Sarine Technologies Ltd. develops, manufactures, markets and sells precision technology products for the processing, grading and trade of diamonds, utilised throughout the diamond industry value chain. Following is a brief profile of our offerings. For additional information, please refer to the Business Review section of this Annual Report.

Rough Stone Evaluation (the "Upstream")

We assist diamond mining companies, also termed "producers", to evaluate their rough stones. Our DiaExpert® family of platforms accurately model a rough diamond's external geometry. The revolutionary Galaxy® family of internal inclusion mapping systems for rough diamonds, based on patented technology, provides high resolution (optionally at microscopic-level), fully automated, fast and comprehensive identification and mapping of a rough stone's internal features - inclusions, cracks, etc. By utilising these two systems and optional software tools, a producer can fully assess the intrinsic value of its rough material and provide prospective customers with comprehensive information pertaining to the stones offered for sale. Disclosing this information, and thus reducing the risk associated with buying the offered rough stones lacking full knowledge of their characteristics, allows bidders to offer a higher premium for the offered goods, thus increasing the producer's profitability. In addition, the provision of such data in a digital form enables producers to reach a broader group of potential buyers.

Alrosa, the primary Russian producer and largest miner of diamonds worldwide in carat terms, Grib, a smaller Russian producer, Lucara, a Canadian-based producer operating in Botswana, and Star Gems, a leading rough stone wholesaler in the secondary market in Dubai, were joined in 2021 by additional Dubai-based wholesalers, including Choron, Gem Auctions, Koin and others, who adopted these technologies to enable digital tenders. We continue to garner interest from additional producers and wholesalers interested in adopting this paradigm.

In 2022 we will launch a new system to aid producers also in the broader control and analysis of their overall produced rough stones inventory. Capable of scanning and weighing rough diamonds of half a carat and up in under 10 seconds per stone, the Sarine AutoScan is now in beta-testing. It will allow a producer to scan diamonds at the actual mining site, thus creating a database, which will serve both the growing demand by consumers for documentation of a diamond's sourcing (Sarine AutoScan will provide the initial data entry into the Sarine Diamond Journey traceability paradigm described below), as well as the miner's internal need for tighter inventory control.

Rough Diamond Polishing (the "Midstream")

Our products and services provide industry-leading automated solutions for every stage of the rough diamond polishing processfrom high-precision geometrical modelling and internal inclusion and tension mapping of the rough stone, through determining the optimally derivable polished gems based on their true dollar value and market trends, to laser cutting and shaping and culminating with the inline quality control of the actual making and faceting of the polished jewel.

Our aforementioned DiaExpert® family of platforms and the copyrighted Advisor® software are the de-facto worldwide standard for planning the optimal utilisation of rough diamonds. These systems assist the manufacturer in the planning, cutting and polishing process of the rough stones in order to achieve polished gems with the highest possible values based on optimisation of the four "C" parameters (Carat, Clarity, Color and Cut) and light performance parameters in accordance with market trends and prices.

The Galaxy® family of internal inclusion mapping systems for rough diamonds allows for the optimisation of the Clarity grade of the resultant polished stones, which could only be roughly estimated prior to this technology's introduction in 2010. To allow the industry to fully benefit from this cutting edge technology, various models (see the Business Review section) offer inclusion mapping of rough stones across the entire spectrum of sizes - from below 10 points (0.10 carats) to over 200 carats. To further affordability and flexibility, we offer per-use inclusion scanning services at wholly-owned or affiliated service centres in all the major diamond polishing and trading centres - Mumbai and Surat (India), Antwerp (Belgium), Dubai, Gaborone (Botswana), Guangzhou (China), Johannesburg (South Africa), Moscow, New York, Ramat-Gan (Israel) and Windhoek (Namibia). As of 2019, our Galaxy® systems can be upgraded with an add-on hardware kit, which enables the mapping of the internal tension (stress) of the rough stone's crystal structure, reducing the risk of damage or breakage during the subsequent cutting and polishing stages.

Our third-generation Quazer® 3 green-laser system, integrated with our planning systems by way of the Strategist® setup station, is the industry's most cost-effective high-end solution for the laser cutting and shaping of rough stones, as well as for the processing of CVDtype lab-grown (so called "synthetic") diamonds. The Quazer® 3's main advantage is its ability to perform complicated non-linear cutting, like pie sawing, with a single setup, giving more accurate results and saving significant time. We offer rough diamond cutting and shaping services on a per-use basis at our service centres in India.

The Instructor® software assists in the real-time quality control and optimisation of the actual diamond faceting processes. It can provide for corrective polishing, when deviations from the original planned optimal polishing solution are discerned, by re-analysing the semi-polished stone and proposing alternative solutions, including utilisation of unique asymmetrical methods. Here too, as in planning, conventional 4Cs optimisation can be enhanced by light performance optimisation for ultimate polishing results.

The combination of these technologies has redefined the art of diamond polishing into a science. It has raised the optimally achievable yield of the polished stones combined weights from historically less than 40% of the rough stone's original weight to often over 50%, a benefit nearing 33%. But no less important, it allows the manufacturer to select planning options which best suit actual demand at any given time for any specific geographic market (e.g., trading off between weight, typically a key criterion in US markets, and quality, more emphasised in Asia Pacific (APAC) markets) or any individual retailer's needs for specific lines of jewellery, so called "programmes". These technologies are equally effective on natural and lab-grown diamonds (LGD).

Polished Diamond Grading and Trade (the "Downstream")


Having pioneered the technology-derived automated grading of a polished diamond's Cut in 1992, and having introduced the industry's most accurate system for measuring a polished diamond's actual light performance in 2013, the Sarine Light, we now also provide automated grading of a polished diamond's Clarity, a world first, and Color. Our Sarine Technology Lab provides the world's first (and currently only) artificial intelligence ("AI") based, technologicallyderived objective and consistent grading of a polished diamond's 4Cs and light performance, as well as authentication of the diamond's source (natural or lab-grown) and identification of any treatments to which it has been submitted.

We launched the DiaMension® family of products in 1992 for the accurate measurement of a polished diamond's proportions, in order to derive its Cut and Symmetry grades. The DiaMension® HD (High Definition) and the Instructor® software are today the industry's defacto standard for measuring proportions and Cut grading worldwide. The newest model, the DiaMension® Axiom 3, based on revolutionary technology with micron level accuracy, was originally developed to meet and exceed Tiffany & Company's ("Tiffany") most stringent requirements for extra-fine diamond quality assessment including Symmetry grading. Our polished stone proportion measuring and Cut/Symmetry grading systems are driven by the Instructor® software package.

The Sarine Light introduced in 2013 has today become the most widely used system for light performance analysis and grading in the Asia Pacific (APAC) market, and has all but become the fifth "C" in Japan. We offer light performance grading services independently or as a key element in the Sarine Profile, detailed below. The Sarine Light enables the automatic, accurate, consistent and quantified measurement of a polished diamond's light performance, in order to provide additional criteria by which to appreciate the diamond's quality:

  • Brilliance – the intense bright light that shines from the diamond.

  • Sparkle – the dramatic flashes that burst out of the diamond.

  • Fire – the vivid colours of the rainbow that radiate from within the diamond.

  • Light symmetry – the equal distribution of the light that reflects from the diamond.

Since mid-2018, we offer comprehensive polished diamond 4Cs grading, utilising our groundbreaking AI-derived technology and two dedicated hardware platforms - the Sarine Clarity and Sarine Color. The ability to provide technologically-derived automated grading of a polished stone's Clarity is an industry first. Clarity grading is a very complex multi-dimensional classification, derived from the number of inclusions, their sizes, types and locations as well as other parameters, and has always been a subjective and manual labourintensive process. Typically two graders would manually grade each stone, and it is not unusual for a third expert opinion to be required. Even so, Clarity grading is not consistent, and it is not uncommon to have significant disparities in the prescribed grade, often resulting in it being contested. Our tests have shown that when a statistically significant reference team of proficiently trained graders assesses a stone's Clarity, variances can be spread over two or sometimes even three different grades. The utilisation of technology enables objective, consistent grading, which, as the AI-based algorithms are self-learning, continuously improves over time. We are currently working with various luxury brands (including Tiffany and Boucheron, as announced, as well as others) to adapt our automated AI-based grading technology to their grading guidelines and criteria. We have also entered into a joint initiative with China's largest and most important gemmological laboratory, the National Gemstone Testing Center (NGTC), in order to develop automated grading standards for a polished diamond's 4Cs and its light performance for the Chinese trade.

In 2020 we announced the next revolution of polished diamond grading - e-Grading. Currently in initial commercial rollout in India, the use of our above-mentioned hardware platforms and AI-based software, enhanced by unique in-process inter-system control and verification software, allow on-site grading, replacing the need to send stones offsite to third-party gemmological laboratories. This provides the midstream polisher a number of key benefits- significantly less direct costs, virtually no indirect costs (e.g., shipping, insurance, etc.), a substantially shorter process (minutes to hours vs. days to weeks) and operational flexibility (enabling a manufacturer to independently prioritise his stones' grading sequence and schedule). e-Grading is uniquely suitable to LGD grading, as its lower cost allows application to the lower-valued LGD, and what is more natural than grading a stone created by technology using technology!

Ultimately, we will enable the automated on-site fine-sorting of key parameters of a polished diamond in accordance with industryaccepted criteria e.g., "eye-clean", "no black inclusions", "no inclusions under the table", "no milkiness", issues of tinge, etc., so as to facilitate more accurate matching to the retail customer's needs, reducing rejects and bolstering profitability.

Retail Trade

We also provide technologically advanced standard-setting solutions for key aspects of the polished diamond retail trade, whether natural stones or LGD. In today's changing retail world, channel and product branding and differentiation, as well as providing a captivating digital experience on an online portal, are key to a retailer's success. In the 2021 holiday season in the U.S., online sales grew by 27% (following phenomenal growth of almost 50% in 2020, also as a solution to Covid-19 related impediments to traditional retail channels). The ability to tell the polished gem's "story" online, and demonstrate its unique features, differentiating it from near-commoditised standard cuts and stones, are becoming universal goals amongst e-tailers and in-store retailers alike. Non-intuitive data, as formulated in the historic 4Cs, are no longer sufficient for the younger generation of internet and social media savvy buyers.

Our pioneering Sarine Profile addresses the retailers' needs for differentiation by providing engaging imagery and video information pertaining to the offered diamond's appearance, beauty and quality. Sarine Profile, a toolbox of various technologies, allows the wholesaler and retailer to display their inventory according to their own specific branding goals, as best suited to the merchandise being sold and the market in which it is sold. Each user, whether wholesaler or retailer, online or brick and mortar, can create its unique branding message by utilising various imaging technologies as provided by the Sarine Loupe, at various levels of 3 to 40 times magnification and from various simulated distances and perspectives, along with light performance analyses and grading, as provided by the industry-leading Sarine Light. Other graphic information such as Hearts and Arrows depictions, Cut proportions in 2D or 3D, laser inscription viewing, etc. can also be presented to the prospective consumer. Sarine Profile of course also provides the stone's gemmological laboratory report and can accommodate the retailer's promotional branding material and even the end-consumer's personalisation message (e.g., proposal) to the ultimate recipient of the jewellery.

Sarine Profile is unique in that it caters to the new generation of buyers' engrossment with their mobile devices and their passion for social media, allowing retailers to connect with them and engage them on their media of choice. Doing so enables online transactions with a completely new level of confidence. But it also enhances the in-store buying experience by empowering the consumer to make a truly informed decision.

In today's conscientious, even "activist", marketplace, responsible and sustainable sourcing and manufacturing are also key to a retailer's success. The Sarine Diamond Journey uniquely provides concrete reliable documentation of the rough diamond's provenance and its audited journey from rough stone to polished jewel. Critical to its unique proposition as a provenance solution is Sarine Diamond Journey's access to actual verifiable data from end to end of the polishing process, enabled by Sarine's uniquely extensive presence in the diamond industry's midstream, wherein the critical transition from rough to polish occurs. In 2021 33 million (up from only 19 million in 2020) rough diamonds were scanned for inclusion mapping using our systems and 70 million were planned using our online Advisor® cloudbased software which, optionally, records the actual planning stages for the Sarine Diamond Journey (including our older versions of the Advisor® software, which are not online, we estimate some 100 million stones in total were planned on our systems in 2021). Thus, we can exclusively provide a conclusive certified testimonial of the polished stone's derivation, with no need to rely on declaratory information provided by the audited parties. The mined rough stone's source data is optionally provided by the producer. If not, key data pertaining to its weight, form, inclusions, etc. can be derived independently by our technologies, and its source verified by official data (e.g., customs manifests). Already today Alrosa, the world's largest miner by carat volume, and Lucara collaborate with us to provide mine/source information for various categories and sizes of their rough stones. The rough stone's form is retained in high-resolution mathematical model and video formats, for authentication at the manufacturing venue and presentation to the consumer. As an option, a realistic 3D-printed model of the rough stone can be derived from these data and provided for the consumer's fascination - the 3D-Origin. Subsequently through various stages of the stone's processing, to the level desired, accurate graphic/video data are collated. Beyond offering consumers insight into the sophisticated technology and painstaking craftsmanship that went into creating their gem in an engaging visual format, the Sarine Diamond Journey verifies for the consumer where their diamond was mined and how and by who it was polished, even if by multiple parties, reinforcing their confidence in the sustainable value of their unique natural jewel. The Sarine Diamond Journey has already been adopted by leading luxury brand Maison Boucheron, and, as other high-end luxury brands are also in the advanced stages of evaluating our solution, we expect additional adoptions during 2022.

Upon the polishing process's completion, proprietary technology for "fingerprinting" the polished stone, TruMatch, can also be engraved on the stone without denigrating from its beauty or value. TruMatch can subsequently be used to singularly verify the identity of polished stone in the retail outlet, whether it is loose or mounted in a setting. A so-called digital twin for the authentication of the purchased item is readily retrievable, which can also be utilised by retailers offering extended warranties, providing cleaning and repair services or proposing "buy-up" exchanges, as well as by financial institutions or insurers in need of reliable unequivocal identification of the item.