Exhibit 99.1

News release via Canada NewsWire, Toronto 416-863-9350

	    Attention Business/Financial Editors:
	    Harry Winston Diamond Corporation Announces Fiscal 2010 Fourth Quarter
	    and Year-End Results

	    TORONTO, March 31 /CNW/ - Harry Winston Diamond Corporation (TSX:HW,
NYSE:HWD) (the "Company") today announced its fourth quarter and year-end
results for the period ending January 31, 2010.

	    Fourth Quarter Highlights:

	    <<
	        -  Consolidated sales increased 13% to $133.7 million from $118.4
	           million in the comparable quarter of the prior year.

	        -  Rough diamond sales for the fourth quarter were 24% higher at
	           $63.5 million compared to $51.1 million for the fourth quarter
	           last year. This increase resulted from a combination of a 12%
	           increase in the Company's achieved rough diamond prices and an 11%
	           increase in volume of carats sold.

	        -  Retail sales for the fourth quarter increased 4% to $70.2 million
	           from $67.3 million for the comparable quarter of the prior year,
	           reflecting the strength of the Asian market and offsetting
	           continuing slowness in the US market.

	        -  Rough diamond production during the calendar quarter from the
	           Diavik Diamond Mine was significantly lower at 1.6 million carats,
	           compared to 2.6 million carats for the fourth calendar quarter of
	           last year (on a 100% basis). The decrease was due to a planned
	           reduction in mining activity to reflect the softness in the rough
	           diamond market earlier in the year.

	        -  Consolidated net loss for the fourth quarter was $3.4 million or
	           $0.04 per share compared to net loss of $73.0 million or $1.19 per
	           share in the fourth quarter of the prior year. Included in
	           consolidated net loss for the quarter was a net foreign exchange
	           loss of $2.0 million or $0.03 per share primarily on future income
	           tax liabilities compared to a net foreign exchange gain of
	           $4.6 million or $0.08 per share in the comparable quarter of the
	           prior year. The comparable quarter of the prior year also included
	           a non-cash write-down of goodwill relating to the retail
	           operations of $93.8 million or $1.53 per share.
	    >>

	    Robert Gannicott, Chairman and Chief Executive Officer said:

	    "We end the year with a quarter that reflects recovery in both the rough
diamond and jewelry businesses, but in a diamond business significantly
changed from the years before the downturn. Prior to the downturn, diamond
mine production was at extreme capacity and is not capable of returning to
those levels, at least in the near-term. Rough diamond prices have already
reacted and are back near the peaks of mid-2008. We anticipate further price
increases as recovery in the US, and probably later in Europe, is added to
ongoing growth in demand from China and India.
	    In 2007 barely 5% of our retail sales were to Asian customers outside of
Japan. For this last year that same group accounts for 18% of our sales with
an increase of nearly 200% between this and the prior fourth quarters. The
momentum in retail sales has continued and accelerated into the new-year."

	    Annual Results Highlights:

	    <<
	        -  Consolidated sales were $412.9 million for the year compared to
	           $609.2 million for the prior year, resulting in a 62% decrease in
	           gross margin and a loss from operations of $22.0 million.
	        -  Rough diamond sales of $187.9 million were 43% lower from the
	           prior year. The decrease in sales resulted from a combination of a
	           34% decrease in the Company's achieved rough diamond prices and a
	           14% decrease in volume of carats sold during the year. This
	           significant reduction in sales resulted in a loss from mining
	           operations of $6.3 million for the year.
	        -  Retail sales of $225.0 million and a loss from operations of $15.7
	           million for the year, compares to $281.0 million and $2.5 million,
	           respectively, in the prior year. Management continued to focus on
	           cost reduction initiatives resulting in a $12.3 million decrease
	           in selling, general and administrative expenses to $123.6 million
	        -  Rough diamond production for the calendar year was 5.5 million
	           carats compared to 9.2 million carats in the prior calendar year
	           (on a 100% basis). This reduction was a planned response to the
	           softness in the rough diamond market that included a six-week
	           summer shut-down.
	        -  Harry Winston Diamond Corporation recorded a consolidated net loss
	           of $73.2 million or $0.99 per share for the year, compared to net
	           earnings of $70.1 million or $1.15 per share in the prior year.
	           Included in the consolidated net loss for the year was a net
	           foreign exchange loss of $31.5 million or $0.43 per share
	           primarily on future income tax liabilities compared to net foreign
	           exchange gain of $59.1 million or $0.96 per share in the prior
	           year. The current year consolidated net loss also includes a non-
	           cash dilution loss of $34.8 million or $0.47 per share as a result
	           of the investment by Kinross Gold Corporation in Harry Winston
	           Diamond Limited Partnership, which holds the Company's 40%
	           interest in the Diavik Diamond Mine. The prior year consolidated
	           net earnings also included a non-cash write-down of goodwill
	           relating to the retail operations of $93.8 million or $1.54 per
	           share, and an after-tax gain on insurance settlement of $9.9
	           million or $0.16 per share.

	    >>

	    Fourth Quarter and Fiscal 2010 Financial Summary

	    <<
	    (US$ in millions except Earnings per Share amounts)
	    -------------------------------------------------------------------------
	                                      Three      Three     Twelve     Twelve
	                                     months     months     months     months
	                                      ended      ended      ended      ended
	                                    Jan. 31,   Jan. 31,   Jan. 31,   Jan. 31,
	                                       2010       2009       2010       2009
	    -------------------------------------------------------------------------
	    Sales                             133.7      118.4      412.9      609.2
	    - Mining Segment                   63.5       51.1      187.9      328.2
	    - Retail Segment                   70.2       67.3      225.0      281.0
	    -------------------------------------------------------------------------
	    Earnings (loss) from operations    (3.1)      10.1      (22.0)     166.1
	    - Mining Segment                    1.6       12.1       (6.3)     168.6
	    - Retail Segment                   (4.7)      (2.0)     (15.7)      (2.5)
	    -------------------------------------------------------------------------
	    Net earnings (loss)                (3.4)     (73.0)     (73.2)      70.1
	    -------------------------------------------------------------------------
	    Earnings (loss) per share        $(0.04)    $(1.19)    $(0.99)     $1.15
	    -------------------------------------------------------------------------
	    >>

	    Conference Call and Webcast

	    Beginning at 8:30AM (EDT) on Thursday, April 1, the Company will host a
conference call for analysts, investors and other interested parties.
Listeners may access a live broadcast of the conference call on the Company's
investor relations web site at http://investor.harrywinston.com or by dialing
866-711-8198 within North America or 617-597-5327 from international locations
and entering passcode 60192806.
	    An online archive of the broadcast will be available by accessing the
Company's investor relations web site at http://investor.harrywinston.com. A
telephone replay of the call will be available one hour after the call through
11:00PM (EDT) through Thursday, April 15, 2010, by dialing 888-286-8010 within
North America or 617-801-6888 from international locations and entering
passcode 14552430.

	    About Harry Winston Diamond Corporation

	    Harry Winston Diamond Corporation is a specialist diamond enterprise with
assets in the mining and retail segments of the diamond industry. Harry
Winston supplies rough diamonds to the global market from its 40 percent
ownership interest in the Diavik Diamond Mine (economic ownership of 31%). The
Company's retail division is a premier diamond jeweler and luxury timepiece
retailer with salons in key locations, including New York, Paris, London,
Beijing, Tokyo, and Beverly Hills.
	    The Company focuses on the two most profitable segments of the diamond
industry, mining and retail, in which its expertise creates shareholder value.
This unique business model provides key competitive advantages; rough diamond
sales and polished diamond purchases provide market intelligence that enhances
the Company's overall performance.
	    For more information, please visit www.harrywinston.com. or for investor
information, visit http://investor.harrywinston.com.


	    <<
	                                 Highlights

	    (ALL FIGURES ARE IN UNITED STATES DOLLARS UNLESS OTHERWISE INDICATED)
	    >>

	    Fourth Quarter Results

	    Harry Winston Diamond Corporation recorded a fourth quarter consolidated
net loss of $3.4 million or $0.04 per share compared to a net loss of $73.0
million or $1.19 per share in the fourth quarter of the prior year. Included
in consolidated net loss for the quarter was a net foreign exchange loss of
$2.0 million or $0.03 per share primarily on future income tax liabilities
compared to a net foreign exchange gain of $4.6 million or $0.08 per share in
the comparable quarter of the prior year. The comparable quarter of the prior
year also included a non-cash write-down of goodwill relating to the retail
operations of $93.8 million or $1.53 per share and an after-tax gain on
insurance settlement of $9.9 million or $0.16 per share that resulted from the
December 2008 robbery at the Harry Winston Paris salon.
	    Consolidated sales for the fourth quarter were $133.7 million compared to
sales of $118.4 million in the comparable quarter of the prior year. Rough
diamond sales for the quarter totalled $63.5 million compared to $51.1 million
in the comparable quarter of the prior year resulting from a combination of a
12% increase in the Company's achieved rough diamond prices and an 11%
increase in volume of carats sold. Rough diamond production during the quarter
was significantly lower than the comparable quarter of the prior year due to a
planned reduction in mining activity to reflect the softness in the rough
diamond market earlier in the year. Retail sales for the fourth quarter were
$70.2 million compared to $67.3 million for the comparable quarter of the
prior year, an increase of 4%, reflecting the strength of the Asian market and
offsetting continuing slowness in the US.

	    Annual Results

	    The Company recorded a consolidated net loss of $73.2 million or $0.99
per share for the year, compared to net earnings of $70.1 million or $1.15 per
share in the prior year. The current year consolidated net loss includes a
non-cash dilution loss of $34.8 million or $0.47 per share as a result of the
investment by Kinross Gold Corporation in Harry Winston Diamond Limited
Partnership, which holds the Company's 40% interest in the Diavik Diamond
Mine. Also included in the consolidated net loss for the year was a net
foreign exchange loss of $31.5 million or $0.43 per share primarily on future
income tax liabilities compared to a net foreign exchange gain of $59.1
million or $0.96 per share in the prior year. In addition, the Company
recognized a subsequent after-tax gain on insurance settlement of $2.1 million
or $0.03 per share that resulted from the December 2008 robbery at the Harry
Winston Paris salon, versus an after-tax gain on insurance settlement of $9.9
million or $0.16 per share recorded in the prior year. The prior year
consolidated net earnings also included a non-cash write-down of goodwill
relating to the retail operations of $93.8 million or $1.54 per share.
	    Consolidated sales were $412.9 million for the year compared to $609.2
million for the prior year, resulting in a 62% decrease in gross margin and a
loss from operations of $22.0 million.
	    The mining segment recorded sales of $187.9 million, a 43% decrease from
$328.2 million in the prior year. The decrease in sales resulted from a
combination of a 34% decrease in the Company's achieved rough diamond prices
and a 14% decrease in volume of carats sold during the year. The Company's
share of rough diamond production for the calendar year was 2.2 million carats
compared to 3.7 million carats in the prior year. As a response to the
softness in the rough diamond market, production was reduced through a planned
six-week summer shutdown from July 14, 2009 to August 24, 2009 (the "Summer
Shutdown") and a general reduction in mining activity throughout the rest of
the year. The significant reduction in sales resulted in a loss from
operations for the year of $6.3 million.
	    The retail segment recorded sales of $225.0 million and a loss from
operations of $15.7 million for the year, compared to $281.0 million and $2.5
million, respectively, in the prior year. Selling, general and administrative
expenses decreased $12.3 million to $123.6 million for the year primarily as a
result of the continued focus on cost reduction initiatives.

	    <<
	                     Management's Discussion and Analysis

	       Prepared as of March 31, 2010 (ALL FIGURES ARE IN UNITED STATES
	                     DOLLARS UNLESS OTHERWISE INDICATED)
	    >>

	    The following is management's discussion and analysis ("MD&A") of the
results of operations for Harry Winston Diamond Corporation ("Harry Winston
Diamond Corporation", or the "Company") for the fiscal year ended January 31,
2010, and its financial position as at January 31, 2010. This MD&A is based on
the Company's consolidated financial statements prepared in accordance with
generally accepted accounting principles in Canada ("Canadian GAAP") and
should be read in conjunction with the consolidated financial statements and
notes. Unless otherwise specified, all financial information is presented in
United States dollars. Unless otherwise indicated, all references to "year"
refer to the fiscal year ended January 31. Unless otherwise indicated,
references to "international" for the retail segment refer to Europe and Asia.
	    Certain comparative figures have been reclassified to conform to the
current year's presentation.

	    Caution Regarding Forward-Looking Information

	    Certain information included in this MD&A may constitute forward-looking
information within the meaning of Canadian and United States securities laws.
In some cases, forward-looking information can be identified by the use of
terms such as "may", "will", "should", "expect", "plan", "anticipate",
"appears", "believe", "intend", "estimate", "predict", "potential",
"continue", "objective" or other similar expressions concerning matters that
are not historical facts. Forward-looking information may relate to
management's future outlook and anticipated events or results, and may include
statements or information regarding plans, timelines and targets for
construction, mining, development, production and exploration activities at
the Diavik Diamond Mine, future mining and processing at the Diavik Diamond
Mine, projected capital expenditure requirements and the funding thereof,
liquidity and working capital requirements and sources, estimated reserves and
resources at, and production from, the Diavik Diamond Mine, the number and
timing of expected rough diamond sales, expected diamond prices and
expectations concerning the diamond industry and the demand for luxury goods,
expected cost of sales and gross margin trends in the mining segment, and
expected sales trends and market conditions in the retail segment. Actual
results may vary from the forward-looking information. See "Risks and
Uncertainties" on page 18 for material risk factors that could cause actual
results to differ materially from the forward-looking information.
	    Forward-looking information is based on certain factors and assumptions
regarding, among other things, mining, production, construction and
exploration activities at the Diavik Diamond Mine, world and US economic
conditions and the worldwide demand for luxury goods. Specifically, in making
statements regarding expected diamond prices and expectations concerning the
diamond industry and expected sales trends and market conditions in the retail
segment, the Company has made assumptions regarding, among other things,
continuing recovery of world and US economic conditions and demand for luxury
goods. While the Company considers these assumptions to be reasonable based on
the information currently available to it, they may prove to be incorrect. See
"Risks and Uncertainties" on page 18.
	    Forward-looking information is subject to certain factors, including
risks and uncertainties, which could cause actual results to differ materially
from what we currently expect. These factors include, among other things, the
uncertain nature of mining activities, including risks associated with
underground construction and mining operations, risks associated with joint
venture operations, risks associated with the remote location of and harsh
climate at the Diavik Diamond Mine site, risks associated with regulatory
requirements, fluctuations in diamond prices and changes in US and world
economic conditions, the risk of fluctuations in the Canadian/US dollar
exchange rate, cash flow and liquidity risks and the risks of competition in
the luxury jewelry segment as well as changes in demand for high end luxury
goods. Please see page 18 of this Annual Report, as well as the Company's
current Annual Information Form, available at www.sedar.com, for a discussion
of these and other risks and uncertainties involved in the Company's
operations.
	    Readers are cautioned not to place undue importance on forward-looking
information, which speaks only as of the date of this MD&A, and should not
rely upon this information as of any other date. Due to assumptions, risks and
uncertainties, including the assumptions, risks and uncertainties identified
above and elsewhere in this MD&A, actual events may differ materially from
current expectations. The Company uses forward-looking statements because it
believes such statements provide useful information with respect to the
expected future operations and financial performance of the Company, and
cautions readers that the information may not be appropriate for other
purposes. While the Company may elect to, it is under no obligation and does
not undertake to update or revise any forward-looking information, whether as
a result of new information, future events or otherwise at any particular
time, except as required by law. Additional information concerning factors
that may cause actual results to materially differ from those in such
forward-looking statements is contained in the Company's filings with Canadian
and United States securities regulatory authorities and can be found at
www.sedar.com and www.sec.gov, respectively.

	    Summary Discussion

	    Harry Winston Diamond Corporation is a specialist diamond company
focusing on the mining and retail segments of the diamond industry. The
Company supplies rough diamonds to the global market from production received
from its 40% ownership interest in the Diavik Diamond Mine (economic interest
of 31%), located off Lac de Gras in Canada's Northwest Territories. The
Company also owns Harry Winston Inc., the premier fine jewelry and watch
retailer operating under the Harry Winston(R) brand.
	    The Company's most significant asset is an ownership interest in the
Diavik group of mineral claims. The Diavik Joint Venture (the "Joint Venture")
is an unincorporated joint arrangement between Diavik Diamond Mines Inc.
("DDMI") (60%) and Harry Winston Diamond Limited Partnership ("HWDLP") (40%)
where HWDLP holds an undivided 40% ownership interest in the assets,
liabilities and expenses of the Diavik Diamond Mine. DDMI is the operator of
the Diavik Diamond Mine. DDMI and HWDLP are headquartered in Yellowknife,
Canada. DDMI is a wholly owned subsidiary of Rio Tinto plc of London, England.
As a result of the strategic investment by Kinross Gold Corporation
("Kinross") of Toronto, Canada, described below, HWDLP is 77.5% owned by the
Company and 22.5% owned by Kinross. Kinross's 22.5% ownership is reported in
the consolidated financial statements as part of non-controlling interest.
	    On March 31, 2009, Kinross made a net investment of $150.0 million to
acquire an indirect interest in the Diavik Diamond Mine and a direct equity
stake in the Company. Kinross subscribed for 15.2 million of the Company's
treasury shares at a price of $3.00 per share, being approximately 19.9% of
the Company's issued equity post the transaction. Kinross also subscribed for
new partnership units representing a 22.5% interest in HWDLP, for a net
effective subscription value of $103.7 million. With the closing of the
Kinross transaction, the Company's economic interest in the Diavik Diamond
Mine is 31%.

	    Market Commentary

	    The Diamond Market

	    During the first half of fiscal 2010, the rough diamond market
experienced substantial price weakness as the industry was significantly
impacted by the global financial crisis and the resulting economic slowdown.
Stability returned to the rough diamond market during the third quarter of the
year and prices strengthened considerably. This recovery continued in the
fourth quarter, with rough diamond prices closing the year only slightly below
the market highs achieved in fiscal 2009. Sustained demand from the Far East
and India was coupled with a cautious renewal of interest from US retailers.
The availability of credit improved as banks responded to the positive diamond
market by reducing the tight credit restrictions imposed during the global
financial crisis.
	    The price of polished diamonds, which experienced a less significant
decline than rough diamond prices, has almost returned to previous levels and
even surpassed these in certain popular ranges.
	    The outlook for the diamond market for fiscal 2011 is positive, with
evidence of increased consumer demand in the Far East and India, coupled with
the reawakening of the US retail sector, providing the basis for continued
expected price growth in rough diamonds.

	    The Retail Jewelry Market

	    The luxury diamond jewelry market was also negatively affected by the
depth and duration of the global economic recession. During the third quarter
of the year, signs of recovery began to appear, particularly in Asia. In the
US, many retailers reported a stronger holiday season than in the previous
year as overall consumer sentiment appears to be more positive. The global
economy continues to recover from the recession at varying rates depending on
the region. During fiscal 2011, consumer demand for luxury diamond jewelry is
expected to be strong in Asia, but the US and European markets are expected to
experience a more modest recovery.
	    (R) Harry Winston is a registered trademark of Harry Winston Inc.

	    Consolidated Financial Results

	    The following is a summary of the Company's consolidated quarterly
results for the eight quarters ended January 31, 2010 following the basis of
presentation utilized in its Canadian GAAP financial statements:

	    <<
	    (expressed in thousands of United States dollars except per share amounts
	     and where otherwise noted)
	    (quarterly results are unaudited)

	    -------------------------------------------------------------------------
	                                          2010      2010      2010      2010
	                                            Q4        Q3        Q2        Q1
	    -------------------------------------------------------------------------
	    Sales                             $133,654  $ 74,828  $ 94,776  $109,643
	    Cost of sales                       96,257    45,227    66,294    83,944
	    -------------------------------------------------------------------------
	    Gross margin                        37,397    29,601    28,482    25,699
	    Gross margin (%)                     28.0%     39.6%     30.1%     23.4%
	    Selling, general and
	     administrative expenses            40,479    34,542    32,380    35,749
	    -------------------------------------------------------------------------
	    Earnings (loss) from operations     (3,082)   (4,941)   (3,898)  (10,050)
	    -------------------------------------------------------------------------
	    Interest and financing expenses     (2,396)   (2,448)   (2,998)   (3,699)
	    Other income                           129        99        83       281
	    Insurance settlement                     -       100         -     3,250
	    Dilution loss                            -         -      (539)  (34,222)
	    Impairment charge                        -         -         -         -
	    Foreign exchange gain (loss)        (1,978)    1,598   (25,274)   (5,839)
	    -------------------------------------------------------------------------
	    Earnings (loss) before
	     income taxes                       (7,327)   (5,592)  (32,626)  (50,279)
	    Income taxes (recovery)             (5,800)   (4,221)   (5,662)   (3,120)
	    -------------------------------------------------------------------------
	    Earnings (loss) before
	     non-controlling interest           (1,527)   (1,371)  (26,964)  (47,159)
	    Non-controlling interest             1,831    (1,157)   (2,443)   (2,075)
	    -------------------------------------------------------------------------
	    Net earnings (loss)               $ (3,358) $   (214) $(24,521) $(45,084)
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    Basic earnings (loss)
	     per share                        $  (0.04) $   0.00  $  (0.32) $  (0.68)
	    Diluted earnings (loss)
	     per share                        $  (0.04) $   0.00  $  (0.32) $  (0.68)
	    Cash dividends declared
	     per share                        $   0.00  $   0.00  $   0.00  $   0.00
	    Total assets(i)                   $  1,495  $  1,535  $  1,533  $  1,592
	    Total long-term liabilities(i)    $    477  $    506  $    507  $    496
	    -------------------------------------------------------------------------


	    -------------------------------------------------------------------------
	                                          2009      2009      2009      2009
	                                            Q4        Q3        Q2        Q1
	    -------------------------------------------------------------------------
	    Sales                             $118,399  $148,623  $186,119  $156,079
	    Cost of sales                       68,908    71,679    73,542    73,149
	    -------------------------------------------------------------------------
	    Gross margin                        49,491    76,944   112,577    82,930
	    Gross margin (%)                     41.8%     51.8%     60.5%     53.1%
	    Selling, general and
	     administrative expenses            39,399    33,998    39,194    43,285
	    -------------------------------------------------------------------------
	    Earnings (loss) from operations     10,092    42,946    73,383    39,645
	    -------------------------------------------------------------------------
	    Interest and financing expenses     (4,960)   (4,678)   (5,366)   (5,453)
	    Other income                           778       407       815       246
	    Insurance settlement                17,240         -         -         -
	    Dilution loss                            -         -         -         -
	    Impairment charge                  (93,780)        -         -         -
	    Foreign exchange gain (loss)         4,649    48,982     5,301       155
	    -------------------------------------------------------------------------
	    Earnings (loss) before
	     income taxes                      (65,981)   87,657    74,133    34,593
	    Income taxes (recovery)              7,052    15,685    24,185    13,336
	    -------------------------------------------------------------------------
	    Earnings (loss) before
	     non-controlling interest          (73,033)   71,972    49,948    21,257
	    Non-controlling interest               (58)       81         1         1
	    -------------------------------------------------------------------------
	    Net earnings (loss)               $(72,975) $ 71,891  $ 49,947  $ 21,256
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------
	    Basic earnings (loss)
	     per share                        $  (1.19) $   1.17  $   0.81  $   0.35
	    Diluted earnings (loss)
	     per share                        $  (1.19) $   1.17  $   0.81  $   0.35
	    Cash dividends declared
	     per share                        $   0.05  $   0.05  $   0.05  $   0.05
	    Total assets(i)                   $  1,567  $  1,645  $  1,637  $  1,591
	    Total long-term liabilities(i)    $    550  $    562  $    617  $    634
	    -------------------------------------------------------------------------


	    ---------------------------------------------------------------
	                                          2010      2009      2008
	                                         Total     Total     Total
	    ---------------------------------------------------------------
	    Sales                             $412,901  $609,220  $679,307
	    Cost of sales                      291,722   287,278   311,187
	    ---------------------------------------------------------------
	    Gross margin                       121,179   321,942   368,120
	    Gross margin (%)                     29.3%     52.8%     54.2%
	    Selling, general and
	     administrative expenses           143,150   155,876   150,445
	    ---------------------------------------------------------------
	    Earnings (loss) from operations    (21,971)  166,066   217,675
	    ---------------------------------------------------------------
	    Interest and financing expenses    (11,541)  (20,457)  (27,858)
	    Other income                           592     2,246     2,758
	    Insurance settlement                 3,350    17,240    13,488
	    Dilution loss                      (34,761)        -         -
	    Impairment charge                        -   (93,780)        -
	    Foreign exchange gain (loss)       (31,493)   59,087   (43,391)
	    ---------------------------------------------------------------
	    Earnings (loss) before
	     income taxes                      (95,824)  130,402   162,672
	    Income taxes (recovery)            (18,803)   60,256    56,094
	    ---------------------------------------------------------------
	    Earnings (loss) before
	     non-controlling interest          (77,021)   70,146   106,578
	    Non-controlling interest            (3,845)       25       170
	    ---------------------------------------------------------------
	    Net earnings (loss)               $(73,176) $ 70,121  $106,408
	    ---------------------------------------------------------------
	    ---------------------------------------------------------------
	    Basic earnings (loss)
	     per share                        $  (0.99) $   1.15  $   1.82
	    Diluted earnings (loss)
	     per share                        $  (0.99) $   1.15  $   1.81
	    Cash dividends declared
	     per share                        $   0.00  $   0.20  $   0.80
	    Total assets(i)                   $  1,495  $  1,567  $  1,494
	    Total long-term liabilities(i)    $    477  $    550  $    660
	    ---------------------------------------------------------------
	    (i) Total assets and total long-term liabilities are expressed in
	        millions of United States dollars.

	        The comparability of quarter-over-quarter results is impacted by
	        seasonality for both the mining and retail segments. Harry Winston
	        Diamond Corporation expects that the quarterly results for its
	        mining segment will continue to fluctuate depending on the
	        seasonality of production at the Diavik Diamond Mine, the number of
	        sales events conducted during the quarter, and the volume, size and
	        quality distribution of rough diamonds delivered from the Diavik
	        Diamond Mine in each quarter. The quarterly results for the retail
	        segment are also seasonal, with generally higher sales during the
	        fourth quarter due to the holiday season. See "Segmented Analysis" on
	        page 10 for additional information.
	    >>

	    Year Ended January 31, 2010 Compared to Year Ended January 31, 2009

	    CONSOLIDATED NET EARNINGS

	    The Company recorded a consolidated net loss for the fiscal year ended
January 31, 2010 of $73.2 million or $0.99 per share compared to net earnings
of $70.1 million or $1.15 per share for the prior year. The current year
consolidated net loss includes a non-cash dilution loss of $34.8 million or
$0.47 per share as a result of the investment by Kinross in HWDLP, which holds
the Company's 40% interest in the Diavik Diamond Mine. Also included in the
consolidated net loss for the year was a net foreign exchange loss of $31.5
million or $0.43 per share primarily on future income tax liabilities compared
to a net foreign exchange gain of $59.1 million or $0.96 per share in the
prior year. In addition, the Company recognized a subsequent after-tax gain on
insurance settlement of $2.1 million or $0.03 per share that resulted from the
December 2008 robbery at the Harry Winston Paris salon, versus an after-tax
gain on insurance settlement of $9.9 million or $0.16 per share recorded in
the prior year. The prior year consolidated net earnings also included a
non-cash write-down of goodwill relating to the retail operations of $93.8
million or $1.54 per share.

	    CONSOLIDATED SALES

	    The Company recorded sales for the fiscal year ended January 31, 2010 of
$412.9 million compared to sales of $609.2 million for the prior year. On a
segment basis, rough diamond sales accounted for $187.9 million of these sales
compared to $328.2 million for the prior year. The Company completed eight
rough diamond sales during the fiscal year compared to nine rough diamond
sales in the prior year. Harry Winston's retail segment sales were $225.0
million, compared to $281.0 million for the prior year. See "Segmented
Analysis" on page 10 for additional information.

	    CONSOLIDATED COST OF SALES AND GROSS MARGIN

	    The Company recorded cost of sales of $291.7 million for a gross margin
of 29.3% during the fiscal year compared to $287.3 million and a gross margin
of 52.8% during the prior year. The Company's cost of sales includes costs
associated with mining, rough diamond sorting and retail sales activities. See
"Segmented Analysis" on page 10 for additional information.

	    CONSOLIDATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

	    The principal components of selling, general and administrative ("SG&A")
expenses include expenses for salaries and benefits, advertising, professional
fees, rent and building related costs. The Company incurred SG&A expenses of
$143.2 million for the fiscal year compared to $155.9 million in the prior
year.
	    Included in SG&A expenses for the year are $19.5 million for the mining
segment compared to $19.9 million for the prior year and $123.6 million for
the retail segment compared to $136.0 million for the prior year. In the
fourth quarter, SG&A expenses included executive severance of $4.2 million,
$1.5 million of which was related to the mining segment and $2.7 million of
which was related to the retail segment. For the retail segment, the decrease
was due to an adjustment to incentive-based compensation, reduced advertising
and selling expenses, savings from staff reductions and reductions in
discretionary spending. See "Segmented Analysis" on page 10 for additional
information.

	    CONSOLIDATED INCOME TAXES

	    The Company recorded a tax recovery of $18.8 million during the fiscal
year, compared to a tax expense of $60.3 million in the prior year. The
Company's effective income tax rate for the year, excluding Harry Winston's
retail segment, is 15%, which is based on a statutory income tax rate of 30%
adjusted for various items including Northwest Territories mining royalty,
impact of foreign exchange, and earnings subject to tax different than the
statutory rate.
	    The Company's functional and reporting currency is US dollars; however,
the calculation of income tax expense is based on income in the currency of
the country of origin. As such, the Company is continually subject to foreign
exchange fluctuations, particularly as the Canadian dollar moves against the
US dollar. During the twelve months ended January 31, 2010, the Company
recorded an unrealized foreign exchange loss of $24.4 million on the
revaluation of the Canadian denominated future income tax liability, as
compared to an unrealized foreign exchange gain of $48.6 million recorded in
the prior year. The unrealized foreign exchange loss is not deductible for
Canadian income tax purposes.
	    During the twelve months ended January 31, 2010, the Company recorded a
non-cash dilution loss of $34.8 million as a result of the investment by
Kinross in HWDLP, which holds the Company's 40% interest in the Diavik Diamond
Mine. The dilution loss is not deductible for Canadian tax purposes and hence
no tax recovery was recorded against the dilution loss. In addition, a certain
portion of the Company's loss before income taxes is allocated to Kinross as a
result of its investment of an indirect interest in the Diavik Diamond Mine.
As a result, the tax impact of the loss allocated to non-controlling interest
is recorded as a reconciling item in the tax rate reconciliation.
	    The rate of income tax payable by Harry Winston Inc. varies by
jurisdiction. Net operating losses are available in certain jurisdictions to
offset future income taxes payable in such jurisdictions. The net operating
losses are scheduled to expire through 2030.
	    The Company has provided a table below summarizing the movement from the
statutory to the effective income tax rate as a percentage of earnings before
taxes:

	    <<
	                                                     Year ended   Year ended
	                                                     January 31,  January 31,
	                                                           2010         2009
	    -------------------------------------------------------------------------
	    Statutory income tax rate                               30%          31%
	    Northwest Territories mining royalty
	     (net of income tax relief)                              -%          12%
	    Impact of foreign exchange                             (3)%        (16)%
	    Earnings subject to tax different
	     than statutory rate                                     5%         (5)%
	    Changes in valuation allowance                         (2)%           2%
	    Assessments and adjustments                              3%           -%
	    Impact of impairment charge on goodwill                  -%          22%
	    Tax effect on income allocated to
	     non-controlling interest                              (2)%           -%
	    Tax effect on dilution loss                           (11)%           -%
	    Effective income tax rate                               20%          46%
	    -------------------------------------------------------------------------
	    >>

	    CONSOLIDATED INTEREST AND FINANCING EXPENSES

	    Interest and financing expenses of $11.5 million were incurred during the
fiscal year compared to $20.5 million for the prior year. The Company repaid
the full amount of $74.2 million of the mining segment's senior secured term
and revolving credit facilities with the March 31, 2009 closing of the Kinross
transaction. Interest and financing expenses were also impacted by a reduction
in debt levels at the retail segment during the year.

	    CONSOLIDATED OTHER INCOME

	    Other income, which includes interest income on the Company's various
bank balances, was $0.6 million during the year compared to $2.2 million in
the prior year.

	    CONSOLIDATED INSURANCE SETTLEMENT

	    During the fiscal year, the Company received the remaining insurance
settlement of $3.4 million pre-tax related to the December 2008 robbery at the
Harry Winston Paris salon. In the prior year, the Company recognized a pre-tax
gain of $16.7 million in the fourth quarter on settlement of the insurance
claim relating to the December 2008 robbery. Also included in the prior year
was a gain on insurance settlement of $0.5 million resulting from an excavator
fire that occurred at the Diavik Diamond Mine in the fourth quarter of fiscal
2006.

	    CONSOLIDATED DILUTION LOSS

	    The Company recorded a non-cash dilution loss of $34.8 million as a
result of the investment by Kinross in HWDLP, which holds the Company's 40%
interest in the Diavik Diamond Mine.

	    CONSOLIDATED IMPAIRMENT CHARGE

	    In the prior year, the Company determined that the fair value of its
retail segment was below the carrying value and recorded a non-cash goodwill
impairment charge of $93.8 million.

	    CONSOLIDATED FOREIGN EXCHANGE

	    A net foreign exchange loss of $31.5 million was recognized during the
fiscal year compared to a net foreign exchange gain of $59.1 million in the
prior year. The current year loss relates principally to the revaluation of
the Company's Canadian dollar denominated long-term future income tax
liability as a result of the strengthening of the Canadian dollar against the
US dollar at January 31, 2010. The Company's ongoing currency exposure relates
primarily to expenses and obligations incurred in Canadian dollars, as well as
the revaluation of certain Canadian monetary balance sheet amounts. The
Company does not currently have any significant foreign exchange derivative
instruments outstanding.

	    Three Months Ended January 31, 2010 Compared to Three Months Ended
January 31, 2009

	    CONSOLIDATED NET EARNINGS

	    The Company recorded a fourth quarter consolidated net loss of $3.4
million or $0.04 per share compared to a net loss of $73.0 million or $1.19
per share in the fourth quarter of the prior year. Included in consolidated
net loss for the quarter was a net foreign exchange loss of $2.0 million or
$0.03 per share primarily on future income tax liabilities compared to a net
foreign exchange gain of $4.6 million or $0.08 per share in the comparable
quarter of the prior year. The comparable quarter of the prior year also
included a non-cash write-down of goodwill relating to the retail operations
of $93.8 million or $1.53 per share and an after-tax gain on insurance
settlement of $9.9 million or $0.16 per share that resulted from the December
2008 robbery at the Harry Winston Paris salon.

	    CONSOLIDATED SALES

	    Sales for the fourth quarter totalled $133.7 million, consisting of rough
diamond sales of $63.5 million and retail segment sales of $70.2 million. This
compares to sales of $118.4 million in the comparable quarter of the prior
year (rough diamond sales of $51.1 million and retail segment sales of $67.3
million). The Company held three rough diamond sales in the fourth quarter,
compared to two in the comparable quarter of the prior year. See "Segmented
Analysis" on page 10 for additional information.

	    CONSOLIDATED COST OF SALES AND GROSS MARGIN

	    The Company's fourth quarter cost of sales was $96.3 million for a gross
margin of 28.0% compared to a cost of sales of $68.9 million and a gross
margin of 41.8% for the comparable quarter of the prior year. The Company's
cost of sales includes costs associated with mining, rough diamond sorting and
retail sales activities. See "Segmented Analysis" on page 10 for additional
information.

	    CONSOLIDATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

	    The principal components of SG&A expenses include expenses for salaries
and benefits, advertising, professional fees, rent and building related costs.
The Company incurred SG&A expenses of $40.5 million for the fourth quarter,
compared to $39.4 million in the comparable quarter of the prior year.
	    Included in SG&A expenses for the fourth quarter are $4.9 million for the
mining segment compared to $4.4 million for the comparable quarter of the
prior year and $35.6 million for the retail segment compared to $35.0 million
for the comparable quarter of the prior year. For the mining and retail
segments, the higher SG&A expenses were due to executive severance. See
"Segmented Analysis" on page 10 for additional information.

	    CONSOLIDATED INCOME TAXES

	    The Company recorded a tax recovery of $5.8 million during the fourth
quarter, compared to a tax expense of $7.1 million in the comparable quarter
of the prior year. The Company's effective income tax rate for the quarter,
excluding Harry Winston's retail segment, is 262%, which is based on a
statutory income tax rate of 30% adjusted for various items including
Northwest Territories mining royalty, impact of foreign exchange, and earnings
subject to tax different than the statutory rate.
	    The Company's functional and reporting currency is US dollars; however,
the calculation of income tax expense is based on income in the currency of
the country of origin. As such, the Company is continually subject to foreign
exchange fluctuations, particularly as the Canadian dollar moves against the
US dollar. During the fourth quarter, the Canadian dollar strengthened against
the US dollar. As a result, the Company recorded a foreign exchange loss of
$2.2 million on the revaluation of the Company's Canadian dollar denominated
future income tax liability. This compares to a foreign exchange gain of $3.9
million in the comparable quarter of the prior year. The unrealized foreign
exchange loss is not deductible for Canadian income tax purposes.
	    During the fourth quarter, the Company also recorded a $3.8 million
recovery in future Northwest Territories mining royalty as a result of an
adjustment to the effective future royalty tax rate applicable to the Company
as at the end of fiscal 2010. This adjustment is the primary cause of the
unusual effective tax rate for the current quarter.
	    The rate of income tax payable by Harry Winston Inc. varies by
jurisdiction. Net operating losses are available in certain jurisdictions to
offset future income taxes payable in such jurisdictions. The net operating
losses are scheduled to expire through 2030.
	    The Company has provided a table below summarizing the movement from the
statutory to the effective income tax rate as a percentage of earnings before
taxes:

	    <<
	                                                          Three        Three
	                                                         months       months
	                                                          ended        ended
	                                                     January 31,  January 31,
	                                                           2010         2009
	    -------------------------------------------------------------------------
	    Statutory income tax rate                               30%          31%
	    Northwest Territories mining royalty
	     (net of income tax relief)                              3%         (1)%
	    Impact of foreign exchange                               8%           -%
	    Earnings subject to tax different
	     than statutory rate                                   (3)%           4%
	    Changes in valuation allowance                        (12)%         (2)%
	    Assessments and adjustments                             53%           2%
	    Impact of impairment charge on goodwill                  -%        (44)%
	    Other items                                              -%         (1)%
	    Effective income tax rate                               79%        (11)%
	    -------------------------------------------------------------------------
	    >>

	    CONSOLIDATED INTEREST AND FINANCING EXPENSES

	    Interest and financing expenses of $2.4 million were incurred during the
fourth quarter compared to $5.0 million during the comparable quarter of the
prior year. The Company repaid the full amount of $74.2 million of the mining
segment's senior secured term and revolving credit facilities with the March
31, 2009 closing of the Kinross transaction. Interest and financing expenses
were also impacted by a reduction in debt levels at the retail segment during
the quarter.

	    CONSOLIDATED OTHER INCOME

	    Other income of $0.1 million was recorded during the quarter compared to
$0.8 million in the comparable quarter of the prior year.

	    CONSOLIDATED INSURANCE SETTLEMENT

	    In the comparable quarter of the prior year, the Company recognized a
pre-tax gain of $16.7 million on settlement of the insurance claim relating to
the December 2008 robbery at the Harry Winston Paris salon. Also included the
prior year was a gain on insurance settlement of $0.5 million resulting from
an excavator fire that occurred at the Diavik Diamond Mine in the fourth
quarter of fiscal 2006.

	    CONSOLIDATED IMPAIRMENT CHARGE

	    In the prior year, the Company determined that the fair value of its
retail segment was below the carrying value and recorded a non-cash goodwill
impairment charge of $93.8 million.

	    CONSOLIDATED FOREIGN EXCHANGE

	    A net foreign exchange loss of $2.0 million was recognized during the
quarter compared to a net foreign exchange gain of $4.6 million in the
comparable quarter of the prior year. The loss relates principally to the
revaluation of the Company's Canadian dollar denominated long-term future
income tax liability as a result of the strengthening of the Canadian dollar
against the US dollar at January 31, 2010. The Company's ongoing currency
exposure relates primarily to expenses and obligations incurred in Canadian
dollars, as well as the revaluation of certain Canadian monetary balance sheet
amounts. The Company does not currently have any significant foreign exchange
derivative instruments outstanding.

	    Segmented Analysis

	    The operating segments of the Company include mining and retail segments.

	    Mining

	    The mining segment includes the production and sale of rough diamonds.

	    <<
	    (expressed in thousands of United States dollars)
	    (quarterly results are unaudited)

	    -------------------------------------------------------------------------
	                                          2010      2010      2010      2010
	                                            Q4        Q3        Q2        Q1
	    -------------------------------------------------------------------------
	    Sales                             $ 63,489  $ 20,765  $ 45,941  $ 57,690
	    Cost of sales                       57,027    20,319    40,049    57,256
	    -------------------------------------------------------------------------
	    Gross margin                         6,462       446     5,892       434
	    Gross margin (%)                     10.2%      2.1%     12.8%      0.8%
	    Selling, general and
	     administrative expenses             4,885     4,932     4,182     5,503
	    -------------------------------------------------------------------------
	    Earnings (loss) from operations   $  1,577  $ (4,486) $  1,710  $ (5,069)
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------


	    -------------------------------------------------------------------------
	                                          2009      2009      2009      2009
	                                            Q4        Q3        Q2        Q1
	    -------------------------------------------------------------------------
	    Sales                             $ 51,100  $ 90,716  $105,014  $ 81,393
	    Cost of sales                       34,612    40,617    32,390    32,150
	    -------------------------------------------------------------------------
	    Gross margin                        16,488    50,099    72,624    49,243
	    Gross margin (%)                     32.3%     55.2%     69.2%     60.5%
	    Selling, general and
	     administrative expenses             4,430     3,114     5,151     7,208
	    -------------------------------------------------------------------------
	    Earnings (loss) from operations   $ 12,058  $ 46,985  $ 67,473  $ 42,035
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------


	    ---------------------------------------------------------------
	                                          2010      2009      2008
	                                         Total     Total     Total
	    ---------------------------------------------------------------
	    Sales                             $187,885  $328,223  $413,772
	    Cost of sales                      174,651   139,769   169,680
	    ---------------------------------------------------------------
	    Gross margin                        13,234   188,454   244,092
	    Gross margin (%)                      7.0%     57.4%     59.0%
	    Selling, general and
	     administrative expenses            19,502    19,903    23,359
	    ---------------------------------------------------------------
	    Earnings (loss) from operations   $ (6,268) $168,551  $220,733
	    ---------------------------------------------------------------
	    ---------------------------------------------------------------
	    >>

	    Year Ended January 31, 2010 Compared to Year Ended January 31, 2009

	    MINING SALES

	    Rough diamond sales for the year totalled $187.9 million compared to
$328.2 million in the prior year resulting from a combination of a 34%
decrease in the Company's achieved rough diamond prices and a 14% decrease in
volume of carats sold. The Company held eight rough diamond sales during the
fiscal year, compared to nine in the prior year and ten in normal years. Rough
diamond prices have increased significantly over the market lows seen in the
first quarter of this year but the average price for the year remains lower
than the average price achieved in the prior year. In addition, the Company's
achieved prices were particularly low in the first quarter as the sales mix
contained a significant proportion of lower value goods carried in inventory
from January 31, 2009. Rough diamond production during the year was
significantly lower than the prior year due to the Summer Shutdown and a
general reduction in mining activity to reflect the softness in the rough
diamond market.

	    MINING COST OF SALES AND GROSS MARGIN

	    For the fiscal year ended January 31, 2010, cost of sales was $174.7
million resulting in a gross margin of 7.0%, compared to a cost of sales of
$139.8 million and a gross margin of 57.4% in the prior year. The gross margin
rate was significantly impacted by lower carat production spread across a
largely fixed operating cost platform. The increase in cost of sales,
attributable to mining costs, resulted primarily from the costs associated
with preparing the A-418 kimberlite pipe for commercial production being
capitalized in the first half of the prior year. These same activities have
been recorded as direct operating costs in the current year. Also included in
cost of sales is $9.8 million related to goods carried in inventory at January
31, 2009, which were sold subsequent to year end.
	    A substantial portion of cost of sales is mining operating costs, which
are incurred at the Diavik Diamond Mine. Cost of sales also includes sorting
costs, which consist of the Company's cost of handling and sorting product in
preparation for sales to third parties, and amortization and depreciation, the
majority of which is recorded using the unit-of-production method over
estimated proven and probable reserves.

	    MINING SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

	    SG&A expenses for the mining segment decreased by $0.4 million from the
prior year.

	    Three Months Ended January 31, 2010 Compared to Three Months Ended
January 31, 2009

	    MINING SALES

	    Rough diamond sales for the quarter totalled $63.5 million compared to
$51.1 million in the comparable quarter of the prior year resulting from a
combination of a 12% increase in the Company's achieved rough diamond prices
and an 11% increase in volume of carats sold. The Company held three rough
diamond sales in the fourth quarter compared to two in the comparable quarter
of the prior year. Rough diamond production during the quarter was
significantly lower than the comparable quarter of the prior year due to a
planned reduction in mining activity to reflect the softness in the rough
diamond market earlier in the year. Rough diamond prices continued to increase
over the third quarter of the current year but remain lower than the highs
achieved during fiscal 2009.
	    The Company expects that results for its mining segment will continue to
fluctuate depending on the seasonality of production at the Diavik Diamond
Mine, the number of sales events conducted at each sales location during the
quarter, rough diamond prices and the volume, size and quality distribution of
rough diamonds delivered from the Diavik Diamond Mine in each quarter.

	    MINING COST OF SALES AND GROSS MARGIN

	    The Company's fourth quarter cost of sales was $57.0 million resulting in
a gross margin of 10.2% compared to a cost of sales of $34.6 million and a
gross margin of 32.3% in the comparable quarter of the prior year. The
decrease in gross margin resulted primarily from lower carat production. The
mining gross margin is anticipated to fluctuate between quarters, resulting
from variations in the specific mix of product sold during each quarter and
rough diamond prices.
	    A substantial portion of cost of sales is mining operating costs, which
are incurred at the Diavik Diamond Mine. Cost of sales also includes sorting
costs, which consist of the Company's cost of handling and sorting product in
preparation for sales to third parties, and amortization and depreciation, the
majority of which is recorded using the unit-of-production method over
estimated proven and probable reserves.

	    MINING SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

	    SG&A expenses for the mining segment increased by $0.5 million from the
comparable period of the prior year due to executive severance.

	    Mining Segment Operational Update

	    Annual production at the Diavik Diamond Mine was 5.5 million carats,
consisting of 3.4 million carats produced from 0.58 million tonnes of ore from
the A-154 South kimberlite pipe and 2.1 million carats produced from 0.78
million tonnes of ore from the A-418 kimberlite pipe. Annual production was
9.2 million carats during calendar 2008. The lower production in the current
calendar year resulted from the Summer Shutdown and a planned reduction in
mining activity to reflect the softness in the rough diamond market.
	    Ore production for the fourth calendar quarter consisted of 1.0 million
carats produced from 0.16 million tonnes of ore from the A-154 South
kimberlite pipe and 0.6 million carats produced from 0.21 million tonnes of
ore from the A-418 kimberlite pipe. Rough diamond production was significantly
lower than the comparable calendar quarter of the prior year due to a planned
reduction in mining activity to reflect the softness in the rough diamond
market earlier in the year. Average grade decreased to 4.2 carats per tonne in
the fourth calendar quarter from 4.6 carats per tonne in the comparable
quarter of the prior year. The decrease in average grade was primarily driven
by a decrease in the proportion of ore sourced from the A-154 South kimberlite
pipe.

	    HARRY WINSTON DIAMOND LIMITED PARTNERSHIP'S 40% SHARE OF DIAVIK DIAMOND
MINE PRODUCTION

	    <<
	    (reported on a one-month lag)

	    -------------------------------------------------------------------------
	                      Three months  Three months Twelve months Twelve months
	                             ended         ended         ended         ended
	                       December 31,  December 31   December 31   December 31
	                              2009          2008          2009          2008
	    -------------------------------------------------------------------------
	    Diamonds recovered
	     (000s carats)             612         1,039         2,226         3,690
	    Grade (carats/tonne)      4.19          4.56          4.09          3.82
	    -------------------------------------------------------------------------
	    >>

	    Mining Segment Outlook

	    A mine plan and budget for calendar 2010 has been approved by Rio Tinto
plc, the operator of the Diavik Diamond Mine, and the Company. The plan for
calendar 2010 foresees Diavik Diamond Mine production of approximately 7.8
million carats from the processing of 2.1 million tonnes of ore.

	    PRICING

	    The rough diamond market continues to experience a robust recovery from
the extreme market lows seen in the first quarter of the year and pricing has
improved significantly. Future sustained price growth is anticipated in the
rough diamond market during a period of diminishing rough diamond supply.

	    PRODUCTION

	    In calendar 2010, open pit mining from the A-418 kimberlite pipe
supplemented by the A-154 South kimberlite pipe is expected to be the primary
source of ore. Underground mining is scheduled to commence in the first
calendar quarter, with ore sourced mainly from the A-154 South kimberlite
pipe. Total open pit ore mined is expected to be 1.4 million tonnes, and total
underground ore mined is expected to be 0.7 million tonnes.
	    Looking beyond calendar 2010, the objective is to utilize as much of the
processing capability as possible with a combination of underground and open
pit production. As underground capacity ramps up, open pit production from the
A-418 kimberlite pipe will synchronously decline. A new mining technique is
under consideration for the potential mining of the A-21 resource. The
feasibility of this resource is now under review with the objective that it
becomes the supplemental ore source to underground production beyond 2012. In
addition, exploration work has identified extensions at depth to the A-418 and
A-154 North kimberlite pipes. Extension of production beyond 2022 will be
dependent on bringing resources and exploratory tonnages into reserves.

	    COST OF SALES

	    The Company expects cost of sales in fiscal 2011 to increase to
approximately $265 million at an assumed average Canadian/US dollar exchange
rate of $1.00. The increase over fiscal 2010 is due primarily to the cost of
mining open pit synchronously with the high-cost start-up phase of underground
mining. Of this increase, approximately half is related to an increase in
non-cash costs. The Company expects that the cost of sales will decline as the
velocity of underground mining increases and open pit waste stripping ends.

	    CAPITAL EXPENDITURES

	    For fiscal 2010, HWDLP's share of capital expenditures was $51 million,
of which underground capital expenditures were $41 million. During fiscal
2011, HWDLP's 40% share of the planned capital expenditures is expected to be
approximately $56 million at an assumed average Canadian/US dollar exchange
rate of $1.00, of which $26 million relates to substantially completing
underground development.

	    Retail

	    The retail segment includes sales from Harry Winston salons, which are
located in prime markets around the world, including eight salons in the
United States: New York, Beverly Hills, Bal Harbour, Honolulu, Las Vegas,
Dallas, Chicago and Costa Mesa; five salons in Japan: Ginza, Roppongi Hills,
Osaka, Omotesando and Nagoya; two salons in Europe: Paris and London; and four
salons in Asia outside of Japan: Beijing, Taipei, Hong Kong and Singapore.

	    <<
	    (expressed in thousands of United States dollars)
	    (quarterly results are unaudited)

	    -------------------------------------------------------------------------
	                                          2010      2010      2010      2010
	                                            Q4        Q3        Q2        Q1
	    -------------------------------------------------------------------------
	    Sales                             $ 70,165  $ 54,063  $ 48,835  $ 51,953
	    Cost of sales                       39,230    24,908    26,245    26,688
	    -------------------------------------------------------------------------
	    Gross margin                        30,935    29,155    22,590    25,265
	    Gross margin (%)                     44.1%     53.9%     46.3%     48.6%
	    Selling, general and
	     administrative expenses            35,594    29,610    28,198    30,246
	    -------------------------------------------------------------------------
	    Earnings (loss) from operations   $ (4,659) $   (455) $ (5,608) $ (4,981)
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------


	    -------------------------------------------------------------------------
	                                          2009      2009      2009      2009
	                                            Q4        Q3        Q2        Q1
	    -------------------------------------------------------------------------
	    Sales                             $ 67,299  $ 57,907  $ 81,105  $ 74,686
	    Cost of sales                       34,296    31,062    41,152    40,999
	    -------------------------------------------------------------------------
	    Gross margin                        33,003    26,845    39,953    33,687
	    Gross margin (%)                     49.0%     46.4%     49.3%     45.1%
	    Selling, general and
	     administrative expenses            34,969    30,884    34,043    36,077
	    -------------------------------------------------------------------------
	    Earnings (loss) from operations   $ (1,966) $ (4,039) $  5,910  $ (2,390)
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------


	    ---------------------------------------------------------------
	                                          2010      2009      2008
	                                         Total     Total     Total
	    ---------------------------------------------------------------
	    Sales                             $225,016  $280,997  $265,535
	    Cost of sales                      117,071   147,509   141,507
	    ---------------------------------------------------------------
	    Gross margin                       107,945   133,488   124,028
	    Gross margin (%)                     48.0%     47.5%     46.7%
	    Selling, general and
	     administrative expenses           123,648   135,973   127,086
	    ---------------------------------------------------------------
	    Earnings (loss) from operations   $(15,703) $ (2,485) $ (3,058)
	    ---------------------------------------------------------------
	    ---------------------------------------------------------------
	    >>

	    Year Ended January 31, 2010 Compared to Year Ended January 31, 2009

	    RETAIL SALES

	    Sales for the fiscal year ended January 31, 2010 were $225.0 million
compared to $281.0 million for the prior year, a decrease of 20%. Sales in
Asia increased 11% to $77.0 million, US sales decreased 22% to $72.9 million
and European sales decreased 36% to $75.1 million.

	    RETAIL COST OF SALES AND GROSS MARGIN

	    Cost of sales for the retail segment for the fiscal year was $117.1
million compared to $147.5 million for the prior year. Gross margin for the
fiscal year was $107.9 million or 48.0% compared to $133.5 million or 47.5%
for the prior year. Excluding the impact of sales of Harry Winston Inc.
pre-acquisition inventory, gross margin for the fiscal year and the prior year
would have been 48.5% and 49.4%, respectively.

	    RETAIL SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

	    SG&A expenses decreased to $123.6 million from $136.0 million in the
prior year. The decrease was due to an adjustment to incentive-based
compensation, reduced advertising and selling expenses, savings from staff
reductions and reductions in discretionary spending. SG&A expenses include
depreciation and amortization expense of $13.0 million, compared to $12.6
million in the prior year.

	    Three Months Ended January 31, 2010 Compared to Three Months Ended
January 31, 2009

	    RETAIL SALES

	    Sales for the fourth quarter were $70.2 million compared to $67.3 million
for the comparable quarter of the prior year, an increase of 4%. Sales in Asia
increased 52% to $26.9 million, US sales increased 40% to $26.2 million and
European sales decreased 45% to $17.1 million.

	    RETAIL COST OF SALES AND GROSS MARGIN

	    Cost of sales for the retail segment for the fourth quarter was $39.2
million compared to $34.3 million for the comparable quarter of the prior
year. Gross margin for the quarter was $30.9 million or 44.1% compared to
$33.0 million or 49.0% for the fourth quarter of the prior year. Excluding the
impact of sales of Harry Winston Inc. pre-acquisition inventory, gross margin
for the fourth quarter and the comparable quarter of the prior year would have
been 44.2% and 50.1%, respectively. The decrease in gross margin resulted
primarily from a product mix comprising a higher proportion of lower margin
sales.

	    RETAIL SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

	    SG&A expenses increased to $35.6 million from $35.0 million in the
comparable quarter of the prior year. SG&A expenses include depreciation and
amortization expense of $3.3 million, compared to $3.2 million in the
comparable quarter of the prior year.

	    Retail Segment Operational Update

	    For the fiscal year, the retail segment recorded a sales decrease of 20%.
Strong sales in Asia, including Japan, partially compensated for weak sales in
the US and Europe. The retail segment successfully introduced the Harry
Winston New York Collection, a series of jewelry and timepieces inspired by
the glamour and architecture of some of New York's most famous landmarks. The
retail segment implemented a series of measures during the year to
significantly lower the cost structure and maximize liquidity, including
reductions in discretionary expenses, inventory levels and capital
expenditures. Harry Winston Inc. currently operates a network of 19 retail
salons, including a new salon that opened in Singapore in July 2009.
	    Consumer demand for luxury goods increased in the fourth quarter,
reversing the dramatic slowdown experienced during the first half of this
fiscal year. During the fourth quarter, the retail segment recorded a 4%
increase in sales versus the comparable quarter of the prior year. This
continues a positive trend of improving sales as the global economy recovers
from the economic downturn. The increase in sales was driven by positive
consumer response to the introduction of the Harry Winston New York
Collection, strong Asian sales and an improved holiday season in the US.

	    Retail Segment Outlook

	    Harry Winston Inc. expects sales in the luxury jewelry market to continue
to strengthen. For fiscal 2011, the retail segment anticipates strong sales
growth and underlying gross margins, resulting in an improvement in earnings
from operations. The positive momentum from the holiday season is expected to
continue as the global economic recovery gains traction. The emerging markets
and Asia are expected to remain strong while the US and European markets
continue to recover. The retail segment will continue to offer the highest
quality products and services to its customers. The Company believes that the
strength of the Harry Winston brand, supported by a global distribution
network in prime locations and the introduction of new products, has
positioned the retail segment for a higher level of sustained profitability
over the next several years.

	    Liquidity and Capital Resources

	    Working Capital

	    As at January 31, 2010, the Company had unrestricted cash and cash
equivalents of $63.0 million and contingency cash collateral and cash reserves
of $nil, compared to $16.7 million and $30.1 million, respectively, at January
31, 2009. The Company had cash on hand and balances with banks of $61.5
million and short-term investments of $1.5 million at January 31, 2010. Total
cash resources were impacted by the $150.0 million net investment by Kinross
and the subsequent repayment by the Company of the mining segment's $74.2
million senior secured term and revolving credit facilities on March 31, 2009.
With the repayment of these facilities, the Company is no longer required to
maintain a cash collateral and cash reserve account.
	    During the year ended January 31, 2010, the Company generated $44.2
million in cash from operations compared to $144.1 million in the prior year.
The reduction in cash from operations resulted primarily from significantly
lower net earnings compared to the prior year.
	    Working capital increased to $284.5 million at January 31, 2010 from
$195.1 million at January 31, 2009. With the cash received from the closing of
the Kinross transaction, the Company repaid in full the mining segment's
senior secured credit facilities. This transaction increased the Company's
working capital from that of January 31, 2009. Also during the fiscal year,
the Company decreased accounts receivable by $43.7 million, decreased prepaid
expenses and other current assets by $1.8 million, decreased inventory by
$39.0 million, decreased accounts payable and accrued liabilities by $33.3
million, and decreased income taxes payable by $38.9 million.
	    The Company's liquidity requirements fluctuate from quarter to quarter
depending on, among other factors, the seasonality of production at the Diavik
Diamond Mine, seasonality of mine operating expenses, capital expenditure
programs, the number of rough diamond sales events conducted during the
quarter and the volume, size and quality distribution of rough diamonds
delivered from the Diavik Diamond Mine in each quarter, along with the
seasonality of sales and salon expansion in the retail segment. The Company's
principal working capital needs include investments in inventory, prepaid
expenses and other current assets, and accounts payable and income taxes
payable.
	    With the closing of the Kinross transaction and the repayment in full of
the mining segment's senior secured credit facilities, the Company assesses
liquidity and capital resources on a consolidated basis. The Company's
requirements are for cash operating expenses, working capital, contractual
debt requirements and capital expenditures. The Company believes that it will
generate sufficient liquidity to meet its anticipated requirements for the
next twelve months.

	    Financing Activities

	    On March 31, 2009, the Company issued 15.2 million of treasury shares at
a price of $3.00 per share to Kinross, being approximately 19.9% of the
Company's issued equity post the transaction. This transaction generated net
proceeds of $44.7 million, net of transaction costs.
	    During the year, the Company repaid $74.2 million of the mining segment's
senior secured term and revolving credit facilities with the closing of the
Kinross transaction.
	    As at January 31, 2010, the Company's main retail subsidiary, Harry
Winston Inc., had $140.0 million outstanding on its $250.0 million secured
five-year revolving credit facility, which is used to fund salon inventory and
capital expenditure requirements. This represents a decrease of $39.6 million
from the amount outstanding at January 31, 2009.
	    Also included in long-term debt of the Company's retail operations is a
25-year loan agreement for CHF 17.5 million ($16.4 million) used to finance
the construction of the Company's watch factory in Geneva, Switzerland. At
January 31, 2010, $15.5 million was outstanding compared to $14.7 million at
January 31, 2009. The bank has a secured interest in the factory building. In
addition, the Company has a demand credit facility of CHF 2.0 million ($1.9
million), supported by a $2.0 million standby letter of credit, which is
classified as bank advances. At January 31, 2010, $nil was outstanding,
compared to $0.5 million at January 31, 2009.
	    Harry Winston Japan, K.K. maintains secured and unsecured credit
agreements with three banks amounting to (Yen)2,030 million ($22.5 million).
At January 31, 2010, $22.5 million had been drawn against these facilities and
classified as bank advances compared to $23.1 million at January 31, 2009,
$5.5 million of which was long term.
	    At January 31, 2010, no amounts were outstanding under the Company's
revolving financing facility relating to its Belgian subsidiary, Harry Winston
Diamond International N.V., or its Indian subsidiary, Harry Winston Diamond
(India) Private Limited. At January 31, 2009, $18.4 million, $4.7 million and
$1.5 million were drawn under the Company's revolving financing facilities
relating to Harry Winston Diamond International N.V., Harry Winston Diamond
(Israel) Limited and Harry Winston Diamond (India) Private Limited,
respectively.
	    During the year, the Company distributed $9.7 million to Kinross in
relation to its investment in HWDLP.

	    Investing Activities

	    As part of the Kinross transaction, Kinross also subscribed for new
partnership units representing a 22.5% interest in HWDLP, for a subscription
value of $125.1 million.
	    During the fiscal year, the Company purchased capital assets of $53.9
million, of which $50.9 million were purchased for the mining segment and $3.0
million for the retail segment.

	    Contractual Obligations

	    The Company has contractual payment obligations with respect to long-term
debt and, through its participation in the Joint Venture, future site
restoration costs at the Diavik Diamond Mine level. Additionally, at the Joint
Venture level, contractual obligations exist with respect to operating
purchase obligations, as administered by DDMI, the operator of the mine. In
order to maintain its 40% ownership interest in the Diavik Diamond Mine, HWDLP
is obligated to fund 40% of the Joint Venture's total expenditures on a
monthly basis. HWDLP's current projected share of the planned capital
expenditures at the Diavik Diamond Mine, which are not reflected in the table
below, including capital expenditures for the calendar years 2010 to 2014, is
approximately $170 million assuming a Canadian/US average exchange rate of
$1.00 for the five years. The most significant contractual obligations for the
ensuing five-year period can be summarized as follows:

	    CONTRACTUAL OBLIGATIONS

	    <<
	    (expressed in thousands               Less
	     of United States                     than      Year      Year     After
	     dollars)                  Total    1 year       2-3       4-5   5 years
	    -------------------------------------------------------------------------
	    Long-term debt(a)(b)    $188,595  $  7,982  $ 15,612  $148,376  $ 16,625
	    Environmental and
	     participation
	     agreements incremental
	     commitments(c)           89,695    75,662     1,870     4,540     7,623
	    Operating lease
	     obligations(d)          106,250    19,518    28,655    18,734    39,343
	    Capital lease
	     obligations(e)              367       289        78         -         -
	    -------------------------------------------------------------------------
	    Total contractual
	     obligations            $384,907  $103,451  $ 46,215  $171,650  $ 63,591
	    -------------------------------------------------------------------------
	    -------------------------------------------------------------------------

	    (a) Long-term debt presented in the foregoing table includes current and
	        long-term portions. Harry Winston Inc. maintains a credit agreement
	        with a syndicate of banks for a $250.0 million five-year revolving
	        credit facility. There are no scheduled repayments required before
	        maturity. At January 31, 2010, $140.0 million had been drawn against
	        this secured credit facility, which expires on March 31, 2013.

	        Also included in long-term debt of Harry Winston Inc. is a 25-year
	        loan agreement for CHF 17.5 million ($16.4 million) used to finance
	        the construction of the Company's watch factory in Geneva,
	        Switzerland. The loan agreement is comprised of a CHF 3.5 million
	        ($3.3 million) loan and a CHF 14.0 million ($13.2 million) loan. The
	        CHF 3.5 million loan bears interest at a rate of 3.9% and matures on
	        April 22, 2013. The CHF 14.0 million loan bears interest at a rate of
	        3.55% and matures on January 31, 2033. At January 31, 2010,
	        $15.5 million was outstanding on the loan agreement compared to
	        $14.7 million at January 31, 2009. The bank has a secured interest in
	        the factory building.

	        The Company's first mortgage on real property has scheduled principal
	        payments of approximately $0.2 million quarterly, and may be prepaid
	        at any time. On January 31, 2010, $7.2 million was outstanding on the
	        mortgage payable.

	    (b) Interest on long-term debt is calculated at various fixed and
	        floating rates. Projected interest payments on the current debt
	        outstanding were based on interest rates in effect at January 31,
	        2010, and have been included under long-term debt in the table above.
	        Interest payments for the next twelve months are approximated to be
	        $6.8 million.

	    (c) The Joint Venture, under environmental and other agreements, must
	        provide funding for the Environmental Monitoring Advisory Board.
	        These agreements also state that the Joint Venture must provide
	        security deposits for the performance by the Joint Venture of its
	        reclamation and abandonment obligations under all environmental laws
	        and regulations. The operator of the Joint Venture has fulfilled such
	        obligations for the security deposits by posting letters of credit of
	        which HWDLP's share as at January 31, 2010 was $74.2 million based on
	        its 40% ownership interest in the Diavik Diamond Mine. There can be
	        no assurance that the operator will continue its practice of posting
	        letters of credit in fulfillment of this obligation, in which event
	        HWDLP would be required to post its proportionate share of such
	        security directly, which would result in additional constraints on
	        liquidity. The requirement to post security for the reclamation and
	        abandonment obligations may be reduced to the extent of amounts spent
	        by the Joint Venture on those activities. The Joint Venture has also
	        signed participation agreements with various native groups. These
	        agreements are expected to contribute to the social, economic and
	        cultural well-being of area Aboriginal bands. The actual cash outlay
	        for the Joint Venture's obligations under these agreements is not
	        anticipated to occur until later in the life of the Diavik Diamond
	        Mine.

	    (d) Operating lease obligations represent future minimum annual rentals
	        under non-cancellable operating leases for Harry Winston salons and
	        office space, and long-term leases for property, land, office
	        premises and a fuel tank farm for the Diavik Diamond Mine. Harry
	        Winston Inc.'s New York salon lease expires on December 17, 2010 with
	        an option to renew.

	    (e) Capital lease obligations represent future minimum annual rentals
	        under non-cancellable capital leases for Harry Winston Inc. retail
	        exhibit space.
	    >>

	    Dividend

	    On March 19, 2009, the Company announced that it had suspended its
dividend for the time being.

	    Disclosure Controls and Procedures

	    The Company has designed a system of disclosure controls and procedures
to provide reasonable assurance that material information relating to Harry
Winston Diamond Corporation, including its consolidated subsidiaries, is made
known to them by others within those entities, particularly during the period
in which the Company's annual filings are being prepared. In designing and
evaluating the disclosure controls and procedures, the management of the
Company recognized that any controls and procedures, no matter how well
designed and operated, can provide only reasonable assurance of achieving the
desired control objectives. The management of Harry Winston Diamond
Corporation was required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures. The result of the inherent
limitations in all control systems means no evaluation of controls can provide
absolute assurance that all control issues and instances of fraud, if any,
have been detected.
	    The management of Harry Winston Diamond Corporation has evaluated the
effectiveness of the design and operation of its disclosure controls and
procedures as of the end of the period covered by the Annual Report. Based on
that evaluation, management has concluded that these disclosure controls and
procedures, as defined in Canada by Multilateral Instrument 52-109,
Certification of Disclosure in Issuers' Annual and Interim Filings, and in the
United States by Rule 13a-15(e) under the Securities Exchange Act of 1934 (the
"Exchange Act"), are effective as of January 31, 2010, to ensure that
information required to be disclosed in reports that the Company will file or
submit under Canadian securities legislation and the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in those
rules and forms.

	    Internal Control over Financial Reporting

	    The certifying officers of Harry Winston Diamond Corporation have
designed a system of internal control over financial reporting to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements in accordance with Canadian GAAP and the
requirements of the Securities and Exchange Commission in the United States,
as applicable. Management is responsible for establishing and maintaining
adequate internal control over financial reporting for the Company, including
its consolidated subsidiaries.
	    Management has evaluated the effectiveness of internal control over
financial reporting using the framework and criteria established in the
Internal Control - Integrated Framework, issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on this evaluation, management
has concluded that internal control over financial reporting was effective as
of January 31, 2010.

	    Changes in Internal Control over Financial Reporting

	    During the fourth quarter of fiscal 2010, there were no changes in the
Company's internal control over financial reporting that materially affected,
or are reasonably likely to materially affect, the Company's internal control
over financial reporting.

	    Critical Accounting Estimates

	    Management is often required to make judgments, assumptions and estimates
in the application of Canadian GAAP that have a significant impact on the
financial results of the Company. Certain policies are more significant than
others and are, therefore, considered critical accounting policies. Accounting
policies are considered critical if they rely on a substantial amount of
judgment (use of estimates) in their application or if they result from a
choice between accounting alternatives and that choice has a material impact
on the Company's reported results or financial position. The following
discussion outlines the accounting policies and practices that are critical to
determining Harry Winston Diamond Corporation's financial results.

	    Use of Estimates

	    The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of earnings, revenues and expenses during
the reporting year. Significant areas requiring the use of management
estimates relate to the determination of impairment of capital assets,
intangible assets, goodwill and deferred mineral property costs, estimation of
future site restoration costs and future income taxes. Financial results as
determined by actual events could differ from those estimated.
	    The most significant estimates relate to the valuation of deferred
mineral property costs and future site restoration costs. Management makes
significant estimates related to the measurement of reclamation obligations
and the timing of the related cash flows and future income tax liabilities.
Such timing and measurement uncertainty could have a material effect on the
reported results of operations and the financial position of the Company.
	    Actual results could differ materially from those estimates in the near
term.

	    Deferred Mineral Property Costs and Mineral Reserves

	    Harry Winston Diamond Corporation capitalizes all direct development and
pre-production costs relating to mineral properties and amortizes such costs
on a unit-of-production basis upon commencement of commercial production
relating to the underlying property. Deferred mineral property costs are
amortized based on estimated proven and probable reserves at the property.
	    On an ongoing basis, the Company evaluates deferred costs relating to
each property to ensure that the estimated recoverable amount exceeds the
carrying value. Based on the Diavik Diamond Mine's latest projected open pit
and underground life from the mine plan and diamond prices from the Diavik
Project feasibility study, there is no requirement to write down deferred
mineral property costs.
	    The estimation of reserves is a subjective process. Forecasts are based
on engineering data, projected future rates of production and the timing of
future expenditures, all of which are subject to numerous uncertainties and
various interpretations. The Company expects that its estimates of reserves
will change to reflect updated information. Reserve estimates can be revised
upward or downward based on the results of future drilling, testing or
production levels, and diamond prices. Changes in reserve estimates can impact
the evaluation of net recoverable deferred costs.

	    Future Site Restoration Costs

	    The Company has obligations for future site restoration costs. The
Company records the fair value of an asset retirement obligation as a
liability in the period in which it incurs a legal obligation associated with
the retirement of tangible long-lived assets that result from the acquisition,
construction, development and/or normal use of the assets. The fair value of
the liability is added to the carrying amount of the associated asset and this
additional carrying amount is depreciated over the life of the asset.
Subsequent to the initial measurement of the asset retirement obligation, the
obligation is adjusted at the end of each period to reflect the passage of
time and changes in the estimated future cash flows underlying the obligation.
If the obligation is settled for other than the carrying amount of the
liability, the Company will recognize a gain or loss on settlement. As at
January 31, 2010, estimates of all legal obligations at the joint venture
level have been included in the consolidated financial statements of the
Company. Processes to track and monitor these obligations are carried out at
the joint venture level.

	    Intangible Assets

	    Certain of the Company's intangible assets are recorded at fair value
upon acquisition and have an indefinite useful life. The Company assesses
impairment of such intangible assets by determining whether the carrying value
exceeds the fair value. If the fair value is determined to be less than the
net book value, the excess of the net book value over the fair value is
charged to earnings in the year in which such impairment is determined by
management. These approaches involve significant management judgment and, as a
result, are subject to change.

	    Risks and Uncertainties

	    Harry Winston Diamond Corporation is subject to a number of risks and
uncertainties as a result of its operations. In addition to the other
information contained in this MD&A and the Company's other publicly filed
disclosure documents, readers should give careful consideration to the
following risks, each of which could have a material adverse effect on the
Company's business prospects or financial condition.

	    Nature of Mining

	    The operation of the Diavik Diamond Mine is subject to risks inherent in
the mining industry, including variations in grade and other geological
differences, unexpected problems associated with required water retention
dikes, water quality, surface and underground conditions, processing problems,
equipment performance, accidents, labour disputes, risks relating to the
physical security of the diamonds, force majeure risks and natural disasters.
Particularly with underground mining operations, inherent risks include
variations in rock structure and strength as it impacts on mining method
selection and performance, de-watering and water handling requirements,
achieving the required paste backfill strengths, and unexpected local ground
conditions. Hazards, such as unusual or unexpected rock formations, rock
bursts, pressures, collapses, flooding or other conditions, may be encountered
during mining. Such risks could result in personal injury or fatality; damage
to or destruction of mining properties, processing facilities or equipment;
environmental damage; delays, suspensions or permanent reductions in mining
production; monetary losses; and possible legal liability.
	    The Diavik Diamond Mine, because of its remote northern location and
access only by winter road or by air, is subject to special climate and
transportation risks. These risks include the inability to operate or to
operate efficiently during periods of extreme cold, the unavailability of
materials and equipment, and increased transportation costs due to the late
opening and/or early closure of the winter road. Such factors can add to the
cost of mine development, production and operation and/or impair production
and mining activities, thereby affecting the Company's profitability.

	    Nature of Joint Arrangement with DDMI

	    HWDLP holds an undivided 40% interest in the assets, liabilities and
expenses of the Diavik Diamond Mine and the Diavik group of mineral claims.
HWDLP is owned 77.5% by the Company and 22.5% by Kinross. The Diavik Diamond
Mine and the exploration and development of the Diavik group of mineral claims
is a joint arrangement between DDMI (60%) and HWDLP (40%), and is subject to
the risks normally associated with the conduct of joint ventures and similar
joint arrangements. These risks include the inability to exert influence over
strategic decisions made in respect of the Diavik Diamond Mine and the Diavik
group of mineral claims. By virtue of DDMI's 60% interest in the Diavik
Diamond Mine, it has a controlling vote in virtually all Joint Venture
management decisions respecting the development and operation of the Diavik
Diamond Mine and the development of the Diavik group of mineral claims.
Accordingly, DDMI is able to determine the timing and scope of future project
capital expenditures, and therefore is able to impose capital expenditure
requirements on HWDLP that the Company may not have sufficient cash to meet. A
failure to meet capital expenditure requirements imposed by DDMI could result
in HWDLP's interest in the Diavik Diamond Mine and the Diavik group of mineral
claims being diluted.

	    Agreement with Kinross

	    Under the amended partnership agreement of HWDLP, the general partner is
entitled to request that the partners in the partnership advance funds to the
partnership pro rata based on their holdings of partnership units for the
purpose of satisfying the partnership's obligations under various contractual
commitments, including those deriving from the joint arrangement between DDMI
and the partnership. The partners may unanimously determine to fund any cash
call by way of a loan rather than equity contribution. If a partner fails to
contribute its proportion of funds with respect to a cash call, the
non-defaulting partner or partners will have the option, but not the
obligation, to fund the defaulting partner's portion of the cash call by way
of equity contribution or loan or a combination of the two, provided that if
any equity contribution is made, the non-defaulting partner's interest in the
partnership will be increased proportionately through the issuance of
additional partnership units.
	    As DDMI, under the joint arrangement between DDMI and the partnership, is
able to determine the timing and scope of future project capital expenditures
and to impose capital expenditure requirements on the Company that the Company
may not have sufficient cash to meet, the Company's interest in HWDLP could be
diluted under the amended partnership agreement as a result of a failure by
the Company to meet cash call requirements imposed by the amended partnership
agreement.

	    Diamond Prices and Demand for Diamonds

	    The profitability of the Company is dependent upon production from the
Diavik Diamond Mine and on the results of the operations of its retail
operations. Each, in turn, is dependent in significant part upon the worldwide
demand for and price of diamonds. Diamond prices fluctuate and are affected by
numerous factors beyond the control of the Company, including worldwide
economic trends, particularly in the US, Japan, China and India, worldwide
levels of diamond discovery and production, and the level of demand for, and
discretionary spending on, luxury goods such as diamonds and jewelry. Low or
negative growth in the worldwide economy, prolonged credit market disruptions
or the occurrence of further terrorist or similar activities creating
disruptions in economic growth could result in decreased demand for luxury
goods such as diamonds and jewelry, thereby negatively affecting the price of
diamonds and jewelry. Similarly, a substantial increase in the worldwide level
of diamond production or in diamonds available for sale could also negatively
affect the price of diamonds. In each case, such developments could have a
material adverse effect on the Company's results of operations.

	    Cash Flow and Liquidity

	    The Company's liquidity requirements fluctuate from quarter to quarter
depending on, among other factors, the seasonality of production at the Diavik
Diamond Mine, seasonality of mine operating expenses, capital expenditure
programs, the number of rough diamond sales events conducted during the
quarter and the volume, size and quality distribution of rough diamonds
delivered from the Diavik Diamond Mine in each quarter, along with the
seasonality of sales and salon expansion in the retail segment. The Company's
principal working capital needs include investments in inventory, prepaid
expenses and other current assets, and accounts payable and income taxes
payable. There can be no assurance that the Company will be able to meet each
or all of its liquidity requirements. A failure by the Company to meet its
liquidity requirements could result in the Company failing to meet its planned
development objectives, or in the Company being in default of a contractual
obligation, each of which could have a material adverse effect on the
Company's business prospects or financial condition.

	    Economic Environment

	    The Company's financial results are tied to the global economic
environment. The global markets have experienced the impact of a significant
US and international economic downturn since the fall of 2008. This has
restricted the Company's growth opportunities both domestically and
internationally, and a return to a recession or weak recovery could cause the
Company to experience further revenue declines across both of its business
segments, and a decrease in the availability of credit, which could have a
material adverse effect on the Company's business prospects or financial
condition.

	    Currency Risk

	    Currency fluctuations may affect the Company's financial performance.
Diamonds are sold throughout the world based principally on the US dollar
price, and although the Company reports its financial results in US dollars, a
majority of the costs and expenses of the Diavik Diamond Mine are incurred in
Canadian dollars. Further, the Company has a significant future income tax
liability that has been incurred and will be payable in Canadian dollars. The
Company's currency exposure relates primarily to expenses and obligations
incurred by it in Canadian dollars and, secondarily, to revenues of Harry
Winston Inc. in currencies other than the US dollar. The appreciation of the
Canadian dollar against the US dollar, and the depreciation of such other
currencies against the US dollar, therefore, will increase the expenses of the
Diavik Diamond Mine and the amount of the Company's Canadian dollar
liabilities relative to the revenue the Company will receive from diamond
sales, and will decrease the US dollar revenues received by Harry Winston Inc.
From time to time, the Company may use a limited number of derivative
financial instruments to manage its foreign currency exposure.

	    Licences and Permits

	    The operation of the Diavik Diamond Mine and exploration on the Diavik
property requires licences and permits from the Canadian government. The
Diavik Diamond Mine Type "A" Water Licence was renewed by the regional
Wek'eezhii Land and Water Board to October 31, 2015. While the Company
anticipates that DDMI, the operator of the Diavik Diamond Mine, will be able
to renew this licence and other necessary permits in the future, there can be
no guarantee that DDMI will be able to do so or obtain or maintain all other
necessary licences and permits that may be required to maintain the operation
of the Diavik Diamond Mine or to further explore and develop the Diavik
property.

	    Regulatory and Environmental Risks

	    The operation of the Diavik Diamond Mine, exploration activities at the
Diavik Project and the manufacturing of jewelry and watches are subject to
various laws and regulations governing the protection of the environment,
exploration, development, production, taxes, labour standards, occupational
health, waste disposal, mine safety, manufacturing safety and other matters.
New laws and regulations, amendments to existing laws and regulations, or more
stringent implementation or changes in enforcement policies under existing
laws and regulations could have a material adverse effect on the Company by
increasing costs and/or causing a reduction in levels of production from the
Diavik Diamond Mine and in the manufacture of jewelry and watches. As well, as
the Company's international operations expand, it or its subsidiaries become
subject to laws and regulatory regimes which differ materially from those
under which they operate in Canada and the US.
	    Mining and manufacturing are subject to potential risks and liabilities
associated with pollution of the environment and the disposal of waste
products occurring as a result of mining and manufacturing operations. To the
extent that the Company's operations are subject to uninsured environmental
liabilities, the payment of such liabilities could have a material adverse
effect on the Company.

	    Climate Change

	    Canada ratified the Kyoto Protocol to the United Nations Framework
Convention on Climate Change in late 2002 and the Kyoto Protocol came into
effect in Canada in February 2005. The Canadian government has established a
number of policy measures in order to meet its emission reduction guidelines.
While the impact of these measures cannot be quantified at this time, the
likely effect will be to increase costs for fossil fuels, electricity and
transportation; restrict industrial emission levels; impose added costs for
emissions in excess of permitted levels; and increase costs for monitoring and
reporting. Compliance with these initiatives could have a material adverse
effect on the Company's results of operations.

	    Resource and Reserve Estimates

	    The Company's figures for mineral resources and ore reserves on the
Diavik group of mineral claims are estimates, and no assurance can be given
that the anticipated carats will be recovered. The estimation of reserves is a
subjective process. Forecasts are based on engineering data, projected future
rates of production and the timing of future expenditures, all of which are
subject to numerous uncertainties and various interpretations. The Company
expects that its estimates of reserves will change to reflect updated
information. Reserve estimates may be revised upward or downward based on the
results of current and future drilling, testing or production levels, and on
changes in mine design. In addition, market fluctuations in the price of
diamonds or increases in the costs to recover diamonds from the Diavik Diamond
Mine may render the mining of ore reserves uneconomical.
	    Mineral resources that are not mineral reserves do not have demonstrated
economic viability. Due to the uncertainty that may attach to inferred mineral
resources, there is no assurance that mineral resources at the Diavik property
will be upgraded to proven and probable ore reserves.

	    Insurance

	    The Company's business is subject to a number of risks and hazards,
including adverse environmental conditions, industrial accidents, labour
disputes, unusual or unexpected geological conditions, risks relating to the
physical security of diamonds and jewelry held as inventory or in transit,
changes in the regulatory environment and natural phenomena such as inclement
weather conditions. Such occurrences could result in damage to the Diavik
Diamond Mine, personal injury or death, environmental damage to the Diavik
property, delays in mining, closing of Harry Winston Inc.'s manufacturing
facilities or salons, monetary losses and possible legal liability. Although
insurance is maintained to protect against certain risks in connection with
the Diavik Diamond Mine and the Company's operations, the insurance in place
will not cover all potential risks. It may not be possible to maintain
insurance to cover insurable risks at economically feasible premiums.

	    Fuel Costs

	    The Diavik Diamond Mine's expected fuel needs are purchased periodically
during the year for storage, and transported to the mine site by way of the
winter road. These costs will increase if transportation by air freight is
required due to a shortened "winter road season" or unexpectedly high fuel
usage.
	    The cost of the fuel purchased is based on the then prevailing price and
expensed into operating costs on a usage basis. The Diavik Diamond Mine
currently has no hedges for its future anticipated fuel consumption.

	    Reliance on Skilled Employees

	    Production at the Diavik Diamond Mine is dependent upon the efforts of
certain skilled employees of DDMI. The loss of these employees or the
inability of DDMI to attract and retain additional skilled employees may
adversely affect the level of diamond production from the Diavik Diamond Mine.
	    The Company's success in marketing rough diamonds and operating the
business of Harry Winston Inc. is dependent on the services of key executives
and skilled employees, as well as the continuance of key relationships with
certain third parties, such as diamantaires. The loss of these persons or the
Company's inability to attract and retain additional skilled employees or to
establish and maintain relationships with required third parties may adversely
affect its business and future operations in marketing diamonds and operating
its retail segment.

	    Expansion of the Existing Salon Network

	    A key component of the Company's retail strategy in recent years has been
the expansion of its salon network. This strategy requires the Company to make
ongoing capital expenditures to build and open new salons, to refurbish
existing salons from time to time, and to incur additional operating expenses
in order to operate the new salons. To date, much of this expansion has been
financed by Harry Winston Inc. through borrowings. There can be no assurance
that the expansion of the salon network will continue or that the current
expansion will prove successful in increasing annual sales or earnings from
the retail segment, and the increased debt levels resulting from this
expansion could negatively impact the Company's liquidity and its results from
operations in the absence of increased sales and earnings.

	    Competition in the Luxury Jewelry Segment

	    The Company is exposed to competition in the retail diamond market from
other luxury goods, diamond, jewelry and watch retailers. The ability of Harry
Winston Inc. to successfully compete with such luxury goods, diamond, jewelry
and watch retailers is dependent upon a number of factors, including the
ability to source high-end polished diamonds and protect and promote its
distinctive brand name and reputation. If Harry Winston Inc. is unable to
successfully compete in the luxury jewelry segment, then the Company's results
of operations will be adversely affected.

	    Changes in Accounting Policies

	    Goodwill and Intangibles Assets

	    On February 1, 2008, the Canadian Institute of Chartered Accountants
("CICA") issued Handbook Section 3064, "Goodwill and Intangible Assets". This
Section establishes revised standards for the recognition, measurement,
presentation and disclosure of goodwill and intangible assets. The Company
adopted the new standard effective February 1, 2009. This standard has had no
material impact on the consolidated financial statements.

	    Credit Risk and the Fair Value of Financial Assets and Liabilities

	    In January 2009, the CICA issued EIC-173, "Credit Risk and the Fair Value
of Financial Assets and Liabilities". This abstract requires companies to take
each counterparty's credit risk into account when measuring the fair value of
financial assets and liabilities, including derivatives. The Company applied
this EIC abstract commencing the quarter ended April 30, 2009. This abstract
has had no material impact on the consolidated financial statements.

	    Mining Exploration Costs

	    In March 2009, the CICA issued EIC-174, "Mining Exploration Costs", which
provides guidance on the capitalization of exploration costs related to mining
properties and the subsequent impairment review of capitalized exploration
costs. The Company applied this EIC abstract commencing the quarter ended
April 30, 2009. This abstract has had no material impact on the consolidated
financial statements.

	    Financial Instruments - Disclosures

	    In June 2009, the CICA amended Section 3862, "Financial Instruments -
Disclosures", to enhance disclosure requirements for fair value measurement of
financial instruments and liquidity risk. These amendments require fair value
measurements to be classified using a fair value hierarchy that reflects the
significance of the inputs used in making the fair value measurements as
follows:

	    <<
	        Level 1 - valuation techniques based on quoted prices (unadjusted) in
	        active markets for identical assets or liabilities;

	        Level 2 - valuation techniques based on inputs other than quoted
	        prices included in Level 1 that are observable for the asset or
	        liability, either directly (as prices) or indirectly (derived from
	        prices); and

	        Level 3 - valuation techniques based on unobservable market inputs
	        (involves assumptions and estimates by management of how market
	        participants would price the assets or liabilities).
	    >>

	    The fair value hierarchy gives the highest priority to Level 1 inputs and
the lowest priority to Level 3 inputs. Section 3862 also requires an entity to
disclose for each class of financial instrument, any significant transfers
between Level 1 and Level 2 of the fair value hierarchy and the reasons for
those transfers. For fair value measurements in Level 3 of the fair value
hierarchy, a reconciliation from the beginning balances to the ending balances
is required, disclosing transfers into or out of Level 3 (attributable to
changes in the observability of market data) and the reasons for those
transfers. This amendment has resulted in additional disclosures in note 18 of
the Company's consolidated financial statements.

	    Financial Instruments - Recognition and Measurement

	    In August 2009, the CICA issued amendments to Section 3855, "Financial
Instruments - Recognition and Measurement". Under the amendments,
reclassification of financial assets out of assets held for trading and assets
held for sale categories into the loans and receivables category is now
permitted under certain circumstances; the definition of loans and receivables
category has been updated so that debt securities that are not quoted in an
active market are permitted to be classified in the loans and receivables
category; impairment losses relating to available for sale debt instruments
must be reversed if the fair value of the instrument increases due to an event
occurring after the loss was recognized. These amendments have had no material
impact on the consolidated financial statements.

	    Recently Issued Accounting Standards

	    Equity

	    In August 2009, the CICA amended Section 3251, "Equity". The amendments
apply only to entities that have adopted Section 1602, "Non-Controlling
Interests". The amendments require separate presentation on the consolidated
statements of earnings and comprehensive income of earnings attributable to
owners of the Company and those attributable to non-controlling interests. The
amendments require that non-controlling interests be presented separately as a
component of equity. As the Company has not adopted section 1602, which is
mandatory for fiscal years beginning on or after January 1, 2011, the
amendments are not applicable to the Company in the current fiscal year.

	    Business Combinations

	    In December 2008, the CICA issued Handbook Section 1582, "Business
Combinations", which applies prospectively to business combinations with an
acquisition date on or after January 1, 2011. The section provides the
Canadian equivalent to IFRS 3, "Business Combinations", and is expected to
have a material impact on how prospective business combinations are accounted
for by requiring additional use of fair value measurements, recognition of
additional assets and liabilities and increased disclosure.

	    International Financial Reporting Standards

	    In February 2008, the Canadian Accounting Standards Board confirmed that
publicly accountable enterprises will be required to adopt International
Financial Reporting Standards ("IFRS") in place of Canadian GAAP for financial
periods beginning on or after January 1, 2011. Accordingly, commencing
February 1, 2011, the Company will convert to IFRS and prepare its first
financial statements in accordance with IFRS for the three-month period ended
April 30, 2011, with comparative information also prepared under IFRS.
	    IFRS 1, "First Time Adoption of International Financial Reporting
Standards" ("IFRS 1"), provides mandatory guidance that generally requires
full retrospective application of IFRS and interpretations from the date of
transition, February 1, 2010. All material accounting differences between
Canadian GAAP and IFRS will be eliminated generally through opening retained
earnings at the date of transition. However, IFRS 1 allows certain optional
exemptions in the application of particular standards to prior periods in
order to assist companies with the transition process. For the transition
year, which commenced February 1, 2010, the Company will continue to report
under Canadian GAAP and will be required to capture comparable IFRS financial
information.
	    The conversion project from Canadian GAAP to IFRS is led by finance
management, and includes representatives from various areas of the Company as
necessary to plan for and achieve a smooth transition. The Company has engaged
the services of a third party expert advisor to assist. Regular progress
reporting to senior management and to the Audit Committee on the status of the
IFRS conversion project is in place. The conversion project consists of three
phases:

	    <<
	        Assessment Phase - This phase involves a review of accounting
	        differences between Canadian GAAP and IFRS; an evaluation of IFRS 1
	        exemptions for first time IFRS adopters; and a high-level impact
	        assessment on systems and business processes. This phase was
	        completed during the third quarter of fiscal 2010.

	        Design Phase - This phase involves prioritizing and resolving
	        accounting treatment issues; quantifying the impact of converting to
	        IFRS; reviewing and approving accounting policy choices; performing a
	        detailed impact assessment on systems and processes; designing system
	        and business process changes; developing IFRS training material; and
	        drafting IFRS financial statement content. The Company is currently
	        progressing through its design phase activities.

	        Implementation Phase - This phase involves changes to systems and
	        business processes; determining the opening IFRS transition balance
	        sheet; dual accounting under both Canadian GAAP and IFRS; and
	        preparing detailed reconciliations of Canadian GAAP to IFRS financial
	        statements. The Company commenced the implementation phase of its
	        conversion project towards the end of fiscal 2010.
	    >>

	    EXPECTED ACCOUNTING DIFFERENCES BETWEEN CANADIAN GAAP AND IFRS

	    The Company has identified the following major areas where the accounting
differences between Canadian GAAP and existing IFRS may have an impact on the
Company's consolidated financial statements. The accounting differences
described below should not be regarded as a complete list of areas that may be
impacted by the transition to IFRS.

	    <<
	        Property, plant and equipment - Separate accounting for components of
	        property, plant and equipment is broader and more vigorously applied
	        under IFRS. Costs are allocated to significant parts of an asset if
	        the useful lives differ, and each part is then separately
	        depreciated.

	        Exploration and evaluation - IFRS 6, "Exploration for and Evaluation
	        of Mineral Resources", allows an entity to either develop a new
	        accounting policy for exploration and evaluation expenditures
	        consistent with IFRS requirements or continue to follow the Company's
	        existing policy.

	        Income taxes - Existing IFRS requires the recognition of deferred
	        taxes in situations not required under Canadian GAAP. Specifically, a
	        deferred tax liability (asset) is recognized for exchange gains and
	        losses relating to foreign non-monetary assets and liabilities that
	        are remeasured into the functional currency using historical exchange
	        rates. Similar timing differences are also recognized for the
	        differences in tax bases between jurisdictions as a result of intra-
	        group transfer of assets.

	        Asset impairment - Under IFRS, assets are tested for impairment
	        either individually or within cash generating units. This approach
	        reflects the smallest group of assets capable of generating largely
	        independent cash inflows, which may differ from asset groups under
	        Canadian GAAP. Impairment charges relating to long-lived assets may
	        be more frequent under IFRS as the cash flow test for recoverability
	        is based on a one-step discounted cash flow approach. Impairment
	        under IFRS is recognized if the carrying amount exceeds the higher of
	        fair value less cost to sell, or value in use. Reversal of impairment
	        charges is required under IFRS if the circumstances leading to the
	        impairment have changed.
	    >>

	    The Company also anticipates a significant increase in disclosure within
its consolidated financial statements resulting from the adoption of IFRS.
	    In a recent announcement, the International Accounting Standards Board
updated its estimated publication dates for new or amended IFRS to late 2010
and 2011. It now seems likely that there will be a relatively stable platform
of IFRS during the Company's transition year ending January 31, 2011. The
Company will continue to monitor these international accounting developments.
	    At this time, the impact of the IFRS conversion project on the Company's
financial position and results of operations is not reasonably determinable or
estimable.

	    Outstanding Share Information

	    <<
	    As at January 31, 2010
	    -------------------------------------------------------------------------
	    Authorized                                                     Unlimited
	    Issued and outstanding shares                                 76,588,593
	    Options outstanding                                            3,233,779
	    Fully diluted                                                 79,822,372
	    -------------------------------------------------------------------------
	    >>

	    Additional Information

	    Additional information relating to the Company, including the Company's
most recently filed annual information form, can be found on SEDAR at
www.sedar.com, and is also available on the Company's website at
http://investor.harrywinston.com.

	    <<
	                         Consolidated Balance Sheets
	              (EXPRESSED IN THOUSANDS OF UNITED STATES DOLLARS)


	    As at January 31,                                      2010         2009
	    -------------------------------------------------------------------------
	    Assets
	    Current assets
	      Cash and cash equivalents (note 3)            $    62,969  $    16,735
	      Cash collateral and cash reserves (note 3)              -       30,145
	      Accounts receivable (note 20)                      23,520       66,980
	      Inventory and supplies (note 4)                   311,188      346,235
	      Prepaid expenses and other current assets          44,220       48,130
	    -------------------------------------------------------------------------
	                                                        441,897      508,225
	    Mining capital assets (note 5)                      802,984      800,358
	    Retail capital assets (note 5)                       62,277       68,258
	    Intangible assets, net (note 7)                     129,213      130,752
	    Other assets (note 8)                                15,629       15,644
	    Future income tax asset (note 11)                    42,805       43,338
	    -------------------------------------------------------------------------
	                                                    $ 1,494,805  $ 1,566,575
	                                                   --------------------------
	                                                   --------------------------
	    Liabilities and Shareholders' Equity
	    Current liabilities
	      Accounts payable and accrued liabilities
	       (note 9)                                     $    87,448  $   118,390
	      Income taxes payable                               46,297       76,987
	      Bank advances (note 10(d))                         22,485       42,621
	      Current portion of long-term debt (note 10)         1,154       75,097
	    -------------------------------------------------------------------------
	                                                        157,384      313,095
	    Long-term debt (note 10)                            161,538      205,625
	    Future income tax liability (note 11)               271,822      303,284
	    Other long-term liability                             2,201        1,946
	    Future site restoration costs (note 12)              41,275       39,506
	    Non-controlling interest (note 1)                   177,816          280

	    Shareholders' Equity
	      Share capital (note 13)                           426,593      381,541
	      Contributed surplus                                17,730       16,079
	      Retained earnings                                 210,001      283,177
	      Accumulated other comprehensive income (note 9)    28,445       22,042
	    -------------------------------------------------------------------------
	                                                        682,769      702,839
	    Commitments and guarantees (note 15)
	    -------------------------------------------------------------------------
	                                                    $ 1,494,805  $ 1,566,575
	                                                   --------------------------
	                                                   --------------------------

	    See accompanying notes to consolidated financial statements.



	                     Consolidated Statements of Earnings
	              (EXPRESSED IN THOUSANDS OF UNITED STATES DOLLARS,
	                          EXCEPT PER SHARE AMOUNTS)


	    Years ended January 31,                                2010         2009
	    -------------------------------------------------------------------------
	    Sales                                           $   412,901  $   609,220
	    Cost of sales                                       291,722      287,278
	    -------------------------------------------------------------------------
	    Gross margin                                        121,179      321,942
	    Selling, general and administrative expenses        143,150      155,876
	    -------------------------------------------------------------------------
	    Earnings (loss) from operations                     (21,971)     166,066
	    -------------------------------------------------------------------------
	    Interest and financing expenses                     (11,541)     (20,457)
	    Other income                                            592        2,246
	    Insurance settlement (note 20)                        3,350       17,240
	    Dilution loss (note 21)                             (34,761)           -
	    Impairment charge (note 22)                               -      (93,780)
	    Foreign exchange gain (loss)                        (31,493)      59,087
	    -------------------------------------------------------------------------
	    Earnings (loss) before income taxes                 (95,824)     130,402
	    Income tax expense - Current                          4,586       81,787
	    Income tax recovery - Future                        (23,389)     (21,531)
	    -------------------------------------------------------------------------
	    Earnings (loss) before non-controlling interest     (77,021)      70,146
	    Non-controlling interest (note 1)                    (3,845)          25
	    -------------------------------------------------------------------------
	    Net earnings (loss)                             $   (73,176) $    70,121
	                                                   --------------------------
	                                                   --------------------------
	    Earnings (loss) per share
	      Basic                                         $     (0.99) $      1.15
	                                                   --------------------------
	                                                   --------------------------
	      Fully diluted                                 $     (0.99) $      1.15
	                                                   --------------------------
	                                                   --------------------------
	    Weighted average number of shares outstanding    74,048,981   61,013,758
	                                                   --------------------------
	                                                   --------------------------

	    See accompanying notes to consolidated financial statements.



	               Consolidated Statements of Comprehensive Income
	              (EXPRESSED IN THOUSANDS OF UNITED STATES DOLLARS)


	    Years ended January 31,                                2010         2009
	    -------------------------------------------------------------------------
	    Net earnings (loss)                             $   (73,176) $    70,121
	    Other comprehensive income (loss)
	      Net gain (loss) on translation of net
	       foreign operations (net of tax of nil)             6,757       (3,170)
	      Change in fair value of derivative financial
	       instruments designated as cash flow hedges
	       (net of tax of $0.2 million)                        (354)           -
	    -------------------------------------------------------------------------
	    Total comprehensive income (loss)               $   (66,773) $    66,951
	                                                   --------------------------
	                                                   --------------------------

	    See accompanying notes to consolidated financial statements.



	         Consolidated Statements of Changes in Shareholders' Equity
	              (EXPRESSED IN THOUSANDS OF UNITED STATES DOLLARS)


	    Years ended January 31,                                2010         2009
	    -------------------------------------------------------------------------
	    COMMON SHARES
	    Balance at beginning of year                    $   381,541  $   305,502
	    Issued during the year                               45,052       76,039
	    -------------------------------------------------------------------------
	    Balance at end of year                              426,593      381,541
	    -------------------------------------------------------------------------
	    CONTRIBUTED SURPLUS
	    Balance at beginning of year                         16,079       15,614
	    Stock option expense                                  1,651          465
	    -------------------------------------------------------------------------
	    Balance at end of year                               17,730       16,079
	    -------------------------------------------------------------------------
	    RETAINED EARNINGS
	    Balance at beginning of year                        283,177      225,334
	    Net earnings (loss)                                 (73,176)      70,121
	    Dividends paid                                            -      (12,278)
	    -------------------------------------------------------------------------
	    Balance at end of year                              210,001      283,177
	    -------------------------------------------------------------------------
	    ACCUMULATED OTHER COMPREHENSIVE INCOME
	    Balance at beginning of year                         22,042       25,212
	    Other comprehensive income
	      Net gain (loss) on translation of net
	       foreign operations (net of tax of nil)             6,757       (3,170)
	      Change in fair value of derivative financial
	       instruments designated as cash flow hedges
	       (net of tax of $0.2 million)                        (354)           -
	    -------------------------------------------------------------------------
	    Balance at end of year                               28,445       22,042
	    -------------------------------------------------------------------------
	    Total shareholders' equity                      $   682,769  $   702,839
	                                                   --------------------------
	                                                   --------------------------

	    See accompanying notes to consolidated financial statements.



	                    Consolidated Statements of Cash Flows
	              (EXPRESSED IN THOUSANDS OF UNITED STATES DOLLARS)


	    Years ended January 31,                                2010         2009
	    -------------------------------------------------------------------------
	    Cash provided by (used in)
	    Operating
	    Net earnings (loss)                             $   (73,176) $    70,121
	    Items not involving cash
	      Amortization and accretion                         64,112       76,970
	      Future income tax recovery                        (23,389)     (21,531)
	      Stock-based compensation and pension expense        1,906          683
	      Foreign exchange loss (gain)                       31,454      (60,996)
	      Loss on disposal of assets                              -          494
	    Non-controlling interest                             (3,845)          25
	    Dilution loss                                        34,761            -
	    Impairment charge                                         -       93,780
	    Change in non-cash operating working capital         12,386      (15,470)
	    -------------------------------------------------------------------------
	                                                         44,209      144,076
	    -------------------------------------------------------------------------
	    Financing
	    Decrease in long-term debt                             (404)     (52,194)
	    Increase (decrease) in revolving credit             (64,497)     191,799
	    Repayment of mining segment senior secured
	     term and revolving credit facilities               (74,160)           -
	    Repayment of Harry Winston Inc. 2008 revolving
	     credit facility                                          -     (159,109)
	    Distribution to Kinross                              (9,675)           -
	    Dividends paid                                            -      (12,278)
	    Issue of common shares, net of issue costs           44,740       76,039
	    -------------------------------------------------------------------------
	                                                       (103,996)      44,257
	    -------------------------------------------------------------------------
	    Investing
	    Subscription of partnership units                   125,095            -
	    Cash collateral and cash reserve                     30,145       (4,530)
	    Mining capital assets                               (50,856)    (200,289)
	    Retail capital assets                                (3,033)      (9,574)
	    Other assets                                           (992)      (3,035)
	    -------------------------------------------------------------------------
	                                                        100,359     (217,428)
	    -------------------------------------------------------------------------
	    Foreign exchange effect on cash balances              5,662       (3,798)
	    Increase (decrease) in cash and cash equivalents     46,234      (32,893)
	    Cash and cash equivalents, beginning of year
	     (note 3)                                            16,735       49,628
	    -------------------------------------------------------------------------
	    Cash and cash equivalents, end of year
	     (note 3)                                       $    62,969  $    16,735
	                                                   --------------------------
	                                                   --------------------------
	    Change in non-cash operating working capital
	    Accounts receivable                                  43,720      (43,311)
	    Prepaid expenses and other current assets             1,823        8,230
	    Inventory and supplies                               38,974      (24,007)
	    Accounts payable and accrued liabilities            (33,277)       4,470
	    Income taxes payable                                (38,854)      39,148
	    -------------------------------------------------------------------------
	                                                    $    12,386  $   (15,470)
	    -------------------------------------------------------------------------
	    Supplemental cash flow information
	    Cash taxes paid                                 $    43,925  $    35,986
	    Cash interest paid                              $    10,827  $    17,570
	    -------------------------------------------------------------------------

	    See accompanying notes to consolidated financial statements.



	                 Notes to Consolidated Financial Statements

	                    YEARS ENDED JANUARY 31, 2010 AND 2009
	           (TABULAR AMOUNTS IN THOUSANDS OF UNITED STATES DOLLARS,
	                         EXCEPT AS OTHERWISE NOTED)
	    >>

	    NOTE 1:

	    Nature of Operations

	    Harry Winston Diamond Corporation (the "Company") is a specialist diamond
company focusing on the mining and retail segments of the diamond industry.
	    The Company's most significant asset is an ownership interest in the
Diavik group of mineral claims. The Diavik Joint Venture (the "Joint Venture")
is an unincorporated joint arrangement between Diavik Diamond Mines Inc.
("DDMI") (60%) and Harry Winston Diamond Limited Partnership ("HWDLP") (40%),
where HWDLP holds an undivided 40% ownership interest in the assets,
liabilities and expenses of the Diavik Diamond Mine. DDMI is the operator of
the Diavik Diamond Mine. DDMI and HWDLP are headquartered in Yellowknife,
Canada. DDMI is a wholly owned subsidiary of Rio Tinto plc of London, England.
As a result of the strategic investment by Kinross Gold Corporation
("Kinross") of Toronto, Canada, described below, HWDLP is 77.5% owned by the
Company and 22.5% owned by Kinross. Kinross's 22.5% ownership is reported in
the consolidated financial statements as part of non-controlling interest.
	    On March 31, 2009, Kinross made a net investment of $150.0 million to
acquire an indirect interest in the Diavik Diamond Mine and a direct equity
stake in the Company. Kinross subscribed for 15.2 million of the Company's
treasury shares at a price of $3.00 per share, being approximately 19.9% of
the Company's issued equity post the transaction. Kinross also subscribed for
new partnership units representing a 22.5% interest in HWDLP, for a net
effective subscription value of $103.7 million. With the closing of the
Kinross transaction, the Company's economic interest in the Diavik Diamond
Mine is 31%.
	    The Company also owns Harry Winston Inc., the premier fine jewelry and
watch retailer. The results of Harry Winston Inc., located in New York City,
US, are consolidated in the financial statements of the Company.
	    Certain comparative figures have been reclassified to conform with the
current year's presentation.

	    NOTE 2:

	    Significant Accounting Policies

	    The consolidated financial statements are prepared by management in
accordance with accounting principles generally accepted in Canada. The
principal accounting policies presently followed by the Company are summarized
as follows:

	    <<
	    (a) Principles of Consolidation

	        The consolidated financial statements include the accounts of the
	        Company and all of its subsidiaries as well as its proportionate
	        share of unincorporated joint arrangements.

	        SUBSIDIARIES

	        A subsidiary is an entity that is controlled by the Company. The
	        consolidated financial statements include all the assets,
	        liabilities, revenues, expenses and cash flows of the Company and its
	        subsidiaries after eliminating intercompany balances and
	        transactions. For partly owned subsidiaries, the net assets and net
	        earnings attributable to minority shareholders are presented as
	        minority interests on the consolidated balance sheets and
	        consolidated statements of earnings.

	        JOINT ARRANGEMENTS THAT ARE NOT ENTITIES ("JOINT ARRANGEMENTS")

	        The Diavik Joint Venture is an unincorporated joint arrangement.
	        HWDLP owns an undivided 40% ownership interest in the assets,
	        liabilities and expenses of the Joint Venture. The Company records
	        its proportionate interest in the assets, liabilities and expenses of
	        the Joint Venture in its consolidated financial statements with a
	        one-month lag. The accounting policies described below include those
	        of the Joint Venture. With the closing of the Kinross transaction,
	        the Company's economic interest in the Diavik Diamond Mine is 31%.

	    (b) Measurement Uncertainty

	        The preparation of financial statements in conformity with generally
	        accepted accounting principles ("GAAP") requires management to make
	        estimates and assumptions that affect the reported amounts of assets
	        and liabilities and disclosure of contingent assets and liabilities
	        at the date of the financial statements, and the reported amounts of
	        earnings, revenues and expenses during the reporting year.
	        Significant areas requiring the use of management estimates relate to
	        the determination of impairment of capital assets, intangible assets,
	        goodwill and deferred mineral property costs, estimation of future
	        site restoration costs and future income taxes. Financial results as
	        determined by actual events could differ from those estimated.

	    (c) Revenue Recognition

	        Revenue from rough diamond sales is recognized upon delivery of
	        merchandise when the customer takes ownership and assumes risk of
	        loss, persuasive evidence of an arrangement exists, the Company's
	        price to the customer is fixed or determinable and collection of the
	        resulting receivable is reasonably assured.

	        Revenue from fine jewelry and watch sales is recognized upon delivery
	        of merchandise when the customer takes ownership and assumes risk of
	        loss, collection of the relevant receivable is probable, persuasive
	        evidence of an arrangement exists and the sales price is fixed or
	        determinable. Sales are reported net of returns.

	    (d) Cash Resources

	        Cash and cash equivalents, and cash collateral and cash reserves,
	        consist of cash on hand, balances with banks and short-term money
	        market instruments (with a maturity on acquisition of less than
	        90 days), and are carried at fair value.

	        Funds in cash collateral and cash reserves are maintained as
	        prescribed under the Company's debt financing arrangements and will
	        become available to Harry Winston Diamond Corporation for general
	        corporate purposes and for debt servicing as prescribed by the terms
	        of credit facility agreements.

	    (e) Trade Accounts Receivable

	        Trade accounts receivable are recorded at the invoiced amount and
	        generally do not bear interest. The allowance for doubtful accounts
	        is the Company's best estimate of the amount of probable credit
	        losses in the existing accounts receivable. The Company reviews its
	        allowance for doubtful accounts monthly. Account balances are written
	        off against the allowance after all means of collection have been
	        exhausted and the potential for recovery is considered remote.

	    (f) Inventory

	        Rough diamond inventory is recorded at the lower of cost or net
	        realizable value. Cost is determined on an average cost basis,
	        including production costs and value-added processing activity.

	        Merchandise inventory is recorded at the lower of cost or net
	        realizable value and includes fine jewelry and watches. Included in
	        merchandise inventory are production costs such as material, labour
	        and overhead costs.

	        Supplies inventory is recorded at the lower of cost or net realizable
	        value. Supplies inventory includes consumables and spare parts to be
	        maintained at the Diavik Diamond Mine site and at the Company's
	        sorting and distribution facility locations, and raw materials used
	        in the manufacturing of retail merchandise inventory.

	    (g) Deferred Mineral Property Costs

	        All direct costs relating to mineral properties, including mineral
	        claim acquisition costs, exploration and development expenditures in
	        the pre-production stage, ongoing property exploration expenditures,
	        pre-production operating costs net of any recoveries, interest, and
	        amortization, are capitalized and accumulated on a property-by-
	        property basis.

	        The costs of deferred mineral properties from which there is
	        production are amortized using the unit-of-production method based on
	        carats of diamonds recovered during the period relative to estimated
	        proven and probable ore reserves. The Company does not include
	        estimates of indicated or inferred resources in its calculation of
	        ore reserves.

	        General exploration expenditures which do not relate to specific
	        resource properties are expensed in the period incurred.

	        On an ongoing basis, the Company evaluates each property based on
	        results to date to determine the nature of exploration and
	        development activities that are warranted in the future. If there is
	        little prospect of the Joint Venture continuing to explore or develop
	        a property, the deferred costs related to that property are written
	        down to the estimated fair value.

	    (h) Capital Assets

	        Capital assets are stated at cost less accumulated depreciation and
	        amortization. Depreciation and amortization are provided using the
	        units-of-production method or straight-line method as appropriate.
	        The units-of-production method is applied to a substantial portion of
	        Diavik Diamond Mine capital assets and, depending on the asset, is
	        based on carats of diamonds recovered during the period relative to
	        the estimated proven and probable ore reserves of the ore deposit
	        being mined, or to the total ore deposit. The Company does not
	        include estimates of indicated or inferred resources in its
	        calculation of ore reserves. Other capital assets are depreciated
	        using the straight-line method over the estimated useful lives of the
	        related assets, which are as follows:

	        Asset                                   Estimated useful life (years)
	        ---------------------------------------------------------------------
	        Buildings                                                      10-40
	        Machinery and mobile equipment                                  3-10
	        Computer equipment and software                                    3
	        Furniture and equipment                                         2-10
	        Leasehold and building improvements                         Up to 20
	        ---------------------------------------------------------------------

	        Amortization for mine related assets was charged to deferred mineral
	        property costs during the pre-commercial production stage.

	        Maintenance and repair costs are charged to earnings while
	        expenditures for major renewals and improvements are capitalized.

	        The recoverability of the amounts shown for the Diavik Diamond Mine
	        capital assets is dependent upon the continued existence of
	        economically recoverable reserves, upon maintaining title and
	        beneficial interest in the property, and upon future profitable
	        production or proceeds from disposition of the diamond properties.
	        The amounts representing Diavik Diamond Mine capital assets do not
	        necessarily represent present or future values.

	        Upon the disposition of capital assets, the accumulated amortization
	        is deducted from the original cost and any gain or loss is reflected
	        in current earnings.

	    (i) Intangible Assets

	        Intangible assets acquired individually or as part of a group of
	        other assets are initially recognized and measured at cost. The cost
	        of a group of intangible assets acquired in a transaction, including
	        those acquired in a business combination that meet the specified
	        criteria for recognition apart from goodwill, is allocated to the
	        individual assets acquired based on their fair values at acquisition.

	        Intangible assets with finite useful lives are amortized on a
	        straight-line basis over their useful lives as follows:

	        Asset                                   Estimated useful life (years)
	        ---------------------------------------------------------------------
	        Wholesale distribution network                                    10
	        Store leases                                                 Up to 9
	        ---------------------------------------------------------------------

	        The amortization methods and estimated useful lives of intangible
	        assets are reviewed annually.

	        Intangible assets with indefinite useful lives are not amortized and
	        are tested for impairment annually, or more frequently if events or
	        changes in circumstances indicate that the asset might be impaired.
	        The impairment test compares the carrying amount of the intangible
	        asset with its fair value, and an impairment loss is recognized in
	        income for the excess, if any.

	    (j) Other Assets

	        Other assets include depreciable assets amortized over a period not
	        exceeding ten years.

	    (k) Future Site Restoration Costs

	        The Company records the fair value of any asset retirement obligation
	        as a long-term liability in the year in which the related
	        environmental disturbance occurs, based on the net present value of
	        the estimated future costs. The fair value of the liability is added
	        to the carrying amount of the deferred mineral property and this
	        additional carrying amount is amortized over the life of the asset
	        based on units of production. The obligation is adjusted periodically
	        to reflect the passage of time and changes in the estimated future
	        cash flows underlying the obligation. If the obligation is settled
	        for other than the carrying amount of the liability, the Company will
	        recognize a gain or loss on settlement.

	    (l) Foreign Currency Translation

	        The functional currency of the Company is the US dollar. At year end,
	        monetary assets and liabilities denominated in foreign currencies are
	        translated to US dollars at exchange rates in effect at the balance
	        sheet date and non-monetary assets and liabilities are translated at
	        rates of exchange in effect when the assets were acquired or
	        obligations were incurred. Revenues and expenses are translated at
	        rates in effect at the time of the transactions. Foreign exchange
	        gains and losses are included in earnings.

	        For certain subsidiaries of the Company where the functional currency
	        is not the US dollar, the assets and liabilities of these
	        subsidiaries are translated at the rate of exchange in effect at the
	        balance sheet date. Revenues and expenses are translated at the rate
	        of exchange in effect at the time of the transactions. Foreign
	        exchange gains and losses are accumulated in other comprehensive
	        income under shareholders' equity.

	    (m) Income and Mining Taxes

	        The Company accounts for income taxes under the asset and liability
	        method. Under this method, future tax assets and liabilities are
	        recognized for future tax consequences attributable to differences
	        between the financial statement carrying value and the tax basis of
	        assets and liabilities.

	        Future tax assets and liabilities are measured using enacted or
	        substantively enacted tax rates expected to apply to taxable income
	        in the years in which those temporary differences are expected to be
	        recovered or settled. A reduction in respect of the benefit of a
	        future tax asset (a valuation allowance) is recorded against any
	        future tax asset if it is not likely to be realized. The effect on
	        future tax assets and liabilities of a change in tax rates is
	        recognized in earnings in the year during which the change in tax
	        rates is considered to be substantively enacted.

	    (n) Stock-Based Compensation

	        The Company applies the fair value method to all grants of stock
	        options.

	        The fair value of options granted is estimated at the date of grant
	        using a Black-Scholes option pricing model incorporating assumptions
	        regarding risk-free interest rates, dividend yield, volatility factor
	        of the expected market price of the Company's stock, and a weighted
	        average expected life of the options. The estimated fair value of the
	        options is recorded as an expense on a straight-line basis over the
	        vesting period, with an offsetting credit to shareholders' equity.
	        Any consideration received on amounts attributable to stock options
	        is credited to share capital.

	    (o) Restricted and Deferred Share Unit Plans

	        The Restricted and Deferred Share Unit ("RSU" and "DSU") Plans are
	        full value phantom shares that mirror the value of Harry Winston
	        Diamond Corporation's publicly traded common shares. Grants under the
	        RSU Plan are on a discretionary basis to employees of the Company
	        subject to Board of Director approval. Each RSU grant vests on the
	        third anniversary of the grant date, subject to special rules for
	        death and disability. Grants under the DSU Plan are awarded to non-
	        executive directors of the Company. Each DSU grant vests immediately
	        on the grant date.

	    (p) Post Retirement Benefits

	        The expected costs of post retirement benefits under defined benefit
	        arrangements are charged to earnings over the service lives of
	        employees entitled to those benefits. Variations from the regular
	        cost are spread on a straight-line basis over the expected average
	        remaining service lives of relevant current employees. The plan
	        assets and liabilities are valued annually by qualified actuaries.

	    (q) Financial Instruments

	        From time to time, the Company may use a limited number of derivative
	        financial instruments to manage its foreign currency and interest
	        rate exposure. For a derivative to qualify as a hedge at inception
	        and throughout the hedged period, the Company formally documents the
	        nature and relationships between the hedging instruments and hedged
	        items, as well as its risk-management objectives, strategies for
	        undertaking the various hedge transactions and method of assessing
	        hedge effectiveness. Financial instruments qualifying for hedge
	        accounting must maintain a specified level of effectiveness between
	        the hedge instrument and the item being hedged, both at inception and
	        throughout the hedged period. Gains and losses resulting from any
	        ineffectiveness in a hedging relationship must be recognized
	        immediately in net income. The Company may also have a limited number
	        of embedded derivatives relating to the Diavik Diamond Mine.
	        Derivatives embedded in non-derivative host contracts are recognized
	        separately unless closely related to the host contract. The Company
	        does not use derivatives for trading or speculative purposes.

	    (r) Basic and Diluted Earnings per Share

	        Basic earnings per share are computed by dividing net earnings (loss)
	        by the weighted average number of shares outstanding during the year.

	        Diluted earnings per share are prepared using the treasury stock
	        method to compute the dilutive effect of options and warrants. The
	        treasury stock method assumes that the exercise of any "in-the-money"
	        options with the option proceeds would be used to purchase common
	        shares at the average market value for the year. Options with an
	        average market value for the year higher than the exercise price are
	        not included in the calculation of diluted earnings per share as such
	        options are not dilutive.

	    (s) Impairment of Long-Lived Assets

	        Long-lived assets, including property, plant and equipment and
	        purchased intangibles subject to amortization, are reviewed for
	        impairment whenever events or changes in circumstances indicate that
	        the carrying amount of an asset may not be recoverable.
	        Recoverability of assets to be held and used is measured by a
	        comparison of the carrying amount of an asset to estimated
	        undiscounted future cash flows expected to be generated by the asset.
	        If the carrying amount of an asset exceeds its estimated future cash
	        flows, an impairment charge is recognized by the amount by which the
	        carrying amount of the asset exceeds the fair value of the asset.
	        Assets to be disposed of by sale would be separately presented in the
	        balance sheet and reported at the lower of the carrying amount or
	        fair value less costs to sell, and are no longer depreciated. The
	        assets and liabilities of a disposed group classified as held for
	        sale would be presented separately in the appropriate asset and
	        liability sections of the balance sheet.

	    (t) Adoption of New Accounting Standards and Developments

	        GOODWILL AND INTANGIBLE ASSETS

	        On February 1, 2008, the Canadian Institute of Chartered Accountants
	        ("CICA") issued Handbook Section 3064, "Goodwill and Intangible
	        Assets". This Section establishes revised standards for the
	        recognition, measurement, presentation and disclosure of goodwill and
	        intangible assets. The Company adopted the new standard effective
	        February 1, 2009. This standard has had no material impact on the
	        consolidated financial statements.

	        CREDIT RISK AND THE FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

	        In January 2009, the CICA issued EIC-173, "Credit Risk and the Fair
	        Value of Financial Assets and Liabilities". This abstract requires
	        companies to take each counterparty's credit risk into account when
	        measuring the fair value of financial assets and liabilities,
	        including derivatives. The Company applied this EIC abstract
	        commencing the quarter ended April 30, 2009. This abstract has had no
	        material impact on the consolidated financial statements.

	        MINING EXPLORATION COSTS

	        In March 2009, the CICA issued EIC-174, "Mining Exploration Costs",
	        which provides guidance on the capitalization of exploration costs
	        related to mining properties and the subsequent impairment review of
	        capitalized exploration costs. The Company applied this EIC abstract
	        commencing the quarter ended April 30, 2009. This abstract has had no
	        material impact on the consolidated financial statements.

	        FINANCIAL INSTRUMENTS - DISCLOSURES

	        In June 2009, the CICA amended Section 3862, "Financial Instruments -
	        Disclosures", to enhance disclosure requirements for fair value
	        measurement of financial instruments and liquidity risk. These
	        amendments require fair value measurements to be classified using a
	        fair value hierarchy that reflects the significance of the inputs
	        used in making the fair value measurements as follows:

	           Level 1 - valuation techniques based on quoted prices (unadjusted)
	           in active markets for identical assets or liabilities;

	           Level 2 - valuation techniques based on inputs other than quoted
	           prices included in Level 1 that are observable for the asset or
	           liability, either directly (as prices) or indirectly (derived from
	           prices); and

	           Level 3 - valuation techniques based on unobservable market inputs
	           (involves assumptions and estimates by management of how market
	           participants would price the assets or liabilities).

	        The fair value hierarchy gives the highest priority to Level 1 inputs
	        and the lowest priority to Level 3 inputs. Section 3862 also requires
	        an entity to disclose for each class of financial instrument, any
	        significant transfers between Level 1 and Level 2 of the fair value
	        hierarchy and the reasons for those transfers. For fair value
	        measurements in Level 3 of the fair value hierarchy, a reconciliation
	        from the beginning balances to the ending balances is required,
	        disclosing transfers into or out of Level 3 (attributable to changes
	        in the observability of market data) and the reasons for those
	        transfers. This amendment has resulted in additional disclosures in
	        note 18 of the Company's consolidated financial statements.

	        FINANCIAL INSTRUMENTS - RECOGNITION AND MEASUREMENT

	        In August 2009, the CICA issued amendments to Section 3855,
	        "Financial Instruments - Recognition and Measurement". Under the
	        amendments, reclassification of financial assets out of assets held
	        for trading and assets held for sale categories into the loans and
	        receivables category is now permitted under certain circumstances;
	        the definition of loans and receivables category has been updated so
	        that debt securities that are not quoted in an active market are
	        permitted to be classified in the loans and receivables category;
	        impairment losses relating to available for sale debt instruments
	        must be reversed if the fair value of the instrument increases due to
	        an event occurring after the loss was recognized. These amendments
	        have had no material impact on the consolidated financial statements.

	    (u) Recently Issued Accounting Standards

	        EQUITY

	        In August 2009, the CICA amended Section 3251, "Equity". The
	        amendments apply only to entities that have adopted Section 1602,
	        "Non-Controlling Interests". The amendments require separate
	        presentation on the consolidated statements of earnings and
	        comprehensive income of earnings attributable to owners of the
	        Company and those attributable to non-controlling interests. The
	        amendments require that non-controlling interests be presented
	        separately as a component of equity. As the Company has not adopted
	        section 1602, which is mandatory for fiscal years beginning on or
	        after January 1, 2011, the amendments are not applicable to the
	        Company in the interim.

	        BUSINESS COMBINATIONS

	        In December 2008, the CICA issued Handbook Section 1582, "Business
	        Combinations", which applies prospectively to business combinations
	        with an acquisition date on or after January 1, 2011. The section
	        provides the Canadian equivalent to IFRS 3, "Business Combinations",
	        and is expected to have a material impact on how prospective business
	        combinations are accounted for by requiring additional use of fair
	        value measurements, recognition of additional assets and liabilities
	        and increased disclosure.
	    >>

	    NOTE 3:

	    Cash Resources

	    <<
	                                                           2010         2009
	    -------------------------------------------------------------------------
	    Cash on hand and balances with banks            $    61,449  $    14,118
	    Short-term investments(a)                             1,520        2,617
	    -------------------------------------------------------------------------
	    Total cash and cash equivalents                      62,969       16,735
	    Cash collateral and cash reserves                         -       30,145
	    -------------------------------------------------------------------------
	    Total cash resources                            $    62,969  $    46,880
	                                                   --------------------------
	                                                   --------------------------

	    (a) Short-term investments are held in overnight deposits.
	    >>

	    Total cash resources were impacted by the $150.0 million net investment
by Kinross and the subsequent repayment of the mining segment's senior secured
term and revolving credit facilities on March 31, 2009.

	    NOTE 4:

	    Inventory and Supplies

	    <<
	                                                           2010         2009
	    -------------------------------------------------------------------------
	    Merchandise inventory                           $   176,114  $   192,461
	    Rough diamond inventory                              23,365       31,872
	    Supplies inventory                                  111,709      121,902
	    -------------------------------------------------------------------------
	    Total inventory and supplies                    $   311,188  $   346,235
	                                                   --------------------------
	                                                   --------------------------
	    >>

	    NOTE 5:

	    Capital Assets

	    <<
	                                                                        2010
	    -------------------------------------------------------------------------
	                                                    Accumulated          Net
	                                            Cost   amortization   book value
	    -------------------------------------------------------------------------
	    MINING
	    Deferred mineral property costs(a) $   284,321  $   128,574  $   155,747
	    Diavik equipment and leaseholds(b)     815,858      196,816      619,042
	    Furniture, equipment and other(c)        7,742        5,319        2,423
	    Real property - land and
	     building(d)                            32,468        6,696       25,772
	    -------------------------------------------------------------------------
	                                       $ 1,140,389  $   337,405  $   802,984
	                                      ---------------------------------------
	                                      ---------------------------------------
	    RETAIL
	    Furniture, equipment and other(c)  $    29,278  $    18,139  $    11,139
	    Real property - land and
	     building(d)                            77,485       26,347       51,138
	    -------------------------------------------------------------------------
	                                       $   106,763  $    44,486  $    62,277
	                                      ---------------------------------------
	                                      ---------------------------------------


	                                                                        2009
	    -------------------------------------------------------------------------
	                                                    Accumulated          Net
	                                            Cost   amortization   book value
	    -------------------------------------------------------------------------
	    MINING
	    Deferred mineral property costs(a) $   283,049  $   113,679  $   169,370
	    Diavik equipment and leaseholds(b)     776,638      171,571      605,067
	    Furniture, equipment and other(c)        7,912        4,814        3,098
	    Real property - land and
	     building(d)                            27,758        4,935       22,823
	    -------------------------------------------------------------------------
	                                       $ 1,095,357  $   294,999  $   800,358
	                                      ---------------------------------------
	                                      ---------------------------------------
	    RETAIL
	    Furniture, equipment and other(c)  $    27,265  $    13,586  $    13,679
	    Real property - land and
	     building(d)                            72,686       18,107       54,579
	    -------------------------------------------------------------------------
	                                       $    99,951  $    31,693  $    68,258
	                                      ---------------------------------------
	                                      ---------------------------------------

	    (a) The Company holds a 40% ownership interest (31% economic interest) in
	        the Diavik group of mineral claims, which contains commercially
	        mineable diamond reserves. DDMI, a subsidiary of Rio Tinto plc, is
	        the operator of the Joint Venture and holds the remaining 60%
	        interest. The claims are subject to private royalties which are in
	        the aggregate 2% of the value of production.
	    (b) Diavik equipment and leaseholds are project related assets at the
	        Joint Venture level.
	    (c) Furniture, equipment and other includes equipment located at the
	        Company's diamond sorting facility and at Harry Winston Inc. salons.
	    (d) Real property is comprised of land and a building that houses the
	        corporate activities of the Company and various leasehold
	        improvements to Harry Winston Inc. salons and corporate offices.
	    >>

	    Amortization expense for 2010 was $60.9 million (2009 - $71.8 million).

	    NOTE 6:

	    Diavik Joint Venture

	    The following represents HWDLP's 40% proportionate interest in the Joint
Venture as at December 31, 2009 and 2008:

	    <<
	                                                           2010         2009
	    -------------------------------------------------------------------------
	    Current assets                                  $    97,660  $   105,612
	    Long-term assets                                    760,680      754,886
	    Current liabilities                                  27,422       38,808
	    Long-term liabilities and participant's account     830,918      821,690
	    -------------------------------------------------------------------------


	    Years ended                                            2010         2009
	    -------------------------------------------------------------------------
	    Expenses net of interest income of $0.3 million
	     (2009 - interest income of $0.3 million and
	     insurance settlement of $0.5 million)(a)       $   171,159  $   187,839
	    Cash flows resulting from (used in) operating
	     activities                                        (104,394)    (121,955)
	    Cash flows resulting from financing activities      167,629      292,208
	    Cash flows resulting from (used in) investing
	     activities                                         (64,180)    (183,552)
	    -------------------------------------------------------------------------

	    (a) The Joint Venture only earns interest income.
	    >>

	    HWDLP is contingently liable for DDMI's portion of the liabilities of the
Joint Venture, and to the extent HWDLP's participating interest has increased
because of the failure of DDMI to make a cash contribution when required,
HWDLP would have access to an increased portion of the assets of the Joint
Venture to settle these liabilities.

	    NOTE 7:

	    Intangible Assets

	    <<
	                                            Accumulated
	                    Amortization                amorti-
	                          period       Cost     zation   2010 net   2009 net
	    -------------------------------------------------------------------------
	    Trademark    indefinite life  $ 112,995  $       -  $ 112,995  $ 112,995
	    Drawings     indefinite life     12,365          -     12,365     12,365
	    Wholesale
	     distribution
	     network          120 months      5,575     (2,483)     3,092      3,649
	    Store
	     leases     65 to 105 months      5,639     (4,878)       761      1,743
	    -------------------------------------------------------------------------
	    Intangible
	     assets                       $ 136,574  $  (7,361) $ 129,213  $ 130,752
	                                 --------------------------------------------
	                                 --------------------------------------------
	    >>

	    Amortization expense for 2010 was $1.5 million (2009 - $1.9 million). The
Company completed a valuation of its trademark and drawings as of January 31,
2010 and concluded that there was no impairment of these assets.

	    NOTE 8:

	    Other Assets

	    <<
	                                                           2010         2009
	    -------------------------------------------------------------------------
	    Prepaid pricing discount(a), net of
	     accumulated amortization of $7.4 million
	     (2009 - $6.0 million)                          $     4,560  $     6,000
	    Other assets                                          1,328        2,391
	    Refundable security deposits                          9,741        7,253
	    -------------------------------------------------------------------------
	                                                    $    15,629  $    15,644
	                                                   --------------------------
	                                                   --------------------------

	    (a) Prepaid pricing discount represents funds paid to Tiffany & Co.
	        ("Tiffany") by the Company to amend its rough diamond supply
	        agreement. The amendment eliminated all pricing discounts on future
	        sales. The payment has been deferred and is being amortized on a
	        straight-line basis over the remaining life of the contract.
	    >>

	    NOTE 9:

	    Derivative Financial Instruments

	    On October 1, 2009, the Company executed an interest rate cash flow hedge
on Harry Winston Inc.'s five-year revolving credit facility in the form of a
swap to mitigate the Company's exposure to variability in cash flows for the
future interest payments on a designated portion of borrowings on the
facility. The interest rate swap qualifies as a hedge for accounting purposes.
Accordingly, the fair value of the derivative is recorded as an asset or
liability on the consolidated balance sheets and the effective portion of the
change in the derivative's fair value at the end of each period is recorded in
other comprehensive income. Any gain or loss in fair value relating to the
ineffective portion of the hedging relationship is recorded in current
earnings. For the year ended January 31, 2010, the Company recorded an other
comprehensive loss of $0.4 million (net of income taxes of $0.2 million). No
gain or loss was recorded in earnings as a result of hedge ineffectiveness.

	    <<
	                                                            January 31, 2010
	    -------------------------------------------------------------------------
	                                                              Interest rates
	                                                       ----------------------
	                                              Notional
	                                             principal    Receive        Pay
	    -------------------------------------------------------------------------
	    Interest      1 year: receive variable                1-month
	     rate swap     - pay fixed               $ 140,000      LIBOR      3.19%
	    -------------------------------------------------------------------------
	    >>

	    In addition, the Company has recorded an embedded derivative at the
Diavik Diamond Mine. The notional amount of the contract is $0.9 million and
the contract matures in 2012. The fair value of the derivative is recorded as
an asset or liability on the consolidated balance sheets and the change in the
derivative's fair value at the end of each period is recorded in earnings. For
the year ended January 31, 2010, the Company recorded an asset of $0.4 million
(2009 - $0.3 million) relating to the embedded derivative and recorded a gain
of $0.1 million (2009 - $0.3 million).

	    NOTE 10:

	    Long-Term Debt

	    <<
	                                                           2010         2009
	    -------------------------------------------------------------------------
	    Mining segment credit facilities(a)(i)          $         -  $    74,107
	    Harry Winston Inc. credit facilities(b)             155,486      199,846
	    First mortgage on real property (a)(ii)               7,206        6,769
	    -------------------------------------------------------------------------
	    Total long-term debt                                162,692      280,722
	    -------------------------------------------------------------------------
	    Less current portion                                 (1,154)     (75,097)
	    -------------------------------------------------------------------------
	                                                    $   161,538  $   205,625
	                                                   --------------------------
	                                                   --------------------------


	                                                     Carrying
	                          Nominal                      Amount
	                         interest     Date of   at January 31,
	                Currency     rate    maturity            2010       Borrower
	    -------------------------------------------------------------------------
	    Secured bank                     March 31,                 Harry Winston
	     loan(b)(i)       US    5.60%        2013  $140.0 million            Inc.
	    -------------------------------------------------------------------------
	    Secured bank                     April 22,                 Harry Winston
	     loan(b)(ii)     CHF    3.90%        2013    $3.3 million            S.A.
	    -------------------------------------------------------------------------
	    Secured bank                   January 31,                 Harry Winston
	     loan(b)(ii)     CHF    3.55%        2033   $12.2 million            S.A.
	    -------------------------------------------------------------------------
	    Unsecured bank                                             Harry Winston
	     advance(b)(ii)  CHF      N/A         N/A             nil            S.A.
	    -------------------------------------------------------------------------
	    First mortgage
	     on real
	     property                       September,                       6019838
	     (a)(ii)         CDN    7.98%        2018    $7.2 million     Canada Inc.
	    -------------------------------------------------------------------------
	    Secured bank                       Due on                  Harry Winston
	     advance(d)       US      N/A      demand             nil        Diamond
	                                                               International
	                                                                         N.V.
	                                                               Harry Winston
	                                                              Diamond (India)
	                                                              Private Limited
	    -------------------------------------------------------------------------
	    Unsecured bank                   March 31,                 Harry Winston
	     advance(d)      YEN    1.98%        2010    $7.9 million     Japan, K.K.
	    -------------------------------------------------------------------------
	    Unsecured bank                   April 28,                 Harry Winston
	     advance(d)      YEN    2.48%        2010    $2.7 million     Japan, K.K.
	    -------------------------------------------------------------------------
	    Unsecured bank                    June 28,                 Harry Winston
	     advance(d)      YEN    2.38%        2010    $5.5 million     Japan, K.K.
	    -------------------------------------------------------------------------
	    Secured bank                      June 18,                 Harry Winston
	     advance(d)      YEN    2.30%        2010    $6.4 million     Japan, K.K.
	    -------------------------------------------------------------------------

	    (a) MINING SEGMENT CREDIT FACILITIES

	        (i)  On March 31, 2009, with the closing of the Kinross transaction,
	             the Company repaid all amounts outstanding on the mining
	             segment's senior secured term and revolving credit facilities.

	        (ii) The Company's first mortgage on real property has scheduled
	             principal payments of approximately $0.2 million quarterly, and
	             may be prepaid at any time.

	    (b) RETAIL SEGMENT CREDIT FACILITIES

	        (i)  Harry Winston Inc. maintains a credit agreement with a syndicate
	             of banks for a $250.0 million five-year revolving credit
	             facility. In addition, Harry Winston Inc. may increase the
	             credit facility by an additional $50.0 million to $300.0 million
	             during the term of the facility. There are no scheduled
	             repayments required before maturity. The credit facility is
	             supported by a $20.0 million limited guarantee provided by Harry
	             Winston Diamond Corporation. The amount available under this
	             facility is subject to a borrowing base formula based on certain
	             assets of Harry Winston Inc.

	             The credit agreement contains affirmative and negative non-
	             financial and financial covenants, which apply to the retail
	             segment. These provisions include consolidated minimum tangible
	             net worth, minimum coverage of fixed charges, leverage ratio and
	             limitations on capital expenditures and certain investments. The
	             credit agreement also includes a change of control provision,
	             which would result in the entire unpaid principal and all
	             accrued interest of the facility becoming due immediately upon
	             change of control, as defined. Any material adverse change, as
	             defined, in the retail segment's business, assets, liabilities,
	             consolidated financial position or consolidated results of
	             operations constitutes default under the agreement.

	             The retail segment has pledged 100% of Harry Winston Inc.'s
	             common stock and 66 2/3% of the common stock of its foreign
	             subsidiaries to the bank to secure the loan. Inventory and
	             accounts receivable of Harry Winston Inc. are pledged as
	             collateral to secure the borrowings of Harry Winston Inc. In
	             addition, an assignment of proceeds on insurance covering
	             security collateral was made.

	             Loans under the credit facility can be either fixed rate loans
	             or revolving line of credit loans. The fixed rate loans will
	             bear interest within a range of 1.50% to 2.25% above LIBOR,
	             based upon a pricing grid determined by the fixed charge
	             coverage ratio. Interest under this option will be determined
	             for periods of either one, two, three or six months. The
	             revolving line of credit loans will bear interest within a range
	             of 0.50% to 0.75% above the bank's prime rate based upon a
	             pricing grid determined by the fixed charge coverage ratio as
	             well.

	        (ii) Harry Winston S.A. maintains a 25-year loan agreement for
	             17.5 million CHF ($16.4 million) used to finance the
	             construction of the Company's watch factory in Geneva,
	             Switzerland. The loan agreement is comprised of a
	             CHF 3.5 million ($3.3 million) loan and a CHF 14.0 million
	             ($13.2 million) loan. The bank has a secured interest in the
	             factory building. In addition, the Company has a demand credit
	             facility of CHF 2.0 million ($1.9 million), supported by a
	             $2.0 million standby letter of credit, which is classified as
	             bank advances. At January 31, 2010, $nil was outstanding,
	             compared to $0.5 million at January 31, 2009.

	    (c) REQUIRED PRINCIPAL REPAYMENTS

	        2011                                                     $     1,154
	        2012                                                           1,204
	        2013                                                           1,257
	        2014                                                         144,604
	        2015                                                           1,376
	        Thereafter                                                    13,097
	        ---------------------------------------------------------------------

	    (d) BANK ADVANCES

	        The Company has available a $45.0 million (utilization in either US
	        dollars or Euros) revolving financing facility for inventory and
	        receivables funding in connection with marketing activities through
	        its Belgian subsidiary, Harry Winston Diamond International N.V., and
	        its Indian subsidiary, Harry Winston Diamond (India) Private Limited.
	        Borrowings under the Belgium facility bear interest at the bank's
	        base rate plus 1.5%. At January 31, 2010, $nil was drawn under the
	        Company's revolving financing facilities relating to its Belgian
	        subsidiary, Harry Winston Diamond International N.V., or its Indian
	        subsidiary, Harry Winston Diamond (India) Private Limited. The
	        facility is guaranteed by Harry Winston Diamond Corporation.

	        Harry Winston Japan, K.K. maintains unsecured credit agreements with
	        two banks, each amounting to (Yen) 1,455 million ($16.1 million).
	        Harry Winston Japan, K.K. also maintains a secured credit agreement
	        amounting to (Yen) 575 million ($6.4 million) classified as bank
	        advances. This facility is secured by inventory owned by Harry
	        Winston Japan, K.K.
	    >>

	    NOTE 11:

	    Income Tax

	    The future income tax asset of the Company is $42.8 million, of which
$27.8 million relates to the retail segment. Included in the future tax asset
is $21.9 million that has been recorded to recognize the benefit of $74.3
million of net operating losses that Harry Winston Inc. and its subsidiaries
have available for carry forward to shelter income taxes for future years. The
net operating losses are scheduled to expire between 2014 and 2030.
	    The future income tax liability of the Company is $271.8 million of which
$74.6 million relates to the retail segment. Harry Winston Inc.'s future
income tax liabilities include $55.5 million from the purchase price
allocation. The Company's future income tax asset and liability accounts are
revalued to take into consideration the change in the Canadian dollar compared
to the US dollar and the unrealized foreign exchange gain or loss is recorded
in net earnings for each year.

	    <<
	    (a) The income tax provision consists of the following:

	                                                           2010         2009
	        ---------------------------------------------------------------------
	        Current expense                             $     4,586  $    81,787
	        Future recovery                                 (23,389)     (21,531)
	        ---------------------------------------------------------------------
	                                                    $   (18,803) $    60,256
	                                                   --------------------------
	                                                   --------------------------

	    (b) The tax effects of temporary differences that give rise to
	        significant portions of the future tax assets and liabilities at
	        January 31, 2010 and 2009 are as follows:

	                                                           2010         2009
	        ---------------------------------------------------------------------
	        FUTURE INCOME TAX ASSETS:
	        Net operating loss carryforwards            $    27,466  $    27,199
	        Capital assets                                    2,499        1,267
	        Future site restoration costs                    12,471       12,691
	        Retail inventory                                  1,525        2,635
	        Other future income tax assets                    5,468        4,959
	        ---------------------------------------------------------------------
	        Gross future income tax assets                   49,429       48,751
	        Valuation allowance                              (6,624)      (5,413)
	        ---------------------------------------------------------------------
	        Future income tax assets                         42,805       43,338
	        FUTURE INCOME TAX LIABILITIES:
	        Deferred mineral property costs                 (47,398)     (38,813)
	        Capital assets                                 (140,118)    (143,659)
	        Future site restoration costs                    (6,894)      (7,920)
	        Retail inventory                                (15,995)     (25,735)
	        Intangible assets                               (55,542)     (56,748)
	        Unrealized foreign exchange gains                   (24)        (580)
	        Other future income tax liabilities              (5,851)     (29,829)
	        ---------------------------------------------------------------------
	        Future income tax liabilities                  (271,822)    (303,284)
	        ---------------------------------------------------------------------
	        Future income tax liability, net            $  (229,017) $  (259,946)
	                                                   --------------------------
	                                                   --------------------------

	    (c) The difference between the amount of the reported consolidated income
	        tax provision and the amount computed by multiplying the earnings
	        (loss) before income taxes by the statutory tax rate of 30% (2009 -
	        31%) is a result of the following:

	                                                           2010         2009
	        ---------------------------------------------------------------------
	        Expected income tax expense                 $   (28,747) $    40,424
	        Non-deductible (non-taxable) items               14,990      (20,884)
	        Northwest Territories mining royalty
	         (net of income tax relief)                        (137)      15,686
	        Earnings subject to tax different than
	         statutory rate                                  (4,767)      (6,032)
	        Impact of impairment charge on goodwill               -       29,034
	        Assessments and adjustments                      (2,743)         (64)
	        Change in valuation allowance                     1,666        2,603
	        Other                                               935         (511)
	        ---------------------------------------------------------------------
	        Recorded income tax (recovery) expense      $   (18,803) $    60,256
	                                                   --------------------------
	                                                   --------------------------

	    (d) The Company has net operating loss carryforwards for Canadian income
	        tax purposes of approximately $1.1 million. Harry Winston Inc. has
	        net operating loss carryforwards for US income tax purposes of
	        $55.0 million and $19.3 million for other foreign jurisdiction tax
	        purposes.
	    >>

	    NOTE 12:

	    Future Site Restoration Costs

	    <<
	                                                           2010         2009
	    -------------------------------------------------------------------------
	    At February 1, 2009 and 2008                    $    39,506  $    32,980
	    Revision of previous estimates                            -        4,880
	    Accretion of provision                                1,769        1,646
	        ---------------------------------------------------------------------
	    At January 31, 2010 and 2009                    $    41,275  $    39,506
	                                                   --------------------------
	                                                   --------------------------
	    >>

	    The Joint Venture has an obligation under various agreements (note 15) to
reclaim and restore the lands disturbed by its mining operations.
	    The Company's share of the total undiscounted amount of the future cash
flows that will be required to settle the obligation incurred at January 31,
2010 is estimated to be $80.5 million, of which approximately $72.5 million is
expected to occur at the end of the mine life. The revision of previous
estimates in fiscal 2008 reflects anticipated higher costs for fuel, labour
and equipment based on a significant escalation in these key operating costs
in recent years. The anticipated cash flows relating to the obligation at the
time of the obligation have been discounted at a credit adjusted risk-free
interest rate of 4.96%.

	    NOTE 13:

	    Share Capital

	    <<
	    (a) Authorized

	        Unlimited common shares without par value.

	    (b) Issued

	                                                      Number of
	                                                         shares       Amount
	        ---------------------------------------------------------------------
	        Balance, January 31, 2008                    58,372,091  $   305,502
	        SHARES ISSUED FOR:
	        Cash                                          3,000,001       76,039
	        ---------------------------------------------------------------------
	        Balance, January 31, 2009                    61,372,092  $   381,541
	        SHARES ISSUED FOR:
	        Cash                                         15,200,000       44,997
	        Exercise of options                              16,501           55
	        ---------------------------------------------------------------------
	        Balance, January 31, 2010                    76,588,593  $   426,593
	                                                    -------------------------
	                                                    -------------------------

	    (c) Stock Options

	        Under the Employee Stock Option Plan, amended and approved by the
	        shareholders on June 4, 2008, the Company may grant options for up to
	        6,000,000 shares of common stock. Options may be granted to any
	        director, officer, employee or consultant of the Company or any of
	        its affiliates. Options granted to directors vest immediately and
	        options granted to officers, employees or consultants vest over three
	        to four years. The maximum term of an option is ten years. The number
	        of shares reserved for issuance to any one optionee pursuant to
	        options cannot exceed 2% of the issued and outstanding common shares
	        of the Company at the date of grant of such options.

	        The exercise price of each option cannot be less than the fair market
	        value of the shares on the last trading day preceding the date of
	        grant.

	        The Company's shares are primarily traded on a Canadian dollar based
	        exchange, and accordingly stock option information is presented in
	        Canadian dollars, with conversion to US dollars at the average
	        exchange rate for the year.

	        Compensation expense for stock options was $1.7 million for fiscal
	        2010 (2009 - $0.5 million) and is presented as a component of both
	        cost of sales and selling, general and administrative expenses. The
	        amount credited to share capital for the exercise of the options is
	        the sum of (a) the cash proceeds received and (b) the amount debited
	        to contributed surplus upon exercise of stock options by optionees
	        (2010 - $nil; 2009 - $nil).

	        Changes in share options outstanding are as follows:

	                                             2010                       2009
	        ---------------------------------------------------------------------
	                                 Weighted average           Weighted average
	                        Options    exercise price  Options    exercise price
	        ---------------------------------------------------------------------
	                           000s     CDN$      US$     000s     CDN$      US$
	        ---------------------------------------------------------------------
	        Outstanding,
	         beginning
	         of year          1,604  $ 22.45  $ 18.30    1,719  $ 23.52  $ 22.19
	        Granted           1,674     3.78     3.05        -        -        -
	        Exercised           (17)    3.78     3.34        -        -        -
	        Expired             (27)   21.61    17.73     (115)   38.49    31.38
	        ---------------------------------------------------------------------
	                          3,234  $ 12.89  $  7.61    1,604  $ 22.45  $ 18.30
	                        -----------------------------------------------------
	                        -----------------------------------------------------

	        The following summarizes information about stock options outstanding
	        at January 31, 2010:

	                                 Options outstanding     Options exercisable
	                 ------------------------------------------------------------
	                                 Weighted
	                                  average   Weighted                Weighted
	    Range of                    remaining    average                 average
	    exercise          Number  contractual   exercise       Number   exercise
	    prices       outstanding         life      price  exercisable      price
	    CDN$                000s     in years       CDN$         000s       CDN$
	    -------------------------------------------------------------------------
	    $3.78-$3.78        1,657          9.2    $  3.78          821    $  3.78
	    9.10-9.15            268          0.2       9.15          268       9.15
	    10.60-12.45          287          1.0      12.45          287      12.45
	    17.50-17.50           39          1.8      17.50           39      17.50
	    23.35-29.25          747          3.3      25.29          697      25.27
	    41.45-41.95          236          4.4      41.66          236      41.66
	    -------------------------------------------------------------------------
	                       3,234                 $ 12.89        2,348    $ 15.87
	                 ------------------------------------------------------------
	                 ------------------------------------------------------------

	    (d) Stock-Based Compensation

	        The Company applies the fair value method to all grants of stock
	        options.

	        The fair value of options granted during the year ended January 31,
	        2010 was estimated using a Black-Scholes option pricing model with
	        the following weighted average assumptions. The Company did not grant
	        any options during fiscal 2009.

	                                                           2010         2009
	        ---------------------------------------------------------------------
	        Risk-free interest rate                           1.00%            -
	        Dividend yield                                    0.00%            -
	        Volatility factor                                51.00%            -
	        Expected life of the options                  5.5 years            -
	        Average fair value per option, CDN          $      1.45            -
	        Average fair value per option, US           $      1.17            -
	        ---------------------------------------------------------------------

	    (e) RSU and DSU Plans

	        RSU                                                  Number of units
	        ---------------------------------------------------------------------
	        Balance, January 31, 2008                                    143,715
	        AWARDS AND PAYOUTS DURING THE YEAR (NET)
	          RSU awards                                                  (2,500)
	          RSU payouts                                                (32,616)
	        ---------------------------------------------------------------------
	        Balance, January 31, 2009                                    108,599
	        AWARDS AND PAYOUTS DURING THE YEAR (NET)
	          RSU awards                                                  11,895
	          RSU payouts                                                (74,614)
	        ---------------------------------------------------------------------
	        Balance, January 31, 2010                                     45,880
	                                                            -----------------
	                                                            -----------------


	        DSU                                                  Number of units
	        ---------------------------------------------------------------------
	        Balance, January 31, 2008                                     72,198
	        AWARDS AND PAYOUTS DURING THE YEAR (NET)
	          DSU awards                                                  56,790
	          DSU payouts                                                      -
	        ---------------------------------------------------------------------
	        Balance, January 31, 2009                                    128,988
	        AWARDS AND PAYOUTS DURING THE YEAR (NET)
	          DSU awards                                                  73,521
	          DSU payouts                                                (43,034)
	        ---------------------------------------------------------------------
	        Balance, January 31, 2010                                    159,475
	                                                            -----------------
	                                                            -----------------

	        During the fiscal year, the Company granted 11,895 RSUs (net of
	        forfeitures) and 73,521 DSUs under an employee and director incentive
	        compensation program, respectively. The RSU and DSU Plans are full
	        value phantom shares that mirror the value of Harry Winston Diamond
	        Corporation's publicly traded common shares.

	        Grants under the RSU Plan are on a discretionary basis to employees
	        of the Company subject to Board of Director approval. Each RSU grant
	        vests on the third anniversary of the grant date, subject to special
	        rules for death and disability. The Company anticipates paying out
	        cash on maturity of RSUs and DSUs.

	        Only non-executive directors of the Company are eligible for grants
	        under the DSU Plan. Each DSU grant vests immediately on the grant
	        date.

	        The expenses related to the RSUs and DSUs are accrued based on the
	        price of Harry Winston Diamond Corporation's common shares at the end
	        of the period and on the probability of vesting. This expense is
	        recognized on a straight-line basis over the term of the grant. The
	        Company recognized an expense of $1.5 million (2009 - recovery of
	        $1.9 million) for the twelve months ended January 31, 2010.
	    >>

	    NOTE 14:

	    Earnings per Share

	    The following table sets forth the computation of diluted earnings per
share:

	    <<
	                                                           2010         2009
	    -------------------------------------------------------------------------
	    NUMERATOR
	    Net earnings for the year                       $   (73,176) $    70,121
	                                                   --------------------------
	                                                   --------------------------
	    DENOMINATOR (THOUSANDS OF SHARES)
	    Weighted average number of shares outstanding        74,049       61,014
	    Dilutive effect of employee stock options               662          193
	    -------------------------------------------------------------------------
	                                                         74,711       61,207
	                                                   --------------------------
	                                                   --------------------------
	    >>

	    NOTE 15:

	    Commitments and Guarantees

	    <<
	    (a) Environmental Agreement

	        Through negotiations of environmental and other agreements, the Joint
	        Venture must provide funding for the Environmental Monitoring
	        Advisory Board. HWDLP's share of this funding requirement was
	        $0.2 million for calendar 2009. Further funding will be required in
	        future years; however, specific amounts have not yet been determined.
	        These agreements also state that the Joint Venture must provide
	        security deposits for the performance by the Joint Venture of its
	        reclamation and abandonment obligations under all environmental laws
	        and regulations. HWDLP's share of the letters of credit outstanding
	        posted by the operator of the Joint Venture with respect to the
	        environmental agreements as at January 31, 2010, was $74.2 million.
	        The agreement specifically provides that these funding requirements
	        will be reduced by amounts incurred by the Joint Venture on
	        reclamation and abandonment activities.

	    (b) Participation Agreements

	        The Joint Venture has signed participation agreements with various
	        native groups. These agreements are expected to contribute to the
	        social, economic and cultural well-being of the Aboriginal bands. The
	        agreements are each for an initial term of twelve years and shall be
	        automatically renewed on terms to be agreed for successive periods of
	        six years thereafter until termination. The agreements terminate in
	        the event that the mine permanently ceases to operate.

	    (c) Commitments

	        Commitments include the cumulative maximum funding commitments
	        secured by letters of credit of the Joint Venture's environmental and
	        participation agreements at HWDLP's 40% ownership interest, before
	        any reduction of future reclamation activities, and future minimum
	        annual rentals under non-cancellable operating and capital leases for
	        retail salons, corporate office space, and long-term leases for
	        property, land, office premises and a fuel tank farm at the Diavik
	        Diamond Mine, and are as follows:

	        2011                                                     $    95,469
	        2012                                                          92,426
	        2013                                                          90,622
	        2014                                                          86,967
	        2015                                                          91,422
	        Thereafter                                                   129,037
	        ---------------------------------------------------------------------
	    >>

	    NOTE 16:

	    Employee Benefit Plans

	    <<
	                                                     Year ended   Year ended
	                                                     January 31,  January 31,
	    Expenses for the period                                2010         2009
	    -------------------------------------------------------------------------
	    Defined benefit pension plan - Harry Winston
	     retail segment(a)                              $     2,184  $     1,527
	    Defined contribution plan - Harry Winston
	     retail segment(b)                                      727          866
	    Defined contribution plan - Harry Winston
	     mining segment(b)                                      200          223
	    Defined contribution plan - Diavik Diamond
	     Mine(b)                                                794          916
	    -------------------------------------------------------------------------
	                                                    $     3,905  $     3,532
	                                                   --------------------------
	                                                   --------------------------

	    (a) Defined Benefit Pension Plan

	        The Harry Winston retail segment sponsors three separate defined
	        benefit pension plans covering substantially all of its employees in
	        the United States, Japan and Switzerland. The principal pension plan
	        is the Harry Winston Employee Retirement Plan for Harry Winston Inc.
	        US employees. The benefits for the Harry Winston Inc. plan are based
	        on years of service and the employee's compensation. In April 2001,
	        Harry Winston Inc. amended its defined benefit pension plan. The
	        amendment froze plan participation effective April 30, 2001. Harry
	        Winston Inc.'s funding policy for the US plan is to contribute
	        amounts to the plan sufficient to meet the minimum funding
	        requirements set forth in the Employee Retirement Income Security Act
	        of 1974. Plan assets consist primarily of fixed income, equity and
	        other short-term investments. The other two defined benefit pension
	        plans are sponsored by retail segment subsidiaries Harry Winston
	        Japan, K.K. and Harry Winston S.A., which converted their previous
	        pension plan arrangements into defined benefit plans effective
	        February 1, 2007. Pension liabilities for these two non-US plans are
	        funded in accordance with local laws and regulations.

	        (i)   INFORMATION ABOUT HARRY WINSTON INC.'S US DEFINED BENEFIT PLAN
	              IS AS FOLLOWS:

	                                                           2010         2009
	              ---------------------------------------------------------------
	              ACCRUED BENEFIT OBLIGATION:
	              Balance, beginning of year                  8,043  $    11,296
	              Interest cost                                 672          656
	              Actuarial gain                              1,075       (3,171)
	              Effects of changes in assumptions               -            -
	              Benefits paid                                (830)        (738)
	              ---------------------------------------------------------------
	              Balance, end of year                        8,960        8,043
	              ---------------------------------------------------------------
	              PLAN ASSETS:
	              Fair value, beginning of year               7,220       10,384
	              Actual return on plan assets                1,462       (2,426)
	              Employer contributions                          -            -
	              Benefits paid                                (830)        (738)
	              ---------------------------------------------------------------
	              Fair value, end of year                     7,852        7,220
	              ---------------------------------------------------------------
	              Funded status - plan deficit
	               (included in accrued liabilities)         (1,108) $      (823)
	                                                    -------------------------
	                                                    -------------------------

	              US plan assets represented approximately 57% of total Harry
	              Winston retail segment plan assets at January 31, 2010. The
	              unfunded status of the retail segment plans are comprised of
	              $1.1 million attributed to the US-based Harry Winston Inc.
	              plan, as reported in the table above, and $1.6 million
	              attributed to the Harry Winston Japan, K.K. plan. The Harry
	              Winston Japan, K.K. plan is non-funded with a benefit
	              obligation of $1.6 million. The Harry Winston S.A. plan was
	              fully funded at January 31, 2010 with a benefit obligation of
	              $5.4 million offset by plan assets of $5.9 million.

	              The following table provides the components of the net periodic
	              pension costs for the three plans for the years ended
	              January 31.

	                                                           2010         2009
	              ---------------------------------------------------------------
	              Service cost                               (1,560) $    (1,408)
	              Interest cost                                (865)        (863)
	              Expected return on plan assets                692          923
	              Amortization of net actuarial gain (loss)    (189)           -
	              Amortization of prior service cost            (62)           -
	              ---------------------------------------------------------------
	              Total                                      (1,984) $    (1,348)
	                                                    -------------------------
	                                                    -------------------------

	        (ii)  PLAN ASSETS

	              The asset allocation of Harry Winston Inc.'s US pension
	              benefits at January 31, 2010 were as follows:

	                                                           2010         2009
	              ---------------------------------------------------------------
	              ASSET CATEGORY:
	              Cash equivalents                               2%          10%
	              Equity securities                             67%          54%
	              Fixed income securities                       29%          36%
	              Other                                          2%           0%
	              ---------------------------------------------------------------
	              Total                                        100%         100%
	                                                    -------------------------
	                                                    -------------------------

	        (iii) THE SIGNIFICANT ASSUMPTIONS USED FOR HARRY WINSTON INC.'S US
	              PLAN ARE AS FOLLOWS:

	                                                           2010         2009
	              ---------------------------------------------------------------
	              ACCRUED BENEFIT OBLIGATION:
	              Discount rate                               5.56%        6.53%
	              Expected long-term rate of return           7.50%        7.50%
	              ---------------------------------------------------------------
	              BENEFIT COSTS FOR THE YEAR:
	              Discount rate                               6.53%        6.24%
	              Expected long-term rate of return
	               on plan assets                             7.50%        7.50%
	              Rate of compensation increase               0.00%        0.00%
	              ---------------------------------------------------------------

	              Harry Winston Inc's overall expected long-term rate of return
	              on assets is 7.50%. The expected long-term rate of return is
	              based on the portfolio as a whole and not on the sum of the
	              returns on individual asset categories. The return is based
	              exclusively on historical returns, without adjustments. Harry
	              Winston S.A.'s overall expected long-term rate of return on
	              assets is 3.75%. Long-term rate of return for Harry Winston
	              Japan, K.K. plan assets is not applicable due to the unfunded
	              status of the plan.

	              The weighted average assumptions used to determine the benefit
	              obligations for Harry Winston Japan, K.K. and Harry Winston
	              S.A. at January 31, 2010 are a discount rate and expected
	              long-term rate of return of 1.84% and 0.00% and 3.00% and
	              3.75%, respectively.

	              The weighted average assumptions used to determine the benefit
	              costs for Harry Winston Japan, K.K. and Harry Winston S.A. at
	              January 31, 2010 are a discount rate, expected long-term rate
	              of return and a rate of compensation increase of 1.84%, 0.00%
	              and 4.36%, and 3.00%, 3.75% and 2.00%, respectively.

	        (iv)  HARRY WINSTON RETAIL SEGMENT EXPECTS TO CONTRIBUTE $1.0 MILLION
	              TO ITS PENSION PLAN IN FISCAL 2011

	              Benefits of approximately $1.4 million are expected to be paid
	              by the retail segment in each fiscal year from 2011 to 2015.
	              The aggregate benefits expected to be paid in the five fiscal
	              years from 2016 to 2020 are $6.3 million. The expected benefits
	              are based on the same assumptions used to measure the retail
	              segment's benefit obligation at January 31, 2010.

	    (b) Defined Contribution Plan

	        Harry Winston Inc. has a defined contribution 401(k) plan covering
	        substantially all employees in the United States. For the fiscal
	        years ended January 31, 2010 and 2009, Harry Winston Inc. elected to
	        increase the employer-matching contribution to 100% of the first 6%
	        of the employee's salary from 50% in fiscal 2007 and prior. Employees
	        must meet minimum service requirements and be employed on December 31
	        of each year in order to receive this matching contribution.

	        The Joint Venture sponsors a defined contribution plan whereby the
	        employer contributes 6% of the employee's salary.

	        Harry Winston Diamond Corporation introduced a defined contribution
	        plan in fiscal 2009 whereby the employer contributes to a maximum of
	        6% of the employee's salary to the maximum contribution limit under
	        Canada's Income Tax Act.

	    (c) Deferred Compensation Plan

	        On January 28, 2005, the Board of Directors of Harry Winston Inc.
	        approved an Equity Participation Plan (the "Plan") for certain
	        executives of Harry Winston Inc. The Plan involves "Phantom Stock"
	        awards, as defined in the executives' employment agreements, which
	        are payable in cash. These awards are split into a 40% time-vested
	        award and a 60% cliff-vested award. The value of the award for each
	        executive is calculated as a percentage of return on investment, as
	        defined in the agreements as the excess of the fair value of Harry
	        Winston Inc. at the date of calculation, over the fair value of Harry
	        Winston Inc. at April 2, 2004, adjusted for certain items as defined
	        in the agreements. The 40% time-vested award vests on the six annual
	        anniversaries of each executive's designated start date and over the
	        six-year period, the vesting percentages are 0%, 0%, 10%, 10%, 10%
	        and 10%, respectively. The 60% cliff-vested award vests in full on
	        the date that Harry Winston Diamond Corporation becomes the acquirer
	        of 100% of the common stock of Harry Winston Inc. The executives must
	        remain employed by Harry Winston Inc. through the vesting dates in
	        order for the awards to vest. Both awards would vest immediately upon
	        the date of any future change in control as defined in the employment
	        agreements. On September 29, 2006, Harry Winston Diamond Corporation
	        acquired 100% of the common stock of Harry Winston Inc. As a result,
	        the cliff-vested award has vested. At January 31, 2010 and 2009,
	        Harry Winston Inc. has recorded a liability of $3.2 million and
	        $3.1 million, respectively, relating to the Plan.

	        At January 31, 2010 and 2009, Harry Winston Inc. has recorded a
	        liability of $6.0 million and $6.0 million, respectively, in
	        connection with a deferred compensation plan for a key executive.
	        According to the terms of this plan, the executive is entitled to
	        deferred compensation of $5.0 million, which vests in equal
	        installments on the first through the third anniversaries of the
	        executive's first day of employment with Harry Winston Inc. On each
	        vesting date, the vested portion of the deferred compensation will be
	        paid to the executive unless the executive provides Harry Winston
	        Inc. with prior written notice to defer receipt of all or a portion
	        of the vested portion of the deferred compensation. All such vested
	        amounts deferred at the request of the executive will be distributed
	        to the executive upon the executive's termination of employment with
	        Harry Winston Inc. The deferred compensation bears interest at LIBOR.
	        This executive's employment with Harry Winston, Inc. terminated on
	        December 31, 2009 and hence, the amount of $6.0 million in connection
	        of deferred compensation plan will be distributed on July 1, 2010 as
	        per this plan.
	    >>

	    NOTE 17:

	    Capital Management

	    As part of the Kinross investment, the Company and Kinross have agreed to
certain provisions regarding capital management for a period of two years
following the closing, subject to earlier termination in specified
circumstances. During this period, without Kinross' consent not to be
unreasonably withheld, the Company has agreed not to incur indebtedness in
excess of a specified amount, subject to an exception for indebtedness
incurred to finance an acquisition by the Company. In addition, the Company
has agreed not to pay dividends and to limit the amount of funding it will
provide to the retail segment. The Company believes that the funding limit for
the retail segment will not be exceeded during the next twelve months. The
capital management provisions do not in any way limit the Company's ability to
issue equity or equity-linked securities, subject to compliance with Kinross'
pro rata participation right in such equity issuances.
	    The Company's capital includes cash and cash equivalents, short-term
debt, long-term debt and equity, which includes issued common shares,
contributed surplus and retained earnings.
	    The Company's primary objective with respect to its capital management is
to ensure that it has sufficient cash resources to maintain its ongoing
operations, to provide returns to shareholders and benefits for other
stakeholders, and to pursue growth opportunities. To meet these needs, the
Company may from time to time raise additional funds through borrowing and/or
the issuance of equity or debt or by securing strategic partners, upon
approval by the Board of Directors. The Board of Directors reviews and
approves any material transactions out of the ordinary course of business,
including proposals on acquisitions or other major investments or
divestitures, as well as annual capital and operating budgets.
	    With the closing of the Kinross transaction and the repayment in full of
the mining segment's senior secured credit facilities, the Company assesses
liquidity and capital resources on a consolidated basis. The Company's
requirements are for cash operating expenses, working capital, contractual
debt requirements and capital expenditures. The Company believes that it will
generate sufficient liquidity to meet its anticipated requirements for the
next twelve months.

	    NOTE 18:

	    Financial Instruments

	    The Company has various financial instruments comprising cash and cash
equivalents, cash collateral and cash reserves, accounts receivable, accounts
payable and accrued liabilities, bank advances and long-term debt.
	    Cash and cash equivalents consist of cash on hand and balances with banks
and short-term investments held in overnight deposits with a maturity on
acquisition of less than 90 days. Cash and cash equivalents, which are
designated as held-for-trading, are carried at fair value based on quoted
market prices and are classified within Level 1 of the fair value hierarchy
established by CICA Handbook Section 3862.
	    The fair value of accounts receivable is determined by the amount of cash
anticipated to be received in the normal course of business from the financial
asset.
	    The Company's long-term debt is fully secured; hence the fair value of
this instrument at January 31, 2010 is considered to approximate its carrying
value.
	    The fair value of derivative financial instruments included in accounts
payable and accrued liabilities is determined using standard valuation
techniques with observable market information and is classified within Level 2
of the fair value hierarchy established by CICA Handbook Section 3862.
	    The carrying values of these financial instruments are as follows:

	    <<
	                                    January 31, 2010        January 31, 2009
	    -------------------------------------------------------------------------
	                               Estimated    Carrying   Estimated    Carrying
	                              fair value       value  fair value       value
	    -------------------------------------------------------------------------
	    FINANCIAL ASSETS
	      Cash and cash
	       equivalents            $   62,969  $   62,969  $   16,735  $   16,735
	      Cash collateral and
	       cash reserves                   -           -      30,145      30,145
	      Accounts receivable         23,520      23,520      66,980      66,980
	    -------------------------------------------------------------------------
	                              $   86,489  $   86,489  $  113,860  $  113,860
	                             ------------------------------------------------
	                             ------------------------------------------------
	    FINANCIAL LIABILITIES
	      Accounts payable and
	       accrued liabilities    $   87,448  $   87,448  $  118,390  $  118,390
	      Bank advances               22,485      22,485      42,621      42,621
	      Long-term debt             162,692     162,692     280,722     280,722
	    -------------------------------------------------------------------------
	                              $  272,625  $  272,625  $  441,733  $  441,733
	                             ------------------------------------------------
	                             ------------------------------------------------
	    >>

	    NOTE 19:

	    Financial Risk Exposure and Risk Management

	    The Company is exposed, in varying degrees, to a variety of
financial-instrument-related risks by virtue of its activities. The Company's
overall financial risk management program focuses on the preservation of
capital and protecting current and future Company assets and cash flows by
minimizing exposure to risks posed by the uncertainties and volatilities of
financial markets.
	    The Company's Audit Committee has responsibility to review and discuss
significant financial risks or exposures and to assess the steps management
has taken to monitor, control, report and mitigate such risks to the Company.
	    Financial risk management is carried out by the Finance department, which
identifies and evaluates financial risks and establishes controls and
procedures to ensure financial risks are mitigated.
	    The types of risk exposure and the way in which such exposures are
managed are as follows:

	    <<
	    i)   Currency Risk

	         The Company's sales are predominately denominated in US dollars. As
	         the Company operates in an international environment, some of the
	         Company's financial instruments and transactions are denominated in
	         currencies other than the US dollar. The results of the Company's
	         operations are subject to currency transaction risk and currency
	         translation risk. The operating results and financial position of
	         the Company are reported in US dollars in the Company's consolidated
	         financial statements.

	         The Company's primary foreign exchange exposure impacting pre-tax
	         earnings arises from the following sources:

	            Net Canadian dollar denominated monetary assets and liabilities.
	            The most significant exposure relates to its Canadian dollar
	            future income tax liability. The Company's functional and
	            reporting currency is US dollars; however, the calculation of
	            income tax expense is based on income in the currency of the
	            country of origin. As such, the Company is continually subject to
	            foreign exchange fluctuations, particularly as the Canadian
	            dollar moves against the US dollar. The weakening/strengthening
	            of the Canadian dollar versus the US dollar results in an
	            unrealized foreign exchange gain/loss on the revaluation of the
	            Canadian dollar denominated future income tax liability.

	            Committed or anticipated foreign currency denominated
	            transactions, primarily Canadian dollar costs at the Diavik
	            Diamond Mine.

	         Based on the Company's net exposure to Canadian dollar monetary
	         assets and liabilities at January 31, 2010, a one-cent change in the
	         exchange rate would have impacted pre-tax net earnings for the year
	         by $2.2 million.

	    ii)  Interest Rate Risk

	         Interest rate risk is the risk borne by an interest-bearing asset or
	         liability as a result of fluctuations in interest rates. Financial
	         assets and financial liabilities with variable interest rates expose
	         the Company to cash flow interest rate risk. The Company's most
	         significant interest rate risk arises from its various credit
	         facilities which bear variable interest based on LIBOR. Based on the
	         Company's LIBOR based credit facilities at January 31, 2010, a
	         100 basis point change in the LIBOR rate would have impacted pre-tax
	         net earnings for the year by $1.4 million.

	    iii) Concentration of Credit Risk

	         Credit risk is the risk of a financial loss to the Company if a
	         customer or counterparty to a financial instrument fails to meet its
	         contractual obligation.

	         Financial instruments that potentially subject the Company to credit
	         risk consist of trade receivables from retail segment clients. While
	         economic factors can affect credit risk, the Company manages risk by
	         providing credit terms on a case-by-case basis only after a review
	         of the client's financial position and past credit history. The
	         Company has not experienced significant losses in the past from its
	         customers.

	         The Company's exposure to credit risk in the mining segment is
	         minimized by its sales policy, which requires receipt of cash prior
	         to the delivery of rough diamonds to its customers.

	         The Company manages credit risk, in respect of short-term
	         investments, by maintaining bank accounts with Tier 1 banks and
	         investing only in term deposits or banker's acceptances with highly
	         rated financial institutions that are capable of prompt liquidation.
	         The Company monitors and manages its concentration of counterparty
	         credit risk on an ongoing basis.

	         At January 31, 2010, the Company's maximum counterparty credit
	         exposure consists of the carrying amount of cash and cash
	         equivalents and accounts receivable, which approximates fair value.

	    iv)  Liquidity Risk

	         Liquidity risk is the risk that the Company will not be able to meet
	         its financial obligations as they fall due.

	         The Company manages its liquidity by ensuring that there is
	         sufficient capital to meet short and long-term business
	         requirements, after taking into account cash flows from operations
	         and the Company's holdings of cash and cash equivalents. The Company
	         also strives to maintain sufficient financial liquidity at all times
	         in order to participate in investment opportunities as they arise,
	         as well as to withstand sudden adverse changes in economic
	         circumstances. The Company assesses liquidity and capital resources
	         on a consolidated basis. Management forecasts cash flows for its
	         current and subsequent fiscal years to predict future financing
	         requirements. Future requirements are met through a combination of
	         committed credit facilities and access to capital markets.

	         At January 31, 2010, the Company had $63.0 million of cash and cash
	         equivalents and $40.2 million available under credit facilities.

	         The following table summarizes the aggregate amount of contractual
	         future cash outflows for the Company's financial liabilities:

	                                     Less than      Year      Year     After
	                               Total    1 year       2-3       4-5   5 years
	    -------------------------------------------------------------------------
	    Accounts payable and
	     accrued liabilities    $ 87,448  $ 87,448  $      -  $      -  $      -
	    Income taxes payable      46,297    46,297         -         -         -
	    Bank advances             22,485    22,485         -         -         -
	    Long-term debt(a)        188,595  $  7,982  $ 15,612  $148,376  $ 16,625
	    Environmental and
	     participation
	     agreements
	     incremental
	     commitments              89,695    75,662     1,870     4,540     7,623
	    Operating lease
	     obligations             106,250    19,518    28,655    18,734    39,343
	    Capital lease
	     obligations                 367       289        78         -         -
	    -------------------------------------------------------------------------

	    (a) Includes projected interest payments on the current debt outstanding
	        based on interest rates in effect at January 31, 2010.
	    >>

	    NOTE 20:

	    Insurance Settlement

	    In December 2008, approximately $31.7 million in Company-owned and
consigned retail inventory at cost was stolen during a second robbery at the
Harry Winston Paris salon. Included in accounts receivable at January 31, 2009
is a $48.4 million receivable relating to the insurance settlement that was
received in February 2009. The $3.4 million balance of the insurance claim was
received during the first quarter of the current year. In the prior year, the
Company recognized a pre-tax gain of $16.7 million in the fourth quarter on
settlement of the insurance claim. Also included in the prior year was a gain
on insurance settlement of $0.5 million, resulting from an excavator fire that
occurred in the fourth quarter of fiscal 2006 at the Diavik Diamond Mine.

	    NOTE 21:

	    Dilution Loss

	    The Company recorded a non-cash dilution loss of $34.8 million with
respect to the investment by Kinross of an indirect interest in the Diavik
Diamond Mine.

	    NOTE 22:

	    Impairment Charge

	    As at January 31, 2009, the Company determined that the fair value of its
retail segment was below the carrying value and recorded a non-cash goodwill
impairment charge of $93.8 million.

	    NOTE 23:

	    Segmented Information

	    The Company operates in two segments within the diamond industry, mining
and retail, for the twelve months ended January 31, 2010.
	    The mining segment consists of the Company's rough diamond business. This
business includes the 40% ownership interest in the Diavik group of mineral
claims and the sale of rough diamonds in the market-place.
	    The retail segment consists of the Company's ownership in Harry Winston
Inc. This segment consists of the marketing of fine jewelry and watches on a
worldwide basis.

	    <<
	    For the twelve months ended
	     January 31, 2010                       Mining       Retail        Total
	    -------------------------------------------------------------------------
	    Sales
	      Canada                           $   187,885  $         -  $   187,885
	      United States                              -       72,897       72,897
	      Europe                                     -       75,078       75,078
	      Asia                                       -       77,041       77,041
	    Cost of sales                          174,651      117,071      291,722
	    -------------------------------------------------------------------------
	    Gross margin                            13,234      107,945      121,179
	    Gross margin (%)                          7.0%        48.0%        29.3%
	    Selling, general and
	     administrative expenses                19,502      123,648      143,150
	    -------------------------------------------------------------------------
	    Loss from operations                    (6,268)     (15,703)     (21,971)
	    -------------------------------------------------------------------------
	    Interest and financing expenses         (3,853)      (7,688)     (11,541)
	    Other income                               546           46          592
	    Insurance proceeds                           -        3,350        3,350
	    Dilution loss                          (34,761)           -      (34,761)
	    Foreign exchange gain (loss)           (34,020)       2,527      (31,493)
	    -------------------------------------------------------------------------
	    Segmented loss before income
	     taxes                             $   (78,356) $   (17,468) $   (95,824)
	                                      ---------------------------------------
	                                      ---------------------------------------
	    Segmented assets as at
	     January 31, 2010
	      Canada                           $   952,663  $         -  $   952,663
	      United States                              -      361,598      361,598
	      Other foreign countries               19,894      160,650      180,544
	    -------------------------------------------------------------------------
	                                       $   972,557  $   522,248  $ 1,494,805
	    -------------------------------------------------------------------------
	    Capital expenditures               $    50,856  $     3,033  $    53,889
	    OTHER SIGNIFICANT NON-CASH ITEMS
	      Income tax recovery              $   (15,774) $    (7,615) $   (23,389)
	      Amortization and accretion       $    51,154  $    12,958  $    64,112
	    -------------------------------------------------------------------------
	    >>

	    Sales to three significant customers in the mining segment totalled $64.0
million (2009 - $57.2 million) for the twelve months ended January 31, 2010.

	    <<
	    For the twelve months ended
	     January 31, 2009                       Mining       Retail        Total
	    -------------------------------------------------------------------------
	    Sales
	      Canada                           $   328,223  $         -  $   328,223
	      United States                              -       93,978       93,978
	      Europe                                     -      117,588      117,588
	      Asia                                       -       69,431       69,431
	    Cost of sales                          139,769      147,509      287,278
	    -------------------------------------------------------------------------
	    Gross margin                           188,454      133,488      321,942
	    Gross margin (%)                         57.4%        47.5%        52.8%
	    Selling, general and
	     administrative expenses                19,903      135,973      155,876
	    -------------------------------------------------------------------------
	    Earnings (loss) from operations        168,551       (2,485)     166,066
	    -------------------------------------------------------------------------
	    Interest and financing expenses         (9,183)     (11,274)     (20,457)
	    Other income (expense)                   2,595         (349)       2,246
	    Insurance settlement                       558       16,682       17,240
	    Impairment charge                            -      (93,780)     (93,780)
	    Foreign exchange gain (loss)            60,879       (1,792)      59,087
	    -------------------------------------------------------------------------
	    Segmented earnings (loss)
	     before income taxes               $   223,400  $   (92,998) $   130,402
	                                      ---------------------------------------
	                                      ---------------------------------------
	    Segmented assets as at
	     January 31, 2009
	      Canada                           $   980,500  $         -  $   980,500
	      United States                              -      404,952      404,952
	      Other foreign countries               27,243      153,880      181,123
	    -------------------------------------------------------------------------
	                                       $ 1,007,743  $   558,832  $ 1,566,575
	    -------------------------------------------------------------------------
	    Capital expenditures               $   200,289  $     9,574  $   209,863
	    OTHER SIGNIFICANT NON-CASH ITEMS
	      Income tax recovery              $   (17,789) $    (3,742) $   (21,531)
	      Amortization and accretion       $    64,374  $    12,596  $    76,970
	    -------------------------------------------------------------------------



	                     Diavik Diamond Mine Mineral Reserve
	                       and Mineral Resource Statement

	                           AS OF DECEMBER 31, 2009


	    Proven and Probable Reserves

	                                                                  Proven and
	                              Proven            Probable            Probable
	    -------------------------------------------------------------------------
	    Open           Mill-        Mill-  Mill-        Mill-  Mill-        Mill-
	     pit and       ions Carats  ions   ions Carats  ions   ions Carats  ions
	     underground     of   per     of     of   per     of     of   per     of
	     mining      tonnes tonne carats tonnes tonne carats tonnes tonne carats
	    -------------------------------------------------------------------------
	    A-154 South
	      Open Pit      0.2   5.1    0.8      -     -      -    0.2   5.1    0.8
	      Underground   2.3   4.0    9.1    1.4   3.3    4.7    3.7   3.8   13.9
	    -------------------------------------------------------------------------
	      Total A-154
	       South        2.4   4.1   10.0    1.4   3.3    4.7    3.8   3.8   14.7
	    -------------------------------------------------------------------------
	    A-154 North
	      Open Pit        -     -      -      -     -      -      -     -      -
	      Underground   2.9   2.2    6.3    5.8   2.2   12.6    8.7   2.2   18.9
	    -------------------------------------------------------------------------
	      Total A-154
	       North        2.9   2.2    6.3    5.8   2.2   12.6    8.7   2.2   18.9
	    -------------------------------------------------------------------------
	    A-418
	      Open Pit      3.1   3.2   10.2      -     -      -    3.1   3.2   10.2
	      Underground   0.3   4.0    1.1    3.7   4.0   14.9    4.0   4.0   15.9
	    -------------------------------------------------------------------------
	      Total A-418   3.4   3.3   11.2    3.7   4.0   14.9    7.1   3.7   26.1
	    -------------------------------------------------------------------------
	    Total
	      Open Pit      3.3   3.3   11.0      -     -      -    3.3   3.3   11.0
	      Underground   5.5   3.0   16.5   10.9   2.9   32.2   16.4   3.0   48.7
	    -------------------------------------------------------------------------
	      Total
	       Reserves     8.8   3.1   27.5   10.9   2.9   32.2   19.7   3.0   59.7
	                  -----------------------------------------------------------
	                  -----------------------------------------------------------

	    Note: Totals may not add up due to rounding.


	    Additional Indicated and Inferred Resources

	                            Measured           Indicated            Inferred
	                           Resources           Resources           Resources
	    -------------------------------------------------------------------------
	                   Mill-        Mill-  Mill-        Mill-  Mill-        Mill-
	                   ions Carats  ions   ions Carats  ions   ions Carats  ions
	    Kimberlite       of   per     of     of   per     of     of   per     of
	     pipe        tonnes tonne carats tonnes tonne carats tonnes tonne carats
	    -------------------------------------------------------------------------
	    A-154 South       -     -      -      -     -      -   0.04   3.5    0.1
	    A-154 North       -     -      -      -     -      -    2.1   2.7    5.6
	    A-418             -     -      -      -     -      -    0.7   4.5    3.0
	    A-21            3.6   2.8   10.0    0.4   2.6    1.0    0.8   3.0    2.3
	    -------------------------------------------------------------------------
	    Total           3.6   2.8   10.0    0.4   2.6    1.0    3.5   3.1   11.1
	                  -----------------------------------------------------------
	                  -----------------------------------------------------------

	    Note: Totals may not add up due to rounding.
	    >>

	    The above mineral reserve and mineral resource statement was prepared by
Diavik Diamond Mines Inc., operator of the Diavik Diamond Mine, under the
supervision of Calvin Yip, P.Eng., Principal Advisor, Strategic Planning of
Diavik Diamond Mines Inc., a Qualified Person within the meaning of National
Instrument 43-101 of the Canadian Securities Administrators.
	    For further details and information concerning Harry Winston Diamond
Corporation's Mineral Reserves and Resources, readers should reference Harry
Winston Diamond Corporation's Annual Information Form available through
www.sedar.com and http://investor.harrywinston.com.

	    %SEDAR: 00003786E %CIK: 0000841071

	    /For further information: Ms.Kelley Stamm, Manager, Investor Relations,
(416) 362-2237 ext 223 or kstamm(at)harrywinston.com/
	    (HW. HWD)

CO:  Harry Winston Diamond Corporation

CNW 17:59e 31-MAR-10