The Customer Wants to Know Transparency & the New World of Diamonds Mr. Amihai Zivan Sussholz YEI- Yahalomei Espeka International Ltd.

YEI at a Glance  Founded in 1969  Sightholder since 1993  Serves hundreds of clients from 6 offices in major worldwide diamond centers  Specializes in fine-make small round diamonds under 1ct  Capable of catering to very specific client requests (special sizes)  Over 2,600 employees in two manufacturing facilities  State-of-the-art production facility in Panyu, China

Luxury Jewelry - Raising Standards THEY WANT MORE !  More services  More partnership – particularly in product development and marketing  More flexibility  More attentive to make  More careful about quality - end-customer is more informed Luxury jewelry manufacturers want more professional partners who provide transparency and real added value

Sorting and ease- of-ordering Sorting and ease- of-ordering Partnership via joint marketing initiatives Inventory / Availability Inventory / Availability Conveniently located offices Conveniently located offices Fine-make diamonds (or other “specialty”) Fine-make diamonds (or other “specialty”) Efficient, ethical sourcing CUT SUPPLYVALUE Expectations

How it YEI Value Pre-sorted product and easy ordering as well as joint marketing programs and other value-added services. Value Pre-sorted product and easy ordering as well as joint marketing programs and other value-added services. Cut Highest standards for fine- make production. Cut Highest standards for fine- make production. Supply Customers have what they want available when and where they need it. Supply Customers have what they want available when and where they need it. Professionalism Have attained and exceeded industry standards for production and ethical practices (BPP, ISO). Professionalism Have attained and exceeded industry standards for production and ethical practices (BPP, ISO).

Cut  Maintain high-quality rough sourcing capabilities (located in Israel).  Sightholder status enhances customer confidence in the product.  Excellent reputation for fine-quality make backed up by experienced, well-trained staff and top-notch facilities.

Supply - Sorting  Over 2000 assortments available.  Customers can purchase specific sizes and not only parcels. For both large and small clients, pre-sorted product helps clients save time and money.

Supply – Inventory/Availability  Each of over 2,000 items are stored independently.  Online “Harmony” stock system allows customers to know exactly what’s available.  Worldwide offices to reduce time for communication /delivery Having a large inventory means the customer doesn’t need to maintain one. Having a large inventory means the customer doesn’t need to maintain one.

Value - Ease-of-Ordering  Clear Code - YEI’s proprietary coding system Developed as “The Espeka Language” and upgraded over the years.  Order precisely the stones they need, with no leftovers and no bulk packages.  Simplifies ordering and especially reordering

Value - Partnership  YEI has developed joint marketing initiatives with both U.S. and Asian jewellery manufacturers PERFECTLY MATCHED DIAMONDS: Identically-cut fine-make stones manufactured by YEI.  Jewelry created by retailer  Marketing & Advertising - developed jointly  Support includes advertising, in-store materials and staff training

 Establishing clear objectives and goals (which each side needs to consider and agree upon)  Expectations, milestones for success, etc  Understanding the local market and consumer  Choosing the right communications approach  Maintaining consistency (over time/geography) Value - Partnership (cont.)

 Excellent reputation for fine-make diamonds  State-of-the-art China manufacturing complex – excellent evaluation in annual BPP review…  Exceed industry standards so clients can be more confident in product  ISO 9001 certification achieved in early 2008 Professionalism

Who Wins? EVERYONE! Clients Better service, lower costs Clients Better service, lower costs YEI Satisfied customers YEI Satisfied customers Industry Progressive practices become the norm Industry Progressive practices become the norm

Leading the way to the New World of Diamonds