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Board committees and corporate governance

Audit committee
Under the Israeli Act, the board of directors of a public company must appoint an audit committee from among its members. The number of members of the audit committee must be no fewer than three directors, including all the "external directors" which every Israeli public company is required to have and with the majority of independent directors (according to the definition of independency under the Israeli Act). The Company has established an audit committee of the Board (the "Audit Committee"). Currently, the committee is comprised of Derek Zissman, Jenny Cohen Derfler and Simon Olswang, who serves as the chairman of the Audit Committee.

The Audit Committee has primary responsibility for monitoring the quality of internal controls and ensuring that the financial performance of the Company is properly measured and reported on. It receives and reviews reports from the Company's management and auditors relating to the interim and annual accounts and the accounting and internal control systems in use throughout the Company. The Audit Committee adheres to detailed terms of reference, which are available for inspection upon request. The Audit Committee is given unrestricted access to the Company's auditors. Under the Israeli Act, the Audit Committee's role also includes the review and approval of certain related party transactions.

The Audit Committee holds, twice a year, a discussion regarding deficiencies in the management of the Company's business in the presence of the internal auditor and the external auditor of the Company, and without the presence of the officers who are not members of the Audit Committee, after giving them the opportunity to express their views.

The Audit Committee regularly reports its decisions and recommendations to the Board.

Remuneration committee
Under the Israeli Act, the Board of a public company must appoint a remuneration committee from among its members (the "Remuneration Committee"). The number of members of the Remuneration Committee must be no fewer than three directors, including all the "external directors" which every Israeli public company is required to have and with the majority of independent directors (according to the definition of independency under the Israeli Act). Currently, the Remuneration Committee is comprised of Simon Olswang, Jenny Cohen Derfler and Derek Zissman, who serves as the chairman of the Remuneration Committee.

The Remuneration Committee's responsibility is to make recommendations to the Board with respect to updates on the Company's remuneration policy for the terms of service and employment of office holders and to examine the remuneration policy's implementation from time to time. In addition, the Remuneration Committee decides whether to approve transactions concerning the terms of service or employment of the office holders of the Company and holds the authority to provide an exemption, under certain circumstances, from obtaining approval of the general meeting of the shareholders, to the appointment of a candidate to serve as the chief executive officer. The Remuneration Committee also serves the role of the nomination committee of the Company. The Company's remuneration policy is published on the Company's website. The Remuneration Committee regularly reports its decisions and recommendations to the Board.

Strategic Committee
During 2015, the Board decided to establish a strategic committee (the "Strategic Committee"). The number of members of the Strategic Committee must be no fewer than three members, which will be appointed by the Board. The executive director who serves as the chief executive officer shall be a member of the Strategic Committee. The Strategic Committee shall meet at least three times a year. Currently, the Strategic Committee is comprised of Arik Dayan, Amos Shalev, Zehava Simon, Oded Rosen, Simon Olswang, Gilead Fortuna and Eli Opper, who serves as the chairman of the Strategic Committee. The Strategic Committee's responsibility is to advise and make recommendations to the Board with respect to the Company's business strategy.

The Strategic Committee regularly reports its decisions and recommendations to the Board.

Finance Committee
During 2015, the Board decided to establish a finance committee (the "Finance Committee"). The number of members of the Finance Committee must be no fewer than three members, which will be appointed by the Board. The Finance Committee shall meet at least three time a year. Currently, the Finance Committee is comprised of Derek Zissmen, Avraham Azani and Zehava Simon, who serves as the chairman of the Finance Committee. The Finance Committee's responsibility is to review and make recommendations to the Board on financial strategies and policies that support the mission, values, and strategic goals of the Company. The Finance Committee regularly reports its decisions and recommendations to the Board.

Internal audit
Under the Israeli Act, the board of directors of a public company must appoint an internal auditor proposed by the audit committee.

The role of the internal auditor is to examine whether such public company's actions comply with the law, integrity and orderly business procedure. The internal auditor must not be an interested party or office holder, or a relative of any interested party or office holder, or a member or representative of the Company's external auditors. The Israeli Act defines the term "interested party" for such purposes so as to include a person who holds five per cent or more of the Company's outstanding share capital or voting rights, a person who has the right to appoint one or more directors or the general manager or any person who serves as a director or as the general manager. The Company's internal auditor is a certified accountant, nominated by the Audit Committee and approved by the Board. The internal auditor is invited to attend every meeting of the Audit Committee. The internal auditor performs an internal audit according to an annual plan that is based on a risk assessment that was conducted by the said internal auditor in the Company.

Corporate Governance
The Directors recognise the importance of sound corporate governance and intend that the Company will comply with the main provisions of the Combined Code and the QCA Guidelines insofar as they are appropriate given the Company's size and stage of development and insofar as is permitted by the Israeli Act. The Company also intends to comply with the applicable corporate governance requirements under Israeli law.



Last update: 10/07/2016