
disclosed in Note 9 to the Company's consolidated financial statements, the tax
benefit of these losses has been offset by a valuation allowance of the same
amount due to the uncertainty of their realization.

Net earnings for the year of $322,708 reflect a decrease of $4,973 over
last year's figure of $327,681.

The Company does not expect Bygo to generate more than minimal revenues
from the services it provides. Bygo incurred approximately $15,000 (2004:
$47,000) of expenses in fiscal 2005. The Company expects to discontinue its
operations in the fiscal 2007 and to wind up its operations into one of its
operating subsidiaries.

Fiscal 2004 v. Fiscal 2003

Sales for the fiscal year ended March 31, 2004 ("Fiscal 2004") were
$16,322,923 compared to $17,240,986 for the fiscal year ended March 31, 2003
("Fiscal 2003"), a decrease of $918,063 or 5.32%. The Fiscal 2004 sales decrease
was primarily a result of:

o The discontinuation of a Major customers program

o Economic factors which has resulted in conservative purchasing by both
independent and Major customers

o Tightening of credit policies to mitigate exposure to potential losses,
primarily in the area of independent sales

Cost of sales for Fiscal 2004 was $12,156,794 with a gross margin of 25.5%
compared to $13,007,581 with a gross margin of 24.6% for Fiscal 2003. The
decrease in cost of sales of $850,787 or 6.54% was a result of decreased sales
in Fiscal 2004. Gross margin percentage for the current year has improved from
the prior year. This percentage improved partly as a result of an increase in
gold price and the improvement in the level of the Canadian Dollar.

Page 22 of 75

Cost of sales includes the cost of inventory sold, inbound freight,
duties, taxes and brokerage, jewelry packaging sold with the product, and the
gain/loss on settlement of inventory purchases as discuss above. The Company's
cost of sales may not be comparable to others as the costs associated with
purchasing and receiving and warehousing are included in our selling, general
and administrative expenses as the amounts are not material. Purchasing and
receiving costs approximate $52,000 (2003: $52,000) and warehousing costs
approximate $16,000 (2003: $16,000).

General administrative costs increased by 7.12% or $168,715 from
$2,369,232 in Fiscal 2003 to $2,537,947 in Fiscal 2004. The changes were
primarily a result of:

o Salaries and Wages: The Company hired additional accounting, sales and
administration staff to manage the workload.

o Higher accounting and legal fees associated with working towards
compliance with more stringent regulatory requirements, and consultation
in connection with a unconsummated acquisition.

Bad Debts: In the prior year there was a significant recovery of
previously written off accounts receivables relating to bad debts. In the
current year there were no similar recoveries.

Selling and delivery expenses decreased by $122,178 or 15.4% to $668,710
in Fiscal 2004 from $790,888 in the prior year, as a result of:

o A reduction in commissionable sales

o The discontinuation of a major program that previously incurred
substantial delivery costs

o Display costs were lower than in previous years as a result of there being
no significant content changes to major programs

Interest and bank charges for Fiscal 2004 increased by 8.17% to $497,534
when compared to the Fiscal 2003 figure of $459,939.The change was primarily a
result of:

o The company paying a guarantee fee for a $1,000,000 standby letter of
credit, which was used as a guarantee to our bank indebtedness.

Earnings before tax in Fiscal 2004 was $388,567 compared to $539,820 in
Fiscal 2003. This decrease was substantially due to higher administrative
expenses coupled with a reduction in sales for the year.

Net earnings for the year of $327,681 reflect a decrease of $70,403 over
last year's figure of $398,084.

Corporate Reorganization

In April 1999, the Company undertook the following steps to complete a
corporate re-organization: (i) it issued 250,000 shares to Thomas and Linda
Weckman to acquire the non-controlling interest of Allura Diamonds Limited
("ADL"), effectively rendering ADL a wholly owned subsidiary of IBB, (ii) it
transferred its net assets and operations to IBB; and (iii) it changed it's name
from IBB International Bullion and Metal

Page 23 of 75

Brokers (Canada) Limited to Allura International Inc.

B. Liquidity and Capital Resources

During fiscal 2001, the Company (i) completed a private offering of
1,070,298 common shares from which it realized net proceeds of $1,535,004, (ii)
completed a second private offering of 400,000 shares from which it realized net
proceeds of $588,000, (iii) issued 340,136 common shares pursuant to an
investment agreement, ("Investment Agreement") to a venture capital group,
Business Development Bank of Canada, ("BDC") on July 25, 2000, ("BDC Investment
Date") for which it realized proceeds of $500,000 less issue costs of $23,867
and (iv) issued 114,753 common shares to MacDonald Dettwiler & Associates
("MDA") in exchange for contracted services in developing Bygo's web site for
value of $167,539.

During Fiscal 2003, the shares issued to MDA were returned to and
cancelled by the Company as part of the Settlement Agreement discussed in ITEM 5
H. OPERATING AND FINANCIAL REVIEW AND PROSPECTS-Legal Proceedings.

On September 30, 2005, the shareholders approved a 3 to 1 share
consolidation for shareholders on record at September 30, 2005.

Investment Agreement

Each common share call option expired on July 25, 2001 unexercised.

The put options are exercisable after July 25, 2005 and will expire upon
the closing of certain qualified initial public offerings. The put options
entitle the holders to put the shares to the Company for the lesser of their
fair value (estimated at $64,000 at March 31, 2005 (2004: $55,600; 2003:
$49,500)) and the original proceeds received under the unit offering ($500,000).
The common share put options were outstanding as at September 15, 2005.

As required under recently adopted Canadian generally accepted accounting
principles, the Company has presented its obligation under this put as a current
liability as disclosed in Note 3.

Bank Financing

The Company's subsidiaries IBB and ADL (collectively the "Borrowers")
currently have "Revolving Demand Loan" credit facilities ("Overdraft Loan") with
HSBC to a combined maximum principal of $6,500,000 with a $3,000,000 onetime
bulge in effect June 1, 2005 to February 28, 2006, reducing to $2,500,000 in
effect April 1, 2006 to July 31, 2006 (the "Onetime Bulge"), thereafter an
annual $1,100,000 bulge in effect from July 1 to February 28 each year (the
"Seasonal Bulge"). The credit facilities are subject to certain margin
requirements as defined in the Overdraft Loan offer letter from HSBC dated July
14, 2000, amended on August 9, 2001, and subsequently amended on August 28,
2002, October 8, 2002, March 18, 2003, July 31, 2003, July 2, 2004, July 19,
2004, March 31, 2005 and July 13, 2005 collectively referred to as the Company's
"Banking Agreement".

The margin requirements as defined by the Banking Agreement are as
follows:

Page 24 of 75

The amount outstanding under the Loan will not, at any time, exceed the
sum of:

o 50% of the value of Acceptable Inventory, up to a maximum margin
contribution of $2,500,000, including a onetime sub-limit increase
to $1,350,000 in effect June 30, 2005 to March 31, 2006, thereafter
a $1,000,000 sub-limit for Allura Diamonds Limited inventory at all
times and a onetime increase to $3,725,000 in effect June 30, 2005
to March 31, 2006, reducing to $3,050,000 in effect April 1, 2005 to
June 30, 2006, thereafter $3,050,000 for the months of July through
October, plus 50% of consignment inventory limited to a maximum of
$1,500,000 subject to the following sub limits; Bay/Zellers
$1,500,000; Charms $100,000; Ben Moss $175,000;

o 75% of the amount of Acceptable Accounts Receivable; plus 80% of the
amount of Acceptable Accounts Receivable approved by the Bank as a
"Major" account, and insured by Euler American Credit Indemnity
Company ("Euler"), for 100% of the account receivable for a 60% pay
out; plus 90% of the amount of Acceptable Accounts receivable
insured by Euler for 100% of the account receivable for a 90% pay
out;

o 100% of the sum of Acceptable Credit Instruments;

o An $800,000 allowance for the mortgage given in support of the
guarantee.

The Company's borrowings bear interest at a rate equal to Canadian prime
plus 1/8% on the first $1,000,000 (Fiscal 2004: $1,000,000) and prime plus 1% on
the balance. The prime interest rate on these loans at year-end was 4.25%
(Fiscal 2004: 4.00%). The loans are collateralized by a general security
agreement creating a first floating charge over all assets, a general assignment
of book debts, an assignment of inventory under Section 427 of the Bank Act, a
guarantee from a shareholder for $4,000,000 supported by a standby letter of
credit for $1,000,000 (Fiscal 2004: $1,000,000), guarantees by certain other
shareholders to a maximum of $800,000, supported by an assignment of certain
shareholders' residential real estate to a maximum of $800,000.

Under the terms of the demand overdraft loan agreement facility, the
Company must maintain certain Debt to Tangible Net Worth ratios not exceeding
3.0 to 1 for its Jewelry Division and not exceeding 2.6 to 1 on the consolidated
entity basis as defined by the bank at each year-end when the loan is
outstanding. As at March 31, 2005, the Debt to Tangible Net worth ratios were
3.25 to 1 and 3.28 to 1 respectively.

Notwithstanding the foregoing defaults, the bank has agreed not to demand
repayment of the loan although they have not waived their ability to so and
retain their ability to demand repayment due to the breached covenants. The
Company expects to see cash flow improvement but will continue to rely on its
bank financing to maintain operations and to finance potential increases in
revenues and expansion of customer programs. The Company expects cash flow to be
provided by operations in fiscal 2008. However, it will continue to depend on
bank financing at its current level to expand its business into new areas.

For the year ended March 31, 2005, the combined overdraft loan amounted to
$7,849,332. The facility was renewed on July 13, 2005. The Company's account
receivables net of allowances for doubtful accounts as at March 31, 2005 were
$3,413,824 the balance in accounts receivable represented 18.4% of net sales for
Fiscal 2005.

The Company's inventory as at March 31, 2005 was $13,043,939 or 70.5 % of
net sales for Fiscal 2005. Inventory increased significantly to such a large
percentage of sales because it reflects (i) the Company's commitment to ensure
customers orders can be turned around in a short period from the time the order
is placed with the Company to the time it is delivered, (ii) the increases in
replenishment programs with customers, which the Company must ensure sufficient
inventory is available at all times to achieve maximum ship value on each order
(iii) the customers' higher fulfillment targets for each purchase order
delivered and (iv) an increase of $1

Page 25 of 75

million in consignment goods under consignment agreements resulting from
customers store and program expansion. ADL continues to expand and develop its
product line to increase selection and availability in the market place.
Inventory has increased over the prior year as a result of two new programs with
customers and a new program offered to Independent Groups.

The Company does not anticipate its inventory levels to continue to
increase significantly in future periods except to accommodate for new product
lines and new business.

The Company's accounts payable and accrued liabilities as at March 31,
2005 were $4,674,618 for Fiscal 2005. The Company does not anticipate any
difficulties in settling these obligations.

Except for anticipated aggregate lease payments for both IBB and ADL of
approximately $594,120 over the next five years, the Company has no significant
capital commitments as of September 15, 2005. The Company anticipates that cash
flow from operations, as well as borrowings available under current Overdraft
Loan Facilities will be sufficient to satisfy the operating needs for the next
twelve months.

U.S. Generally Accepted Accounting Principles

There are no material differences between Canadian GAAP and U.S. GAAP as
applicable to the Company's operations and financial statements, including
disclosure items as disclosed in Note 16 to the Company's consolidated financial
statements.

C. Research and Development, Patents and Licenses, etc.

The Company does not conduct research and development and holds no patents
or licenses.

D. Trend Information

See "Item 4. - Information on the Company, - Part B., Business Overview"

E. Off-Balance Sheet Arrangements

There are no known significant off-balance sheet arrangements other than
those disclosed in Item 10 Section 3 under "Investment Agreement" and as
disclosed in Note 10 of our audited consolidated financial statements for the
year ended March 31, 2005.

F. Tabular Disclosure Of Contractual Obligations

The following table summarizes all of the outstanding obligations of the
Company's continuing operations by the year that they become due. We expect to
fund these obligations from operating income and equity/debt financing:

Page 26 of 75

- ---------------------------------------------------------------------------------------------------------------------
Payments due by period
----------------------------------------------------------
Contractual Obligations Less than 1-3 More than
Total 1 year years 3-5 years 5 years
- ---------------------------------------------------------------------------------------------------------------------

[Short-Term Debt Obligations] -- $8,911,408 -- -- --
[Long-Term Debt Obligations] -- -- -- -- --
[Capital (Finance) Lease Obligations] -- -- -- -- --
[Operating Lease Obligations] $612,934 -- $368,352 $225,768 $18,814
[Purchase Obligations] -- -- -- -- --
[Other Long-Term Liabilities Reflected on the Company's -- -- -- -- --
Balance Sheet under the GAAP of the primary financial
statements]
- ---------------------------------------------------------------------------------------------------------------------
Total $612,934 -- $368,352 $225,768 $18,814
- ---------------------------------------------------------------------------------------------------------------------

G. Safe Harbor

Some of the information in this report contains forward-looking
statements. Forward-looking statements represent our current expectations or
forecasts of future events and are based on our management's beliefs, as well as
assumptions made by and information currently available to them. You can
identify these statements by the fact that they do not relate strictly to
historical or current facts. These statements may include the words
"anticipate," "believe," "budget," "estimate," "expect," "intend," "objective,"
"plan," "probable" "possible," "potential," "project" and other words and terms
of similar meaning in connection with any discussion of future operating or
financial performances.

Any or all of our forward-looking statements in this Form 20-F may turn
out to be wrong. They can be affected by inaccurate assumptions or by known or
unknown risks and uncertainties. Many of these factors, including the risks
outlined under "Risk Factors," will be important in determining our actual
future results, which may differ materially from those contemplated in any
forward-looking statements.

When you consider these forward-looking statements, you should keep in
mind these risk factors and other cautionary statements in this prospectus. Our
forward-looking statements speak only as of the date made. Although we believe
that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. All forward-looking statements attributable to us are expressly
qualified in their entirety by the foregoing cautionary statement.

H. Legal Proceedings

As at September 30th, 2005, there are no legal proceedings to which the
Company is a party or to which

Page 27 of 75

its properties are subject. The Company does not know of any legal proceedings
that are contemplated.

In Fiscal 2003 the Company settled an outstanding dispute between MDA,
Bygo and Allura, which culminated in the signing of a Settlement Agreement
between all the parties dated May 1, 2002. The impact of the settlement was
primarily accrued in Fiscal 2002 as the amounts related to the settlement were
known at the financial statement date and were material. In the Financial
Statements under Note 5, the return of 114,753 common shares of the Company by
MDA as a component of the final settlement has been disclosed. Theses shares
have been returned to Treasury and cancelled.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management

The following table sets out the full name, age, and function in the
Company of the directors, executive officers and key employees of the Company as
of September 15, 2005.

On September 28th, 2004, the Directors on the Board of Directors were
re-nominated to stand for election to the Board. All nominated Directors were
re-appointed effective September 28th, 2004. On July 15, 2005, Andrew Lugsdin
resigned as a Director.

Position Held
Name Age Positions Since
- ---------------------------------------------------------------------------------------------

Jeremy Bowman 54 Director, President and CEO 1988
Sheila Bowman 47 Director, Secretary, and Treasurer 1988
Frank Kovacs 52 Director 1998
Thomas Weckman 51 Director and President of Allura Diamonds Limited 1994
Tina VanderHeyden 53 Director 1999
Dave Wall 56 Director 2003
Emily Tsen 39 Chief Financial Officer /V.P.Operations 1996

Jeremy Bowman has been the President, CEO and Director of the Company
since 1988. He is also a 25% Owner/Director of The Black Bear Pub Limited in
Nanaimo, B.C., Canada. A restaurant, bar and liquor store.

Sheila Bowman has been the Secretary and Treasurer and a Director of the
Company since 1988. She is also a 25% Owner/Director of The Black Bear Pub
Limited in Nanaimo, B.C., Canada. A restaurant, bar and liquor store.

Page 28 of 75

Frank Kovacs is the Managing Director of International Bullion & Metal
Brokers Ltd., a company incorporated in the United Kingdom for the past six
years. He has also been a Director of the Company since 1988.

Thomas Weckman has been the President of ADL since 1994 and a Director of
the Company since 1999. He has also served as President of Baird Weckman Sales
Ltd., a private trading company incorporated under federal laws of Canada since
1997.

Tina VanderHeyden has been the President of T. VanderHeyden Associates
Inc., a company incorporated under the laws of the Province of British Columbia,
for the past 27 years and has served on the Company's Board of Directors since
1999. She is also a director for The Canadian Film Centre.

Dave Wall has been a Director since September 30th, 2003. Mr. Wall joined
Norpac Controls Ltd. ("Norpac") in 1973 and became President of Norpac in June
2000. In addition, Mr. Wall serves on the Emerson Process Management
Representative Presidents' Executive Committee and the Control Systems Division
Advisory Committee. He also sits on two B.C.I.T. advisory Boards: the UBC
Chemical Engineering Industry Advisory Board and the Association for
Professional Engineers and Geo Scientists. He is a corporate campaign Executive
for United Way and in prior years served as Board President for the North Shore
Neighborhood House. Mr. Wall is a director of Norpac, Artemis Industrial
Networks Ltd. and Norpac Employee Owners Ltd.

Emily Tsen has served as the Chief Financial Officer of the Company since
1999 and previously as its Controller since 1996. In December 2003 she was
further given the title of Vice President Operations. She received her chartered
accountancy designation in British Columbia in 1993.

Each director serves until the next annual meeting of shareholders and
until his successor shall have been duly elected and qualified or until such
earlier time as such director may resign or be removed. Officers are elected
annually by the Board of Directors and serve at the discretion of the Board.

There are no arrangements or understandings between the director and any
other person regarding such director or officers election to serve in his or her
official capacity on behalf of the Company. The Shareholders' Agreement entitles
Business Development Bank of Canada ("BDC') to select a nominee for the Board of
Directors as long as BDC holds at least 300,000 Common Shares in the Company. As
at September 15, 2005, BDC has not selected a nominee for the Board of
Directors.

Except as noted in the following paragraph, the Company has employment
agreements with all of its senior management.

B. Compensation

The Company paid aggregate compensation of $607,500, $620,000 and $616,700
to all directors and officers as a group during the fiscal years ended March 31,
2005, 2004, and 2003, for services in all capacities. There were no funds set
aside by the Company during the fiscal year ended March 31, 2005 to provide
pension, retirement or similar benefits for officers or directors.

On October 30, 1999, the Company approved stock options to be issued to
employees and consultants of the Company. Total options granted by the Company,
as at March 31, 2005 were 352,500 of which, 140,000 were granted to officers and
directors of the Company. Each option is convertible into a share of the
Company's common stock. Of the options currently outstanding, 57,500 options
have an exercise price of $1.50 and will

Page 29 of 75

expire in approximately 0.32 years and 260,000 options have an exercise price of
$1.58 and will expire in approximately 1.86 years. The balance of 35,000 options
are unvested and vesting is at the discretion of the Board of Directors.

The Company has a standard arrangement for the payment of fees to three
directors of the Company for acting in such capacity. Directors are reimbursed
for all expenses necessary for travel and attendance at meetings. Total payments
of $21,000 during Fiscal 2005 to directors for acting in such capacity are
included in the aggregate compensation disclosure discussed above.

C. Board Practices

There are no directors' service contracts with the Company or any of its
subsidiaries that provide for benefits upon termination of employment. Although
some directors are subject to employment contracts with the Company, such
contracts are not applicable to their services in the capacity of directors.

The Board of Directors has elected members to an Audit Committee and a
Compensation and Human Resource Committee.

The Audit Committee is comprised of the following members as at September
15, 2005: Sheila Bowman, Tina VanderHeyden, Dave Wall and Frank Kovacs. The
Audit Committee chair is Sheila Bowman.

The Audit Committee holds meetings four times a year and its primary
mandate is to facilitate the Company's corporate governance and protect the
interest of shareholders by overseeing the financial reporting process and
monitoring the responsibilities of the Company's management team as well as its
Board of Directors.

The Compensation and Human Resource Committee is comprised of the
following members as at September 15, 2005: Tina VanderHeyden, Frank Kovacs, and
Dave Wall. The Compensation and Human Resource Committee chair is Tina
VanderHeyden.

The Compensation and Human Resource committee holds meetings four times a
year and its primary mandate is to monitor and review the Company's management
structure and their performance, to review the Company's philosophies and
compensation and human resource policies, to administer the Company's incentive
plans and stock option plan and to monitor and review the Board of Directors'
composition and performance.

D. Employees

At March 31, 2005, the Company employed thirty-three persons on a full
time basis. As at September 15, 2005, there were thirty-two persons employed on
a full time basis. As at September 15, 2005, there are twelve employees in
finance and administration, nine in sales and merchandising, and eleven in
inventory warehouse. Five employees are employed in the Halifax office, one is
employed in Toronto, and twenty-six are employed in the Vancouver office. None
of the Company's employees are covered by a collective bargaining agreement. The
Company considers its relations with its employees to be good.

During Fiscal 2005, the Company employed approximately thirty-five
temporary employees to cover off seasonal requirements.

Page 30 of 75

E. Share Ownership

The share ownership of the persons set forth in Item 6.B above is
disclosed in "Item 7. Major Shareholders and Related Party Transactions - Major
Shareholders" below.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. Major Shareholders

As far as is known to the Company, the Company is not directly or
indirectly owned or controlled by another corporation or by any foreign
government. The following table sets forth certain information, as at September
30, 2005, concerning (i) persons and companies that own of record or are known
by the Company to own beneficially, directly or indirectly, more than 5% of the
outstanding Common Shares and (ii) beneficial ownership of outstanding Common
Shares by all directors and executive officers of the Company.

Number of Shares
Beneficially or Directly Percentage of
Name of Shareholder Owned Class
- ----------------------------------------------------------------------------------------

International Bullion & Metal Brokers Ltd.(1) 6,250,000 41.1%
Bowman Family Trust ("Trust")(2) 5,325,000 34.2%
Jeremy C. Bowman(3) 462,500 3.0%
Sheila P. Bowman(4) 602,500 3.9%
Thomas Weckman(7) 250,000 1.6%
B.D.C (6) 340,136 2.2%
Tina VanderHeyden (*) (*)
Emily Tsen (*) (*)
Officers and Directors as a group (7 people) 13,258,136 85.1%

(1) International Bullion & Metal Brokers Limited ("International Bullion") is
a corporation formed under the laws of England of which Frank Kovacs is a
Director.

(2) Although not a beneficiary of the trust, Mr. Bowman, the Company's
President and CEO, is one of the three Trustees of the Trust. Sheila
Bowman, is a beneficiary of the Bowman Family Trust. The other
beneficiaries are the children of Mr. Bowman.

(3) Mr. Bowman is the Company's President, CEO and a Director.

(4) Sheila Bowman is a Director of the Company. Ms. Bowman's shares include
140,000 options with an exercise price of US$1.00 per share. The 140,000
options expire July 13, 2007.

Page 31 of 75

(5) Frank Kovacs is a Director of International Bullion and is a Director of
the Company.

(6) The Business Development Bank of Canada is a venture capital shareholder
owning 340,136, or 2.2% of outstanding shares.

(7) Tom Weckman is ADL's President and a Director.

* Less than 1% of class.

The Company's major shareholders do not have different voting rights.
However, some of these shareholders are subject to a shareholders agreement as
described below.

There has been no significant change in the percentage ownership held by
any major shareholders during the past three years.

As at September 15, 2005 there was no trading market for the Common Shares
in the United States or Canada. The following table indicates the approximate
number of record holders of Common Shares, the number of record holders of
Common Shares with United States addresses and the portion and percentage of
Common Shares so held in the United States.

Total Number Number of US Number of
Registered Registered Holders Common Shares Percentage of Class
-----------------------------------------------------------------------
113 45 90,400 0.60%

The computation of the number and percentage of Common Shares held in the
United States is based upon the number of Common Shares held by record holders
with United States addresses. United States residents may beneficially own
Common Shares held of record by non-United States residents.

Shareholders' Agreement

The Company has entered into a shareholders' agreement ("Shareholders'
Agreement") with shareholders holding at least 5% of the outstanding shares of
the Company on July 25, 2000. The Shareholders' Agreement requires that board
approval be obtained prior to:

o issuance or redemption of the Company's shares,

o changes to the authorized share capital,

o declaration or payment of dividends,

o distribution of shares to the public or listed for trading on a
recognized securities exchange,

o business combinations between the Company or any of its subsidiaries
with any other persons,

o disposition of any subsidiaries,

o loaning of any money, providing guarantees or assuming liability for
the debts or obligations of any other persons or paying any
shareholder, and

o changing the nature of the Company's business outside of the
ordinary course of business of the Company.

The Shareholders' Agreement had provided that as long as BDC hold at least
300,000 shares, the

Page 32 of 75

Company was to proceed with any of the following matters only with prior written
consent of BDC:

o declare or pay dividends, redeem or repurchase any shares or make
any distribution in respect of shares,

o loan any money, provide guarantees or assume liability for the debts
or obligations of any other persons or pay any shareholder, or

o any initial public offering by the Company.

The Shareholders' Agreement also provided that, subject to the
satisfaction of certain conditions, until the earlier of the first anniversary
of the date of the Shareholders' Agreement, being July 25, 2000 or the
occurrence of an initial public offering by the Company, (the "initial
preemptive date") and subject further to BDC holding at least 300,000 shares, if
the Company proposed to effect an offer and sale of its securities, the Company
was obliged to first offer BDC the opportunity to purchase, and BDC, in its sole
discretion could purchase, all or a portion of such securities from the Company
up to a maximum of $2,000,000 of the proposed aggregate offering price. BDC did
not exercise this right within the specified time frame therefore the option
expired. After the initial preemptive date and prior to the termination of the
Shareholders' Agreement by virtue of the Company completing a qualified public
offering, BDC has the right, except for certain excepted transactions, to
participate pro-rata in any securities offerings affected by the Company.

As far as is known to the Company, there are no arrangements the
operations of which may at a subsequent date result in a change of control of
the Company.

B. Related Party Transactions

The Company operates from leased premises in Vancouver and Halifax. The
Vancouver premises cover 8,557 square feet and give the Company a self-contained
headquarters building from which to operate. The premises have an underground
parking garage. The premises are leased from a partnership of which Jeremy
Bowman, the Company's President and a stockholder who has significant influence
on operations, is a partner. The Company believes that the terms of the lease
are as favorable as those that could have been obtained from an unaffiliated
third party. The Company leases the Vancouver premise for $9,400 per month plus
expenses. The lease was renewed under the same terms during June 2005.

The Company believes that its current premises are adequate for the
Company's current operating level and presently foreseeable growth.

Except as set forth above, no key management personnel of the Company or
any shareholder holding of record or beneficially, directly or indirectly, more
than 5 percent of the issued and outstanding Common Shares (including options)
of the Company, or any of their respective associates or affiliates, had any
material interest, directly or indirectly, in any transaction with the Company
except for those in the normal course of the business and as disclosed in the
Company's financial statements, or in any proposed transaction, since the
beginning of the Company's last fiscal year up to the date of the Report.

The Company believes that all payments made for services rendered were
comparable to those that would be made to an unaffiliated provider of such
services.

Page 33 of 75

C. Interests of Experts and Counsel

This form is being filed as an Annual Report under the Securities Exchange
Act 0f 1934, accordingly the information called for by this Item 7.C. is not
required.

ITEM 8. FINANCIAL INFORMATION

A. Consolidated Statements and Other Financial Information

See Item 17 for the Company's Financial Statements.

The Company knows of no contemplated or pending legal or arbitration
proceedings including those relating to bankruptcy, governmental receivership or
similar proceeding and those involving any third party against it, nor is the
Company involved as a plaintiff in any material pending litigation.

The Company knows of no pending proceedings to which any director, member
of senior management, or affiliate is either a party adverse to the Company or
its subsidiaries or has a material interest adverse to the Company or its
subsidiaries.

The Company declared its first dividend on September 6, 2005 for all
shareholders on record as at September 6, 2005. The dividend of USD $.01 per
share was paid September 8, 2005. The Company's four largest shareholders have
waived their dividends choosing to retain the funds in the Company to grow the
business.

B. Significant Changes

No significant changes have occurred since the date of the annual
financial statements included in the Report.

ITEM 9. THE OFFER AND LISTING

A. Offer and Listing Details/Markets

There is no trading market for the Company's Common Stock and there can be
no assurance that a trading market will develop, or, if such a trading market
does develop that it will be sustained. To the extent that a market develops for
the Common Stock at all, of which there can be no assurance, it will likely
appear in what is customarily known as the "pink sheets" or on the NASDAQ
Bulletin Board, which may limit the marketability and liquidity of the Company's
Common Stock.

B. Plan of Distribution

This Form 20F is being filed as an Annual Report under the Securities
Exchange Act of 1934, and accordingly, the information called for by this Item
9.B. is not applicable to this report.

C. Selling Shareholders

Page 34 of 75

This Form 20F is being filed as an Annual Report under the Securities
Exchange Act of 1934, and accordingly, the information called for by this Item
9.C. is not applicable to this report.

D. Dilution

This Form 20F is being filed as an Annual Report under the Securities
Exchange Act of 1934, and accordingly, the information called for by this Item
9.D. is not applicable to this report.

E. Expenses of the Issue

This Form 20F is being filed as an Annual Report under the Securities
Exchange Act of 1934, and accordingly, the information called for by this Item
9.E. is not applicable to this report.

ITEM 10. ADDITIONAL INFORMATION

A. Share Capital

This Form 20F is being filed as an Annual Report under the Securities
Exchange Act of 1934, and accordingly, the information called for by this Item
10.A. is not required.

B. Memorandum and Articles of Association

The Company's Certificate of Incorporation, Bylaws, Articles of Amendment,
Certificate of Amendment and Certificate of Change of Name which were included
as Exhibits 1.1, 1.2, 1.3, 1.4 and 1.5, respectively, to the Company's
Registration Statement on Form 20-F, file number 030228, as amended, are hereby
incorporated by reference.

There is no limitation imposed by Canadian law or by the constituent
documents of the Company on the right of a non-resident to hold or vote common
Shares (the "Voting Shares"), other than are provided in the Investment Canada
Act (Canada) (the "Investment Act"), as amended by the World Trade Organization
Agreement Implementation Act (the "WTOA Act"). The Investment Act generally
prohibits implementation of a reviewable investment by an individual,
government, or agency thereof, corporation, partnership, trust or joint venture
that is not a "Canadian", as defined in the Investment Act (a "non-Canadian"),
unless, after review, the minister responsible for the Investment Act is
satisfied that the investment is likely to be of net benefit to Canada. An
investment in the Voting Shares of the Company by a non-Canadian (other than a
"WTO Investor", as defined below) would be reviewable under the Investment Act
if it were an investment to acquire control of the Company and the Company was
not, immediately prior to the implementation of the investment, controlled by a
WTO Investor, and the value of the assets of the Company were $5.0 million or
more. An investment in Voting Shares of the Company by a WTO Investor would be
reviewable under the Investment Act if it were an investment to acquire direct
control of the Company, and the value of the assets of the Company equaled or
exceeded $179 million (threshold amount for 1998). A non-Canadian, whether a WTO
Investor or otherwise, would acquire control of the Company for purposes of the
Investment Act if he or she acquired a majority of the Voting Shares of the
Company. The acquisition of less than a majority, but at least one-third of the
Voting Shares of the Company, would be presumed to be an acquisition of control
of the Company, unless it could be established that the Company was not
controlled in fact by the acquirer through the ownership of the Voting Shares.
In general, an individual is a WTO Investor if he or she is a "national" of a
country (other than Canada) that is a member of the World Trade Organization
("WTO Member") or has a right of permanent residence in a

Page 35 of 75

WTO Member other than Canada. A corporation or other entity will be a WTO
Investor if it is a "WTO Investor-controlled entity" pursuant to detailed rules
set out in the Investment Act. The United States is a WTO Member.

Certain transactions involving Voting Shares of the Company would be
exempt from the Investment Act, including: (a) an acquisition of Voting Shares
of the Company if the acquisition were made in connection with the person's
business as a trader or dealer in securities: (b) an acquisition or control of
the Company in connection with the realization of a security interest granted
for a loan or other financial assistance and not for the purpose related to the
provisions of the Investment Act: and (c) an acquisition of control of the
Company by reason of an amalgamation, merger, consolidation or corporate
reorganization, following which the ultimate direct or indirect control in fact
of the Company, through the ownership of voting interests, remains unchanged.

C. Material Contracts

Shareholders' Agreement

o issuance or redemption of the Company's shares,

o changes to the authorized share capital,

o declaration or payment of dividends,

o distribution of shares to the public or listed for trading on a
recognized securities exchange,

o business combinations between the Company or any of its subsidiaries
with any other persons,

o disposition of any subsidiaries,

o loaning of any money, providing guarantees or assuming liability for
the debts or obligations of any other persons or paying any
shareholder, and

o changing the nature of the Company's business outside of the
ordinary course of business of the Company.

The Shareholders' Agreement had provided that as long as BDC hold at least
300,000 shares, the Company was to proceed with any of the following matters
only with prior written consent of BDC:

o declare or pay dividends, redeem or repurchase any shares or make
any distribution in respect of shares,

o loan any money, provide guarantees or assume liability for the debts
or obligations of any other persons or pay any shareholder, or

o any initial public offering by the Company.

After the initial preemptive date and prior to the termination of the
Agreement by virtue of the Company completing a qualified public offering, BDC
has the right, except for certain excepted transactions, to participate pro-rata
in any securities offerings affected by the Company.

Page 36 of 75

Investment Agreement

The Company entered into an Investment Agreement on July 25, 2000 with
BDC. Pursuant to such Investment Agreement, BDC acquired 340,136 units
consisting of one common share, one common share call option and one common
share put option from the Company for an aggregate purchase price of $500,000
less issue costs of $23,867, which price is subject to adjustment under certain
conditions, including the sale by the Company, during specified period of time,
of any shares at a lower price per share price.

Each common share call option expired July 25, 2001 unexercised.

The put options are exercisable after July 25, 2005 and will expire upon
the closing of certain qualified initial public offerings. The put options
entitle the holders to put the shares to the company for the lesser of their
fair value (estimated at $64,000 at March 31, 2005 (2004: $55,600)) and the
original proceeds received under the unit offering ($500,000). The common share
put option was still outstanding as at September 15, 2005.

Leases

The Company entered into a lease on June 22, 1998, with a partnership of
which Jeremy Bowman, the Company's President, CEO and director, is a partner.
The lease is for premises at its Vancouver office on 1555 West 8th Avenue,
Vancouver, B.C., V6J 1T5, Canada which it leases for $9,400 per month plus
expenses. The Company moved to these premises in June 2000. The lease was
renewed with the same terms during June 2005.

Stock Option Plan

The Company implemented the Allura International Inc. 2000 Stock Option
Plan ("Plan") during January 2000. The Company's Board of Directors administers
the Plan. The maximum aggregate number of shares, which may be optioned and sold
or otherwise awarded under the Stock Option Plan, is 3,000,000 shares.

Agreement between Bygo, the Company and MDA

On May 9, 2000, the Company entered into an agreement with MacDonald
Dettwiler and Associates Ltd. ("MDA") for software development services to be
provided by MDA (the "MDA Agreement"). MDA and the Company entered into an
amendment to the MDA Agreement dated July 28, 2000 (the " July Amendment")
pursuant to which, among other things, Allura's interest therein was assigned to
Bygo. A further amendment was entered into on December 12, 2000 (the "December
Amendment'). The MDA Agreement as amended by the July Amendment, the December
Amendment and certain other subsequent amendments, is herein referred to as the
"Amended MDA Agreement."

Disputes arose between MDA and Allura and Bygo (collectively, with all of
the other parties to the Settlement Agreement, as defined below, the "Parties").
Proceedings were commenced in relation to the disputes between the parties,
pursuant to the arbitration provisions of the Amended MDA Agreement, and in the
Supreme Court of British Columbia and the British Columbia Court of Appeal (the
"Proceedings"). The Parties agreed to

Page 37 of 75

resolve their disputes, including those raised in the Proceedings, through
binding arbitration and entered into a submission to arbitration dated May 17,
2001 (the "Arbitration"). Prior to the completion of the Arbitration, the
Parties entered into a Mutual Release and Settlement Agreement dated May 1, 2002
(the "Settlement Agreement") to settle all the matters in dispute between them.

Pursuant to the terms of the Settlement Agreement, among other things:

1. the Parties delivered mutual releases to and from, inter alia, claims,
damages and liabilities arising out of the Amended MDA Agreement, the
Arbitration and/or the Proceedings;

2. the forgiveness of payment by the Company and Bygo of amounts owing by the
Company or Bygo or claimed by MDA under the terms of the Amended MDA
Agreement; and, payment to Bygo in settlement of amounts claimed by it;

3. the transfer by MDA to the Company of all shares in the capital of the
Company owned by MDA; and

4. the retention by Allura of all right, title and interest in and to the
subject matter of certain Canadian patent applications as well as design and
architecture of the Bygo System.

D. Exchange Controls

There is no law or governmental decree or regulation in Canada that
restricts the export or import of capital, or affects the remittance of
dividends, interest or other payments to a non-resident holder of Shares, other
than withholding tax requirements. See "Taxation" below.

E. Taxation

A brief description of the provisions of the tax treaty between Canada and
the United States is included below, together with a brief outline of the taxes,
including withholding provisions to which United States security holders are
subject under existing laws and regulations of Canada and the United States; the
consequences, if any, of state and local taxes are not considered. Security
holders are urged to seek the advice of their own tax advisors, tax counsel or
accountants with respect to the applicability or effect of these provisions on
their own taxes. The Company has not paid dividends on the Common Shares in any
of its last five fiscal years, and has no plans to pay dividends in the
immediate future.

Canadian federal tax legislation would require a 25% withholding from any
dividends paid or deemed to be paid to the Company's non-resident shareholders.
However, a company resident in the United States that beneficially owns at least
10% of the voting stock of the Company would have this rate reduced to 5%
through the tax treaty between Canada and the United States. The rate of
Canadian non-resident withholding may not exceed 15% of the dividend in the case
of United States shareholders other than as described above. The amount of stock
dividends paid to non-residents of Canada would be subject to withholding tax at
the same rate as cash dividends. The amount of a stock dividend (for tax
purposes) would be equal to the amount by which the stated capital of the
Company had increased by reason of the payment of such a dividend. Interest paid
or deemed to be paid on the Company's debt securities held by non-Canadian
residents may also be subject to Canadian withholding tax, depending upon the
terms and provisions of such securities and any applicable tax treaty.

Under the present legislation in the United States, the Company is not
subject to United States back-up withholding rules, which would require
withholding at a rate of 20% on dividends and interest paid to certain United
States persons who have not provided the Company with a taxpayer identification
number.

Gains derived from a disposition of Common Shares by a non-resident
shareholder will be subject to tax in Canada only if not less than 25% of any
class of Common Shares was owned by the non-resident shareholder and/or persons
with whom the non-resident did not deal at arm's length at any time during the
five year period

Page 38 of 75

immediately preceding the disposition. In such cases, gains derived by a U.S.
shareholder from a disposition of Common Shares would likely be exempt from tax
in Canada by virtue of the Canada-U.S. tax treaty, provided that the U.S.
shareholder has not resided in Canada in the ten years immediately preceding the
disposition.

This discussion is not intended to be, nor should it be construed to be,
legal or tax advice to any holder or prospective holder of Common Shares and no
opinion or representation with respect to the United States federal income tax
consequences to any such holder or prospective holder is made. Holders and
prospective holders of Common Shares are urged therefore to consult their own
tax advisors with respect to their particular circumstances.

F. Dividends and Paying Agents

This Form 20F is being filed as an Annual Report under the Securities
Exchange Act of 1934, accordingly the information called for by this Item 10.F.
is not required.

G. Statement by Experts

This Form 20F is being filed as an Annual Report under the Securities
Exchange Act of 1934, accordingly the information called for by this Item 10.G.
is not required.

H. Documents on Display

The documents concerning the Company which are referred to in this Report
are either annexed hereto as exhibits (See "Item 19 Exhibits") or may be
inspected at the principal executive offices of the Company.

You may inspect and copy our registration statements, including their
exhibits and schedules, and the reports and other information we file with the
Securities and Exchange Commission in accordance with the Exchange Act at the
public reference facilities maintained by the Securities and Exchange Commission
at Judiciary Plaza, 450 Fifth Street, Room 1024, N.W., Washington, D.C. 20549
You may obtain information regarding the Washington D.C. Public Reference Room
by calling the Securities and Exchange Commission at 1-800-SEC-0330 or by
contacting the Securities and Exchange Commission over the Internet at its
website at http://www.sec.gov.

I. Subsidiary Information

This information is not applicable to this report.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

A. Quantitative Information about Market Risk

The Company does not invest in market risk sensitive instruments such as
debt instruments, forwards and futures, options, SWAPs or other derivative
financial and commodity instruments.

Page 39 of 75

B. Qualitative Information about Market Risk

Currency Exchange Rate Sensitivity

The Company is exposed to currency risk as some of its accounts payable
are denominated in currencies other than the Canadian dollar. The Company earns
revenue and incurs operating expenses predominantly in Canadian dollars.
Unfavorable changes in the applicable exchange rates may result in a decrease or
increase in foreign exchange gain or loss.

At March 31, 2005 and 2004, the Company's accounts payable and accrued
liabilities included the following foreign currency denominated amounts:

2005 2004
---------- --------
U.S. $2,846,208 $921,269

Euro 377,647 45,125

---------- --------
$3,223,855 $966,394
========== ========

Interest Rate Sensitivity

The Company's bank indebtedness bears floating interest rates. This
exposes the Company to the risk of changing interest rates that may have a
detrimental affect on its earnings in future periods. The Company has not
entered into any agreement or purchased any instrument to hedge against possible
interest rate risks at this time. The Company's interest earning investments are
short term. Thus, any reductions in future income or carrying values due to
future interest rate declines are believed to be immaterial.

Credit risk

Credit risk arises from the possibility that the entities to which the
Company sells products may experience financial difficulty and be unable to
fulfill their contractual obligations. This risk is mitigated by proactive
credit management policies that include regular monitoring of the debtor's
payment history and performance, credit insurance, geographic diversification,
obtaining security where appropriate, and credit insurance policy coverage.

Fair value

The Company has various financial instruments including receivables, bank
indebtedness, payables and accruals, and bonus payables.

The carrying value of all other financial instruments approximates their
fair value due to their short-term nature.

Commodity Price Sensitivity

Page 40 of 75

Company does not engage in any hedging activities.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

This Form 20F is being filed as an Annual Report pursuant to the
Securities Exchange Act of 1934, and accordingly, the information called for by
this Item 12 is not required.

PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.

Under the terms of the Company's demand overdraft loan agreement facility
with its bank as discussed in Item 5, the Company must maintain certain Debt to
Tangible Net Worth ratios not exceeding 3.0 to 1 for its Jewelry Division and
not exceeding 2.6 to 1 on the consolidated entity basis as defined by the bank
at each year-end when the loan is outstanding. As at March 31, 2005, the Debt to
Tangible Net worth ratios were 3.25 to 1 and 3.28 to 1 respectively.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
PROCEEDS.

None.

ITEM 15. CONTROLS AND PROCEDURES

The Board of Directors has overall responsibility for reviewing the
Company's disclosure to ensure the Company provides full and plain disclosure to
shareholders and other stakeholders. The Board discharges its responsibilities
through its committees, specifically, with respect to financial disclosure to
the Audit Committee, which is responsible for reviewing the Company's financial
reporting procedures and internal controls to ensure full and accurate
disclosure of the Company's financial position.

During the annual report period, we carried out an evaluation, under the
supervision and with the participation of our senior management, including Chief
Executive Officer, Jeremy Bowman, and Chief Financial Officer, Emily Tsen, of
the effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Rule 13(a)-14(c) of the Securities Exchange Act of 1934.
Disclosure controls and procedures are designed to ensure that the material
financial and non-financial information required to be disclosed in this Form
20-F filed with the SEC is recorded, processed, summarized and reported timely.
Based upon that evaluation, our management, including the Chief Executive
Officer and Chief Financial Officer, concluded that our disclosure controls and
procedures, are not effective in timely alerting them to material information
relating to us required to be included in the our periodic SEC filings given the
matters identified below.

Page 41 of 75

During the audit of the 2005 financial statements the Company and the
Company's independent registered public accountants identified five material
weaknesses in internal controls over financial reporting as follows:

a. Governance

In the governance area, segregation of duties is not at an appropriate
level and the company needs to improve its oversight controls. There are
employees who have responsibilities and control access to the information and
financial reporting systems and in the management of the information systems.
The company does not have an anonymous reporting process to collect and act on
allegations of improprieties and or errors pertaining to questionable practices.

When employees perform incompatible duties and if compensating controls
are not appropriate, then this situation could result in material errors and/or
fraud.

b. Revenues

In the revenue process area, segregation of duties is not at an
appropriate level. There are employees who have access to the processing of
accounts receivable payment transactions and who also have access to maintaining
and reconciling accounts receivable records.

When employees perform incompatible duties, and if compensating controls
are not appropriate, then this situation could result in material errors and/or
fraud.

c. Inventory

In the area of expense/payables/inventory processes, enhanced segregation
of duties procedures need to be put in place. Employees who are responsible for
data input from source documents do not have their work independently reviewed
for accuracy or appropriateness. As well, these same employees are also
responsible for indicating that documents have been processed, a step that is
performed without further verification.

When employees perform incompatible duties, and if compensating controls
are not appropriate, then this situation could result in material errors and/or
fraud.

d. Financial Reporting

In the area of financial reporting, enhanced segregation of duties
procedures need to be put in place. Employees who are responsible for providing
and calculating estimates and evaluating disclosures do not have their work
independently reviewed for accuracy or appropriateness.

When employees perform incompatible duties, and if compensating controls
are not appropriate, then this situation could result in material errors and/or
fraud.

e. Evidence of internal control documentation

In the area of internal control documentation, performance of controls
should be evidenced with documentation of the internal controls in the revenue
process.

When performance of controls is not properly evidenced, the internal
control process may not be performed and this may lead to errors or
inappropriateness.

Page 42 of 75

The material weaknesses above were identified by the Company and the
Company's independent registered accountants, Grant Thornton during the March
31, 2005 year end audit. The identified weaknesses are a result of a reduction
and change in staff in the accounting department of the Company that occurred
during the 2005 fiscal year when an accounting staff member departed. This staff
departure was believed to be reasonably likely to have had a material impact on
internal controls over financial reporting in fiscal 2005.

Subsequent to the 2005 fiscal year, during fiscal 2006, additional changes
were made that are reasonably likely to have had a material impact on internal
controls over financial reporting. As there were only five people in the
accounting department after the staff departure in fiscal 2005, it was difficult
to assign duties using the segregation framework. The Company was committed to
cross training and the re-evaluation of its needs and ways to improve systems to
put in place stronger controls to compensate for the limitation of the size of
the accounting department. As such, an outside independent resource was retained
in fiscal 2006 (May 2005) to provide some level of oversight by reviewing and
monitoring the significant transactional activities of the Company. This
consultant was replaced with a full time staff junior accountant in fiscal 2006
(September 2005) As well, the audit committee chair meets regularly with the CFO
of the Company to review the financial results. These reviews provided by the
independent contractor, new staff member and audit committee provide some degree
of compensating controls over the segregation of duties for future reporting
periods, however; did not overcome the identified material weaknesses that
continue to exist at the end of the 2006 fiscal reporting period.

As part of the process to put into operations its program for complying
with Section 404 of the Sarbanes Oxley Act of 2002 the Company will continue
evaluate and enhance its procedures where the interpretation of GAAP is involved
and will expand its external consultative process in advance of implementing new
accounting procedures. The interpretation issues have been accounted for
correctly in the preparation of the financial statements set out in Item 17.

The Company will review the identified internal control weaknesses and
consider implementing other compensating controls in future periods in an effort
to mitigate the potential identified risks and is also looking into the hiring
of additional staff members to allow for the appropriate segregation of duties

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

The Audit Committee is responsible for reviewing the Company's financial
reporting procedures, internal controls and the performance of the Company's
auditors as detailed in the Mandate of the Audit Committee. The Audit Committee
is also responsible for reviewing all disclosure with respect to financial
matters prior to filing or release and quarterly and annual financial statements
prior to their approval by the full Board.

Currently the Company does not have a financial expert on its Audit
Committee. No current Board member possesses the necessary qualifications of a
financial expert as defined by the Sarbanes Oxley Act of 2002, however the Board
is seeking a solution to fulfill this requirement.

ITEM 16B. CODE OF ETHICS

The Company has not adopted a formal "code of ethics", however, it does
maintain standards that are reasonably designed to deter wrong-doing and to
promote:

1. Honest and ethical conduct, including the ethical handling of actual or
apparent conflicts of interest

Page 43 of 75

between personal and professional relationships;

2. Full, fair, accurate, timely, and understandable disclosure in reports and
documents that a registrant files with, or submits to, regulatory agencies
and in other public communications made by the registrant;

3. Compliance with applicable governmental laws, rules and regulations;

4. The prompt internal reporting of violations of the standards to an
appropriate person or persons identified in the standards; and

5. Accountability for adherence to the standards.

In addition, the Company practices corporate governance in accordance with
rules and regulations in Canada.

Corporate Governance relates to the activities of the Board of Directors
who are elected by and accountable to the Shareholders, and takes into account
the role of management who are appointed by the Board of Directors and who are
charged with the on-going management of the Company. The Board of Directors of
the Company encourages sound corporate governance practices designed to promote
the well being and on-going development of the Company, having always as its
ultimate objective the best long-term interests of the Company and the
enhancement of value for all Shareholders. Currently there is no formal document
stating the Company's Corporate Governance policies, however, there are in
existence, Board of Directors, Audit Committee and Compensation and Human
Resource Committee Mandates.

ITEM 16C. PRINCIPAL ACCOUNTANTS FEES AND SERVICES

2004 2005 Aggregate Fees

Audit fees $52,900 77,500 130,400

Tax services and $14,100 7,280 21,380
Other services
---------------------------------
$67,000 84,780 151,780
=================================

ITEM 16D. EXEMPTION FROM THE LISTING STANDARDS FOR AUDIT COMMITEES

The information called for by this Item 16D is not applicable to the
Company.

ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFLILIATED
PURCHASERS

There have been no purchases of equity securities by the Company or
affiliated purchasers.

ITEM 17. FINANCIAL STATEMENTS

The consolidated financial statements of the Company have been prepared on
the basis of Canadian GAAP. Reconciliation to U.S. GAAP is included therein
under note 16 to the financial statements.

The report of independent registered public accountants, financial
statements and notes thereto,

Page 44 of 75

schedules thereto as required under Item 17 are found immediately below. The
report of independent registered public accounting firm is included herein
immediately preceding the respective financial statements, notes, schedules,
etc.

Page 45 of 75

Allura International Inc.
Consolidated
Financial Statements
(expressed in Canadian dollars)
March 31, 2005, 2004 and 2003

Page 46 of 75

Contents

Page
-----

Report of Independent Registered Public Accounting Firm 46

Consolidated Balance Sheets 47

Consolidated Statements of Operations 48

Consolidated Statements of Cash Flows 49

Consolidated Statements of Shareholders' Equity 50

Notes to the Consolidated Financial Statements 51-65

Consolidated Schedules of Administrative and Selling and Delivery
Expenses 66

Page 47 of 75

Grant Thornton LLP
Chartered Accountants Grant Thornton [LOGO]
Management Consultants

Report of Independent Registered Public Accounting Firm
To the shareholders of
Allura International Inc.

We have audited the accompanying consolidated balance sheets of Allura
International Inc. as at March 31, 2005 and 2004 and the consolidated statements
of operations, cash flows, and shareholders' equity for each of the three years
in the period ended March 31, 2005. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States) and auditing standards generally
accepted in Canada. Those standards require that we plan and perform an audit to
obtain reasonable assurance whether the financial statements are free of
material misstatement. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. Our audit
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.

In our opinion, these consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Allura
International Ltd. as at March 31, 2005 and 2004 and the results of its
operations and its cash flows for each of three years ended March 31, 2005 in
accordance with Canadian generally accepted accounting principles.

Our previous report dated April 19, 2005 except as to Note 3(b) which is as of
October 4, 2005 has been withdrawn and the financial statements have been
revised as explained in Note 3(c).

Vancouver, Canada
August 19, 2005, except as to Note 3(b) /s/ "Grant Thornton LLP"
which is as at October 4, 2005 and 2(e),(j),(k) and ------------------------
3(c) which are as of September 13, 2006 Chartered Accountants

Comment by Auditors for US Readers on Canada - US Reporting Differences

The standards of the Public Company Accounting Oversight Board (United States)
for auditors require the addition of an explanatory paragraph (following the
opinion paragraph) when there are changes in accounting principles that have
been implemented in the financial statements such as those described in Note 3
to the consolidated financial statements of Allura International Inc. As
described in Note 3, due to a change in Canadian generally accepted accounting
principles, the Company has recorded the fair value of a put option issued in
2000 as a liability rather than as equity as previously presented. The Company
also restated its financial statements related to its presentation of certain
marketing costs related to vendor advertising paid to customers and payment
discounts granted to customers. These discounts have been restated to be
presented as a reduction of net sales rather than as a selling expense. Our
report to the shareholders of Allura International Inc. dated August 19, 2005,
except as to Note 3(b) which is at October 4, 2005 and 2(e),(j),(k) and 3(c)
which are as of September 13, 2006 is expressed in accordance with Canadian
reporting standards, which do not require a reference to such restatements in
the report of the independent registered public accounting firm when the change
is properly accounted for and adequately disclosed in the financial statements.

P.O. Box 11177, Royal Centre, Suite 2800
1055 West Georgia Street
Vancouver, BC V6E 4N3
T (604) 687-2711
F (604) 685-6569
E Vancouver@GrantThornton.ca
www.GrantThornton.ca
Canadian Member of Grant Thornton International

Page 48 of 75

Allura International Inc.
Consolidated Balance Sheets
(expressed in Canadian dollars)
March 31

2005 2004
(Restated
- Note 3)
- --------------------------------------------------------------------------------

Assets
Current
Cash and cash equivalents $ 37,990 $ 72,955
Receivables, net (Note 4) 3,413,824 3,509,367
Inventories 13,043,939 7,607,366
Income taxes receivable -- 59,990
Prepaids 130,269 60,417
----------- -----------

Total current assets 16,626,022 11,310,095

Property and equipment, net (Note 6) 171,378 202,899
Goodwill 26,970 26,970
----------- -----------

Total assets $16,824,370 $11,539,964
=========== ===========

- --------------------------------------------------------------------------------

Liabilities
Current
Bank indebtedness (Note 7) $ 8,911,408 $ 6,382,244
Accounts payable and accruals (Note 8) 4,674,618 2,290,188
Income taxes payable 39,704 --
Obligation under put option (Note 10) 64,000 55,600
----------- -----------

Total current liabilities 13,689,730 8,728,032
----------- -----------

Shareholders' Equity

Capital stock (Note 10) 2,545,765 2,545,765
Retained earnings 588,875 266,167
----------- -----------

Total shareholders' equity 3,134,640 2,811,932
----------- -----------

Total liabilities and shareholders' equity $16,824,370 $11,539,964
=========== ===========

- --------------------------------------------------------------------------------
Commitments (Note 11)

On behalf of The Board

/s/ "Jeremy Bowman"
- ----------------------------
Jeremy Bowman

See accompanying notes to the consolidated financial statements.

Page 49 of 75

Allura International Inc.
Consolidated Statements of Operations
(expressed in Canadian dollars)
Years Ended March 31

2005 2004 2003
(Restated (Restated (Restated
- Note 3) - Note 3) - Note 3)
- ------------------------------------------------------------------------------------------------

Net sales $18,252,286 100% $16,114,338 100.0% $17,031,485 100.0%

Cost of goods sold 13,154,241 71.1 12,156,794 74.5 13,007,581 75.4
----------- ---- ----------- ----- ----------- -----

Gross profit 5,098,045 28.9 3,957,544 25.5 4,023,904 24.6
----------- ---- ----------- ----- ----------- -----

Expenses
Administrative (Appendix 1) 3,248,196 17.6 2,537,947 15.5 2,369,232 13.7
Depreciation and
amortization 64,874 0.3 68,778 0.4 72,884 0.4
Selling and delivery
(Appendix 1) 785,176 5.6 460,125 4.1 581,387 4.6
----------- ---- ----------- ----- ----------- -----

4,098,246 23.5 3,066,850 20.0 3,023,503 18.7
----------- ---- ----------- ----- ----------- -----

Earnings before other income
(expenses) 999,799 5.4 890,694 5.4 1,000,401 5.8
----------- ---- ----------- ----- ----------- -----

Other income (expenses)
Interest, bank charges,
and guarantee fee (Note 13(a)) (562,999) (3.1) (497,534) (3.0) (459,939) (2.7)
Other income 3,229 -- 1,507 -- 5,858 --
Change in put option
obligation (Note 3) (8,400) -- (6,100) -- (6,500) --
----------- ---- ----------- ----- ----------- -----

(568,170) (3.1) (502,127) (3.0) (460,581) (2.7)
----------- ---- ----------- ----- ----------- -----

Earnings before
income taxes 431,629 2.3 388,567 2.4 539,820 3.1

Income taxes 108,921 0.6 60,886 0.4 141,736 0.8
----------- ---- ----------- ----- ----------- -----

Net earnings $ 322,708 1.7% $ 327,681 2.0% $ 398,084 2.3%
=========== ==== =========== ===== =========== =====

Earnings per share
(basic and diluted) $ 0.02 $ 0.02 $ 0.03
=========== =========== ===========
Weighted average common
shares outstanding (basic and
diluted) 15,240,302 15,240,302 15,249,734
=========== =========== ===========

- --------------------------------------------------------------------------------

See accompanying notes to the consolidated financial statements.

Page 50 of 75

Allura International Inc.
Consolidated Statements of Cash Flows
(expressed in Canadian dollars)
Years Ended March 31

2005 2004 2003
- ---------------------------------------------------------------------------------------

Cash and cash equivalents derived from (applied to)

Operating
Net earnings $ 322,708 $ 327,681 $ 398,084
Depreciation and amortization 64,874 68,778 72,884
Change in put option obligation (Note 3) 8,400 6,100 6,500
Change in non-cash operating working capital
(Note 12) (2,926,758) (320,134) (455,111)
----------- --------- ---------
(2,530,776) 82,425 22,357
----------- --------- ---------
Financing
Bank indebtedness 2,529,164 (160,106) (917,354)
----------- --------- ---------

Investing
Purchase of equipment (33,353) (15,515) (52,645)
Proceeds on disposition of equipment -- -- 646,820
Decrease in payables and accruals
related to investing activities -- -- (310,852)
----------- --------- ---------
(33,353) (15,515) 283,323
----------- --------- ---------

Net decrease in cash (34,965) (93,196) (611,674)

Cash and cash equivalents

Beginning of year 72,955 166,151 777,825
----------- --------- ---------

End of year $ 37,990 $ 72,955 $ 166,151
=========== ========= =========

- ---------------------------------------------------------------------------------------

Non-cash investing and financing activities not
included in cash flows

Shares cancelled in part settlement of dispute
(Note 5) $ -- $ -- $ 167,539

Supplementary cash flow information
Interest paid $ 560,558 $ 462,705 $ 422,137

Income taxes paid during the year $ 120,296 $ 288,980 $ 13,796

- --------------------------------------------------------------------------------

See accompanying notes to the consolidated financial statements.

Page 51 of 75

Allura International Inc.
Consolidated Statements of Shareholders' Equity
(expressed in Canadian dollars)
March 31, 2005, 2004 and 2003
- --------------------------------------------------------------------------------

Shares Issued
-----------------------
(Deficit)
Number of Ascribed Retained
Shares Value Earnings Total
---------- ---------- --------- ----------

Balance March 31, 2002 previously
Reported 15,355,055 $3,083,776 $(787,070) $2,296,706

Put option obligation adjustment (Note 3) -- (370,472) 327,472 (43,000)
---------- ---------- --------- ----------
Balance March 31, 2002 restated 15,355,055 $2,713,304 $(459,598) $2,253,706

Shares cancelled (Note 5) (114,753) (167,539) -- (167,539)

Net earnings, year ended March 31, 2003 -- -- 398,084 398,084
---------- ---------- --------- ----------
Balance March 31, 2003, restated 15,240,302 $2,545,765 $ (61,514) 2,484,251

Net earnings, year ended March 31, 2004 -- -- 327,681 327,681
---------- ---------- --------- ----------

Balance March 31, 2004, restated 15,240,302 2,545,765 266,167 2,811,932

Net earnings, year ended March 31, 2005 -- -- 322,708 322,708
---------- ---------- --------- ----------

Balance March 31, 2005 15,240,302 $2,545,765 $ 588,875 $3,134,640
========== ========== ========= ==========

- --------------------------------------------------------------------------------

See accompanying notes to the consolidated financial statements.

Page 52 of 75

Allura International Inc.
Notes to the Consolidated Financial Statements
(expressed in Canadian dollars)
March 31, 2005, 2004 and 2003
- --------------------------------------------------------------------------------

1. Nature of operations

The Company operates in one reportable business segment and is in the business
of wholesaling gold and diamond jewelry in Canada. Its customer base comprises
national chains and independent retailers.

- --------------------------------------------------------------------------------

2. Summary of significant accounting policies

(a) Basis of presentation

These financial statements are presented in accordance with Canadian generally
accepted accounting principles and include the accounts of the Company and its
wholly-owned subsidiaries, IBB International (Canada) Ltd., Allura Diamonds
Limited and Bygo Inc. The accounting principles used conform in all material
respects to principles generally accepted in the United States of America except
as disclosed in Note 16.

(b) Use of estimates

In preparing the financial statements, management is required to make estimates
and assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenue and expenses during the reporting
period. Actual results could differ from management's estimates.

The Company considers the Canadian dollar its functional currency. Monetary
assets and liabilities resulting from foreign currency transactions are
translated into Canadian dollars using the year end conversion rates. Sales,
purchases, receipts and payments are translated throughout the year at exchange
rates prevailing at the date of the transaction. Exchange gains and losses are
included in earnings for the year as part of cost of sales and amounted to a
(gain) loss of $297,583 (2004: $380,273, 2003: $209,316).

(d) Cash and cash equivalents

For the purpose of the statement of cash flows, the Company considers cash on
hand and balances with banks and highly liquid temporary money market
instruments with original maturities of three months or less as cash or cash
equivalents. Bank borrowings are considered to be financing activities.

(e) Inventories

Inventories are comprised of loose gemstones and finished products and are
valued at the lower of cost and net realizable value. Cost is calculated using
the average cost method. Cost consists of the invoiced price plus applicable
duty, excise tax, and freight charges. Net realizable value is based upon
estimated selling price less further costs to completion and disposal. 2005
inventories include goods held on consignment by customers under consignment
agreements totaling $2,605,200 (2004: $1,603,000).

The Company's provision for obsolescence reserve for inventory has been included
in cost of goods sold and the current balance is as follows:

2005 2004 2003

Opening Balance $124,000 $ 72,000 $ 305,000
Add 92,000 100,000 24,000
Deduct (3,000) (48,000) (257,000)
--------------------------------
Closing Balance $213,000 $124,000 $ 72,000
================================

Page 53 of 75

2. Summary of significant accounting policies (Continued)

(f) Property and Equipment

Property and equipment are recorded at cost less accumulated depreciation and
amortization.

The Company depreciates its property and equipment over their useful lives. All
property and equipment other than leasehold improvements are depreciated on a
20% declining balance basis. Leasehold improvements are amortized over the term
of the lease.

(g) Goodwill

Goodwill arises from the 1999 acquisition of the 50% of Allura Diamonds Limited
that the Company did not previously own and consists of the excess of the
purchase price over the estimated fair value of the net tangible assets
acquired. Effective April 1, 2002, the Company adopted, on a prospective basis,
the new recommendations of the Canadian Institute of Chartered Accountants with
respect to the valuation of goodwill. Under the new recommendations, goodwill is
no longer amortized, but is tested for impairment at least on an annual basis.
For the years ended March 31, 2005, 2004 and 2003, application of the new
recommendations resulted in net earnings that were $Nil, $13,462 and $13,508
higher, respectively, if goodwill were amortized as it was prior to April 1,
2002. This change would not affect earnings per share.

Had the Company continued to amortize goodwill as it did prior to April 1, 2002,
the Company's adjusted net earnings and adjusted net earnings per share (basic
and diluted) would be as follows:

2005 2004 2003
(Restated (Restated
- Note 3) - Note 3)

Net earnings as presented $322,708 $327,681 398,084

Reduced amortization under new -- 13,462 13,508
accounting standard
-------- -------- -------

Adjusted net earnings $322,708 $314,219 384,576
======== ======== =======

Adjusted net earnings per share
basic and diluted $ 0.02 $ 0.02 0.03
======== ======== =======

(h) Revenue recognition

The Company recognizes revenue when goods have been shipped, title to the goods
are passed to the customer, and collection is reasonably assured.

Sales of inventory held on consignment by customers are recognized when the
consignment inventory is sold by these customers to third parties or purchased
by these customers.

The Company's e-commerce subsidiary earns fee revenue for services provided and
also earns commission

Page 54 of 75

2. Summary of significant accounting policies (Continued)

(h) Revenue recognition (continued)

revenue based on e-commerce transactions facilitated. Fee revenue is recorded
when the services have been provided. Commission revenue is recorded on a net
basis upon completion of the underlying transaction.

(i) Allowance for doubtful accounts

The Company establishes an allowance for doubtful accounts through review of
open accounts, and historical collection and allowances amounts. The allowance
for doubtful accounts is intended to reduce trade accounts receivable to the
amount that reasonably approximates their fair value due to their short-term
nature. The amount ultimately realized from trade accounts receivable may differ
from the amount estimated in the financial statements based on collection
experience and actual returns and allowances.

(j) Salary and wages

The Company includes its costs of purchasing and receiving in salary and wages.
The costs are approximately $48,000 (2004: $52,000, 2003: $52,000).

(k) Warehousing Costs

The Company includes its warehousing costs in rent. The costs are approximately
$16,000 (2004: $16,000, 2003: $16,000).

(l) Shipping and handling costs

Shipping and handling fees charged to customers are reported as revenue and all
shipping and handling costs incurred related to products sold are reported as a
component of selling and delivery costs.

(m) Stock based compensation

Effective April 1, 2003, the Company adopted the new recommendations of the
Canadian Institute of Chartered Accountants Handbook Section 3870, "Stock-based
Compensation and other Stock-based Payments". The new recommendations have been
applied prospectively to all stock-based payments to employees and non-employees
granted on or after April 1, 2003. The change in accounting policy did not
result in any adjustments to the Company's opening deficit balance.

In accordance with the recommendations under Section 3870, the Company follows
the fair value method for recording compensation for all rewards made to
employees and non-employees including stock appreciation rights, direct awards
of stock and awards that call for settlement in cash or other assets.

The fair value of stock options is determined by the Black Scholes Option
Pricing Model with assumptions for risk-free interest rates, dividend yields,
volatility factors of the expected market price of the Company's common shares
and an expected life of the options.

Prior to April 1, 2003, the Company elected not to follow the fair value based
method of accounting for stock options granted to directors and employees. No
compensation expense was recognized when stock options were granted if the
exercise price of the stock options granted was at market value.

Any consideration paid on the exercise of stock options or purchase of shares
was credited to share capital.

Page 55 of 75

2. Summary of significant accounting policies (Continued)

(n) Income taxes

The Company uses the asset and liability method of accounting for income taxes.
Under the asset and liability method, future tax assets and liabilities are
recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax bases and loss carry forwards. Future tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on future tax assets and liabilities of a
change in tax rates is recognized in earnings in the period that includes the
date of substantive enactment. When it is considered more likely than not that a
future tax asset will not be realized, a valuation allowance is provided.

(o) Earnings per share

The Company uses the treasury stock method to calculate diluted earnings per
share. Under this method, all options with an average exercise price less than
or equal to the average share price for the year are assumed to be exercised at
the average share price during the period.

Diluted per share amounts are not presented as the effect of the assumed
exercise of 352,500 (2004: 2,357,500, 2003: 2,366,000) unexercised options is
antidilutive.

(p) Capital stock issued for consideration other than cash

Capital stock issued for consideration other than cash is recorded at an
estimate of the fair value of the stock issued or issuable or at an estimate of
the fair value of the goods or services received (whichever is more readily
ascertainable).

- --------------------------------------------------------------------------------

3. Restatements

(a) During the year, the Company changed its accounting policy with
regard to put options issued in 2001 and still outstanding (Note 10)
to comply with EIC-149, Accounting for Retractable or Mandatorily
Redeemable Shares. The effect of this change was a reclassification
of the fair value of the Company's obligation under this put option
from equity to liabilities. The change has been accounted for on a
retroactive basis with restatement of the prior year figures.

(b) Subsequent to year end, the Company changed its method of accounting
for payment discounts granted to customers. These discounts were
previously presented as selling expenses, a component of selling and
delivery expenses. The Company has adjusted the 2005, 2004 and 2003
consolidated financial statements to present these discounts as a
reduction in net sales.

(c) The Company has historically accounted for marketing costs related
to vendor advertising paid to customers incorrectly. These amounts
were previously presented as selling expenses, a component of
selling and delivery expenses. The Company has corrected this error
and has adjusted the 2005, 2004, and 2003 consolidated financial
statements to present these amounts as a reduction in net sales.

The effect of those changes on current and prior periods presented is as
follows:

Page 56 of 75

3. Restatements (Continued)

Increase (Decrease)

2005 2004 2003
--------- --------- ---------

Obligation under put option $ 64,000 $ 55,600 $ 49,500

Capital stock $(370,472) $(370,472) $(370,472)

Retained earnings (deficit) $ 306,472 $ 314,872 $ 320,972

Other expense $ 8,400 $ 6,100 $ 6,500

Net sales $(797,953) $(563,250) $(581,551)

Selling expenses $(797,953) $(563,250) $(581,551)

- --------------------------------------------------------------------------------

4. Receivables 2005 2004
---------- ----------

Receivables $3,687,844 $3,703,420
Allowance for doubtful accounts (274,020) (194,053)
---------- ----------

$3,413,824 $3,509,367
========== ==========

- --------------------------------------------------------------------------------

5. Shares cancelled

During 2003, the Company, a subsidiary, and a supplier of e-commerce
applications and software development agreed to settle all disputes pertaining
to a project to develop certain software for the Company's Bygo Internet
commerce platform.

A component of the settlement agreement reached with the supplier of e-commerce
application and software development resulted in 114,753 common shares issued in
2001 being returned to the Company and cancelled during fiscal 2003.

- --------------------------------------------------------------------------------

6. Property and equipment

2005
----------
Accumulated
Depreciation and Net
Cost Amortization Book Value
-------- ---------------- ----------
Computer equipment and Software $410,827 $305,517 $105,310
Furniture and equipment 186,277 140,370 45,907
Leasehold improvements 144,313 125,336 18,977
Trademark 11,840 10,656 1,184
-------- -------- --------

$753,257 $581,879 $171,378
======== ======== ========

Page 57 of 75

6. Property and equipment (Continued)

2004
----------
Accumulated
Depreciation and Net
Cost Amortization Book Value
-------- ---------------- ----------
Computer equipment and Software $389,864 $281,806 $108,058
Furniture and equipment 181,630 138,187 43,443
Leasehold improvements 144,313 96,467 47,846
Trademark 11,840 8,288 3,552
-------- -------- --------
$727,647 $524,748 $202,899
======== ======== ========

- --------------------------------------------------------------------------------

7. Bank indebtedness

Bank indebtedness is comprised of demand overdraft loan facilities totaling
$6,500,000 (2004: $6,500,000) except the loans available increase to $7,600,000
(2004: $7,600,000) from July 1st to February 28th (the "Seasonal Bulge"), plus
an additional $900,000 one-time bulge in effect July 15, 2004 to June 30, 2005
(the "Additional Bulge"), plus a secondary additional $1,600,000 one time bulge
in effect March 1, 2005 to June 30, 2005 (the "Secondary Additional Bulge").
Subsequent to year end, the demand overdraft loan facilities totaling $6,500,000
were renewed except the loan available increased to $9,500,000 from June 1, 2005
to February 28, 2006 (the "One Time Bulge"). The facility details are summarized
as follows:

Demand
Overdraft Annual Secondary
Loan Seasonal Additional Additional Total
Facility Bulge Bulge Bulge Facilities
---------- ----------- ---------- ---------- -----------

Balance March 31, 2003 $6,500,000 $ -- $ -- $ -- $ 6,500,000

Increase on July 1, 2003 -- 1,100,000 -- -- 1,100,000

Decrease on March 1, 2004 -- (1,100,000) -- -- (1,100,000)

---------- ----------- -------- ---------- -----------
Balance, March 31, 2004 6,500,000 -- -- -- 6,500,000

Increase on July 1, 2004 -- 1,100,000 900,000 2,000,000

Decrease on March 1, 2005 -- (1,100,000) -- -- (1,100,000)

Increase on March 1, 2005 -- -- -- 1,600,000 1,600,000
---------- ----------- -------- ---------- -----------

March 31, 2005 $6,500,000 $ -- $900,000 $1,600,000 $ 9,000,000
========== =========== ======== ========== ===========

Page 58 of 75

7. Bank indebtedness (Continued)

These loans bear interest at prime plus 1/8% on the first $1,000,000 (2004:
$1,000,000) and prime plus 1% on the balance. The prime interest rate on these
loans at year-end was 4.25% (2004: 4.00%). The loans are collateralized by a
general security agreement creating a first floating charge over all assets, a
general assignment of book debts, an assignment of inventory under Section 427
of the Bank Act, a guarantee from a shareholder for $4,000,000 supported by a
standby letter of credit for $1,000,000 (2004: $1,000,000), guarantees by
certain other shareholders to a maximum of $800,000, supported by an assignment
of certain shareholders' residential real estate to a maximum of $800,000.

Under the terms of the demand overdraft loan agreement facility, the Company
must maintain certain Debt to Tangible Net Worth ratios not exceeding 3.0 to 1
for its Jewelry Division and not exceeding 2.6 to 1 on the consolidated entity
basis as defined by the bank at each year-end when the loan is outstanding. As
at March 31, 2005, the Debt to Tangible Net worth ratios were 3.25 to 1 and 3.28
to 1 respectively.

- --------------------------------------------------------------------------------

8. Accounts payable and accruals

2005 2004
---------- ----------

Accounts payable $3,835,674 $1,260,732
Accruals 838,944 1,029,456
---------- ----------

$4,674,618 $2,290,188
========== ==========

- --------------------------------------------------------------------------------

9. Income taxes

(a) The provision for income taxes differs from the amount that would have been
expected by applying Canadian corporate income tax to the loss before taxes. The
principal reasons for this difference are as follows:

2005 2004 2003
-------- --------- ---------
(Restated (Restated
- Note 3) - Note 3)
Earnings before income taxes $431,629 $388,567 $539,820
Statutory income tax rate 38% 38% 40%
---------------------------------
Anticipated current income tax $164,019 $147,655 $215,928
provision (recovery )
Tax provision effect arising from:
Small business deduction (52,466) (46,000) (68,580)
Tax losses utilized (17,015) (21,607) (68,000)
Non-deductible expenses and other 11,936 (28,468) 31,488
Potential benefit of losses not recognized 2,447 9,306 30,900
-------- -------- --------
Current income taxes $108,921 $ 60,886 $141,736
======== ======== ========

Page 59 of 75

9. Income taxes (Continued)

(b) Future income tax assets consist of the following:

2005 2004
---------- ----------

Capital assets $ 58,500 $ 44,300
Non-capital loss carry forward 448,500 382,700
Other items 11,000 11,000
Valuation adjustment (518,000) (438,000)
---------- ----------

$ Nil $ Nil
========== ==========

2005 2004
---------- ----------

2008 $ 550,000 $ 608,000
2009 544,000 546,000
2010 102,000 102,000
2011 31,000 31,000
2015 32,000 --
---------- ----------

$1,259,000 $1,287,000
========== ==========

- --------------------------------------------------------------------------------

10. Capital stock

Authorized:
Unlimited number of common shares without par value

Issued: 2005 2004
---------- ----------

15,240,302 (2004: 15,240,302) common shares $2,545,765 $2,545,765

Stock options

The Company established a stock option plan ("the Plan") that allows for the
issuance of up to 3,000,000 common shares as incentive stock options to current
and future key employees and consultants. The Board of Directors administers the
Plan and has the authority to determine the terms and restrictions on all
options, as

Page 60 of 75

10. Capital stock (Continued)

Stock options (continued)

well as to interpret any provision of the Plan. Discretionary options, once
granted, vest at the discretion of The Board of Directors. A summary of the
status of the Company's options is presented below:

Number of Shares Weighted
------------------------------------------ Average
Unvested / Vested / Non- Exercise
Discretionary Discretionary Total Price
------------- ------------- ---------- --------

Balance, March 31, 2003 283,500 2,082,500 2,366,000 $0.75

Year ended March 31, 2004
Cancelled (2,500) -- (2,500) $1.50
Expired -- (6,000) (6,000) $1.58
-------- ---------- ----------

Balance, March 31, 2004 281,000 2,076,500 2,357,500 $0.74
Year ended March 31, 2005
Expired (246,000) (1,759,000) (2,005,000) $0.60
-------- ---------- ----------

Balance, March 31, 2005 35,000 317,500 352,500 $1.56
======== ========== ==========

The weighted average fair value of the options granted during the year was $NIL
(2004: $NIL; 2003: $0.19).

The following table summarizes information concerning options outstanding at
March 31, 2005:

Total Outstanding Exercisable
------------------------- ---------------------
Weighted Weighted
Average Average
Exercise Price Number of Remaining Number of Exercise
-------------- Shares Life (Years) Shares Price
--------- ------------ --------- --------
$1.50 92,500 0.32 57,500 $1.50
$1.58 260,000 1.86 260,000 $1.58
------- -------

352,500 0.81 317,500 $1.57
======= =======

The following proforma financial information presents the net earnings and net
earnings per common share had the Company recognized stock based compensation
expense of $26,600 in the comparative year ended March 31, 2003 using a fair
value based accounting method.

Net Earnings
As reported $398,084
Pro forma $371,484

Page 61 of 75

10. Capital stock (Continued)

Basic and diluted earnings per share
As reported $0.03
Pro forma $0.02

The pro forma amounts may not be representative of future disclosures since the
estimated fair value of stock options is amortized to expense over the vesting
period and additional options may be granted in future years. The Company used
the Black-Scholes option pricing model to estimate the value of the options at
each grant date using the following weighted average assumptions for the year
ended March 31, 2005: dividend yield - nil; annualized volatility 0%; risk-free
interest rate - 4.2%; expected life - 5 years.

Call and put options

During 2001, the Company issued 340,136 units consisting of one common share,
one common share call option and one common share put option. All call options
expired unexercised.

The put options are exercisable after July 25, 2005 and will expire upon the
closing of certain qualified initial public offerings. The put options entitle
the holders to put the shares to the Company for the lesser of their fair value
(estimated at $64,000 at March 31, 2005 (2004: $55,600; 2003: $49,500)) and the
original proceeds received under the unit offering ($500,000).

As required under recently adopted Canadian generally accepted accounting
principles, the Company has presented its obligation under this put as a current
liability as disclosed in Note 3.

- --------------------------------------------------------------------------------

11. Commitments

The Company has entered into two operating lease agreements for office premises
which expire in the 2008 fiscal year. The future minimum lease payments under
these lease agreements for the next five years and thereafter are:

2006 $126,084
2007 126,084
2008 116,184
2009 112,884
2010 and thereafter 131,698

The operating lease agreement for one office premise is with a partnership in
which the Company's president has an interest and the other with a partnership
in which the president of Allura Diamonds Limited has an interest.

Page 62 of 75

12. Change in non-cash operating working capital

2005 2004 2003
----------- --------- ---------

Receivables $ 95,543 $ 353,283 $(438,793)
Income taxes 99,694 (193,858) 159,954
Inventories (5,436,573) 289,184 330,956
Prepaids (69,852) 17,025 (26,003)
Accounts payable and accruals 2,384,430 (785,768) (481,225)
----------- --------- ---------

$(2,926,758) $(320,134) $(455,111)
=========== ========= =========

- --------------------------------------------------------------------------------

13. Related party transactions

Related party transactions during the year and balances at year end are
summarized as follows:

2005 2004 2003
-------- -------- --------

(a) International Bullion and Metal Brokers (London)
Limited Transactions
Inventory purchases $ -- $ 7,759 $ 25,188
Interest and guarantee fee $113,896 $ 89,207 $ 11,649
Balances
Accounts payable and accrued liabilities $ 26,960 $ 27,046 $ 10,098

(b) Other
Rent paid to two related partnerships (Note 11) $126,084 $126,084 $122,784
Guarantee fee paid to two significant shareholders $ 64,000 -- --

These transactions are in the normal course of operations and are measured at
the exchange amount, which is the amount of consideration established and agreed
to by the related parties.

International Bullion and Metal Brokers (London) Limited is a Company controlled
by International Bullion and Metal Brokers Ltd., a shareholder in the Company.

- --------------------------------------------------------------------------------

14. Financial instruments and risk management

The Company is exposed to the following risks related to its financial assets
and liabilities:

Currency risk

The Company is exposed to currency risk as some of its accounts payable are
denominated in currencies other than the Canadian dollar. The Company earns
revenue and incurs operating expenses predominantly in Canadian dollars.
Unfavourable changes in the applicable exchange rates may result in a foreign
exchange loss.

The Company's accounts payable and accrued liabilities included the following
foreign currency denominated amounts:

Page 63 of 75

14. Financial instruments and risk management (Continued)

Currency risk (continued)

2005 2004
---------- --------

U.S. dollar $2,846,208 $921,269
Euro 377,647 45,125
---------- --------

$3,223,855 $966,394
========== ========

The Company does not use derivative instruments to reduce its exposure to
foreign currency risk.

Commodity Risk

Inventory consists of precious metals and gemstones. These items are susceptible
to change in valuation due to market conditions beyond the Company's control.
Increase or decreases in the commodity prices of these assets can have positive
or negative effects on the Company's future net earnings. The Company does not
enter into derivative contracts to mitigate its exposure to commodity risk.

Interest rate risk

Bank indebtedness bears floating interest rates which exposes the Company to the
risk of changing interest rates that may have a detrimental effect on its
earnings in future periods.

Credit risk

Credit risk arises from the possibility that the entities to which the Company
sells products may experience financial difficulty and be unable to fulfill
their contractual obligations. This risk is mitigated by proactive credit
management policies that include regular monitoring of the debtor's payment
history and performance, geographic diversification, credit insurance and
obtaining security when management considers it appropriate.

At March 31, 2005, 66% (2004: 44%) of the Company's accounts receivable was owed
by 3 customers as per table below. The Company had three (2004: two) customers
individually whose balances exceeded 10% of the Company's total accounts
receivable at March 31, 2005.

2005 Percent 2004 Percent
---------- ------- ---------- -------
Company A $1,380,717 40% $ 930,816 25%
Company B 531,248 16% 324,403 10%
Company C 351,714 10% -- --
Company D -- -- 288,873 9%
---------- ------- ---------- -------
$2,263,679 66% $1,544,092 44%
========== ======= ========== =======

Page 64 of 75

14. Financial instruments and risk management (Continued)

Fair value

The Company has various financial instruments including receivables, bank
indebtedness and payables and accruals.

The carrying value of all financial instruments approximates their fair value
due to their short-term nature.

- --------------------------------------------------------------------------------

15. Significant customers

Four major customers account for 53% of total sales in 2005 (2004: 54%, 2003:
44%) as follows:

2005 Percent 2004 Percent 2003 Percent

Company A $ 4,955,465 26% $3,403,950 21% $2,993,413 17%
Company B 1,980,880 10% 2,546,936 16% 2,113,348 12%
Company C 1,792,747 9% 1,746,882 11% 1,495,427 8%
Company D 1,518,852 8% -- -- -- --
Company E -- -- 1,000,722 6% 1,396,282 7%
---------------------- --------------------- ---------------------
$10,247,944 53% $8,698,490 54% $7,998,470 44%
====================== ===================== =====================

- --------------------------------------------------------------------------------

16. Differences between Canadian and U.S. generally accepted accounting
principles and practices

These financial statements have been prepared in accordance with accounting
principles generally accepted in Canada ("Canadian basis") which differ from
those principles and practices that the Company would have followed had its
financial statements been prepared in accordance with accounting principles and
practices generally required in the U.S. ("U.S. basis") as follows:

a) Under the Canadian basis in effect for fiscal years commencing before
January 1, 2002, the issuance of certain stock options did not require any
reflection in the Company's accounts. Under the U.S. basis rules, the
issuance of certain stock options results in a current and/or deferred
expense that must be reflected in the Company's financial statements. The
expense recorded is calculated based on the fair value of the options
issued using the Black Scholes option pricing model. For fiscal years
commencing after January 1, 2002, the Canadian basis rules are
substantially conformed to U.S. basis rules pertaining to the recording of
stock options issued.

As described in Note 2, effective April 1, 2003, the Company adopted the
fair value based approach to Stock Based Compensation under the provisions
of CICA Section 3870 and SFAS No. 148. The method of adoption applied by
the Company is permissible under both Canadian and US standards.

Page 65 of 75

16. Differences between Canadian and U.S. generally accepted accounting
principles and practices (Continued)

b) For U.S. GAAP purposes, the put options disclosed in Note 10 have been
recorded as a liability in accordance with EITF 00-19. The Canadian GAAP
treatment of these put options is disclosed in Note 3 thus Canadian and
U.S. GAAP are now consistent.

These differences between the U.S. and Canadian basis do not result in any
differences to the Company's financial statements during the periods presented.

Recent accounting pronouncements

Consolidation of Variable Interest Entities

In January 2003, the Financial Accounting Standards Board or "FASB" issued
Interpretation No. 46, Consolidation of Variable Interest Entities, and an
Interpretation of Accounting Research Bulletin No. 51 ("FIN 46"). FIN 46
establishes accounting guidance for consolidation of variable interest entities
by the primary beneficiary. FIN 46 applies to any business enterprise, public or
private, that has a controlling interest, contractual relationship or other
business relationship with a variable interest entity. In December 2003, the
FASB issued Interpretation No. 46R ("FIN 46R") which supersedes FIN 46 and is
effective for all Variable Interest Entities ("VIEs") created after February
1,2003 at the end of the first interim or annual reporting period ending
December 15, 2003. "FIN 46R" is applicable to all VIEs created prior to February
1, 2003 by public entities at the end of the first interim or annual reporting
period ending after March 15, 2004. The Company has determined that it has no
VIEs.

In June 2003, the CICA issued a new accounting guideline ACG-15, "Consolidation
of Variable Interest Entities" which is effective for interim and annual periods
beginning on or after November 1, 2004. ACG-15 harmonizes the accounting
treatment for variable interest entities with the US GAAP treatment under "FIN
46R".

Exchanges of Non-Monetary Assets

In December 2004, the FASB issued Statement No. 153 ("SFAS 153") "Exchanges of
Non-monetary Assets". SFAS 153 replaces guidance previously issued under APB
Opinion No. 29, "Accounting for Non-monetary Transactions", which was based on;
the principle that exchanges of non-monetary assets should be measured based on;
the fair value of the assets exchanged. The guidance in that Opinion, however,
included certain exceptions to that principle. SFAS 153 amends Opinion 29 to
eliminate the exception for non-monetary exchanges of similar productive assets
and replaces it with a general exception for exchanges of substance if the
future cash flows of the entity are expected to change significantly as the June
15, 2005. The Company will comply with this guidance for any non-monetary
transactions after the effective date for U.S. GAAP purposes.

Financial Instruments

On January 27, 2005, the CICA issued Section 3855 of the Handbook titled
"Financial Instruments - Recognition and Measurement" It expands Handbook
section 3860, "Financial Instruments - Disclosure and Presentation" by
prescribing when a financial instrument is to be recognized on the balance sheet
and at what

Page 66 of 75

16. Differences between Canadian and U.S. generally accepted accounting
principles and practices (Continued)

amount. It also specifies how financial instrument gains and losses are to be
presented. All financial instruments will be required to be classified into
various categories. Held to maturity investments loans and receivables are
measured at amortized cost with amortization of premium or discounts and losses
and impairment included in current period interest income or expense. Held for
trading financial assets and liabilities are measured at fair market value with
all gains and losses included in net income in the period in which they arise.
All available for sale financial assets are measured at fair market value with
revaluation gains and losses included in other comprehensive income until the
asset is removed from the balance sheet except that other than temporary losses
due to impairment are included in net earnings. All other financial liabilities
are to be carried at amortized cost.

This new Handbook section will bring Canadian GAAP more in line with U.S. GAAP.
The mandatory effective date is for fiscal years beginning on or after October
1, 2006, with optional early recognition for fiscal years beginning on or after
December 31, 2004. At present, the Company's most significant financial
instruments are cash, accounts receivable and accounts payable. This new section
requires little difference in accounting for these financial instruments from
current standards.

Hedge Accounting

New Handbook Section 3865, "Hedges" provides alternative treatments to Handbook
Section 3855 for entities which choose to designate qualifying transactions as
hedges for accounting purposes. The effective date of this section is for fiscal
years beginning on or after October 1, 2006, with optional early recognition for
fiscal years beginning on or after December 31, 2004. The Company does not
currently have any hedging relationships.

Page 67 of 75

Allura International Inc.
Consolidated Schedules of Administrative and Selling and
Delivery Expenses
Appendix 1
(expressed in Canadian dollars)
Years Ended

2005 2004 2003
(Restated - (Restated - (Restated -
Note 3) Note 3) Note 3)
- ------------------------------------------------------------------------------------

Administrative
Alarm and security $ 5,484 $ 5,408 $ 4,373
Automobile 6,165 3,486 2,420
Bad debts 140,692 95,153 49,341
Consulting 29,134 111,935 106,436
Insurance 311,145 183,640 193,929
Legal and accounting 122,203 143,871 80,960
Office and miscellaneous 301,915 133,572 163,981
Rent (Note 13(b)) 183,145 175,780 177,956
Salaries and wages 2,026,538 1,618,089 1,525,710
Telephone 38,082 29,452 30,054
Travel, meals and entertainment 83,693 37,561 34,072
---------- ---------- ----------

$3,248,196 $2,537,947 $2,369,232
========== ========== ==========

Selling and delivery
Marketing $ 52,893 $ 30,892 $ 30,363
Freight and shipping 254,267 169,806 197,501
Sales commission 185,374 163,656 213,755
Selling 292,642 95,771 139,768
---------- ---------- ----------

$ 785,176 $ 460,125 $ 581,387
========== ========== ==========

Page 68 of 75

ITEM 18. FINANCIAL STATEMENTS

The Company has elected to report under Item #17.

ITEM 19. EXHIBITS

1.1 Certificate of Incorporation of the Company (incorporated by reference
from Exhibit 1.1 to the Company's Registration Statement on Form 20-F,
File No. 0-30228 (the "Registration Statement"));

1.2 By-laws of the Company (incorporated by reference from Exhibit 1.2 to
the Registration Statement);

1.3 Articles of Amendment of the Company (incorporated by reference from
Exhibit 1.3 to the Registration Statement);

1.4 Certificate of Amendment of the Company (incorporated by reference from
Exhibit to the Registration Statement);

1.5 Certificate of Change of Name (incorporated by reference from Exhibit
1.5 to the Registration Statement);

4.1 Shareholders Agreement (incorporated by reference from Exhibit 4.1 to
the Annual Report on Form 20-F for the fiscal year ended March 31,
2000);

4.2 Investment Agreement (incorporated by reference from Exhibit 4.2 to the
Annual Report on Form 20-F for the fiscal year ended March 31, 2000);

4.3 Lease for 1555 West 8th Avenue (incorporated by reference from Exhibit
4.3 to the Annual Report on Form 20-F for the fiscal year ended March
31, 2000) and Lease for Unit 104, 276 Bedford Highway, Halifax, N.S.,
B3M 2K6, (incorporated by reference from Exhibit 4.4 to the Annual
Report on Form 20-F for the fiscal year ended March 31, 2003)

4.4 Stock Option Plan (incorporated by reference from Exhibit 4.4 to the
Annual Report on Form 20-F for the fiscal year ended March 31, 2000);

4.5 Mutual Release and Settlement Agreement dated May 1,2002 by and among,
Allura International, Bygo, Inc. and MacDonald Dettwiler and
Associates, Ltd., and certain other parties thereto;

7.0 List of Subsidiaries (incorporated by reference from Exhibit 7.0 to the
Annual Report on Form 20-F for the fiscal year ended March 31, 2000).

12.1 Section 302 Certification by C.E.O.

12.2 Section 302 Certification by C.F.O.

13.1 Section 906 Certification by C.E.O.

13.2 Section 906 Certification by C.F.O.

Page 69 of 75

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for
filing on Form 20-F and that it has duly caused and authorized the undersigned
to sign this Annual Report on its behalf.

Allura International, Inc.

DATED at Vancouver, British Columbia, Canada, as of October 14th, 2005.

/s/ "Jeremy Bowman"
- ------------------------------
Jeremy Bowman, President, CEO and Director

Page 70 of 75

ALLURA INTERNATIONAL INC.

Index to Exhibits Filed

1.1 Certificate of Incorporation of the Company (incorporated by reference
from Exhibit 1.1 to the Company's Registration Statement on Form 20-F,
File No. 0-30228 (the "Registration Statement"));

1.2 By-laws of the Company (incorporated by reference from Exhibit 1.2 to
the Registration Statement);

1.3 Articles of Amendment of the Company (incorporated by reference from
Exhibit 1.3 to the Registration Statement);

1.4 Certificate of Amendment of the Company (incorporated by reference from
Exhibit 1.4 to the Registration Statement);

1.5 Certificate of Change of Name (incorporated by reference from Exhibit
1.5 to the Registration Statement);

4.1 Shareholders Agreement (incorporated by reference from Exhibit 4.1 to
the Annual Report on Form 20-F for the fiscal year ended March 31,
2000);

4.2 Investment Agreement (incorporated by reference from Exhibit 4.2 to the
Annual Report on Form 20-F for the fiscal year ended March 31, 2000);

4.3 Lease for 1555 West 8th Avenue (incorporated by reference from Exhibit
4.3 to the Annual Report on Form 20-F for the fiscal year ended March
31, 2000). Lease for Unit 104, 276 Bedford Highway, Halifax, N.S., B3M
2K6, (incorporated by reference from Exhibit 4.4 to the Annual Report
on Form 20-F for the fiscal year ended March 31, 2003);

4.4 Stock Option Plan (incorporated by reference from Exhibit 4.4 to the
Annual Report on Form 20-F for the fiscal year ended March 31, 2000);

4.5 Mutual Release and Settlement Agreement dated May 1, 2002, by and among
Allura International, Bygo Inc., MacDonald Dettwiler and Associates
Ltd. and certain other parties thereto.

7.0 List of Subsidiaries (incorporated by reference from Exhibit 7.0 to the
Annual Report on Form 20-F for the fiscal year ended March 31, 2000).

12.1 Section 302 Certification by C.E.O.

12.2 Section 302 Certification by C.F.O.

13.1 Section 906 Certification by C.E.O.

13.2 Section 906 Certification by C.F.O.

Page 71 of 75

EXHIBIT 12.1

Certification of Chief Executive Officer pursuant to
Title 18, United States Code, Section 1350, as adopted pursuant to
Section 302 of The Sarbanes-Oxley Act of 2002

I, Jeremy Bowman, certify that:

1. I have reviewed this annual report on Form 20-F of Allura International
Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the company as of, and for, the periods presented in this annual report;

4. The company's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the company and
have:

a. Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
company, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period
in which this annual report is being prepared;

b. Evaluated the effectiveness of the company's disclosure controls and
procedures and presented in this annual report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluation;

c. Disclosed in this report any change in the company's internal
control over financial reporting that occurred during the period
covered by the annual report that has materially affected, or is
reasonably likely to materially affect, the company's internal
control over financial reporting; and

5. The company's other certifying officers and I have disclosed, based on our
most recent evaluation, to the company's auditors and the audit committee
of company's board of directors (or persons performing the equivalent
function):

a. All significant deficiencies in the design or operation of internal
controls which could adversely affect the company's ability to
record, process, summarize and report financial data and have
identified for the company's auditors any material weaknesses in
internal controls; and

b. Any fraud, whether or not material, that involves management or
other employees who have a significant role in the company's
internal controls.

DATED at Vancouver, British Columbia, Canada, as of October 14th, 2005

/s/ "Jeremy Bowman"
- -------------------
Jeremy Bowman, President, CEO and Director

Page 72 of 75

EXHIBIT 12.2

Certification of Chief Financial Officer pursuant to
Title 18, United States Code, Section 1350, as adopted pursuant to
Section 302 of The Sarbanes-Oxley Act of 2002

I, Emily Tsen, certify that:

1. I have reviewed this annual report on Form 20-F of Allura International
Inc.;

b. Any fraud, whether or not material, that involves management or
other employees who have a significant role in the company's
internal controls; and

6. The company's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.

DATED at Vancouver, BC, as of October 14th, 2005

/s/ "Emily Tsen"
- ----------------
Emily Tsen, Chief Financial Officer and Vice President-Operations

Page 73 of 75

EXHIBIT 13.1

Certification of Chief Executive Officer pursuant to
Title 18, United States Code, Section 1350, as adopted pursuant to
Section 906 of The Sarbanes-Oxley Act of 2002

I, Jeremy Bowman, President and Chief Executive Officer of Allura International
Inc., certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18
U.S.C. Section 1350, that, to the best of my knowledge:

1. The Annual Report on Form 20-F of Allura International Inc., for the year
ended March 31, 2005 (the "Report") fully complies with the requirements
of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15
U.S.C. 78m(a) or 78o(d)); and

2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of Allura
International Inc.

Vancouver, BC, Canada
October 14th, 2005

by: /s/ "Jeremy Bowman"
------------------
Jeremy Bowman
President and Chief Executive Officer

The foregoing certification is being furnished solely pursuant to 18U.S.C.
Section 1350 and is not being filed as part of the Report or as a separate
disclosure document.

A signed original of this written statement required by Section 906, or other
document authenticating, acknowledging, or otherwise adopting the signature that
appears in typed form within the electronic version of this written statement
required by Section 906, has been provided to the Company and will be retained
by the Company and furnished to the Securities and Exchange Commission or its
staff upon request.

Page 74 of 75

EXHIBIT 13.2

Certification of Chief Financial Officer pursuant to
Title 18, United States Code, Section 1350, as adopted pursuant to
Section 906 of The Sarbanes-Oxley Act of 2002

I, Emily Tsen, Chief Financial Officer of Allura International Inc., certify,
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section
1350, that, to the best of my knowledge:

1. The Annual Report on Form 20-F of Allura International Inc. for the year
ended March 31, 2005 (the "Report") fully complies with the requirements
of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15
U.S.C. 78m(a) or 78o(d)); and

2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of Allura
International Inc.

Vancouver, British Columbia, Canada
October 14th, 2005

by: /s/ "Emily Tsen"
----------------
Emily Tsen
Chief Financial Officer

The foregoing certification is being furnished solely pursuant to 18U.S.C.
Section 1350 and is not being filed as part of the Report or as a separate
disclosure document.

Page 75 of 75