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THE QUOTED COMPANY ALLIANCE (QCA) CODE

COMPANY STATEMENT

The Directors recognise the importance of good corporate governance and have chosen to apply the Quoted Companies Alliance Corporate Governance Code (the ‘QCA Code’). The QCA Code was developed by the QCA as an alternative corporate governance code applicable to AIM companies. The underlying principle of the QCA Code is that “the purpose of good corporate governance is to ensure that the Company is managed in an efficient, effective and entrepreneurial manner for the benefit of all shareholders over the longer term”. It is the Board’s job to ensure that Ethernity Networks is managed in terms of this underlying principle of the QCA Code, with effective and efficient decision-making. Corporate governance is an important part of that job, reducing risk and adding value to our business.

 The Company addresses the key governance principles defined in the QCA Code as outlined in the table below. We will continue to provide updates on our compliance with the code.

This disclosure was last reviewed and updated on 18 May 2022

DELIVER GROWTH

MAINTAIN A DYNAMIC MANAGEMENT FRAMEWORK

BUILD TRUST

22 December 2021

Board Committees

The Company has Audit & Risk, Nomination and Remuneration Committees.

Audit & Risk Committee

The Audit & Risk Committee is chaired by Zohar Yinon and has the primary responsibility for monitoring the quality of internal controls, ensuring that the financial performance of the Company is properly measured and reported on, reviewing reports from the Company’s auditors relating to the Company’s accounting and internal controls, and in all cases having due regard to the interests of Shareholders. The Audit & Risk Committee meets at least twice a year. Chen Saft-Feiglin and Mark Reichenberg, who was appointed on 1 December 2020 as an interim member until a new Independent Non-Executive Director is appointed, are the other members of the Audit & Risk Committee.

Nomination Committee

The Nomination Committee is chaired by Yosi Albagli, and identifies and nominates, for the approval of the Board, candidates to fill Board vacancies as and when they arise. The Nomination Committee meets as required. On 1 December 2021, Mark Reichenberg was appointed to the Committee, and along with David Levi, they are the other members of the Nomination Committee. When a suitable candidate as an Independent Non-Executive Director is appointed, they will join as a member of the Nomination Committee.

Remuneration Committee

The Remuneration Committee is chaired by Chen Saft-Feiglin and reviews the performance of the executive directors and determines their terms and conditions of service, including their remuneration and the granting of options to the Executive, having due regard to the interests of Shareholders. The Remuneration Committee meets at least once a year. On 1 December 2021, David Levi was appointed as an interim member until a new Independent Non-Executive Director is appointed. Zohar Yinon is the third member of the Remuneration Committee.

Directors’ Responsibilities

Company law requires the Directors to prepare financial statements for each financial year, which give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss for each period. In preparing those financial statements, the Directors are required to:

• Select suitable accounting policies and then apply them consistently;
• Make judgements and estimates that are reasonable and prudent;
• State whether applicable accounting standards have been followed with any material departures disclosed and explained in the financial statements; and
• Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company and the Group will continue in business.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to ensure that the financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

AGM Voting Summary:

16 May 2022

Policies approved at the Annual General Meeting of 13 August 2019:

Compensation Policy Amended on 08 August 2019

Directors and Officers Indemnities