Extracted from Annual Report 2020
Sarine's shares were listed for trade on the SGX-ST on the 8th of April 2005.
The Company's corporate governance practices are described with specific reference to the Code. The Company has exercised its best efforts to adhere with the principles and guidelines of the Code. In the few cases, where the Company did not do so, the Company has explicitly specified the respective background, circumstances and reasons.
BOARD OF DIRECTORS
Principle 1: Board's Conduct of its Affairs
The Board of Directors of the Company (the "Board") is entrusted with the responsibility for the overall management of our Company. The Board's primary roles are: to (i) provide entrepreneurial leadership, and set strategic objectives, which should include appropriate focus
on value creation, innovation and sustainability; (ii) ensure that the necessary resources are in place for the Company to meet its strategic objectives; (iii) establish and maintain a sound risk management framework to effectively monitor and manage risks, and to achieve an appropriate balance between risks and Company performance; (iv) constructively challenge Management and review its performance; (v) instill an ethical corporate culture and ensure that the Company's values, standards, policies and practices are consistent with the culture; and (vi) ensure transparency and accountability to key stakeholder groups.
All directors are well aware of their professional and fiduciary duties and responsibilities as officers of the Company (including their duties of care and duties of trust). In particular, and in accordance with applicable law, directors who may be deemed as having a personal interest in any matter related to the Company, disclose such (actual or deemed) conflict of interest and recuse themselves from discussions and decisions involving such matters.
The Board is authorised to delegate some of its authorities to permanent or ad-hoc Board committees. The Board has thus established the Audit Committee, the Remuneration Committee, the Nominating Committee and the Executive Committee (the Executive Committee is, basically, an advisory committee and has no executive powers). The Board has also authorised its senior officers (during the period commencing as of January 1st, 2018) to issue shares upon the exercise of options under the Company's share option plans. Notwithstanding any delegation of powers as aforesaid, the Board remains responsible, at all times, to any acts or omissions of any of the Board committees.
In line with applicable law, the Board is entrusted with all matters related to the Company's share capital, assumes the responsibility for the approval of the Company's financial statements and sets the Company's goals and policies. The Board also appoints the CEO and oversees the performance of his duties.
Within this framework, the Board discusses and resolves any matters, which require the Board's approval under any applicable law (including, without limitation, interested persons' transactions) and/or any activities conducted pursuant to the guidelines set by the Board. In general, any material issue concerning Sarine (e.g. strategic planning, material research and development milestones, risk assessment and risk management, material market and/or business development issues, potential material transactions, substantial capital investments, etc.) is brought to the attention of the Board.
The Nominating Committee and the Board also consider multiple board representations of members of the Board, so to ascertain that Board
members have sufficient time and attention necessary for the exercise of their duties as directors (the Nominating Committee and the Board
have considered the directorship positions of Mr. Lim, Ms. Shine and Mr. Sin and are of the opinion that such do not interfere with their
service as independent directors of the Company).
The Board meets regularly and in any event no less frequently than five times every calendar year. The Company's Articles of Association
(the "Articles") and the Israeli Companies law allow the convening of meetings of the Board using conference calls or any other device
allowing each director participating in such meeting to hear all the other directors participating in such meeting. Since March 2020 to date all Board meetings were held by way of video conference (with management and certain Israeli directors attending at the Company's offices). Board materials and Committees' materials are disseminated to the members of the Board and to the members of the respective Board
Committees in a timely manner, prior to each meeting.
The attendance (in person or by designated alternate) of the directors in the Board meetings held in 2020 was as follows (in addition, a
written resolution was passed on one occasion):
The Management of the Company provides the Board with interim and periodical (quarterly/annual) financial reports (in line with the SGX
RegCo's announcement of 9 January 2020, the Company publishes semi-annual and annual financial statements, but the Board discusses
the Company's performance at least on a quarterly basis), budget control reports and additional financial and operational information.
The Board has separate and independent access to senior Management of the Company. Requests for information from the Board are
dealt with promptly. The Board is informed on all material events and transactions as and when they occur. Professional advisors (e.g.
with regard to securities-related matters, compliance, insurance, cyber-security, audit, etc.) may be appointed to advise the Board, or (in
special circumstances – as provided by Israeli law) any of its members, if the Board or any individual member thereof needs independent
professional advice (under Israeli law, the retention of an independent counsel by a director is subject to the Board or the court's approval, as applicable; when considering a director's request in this regard, the court will consider the adequacy of the advice rendered by the Board's counsel/s and the fees charged by an independent counsel, in view of the matter in question and the Company's financial situation).
The Board is involved in the appointment and removal of the Company secretary. The Company secretary (who also serves as an external
legal counsel to the Company) attends all Board and Board committees' meetings and is responsible for ensuring that Board procedures are
followed and for the recording of the minutes. Together with the Chairman and the Management, the Company secretary is responsible for
compliance with the applicable laws, rules and regulations in this regard.
During 2020 the entire Board was replaced/reelected (three independent directors retired and three new independent directors were elected; three non-independent directors and one independent director were re-elected). All but one of the newly elected independent directors had prior experience as directors in a publicly traded company listed on the SGX. The new independent director with no such prior experience attended the Singapore Institute of Directors' (SID) LED - listed entity director programme - as required under Rule 210(5) of the SGX Listing Rules (Mainboard). All Board members are instructed and advised, on an ongoing basis, with regard to their roles, responsibilities, powers and duties. Such orientation includes dissemination of written materials, prepared by the Company and its counsels, periodical updates with regard to legal and corporate governance developments affecting the Board and the directors, personal communication with the Company's secretary and ongoing discussions at Board meetings.
During Q1 2020 all new directors (then – candidates) attended an orientation programme conducted at the Company's premises – which
programme addressed issues such as (i) the Group's structure and activities; (ii) the directors' powers and duties; and (iii) accounting, legal and other industry-specifics aspects (as required).
The newly appointed Nominating Committee has started discussing a policy and criteria for directors' development (please see discussion
under Principle 4 below).
Principle 2: Board Composition and Guidance
The Nominating Committee of the Board, in its meeting of 5 January 2020, opined that the following general criteria should be applied to the Board of Directors composition:
- The Board should comprise 7 to 9 directors. The current structure (7 directors) is sufficient and effective. The Board may consider adding additional directors, on a case by case basis, giving proper weight to the potential contribution of the additional member/s vis-à-vis the effects on the effectiveness of the Board.
- The majority of the Board should be comprised of independent directors.
- The Board should be comprised of directors having appropriate expertise and experience in areas related to the operations of the Group. Specifically, if 7 directors, preferably three from the diamond industry, preferably from the various segments thereof (upstream production (mining), midstream polishing and wholesale trade, and downstream retail trade), preferably two with relevant technological background, at least one with accounting / financial review and reporting expertise and at least one with corporate governance expertise. If 9 directors, an additional one from the diamond industry and an additional one with relevant technological background.
- The Board should be gender diversified.
As of the date of this report, the Board comprises seven directors, the majority of who are independent (two of those directors, namely Ms. Neta Zruya-Hashai and Mr. Sin Boon Ann also qualify as "External Directors", under Israeli law) and six directors out of the seven are Non-Executive Directors. Thus the Board is able to exercise objective judgment, independently from Management and no individual or small group of individuals can dominate the decisions of the Board.
The Board is of the opinion that its current size is adequate. However, the Board may consider the addition of up to two additional directors in the future, optimally with strong technological and/or business development record, taking into account the optimal Board's size on the one hand, and the benefits of diversity and complementary expertise on the Board on the other hand.
The Board committees reflect an appropriate balance and mix of skills, knowledge, experience, and other aspects of diversity such as gender and age, so as to avoid groupthink and foster constructive debate.
Ms. Varda Shine has been appointed by the Annual General Meeting as the Lead Independent Director.
The Nominating Committee and the Board have reviewed the independence of each of the Company's independent directors and applied
the Code's definition (as well as the definitions of Israeli law) of independent director qualifications in its review.
As noted below (under the discussion re Principle 4), according to the Articles, each director shall serve, unless the Annual General Meeting appointing him or her provides otherwise, until the third Annual General Meeting following the Annual General Meeting at which such director was appointed, or his or her earlier resignation or removal pursuant to the provisions of the Articles. The current directors were elected in 2020 and are expected to serve until 2023. Therefore, the Nominating Committee has resolved that succession and Board diversity matters shall be discussed in 2021-2022, prior to the retirement of the current members of the Board.
Key information about the directors is detailed in the "Board of Directors" section of the Annual Report.
The directors of the Company in office at the date of this report are:
There are no permanent alternate directors (in the past alternate directors have been appointed in very few cases and only for specific
meetings; during 2020 no alternate director was appointed).
The Board draws from a broad spectrum of backgrounds, ages, genders, competencies and disciplines: from the diamond and gemstones
industry (including "upstream", "midstream" and "downstream" segments of the industry) the high-tech industry, the business community,
legal practice and management. As noted above, the Company is also considering seeking additional directors who will enrich and diversify
The Non-Executive Directors participate actively in developing strategy and in reviewing the performance of the Company.
The independent directors also meet without the presence of the Management of the Company, to the extent necessary or advisable.
Principle 3: Chairman and Chief Executive Officer
The Executive Chairman and the CEO of the Company are separate individuals. They are not related.
According to the resolution of the Board:
"The Company is of the view that a distinct separation of responsibilities between the Chairman and the CEO will indeed ensure an appropriate balance of power, increased accountability and greater capacity of the Board for independent decision making.
As the most senior executive in the Company, the CEO bears executive responsibility for the Company's day-to-day business according to
the policies set by the Board and subject to the Board's directives, and works with the Board on strategic planning, business development
and generally charting the growth of the Company.
The CEO shall report to the Board on a periodic basis and shall seek the Board's advice and consent.
The Chairman bears responsibility for the proper functioning of the Board and the Board's committees (and of the Non-Executive Directors
in particular), maintains on-going supervision over the Management of the Company and over the flow of information from the Company's
Management to the Board, and assists in promoting high standards of corporate governance and ensuring compliance with the Company's
guidelines of corporate governance.
The Chairman ensures that Board meetings are held when necessary and sets the Board meetings agenda in consultation with the CEO.
The Chairman ensures effective communication between the Board and the Company's shareholders."
Mr. Chan Kam Loon has served as the Company's Lead Independent Director and upon his retirement (in 25 June 2020), Ms. Varda Shine
has assumed such position.
The Board's Executive Committee (comprised of Messrs. Glinert and Levami and of Ms. Shine) meets regularly with the CEO to discuss
strategic matters. As noted above, the Executive Committee serves as an advisory committee only and as an interface between the CEO
and the Board.
Principle 4: Board Membership
According to the Articles, each director shall serve, unless the Annual General Meeting appointing him or her provides otherwise, until the third Annual General Meeting following the Annual General Meeting at which such director was appointed, or his or her earlier resignation or removal pursuant to the provisions of the Articles. A director who has completed his or her term of service or has been removed as aforesaid shall be eligible for re-election. The directors who qualify as "External Directors" may be removed from office only if they no longer qualify to serve as such.
The Nominating Committee comprises four directors, the majority of whom, including the Chairman, is independent. As at the date of this
Report, the Nominating Committee members are:
Our Nominating Committee is responsible for:
- the review of succession plans for directors, in particular the appointment and/or replacement of the Chairman, the CEO and key management personnel;
- the process and criteria for evaluation of the performance of the Board, its board committees and directors;
- the review of training and professional development programmes for the Board and its directors; and
- the appointment and re-appointment of directors (including alternate directors, if any).
In performing its duties, the Nominating Committee considers the considerations set forth in Principles 1 & 2.
The Nominating Committee determined, based on information provided to it by all independent directors, that all directors designated
as Independent Directors are indeed independent. The Nominating Committee also determined that all directors have been adequately
carrying out their duties as directors of the Company.
Based on the information provided to the Company by the members of the Board, the following directors hold the following directorship
positions in publicly traded companies and/or other commitments:
The Nominating Committee is of the view that all directors are able to and have adequately carried out their duties as directors of the
Company, notwithstanding such other directorships and/or principal commitments. With reference to Mr. Sin Boon Ann, the Company
noted that Mr. Sin retired from his former full-time positions as a Deputy Managing Director of the Corporate & Finance Department and
the Co-head of the Capital Markets Practice in Drew & Napier LLC. and as member of the Singapore Parliament. Hence, given Mr. Sin's
professional record, after having considered all aspects of Mr. Sin's directorship, e.g., his experience and expertise, his other positions in other corporations, the fact that the Company may even benefit from Mr. Sin's directorship in other corporations, given Mr. Sin's exposure to additional schools of thought and management, and his ability to share such any general insights gained from such positions (without sharing any non-public information, of course) with the Company, the Nominating Committee and the Board are of the opinion that Mr. Sin is able to diligently discharge his duties as a member of the Board in general and as an independent director in particular.
Principle 5: Board Performance
Our Nominating Committee decides how the Board's performance is to be evaluated and proposes objective performance criteria, subject to
the approval of the Board, which are used to assess the degree to which the Board enhances long-term shareholder value.
Each member of the Board evaluated the performance of the Board as a whole and the aggregate (and anonymized) results were submitted
to our Nominating Committee, who conducted a discussion based on same. The performance evaluation takes into consideration, among
other issues, the achievement of the Company's strategic goals and the actual participation and contribution of each director.
Given the unique Covid-19 effects and the fact that the current Board has been in office less than nine months, the Nominating Committee
resolved that a personal evaluation of each director shall be conducted in 2021.
Principle 6: Procedures for Developing Remuneration Policies
The Remuneration Committee comprises 5 directors, the majority of whom is independent. As at the date of this report, the Remuneration
Committee members are:
Our Remuneration Committee recommends to our Board of Directors a framework of remuneration for our directors and key executives
and recommends specific remuneration packages for each Executive Director and the CEO. All aspects of directors' and key executives'
remuneration, including but not limited to directors' fees, salaries, allowances and bonuses, options and benefits in kind are dealt with by our Remuneration Committee. The Remuneration Committee and the Board rely, among other things, on periodical remuneration surveys
conducted by independent Israeli remuneration experts (such as Zviran Compensation and Benefits Solutions). Each member of our
Remuneration Committee shall abstain from voting on any resolutions in respect of his/her remuneration package. The remuneration of our
independent directors, who are deemed also as "External Directors" according to the provisions of the Israeli Companies, is also subject to
the limitations set by Israeli law.
The Company's overall remuneration policy and specific remuneration packages for the directors and key executives were presented to the
General Meeting and approved by it at the Annual General Meeting held on 30 April 2019. In this year's Annual General Meeting the General
Meeting will be requested to approve the Company's new remuneration policy and specific remuneration packages for the directors and key
executives. Please see the Notice of Annual General Meeting for further details.
Principle 7: Level and Mix of Remuneration
The Company's remuneration policy is tailored to the specific role and circumstances of each of the directors and key management personnel, so as to ensure an appropriate remuneration level and mix that recognises the performance, involvement, potential and responsibilities of these individuals.
A certain portion of the officers' and the executive directors' remuneration is performance-related and takes account of the Company's
medium-term and long-term Key Performance Indicators (KPIs).
The Company has in place an Employee Share Option Plan that serves to provide a longer-term incentive better aligned with long-term
performance of the Company and of the directors, officers and employees.
Since its listing on the SGX-ST, the Company had been granting share options to its employees under its 2005 Share Option Plan (the "2005 Plan"). The 2005 Plan is described in the Company's prospectus and a copy thereof is attached to the said prospectus. Following the expiry of the 2005 Plan, the Company's General Meeting, held on 20 April, 2015 approved a new Share Option Plan, substantially similar to the 2005 Plan (the "2015 Plan"). The Board of Directors has set guidelines concerning, among other things, eligibility to receive share options (based on performance and time of service with the Company), vesting periods (typically over four years from the date of grant) and the minimum and maximum amounts of share options to be granted (based on seniority and expertise). Executive Directors, senior officers and key employees are also granted performance-based options, to be vested over two-four years, based upon the achievement of business goals.
The Company's performance-based equity grants include contractual provisions allowing the reclaiming of incentive components of
remuneration from executive directors and from officers in cases of misstatement of financial results.
The Executive Directors's remuneration package and the key Management personnel's remuneration framework are structured in a way that
links rewards to corporate and individual performance. Cash bonuses and share options are linked, to a great extent, to the achievement of
the Company's strategic goals.
The review of remuneration packages also takes into consideration the pay and employment conditions within the industry (in this context
– the Israeli high-tech industry, which is highly competitive) and the long-term interests of the Group. The review covers all aspects of
remuneration including salaries, fees, allowances, cash bonuses and share options.
The Remuneration Committee's recommendations are submitted for endorsement by the entire Board, and, where required under law, are
also brought to the shareholders' approval.
Remuneration of independent directors is set according to the applicable laws and regulations and at a level commensurate with their prior experience and level of responsibility, after taking into account industry benchmarks.
The Company believes that the current remuneration of independent directors is at a level that will not compromise the independence of
It should be noted, that the two Non-Executive Directors are also shareholders of the Company (holding between 3% to 4% of the Company's
Further information about the Company's current remuneration policy may be found in the Company's 2018 Annual Report. Further
information about the Company's proposed remuneration policy may be found in the Notice of General Meeting.
Principle 8: Disclosure of Remuneration
The remuneration (including performance cash-based incentives and non-cash option compensation) paid and accrued by us and our
subsidiaries to each of our directors, our CEO and our top five (in terms of amount of remuneration) employees (not being directors) for
services rendered to us in all capacities during 2020, were as follows:
The aggregate remuneration paid to the top five key Management personnel (who are not directors or the CEO) for the year ended 31
December 2020 was S$ 1,787,000 (including the aggregate fair value of non-cash option compensation).
Any future arrangements concerning the remuneration of our directors and CEO shall be brought to the approval of our Remuneration
Committee, Board of Directors and General Meeting. The Company's General Meeting, scheduled for 27 April 2021, will be requested to
approve the new remuneration policy as well as the remuneration of our directors and CEO for the years 2021 through 2023.
Any future arrangements concerning the remuneration of our key executives shall be brought to the review of the Remuneration Committee
and Board of Directors.
Incentive-based compensation which is linked to the Company's business results is based on audited financial results and may be corrected after the fact (and duly reimbursed by the beneficiary), if subsequent audits find errors which call for restatements of results.
During 2020, all share options granted under the 2015 Plan were granted at the Market Price (as such term is defined in the 2015 Plan).
Further details with regard to the options granted by the Company may be found in the "Directors Report" section of the annual report.
The Company has no employees who are immediate family members of a director or the CEO (and by extension, none whose remuneration
exceeded S$ 100,000 during the year).
None of the Company's agreements with its Executive Directors and/or key employees include any overly generous termination-related
clauses. Except as required by law, the Company does not grant long termination notice periods and/or any other termination-related benefits.
No directors participate in decisions on their own remuneration.
Principle 9: Accountability and Audit, Risk Management and Internal Controls
The Board is accountable to the Company's shareholders. The Board provides the shareholders with periodical, and to the extent necessary
and/or required – immediate, reports with regard to the business, financial and other aspects of the Company's activities.
The Company also invests substantial efforts in maintaining and securing sustainable growth and operations, while serving the interests
of its Shareholders. The Company integrates sustainability considerations into its strategy and its operations by actively engaging with the local communities in which it operates, taking responsibility for the life cycle of the Company's products and putting its people at the heart of its priorities.
The Audit Committee and Management have mapped and analysed the Group's risks and have compiled a matrix of risks pertaining to the
Group's business and performance, financial management, information technology (IT) cyber-security and regulatory compliance issues,
delineating the severity of their potential negative impairment to the Group and their probability of being realised. Thus, a comprehensive
weighted prioritised risk factor list has been derived. The Audit Committee has reviewed the Company's internal controls and their adequacy
at addressing the aforementioned risks in general. The Audit Committee has engaged the services of the Internal Auditor for in-depth
analyses of key issues on a routine basis. The Group's matrix of risks will again be revisited by the Internal Auditor in 2021.
Since 13 November 2018 the Company has commenced releasing annual Sustainability Reports. The Company's most recent Sustainability Report was released on 25 May 2020 and the current Sustainability Report is in preparation and will be released in May 2021, as required.
The Board takes adequate steps to ensure compliance with legislative and regulatory requirements, including requirements under the listing rules of the securities exchange.
The Management provides the Board with management accounts regarding the Company's performance. Such accounts are provided on a
periodical basis (and when needed - as warranted by the circumstances), to enable the Board to make a balanced and informed assessment
of the Company's performance, position and prospects.
The Board, with the assistance of the Audit Committee, reviews, on an ongoing basis and at least annually, the adequacy and effectiveness of the Company's risk management and internal control systems.
The Audit Committee and Board are of the opinion, upon consultation with the Company's CEO, the Company's CFO, the Company's External
Auditors and the Internal Auditor of the Company, that:
- the Company's financial records have been properly maintained and the financial statements give a true and fair view of the Company's operations and finances; and
- the Internal Control procedures and risk management of the Group are adequate.
Principles 10: Audit Committee
The Audit Committee comprises four directors, all of whom are independent. As at the date of this Report, the Audit Committee members
The members of our Audit Committee possess vast and diverse accounting, financial, commercial and legal expertise and experience.
Ms. Netz Zruya-Hashai has served as an Audit Partner at Price Waterhouse Coopers (PWC) Israel, commencing 2000, of which over 7
years as a partner, and audited firms from various sectors (biotech and life sciences, industrial, retail, finance and holding companies) in accordance with IFRS, US GAAP and US / Israel SOX standards (Price Waterhouse Coopers (PWC) Israel did not provide any audit services
to the Company since its listing). She holds a BA in Accounting and Communications and an MBA in Finance Management, both from Tel
Aviv University, and is a Certified Public Accountant (Israel). Mr. Lim Yong Sheng is the Group Chief Executive Officer of SK Jewellery Group Ltd., a leading Singaporean retail jewellery chain with over 60 branches across Singapore, China, Malaysia and Thailand (SK Jewellery Group Ltd. was listed on the SGX Main Board until 2020). Ms. Varda Shine has over 30 years of experience in the production and wholesale trade of rough diamonds, as well as in the retail trade of polished diamonds and has been an Independent Director of the Group since 2017 and Mr. Sin Boon Ann has retired in 2018 from Drew & Napier LLC, after more than 25 years. Prior to his retirement in 2018, he was the Deputy Managing Director of the Corporate & Finance Department and the Co-head of the Capital Markets Practice in Drew & Napier LLC.
Further details with regard to expertise and experience of the members of our Audit Committee may be found in the "Board of Directors"
section of the Annual Report.
Our Audit Committee assists our Board in discharging its responsibility to safeguard our assets, maintain adequate accounting records
and develop and maintain effective systems of internal control, with the overall objective of ensuring that our Management creates and
maintains an effective control environment in our Company, in consultation with the Internal Auditor. Under its terms of reference, our Audit Committee may seek any information it requires from any employee, and all employees are directed to co-operate with any requests made
by our Audit Committee. Our Audit Committee also provides a channel of communications between our Board, our Management and our
Internal and External Auditors on matters relating to audit.
The Audit Committee meets periodically and performs the following functions:
- reviews the significant financial reporting issues and judgements so as to ensure the integrity of the financial statements of the Company and any announcements relating to the Company's financial performance.
- reviews at least annually the adequacy and effectiveness of the Company's internal controls and risk management systems;
- reviews the assurance from the CEO and the CFO on the financial records and financial statements;
- makes recommendations to the Board on: (i) the proposals to the shareholders on the appointment and removal of external auditors; and (ii) the remuneration and terms of engagement of the external auditors;
- reviews the adequacy, effectiveness, independence, scope and results of the external audit and the Company's internal audit function; and
- reviews the policy and arrangements for concerns about possible improprieties in financial reporting or other matters to be safely raised, independently investigated and appropriately followed up on.
Based on the review of the External Auditors' credentials and their registration with and reporting to the Public Company Accounting
Oversight Board (PCAOB), a member of the International Forum of Independent Audit Regulators, independent of the accounting profession
and directly responsible for the system of recurring inspection of accounting firms, the Board and the Audit Committee have confirmed the
External Auditors' suitability and their ability to meet their audit obligations. The Board and the Audit Committee further satisfied themselves that the external audit firms possess the adequate resources, experience and expertise and that the audit engagement partners and the supervisory and professional staff assigned to the particular audit possess the necessary skills and experience required for such task.
Apart from the duties listed above, our Audit Committee communicates and reviews the findings of internal investigation into matters where there is any suspected fraud or irregularity, or failure of internal controls or infringement of any law, rule or regulation which has, or is likely to have, a material impact on our Company's operating units and/or financial position.
The Audit Committee has the authority to investigate any matters within its terms of reference and the discretion to invite any director to attend its meetings. The Management fully cooperates with the Audit Committee and provides it with resources to enable it to discharge its functions properly.
The Audit Committee meets with the Internal and External Auditors several times annually to review the adequacy of audit arrangements,
with particular emphasis on the scope and quality of their audits, and the independence and objectivity of the Internal and External Auditors. Where necessary, the Audit Committee meets with the External and/or the Internal Auditors without the presence of Management.
The Company supports whistle blowing. Employees may raise concerns about possible improprieties in financial reporting or other matters.
Upon receipt of a concern, independent investigation and appropriate follow up action will be taken. So far no matters were raised by whistle blowers.
Based on the recommendations of the Audit Committee, the Board of Directors appointed, in August 2009, Mr. Doron Cohen, CPA, CIA, of
Fahn Kanne Control Management, Ltd., subsidiary of Fahn Kanne and Co., Certified Public Accountants (Isr.) (member firm of Grant Thornton
International) – a reputable auditing firm, as the Internal Auditor of the Company. The Internal Auditor carries out his functions according to the standards set by internationally recognised professional bodies. The role of the Internal Auditor is to independently examine, among other things, whether our activities comply with the law and orderly business procedures. Our Internal Auditor submits his work plans to the prior approval of the Audit Committee and presents his findings to the Audit Committee and to the Board of Directors. The Internal Auditor reports to the Chairman of the Audit Committee and the Chief Executive Officer of the Company. According to Israeli law, the Board appoints and removes the Internal Auditor, based on the Audit Committee's recommendations. The Internal Auditor's compensation is set by the Audit Committee. The Company cooperates fully with the Internal Auditor in terms of allowing access to documents and information and the Internal Auditor has unfettered access to all the Company's documents, records, properties and personnel, including access to the Audit Committee.
The Audit Committee reviews annually the adequacy and effectiveness of the internal audit function and is of the opinion that the internal audit function is independent, effective and adequately resourced.
The External Auditors of the Group are Somekh Chaikin Certifed Public Accountants (Isr.), member firm of KPMG International (partner in
charge, Guy Anavi, appointed with effect 1 January 2019) and Chaikin, Cohen, Rubin and Company (partner in charge, Dani Aviram, appointed
with effect 1 January 2017). The Group engages a suitable auditing firm, BSR & Co. LLP, member firm of the KPMG network of independent
member firms affiliated with KPMG International, for the statutory audit of its significant foreign-incorporated subsidiary, namely Sarin
Technologies India Private Limited.
The Audit Committee is updated periodically (and at least annually) on any changes in accounting standards by the External Auditor.
No former partner or director of the Company's auditing firm has acted as a member of the Company's Audit Committee.
The Company has complied with Rule 712 and Rules 715/716 of the Listing Manual.
The Company has paid to its External Auditors an aggregate amount of US$ 301,000 for services rendered in 2020, out of which amount, US$
217,000 (approximately 72%) were paid as audit fees, US$ 41,000 (approximately14%) were paid for other audit related services, US$ 43,000
(approximately 14%) were paid as tax fees and US$ nil (0%) were paid for travel expense reimbursement.
The Audit Committee confirms that it has undertaken a review of all non-audit services provided by the External Auditors and is satisfied that given the scope and nature of the non-audit related services, such services should not, in the Audit Committee's opinion, affect the independence of the External Auditors.
Principles 11, 12 & 13: Shareholder Rights and Engagement; Shareholder Rights and Conduct of General Meetings;
Engagement with Shareholders and Stakeholders
The Company treats all shareholders fairly and equitably in order to enable them to exercise shareholders' rights and have the opportunity to communicate their views on matters affecting the company. The Company gives shareholders a balanced and understandable assessment of its performance, position and prospects.
All shareholders of the Company are provided with the Annual Report and notice of the convening of the Annual General Meeting. At the
Annual General Meeting shareholders are given the opportunity to air their views and ask directors or Management questions regarding the
Company. The Company's announcements and policies ensure that shareholders are informed of the rules, including voting procedures, that
govern general meetings of shareholders and have the opportunity to participate effectively in and vote at general meetings of shareholders.
The Company tables separate resolutions at general meetings of shareholders on each substantially separate issue unless the issues are
interdependent and linked so as to form one significant proposal. Where the resolutions are "bundled", the Company explains the reasons
and material implications in the notice of meeting.
The Company's results are published through the SGXNET and news releases. The Company does not practice selective disclosure.
Price-sensitive information is first publicly released, before the Company meets with any group of analysts. Results and annual reports
are announced or issued within the mandatory period. The Company also provided corporate presentations with any quarterly financial
statements which were published.
The Company's Chairman and senior Management meet and discuss results, business conditions, prospects, etc., periodically with analysts
and investors, and presentations made by the Company in such events are generally shared with the public at large.
The Company has a dedicated investor relations team, composed of an in-house team in Israel and of consultants and service providers in
Singapore and the USA.
The Company's dividend policy is communicated to the shareholders in the Company's Annual Reports.
The Articles were amended in 2015, so as to allow a member of the Company to appoint more than two proxies to attend and vote instead of
such member. Voting in absentia is also allowed.
Through its meetings with investors, analysts and shareholders, the Company gathers information, views and inputs and addresses
The Company's website offers the Company's shareholders an abundance of information and means of communication with the Company.
The Company's Lead Independent Director is accessible to shareholders, who may also contact her directly (and not through the Company).
The Board and the Management periodically map and identify the Group's material stakeholders, as part of the Group's overall responsibility. Such matters are also discussed in the Company's Annual Report and Sustainability Report.