Board and Committee Membership Guidelines

Board and Committee Membership Guidelines Private Markets

SGRF - Board and Committees Membership Guidelines

DOCUMENT CONTROL

Change Record Date

Author

Version Change Reference

Asset Management

1

Asset Management

2

Approved by Name

Position

Reviewers

Name

Position

Distribution Copy No.

Name

Location

1

SGRF Staff

SGRF Portal

2

Board/Committee Members (Non-

Through Nomination Letters

SGRF Staff)

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SGRF - Board and Committees Membership Guidelines

Contents

1.0 Purpose of the Guidelines ................................................................................................................ 4

2.0 Definitions ........................................................................................................................................ 4

3.0 Introduction ...................................................................................................................................... 4

4.0 Board / Committee Members Nominations .................................................................................... 5

5.0 Expectations from the Board / Committee Members .................................................................... 6

6.0 SGRF Obligations .............................................................................................................................. 8

7.0 Management of SPV Companies ..................................................................................................... 9

8.0 Inconsistency with other Guidelines ............................................................................................... 9

9.0 Review of the Guidelines ................................................................................................................. 9

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SGRF - Board and Committees Membership Guidelines

1.0 Purpose of the Guidelines

These board membership guidelines, “The Guidelines”, are intended to provide an overview of the following:

1. The nomination of the Board and Committee Members on SGRF investee Entities. 2. The expectations from the Board and Committee Members.

These guidelines are intended to compliment the general policies and procedures in place at SGRF and those being followed by the Private Markets and Finance departments. The Board and Committee Members are expected to observe these guidelines in discharge of their duties. In cases where the guidelines do not spell out specific matters, the Members are expected to follow best professional practice in performing their role keeping in mind, above all, the Entity’s interests and objectives, and those of SGRF.

2.0 Definitions

Articles of Association: The articles of association of the Entities where SGRF have invested.

Asset Management: the Asset Management department of SGRF (managing the private equity investments except PE funds and real estate), and the relevant function dealing with asset management in the Real Estate Department. Board and/or Committees: The boards and committees of the operating companies of the investee Entities. The Guidelines exclude the boards of the Special Purpose Vehicles’ (“SPV’s”) that own the shares in the investment (which are managed by the SGRF Finance department) and the government-to-government investment platforms.

Entity/ Entities: the entity or entities where SGRF have invested.

Executive President: His Excellency SGRF’s Executive President.

Investment Committee: SGRF internal investment committee.

Member(s): SGRF or external representatives nominated by SGRF on the Boards and/or Committees of the investee Entities. Reference to Members includes also representatives nominated as Observers, as defined by the relevant agreements.

Private Equity: the private equity department of SGRF.

SPV (or SPE): Special Purpose Vehicle/Entity, the legal vehicle which own the shares in the investee Entity. SPVG (or SPEG) guidelines: the Special Purpose Vehicle governance and controls framework issued by the SGRF Finance department.

3.0 Introduction

The management and oversight of SGRF’s private equity direct investments, local initiatives, and joint ventures is entrusted to SGRF’s Asset Management. The Real Estate department manages its investments independently. Given the uniqueness of each investment, the extent of governance

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SGRF - Board and Committees Membership Guidelines

exercised will naturally depend on the contractual level of control and influence that SGRF has on the investee Entities. In cases where SGRF has adequate governance rights with Board level (or Committee level) representations, the role played by the Members is by far a core element of the asset management function. The active and productive engagement of the Members is therefore required for the best interest of SGRF.

4.0 Board / Committee Members Nominations

The following should be taken into account with respect to the nomination of the Members and the tenure of their membership: 4.1 The nomination of the Members as representatives of SGRF at the Boards or the Committees of the various Entities is a sole decision of the Executive President based on the inputs received from Asset Management. 4.2 In case a need arises to appoint a Member to any of the Entities, Asset Management will propose names, using the applicable forms for this purpose, taking into account the considerations as given below. 4.2.1 In general, the Members should have the appropriate balance of skills, experience, independence, knowledge, personal attributes, and preferably sector knowledge to enable the Members to discharge their duties and responsibilities effectively. 4.2.2 Consideration should be taken with regards to the number of Board/Committee memberships the Member already serves and the bandwidth of time available to the Member for any new nomination. 4.2.3 The number of Board memberships for any nominated member should not exceed four memberships. The Executive President may grant exemptions as deemed necessary. 4.2.4 In cases of availability of more than one board seat and/or observer seats to SGRF in any particular investment, priority should be accorded to an Asset Management member for any of the additional seats. 4.2.5 In cases where more than one Member is appointed to the same Entity, SGRF may seek to pair a person with less competencies for the purposes of gaining additional experience and exposure.

4.2.6 Legal or regulatory requirements in Entity’s jurisdiction should also be taken into account.

4.3 The nominees for the Board and Committee positions could be officials from across SGRF or external nominees from the relevant industry / specialization as deemed required.

4.4 Asset Management should review the status of Memberships and vacancies on an annual basis, or as and when deemed required (the “Review”).

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SGRF - Board and Committees Membership Guidelines

4.4.1 The Review, including recommendations for appointment of alternate Members and/or successors for current Members should be submitted to the Executive President for perusal and endorsement. (As per the Form in Annex 1 of these guidelines) 4.4.2 As part of the Review, consideration should be taken to the period the Members have already spent in their current membership and any replacement/rotation requirements. 4.5 The tenure of the membership of any Member is determined at the discretion of the Executive President. For external Members the tenure of appointment is one year, extendable by similar periods at the discretion of the Executive President. 4.5.1 Early resignation request by a Member should be addressed to the Executive President three months prior to resignation and such request shall follow the process ascribed by the Entities’ Articles & Memorandum of Association and / or relevant charter. 4.6.1 In cases where any form of sitting fee / remuneration (cash or stock based) is permitted by the Articles & Memorandum of Association and the Board/Committee Charter of the respective Entity, such sitting fee / remuneration should be declared by the Member to the Asset Management Director. 4.6.2 In cases where any form of sitting fee / remuneration (cash or stock based) is presented for approval to the Board of the respective Entity, the Member should revert to the Asset Management Director for guidance on the subject. Various factors like possible impact on tax structure, reasonableness of the remuneration, etc. would be considered before any guidance is provided. 4.6.3 SGRF may pay, on a case by case basis and on recommendation by the Asset Management, a sitting fee / remuneration for external Members (non-SGRF employees) subject to the approval of the Executive President. 4.5.2 Decision to discontinue a Member from the role could be taken at any time and as deemed necessary and is at the sole discretion of the Executive President. 4.6 SGRF will not pay a sitting fee / remuneration to its employees serving as Members.

5.0 Expectations from the Board / Committee Members

These guidelines are not meant to be an all-encompassing document on the directors’ duties and liabilities. In general, the Board of Directors are accountable to their entities, owners, regulators and legislators and to other stakeholders. Board members have a fiduciary duty to the aforesaid and SGRF nominated Members are entrusted with the responsibility of observing the Board roles and duties to ensure that the Entities interests are protected while, wherever permissible, aligning such interests

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SGRF - Board and Committees Membership Guidelines

with the overall SGRF interest in the Entity. In general, the Boards are responsible for overseeing the business and providing strategic direction to the Entity, in doing so, may exercise many powers subject to any relevant laws and regulations and to the Entities’ Articles of Association (see Annex 2 for typical board responsibilities). For the purpose of accomplishing their roles, SGRF nominated Members are expected to: 5.1 Familiarize themselves with the relevant laws and regulations, Entities’ Board/Committee Charter (or Terms of Reference), memorandum/articles of association, or the applicable framework that spells the rights and responsibilities of the Members, including the relevant contractual rights and/or obligations held by SGRF or its SPV under the respective investment agreements. The Members are expected to discharge their responsibilities accordingly. In the absence of a definitive framework, the Members are expected to take a prudent approach in performing their role as per best professional practice and subject to any relevant laws and regulations. 5.2 Actively engage with the management of the investee Entity to ensure execution of strategy and to facilitate alignment with SGRF’s economic, financial and other objectives. The Member should deliberate with the Asset Management, before any meeting, any proposed decisions that do not necessarily align with the interests of SGRF. 5.3 The Boards/Committees would normally be collectively responsible for the long-term execution of strategy and the success of the Entity, including but not limited to approving and monitoring capital and operating plans and budgets, key management appointments, overseeing management performance, financial oversight and reviewing key business results. However, the Members should discuss with Asset Management before any board decisions that may entitle changes to the original investment parameters (including, but not limited to: shareholding structure, level of control, additional capital injections, divestment or dilution of SGRF shares). 5.4 Actively participate in all Board and Committee meetings (including regular Board meetings, Committee meetings, and ad-hoc meetings). While the Boards/Committees shall meet with such frequency and at such times as may be determined under the relevant laws and regulation and the relevant Entity charters, the Member should ensure that the Board/Committee meets sufficiently and regularly to discharge its duties and oversight.

5.4.1

The Members should inform Asset Management on time in case of inability to attend / or participate in a Board/Committee meeting to enable nominating an alternative / proxy.

5.5 Maintain an active dialogue with the Asset Management and provide input for the periodic asset performance updates. Unless prevented from doing so by certain non-disclosure requirements in an applicable legal framework –including regulated market restrictions- the Members are required to;

5.5.1

Keep the Asset Management abreast of all the activities relating to the asset under management. Wherever practical, the respective Asset Management lead should be kept in the loop of emails and correspondences with the Entity.

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SGRF - Board and Committees Membership Guidelines

5.5.2

Timely submit (at least 5 working days before the meeting in case of Board meeting agenda and a maximum of 2 working days after any document is received in case of other reports) all documents received from the investee entity to the Asset Management (including: agenda packs, monthly updates, financial statements, and other document) to enable studying the documents and discussing relevant issues. Document the outcomes of the meetings and to debrief the respective Asset Management lead on the major decisions taken at the Board or Committee meetings within 5 working days of such meeting.

5.5.3

5.5.4

To the extent feasible, involve the Asset Management lead as a shadow observer where possible.

5.5.5

To the extent feasible, the Member should facilitate a communication channel between the Asset Management and the management of the investee Entity for business related queries.

5.6 Monitor the business covenants and KPI’s, cash-flow, and key industry trends & risks and raise any relevant operational/business concerns with the Asset Management, for discussing remedial actions and/or escalating such matters to SGRF’s Investment Committee.

5.7 Ensure that the investee Entity is following prudent corporate governance practices and has adequate policies and business monitoring tools and controls.

5.8 The Members should always maintain utmost care and confidentiality in handling the information at their disposal during and after their assignment ends. External members are expected to carry their duties in conformity with their Appointment Letter (letter provided to non SGRF employees at the time of appointment as a Member), non-disclosure requirements, and SGRF’s Code of Business Conduct.

5.9 The Members should provide immediate feedback to SGRF if faced by any challenges during the fulfillment of their roles.

5.10

The Members should declare any existing and/or potential conflict of interest situations arising from their nomination to the role.

6.0 SGRF Obligations

6.1 SGRF shall use reasonable endeavors to ensure that the Members are insured against director liabilities arising from the performance of their duty. The insurance will be available at the Entity level or will be taken directly by SGRF and will be subject to usual market terms and restrictions. On request, a copy of the prevailing insurance policy will be available for

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SGRF - Board and Committees Membership Guidelines

inspection by the Members. Guidance should be sought from SGRF’s legal team on the applicability of the D&O insurance policy to a particular set of circumstances.

6.2 SGRF will provide external/ internal training, if required, to facilitate better performance as a Member. The Member is expected to liaise with SGRF in case prior awareness on the roles and duties of directors has not been obtained.

7.0 Management of SPV Companies

The management, governance, and control of the SPV companies is entrusted to SGRF’s Finance department. The following should be observed in this regard: 7.1 The relevant guidelines, as issued and updated by the Finance department from time to time, should serve as the governing guidelines for the appointment of directors, the roles and responsibilities of directors, and other related matters on the governance of SPV’s. 7.2 Notwithstanding para 7.1, and for the purpose of efficient coordination, efforts should be made to ensure the nomination of a common director on any specific SPV company who simultaneously occupies a seat on the operating company owned by such SPV. This clause is applicable only in case the Member of the board of the operating company is an SGRF regular employee. In cases where the Member is not a SGRF employee, efforts will be made to appoint the Asset Management lead for that particular investment as a director on such SPV.

8.0 Inconsistency with other Guidelines

To the extent that there is any inconsistency between these guidelines and other relevant policies and procedures, the inconsistency must be brought to the attention of the custodian of these guidelines and Asset Management.

9.0 Review of the Guidelines

The Asset Management department or the Investment Committee may trigger a review of these guidelines as and when deemed necessary.

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SGRF - Board and Committees Membership Guidelines

Annex 1 – Current Board Memberships

Months in current role

Comments /recommendation

Asset Class

Investment Name

Memberships Available

Current Member/s

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SGRF - Board and Committees Membership Guidelines

Annex 2 – Typical Powers, Responsibilities, and Matters reserved for the board*

The Boards are typically responsible for overseeing the business of the Entity and, in doing so, may exercise all the powers subject to any relevant laws and regulations and to the Entities’ Articles of Association. In general, the Board of Directors are accountable to their entities, owners, regulators and legislators and to other stakeholders.

Responsibilities of the Board

Typically the Board responsibilities include, but are not limited to:



Formulation of Entity’s strategy -

Market positioning & setting the direction - Reviewing and deciding key resources - Determining Risk appetite and risk management framework

 Supervision and the oversight of corporate governance. The Board may oversee or delegate the responsibility for the oversight of corporate governance to one or more Committees of the Board as it deems fir, for: - Development of appropriate internal control framework and review of policies and practices - Review and monitoring of HR practices - Review of risks including fraud risk and complianceOverseeing CEO and key management performance and setting clear KPI’s - Monitoring budgeting controls - Reviewing key business results  The oversight of large-scale changes, transformation exercises, mergers, acquisitionsetc.  Recommend the appointment of statutory auditor and approval of the financial statement of the entity to SGRF as shareholder.  The Board may as deemed necessary, delegate any of its powers and authorities for such time and on such terms as it deems fits to committees consisting of one or more directors and (if required) to one or more other persons. The Board typically delegates the management and the day-to-day running of the Entity to the Management in accordance with such policies and directions as the Board may from time to time determine with the exception of matters which the Board’s approval is necessary, including but not limited to for example:  Annual plans/ budgets and performance targets for the Entity.  The establishment of effective procedures for monitoring and control of operations including internal procedures for audit, risk, and compliance.  The authority or the delegation of authority to approve, for example, acquisitions, disposals, investments, capital expenditures, creation of new ventures.  Appointment of certain senior management positions and ratifications of appointments of successors or alternate directors.  Changes in the policies and procedures of the Entity.  Incentive programme for the senior management including the CEO *These guidelines are typical matters, responsibilities, and powers reserved to the board, however, would differ based on each Entity’s articles/memorandum of association. Matters reserved to the Board

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