Ethical Code of Conduct

 

1. Introduction

Ethical behavior that is mandatory and unconditional, strict compliance with all legal provisions, integrity and fairness are central values in the activities of G. Willi-Food International Ltd. (the “Company”). These values form the basis of the Company’s relationships with its partners and the community at large, as well as in the relationships between the Company’s directors, officers and employees, as well as certain third-party service providers as may be designated by the chief financial officer or the chief executive officer (the “CFO” and “CEO”, respectively) (hereinafter together: “Company Employee(s)”) and among themselves. The ethical code establishes the fundamental principles that bind Company Employees in the following areas:

• Compliance with legal provisions.
• Prevention of conflicts of interest.
• Prohibition on exploiting business opportunities of the Company.
• Protection of Company assets and ensuring proper use thereof.
• Competition and fairness.
• Prohibition on giving and receiving improper personal benefits.
• Prohibition on use of inside information.
• Record keeping.
• Maintaining confidentiality.
• Fair, honest and professional cooperation between Company employees.
• Respect for people. and
• Preparation of Periodic Reports.

The ethical code does not constitute a comprehensive and detailed guide to all situations you may encounter in the course of your work at the Company. Moreover, the principles and rules set forth in this code are also not the sole source of rules of conduct for Company Employees. Therefore, in maintaining and implementing the principles of the ethical code, you must exercise reasonable and appropriate judgment, and you must read and implement it in conjunction with relevant legal provisions and procedures.

2. Compliance with Legal Provisions

All Company Employees must respect the law and fully and absolutely comply with its provisions in every place where we operate, and they are not permitted to violate any law, rule or regulation in the name of the Company. Company Employees must faithfully comply with all applicable law, rule and regulations and professional rules applicable to the Company. This requirement includes, inter alia, submitting reports and documents to the public or state authorities as required in a complete, accurate manner and on the dates set for this. In any case, ignorance of the law does not constitute a reason or explanation for violating it. It is important and required that Company Employees consult with their superiors, or with another appropriate Company Employee, on any relevant issue that arises.

 

3. Prevention of Conflicts of Interest

Company Employees are prohibited from engaging in any activity that may create a conflict of interest or, concern of a conflict of interest between the Company’s interests and the personal interests of the employees. Company Employees must avoid any situation that may cause them not to properly fulfill their role in the Company and to fulfill their obligations and responsibilities to it in a substantive manner and for the benefit of the Company.

A “conflict of interest” arises when the personal interests or activities of a Company employee influence, impair or interfere in any way with their ability to exclusively and substantively promote the interests of the Company in the best possible manner.

It is important that Company Employees ask themselves: “If all the facts were known to another person, would they doubt my objectivity or ability, in those circumstances or in that situation, to make the right decision for the Company?”

Types of conflicts of interest: A Company Employee must avoid any private or personal activity, investment, or association with people that may influence or may appear to influence, impair or interfere with their ability to act objectively and for the interests of the Company. A Company Employee is prohibited from exploiting their position in the Company to obtain personal profit or benefit.

For example, the following list of actions, among others, may appear to create conflicts of interest:

• When a Company Employee causes the Company to do business with their relatives or friends.
• When a Company employee works for a competitor of the Company or serves as a consultant or Board member.
• When a Company employee has a financial or other interest in suppliers, customers or competitors of the Company.
• When a Company Employee competes or plans during their employment with the Company to compete with it.

A conflict of interest may arise in a situation where a Company Employee or their family member receives improper personal benefits from a supplier or customer as a result of the employee’s position in the Company, such as: gifts, grants or hospitality.

A Company Employee must avoid direct or indirect business relationships with customers, suppliers or competitors of the Company outside the scope of their role. Activity involving a conflict of interest may arise in many other cases. Since it is impossible to anticipate in advance every possible situation for the occurrence of a conflict of interest, all employees must be aware of and sensitive to this important issue.

Discussion with superiors on conflict-of-interest issues: Sometimes, conflicts of interest may be vague and not clear-cut, and therefore in any case of doubt you should consult with your superiors in the Company or the Company’s external legal counsel.

A Company employee who encounters a case or situation of conflict of interest or concern of conflict of interest, between the Company’s interests and their personal interests or the personal interests of another employee, must immediately notify their superior or the appropriate employee in the Company or act in accordance with the instructions detailed in section 14 of this ethical code.

External activities of directors: Directors of the Company must notify the Chairman of the board of directors of the Company (the “Board”) before accepting an advisory or managerial role in any other entity, which may raise concerns of a conflict of interest.

4. Prohibition on Exploiting Business Opportunities of the Company

Company Employees are prohibited from exploiting for their personal purposes business opportunities or information that have come to them by virtue of their work, position or status in the Company, or from the Company’s customers and suppliers, without obtaining explicit prior authorization for this from the Company’s external legal counsel or another appropriate entity in the Company, as applicable. A Company Employee shall not use Company property, information received in the course of their work in it or their position in the Company to obtain personal profits or personal benefit in an improper manner, or in order to compete with it directly or indirectly. Company Employees have an obligation to promote the legitimate interests and objectives of the Company whenever they encounter an opportunity to do so.

Company Employees must disclose to the Company any information and provide it with any document relating to its affairs that have come into their possession by virtue of their work, position or status in the Company, and which can reasonably be assumed that such information may interest it in promoting its activities and developing its business.

5. Protection of Company Assets and Ensuring Proper Use Thereof

Use for business purposes: Employees must respect and protect Company assets and make proper use of them for Company purposes only. Company property, including food products and other products sold by the Company, office equipment, computers (hardware and software), etc., may not be used except within the framework of the employee’s role in the Company and solely for the promotion of Company objectives. Company property may not be removed from its facilities, except with the approval of the Company Employee’s superior for work purposes and for the benefit of the Company.

Employees are obligated to protect all Company assets including its intellectual property. Intellectual property includes intellectual assets such as trade secrets, trademarks and copyrights, as well as business plans, marketing and service plans, databases, data repositories, customers, suppliers, records, arrangements with customers and suppliers, product cost prices to the Company as well as any business information of any kind and business reports that have not been published and are not in the public domain. Improper use of Company property, including its intellectual property, constitutes a violation of Company policy and this ethical code, and may even be considered illegal and lead to significant consequences in the realm of employee-employer relations, civil law and criminal law.

Misappropriation of Company property and assets, theft, negligent use of Company property and waste constitute harm to the Company. In any case of suspicion of such acts or omissions, a Company Employee must report to their superiors so that they can properly investigate the matters.

Cooperation with internal controls: The Company manages and enforces an effective system of internal controls in order to preserve and protect the Company’s assets and intellectual property, as well as the assets of the Company’s customers, suppliers and shareholders. A Company Employee must cooperate with and assist the activity of said controls. Any transaction according to its matter, scope and nature requires approval at the appropriate management level. One may not undertake on behalf of the Company to carry out a transaction in Company matters, assets or property except through those authorized to do so in the Company and according to Company procedures. Each of the employees responsible for purchasing and selling assets on behalf of the Company, including those authorized to undertake on behalf of the Company, must use the authority and responsibility given to them with reasonable judgment and wisdom and in accordance with the law and Company procedures, and must not exceed the powers and authorities granted to them.

6. Competition and Fairness

Trade secrets: The Company strives to improve its competitiveness, and this in honest and fair ways. Theft of intellectual property, receiving or acquiring trade secrets without the consent of their owners and in an improper manner, actions causing Company Employees to leak information or trade secrets – are prohibited actions.

Advertising: Advertising of Company activities and its various promotions, including comparative advertising to other entities, shall be done in a fair manner and in accordance with all laws.

Fair conduct: Company Employees must act fairly towards all entities with which the Company maintains business relationships, including its customers, suppliers, competitors and employees of these entities, and respect their rights. Company Employees must refrain from using manipulation, misuse of confidential information or any other unfair action.

7. Prohibition on Giving and Receiving Improper Personal Benefits

Company Employees and their relatives must refrain from receiving, offering or giving gifts or other personal benefits. Several examples can be listed among the many cases that may constitute receiving an improper personal benefit:

• Relationships with Company suppliers: While the Company encourages maintaining good relationships with Company suppliers, Company Employees are prohibited from exploiting their position as Company representatives for the purpose of obtaining direct or indirect personal profit from a purchase of a service or product made from or for the Company. Company Employees are also strictly prohibited from receiving, directly or indirectly, monetary or monetary equivalent compensation from Company suppliers.
• Bonuses and prizes: The Company and its employees are prohibited from participating in competitions, promotions and raffles in which prizes are awarded to Company representatives by Company suppliers.
• Distribution of samples: Company Employees may receive samples distributed by suppliers as long as it is for business purposes to Company customers and in a quantity intended only for product evaluation.

There is a strict prohibition on receiving or giving “bribes” or payments of any kind by the Company or any Company Employee to or from any person, state representative or other entity. This prohibition refers to all types of payments, whether they may be considered legal or not. Promising, offering or giving a gift or benefit, inter alia, to a state employee, is not only a deviation from Company policy, but may also constitute a criminal offense. A Company Employee must report to their superior immediately upon learning of a case of giving or receiving a gift or offer of a gift or any other benefit.

8. Prohibition on Use of Inside Information

A Company Employee with access to information regarding the Company, including final results, work plans, various agreements, managerial and strategic decisions, information on developments in the Company, on changes in its condition, or expected developments or changes in it or its condition, or other information about the Company that is not known to the public (hereinafter: “Inside Information”) must refrain from disclosing it, using it or sharing it with any third party for any purpose and in particular for the purpose of trading in Company securities, unless the use of this information is within the framework of the Company’s business activity. Any material information which is not public, regarding the Company or third parties with which the Company maintains business relationships, should be treated as Inside Information. Such material information shall be considered Inside Information, unless it has been properly disclosed to the public, for example by:

• Submitting documents to regulatory authorities in accordance with the law;
• Notices to the media;
• Meetings with representatives of the media and the public.

Illegality: The use of inside information for the purpose of executing a transaction in a Company security or as giving a “tip” to others, who may use it to execute a transaction in a security, is not only unethical, but may also be considered illegal. A Company Employee who violates the prohibition on the use of Inside Information may be subject to penalties in accordance with criminal law or liabilities under civil law, and so may the Company itself. To assist in complying with the provisions of laws prohibiting the use of Inside Information, the Company has adopted a detailed policy instructing employees on how to trade in Company securities. A document explaining this policy has been distributed to all Company Employees as part of Company procedures, and a copy thereof is available for review with the payroll accountant and in the Company secretariat.

These requirements are in addition to those in the Company’s insider trading policy. 

 

9. Record Keeping

Keeping records fairly and accurately: The Company expects its employees to record and report information fairly and accurately. Records include, inter alia, reports and documents relating to the Company’s activities, which are intended both for internal use by the Company and for submission to third parties, including state authorities. It is of critical importance that the Company’s filings with the U.S. Securities and Exchange Commission (the “SEC”) and the Israel Securities Authority (the “ISA”) and other public disclosures be accurate and timely.

Management of Company books: All Company books, reports, statements and financial records must be managed so as to fulfill the requirements of the law and the Company’s internal control system. All of the Company’s and its subsidiaries’ books, records, accounts and financial statements must be maintained in reasonable detail, must appropriately reflect the Company’s and its subsidiaries’ transactions and conform both to applicable legal requirements and to the Company’s system of internal controls. Unrecorded or “off the books” funds or assets should not be maintained, unless permitted by applicable law or regulation, with the full knowledge and consent of the audit committee of the Company’s Board (the “Audit Committee”).

Record retention: Employees must act in accordance with Company policy, which will be adopted from time to time, regarding record retention and destruction. Company records must be properly retained for at least seven years. Records (whether in paper form, electronic files or email, or in any other form) may not be destroyed or altered for any reason. A Company Employee who does not comply with these requirements may also bear criminal responsibility.

Concealment of errors: Errors made should not be concealed and presented in a misleading manner. On the contrary, errors should be disclosed immediately and fully and corrected promptly.

10. Maintaining Confidentiality

Confidential information: Company Employees must maintain the confidentiality of information that has come to them by virtue of their work, status or position in the Company or from the Company’s customers and suppliers. Confidential information is any information known to the Company and not known to the public, which may directly or indirectly assist competitors or harm the Company or its customers, if disclosed. The obligation to maintain confidentiality may be subject to laws and regulations requiring the disclosure of this confidential information, usually to state authorities. In such cases, you should consult with the Company’s legal counsel to help you decide whether to disclose this information.

Information to the public: An employee is not permitted to transfer confidential commercial information of the Company to entities outside the Company, including the media, discussion groups, chat rooms and forums on the Internet, unless authorized to do so. Even the transfer of confidential information within the Company shall be done only to authorized entities. In any case, inquiries from the media will be referred to the Company’s CEO or Chairman of the Board or the Company’s Marketing Manager, so that they can determine who in the Company will handle these matters. Only the Company’s CEO, Chairman and Marketing Manager or someone authorized by them are allowed to transfer information to the media.

Media, advertising and public appearances: Company Employees must obtain approval from their superiors before any publication of information, giving a speech, giving an interview, or public appearance. In addition, Company Employees must notify their superiors before any publication of information, giving a speech, giving an interview or public appearance, which are of public interest and which may affect the Company’s public image.

11. Fair, Honest and Professional Cooperation Between Company Employees

The Company attaches supreme importance to maintaining, encouraging and fostering proper working relationships between Company Employees. Working relationships between Company Employees should be based on professional cooperation as broad as possible in a manner that will contribute to promoting the Company’s objectives. Within the framework of this cooperation, Company Employees must act with integrity, fairly and professionally towards their colleagues in the Company, including: sharing professional information with their colleagues in the Company, assisting their colleagues in the Company who encounter difficulties in their work, assisting in the acclimatization of new employees in the Company and assisting in maintaining a proper and pleasant work environment.

12. Respect for People

Respect and consideration: Every person should be treated with respect and consideration. All Company Employees must treat others in a respectful and fair manner, share success and praise with others as appropriate, refrain from publicly criticizing each other, and encourage an atmosphere of openness, cooperation and consultation. Relationships between Company Employees should be based on high standards of respect and consideration, and they should also be applied to relationships with members of the community, customers, suppliers and shareholders.

Discrimination: The Company absolutely and unconditionally rejects discrimination on the basis of race, nationality, origin, religion, gender, personal status, age, sexual preferences, disability or military service. The Company believes that diversity among employees has real significance for the Company’s success, and the Company is fully committed to equal opportunities.

Harassment: The Company’s tradition and spirit are based on equal, respectful, professional treatment and appreciation in the workplace. The Company prohibits sexual harassment or any other form of harassment or threat, at any level. Harassment on the basis of race, nationality, origin, religion, gender, personal status, age, sexual preferences, disability or military service is absolutely prohibited.

The Company has adopted regulations regarding sexual harassment and Company Employees must act in accordance with these regulations and Company procedures. The regulations have been distributed to Company Employees and a copy thereof is available for review, in accordance with Company procedures, with the payroll accountant and in the Company secretariat.

Health and safety: The Company expects employees to help it maintain a healthy, hygienic and safe work environment and to report The Company is committed to adhering to safety laws and regulations, including laws and regulations that promote a clean and hygienic work environment and all in accordance with legal requirements and Company procedures.

13. Exemptions from the Ethical Code

An exemption for a Company Employee from complying with a provision of this code will be granted in extremely rare cases and extreme circumstances in non-material matters, and this only for a specific matter or for a defined period of time, all as decided by the Company’s CEO or Chairman of the Board.

An exemption for a Company officers or directors may be made only by the Board or a Board committee and must be disclosed to shareholders of the Company, along with the reasons for the exemption.

14. Reporting Offenses and Unethical Behavior

If a Company Employee encounters a situation where they believe that they or another employee in the Company is violating or about to violate a provision of this code, or if they are unable to prevent an action, they suspect violates this code, or if they discover such an action after the fact, they must report it immediately to their supervisor or another appropriate person in the Company, as applicable. The Company encourages every employee to discuss unethical behavior with their supervisor or another appropriate staff member in the Company. In case of doubt about the correct course of action an employee should take in a particular case, they should consult with their superiors or with the Company’s legal counsel or another appropriate person in the Company, as applicable.

If after talking with their supervisor or the appropriate staff member in the Company, the employee still has doubts about how their inquiry regarding ethical behavior in the Company is being handled, or if they do not find it appropriate or proper to discuss the matter with these individuals (for any reason), the Company Employee may directly contact the Chairman of the Board and/or the CEO of the Company and/or the Company’s auditor and/or the Company’s external legal counsel, by sending a letter accompanied by relevant documents. Complaints regarding accounting, internal accounting controls, auditing matters or questionable financial practices should be reported to the Chairman of the Audit Committee. 

A Company Employee who wishes to report a matter related to ethical behavior in the Company anonymously may do so, and the Company will ensure the confidentiality and privacy of their message to the fullest extent permitted by law. Anonymous reports should be sent in writing without indicating a name or address to any of the above-mentioned individuals. Company policy prohibits retaliation against an employee who reported unethical behavior in good faith. Retaliation or retribution against any employee for a report made in good faith of any suspected violation of laws, rules, regulations or this Code is cause for appropriate disciplinary action.

All conversations and letters – whether electronic or on paper – will be handled discreetly. The Company and the board are committed to protecting the employee from retaliatory measures against them, under the circumstances described, as stated.

15. Preparation of Periodic Reports

The Company must provide full, fair, accurate, timely and understandable disclosure in the periodic reports that it is required to file with the SEC and ISA. Accordingly, it is the Company’s responsibility to establish and maintain disclosure controls and procedures (as defined under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”)) and it is Company personnel’s responsibility to communicate to the Company’s management any and all information required to be disclosed in such periodic reports in a manner that allows for timely decisions regarding required disclosure. Furthermore, the Company’s management is required to design and supervise, and other Company Personnel, in collaboration with management, are required to effect, the Company’s internal control over financial reporting (as defined under the Exchange Act), in each case, in a manner that provides reasonable assurance regarding the reliability of the Company’s financial reporting and its preparation of financial statements for external purposes in accordance with generally accepted accounting principles. 

Accordingly, Company personnel should bring to the attention of the Audit Committee any information of which they may become aware that is not otherwise recorded, processed or recorded via the Company’s disclosure controls and procedures and that affects the disclosures made by us in our public filings. 

16. The Ethical Code and You

This ethical code establishes binding rules of conduct for Company Employees. An employee who does not meet the standards detailed in this ethical code of conduct may face disciplinary action, depending on the circumstances of the case, which may include reprimand, obligation to reimburse any loss or damage suffered by the Company, its subsidiaries or a third party, termination of employment or other relationship with the Company, referral for civil action or criminal prosecution, or any other disciplinary action deemed appropriate by the Company. If you believe that you may violate or cause a violation of any provision of this ethical code, you should act according to the guidelines detailed in sections 14 and 15 of this ethical code.

The Company attaches supreme importance to promoting ethical behavior of employees in the Company. Your actions and behavior can create and reinforce an ethical atmosphere and positively influence the behavior of other Company Employees, regardless of your status and role in the Company. This code provides guidelines for ethical behavior in broad relevant areas, but it cannot regulate all cases in which you may encounter an ethical question. Each Company Employee should take time to think to assess the ethical consequences and implications of problematic situations. In case of doubt, examine the following questions:

• Is the considered action legal?
• Does the proposed behavior align with this code?
• Would you feel embarrassed if the full details were revealed to your superiors, people working with you, your family members or friends, or if they were published in the newspaper?
• Can this action be interpreted as improper, or might it appear as such?
• Does this action make you feel uncomfortable? Are you compromising your personal ethical principles in any way?
• Are you deriving personal interest from the action?

If you still have doubts after considering these questions, consult with the appropriate individuals in the Company.