Investor Relations.

Trendlines shares were listed for trade on SGX on 26 November 2015

For full information on our Corporate Governance, see the FY2021 Annual Report.

The Trendlines Group Ltd. (the “Company” or the “Group”) recognizes the importance of corporate governance and the offering of high standards of accountability to the shareholders of the Company. Good corporate governance establishes and maintains a legal and ethical environment in the Group to protect the interests of the shareholders and to maximize long-term shareholders’ value.

The Company has implemented the Code of Corporate Governance and the accompanying Practice Guidance (the “2018 Code”), subject however to compliance with the various corporate governance requirements under the Israeli Companies Law (the “Israeli Companies Law”) with which the Company, as a company incorporated in Israel whose shares are publicly traded on a stock exchange, is required to comply.

The Board of Directors of the Company (the “Board”) comprises two Executive Directors and six Non-Executive Directors, out of which five are Independent Directors. The Board have the appropriate core competencies and diversity of experience to enable them, in their collective wisdom, to contribute effectively to the Group.

The Independent Directors are also the non-executive Directors of the Company. They come from different professions and working backgrounds, bringing their wealth of knowledge, business expertise and contacts in the business community to the Company, and play an important role in helping the Company to shape its business strategy by allowing the Company to draw on their diverse backgrounds and working experience.

Additionally, under Israeli Companies Law, shareholders of public companies must elect, by a disinterested majority (as defined under the Israeli Companies Law), at least two members of the Board who qualify as “External Directors” under the Israeli Companies Law. External Directors must meet certain standards of independence at the time of their appointment and during the two-year period prior to their appointment. Under Israeli Companies Law, at least one of the External Directors must have “accounting and financial expertise” and the rest of the External Directors must have either “professional competence” or “accounting and financial expertise”.

Under the Israeli Companies Law and its regulations, a company’s CEO may serve as the chair of the board of directors of such a company, subject to the required approvals, including shareholders’ approval with a special majority, to be renewed following a period of 5 years as of the date on which the Company’s shares were first offered to the public, and thereafter every 3 years, as required under the Israeli Companies Law and its regulations.

Because the CEOs, Messrs. David Todd Dollinger and Stephen Louis Rhodes, also serve as Chairs of the Board as detailed above, and thereby are not considered Independent Directors, the Company is required under the 2018 Code to designate an Independent Director to serve as Lead Independent Director. The Company has appointed Ms. Elka Nir to serve as its Lead Independent Director. The Lead Independent Director is available to the shareholders where they have concerns and for which contact through the normal channels of the Chairman and CEO or the Chief Financial Officer (or equivalent) has failed to resolve or is inappropriate or inadequate.

Matters reserved for the Board’s decision are specified in detail under the Israeli Companies Law and the Company’s Articles of Association (the “Articles”), which provide that the Company’s business and affairs are managed under the direction and oversight of the Board, which may exercise all powers and may take all actions that are not specifically granted to the shareholders or to any other organ of the Company. The Board determines the Company’s policy and supervises the performance of the Chief Executive Officers’ (the “CEOs”) duties and actions and is authorized, amongst other things, to:

• determine the Company’s business plans, principles for funding them and the priorities between them;
• review the financial status and determine the credit the Company is authorized to obtain;
• determine the Company’s organizational structure and remuneration policy;
• resolve to issue a series of debentures;
• report to the Company’s shareholders on the status of the Company’s affairs and the results of its business operations at its annual general meetings (“AGM”);
• appoint and remove the CEO(s);
• resolve whether to approve (or disapprove) certain transactions, which require the approval of the Board under the Israeli Companies Law or the Articles;
• issue securities and securities convertible into shares up to the limit of the Company’s authorized share capital;
• resolve to effect a distribution in accordance with the Israeli Companies Law;
• provide the Company’s opinion in respect of a special tender offer as stipulated in the Israeli Companies Law; and
• determine the minimum number of Directors who should have accounting and financial expertise.

Apart from the matters that specifically require the Board’s approval as set forth above, the Board approves certain transactions of the Group exceeding certain threshold limits, while delegating authority for transactions below those limits to the Group’s management and/or the Group’s investment committees to optimize operational efficiency.

Our Board of Directors has established three (3) committees, namely, the Audit Committee, the Remuneration Committee, and the Nominating Committee.

These Board Committees have been constituted with clearly written terms of reference setting out the basic guiding principles for the establishment and activities of the respective Board Committees. Each Board Committee reviews and re-assesses the adequacy of its applicable terms of reference on an annal basis and submits such evaluation, including any recommendations for change, to the Board for consideration, review, discussion and approval. The Chairman of the respective Board Committees will report to the Board on the outcome of the Committee meetings and their recommendations on the specific agendas mandated to the Committee by the Board. The Board is ultimately responsible for the final decision on all matters.

In accordance with the Israeli Companies Law, every Director by virtue of his or her office occupies a fiduciary position with respect to the Company. A Director is not permitted to place him or herself in a situation where his or her interests conflict with his or her duty. If a director knows that he or she has a personal interest in an existing or proposed transaction of the Company, then he or she must disclose to the Company the nature of his personal interest, including any material fact or document.

The Audit Committee composition is in compliance with the Israeli Companies Law following the election of the External Directors.

The Audit Committee is comprised of four Directors, all of whom, including the Chair, are Independent Directors who do not have any management and business relationships with the Company or any substantial shareholder of the Company. The Audit Committee includes the Company’s External Directors.

At its current composition, the Audit Committee comprises members who are appropriately qualified, having relevant accounting or related financial management expertise and experience to discharge the authority and duties delegated by the Board to the Audit Committee.

None of the Audit Committee members were previous partners or directors of the Company’s external audit firm within the last twenty-four months and none of the Audit Committee members hold any financial interest in the external audit firm.

The authority and duties delegated by the Board to the Audit Committee are detailed in written terms of reference approved by the Board, and include, inter alia:

• Reviewing and recommending to the Board the approval of the Company’s half-yearly and annual financial statements and related management’s discussion and analysis;
• Recommending to the Board and overseeing the external auditors of the Company, including reviewing the scope and results of the external audit, and the independence and objectivity of the external auditors;
• Making recommendations to the Board on the proposals to the shareholders on the appointment, re- appointment and removal of the external auditors, and approving the remuneration and terms of engagement of the external auditors;
• Reviewing the relevance and consistency of the accounting standards, the significant financial reporting issues, recommendations and judgments made by the external auditors so as to ensure the integrity of the financial statements of the Group and any announcements relating to the Group’s financial performance;
• Pre-approving all audit and non-audit services to be provided to the Group by the external auditors;
• Identifying deficiencies in the administration of the Company (including reviewing and reporting to the Board at least annually the adequacy and effectiveness of the Group’s internal controls, including financial, operational, compliance and information technology controls (such review can be carried out internally or with the assistance of any competent third parties), and recommending remedial actions with respect to such deficiencies;
• Reviewing the effectiveness and adequacy of the Group’s internal audit function;
• Reviewing the system of internal controls and management of financial risks with the internal and external auditors;
• Reviewing the cooperation of the Company’s management with the external auditors and the internal auditors (without the presence of management), where applicable, and at least annually;
• Reviewing the Group’s compliance with such functions and duties as may be required under the relevant statutes or the Catalist Rules, including such amendments made thereto from time to time;
• Reviewing of hedging policies and instruments to be implemented (if any);
• Reviewing and approving interested person transactions and review procedures thereof;
• Reviewing potential conflicts of interest (if any) and to set out a framework to resolve or mitigate any potential conflicts of interests;
• Reviewing the risk management framework, with a view to providing an independent oversight on the Group’s financial reporting, the outcome of such review to be disclosed in the annual reports or, where the findings are material, to announce immediately via SGXNET;
• Investigating any matters within its terms of reference;
• Reviewing the policy and arrangements by which the staff and any other parties may, in confidence, raise concerns about possible improprieties in matters of financial reporting and ensuring that arrangements are in place for the independent investigations of such matter and for appropriate follow-up;
• Administering and overseeing the implementation of the Disclosure and Insider Trading Policy, the Whistle Blowing Policy, the Anti-Bribery Policy, and any other corporate policy as may be adopted by the Company;
• Undertaking such other functions and duties as may be required by statute or the Catalist Rules, and by such amendments made thereto from time to time; and
• Reviewing assurance from the CEO and CFO on the financial records and financial statements. In addition, under the Israeli Companies Law, the Audit Committee is required, amongst other things, to:
• Identify deficiencies in the administration of the Company (including by consulting with the internal auditor or the external auditors of the Company), and recommend remedial actions with respect to such deficiencies;
• Determine with respect to transactions with related parties, including office holders and the controlling shareholder (if any), if such transactions are substantial actions (i.e. an action that is likely to materially affect the Company’s profitability, assets or liabilities) or extraordinary transactions (i.e. a transaction that is not in a Company’s ordinary course of business, not on market terms or that is likely to have a material impact on the Company’s profitability, assets or liabilities) and may determine once a year, in advance, criteria for such determination;
• Determine with respect to extraordinary (and non-extraordinary) transactions with the controlling shareholder, the requirement to conduct a competitive procedure, or other procedures to be conducted prior to entry into such transactions;
• Review and approve or disapprove certain related-party transactions;
• Determine the procedure for approval of transactions with the controlling shareholder, which are not negligible transactions;
• Where the Board approves the working plan of the internal auditor, examine such working plan before its submission to the Board and proposing amendments thereto;
• Examine the internal audit controls and internal auditor’s performance, including whether the internal auditor has sufficient resources and tools to fulfil his responsibilities;
• Examine the scope of the external auditor’s work and compensation and submit recommendations with respect thereto to the Board or general meeting, depending on which of them is considering the remuneration of the external auditor; and
• Adopt procedures with respect to processing employee complaints in connection with deficiencies in the administration of the Company, and the appropriate means of protection afforded to such employees.

Apart from the duties listed above, the Audit Committee shall commission and review the findings of internal investigations into matters where there is any suspected fraud or irregularity, or failure of internal controls or suspected infringement of any Israeli law, rule or regulation which has or is likely to have a material impact on the Group’s operating results and/or financial position.

The Audit Committee shall also commission an annual internal control audit until such time as the Audit Committee is satisfied that the Group’s internal controls are robust and effective enough to mitigate the Group’s internal control weaknesses (if any). The Company has established and maintains on an ongoing basis, an effective internal audit function that is adequately resourced and independent of the activities it audits.

The Nominating Committee comprises five Directors, a majority of whom are Independent Directors, including the Nominating Committee Chair. The Lead Independent Director is a member of the Nominating Committee.

The Nominating Committee is established, inter-alia, for the purposes of ensuring that the Company has a formal and transparent processes for all Board appointments, performance evaluation and professional development.

The authority and duties delegated by the Board to the Nominating Committee are detailed in written Terms of Reference approved by the Board, and include, inter alia:

• Developing corporate governance guidelines and principles for the Company;
• Identifying individuals qualified for nomination to the Board and reviewing and recommending the nomination or re-nomination of the Directors, with regard to the Director’s contribution and performance;
• Considering the structure and composition of the Board and Board Committees;
• Evaluating the performance and effectiveness of the Board, the Board Committees and each of their members;
• Succession planning, including the appointment recommendations of Directors, Chairs and CEO and senior management;
• Training and professional development program for Board members;
• determining on an annual basis whether or not a Director is independent or whether an individual qualifies as an external director in accordance with the Israeli Companies Law; and and the 2018 Code;
• reviewing and approving any new employment of related persons and the proposed terms of their employment, subject to the requirements under Israeli law; and
• Recommending from time to time to the Board concerning such other matters, including matters related to corporate governance, as appropriate.

Each member of our Nominating Committee will not take part in determining his or her own re-nomination or independence and shall abstain from voting on any resolutions in respect of the assessment of his or her performance or re-nomination as a Director. In the event that any member of our Nominating Committee has an interest in a matter being deliberated upon by our Nominating Committee, he or she will abstain from participating in the review and approval process relating to that matter.

Under the Israeli Companies Law, a public company must have a Remuneration Committee comprised of at least three directors, including all the external directors who must be the majority members and one must serve as the Chair of the committee. All remaining members must receive remuneration for their service as Directors of the Company, in accordance with the regulations under the Israeli Companies Law governing the remuneration of the external directors.  The  Remuneration Committee must  not  include  the  Chair (or  Chairs) of the Board,  any  controlling  shareholder  or a relative of a controlling shareholder or any director employed by the Company or by the Company’s controlling shareholder or by an entity under the control of the Company’s controlling shareholder, or a Director who provides services, on a regular basis, to the Company, to its controlling shareholder or to any entity under the control of such controlling shareholder, as well as any Director whose principal livelihood derives from the Company’s controlling shareholder. Our remuneration committee is comprised of three Directors, all of whom are Independent Directors, including the Remuneration Committee Chair.

The authority and duties delegated by the Board to the Remuneration Committee are detailed in written terms of reference approved by the Board, and include, inter alia:

• Reviewing and making recommendations to the Board with respect to the approval of the compensation policy with respect to the terms of office and employment of office holders and any extensions thereof;
• Periodically reviewing the implementation of the compensation policy and providing the Board with recommendations with respect to any amendments or updates thereto;
• Reviewing and resolving whether or not to approve arrangements with respect to the terms of office and employment of office holders;
• Determining whether or not to exempt a transaction with a candidate for CEO from shareholders’ approval because such approval would preclude the engagement with such a candidate, provided that such transaction is consistent with the compensation policy;
• Overriding a determination of the shareholders in relation to certain compensation related issues, subject to the approval of the Board and under special circumstances, such as, the approval of the Company’s compensation policy, after such compensation policy was reconsidered by the Remuneration Committee and on the basis of detailed reasons, the Remuneration Committee and thereafter the Board determined that the adoption of the compensation policy is in the best interests of the Company despite the objection of the shareholders;
• The establishment of key human resources and compensation policies, including all incentive and equity- based compensation plans;
• Evaluating the Company’s executive and senior management; and
• Recommending to the Board a framework of remuneration for the Directors and other office holders, including KMPs, and determining specific remuneration packages for each Director and office holder, including, without limitation, directors fees, salaries, allowances, bonuses, benefits in kind, pension rights, compensation payments (including any compensation payable for loss or termination of office, service or appointment), incentive payments, options and share-based incentives and awards.

In addition, the Remuneration Committee will perform an annual review of the remuneration of both employees who are substantial shareholders of the Company and employees related to the Directors and/or substantial shareholder of the Company (as defined in the Catalist Rules) to ensure that their remuneration packages are fair and reasonable and in line with the Company’s staff remuneration guidelines and commensurate with their respective job scopes and level of responsibilities. The Remuneration Committee will also review and approve any bonuses, pay increases and/or promotions for these employees.

The Company encourages shareholders’ participation at the general meetings of its shareholders. All shareholders are entitled to attend and vote at general meetings in person or by proxy. The rules including the voting procedures are set out in the notice of general meetings, which are dispatched to shareholders via the SGXNet and on the Company’s website. A polling agent is appointed by the Company for general meetings who will explain the rules, including the voting procedures, that govern the general meetings of shareholders. All polling procedures are scrutinized by an independent scrutineer.

Being committed to good corporate practices, the Company treats all its shareholders fairly and equitably. To facilitate the exercise of shareholders’ rights, the Company ensures that all material information relating to the Group and its financial performance is disclosed in an accurate and timely manner via the SGXNet.

The Company ensures that its shareholders are notified of all material information in an accurate and timely manner. The Company’s unaudited, half-yearly and annual results are announced within the mandatory period prescribed by the Catalist Rules. The financial statements and other materials presented at the Company’s general meetings, including material and price-sensitive information, are disseminated, and publicly released via the SGXNet on a timely basis. All shareholders receive the annual report of the Company and the notice of the Company’s AGMs, which is also made publicly available in the press and released via the SGXNet. Shareholders and investors may contact the Company or access information regarding the Company on its website which provides, inter alia, corporate announcements, press releases, the latest financial results and presentations as released by the Company on the SGXNet, and contact details of its investor relations service provider.

Anti-Discrimination Policy

The Trendlines Group is committed to work environments free from discrimination, harassment, and retaliation. As an organization with innovation at its heart, we believe that innovation cannot thrive in an atmosphere that allows discrimination or harassment of any kind. Trendlines stands opposed to all forms of discrimination, harassment, and retaliation.

Discrimination occurs when someone is treated differently or unfairly based on a characteristic such as race, color, religion, national origin, age, sex, gender identity, marital status, sexual orientation, disability, or other personal characteristics.

Harassment creates a hostile work environment that interferes with an individual’s work performance. This includes, but is not limited to, offensive comments, jokes, slurs, physical assault, intimidation, or any other such behavior.

Retaliation is action taken against an individual in response to that person’s participation in a protected activity, such as complaining about discrimination or harassment.

Trendlines’ anti-discrimination policy extends to all employees, portfolio companies, contractors, consultants, and to all aspects of employment, including recruitment, hiring, training, promotion, compensation, benefits, and termination. This policy applies to all aspects of our business, extending to our investment decisions in new portfolio companies and our participation in subsequent funding rounds.

The Trendlines Group is committed to promoting a positive and respectful work environment for all and will act to prevent and address discrimination in our organization and beyond. We strive to ensure that none of our employees, consultants, suppliers, and portfolio companies discriminate in any way.

For any reports on discrimination, harassment, or retaliation, please contact Elka Nir, Lead Independent Director, The Trendlines Group at elka@trendlines.com.

The Board Diversity Policy addresses the balance of gender, skills and experience, and any other relevant aspects of diversity, to enhance and strengthen the quality of the Board’s composition and contribution to the Group.

With a view to achieve a sustainable and balanced development, the Company sees diversity at the Board level as an essential element in supporting the attainment of its strategic objectives and its sustainable development. In designing the Board’s composition, Board diversity has been considered from a number of aspects included: gender, age, nationalities, ethnicity, cultural background, educational background, experience, skills, knowledge, independence, and length of service.

The Nominatiion Committee (“NC”) will monitor the implementation of the Board Diversity Policy and report annually, in the Corporate Governance Report, on the Board’s composition under diversified perspectives, and monitor the implementation of the Board Diversity Policy.

Under Israeli Companies Law, at least one of the External Directors must have “accounting and financial expertise” and the rest of the External Directors must have either “professional competence” or “accounting and financial expertise”. The conditions and criteria for a director qualifying as having accounting and financial expertise or professional competence are set out in regulations adopted under the Israeli Companies Law.

The Board is responsible for determining the minimum number of Directors, who should have accounting and financial expertise. In determining the number of Directors required to have accounting and financial expertise, the Company’s Board must consider, amongst other things, the type and size of the Company, the scope and complexity of its operations and the number of its Directors. The Board has determined that at least two of the Directors must possess accounting and financial expertise as defined under Israeli Companies Law.

Under Israeli Companies Law, a public company must appoint at least one director of each gender. The Board has three female members out of the eight members.

The NC and the Board are cognizant of the recommendations as set out under Provision 2.4 and Practice Guidance 2 of the 2018 Code and are of the view that the above-mentioned practices adopted by the Company is consistent with the intent of Principle 2 of the 2018 Code. The Board aims to have an appropriate mix of members with complementary skills, core competencies and experience for the Company as required by the 2018 Code, regardless of gender. The Board’s current composition includes members with a diversity of gender and skills, including accounting and finance expertise, business acumen, management experience, industry knowledge, strategic planning experience and familiarity with regulatory requirements and knowledge of risk management. The Board is mindful that diversity is not specific to gender or certain personal attributes and would strive to ensure the diversity would enhance the long-term success of the Group. The objective of the policy is to avoid groupthink and foster constructive debate and ensure that composition is optimal to support the Group’s needs in the short and long term.

The Board considers that its current Directors possess the necessary competencies, knowledge and diversity to lead and govern the Group effectively. As such, the NC is of the view that the Company does not need any additional targets or plans to further diversify its Board composition. Notwithstanding, the NC will monitor the Board’s composition on an annual basis in conjunction with its Board Diversity Policy and where necessary, set such additional targets and timelines, if needed.

The Board values on-going professional development and recognizes that it is important that all Directors receive regular training to serve effectively on and contribute to the Board. To ensure Directors can fulfil their obligations and to continually improve the performance of the Board, all Directors are encouraged to undergo continual professional development. Professional development may relate to a particular subject area, committee membership, or key developments in the Company’s environment. Directors are encouraged to consult the Chairmen and Chief Executive Officers if they consider that they personally, or the Board as a whole, would benefit from specific education or training on matters that fall within the responsibility of the Board or relate to the Company’s business. Such training costs are borne by the Company. The Company would also arrange for the senior management to brief the Directors on the Group’s business periodically.

The Directors’ academic and professional qualifications are presented in pages 43 to 47 of this Annual Report. The Board has taken the following steps to maintain or enhance its balance and diversity:

• Annual review by the NC to evaluate the size, composition and role of the Board and Board Committees and the methods and processes for evaluating Board and Board Committees’ effectiveness in fulfilling their duties and responsibilities.
• The NC shall identify gaps in the mix of skills, experience and other qualities required in an effective Board and recommend suitable candidates to fill these gaps.
• The NC will consider the results of these exercises in its recommendation for the appointment of new directors and/or the re-appointment of incumbent directors.