Entropy Financial Research Services aspires to be a leading consulting firm in the capital market, providing holistic solutions in the field of corporate governance and compliance with regulatory requirements, while providing an added value to all stakeholders.

Fundamental Principles in the Activities of Entropy Financial Research Services

A. Professional Entity: Over the last decade, the number and complexity of the issues submitted for approval in general meetings have increased. This increase is mainly due to an increase in the requirements and the changes in regulations, as well as to the change in measurement and accounting standards. Therefore the research departments of institutional bodies need to cope with analyzing a variety of complex issues, which include, among other things, value assessments, expert opinions, new accountancy standards (such as IFRS), complex transactions, economic and legal issues and more.

Entropy Financial Research Services views the operation of a best and extensive as possible research department as one of its core values, using the most advanced and innovative tools in the market, for the most close, credible and complete inspection of the complex of issues being raised in general meetings. In addition, Entropy believes it is its job to dynamically and constantly study new regulatory requirements and relevant standards, market requirements and other professional aspects, and include them in the firm’s professional inspection of the subjects being raised at general meetings.

B. Consulting Entity: Entropy Financial Research Services serves as a consulting firm for its institutional customers, while implementing professional, reliable and independent rules when analyzing the complex of issues that are being submitted for the decision at general meetings. Entropy's recommendations are provided to customers as recommendations only, while ensuring that it is the institutional body's responsibility to examine these recommendations and independently decide on the way it votes when the issue in voted upon in the meeting.

Therefore, Entropy’s recommendation is defined and presented to its customers as a professional opinion, merely for the purpose of decision support. Entropy’s customers make their final decision based on the expert opinion, the investment policy and the procedures of the institutional body, and sometimes even according to the decision of the Investments Committee of the institutional body. As part of this concept we ask the public companies to maintain a high level of transparency and wide disclosure, so that the report provided to the general meeting, where the transaction is going to be voted upon, includes all the details needed for the minority shareholders to make an informed decision.

C. Independent Entity: Part of the role of an external consultant to institutional bodies in regards to general meetings, is to act as a buffer between the controlling shareholders and the institutional bodies. The Hamdani Report states that “The existence of conflicts of interests between the benefit of the members as indirect investors in the corporation, and other interests of the institutional body or its controlling shareholders, may divert the votes of the institutional bodies.”

D. Compliance with Regulation Requirements: As mentioned, in the last few years we have witnessed changes and amendments in the law, regarding the operation of public companies and the role of general meetings. These amendments have essential and significant implications on the role of the institutional bodies when deciding upon the issues submitted to the general meeting.

Entropy Financial Research Services constantly acts to monitor the changes to regulations and standards, and to adjust its professional recommendations accordingly. This policy is expressed in the updated changes of the last few years and their impact on the research components of the firm.