global credit rating company limited rating policy &...

GLOBAL CREDIT RATING COMPANY LIMITED

RATING POLICY & PROCEDURE

Global Credit Rating Company Limited | Rating Policy & Procedure 1

INDEX – RATING POLICY & PROCEDURE

PAGE

Foreword 2

Section 1 : Global definitions for policies and procedures 3

Section 2 : Rating Policy & Code of conduct 9

Section 3 : Credit rating process 20

Section 4 : Principles for the conduct of rating panels 26

Section 5 : Rating communication policy 27

Section 6 : Prevention and management of conflicts of interest 30

6.1 Identification of potential conflicts of interest 33

6.2 Ancillary and other services policy 34

6.3 Business and relationship management policy 35

6.4 Confidential and sensitive information and avoiding selective disclosure

policy 36

6.5 General nature of compensation arrangements for ratings accorded 37

6.6 Gift and business visit policy 38

6.7 Limitations and restrictions on advising issuers and others policy 39

6.8 Look back review policy 40

6.9 Securities trading policy 40

6.10 Ratings solicitation and participation disclosure policy 42

6.11 Remuneration and employee independence policy 43

Section 7 : File maintenance and record keeping policy: analytics 45

Section 8 : File maintenance and record keeping policy: commercial 49

Section 9 : Procedure for managing analytical complaints 50

Section 10 : Whistle blowing and procedure policy 53


Foreword

A Policy can only ever be as good as one‘s ability to put it into practice. It is from this point

that Global Credit Rating Company Limited (GCR) is committed to adherence to all our policies

and procedures. We support the Policy Fundamentals as embodied in the International

Organization of Securities Commission (IOSCO) and Securities & Exchange Commission (SEC)

Corporate Governance.

All our policies and procedures embody our thought leadership on key elements of our services

and we envisage that they will be revised and updated as our thinking, knowledge and

capabilities around applicable pieces of SEC regulations, IOSCO standards and governance

principles continue to advance.

Our Policy reflects the fundamental values of fairness and integrity that are a part of our daily

lives. Applying these values to our business lives is an extension of standards by which we are

known as individuals and by which we desire to be known as a company. It remains our

responsibility to conduct ourselves in an ethical business manner and also to ensure that

others do the same.

By doing so, we ensure that the good faith efforts of all of us to comply with the Policy are not

undermined. The ultimate responsibility for maintaining the Policy rests with us. As individuals

of personal integrity, we can do no less than to behave in a way that will continue to attract

credit to our company and to ourselves as we continue to lift the bar on acceptable and

desirable business practices.

Key Contacts: -

Adebisi Ajiboye (MD & CEO) [email protected]

Telephone No: (2341 460 5001 / 462 2545)

Internet: www.globalratings.com.ng

http://www.globalratings.com.ng/


Section 1: Global Definitions for Policies and Procedures

The terms below are organised alphabetically as follows:

An Analytical Sector (or Sector) refers to a specific area of expertise within GCR‘s Credit

Rating business, specifically corporate (including local authorities), structured finance,

insurance (including life assurance, reinsurance and medical schemes) and financial institutions

(including servicer and fund ratings).

An Analyst is a GCR Employee assigned to an Analytical Sector whose function is to a) assign

or monitor Credit Ratings, b) assist in drafting materials or developing models being

considered for Ratings Panels, or c) supervise GCR Employees included in Credit Ratings

teams. The definition of Analyst excludes any employee assigned to a ratings team who: (i) is

not involved in the Credit Rating decision or (ii) supports the Credit Rating process solely

through administrative tasks, such as entering information into internal systems.

Ancillary Services are those products and services offered by GCR that are not Credit Rating

Services, and comprise market forecasts, estimates of economic trends, pricing analysis or

other general data analysis and research, as well as related distribution services.

Backup Rating Analyst, Backup Analyst or Backup (also termed the Secondary Analyst) is

the GCR Analyst who is responsible for assisting the Lead Analyst in his/her stipulated duties,

thereby improving the veracity and integrity of the analysis, as well as reducing the risk

associated with the Lead Analyst becoming incapacitated or leaving GCR.

Commercial Activities, Commercial Roles and Commercial Employees refer to the

commercial business activities of GCR and their associated employees, who have no

participation in GCR‘s Credit Ratings Services.

Communication Policy refers to GCR‘s Ratings Communication Policy, which details the

manner in which GCR communicates its Credit Rating Actions to the client and stakeholders in

general.

Confidential Information is any information received by GCR from an Issuer or its

authorised agent in connection with its Credit Rating Services or in connection with providing

Ancillary Services or Other Services, in respect of which GCR has received written notice

specifically indicating the proprietary and confidential nature of the information. However, the

term ―Confidential Information‖ shall not include:

a. information that is publicly known;

b. information available to GCR on a non-confidential basis prior to disclosure by the Issuer or

its agents;

c. information that becomes available to GCR on a non-confidential basis from a third party

that is not reasonably known by GCR to be bound by a confidentiality agreement with the

Issuer or otherwise prohibited from making available such information;

d. information developed independently by GCR without reference to the Confidential

Information; or


e. information that has been aggregated or transformed in such a way that it is no longer

identified as relating to any individual Issuer.

A Credit Assessment is a preliminary indicator of GCR's opinion of creditworthiness and is

expressed in descriptive terms. Such Credit Assessments reflect our view of the general credit

strengths and weaknesses of an Issuer, obligor, a proposed financing structure, or elements of

such structures. It may also pertain to limited credit matters or to carve out certain elements

of credit risk that would ordinarily be taken into account in a Credit Rating. A Credit

Assessment usually represents a point-in-time evaluation and GCR does not maintain ongoing

surveillance of Credit Assessments. A Credit Assessment is confidential.

A Credit Rating is an opinion regarding the creditworthiness of an entity, a debt or financial

obligation, debt security, preferred share or other financial instrument, or of an issuer of such

a debt or financial obligation, debt security, preferred share or other financial instrument,

issued using an established and defined ranking system of rating categories.

A Credit Rating Action is any one of the items detailed below. GCR publishes Credit Rating

Actions via one or more Credit Rating Announcements or on globalratings.com.ng, with a clear

and prominent reference on the relevant webpage to the place where disclosure required by

the applicable laws for Credit Ratings or Credit Rating Announcements can be found.

i. An assignment of a GCR Credit Rating: where a Credit Rating is determined for a specific

Issuer or obligation for the first time.

ii. A change in a GCR Credit Rating (upgrade or downgrade): GCR‘s Credit Ratings are subject

to either upgrades or downgrades as set out below.

- Upgrade: the Credit Rating is moved upwards on the rating scale.

- Downgrade: the Credit Rating is moved downwards on the rating scale.

iii. A change in the Rating Outlook or Rating Watch statuses:

- Credit Ratings are typically assigned with a Rating Outlook (either ―Positive‖,

―Negative‖, ―Evolving‖ or ―Stable‖), indicating the potential direction of a rated entity‘s

rating over the medium term.

- Credit Ratings are deemed to be on ―Rating Watch‖ if a rating is under review for a

possible change in the short term.

- A withdrawal of a GCR Credit Rating – in this instance, GCR will withdraw a rating if i)

it is of the opinion that information received is unreliable or insufficient to accord a

credible credit rating, ii) at the request of the Rated Entity/Issuer, iii) at expiry of the

rating iv) at maturity of the obligation.

Credit Rating Affiliates are those affiliates of GCR, related by ownership or agreement, that

engage in Credit Rating Services in jurisdictions within which GCR does not operate in.

Credit Rating Announcements are those written communications that publicly announce

Credit Rating Actions, and may take the form of publications on GCR‘s website, press

announcements and/or releases to subscribers and other users of Credit Ratings (inter alia).


A Credit Rating Letter is a letter provided by GCR to Rated Entities/Issuers and/or their

agents, confirming the Credit Rating that has been accorded to the Rated Entity/Issuer.

The Credit Rating Process is the process undertaken by GCR and its Analytical Employees in

the accordance and monitoring of Ratings, as detailed in GCR‘s Ratings Process Policy.

A Credit Rating Report is the research report that provides comprehensive detail of the

analytical process undertaken by GCR in the accordance of a Credit Rating.

Credit Rating Services are those products and services offered by GCR, that are derived

from the Credit Rating process and provide an opinion regarding the creditworthiness of an

entity, a debt or financial obligation, debt security, preferred share or other financial

instrument, or of the issuer of such instruments, issued using an established and defined

ranking system of rating categories.

An Employee is any individual who works for GCR in any capacity.

The term Family Members refers to the following persons:

a. an Employee‘s spouse or domestic partner (or any other person with whom an Employee

cohabits and shares financial responsibilities);

b. an Employee‘s minor or dependent children;

c. any other relative sharing the same household as an Employee;

d. any persons who do not live in the same household as an Employee but whose Trades in

Securities are directed by or are subject to the Employee‘s influence or control (either direct

or Indirect): such as parents or children living in separate households who consult with the

Employee before they Trade; and

e. any other natural or legal person, trust, entity or partnership: i) whose managerial

responsibilities are discharged by, ii) that is set up for the benefit of, iii) that is directly or

indirectly controlled by, or iv) whose economic interests are substantially equivalent to, the

Employee or any Family Member.

A Final Credit Rating is a distinguished from an Indicative Credit Rating, in that the latter has

been issued subject to the provision of outstanding data, documents or confirmations, and is

typically issued with an expiry date.

GCR refers to Global Credit Rating Company Limited, which engages in Credit Rating Services

and that also might engage in Ancillary Services or Other Services.

The Global Credit Rating Company Limited Rating Policy (―GCR Policy‖ or the ―Policy‖)

is GCR‘s policy. Except as otherwise noted, the Policy governs the conduct of:

a. GCR; and

b. all Employees whether employed by GCR in a full-time or part-time capacity.

An Indicative Rating (or Indicative Credit Rating) is a Rating accorded with an expiry date

and one that is issued with the intention of converting to a final Credit Rating, subject to the

receipt of outstanding information (e.g. confirmations, signed documents inter alia). Indicative

Credit Ratings may be publicly available or Private Credit Ratings, and are typically used in

structured finance transactions that may require the existence of a Credit Rating prior to the


issuance of debt. GCR will convert an Indicative Credit Rating into a Final Credit Rating should

it receive the finalised information that was used in arriving at the Indicative Credit Rating.

The International Organization of Securities Commissions’ Code of Conduct

Fundamentals for CRAs (―IOSCO Code‖) is a framework Code of Conduct published on

December 23, 2004 and subsequently revised in May 2008, by the International Organization

of Securities Commissions, on which GCR‘s Rating Policy has relevance.

The International Organization of Securities Commissions’ Principles Regarding the

Activities of CRAs (―IOSCO Principles‖) is a set of principles developed by the international

regulatory community and published on September 25, 2003. The IOSCO Principles is the

document upon which the IOSCO Code is based. GCR has endorsed the IOSCO Principles.

Issuer means any entity by which a Security has been issued, guaranteed, or by which the

credit underlying the Security has been otherwise supported. The term Issuer also includes the

corporate parent or majority-owned subsidiary of an Issuer.

Lead Rating Analyst, Lead Analyst or Lead (also termed the Primary Analyst) is the GCR

Employee who is responsible for processing and/or monitoring a given Credit Rating, and has

the primary responsibility for (a) determining a Credit Rating recommendation and/or

presenting that Credit Rating recommendation to a Ratings Panel and (b) Communicating with

an Issuer with respect to a specific Credit Rating Action.

Management or Managers are those Employees who have personnel management

responsibilities.

For purposes of these policies, Material Information refers to any information that: i) might

have an effect on the market for a Security generally; or ii) might affect an investment

decision of a reasonable investor. Examples of Material Information may include, but are not

limited to: sales results; earnings or estimates (including reaffirmations or changes to

previously released earnings information); dividend actions; strategic plans; new products,

discoveries or services; important personnel changes; acquisition and divestiture plans;

financing plans; proposed securities offerings; marketing plans and joint ventures; government

actions; major litigation, litigation developments, or potential claims; restructurings and

recapitalisations; the negotiation or termination of major contracts; and potential or pending

Credit Rating Actions by GCR. Information about pending or future Credit Rating Actions by

GCR or other material public announcements (including, but not limited to, research reports) is

presumed to be Material Information.

Where it is uncertain if a particular piece of information is Material Information, GCR errs

towards caution and assumes that it is Material Information. Whether information is actually

Material Information will depend on the relevant facts and circumstances.

The term Material Non-Public Information refers to that information that is both Material

Information and Non-Public Information.

Non-Public Information is information that is stipulated as confidential by a Rated

Entity/Issuer or that which has not been publicly disseminated.


Own and Ownership refers to all methods by which an Employee may possess an interest in

a Security or an account with a financial services institution, including direct ownership and

beneficial ownership (i.e. sole or shared dispositive or voting power over a Security). For the

purposes of GCR‘s policies and procedures, direct ownership includes all Securities held in trust

(other than a blind trust) and all Securities held in any individual retirement account.

Other Services are products and services that GCR may offer that are neither Credit Rating

Services nor Ancillary Services.

Principles for the Conduct of Ratings Panels is the GCR policy governing the composition,

functioning and conduct of its Ratings Panels.

Private Credit Rating means a Credit Rating that is not made public and is not disclosed to

any third party, other than advisors bound by appropriate confidentiality obligations, without

the authorisation of the party who requested the Credit Rating.

Public Credit Ratings refer to those Credit Ratings accorded by GCR that have previously

been publicised, and are therefore considered to be in the public domain and therefore subject

to specific requirements in terms of disseminating Credit Rating Actions in line with regulations

and GCR‘s Rating Communication Policy.

Rated Entity refers to any Issuer, obligor, security or other type of financial obligation to

which GCR has accorded a Credit Rating.

Ratings Panel is the committee that is convened in order to assign provisional or final Credit

Ratings, and is subject to the requirements as stipulated in GCR‘s Principles for the Conduct of

Ratings Panels.

Ratings Roles, Ratings Activities (or Credit Rating Activities) and Ratings Employees

refer to those activities and Employees involved in Credit Rating Services, as distinct and

separated from Commercial Activities and Roles. Ratings Analysts or Analysts refers to

those Ratings Employees involved in the specific role of an analyst in any particular Credit

Rating exercise.

Rating Services means any or all of the following: Credit Rating Services and/or Other

Services.

Rating Symbols and Definitions is a reference guide to the definitions of the rating symbols

and rating scales used by GCR.

A Screening Panel is a committee that is convened in order to assess whether information

provided for a Credit Rating is sufficiently comprehensive and of the necessary quality in order

for a credible and accurate Credit Rating to be accorded. The Screening Panel will similarly

assess whether GCR has the required methodologies, models and criteria, as well as sufficient

expertise and available resources, in order for a credible and accurate Credit Rating to be

timeously accorded.

Security means any non-deposit financial instrument that is, or is derived from, any equity or

fixed income security. This includes, but is not limited to: stocks, bonds, debentures, options,


equity securities, convertible securities, warrants, derivative instruments (including swaps,

commodities and futures based on or linked to equity or fixed income securities), notes,

collective investment schemes, fixed annuities, variable annuities, open- or closed-end mutual

funds, exchange traded funds (ETFs) and unit investment trusts (UITs). In this Policy

references to Securities issued or guaranteed by an Issuer include securities derived from any

equity or fixed-income securities issued by that party, even if no direct ownership is held.

Securities Trading Policy is GCR‘s Securities Trading Policy, which governs the conditions

and limitations placed on the investment activities of Ratings Employees.

A Sector Head is a Ratings Employee of GCR that is responsible for oversight of a particular

Analytical Sector in which GCR accords Credit Ratings (for example the corporate sector or

structured finance sector). A Sector Head is also considered to be a Senior Analyst for the

purposes of Ratings Panels.

A Senior Analyst is a Ratings Employee in a specifically analytical role, which has a

prerequisite minimum of experience as a Credit Ratings Analyst in a specific Ratings Sector.

This is typically measured by the number of years of experience, and the number of ratings

exercises in which the Employee has been involved. A Junior/Trainee Analyst is a Ratings

Employee who is of limited experience, and accordingly, cannot act as a Lead Analyst on a

Credit Rating exercise or vote in a Ratings Panel. Analyst‘s that are neither Senior nor Junior

are typically referred to simply as Analyst.

The term Trade refers to any transaction by which a person acquires or divests himself/herself

from an interest or position in a Security, including but not limited to purchases, sales,

repurchase agreements, short sales, spread betting (and other forms of gambling on

Securities) and entering into/liquidating derivative transactions.

Unsolicited Credit Ratings (and Public Information Ratings) are those Credit Ratings not

initiated at the request of the Issuer or Rated Entity (i.e. they do not sign a rating engagement

contract and do not pay a rating fee), but are undertaken for reasons of public interest or

because such a rating has a material bearing on another Credit Rating (often in structured

finance transactions). GCR will disclose the extent to which such an Unsolicited Credit Rating is

based on Material Non-Public Information. In some cases, Credit Ratings may be assigned

where the Issuer/Rated Entity has not participated in the Credit Rating Process. In these cases,

GCR will only assign or maintain a Credit Rating if it has sufficient information to

assign/maintain the rating. Ratings that are accorded/maintained by GCR on a non-

participative basis shall carry a disclosure to document their non-participation status. Such

Credit Ratings are deemed to be Public Information Credit Ratings.


Section 2: Rating Policy & Code of Conduct

The GCR Rating Policy is organised into three sections, structured to track the IOSCO Code as

closely as possible, as follows:

The Quality and Integrity of the Rating Process;

Independence and Avoidance and/or Management of Conflicts of Interest; and

Responsibilities to the Investing Public and Issuers.


The Provisions

1. Quality and Integrity of the Rating Process

Per the IOSCO Principles, GCR will endeavour to provide forward-looking opinions on the

relative creditworthiness of Issuers of debt and debt instruments in order to help reduce the

information asymmetry existing between those Issuers and potential purchasers of their debt.

A. QUALITY OF THE RATING PROCESS

1.1 Since Credit Ratings are opinions about current and future creditworthiness, the

performance of an individual Credit Rating opinion will not be judged on the basis of the

individual outcome, but on whether the individual Credit Rating was formed pursuant to

GCR‘s established processes. Where possible, the performance of Credit Ratings

collectively will be evaluated based on how they perform over time on a statistical basis

(e.g., default and transition studies, accuracy ratios, and stability measures).

1.2 GCR will develop and maintain rigorous and systematic rating methodologies. Where

possible, resulting Credit Ratings will be periodically subjected to objective validation

based on historical experience. The Analytical Employees are responsible for monitoring

the appropriateness and completeness of rating methodologies and procedures, and for

approving any significant changes to these rating methodologies and procedures.

1.3 In assessing creditworthiness, Analysts will use GCR‘s methodologies. Analysts will apply

a given methodology in a consistent manner, as determined by GCR.

1.4 Credit Ratings will be determined by Ratings Panels and not by any individual Analyst. In

producing a Credit Rating, GCR will consider all information known about an Issuer and

believed to be relevant by the applicable Analysts and Ratings Panel, including

information received from a source other than the Issuer or underwriter that the

applicable Analysts and Ratings Panel find credible and potentially significant to a Credit

Rating Action in a manner generally consistent with GCR‘s published methodologies. In

formulating Credit Ratings, GCR will employ Analysts who, individually or collectively,

have appropriate knowledge and experience in developing a Credit Rating opinion for the

type of credit being analysed.

1.5 GCR reflects a File Maintenance and Record Keeping Policy that is compliant with

applicable laws when maintaining records used to support its Credit Ratings and research

processes. Employees are expected to familiarise themselves with GCR‘s record retention

policies, and periodically certify their compliance with such policies.

1.6 GCR and its Analysts will take steps to avoid issuing any credit analyses, Credit Ratings

or reports that contain misrepresentations or are otherwise misleading as to the general

creditworthiness of an Issuer or obligation.

1.7 GCR will invest sufficient resources to carry out high-quality credit assessments of

Issuers or obligations that it rates. In deciding whether to rate or continue rating an

obligation or Issuer, GCR will assess whether it is able to devote sufficient personnel with

appropriate skills to make a proper Credit Rating assessment, and whether its personnel

will likely have access to sufficient information to make this assessment. For Credit


Ratings that present limited historical data, GCR will prominently disclose such limitation

in its Credit Rating Announcements. GCR reflects the necessary controls to ensure that

the information it uses in assigning a Credit Rating is of sufficient quality and from

reliable sources including independent third-party sources.

For new types of financial products presenting limited historical data (such as an

innovative financial vehicle), GCR will not provide a Credit Rating unless it believes that it

has sufficient information and the appropriate analytical skills to do so.

GCR has policies and procedures in place, including a review function comprising at least

one senior manager, to:

1.7.1 review the feasibility of providing a Credit Rating for a type of structure that is materially

different from the structures GCR has rated;

1.7.2 at least each twelve months, formally & rigorously assess the methodologies & models

used by GCR, as well as any significant changes thereto; and

1.7.3 assess whether existing methodologies & models for determining Credit Ratings of struc-

tured products are appropriate when the risk characteristics of the assets underlying a

structured product have materially changed. In cases where the complexity or structure

of a new type of structured product or the lack of robust data about the assets underlying

the structured product raise serious questions as to whether GCR can determine a

credible Credit Rating for the security, GCR will refrain from issuing such a Credit Rating.

1.8 GCR will maintain ongoing training for Analysts.

1.9 GCR will allocate Analysts and organise its Ratings Panels so as to promote continuity

and avoid bias in its Ratings Activities.

B. MONITORING AND UPDATING

1.10 GCR will allocate adequate personnel and financial resources to the monitoring &

updating of its Credit Ratings. Once published, and unless withdrawn, or for Credit

Ratings that clearly indicate they do not entail ongoing surveillance, GCR will monitor the

Credit Rating on an ongoing basis and update it by:

a. at least once in any twelve month period, reviewing the creditworthiness of the Issuer or

other relevant entity or debt or debt-like securities;

b. initiating a review of the status of the Credit Rating upon becoming aware of any

information that might reasonably be expected to result in a Credit Rating Action

(including withdrawal) consistent with the applicable rating methodology; and

c. updating on a timely basis the Credit Rating, as appropriate, based on the results of the

above review.

Where practicable, subsequent monitoring will incorporate all cumulative experience

obtained. GCR will apply changes in ratings criteria and relevant key rating assumptions

both to initial and subsequent Credit Ratings.

1.11 Should GCR use separate analytical teams for assigning initial Credit Ratings and for the

subsequent monitoring of structured finance Credit Ratings, each team will have the

requisite level of expertise and resources in order to perform its respective functions

proficiently and in a timely manner. GCR will continuously evaluate its internal processes


and market trends so as to maintain operational flexibility and allocate resources needed

to monitor existing Credit Ratings and conduct reviews on a timely basis.

1.12 GCR will publish a Credit Rating Announcement if it discontinues a public Credit Rating on

an Issuer or Obligation (except for routine debt maturities, calls, or redemptions), in

accordance with its policies & procedures regarding the withdrawal of Credit Ratings.

Similarly, where a Credit Rating is provided to subscribers only, GCR will announce the

discontinuation of such a Credit Rating to these subscribers. Continued publication of any

discontinued rating will be accompanied by details of when the Credit Rating was last

updated and will stipulate that it has been discontinued.

C. INTEGRITY OF THE RATING PROCESS

1.13 GCR and its Employees will comply with all applicable laws and regulations governing

their activities in all the jurisdictions in which it operates. Where a provision in the Policy

contradicts applicable laws and regulations in a jurisdiction in which GCR operates, then

that provision of the Policy will not apply in that jurisdiction to the extent of the disparity.

1.14 GCR and its Employees will deal fairly and honestly with Issuers, investors, other market

participants, and the public in general.

1.15 GCR will hold its Employees to high standards of integrity, and will not knowingly employ

individuals with demonstrably compromised integrity.

1.16 GCR and its Employees will not, implicitly or explicitly, give any assurance or guarantee

of a particular Credit Rating prior to a Ratings Panel decision. This does not preclude GCR

from developing prospective assessments used in structured financings or similar

transactions.

1.17 GCR Employees are prohibited from making proposals or recommendations to an obligor

or Issuer, underwriter or sponsor of a security about the corporate or legal structure,

assets, liabilities or activities of an obligor or Issuer. In assessing credit risk, GCR

Employees may formally hold discussions with an Issuer or its agents so as to a)

understand the particular facts and features and any modification thereof, as proposed

by the Issuer or its agents; and in turn explain to these parties the Credit Rating

implications of the proposed facts and features in respect of GCR‘s rating methodology.

1.18 Although not required to be experts in law, GCR Employees are expected (and in some

instances legally required) to report activities/conduct by another Employee, or an entity

controlled by GCR, which is reasonably considered to be illegal, unethical or in breach of

this Policy. Employees of GCR are required to report such information immediately to the

Compliance Officer, Chief Executive Officer or the Employee‘s manager/supervisor of

GCR, as appropriate, so proper action may be taken. Furthermore, GCR Employees are

expected to report the activities that a reasonable person would question. Any Senior

Employee who receives such a report from a GCR Employee is obligated to take

appropriate action, as determined by the laws and regulations of the jurisdiction and in

accordance with GCR‘s rules, policies and guidelines.

1.19 Management will prohibit retaliation by any Employee or by GCR itself against any

Employee who, in good faith, reports a possible violation as above.


1.20 Neither GCR nor any CRA under its control, including their respective Employees, will:

a. provide rating advisory services;

b. act as a broker or dealer engaged in the business of underwriting securities or money

market instruments; or

c. have a financial or controlling interest in an entity rated by GCR or any of its ―Credit

Rating Affiliates‖.

2. Independence and Avoidance and/or Management of Conflicts of Interest

A. GENERAL

2.1 GCR will not delay or refrain from taking a Credit Rating Action, or from initiating or

concluding a Credit Rating, as a result of the potential effect (economic, political, or

otherwise) of the action on GCR, an Issuer, an investor or other market participants.

2.2 GCR and its Analysts will use care and professional judgment to maintain both the

substance and appearance of independence and objectivity.

2.3 The determination of any Credit Rating accorded by GCR will only be influenced by

factors relevant to the Credit Rating process.

2.4 The Credit Rating that GCR assigns to an Issuer or security will not be affected by the

existence of, or potential for, a business relationship between GCR (or its affiliates) and

the Issuer (or its affiliates), or any other party, or the lack of such relationship.

2.5 GCR reflects Credit Rating Activities and Employees that are operationally & legally

separated from its Commercial Activities, and any other business that may present a

conflict of interest. Moreover, for Ancillary Services and Other Services, GCR has policies,

procedures and mechanisms to minimise the likelihood that conflicts of interest with

GCR‘s Credit Rating Services will arise, or in need to manage conflicts that may arise.

GCR will disclose on www.globalratings.com.ng any Ancillary Services and Other Services

it offers. Should GCR intend to offer new Ancillary or Other Services, it will consult with

its Compliance Departments and thereafter with the applicable regulatory authority.

B. RATING SERVICES PROCEDURES AND POLICIES

2.6 GCR reflects and discloses written internal procedures and mechanisms to:

a) identify; and b) eliminate, or manage and disclose (as appropriate) actual or potential

conflicts of interest that may influence the opinions & analyses that GCR makes or the

judgment & analyses of its Employees that influence Credit Ratings decisions.

2.7 GCR shall disclose such conflict avoidance and management measures on GCR‘s website

www.globalratings.com.ng

2.8 GCR‘s disclosures of actual and potential conflict of interest shall be complete, timely,

clear, concise, specific and prominent.

2.9 GCR has disclosed, and will continue to disclose, the general nature of its compensation

arrangements with Rated Entities.

a. GCR neither provides consulting services nor receives compensation from Rated

Entities/Issuers that is unrelated to its Rating Services. If GCR were to receive




compensation from a rated Issuer unrelated to its Rating Services, it would disclose the

proportion such non-rating fees constitute against the fees received from the Issuer for

Rating Services.

b. GCR will disclose if it receives 10% or more of its annual net billings from a single Issuer,

originator, arranger, client or subscriber (including any of their affiliates).

2.9 In accordance with the Securities Trading Policy, GCR and its Employees may not engage

in any Securities (including derivatives) trading that presents conflicts of interest with

GCR‘s or its Employees‘ Credit Ratings Activities.

2.10 In instances where Rated Entities (e.g., governments) have, or are simultaneously

pursuing, affiliated oversight functions related to GCR, GCR will use different Employees

to conduct its Credit Rating evaluations for such rated entities to those Employees

involved in its oversight issues.

C. ANALYST AND EMPLOYEE INDEPENDENCE

2.11 Reporting lines for Employees and their compensation arrangements will be organised to

eliminate or effectively manage actual & potential conflicts of interest.

a. Analysts will not be compensated or evaluated based on the revenue that GCR derives

from Issuers that the Analyst rates or regularly interacts with.

b. GCR will conduct formal and periodic reviews of compensation policies and practices for

Employees who participate in, or might otherwise have an effect on, the Credit Rating

process - to ensure that these policies and practices do not compromise the objectivity of

GCR‘s Credit Rating Activities.

2.12 GCR has separated Analysts who are involved in the compilation of Ratings and

Commercial Activities. Accordingly, GCR Employees who compile rating reports or who

are involved in the development/approval of models or methodologies used in providing

ratings will not participate in discussions regarding fees or payments with any Rated

Entity or prospective client. Employees in Commercial Roles will not participate in

monitoring of Credit Ratings or in the development of models or methodologies used in

providing Rating Services.

2.13 As detailed in various policies & procedures, Employees shall not participate in or

otherwise influence the determination of the Credit Rating of any particular entity or

obligation if the Employee, or the spouse, partner or child:

a. owns more than 1% in securities or derivatives of a GCR rated entity. The employee

shall disclose his/her extent of holdings in securities and derivatives to GCR five (5)

working days prior to commencement of the rating process.

b. owns more than 1% in securities or derivatives of any entity related to a Rated

Entity, the ownership of which or intention thereof is known or ought to be known

by the Employee to constitute or to cause a conflict of interest or a potential thereof

and or be deemed to be an undesirable or unacceptable practice to GCR, other than

holdings in collective investment schemes;


c. has or had a recent employment or other significant business relationship with the

Rated Entity that either constitutes a conflict of interest or creates the impression of

a conflict of interest that GCR deems to be unacceptable;

d. has an immediate Family Member or a person who by definition in terms of GCR‘s

policy on conflict of interest is deemed a Family Member who currently works for the

Rated Entity; or

e. has, or had, any other relationship with the Rated Entity or any related entity

thereof that may cause or may be perceived as causing a conflict of interest or a

potential thereof.

2.14 In accordance with the Securities Trading Policy, a Ratings Employee, who owns more

than 1% of securities in respect of a Rated Entity or to be Rated Entity, must disclose

such ownership prior to commencement of rating process.

2.15 It accordance with the Gift and Business Visit Policy, GCR prohibits its Employees from

soliciting or accepting money, gifts, favours, services or entertainment from any

customer (i.e. any third party with whom GCR has a business relationship that relates to

Credit Rating activities), other than those gifts constituting a minimal monetary value.

2.16 Any Analyst or Manager who becomes involved in any personal relationship that creates

the potential for real or apparent conflict of interest (including any personal relationship

with an employee of a Rated Entity, or agent of such entity within his or her area of

analytical responsibility), will be required to disclose such relationship to his/her

immediate supervisor and GCR‘s Compliance department. Thereafter, GCR will take

appropriate steps to mitigate the real or apparent conflict.

2.17 Where an Analyst or any Ratings Employee leaves the employ of GCR and becomes an

employee of an Issuer or underwriter (amongst others) that the Employee was involved

in rating or of a financial firm with which he or she had dealings as part of his or her

duties at GCR, GCR will conduct a look back review of such Analyst or Employee. Where

required by law, GCR will report such instances to the regulatory authorities.

3. Responsibilities to the Investing Public and Issuers

A. TRANSPARENCY AND TIMELINESS OF RATINGS DISCLOSURE

3.1 In accordance with its Principles for the Conduct of Ratings Panels and Ratings

Communication Policy, GCR will distribute as soon as reasonably practical its Credit

Rating Actions regarding the Issuers, debt and debt-like obligations that it rates.

3.2 GCR will make Credit Rating Actions on public debt securities and/or public debt Issuers

available to the public on a non-selective basis and without cost. Such Credit Rating

Actions will be posted on GCR‘s public website (www.globalratings.com.ng), and GCR will

also disclose if the Credit Rating Action is based in whole or part on Material Non-Public

Information. The public may obtain a current Public Credit Rating and any relevant Credit

Rating Announcement for any Issuer, debt or debt-like obligation at no cost.

3.3 Upon the request of an Issuer, and at GCR‘s sole discretion, GCR may agree to keep a

Credit Rating confidential. However, if an Issuer or security — including a tranche of a


structured finance security — already carries a public Credit Rating from GCR, all

subsequent decisions to change or discontinue such Credit Rating will be made available

to the public.

3.4 The Ratings Communication Policy is freely available to the public on

www.globalratings.com.ng, detailing policies and procedures for the distribution of

ratings, reports and updates.

3.5 In each of its Credit Rating Announcements, GCR will include certain information

consistent with the prevailing law in the jurisdiction in which the rating has been

accorded and published, including but not limited to:

a) a reference to the date on which the Credit Rating was last updated;

b) a reference to the principal methodology(ies) and model(s) used to determine the Credit

Rating. GCR will explain if a Credit Rating is based on more than one principal

methodology and if review of only one methodology might cause financial market

professionals to overlook other important aspects of the Credit Rating. GCR will also

indicate where different methodologies and a discussion of other important aspects

factored into the Credit Rating can be found on www.globalratings.com.ng.

c) sufficient information about its procedures, methodologies and assumptions (including

financial statement adjustments that deviate materially from those contained in the

issuer‘s published financial statements and a description of the Ratings Panel process, if

it has deviated from the Principals for the Conduct of Ratings Panels) so that outside

parties are able to understand how a Credit Rating Action was arrived at by GCR. This

will include the meaning of each rating category and the definition of default, and the

time horizon GCR has used in making its Credit Rating Action.

i) Where GCR rates a structured finance product, it will provide investors, clients,

subscribers and other relevant stakeholders with sufficient information about its loss and

cash-flow analysis such that the counterparty can understand the basis for the Credit

Rating Action. Furthermore, GCR will disclose the degree to which it has analysed how

sensitive a rating of each structured finance product is to changes in GCR‘s underlying

assumptions.

ii) GCR has differentiated its ratings of structured finance products from traditional

corporate bond ratings, with ―(sf)‖ appended to each structured finance Credit Rating

symbol. How this differentiation functions is clearly and prominently disclosed on

www.globalratings.com.ng, where clear definitions of rating symbols and scales can also

be found. GCR clearly defines and applies its Credit Rating symbols in a consistent

manner for all types of securities to which that symbol is assigned.

iii) GCR will encourage structured finance Issuers and originators of structured finance

products to publicly disclose all relevant information regarding their products.

iv) GCR has and continues to assist investors in developing a greater understanding of what

a credit rating is, and the limits to which credit ratings can be put to use in respect of the

financial products that GCR rates.

d) a summary of the key elements of the rationale underlying the Credit Rating;


e) a clear indication of the substantially material sources of information that were used to

prepare the Credit Rating; and

f) a description of the attributes/limitations of the Credit Rating, indicating if GCR considers

the quality of information on the Rated Entity satisfactory.

3.6 Where feasible and appropriate, prior to issuing or revising a Credit Rating, GCR will

inform the Issuer of the critical information/principal considerations upon which the

Credit Rating is based and afford the Issuer an opportunity to submit additional factual

information not previously available to the Issuer, or to clarify any likely factual

misperceptions in order to produce an accurate Credit Rating. GCR will duly evaluate the

Issuer‘s response. Where in particular circumstances GCR has not informed the Issuer

prior to issuing or revising a Credit Rating, GCR will inform the Issuer as soon as

practicable thereafter and will explain the reason for not informing the Issuer.

3.7 Where not precluded by specific circumstances, GCR will allow the Issuer a brief period of

time, which may vary depending on the circumstances, to notify GCR of the Issuer‘s

desire to appeal the Credit Rating decision. Appeals must be based on information not

previously available to the Issuer or GCR.

3.8 In order to promote transparency and enable the market to best judge the performance

of its Credit Ratings, GCR (where possible) will publish sufficient information about the

historical default rates of its rating categories and whether the default rates of these

categories have changed over time, so that interested parties can understand the

historical performance of each category and if & how rating categories have changed, as

well as be able to draw quality comparisons among Credit Ratings assigned by different

CRAs. If the nature of the rating or other circumstances renders a historical default rate

inappropriate, statistically invalid, or otherwise likely to mislead the users of the rating,

GCR will explain this. Such information will include verifiable, quantifiable historical

information about the performance of GCR‘s Credit Rating opinions, organised and

structured, and, where possible, standardised in such a way to assist investors in

drawing performance comparisons between GCR and other CRAs. On request, GCR will

provide data to the relevant regulatory authorities to allow those authorities to conduct

their own evaluation of the performance of GCR‘s Credit Ratings.

3.9 To promote transparency of GCR‘s interactions with Issuers, GCR will publicly designate

and disclose if an Issuer has declined to participate in the Credit Rating process. As a

publisher of credit related opinions, GCR reserves the right at any time to issue

Unsolicited Credit Ratings if it believes: i) there is a meaningful credit market or investor

interest served by the publication of such a Credit Rating; and ii) it has sufficient

information to support adequate analysis and, if applicable, on-going monitoring. When a

Credit Rating is unsolicited, GCR will not seek or accept remuneration for its analytical

services from the Issuer for at least one year after the publication of such Credit Rating.

3.10 GCR will publicly disclose via press release and posting on www.globalratings.com.ng any

material modifications to its Credit Rating methodologies and related significant

practices, procedures, and processes. Where feasible and appropriate, disclosure of such

material modifications will be provided to market participants for comment and critique



prior to their implementation. GCR will carefully consider the various uses of Credit

Ratings before modifying its methodologies, practices, procedures, and processes.

3.11 As a publisher of credit research related to its Credit Ratings, GCR will seek to provide

clear, accurate, transparent, and high quality research about rated Issuers and issues.

The sale of GCR‘s credit research is separated from its research and rating process so as

to help protect the latter activities from improper conflicts of interest. As aforementioned,

Confidential Information and Non-Public Information about GCR‘s future Credit Rating

Actions will not be selectively disclosed to research subscribers or others.

B. TREATMENT OF CONFIDENTIAL INFORMATION

3.12 GCR reflects procedures and mechanisms to protect the confidential nature of

information shared with it by Issuers under confidentiality agreements or otherwise

under a mutual understanding that the information is shared confidentially. Unless

otherwise permitted by the confidentiality agreement and consistent with applicable laws

or regulations, GCR and its Employees will not disclose confidential information in press

releases, through research conferences, to future Employers, or in conversations with

investors, other Issuers, other persons, or otherwise.

3.13 GCR and its Employees use confidential information only for purposes related to Credit

Rating Services and in accordance with any confidentiality agreements with the Issuer.

3.14 GCR‘s and its Employees take all reasonable measures to protect all property and records

belonging to or in possession of GCR from fraud, theft or misuse.

3.15 GCR Employees are prohibited from Trading in Securities when they possess confidential

information concerning the issuer of such security, in line with the GCR Securities Trading

Policy.

3.16 In preservation of confidential information, GCR Employees are required to familiarise

themselves with the GCR Securities Trading Policy, and periodically certify their

compliance as required by such policies.

3.17 GCR‘s Employees may not selectively disclose any Non-Public Information about GCR‘s

Credit Ratings or possible future Credit Rating Actions, except to the Issuer or its

designated agents.

3.18 GCR‘s Employees may not share confidential information entrusted to GCR with

employees of any affiliated entities that are not CRAs. Furthermore, GCR‘s Employees will

not share confidential information internally except on an ―as needed‖ basis.

3.19 GCR‘s Employees may not use or share confidential information for the purpose of

trading securities, or for any other purpose apart from the conduct of GCR‘s business.

3.20 GCR‘s policy on the prevention of misuse of material non-public information

stipulates how GCR will deal with the protection of confidential information.

C. REFERRING TIPS TO LAW ENFORCEMENT OR REGULATORY AUTHORITIES

3.21 GCR may be required to refer to appropriate law enforcement or regulatory authorities

any information that GCR has received from a third party and finds credible that alleges that

an Issuer of securities rated by GCR has committed or is committing a violation of law that has


not been adjudicated by the relevant court. GCR is not required to verify the accuracy of the

information alleging the material violation of law.

4. Enforcement/Disclosure of the Policy & Communication with Market Participants

4.1 Management will be responsible for the implementation and the enforcement of this

Policy. The Compliance Department will annually review and assess the efficacy of such

implementation and enforcement.

4.2 This Policy is largely derived from the IOSCO Principles and IOSCO Code, but has been

slightly modified to better align it with GCR‘s business model & practices and SEC

regulations.

4.3 With respect to other standards that are incorporated in this Policy, GCR will use its good

faith efforts in implementing such standards.

4.4 GCR will publish in a prominent position on www.globalratings.com.ng links to (1) the

GCR Policy; (2) a general description of the methodologies GCR uses in assigning Credit

Ratings; and (3) information about GCR‘s historic Credit Rating(s) performance (where

available).

4.5 GCR management personnel assesses GCR‘s adherence to the procedural provisions of

this Policy. An Employee who becomes aware of a breach of this policy will be required to

report such breach in terms of GCR‘s ‗Whistle Blowing Policy’.

4.6 GCR will review its policies and procedures that relate to Credit Rating Services and

conflicts of interest, its internal control systems for such policies and procedures from

time to time. A report will be made to the Chairman of GCR‘s Board of Directors on GCR‘s

compliance with the policies, procedures, systems and practices, and recommend any

changes as necessary.



Section 3: Credit Rating Process Policy

GCR‘s Credit Ratings Process Policy is designed to provide a general outline of the various

stages of the Credit Ratings Process.1

Initiation of a Credit Rating

A Credit Ratings Process is mostly initiated by a Rated Entity/Issuer, which contractually

engages GCR to perform Credit Ratings Services. A Credit Rating resulting from such

engagement is deemed to be a Solicited Credit Rating. Sometimes GCR accords Unsolicited

Credit Ratings, where no contractual engagement with the Rated Entity/Issuer is in place. In

such instances, GCR will indicate the extent to which management has participated in the

Credit Rating Process. Where the Issuer/Rated Entity chooses not to participate in the Credit

Rating Process, ratings that are accorded/maintained by GCR carry an additional disclosure to

document their non-participation status. Such Credit Ratings are deemed to be Public

Information Credit Ratings. In these cases, GCR will only assign or maintain a Credit Rating if

it has sufficient information to assign/maintain the rating.

The time taken to accord a Credit Rating can vary and will for example depend on the time

taken by the Rated Entity/Issuer and/or its agents to meet information requests in a timely

manner. A full Credit Rating Process typically takes between 6 and 8 weeks, although longer or

shorter periods may apply depending on the circumstances.

In certain circumstances GCR, through its Credit Rating (Screening) Panel, will determine at its

sole discretion whether or not it will accord a Credit Rating. A leading principle for the decision

not to accord a Credit Rating is the availability of information of sufficient quality as regards to

accuracy, reliability and history in order to be able to accord a credible Credit Rating. In

addition, GCR may decide not to accord a Credit Rating due to complexity or the absence of

appropriate Credit Rating criteria.

Credit Ratings Screening Panel

Where an Analyst is uncertain as to whether or not a credible Credit Rating can be accorded,

the Analyst will present the case to a Credit Ratings Screening Panel. This panel will decide

whether or not there is sufficient basis to continue with the Credit Rating Process.

A Credit Ratings Screening Panel will follow similar principles as those described under

―Principles for the Conduct of Ratings Panels Policy‖.

Allocation of an Analyst

At the start of the year or in the case of a new rating, at the start of the Credit Rating Process,

GCR will allocate an Analyst to perform the process. The Analyst is responsible for:

1 This policy is designed to provide a brief overview of various key facets of the Credit Rating process, and should be

read in conjunction with GCR‘s Rating Policy Procedure, the Principles for the Conduct of Ratings Committees and the

Policies and Procedures for the Prevention, Identification and Management of Conflicts of Interest. These are freely

available on GCR‘s website, www.globalratings.com.ng.


Gathering information from and conducting meetings with the Rated Entity/Issuer and/or its

agent;

Performing credit analytics and compiling a Credit Rating Report, as well as a Ratings Panel

Pack;

Presenting the results and a Credit Rating recommendation to a Ratings Panel; and

Communicating Credit Rating Actions to the Rated Entity/Issuer and

Communicating the Credit Rating Actions to the market (in cases of public ratings).

At no time may the Analyst, or any other person involved in the rating process, make

proposals, recommendations or give advice, either formally or informally, on ways to improve

the rating, including the design of structured finance instruments or any other aspect of the

rating on which the credit rating agency is expected to issue a credit rating.

Gathering of Information and Conducting of Meetings

At the start of the Credit Rating Process Analysts will compile a list of requested information to

be provided by the Rated Entity/Issuer. After having received the information, the Analysts will

schedule meetings with relevant senior management of the Rated Entity/Issuer to discuss

issues material to the Credit Rating. GCR may also liaise with agents such as accountants and

lawyers to discuss relevant matters.

Analysis of the Information and According of the Credit Rating

GCR‘s analysis and Credit Rating Actions are based on information provided by the Rated

Entity/Issuer and/or information available from other sources known to it and believed to be

relevant and reliable. GCR‘s Analysts may have access to Confidential Information obtained

during the Credit Rating Process. Such information will be treated in accordance with GCR‘s

―Confidential Information Policy‖.

The Analysts will use the information to compile a Credit Rating Panel Pack, which will typically

include the Credit Rating Report. The Analysts will present the pack and/or report together

with a Credit Rating recommendation to a Ratings Panel. Such Ratings Panel is conducted in

accordance with GCR‘s ―Principles for the Conduct of Ratings Panels Policy‖.

GCR‘s Credit Ratings are accorded and monitored in accordance with relevant GCR Credit

Rating criteria or methodologies. If no specific criteria apply, GCR will explain in the Credit

Rating Report what methodology has been applied to accord the Credit Rating. Rating Criteria

and methodologies are not of a static nature and are revised from time to time, and at least

reviewed annually. The panel reviewing the Credit Rating criteria or methodology must consist

of the relevant Sector Head and its senior rating employees, as well as three (3) independent

members from the pool of non-related Sector Heads and/or senior analysts in order to have a

qualifying quorum.

Communication of draft Credit Rating report to the Rated Entity/Issuer

Prior to distribution to the Ratings Panel, GCR will typically provide a draft copy of the Credit

Rating Report to the Rated Entity/Issuer and/or its agent. GCR will allow the Rated

Entity/Issuer ten (10) working days to provide factual comments and corrections, as well as

identify any Confidential Information for removal from the final version of the report.


Allowances for time extension will be made under exceptional or justifiable circumstances. If a

Rated Entity/Issuer suggests wording changes, GCR will consider such comments but is not

obliged to make any changes. Any proposed change that corrects a factual error or prevents

the inadvertent release of Confidential Information will be given consideration before final

release of the Credit Rating Report and will be made, if warranted. Changes that reflect

concerns or misunderstandings by the Rated Entity/Issuer will be discussed. In all instances,

GCR will maintain final editorial control over its published materials, including Credit Rating

Rationales. Such a draft copy of the Credit Rating Report sent for comment to a Rated

Entity/Issuer and/or its agent will be accompanied by a note that states:

―GCR is sending you this initial draft so that you can call our attention to any factual errors, as

well as to identify any Confidential Information in the draft that should be removed at the time

of distribution, although will be included for panel purposes. If you have any comments on the

report that are not factual in nature, we encourage you to discuss these with us. Although, we

will use our discretion in making editorial changes to the document, thus ensuring our

independence. This document will be distributed to GCR’s Ratings Panel and a Credit Rating

accorded within ten (10) working days from the time we have sent this email. The Rated

Entity/Issuer is required to provide comments within this time period. In the event we do not

receive comments, we will assume that all is in order and that you have given your consent to

proceed. Please ensure that this draft rating report remains confidential.‖

Communication of Credit Rating Actions to the Rated Entity/Issuer

Following the Rating Panel, GCR will communicate the outcome of the Rating Panel to the

Rated Entity. GCR will typically provide a copy of its final draft Credit Rating Report to the

Rated Entity/Issuer with five (5) working days allowed between the accordance of the Credit

Rating and its ultimate finalisation. This is to allow the Rated Entity/Issuer an opportunity to

appeal the Credit Rating Action, and a final chance to identify Confidential Information. The

specific cut-off time and date of the Feedback Window must be communicated to the client

explicitly, e.g. 5pm, Wednesday the 26th of March. On the morning of the Feedback Window

cut-off date, should no response have been received from the Rated Entity, a second courtesy

email is to be sent to the Rated Entity as a reminder regarding the time allocated for the

Feedback Window. A phone-call is also made during the course of this day, in order to ensure

that the emails have been received by the relevant personnel. In exceptional circumstances,

GCR will allow an additional grace period for feedback on the final Credit Rating Report, so long

as the underlying information remains up to date (for example, budgets provided may not be

older than four months), failing which renewed information must be provided to GCR and a

further Ratings Panel convened, if necessary. The copy of the final draft Credit Rating Report

sent for comment to a Rated Entity/Issuer and/or its agent will be accompanied by a note that

states:

―GCR is sending you this final draft so that you can call our attention to any inadvertent

inclusion of confidential information in the draft. We will finalise and release our rating after a

period of five (5) working days from the time we have sent this email. If we have not received

a response within this time period we will assume all is in order. To ensure uniform distribution


of the Credit Rating Action to the market, the information in this draft report should not be

disclosed or released prior to its finalisation and communication by GCR.‖

If the Credit Rating is a Public Credit Rating, a Credit Rating Announcement will accompany the

Credit Rating Report.

Appeal Process

A Rated Entity/Issuer has the right to appeal a Credit Rating Action. Such an appeal should be

lodged with the relevant Analysts by the Rated Entity/Issuer in writing within five (5) workings

days following the notification of the Credit Rating Action decided by the Ratings Panel.

A Credit Rating Action may only be appealed if the Rated Entity/Issuer is able to provide

additional, material factual information that would have an impact on the Credit Rating Action.

The Analysts will present such additional information to a Credit Ratings Appeal Panel in

accordance with GCR‘s ―Principles for the Conduct of Ratings Panels Policy‖. The decision of the

Credit Ratings Appeal Panel is final and not subject to further appeal.

Monitoring of Credit Ratings

Unless accorded on a ―point-in-time‖ basis, Credit Ratings are monitored periodically. Unless

otherwise required by prevailing regulations, GCR aims to conduct a full review of a Credit

Rating at least annually. Depending on the circumstances more regular reviews may take

place.

Credit Ratings may be changed, maintained, accorded Rating Watches or Rating Outlooks or

Placed Under Review or Expire as a result of changes in, additions to, accuracy of,

unavailability of or inadequacy of information, or for any other reason GCR deems sufficient.

GCR automatically discontinues a Credit Rating when the related Rated Security is paid in full

and does not publicly announce such discontinuations of Credit Ratings. In terms of on-going

Credit Ratings, which reflect either review or expiry date, GCR manages such transactions in

line with the ―Credit Rating Process Timelines” reflected below.

Credit Rating Process Timelines

Once GCR has rated and publicised a Public Credit Rating, GCR becomes responsible to the

investing public for ensuring that the Credit Rating remains current and relevant. For this

reason, and in order to comply with regulatory requirements, all existing Credit Ratings must

be reviewed at least once in each 12 month period (or sooner where applicable). In order to

ensure that sufficient time is allocated to conducting a thorough rating review, each Rating

Analyst must ensure that they conduct their on-site credit rating meetings at least 4 weeks

prior to the review/expiry date. At all times, the review/expiry date will guide the Credit Rating

Process, and the following guidelines have been implemented to ensure conformity to the

above:

• 12 weeks prior to a specific Credit Rating‘s review/expiry date, a 1st system generated

email will be forwarded to the relevant Sector Head informing him/her of such expiry. At

this time, the Sector Head will allocate the company/issuer/transaction for review to a

Rating Analyst, who will in turn immediately make initial contact with the client regarding

the rating review (please refer to GCR‘s Credit Rating Process Policy and Credit Rating


Process Flow Chart for more detail). In addition to the information requested from the

client, the Analyst must ensure that the following excerpt is incorporated into their initial

communication to the client:

―We would like to draw your attention to the fact that the most recent rating accorded to

your company expires on the last day of [XX month], year. In order for GCR to conduct a

thorough rating review of your company, we require all of the requested information to be

submitted at least 6 weeks prior to this date. Further, we are required to conduct the on-

site meetings with your management team at least 4 weeks prior to the expiry date.

Failure to conduct a full credit rating review within the timeframe detailed above, either

due to your company‘s inability to provide all information requested above timeously

and/or management meeting delays, may lead to GCR placing the rating ‗under review‘, or

alternatively withdrawing such rating from the public domain at review/expiry date‖.

• 4 weeks prior to a specific Credit Rating review/expiry date, a 2nd system generated email

will be forwarded to the relevant Sector Head informing him/her of its imminent

review/expiry date (this will exclude rating reviews that have already been finalised prior to

this date). At this point, the Sector Head will liaise with the responsible Analyst to determine

whether any delays regarding the public release of the Credit Rating are likely to be

encountered in the final 4 weeks leading up to the review/expiry date. Should such concerns

be warranted, an urgent meeting of the Sector Head, Analyst and GCR MD will be called to

discuss the options available at review/expiry date.

• In the event that a Credit Rating review of a specific company has not been finalised at the

review/expiry date (i.e. the rating has not been released publically), each Analyst will be

responsible for ensuring that a Rating Announcement is prepared and disseminated to the

market on the review/expiry date. Such Rating Announcement will indicate whether the

Credit Rating has expired or been placed under review, while providing brief explanation as

to the reasons for GCR‘s decision (i.e. insufficient information to conduct a review; client

management delays etc). All Rating Announcements must be signed off by GCR‘s MD.

Credit Rating Dissemination

Following finalisation, Credit Rating Actions are communicated via Credit Rating

Announcements as per GCR‘s Rating Communication Policy.

Limitations of Credit Ratings

GCR will place appropriate disclaimers on its Credit Rating Reports and Credit Rating

Announcements, indicating any material limitations of the Credit Rating.

Other

GCR is committed to applying similar principles as mentioned under this policy to Indicative

Credit Ratings, Credit Assessments, Unsolicited Credit Ratings and Public Information Credit

Ratings.


Credit Rating Process Flow Chart*

* This chart is for illustrative purposes, and the timing and order of the steps may change according to the specific requirements and

unique characteristics of the Credit Rating being accorded. For example, additional interviews may be conducted with management,

while additional Ratings Panels may similarly be convened.

Aro

und 6

-8 W

eeks

Contact between Assigned Analysts and Rated

Entity/Issuer or their Agents

Request and Receive Initial Documents/Information. Desktop

Analysis is undertaken.

Assignment of Analyst

Follow Appeal Process

Allow Opportunity for Rated

Entity/Issuer or its Agents to

Comment upon Credit Rating

Announcements

Conduct Initial/Annual Management Meetings

Conduct Ratings Panel

Create Analytical Pack for Ratings Panel and Distribute to

Relevant Ratings Panel Attendees

Send Draft Credit Rating Report to Rated Entity/Issuer for Factual

Corrections and Identification of Sensitive & Confidential Information

Incorporate Feedback and Complete Credit Analysis and

Credit Rating Report

Communicate Rating Decision

to Issuer Management

Prepare Minute Sheet

Communicate Credit Rating

Action in Accordance with

Rating Type and GCR’s

Communications Policy

As necessary, involve other Analytical Sectors

Rated Entity/Issuer

Appeal?

Send Final Draft Credit Rating Report

to Rated Entity/Issuer to Identify any

Sensitive & Confidential Information

Inadvertently Included

Update and Maintain Files and

Records


Section 4: Principles for the Conduct of Ratings Panels

Credit Ratings issued by GCR are accorded by a Ratings Panel and not by individual Ratings

Employees2. In this regard, Rating Panels are the committees of GCR that are convened in

order to assign Indicative or final Credit Ratings and represent the decisions of GCR as a CRA,

and not the opinion of any single Employee.

A new rating can either be an indicative Credit Rating or a final Credit Rating, by way of an

indicative Ratings Panel or a final Ratings Panel respectively. Multiple indicative Ratings Panels

may be held before a final Credit Rating is accorded. A decision can be made by the Ratings

Panel ONLY if a qualifying quorum attends the Ratings Panel. Such a qualifying quorum must

meet the following criteria:

The panel member is 5 but with a minimum of 3 members that have voting rights in the

Ratings Panel.

At least two (2) of the panel members must be a Senior Analyst and/or a Director, with

at least one of the panel members being independent. The independent panel member

is a non-executive director or his/her nominee Senior Analyst in the absence of the

non-executive director.

The independent panel member is the chairperson of the panel.

The independent panel member who is the chairperson of the Ratings Panel must not have

sales responsibility but must be very knowledgeable and experienced in all spheres of credit

rating undertakings of GCR.

Panel members in relation to whom (potential or actual) conflicts of interest – as described

in GCR‘s relevant policies - exist in relation to the Rated Entity or Rated Securities must

exclude themselves from participating in the Ratings Panel.

Voting rights are allocated to all Ratings Panel members. Ratings Panel members will

typically be allocated a single vote each, except Trainee Analysts attending a Ratings Panel

are not allocated a vote. In addition, where an external party or personnel of related

companies or Non-Ratings Employee has been invited to attend the Ratings Panel, such an

individual is not allocated a vote.

Panel meeting requests must be sent out with adequate notice, and information must be

distributed to all attendees at least three (3) days prior to panel. Sector heads must be copied

and invited to attend if they so choose.

Chairperson to confirm at start of panel that everyone has read the information provided and

this must be recorded on the panel paper.

Ratings Panel decisions are made based on a majority and represent the collective decisions of

the Ratings Panel and not that of any one single panel member. All individual votes of voting

members must be recorded in writing, together with comprehensive minutes, by a non-voting

2 In respect of Credit Assessments, Screening Panels and any ratings that are not Credit Ratings, GCR will conduct a

process similar to a Ratings Panel.


independent member of the panel. Each rating accorded must be recorded by two panel

attendees. Only analytical factors are considered by the Ratings Panel when making a decision.

When practically possible, as appropriate or as required by regulation, the Ratings Panel will

inform its decision to the Rated Entity/Issuer before making it public. The Rated Entity/Issuer

will be provided with the Ratings Panel‘s principal considerations and, if available, a draft

indicative or final Credit Rating report.

Although documented, GCR does not disclose the Ratings Panel information or the names,

titles or votes of Ratings Panel participants to any party, unless required by regulatory

authorities.

Appeal process

The Rated Entity/Issuer has the right to appeal the decision of the Ratings Panel. In order to

do so, within 5 working days of being advised of the Credit Rating Action, the Rated

Entity/Issuer or its representative must appeal to the Appeal Ratings Panel in writing with

additional factual information that could change the Ratings Panel decision. Waivers for time

extension can be granted under exceptional or justifiable circumstances. However, the primary

analyst must forward the request for the waiver in writing to the MD/CEO for approval. The

Appeal Ratings Panel must consist of at least one (1) different independent compared to the

original Ratings Panel in order to have a qualifying quorum. These must be selected from the

pool of qualifying Sector Heads and Senior Analysts.


Section 5: Ratings Communication Policy

GCR‘s Communication Policy intends to provide clarity on how the outcome of GCR‘s credit

rating services is communicated to relevant participants of the rating process. In addition, the

policy highlights the responsibilities of GCR‘s Communication Officer.

Communication of Credit Rating Actions

GCR disseminates Credit Rating Actions differently, depending on whether they are Public

Credit Ratings or Private Credit Ratings.

Public Credit Rating Actions

Public Credit Rating Actions will be communicated by:

Issuing a Credit Rating Letter describing the Credit Rating Action to the Rated Entity/Issuer,

and/or

Issuing a Credit Rating Report to the Rated Entity/Issuer, which is also available to

subscribers of GCR‘s Credit Rating Services, and/or

Publishing a press release and/or Rating Announcement on GCR‘s website and/or other

public media, as well as direct email notifications to subscribers of GCR‘s ratings services,

and

Recording all ratings, including any Credit Rating Action and new Credit Ratings in GCR‘s

Quarterly Ratings Bulletin.

Providing free access to all public ratings (symbols and outlooks only) on GCR‘ website.

Subscribers are able to access rating reports on GCR‘s website at a reasonable fee.

Private Credit Rating Actions

Private Credit Rating Actions will be communicated by:

Issuing a Credit Rating Letter describing the Credit Rating Action to the Rated Entity/Issuer,

and/or

Issuing a Credit Rating Report to the Rated Entity/Issuer.

Private ratings are by nature confidential but GCR may contractually agree that the Rated

Entity/Issuer distributes the letter and/or Credit Rating Report to (prospective) investors and

other relevant counterparties but only to the extent that such investors agree to confidentiality

with the Rated Entity/Issuer and agree that the Credit Rating Action is private and only

intended to be used in a closed circle of known parties. GCR requires Rated Entities/Issuers to

disclose the counterparties to whom it intends to distribute the letter or Credit Rating Report

prior to such distribution. Private ratings can be converted to Public ratings.

Credit Assessment

Although Credit Assessments are not Credit Ratings, GCR will communicate the outcome of

such assessments by issuing a letter to the Rated Entity/Issuer describing the outcome of the

assessment. Credit Assessments are by nature confidential.


Unsolicited Credit Ratings and Public Information Ratings

GCR typically only performs Unsolicited Credit Ratings/Public Information Ratings if these are

material to other Credit Ratings (usually structured finance ratings). GCR will align the

communication of Unsolicited Credit Ratings and Public Information Ratings with whether the

related Credit Rating is a Public or a Private Credit Rating.

Indicative Ratings

Where a rating is referred to as ―indicative‖, this indicates that a full rating has been assigned

based upon the agency‘s expectations regarding final documentation, typically based upon a

review of the final draft documentation provided by the issuer. If such final documentation is

received and is as expected, the Indicative Rating will typically be converted to a final rating.

However, this may not be the case where the indicative rating is withdrawn in the intervening

period. Similarly, the final rating may not be assigned at the same level as the original

Indicative Rating, where the Indicative Rating has been subject to Credit Rating Action in the

intervening period. While Indicative Ratings typically convert to final ratings within a short

time, as determined by the issuer‘s decisions regarding timing of transaction closure, in the

period between assignment of an Indicative Rating and a final rating, Indicative Ratings may

be raised, lowered or placed on Rating Watch or withdrawn, as with final ratings.

Interaction with Ratings Process Policy

GCR will provide the Rated Entity/Issuer with the opportunity to comment on relevant

communications in line with its ―Ratings Process Policy‖ principles before finalising them.

Regulatory Requirements

Rated Entities/Issuers and other participants of GCR‘s Credit Rating Services should note that

GCR may be required by regulatory authorities and/or prevailing regulations to communicate

details of its private Credit Rating Actions and Services to such authorities or to even make

them public.

Other

GCR will clearly note in its Credit Rating Action communications if it relates to:

(a) a New or Existing Credit Rating,

(b) a Final or Indicative Credit Rating,

(c) a Rating affirmation, a Rating change, an Outlook or Rating Watch change, or a Rating

Withdrawal, and

(c) the extent to which the Credit Rating is based upon Material Non-Public Information.

GCR automatically discontinues a Credit Rating when the obligation is paid in full in accordance

with its terms, and does not publicly announce discontinuations of such Credit Ratings but

denotes the discontinuation in its Quarterly Credit Rating Bulletin and public website.

Communication Responsibilities

GCR‘s Communication responsibilities include the following:

Communicate with (potential) investors and the public about questions, concerns or

complaints they may have regarding GCR‘s credit rating services.

Ensure that public Credit Rating Actions are published on GCR‘s website.


Provide press releases and notices/announcements being published by GCR to public media.

Ensure that GCR‘s website is periodically updated with relevant information.

Section 6: Prevention and Management of Potential Conflicts of

Interest

Reflected in this document are the mechanisms by which GCR ensures the integrity of its

Credit Ratings Activities in terms of conflicts of interest.

The management of conflicts of interest is achieved by means of adequate disclosures and

strong corporate governance structures, achieved through appropriate procedures and policies

and robust firewall mechanisms. To this end, GCR periodically reviews its business for potential

and actual conflicts of interest, as periodically disclosed in GCR‘s Identification of Conflicts of

Interest. Any new potential conflicts of interest identified are then assessed in respect of the

risk they pose to the integrity of the business, and appropriately addressed.

GCR believes that conflicts of interests are inherent to a Credit Rating Agency, and can be

comprehensively managed but never completely eliminated. Moreover, as the success of GCR‘s

business depends upon the credibility of the Credit Ratings it accords, this is a strong

disincentive for GCR to allow conflicts of interest to undermine its Credit Rating Actions.

The above notwithstanding, to mitigate actual and perceived conflicts of interest, GCR utilises

i) Policies and procedures and ii) Analytical Controls. This is supplemented by staff training and

education, the monitoring & measuring of conflicts of interest (with scheduled reviews and

compliance testing), and an escalation and remediation process (by way of internal due

processes). Moreover, all Ratings Employees are subject to on-going Fit & Proper

requirements, and an important part of GCR‘s treatment of conflicts of interest is its confidence

in the honesty and integrity of its Ratings Employees.

Policies, procedures and disclosures

GCR has policies and procedures to prevent, manage and mitigate conflicts of interest. In

addition, transparency and adequate disclosure to the general public about GCR‘s operations,

practices and Credit Rating criteria play an important role in mitigating conflicts of interest.

GCR‘s primary policy document is its Rating Policy & Procedure, which covers various potential

conflicts of interest, to which all of GCR‘s Employees subscribe. While the Policy covers broad

issues regarding GCR‘s operations, importantly it stipulates that:

Rating fees paid are not linked to the successful issuance of a Credit Rating or the actual

Credit Rating accorded. Fee ranges are provided, and fees vary from these parameters

depending on the size and complexity of the work.

Commercial Activities and Ratings Activities are separated.

Compensation of Ratings Employees is not in any way linked to the fees received from the

Credit Rating exercises in which they participated.

Credit Rating research and analytics is undertaken and verified by a team of Analysts, while

actual Credit Ratings are assigned by a Ratings Panel.


These and other potential sources of conflicts of interest are covered in more detail in a

number of specific policies/procedures and disclosures, which also strengthen the quality and

veracity of GCR‘s Credit Rating Activities. Other relevant policies include the:

- Credit Ratings Process Policy;

- Principles for the Conduct of Ratings Panels;

- Ancillary and Other Services Policy;

- Business and Relationship Management Policy;

- Confidential & Sensitive Information and Avoiding Selective Disclosure Policy;

- General Nature of Compensation Arrangements for Ratings Accorded;

- Gift and Business Visit Policy;

- Limitations and Restrictions on Advising Issuers & Others Policy;

- Look Back Review Policy;

- Security Trading Policy;

- Ratings Solicitation and Participation Policy; and

- Rating Communication Policy.

Other Disclosures

In addition to the above polices and disclosures, in furtherance of efficient operation & integrity

and to meet the regulatory requirements of various jurisdictions, GCR (where and when

applicable) discloses the following:

- That its Credit Ratings are generally commissioned and paid for by

Rated Entities/Issuers or their agents.

- The nature and quantum of revenues derived from sources besides Credit Rating Services

i.e. from Other Services.

- Its methodologies, details of its models and other Credit Rating criteria, as well as details of

the Credit Rating Process.

- When issuing a Credit Rating Announcement, GCR clearly & prominently states any

attributes and/or limitations of the Credit Rating and information used to reach the Credit

Rating decision; and clearly explains the elements underpinning the Credit Rating. In

addition, GCR‘s Ratings Employees are available to provide explanation and guidance to

users of its Credit Ratings. GCR also includes an attestation with any Credit Rating it issues

that a) no part of the Credit Rating was influenced by any other business activities of GCR;

b) the Credit Rating was based on the merits of the entity, security or financial instruments

being rated; and c) the Credit Rating is an independent evaluation of the risks & merits of

the entity/security/instrument.

- Each Credit Rating Report issued includes disclosure of: a) the name & job title of the Lead

Analyst and any other Ratings Employees involved in compiling the report; b) the material

sources, including the Rated Entity/Issuer, used to prepare the Credit Rating and whether

the Credit Rating has been disclosed to that Rated Entity & amended following that

disclosure (i.e. successfully appealed); c) the principal methodology used to determine the

Credit Rating, and any other relevant criteria or methodologies; d) when the credit rating

was first distributed and last updated; and e) if the rating is for a newly issued instrument

and if the GCR is issuing a first time Credit Rating.


- When issuing a Credit Rating for structured finance instruments, GCR clearly differentiates

these using an additional symbol (―sf‖) to distinguish them from rating categories used for

any other Ratings issued by GCR. Furthermore, for structured finance Credit Ratings GCR

discloses the level of due diligence carried out at the level of underlying financial

instruments or other assets of structured finance instruments; and whether GCR has

assessed such due diligence processes or relied on a third-party assessment. If third-parties

have been relied upon for due diligence services, GCR discloses their certifications.

- Where a methodology or criteria has been changed, GCR discloses the scope of the affected

Credit Ratings.

- Default and Transition statistics for its Credit Ratings.

- An annual report containing detailed information on GCR's legal structure and ownership; a

description of internal control mechanisms to ensure quality of the Credit Rating Activities; a

description of GCR‘s record-keeping policy; the outcome of the annual internal review by

the independent Compliance Department; and select financial data on revenue sources

divided into fees from Credit Rating and Other Services.

Analytical Controls

GCR has analytical controls in place in order to maintain the integrity of the Credit Rating

process, protect the confidentiality of Non-Public Information provided to GCR in the course of

its Credit Rating Activities and to ensure the timely and symmetric release of its Credit Rating

Actions to the general public. Such analytical controls consist of the practical means by which

GCR ensures that these objectives are met. The most important of GCR‘s controls are:

• Separation of Ratings and Commercial Activities: Ratings compilation are undertaken by

Ratings Analysts while Commercial Employees, do not participate in Ratings compilation..

• Integrity of rating information: GCR has implemented a rigorous IT firewall policy so that

Ratings information and databases are separated from Commercial Activities. Moreover,

Ratings Employees only have access to Confidential Information pertaining to the Credit

Rating Activities that they are involved in. Also such Information is separately stored, and

similarly subject to access controls. GCR‘s IT systems reflect robust redundancy, with

routine backups and offsite storage of password protected data. No physical copies of

Confidential Information are maintained by GCR.

• Ratings Panels are constituted of Ratings Analysts and Senior Management and non-

executive only: GCR Employees are educated as to GCR‘s policies and procedures, and must

ensure that Ratings Panels are constituted and operated in accordance with the Principles

for the Conduct of Ratings Panels.

• Independence of Credit Ratings opinions: GCR‘s Ratings Employees arrive at their opinions

by strictly following GCR‘s internal processes and are not influenced by any commercial

relationship between GCR and any third party. This is achieved through the mechanics of

GCR‘s Credit Rating Process, with up to two Ratings Employees compiling Credit Rating

research and multiple Ratings Panel members viewing and critiquing such research, and

thereafter collectively deciding upon the appropriate Credit Rating Action. Credit Rating

research and Ratings Panels are documented, with the latter including details of attendees,

the deliberations of the Ratings Panel and the decisions reached by each individual panel


member. Such documentation is securely stored and periodically reviewed by GCR‘s

independent Compliance Department, which measures and reports upon GCR‘s compliance

with its policies and procedures.

Section 6.1: Identification of Potential Conflicts of Interest relating to

Credit Ratings

GCR periodically reviews its business for potential and actual conflicts of interest, in order to

assess whether its corporate governance and other mitigants are sufficient and appropriate.

Reflected below is a synopsis of the areas identified as being key sources of potential conflicts

of interest. GCR will periodically review and update this list. Key Industry sources of key

potential conflicts of interest are:

• The "issuer pays" rating business model: This could theoretically see higher than warranted

ratings assigned, or assigning a Credit Rating when a credible Credit Rating cannot be

assigned.

• Conflict of interest arising from the sale of Ancillary and Other Services to Issuers/Rated

Entities: Ancillary and/or Other Services provided to Issuers/Rated Entities could theoretically

lead to more favourable Credit Ratings being assigned so as to boost revenues from these

Ancillary and Other Services.

Conflict of interest arising from the Credit Rating of entities in which GCR’s owners or board

members have investment interests: This could see undue influence placed upon Ratings

Employees to influence their credit opinions.

Conflict of interest arising from ratings dependencies: This could see a lower/more

conservative rating being applied (or threaten to be applied) unless all or a portion of the

underlying credit exposures is rated by GCR.

Commercial Activities: Aside from those listed above, other conflicts of interest might arise if

Commercial Activities that are beneficial to GCR are not adequately separated from Ratings

Activities.

Structuring: Conflicts would arise if GCR were to structure or advise an entity on its

corporate or legal structure, assets, liabilities or activities, and thereafter assigned a Credit

Rating to that entity.

Key Individual sources of potential conflicts of interest have been identified as:

Familiarity

Ratings Employees involved in Commercial Activities of GCR: The involvement of a Ratings

Employee in Commercial Activities pertaining to a Rated Entity, such as contract negotiations

that are to the benefit of the employee either directly or indirectly.

Previous Employment or Other Relationship: A Ratings Employee who has been previously

employed or is otherwise related to a Rated Entity and has failed to make declarations

thereof would be considered a conflicted party. A conflict of interest would similarly arise if a

Ratings Employee has a Family Member who is Employed or otherwise related to a Rated

Entity. This includes Personal Relationships between Ratings Employees (and their Family

Members) and employees of Rated Entities.


Gifts and Entertainment: Ratings Employees (or their Family Members) soliciting or accepting

gifts and or favours and or considerations from Rated Entities/Issuers or their agents.

Rating Assurances: A Rating Employee is conflicted if he/she makes a representation as to

Credit Rating Action prior to enactment of the Credit Rating Process and accordance of the

Credit Rating by a Ratings Panel.

Securities Ownership: Ratings Employees own Securities of a Rated Entity or its related third

party or who at the time of taking employment with GCR fail to declare such ownership or

when required to do so in term of GCR‘s Code of Ethics.

Structuring: A Ratings Employee who has knowingly participated in providing advice to an

entity, and thereafter is involved in the Credit Rating of the entity is by virtue conflicted.

Employment: Should a Ratings Employee leave GCR‘s employ for that of a Rated Entity (or its

related third party or financial intermediary representative), then such an Employee‘s

previous actions might be deemed to have been unduly influenced.


Section 6.2: Ancillary and Other Services Policy

The majority of GCR‘s revenue derives from its Credit Ratings, including revenue that is

derived from the Sale of Credit Rating research (Credit Rating Reports and analytical bulletins

– referred to as GCR‘s Subscription Service). The remainder of GCR‘s revenue is derived from

ratings-like activities that most regulatory jurisdictions do not consider as being Credit Ratings,

as detailed below (Other Services).

GCR does not currently provide any Ancillary Services that are not part of Credit Rating

Activities, such as market forecasts, estimates of economic trends, pricing analysis and other

general data analysis, as well as related distribution services. Moreover, GCR does not provide

consultancy or advisory services to Rated Entities or their related third parties regarding their

corporate or legal structure, assets, liabilities or their activities.

In terms of GCR‘s ‗Other Services’ these are ratings-like services and products that are not

strictly considered to be Credit Ratings. These ‗Other Services‘ are:

- Prospective Credit Assessments, being preliminary indicators of GCR's opinion of

creditworthiness that are typically expressed in descriptive terms.

- The rating of money market and debt security funds (typically mutual funds) in respect of

fund volatility.

- Servicer evaluations and ratings, assessed and ranked in respect of servicer quality.

- General business due diligence assessments.


Section 6.3: Business and Relationship Management Policy

GCR‘s business and relationships with its clients are guided by the overarching principle of the

separation of Commercial Activities from Ratings Activities. Accordingly, the following general

principals apply to business and relationship management:

- Discussions with an Issuer/Rated Entity, or arranger/sponsor (or any party acting on behalf

of the Issuer/Rated Entity), concerning Credit Rating fees and fee arrangements must be

handled by Commercial Employees.

- Where Issuers/Rated Entities and their Agents raise concerns over fees with Analysts and

other Ratings Employees, these enquiries are referred to the relevant Commercial

Employees.

- Access to, and dissemination of, detailed fee information is limited to the relevant

Commercial Employees.

- Sector Heads and Senior Analysts may be consulted by Commercial Employees in

developing revenue budgets, as part of the periodic financial reviews, in revising relevant

fee schedules, and to understand the complexity of transactions for fee-setting purposes.

- Exceptions to this policy must be approved in advance by GCR‘s executive management,

subject to the determination that no conflict of interest would result from such an exception.

Fee Negotiations and Initiating the Rating Process

The following general principles are adhered to for all Credit Rating mandates:

- Commercial Employees are responsible for pricing and quoting on each request for Credit

Rating Services.

- Only Commercial Employees may interact with the Rated Entity/Issuer and/or its Agents

regarding fees and other commercial terms of GCR‘s Credit Rating Services.

- Once commercial terms are agreed, Commercial Employees notify the relevant Ratings

Employees that they may start the assessment or Ratings Process, and the exact nature of

the ratings (or analytical service) to be provided.

- All queries regarding specific fees or GCR‘s general pricing policy received by Ratings

Employees must be forwarded to the appropriate Commercial Employee for resolution.

Revenue, Budget and Market Share Information

- Information concerning individual fees for issuers and transactions is only viewed by the

relevant Commercial Employees, as well as the appropriate members of the board of

directors. However, in line with regulatory requirements, GCR will make public certain

financial information regarding its distribution of fee income et al.

- GCR‘s appropriate Commercial Employees are responsible for preparing annual budgets and

fee schedules. Budgets for Ratings Employees are prepared in respect of Credit Rating

Exercises to be conducted, and not in respect of fees associated with Credit Ratings.

Interactions with Issuers, Agents, Investors and Other Members of the Public

- Meetings or discussions for the sole purpose of enabling GCR to secure new business or

future business from issuers, agents (arrangers, sponsors and other representatives of

Issuers) or investors must be led by a Commercial Employee.


- Senior Ratings Employees may attend such meetings or discussions arranged to secure new

or future business, but only for the purpose of discussing analytical and credit risk

considerations i.e. technical aspects of the rating process.

- Fee discussions may not occur at any meetings or discussions where Ratings Employees are

present. When necessary, Ratings Employees must excuse themselves from the discussions.

If a meeting or discussion is intended to cover both Analytical and Commercial topics, a

Commercial Employee must attend. Senior Ratings Employees may attend, however, no fee

discussions may occur while Ratings Employees are present.

- If a meeting is intended to cover only analytical topics, such as annual credit reviews,

Commercial Employees are not required to be present. However, they may attend where

appropriate to address organisational developments at GCR. Where topics of this nature

regarding GCR itself are discussed with issuers, agents or investors, they should form a

distinct discussion.

- All inquiries regarding commercial issues received from Agents by analysts must be

forwarded to, and addressed by, the appropriate Commercial Employee.

- Ratings Employees are encouraged to respond to investor inquiries and proactively interact

with investors on analytical topics, within the bounds of GCR‘s policies and procedures.

- Senior Ratings Employees may attend one-on-one investor meetings.

- With the prior approval, Ratings Employees may invite an issuer, agent or investor‘s

employee(s) to be their guest at business entertainment events (e.g. a business meal).

Solicitation of new or future business may occur during the event but there should be no fee

discussion. However Ratings Employees may seek reimbursement for the event from GCR.

All such interactions must be reported to senior management.

- Senior Analysts may speak at conferences, subject to the provisions of GCR‘s policies and

procedures.

- Any Ratings Employees may attend conferences subject to the approval of management.

- Ratings Employees may attend receptions and social events hosted by Issuers or arrangers

(inter alia) that are widely attended by a broad range of market participants subject to the

approval of GCR‘s Compliance Officer.


Section 6.4: Confidential & Sensitive Information/Avoiding Selective

Disclosure Policy

In the course of its Credit Rating Activities, GCR frequently comes into possession of

Confidential Information, being Non-Public Confidential Information received from external

sources (such as Rated Entities or their agents) and Confidential Information on the Credit

Rating Activities of Rating Entities, such as the content or timing of a pending Credit Rating

Action or the internal deliberations in deciding such a Credit Rating Action.

As such, Employees may only share or use Confidential Information consistent with the GCR

policy. All Employees must protect Confidential Information in their possession and must only

use or share Confidential Information as appropriate to their Credit Rating Activities or related

oversight responsibilities. Specifically:

• Employees may not disclose Confidential Information received in connection with their

performance of Credit Rating Activities, even to other Ratings Employees, unless it is

necessary for the other Employees to appropriately perform their Credit Rating Activities or

related oversight responsibilities.

• Employees may not disclose, even to other Rating Employees, pending Rating Actions, the

specific deliberations of a Ratings Panel, or any other Confidential Information with respect

to a Credit Rating unless the other Employee requires the information to perform his/her

Credit Rating Activities or related oversight responsibilities.

An Employee may discuss matters related to an Issuer, Issue, or industry sector with other

Ratings Employees if the discussion is limited to: i) information that is publicly available, ii)

information that is generally available to Ratings Employees, such as methodologies, models or

criteria, or iii) information that the other Employees need to appropriately perform their Credit

Rating Activities or related oversight responsibilities. Finally, an Employee may not share or

use Confidential Information for his or her personal benefit or for the financial/other benefit of

another person or entity.

When dealing with outside parties other than the Rated Entities/Issuers and their agents,

Ratings Employees may not disclose pending Credit Rating Actions or any other Confidential

Information with respect to Credit Ratings unless necessary to comply with a regulatory

requirement or otherwise consistent with GCR‘s policies and guidelines.

When dealing with Issuers, Ratings Employees may disclose or otherwise share Confidential

Information regarding Credit Rating Actions solely consistent with GCR‘s Communication Policy

and its Policy & procedure. However, this does not preclude Employees from discussing

matters related to an Issuer, Issue, or industry sector with an outside party, so long as such

matters and information are publicly available, not of a confidential nature, or, does not

otherwise inappropriately provide the outsider with an asymmetric information advantage.

Failure to comply with the requirements of this policy will result in the appropriate escalation

and / or disciplinary action which may include dismissal.


Section 6.5: General Nature of Compensation Arrangements for

Ratings Accorded

GCR receives compensation for assigning solicited Credit Ratings. Such compensation is paid

by either the Issuers of the securities/facilities being rated, by the investors in certain Issuers

or securities, or by another third party (arranger, structure etc.). The general nature of GCR‘s

compensation arrangements for its Credit Ratings is detailed below:

1. Standardisation of fee arrangements. Fee structures are summarised in fee schedules,

which are communicated and finalised before the commencement of the Credit Rating

process. GCR charges an initial rating fee at the time of the initial rating exercise and an

annual surveillance/maintenance fee subsequently for such time as the Credit Rating

remains in issue. Precise fee amounts are determined by various factors including, but not

limited to, the principal amount of the debt issuance that is rated and the complexity of the

assignment. Fees in all cases are negotiated by the Commercial Employees, specifically the

business development team, and this team is not involved in any Ratings Activities. The

business development team may alter the fee structures for volume Issuers and other

entities.

2. Creation of analytical firewalls. In all analytical processes, GCR is dedicated to preserving

the objectivity, integrity and independence of its Credit Ratings. The analytical firewalls are

created to ensure that Ratings Employees are not involved in the sourcing of assignments,

negotiation of fees or collection of fees from the Issuers. The fact that GCR receives a fee is

not a factor in its analysis or Credit Rating opinion. Moreover, the fee amount and

compensation arrangement is not disclosed to the Analysts.

3. Dissemination of Credit Rating Actions on Public Credit Ratings is free of cost. GCR does not

receive payments from the entity soliciting the rating for disseminating Credit Rating

Actions, publishing the Credit Ratings and any related analyses or commentaries on its

website.

Within the general nature of compensation arrangements with rated entities GCR reserves the

right to charge specific fees. However, broad fee schedules are available upon request.


Section 6.6: Gift and Business Visit Policy

No Employee can accept or solicit any tangible gift, money or favours of any form in

connection with any Credit Rating or other work performed by GCR, except as permitted

herein. The exception pertains to the customary exchange of gifts in festive seasons of

Christmas/New year, Id-el-Fitri and Id-el-Kabir as well as Easter. At any of these seasons,

employees shall not accept gift of any kind from any client whose value exceeds N50,000 (or

the equivalent in other currencies) per Entity.

If an Employee receives a tangible gift in excess of the above limit, he or she must return it to

the donor immediately. Where not practical then the item shall be donated to charity. In either

event, the Employee receiving the gift (or the head of a group receiving the gift, if offered to a

group of Employees) shall send a letter to the donor explaining GCR‘s prohibition against

accepting gifts, describing the disposal of the gift, and requesting that no gifts exceeding the

stipulated maximum be proffered in the future. A copy of that letter shall be sent to the

Managing Director, who will follow up with the recipient of the gift as necessary.

If an Employee participates in an event at which a prize is offered to or won by the Employee,

then the Employee shall decline the prize if it is in excess of the abovementioned limit.

Ratings Employees may accept invitations to conferences, outings, dinners or lunches

sponsored by Issuers, investment bankers, arrangers or other agents of the Issuer/Rated

Entity after consultation with the Managing Director /or the Employee‘s manager, and only in

accordance with GCR‘s policies regarding the separation of business and credit functions. In

the event that a Rating Employee accepts such an invitation, the Employee shall pay for any

expenses in excess of N10,000 limit, unless accompanied by a Commercial Employee.

Commercial Employees may accept business entertainment invitations, such as tickets to

sporting events and theatre and invitations to lunches and dinners, if the business

entertainment is a customary part of participating in ordinary business activities and if the

Employee attends the event with the representatives of the entity extending the invitation.

However, if any business entertainment is extravagant, expensive or highly sought after, such

business entertainment invitation shall be declined. In no event shall any gift influence any

decision to purchase goods or services from a supplier or to do business with any party.

Appropriate and reasonable business gifts and business entertainment invitations may be

extended by Employees in Commercial Roles to any person with whom GCR conducts business.

A Ratings Employee may attend a GCR-sponsored function with Commercial Employees and

the third party provided that GCR pays for all expenses and the Ratings Employee‘s attendance

is in accordance with GCR‘s policy regarding the separation of Commercial and Credit Rating

Activities. Commercial Employees may extend such business entertainment invitations to a

third party if this is a customary part of participating in ordinary business development

activities and if a Commercial Employee attends the events with the third party.

In no event shall GCR extend any gift or business entertainment that is: (i) prohibited by law

or regulation, (ii) known to violate the third party‘s policies concerning gifts and/or business

entertainment, or (iii) extravagant, expensive or highly sought after.


Section 6.7: Limitations and Restrictions on Advising Issuers & Others

Policy

GCR Employees, GCR or its affiliates may not provide advice to Issuers and others involved in

the process of issuing securities on how to achieve a desired Credit Rating. This is for the

reason that GCR may not, either implicitly or explicitly, give any indication, assurance or

guarantee of a particular Credit Rating prior to a Credit Rating assessment, and accordingly,

such an advisory role would present a significant conflict of interest.

In respect of structured finance transactions, Ratings Employees of GCR may not make

proposals or recommendations, either formally or informally, regarding the design of

structured finance instruments on which GCR is expected to issue a Credit Rating. However,

this does not preclude GCR from developing Credit Assessments.

Further to the above, should GCR be approached to provide consultancy or advisory services to

a Rated Entity or a related third party regarding its corporate or legal structure, assets,

liabilities or activities (or similarly wish to approach such a party), then GCR will first apply to

the relevant regulatory authority to approve such Other Services.

Each GCR Employee, having met GCR‘s Fit and Proper Requirements for Analytical Employees,

is responsible for complying with these restrictions on advising Issuers and others, and will be

subject to disciplinary processes should he or she be found to have violated such restrictions.


Section 6.8: Look-Back Review Policy

As part of its conflict management processes and to facilitate regulatory compliance in certain

jurisdictions, GCR periodically performs a ―look-back‖ review of a sample of Credit Ratings to

determine whether any conflicts of interest influenced those Credit Ratings. Such a look-back

review will typically consist of the following steps:

a) GCR will assess which Employees participated in any capacity in determining a Credit Rating

for the Rated Entity; and

b) GCR will identify and review the most recent Credit Rating of a Rated Entity in which the

relevant Ratings Employee participated, and identify and review all other Credit Ratings in

which the Analyst participated that involved the Rated Entity or its related third parties, as

applicable, for the one-year period prior.

It will be the responsibility of the allocated person to ensure that all ratings complied with the

requirements that the ratings are to be fair, independent, impartial, objective and as accurate

as possible. Failure to comply with the requirements specified herein may result in disciplinary

action as determined in the compliance and HR policy for GCR.

Furthermore, when a Ratings Employee who participated in the Credit Rating Activities of a

Rated Entity resigns to accept employment with the Rated Entity (or its related party or

financial services representative), GCR will perform a look-back review of all of the Credit

Ratings of that Rated Entity or related party during the two years before the Employee‘s

departure and in which the Employee participated in relevant Credit Ratings Activities.

Ratings under this review Policy must be randomly selected for review, identified by the

Strategic Committee, or alternatively all ratings not performed within the time frame as per

the ‗Credit Ratings Process Policy’ must be reviewed, and or as per GCR‘s Policies and

Procedures for Validation and Backtesting.


Section 6.9: Securities Trading Policy

GCR‘s Securities Trading Policy aims to avoid potential conflict of interest in respect of

Employees involved in Credit Rating Services.

General Principles

This policy only applies to Securities in respect of which GCR performs Credit Rating

Services.

This policy only applies to Securities that are not exempt under this policy.

This policy applies to Employees of GCR.

Prohibition to Trade certain Securities

An Employee, who is in possession of Material Non-Public Information in relation to a Rated

Entity and/or Securities (to be) issued by a Rated Entity, is prohibited in trading in Securities

relating to such Rated Entity until the Material Non-Public Information has been widely

disseminated to the market.

Participation in Ratings Panel

A Ratings Employee, who owns more than 1% Securities in respect of a Rated Entity or to be

Rated Entity, must disclose such ownership prior to commencement of rating process. A

Ratings Employee who owns more than 1% securities in respect of a rated entity or to be rated

entity must disclose such ownership within five (5) working days prior to commencement of

the rating in the event he had not declared ownership thereof at the time when he signed a

declaration of interest form and or ownership thereof was acquired subsequent to the signing

of the declaration of interest form.

Disclosure Requirement of certain Securities Holdings

Employees that have more than 1% Securities holdings must report their holdings and trades

to the executive management on a quarterly basis.

Exempt Securities

Neither the trading or Ratings Panel prohibitions nor the disclosure requirements apply to the

following:

Bank accounts (current & savings), bank certificates of deposit, loans and similar products.

Money market investments/mutual funds.

Diversified collective investments, investment/mutual funds, ETFs and similar products.

Pension funds.

Life assurance, personal insurance, annuities or similar products.

Securities that are managed by an independent investment professional or company over

whom the Employee have no control.

Securities (other than listed as exempt above) issued by a Rated Entity that do not fall

within the Employee‘s area of primary analytical responsibility.

Other

The executive management has the discretionary power to grant a waiver of the trading or

Ratings Panel prohibitions or the disclosure requirements if done so in writing and providing


the rationale why such waiver would not violate the principles of this policy. A waiver may

apply, for example, if an Employee has inherited Securities.

The executive management may implement additional restrictions on trading prohibitions in

respect of Securities, which are not exempt under this policy, as deems prudent. Such

additional restrictions must be communicated in writing.

Securities & Exchange Regulations Prevail

To the extent that relevant SEC regulations have other or additional requirements in respect of

trading prohibitions or disclosures, such regulations prevail where relevant. Management has

the responsibility to inform the Employees periodically if certain SEC regulations supersede this

policy.


Section 6.10: Rating Solicitation and Participation Disclosure Policy

GCR defines solicitation status in terms of whether it receives compensation for the provision

of a Credit Rating. As a publisher of credit related opinions, GCR reserves the right at any time

to issue Unsolicited Credit Ratings if it believes: i) there is a meaningful credit market or

investor interest served by the undertaking of such a Credit Rating; and ii) it has sufficient

information to support adequate analysis and, if applicable, ongoing monitoring. When a Credit

Rating is unsolicited, GCR will not seek or accept remuneration for its analytical services from

the Issuer for at least one year after the publication of such Credit Rating. As GCR‘s Credit

Ratings are typically solicited, GCR will disclose in its Credit Rating Reports (and any Credit

Rating Announcement regarding a Credit Rating Action or issuer specific research) if the Credit

Rating is unsolicited.

GCR‘s criteria and Rating Panel procedures are no different for ratings that are unsolicited and

for those solicited by an issuer or investor. Therefore, the Credit Ratings assigned to

Issuers/Rated Entities with similar credit characteristics are comparable, irrespective of

whether the Credit Ratings are solicited or not.

Notwithstanding the above, in some cases, Credit Ratings may be assigned where the

Issuer/Rated Entity chooses not to participate in the Credit Rating Process. In these cases,

GCR will only assign or maintain a Credit Rating if it has sufficient information to

assign/maintain the rating. Ratings that are accorded/maintained by GCR on a non-

participative basis shall carry an additional disclosure to document their non-participation

status. Such Credit Ratings are deemed to be Public Information Credit Ratings. Such Public

Information Credit Ratings are those that do not meet GCR‘s minimum requirements in terms

of management participation (including Material Non-Public Information, substantive

discussions with management, management feedback on credit rating analytics).

The credit rating process followed is described below:

Credit rating process for Unsolicited/Public Information Credit Ratings

The credit rating process followed for Unsolicited/Public Information Credit Ratings will follow

similar principles as those described under ―Credit Rating Process Policy‖. The time taken to

accord a Credit Rating can vary and will for example depend on the time taken to collate all

the necessary information to complete the rating analysis. A full Credit Rating Process on

Unsolicited/Public Information ratings typically takes up to 4 weeks, although longer or shorter

periods may apply depending on the circumstances.

GCR, through its Credit Rating (Screening) Panel, will determine at its sole discretion whether

or not it will accord a Credit Rating. A leading principle for the decision not to accord a Credit

Rating is the availability of information of sufficient quality as regards to accuracy, reliability

and history in order to be able to accord a credible Credit Rating. In addition, GCR may decide

not to accord a Credit Rating due to complexity or the absence of appropriate Credit Rating

criteria.


Credit Ratings Screening Panel

Where an Analyst is uncertain as to whether or not a credible Credit Rating can be accorded,

the Analyst will present the case to a Credit Ratings Screening Panel. This panel will decide

whether or not there is sufficient basis to continue with the Credit Rating Process.

A Credit Ratings Screening Panel will follow similar principles as those described under

―Principles for the Conduct of Ratings Panels Policy‖.


Section 6.11: GCR Policy on Remuneration and Employee

Independence

Definition of terms

GCR means Global Credit Rating Company Limited incorporated in terms of Companies And

Allied Matters Act and operating as A Rating Agency in terms of Investments And Securities Act

Employee means any person in the employ of GCR in terms of the Nigerian Labour laws and

shall include any other person performing remunerative work for and on behalf of GCR.

Basic Remuneration means a salary and production bonus which an employee receives in

return for work or services rendered to GCR as per the employment contract signed and

entered into by the employee and GCR at the beginning of each year.

Compulsory Contributions and Deductions means all deductions and contributions that are

compulsory in a total remuneration package including PAYE and Pension contributions.

Variable Remuneration means discretionary performance bonuses, share incentive

participation schemes and any ad-hoc remuneration not included in the total package that GCR

may elect to pay or award as its skill and competence retention strategy for employees whose

performance consistently exceeds expectations, where the loss of these employees would

impact negatively on the achievement of GCR‘s goals and objectives.

Background

This policy is put in place and implemented in pursuit of Clause 3.2 (3) of the Credit Rating

Agency Rules, Clause C 2.11 (a) and (b) of IOSCO Code of Conduct Fundamentals and SEC

Rules And Regulations pursuant to Investments And Securities Act.

Purpose

The purpose of this policy is to ensure that the remuneration of employees of GCR is not in any

way linked to the amount of revenue received by GCR from the entities that were rated by its

credit rating services analysts and in furtherance of compliance with the provisions of

regulatory requirements stipulated in 1.1 above.

Scope

This policy highlights the risk of the credit rating services analysts and other employees of GCR

operating in a situation where there is an actual lack of independence and competence or a

potential thereof. It is applicable and to be adhered to by all employees of GCR.

Approach

This policy shall be read together with the following by all employees of GCR-

The contract of employment that was entered into and signed by the employee and

GCR

Credit Rating Process Policy

The policy of competency review

The policy on conflict of interest


The competency appraisal and review sessions must be conducted twice in a year at an

interval of six months to ensure that the employees remain competent and possess the

requisite skill, integrity and independence.

Policy Governance Structure

This policy is originated by the Compliance Officer who is also the custodian of policies.

Approval

This policy is approved by the Chief Executive Officer.

Implementation

The Compliance officer has the lead role in ensuring that the policy is made available to the

sector heads and that they shall ensure that there is absolute adherence to the policy.


Section 7: File Maintenance and Recordkeeping Policy for Analytical

Employees

This policy provides guidelines for the management, maintenance and orderly arrangement of

GCR‘s analytical records, to facilitate:

a) Retention of records for periods as required by applicable laws and regulations.

b) Retention of records required for Ratings and Commercial reasons to ensure their

availability when needed.

c) Documentation of GCR‘s compliance with laws & regulations and its policies & procedures.

d) Preservation of the confidentiality and security of records.

e) Disposal of records not necessary for regulatory, legal or business reasons.

f) Preservation of documents required in specific circumstances, such as complaints or threats

to independence.

Scope

This policy is intended for application in respect of Ratings (Analytical) Employees, with the

considerations for Commercial Employees detailed in GCR‘s File Maintenance and Record

Keeping Policy for Commercial Employees.

This Policy covers all physical and electronically stored information regarding Ratings Activities

including all documents, paperwork, writings, drawings, graphs, images, charts, models, and

data from which information concerning Credit Rating Activities can be obtained. Information

located in remote offices, at home or otherwise offsite remains subject to this Policy.

To the extent that the legal or regulatory requirements of any jurisdiction in which GCR

operates are inconsistent with any provision of this Policy, Rating Employees in any such

jurisdiction are required to comply with the more stringent of the requirements, subject to

verification by the Compliance Officer.

Roles and Responsibilities

Maintaining Complete Transaction (Issuer/Rated Entity) Files

Analysts are required to maintain a complete file for each Rated Entity/Issuer that they cover.

A complete file is deemed to be one or more hard copies and/or electronic files containing

information relating to the Ratings Activities for a particular transaction, Rated Entity/Issuer,

criteria or policy. GCR retains several distinct sets of documents for each Issuer/Rated Entity

or transaction, together forming the complete file. These are:

1. Data provided to GCR, as well as that researched by GCR, in respect of a Rated

Entity/Issuer i.e. company information.

2. Correspondence and discussions, which are conducted in person and via email. GCR retains

scanned copies of ratings meeting notes and electronic copies of all email correspondence

between a Rated Entity and GCR Employees.

3. Captured/created financial data and financial analytics, including the outcomes of various

financial models.

4. GCR-created Credit Rating Reports, Credit Assessments, Credit Rating Letters and Credit

Rating Announcements.


5. The Ratings Panel presentation, recommendation, minutes and outcome.

GCR‘s public research, Credit Rating Announcements and Credit Rating histories are subject to

the above record retention requirements. Invoices and other documents pertaining to fee

arrangements or other Commercial Activities are not included in the complete file.

Maintaining Information Relating to Rating Methodologies and Credit Policies

Documentation of the methodologies, models, procedures, and policies used by Ratings

Employees in respect of Ratings Activities are stored and managed by a Sector for the

stipulated periods.

Documents concerning GCR responses, discussions with regulators or industry experts, and

any correspondence or emails regarding GCR policies or compliance, will be maintained by

Senior Staff together with the Compliance Officer.

Maintaining Information Relating to Models, Model Verification, Projects and Research

Data and other information concerning:

a) the development, revision, or validation of GCR‘s models, criteria or methodologies used for

Ratings Activities by a Sector and

b) special projects and research (the results of which may impact analytical activities) shall be

managed within the Analytical Sector by the relevant Sector Head.

Maintaining Analytical Non-Rating Related Information

At their discretion, Analysts may maintain information assisting in their understanding of

special reports, criteria reports, industry reports and other such analytical work not specific to

an individual rating.

Records of Compliance

Records of GCR‘s compliance with its policies and procedures, as well as the regulatory

requirements are to be maintained by Ratings Employees and periodically measured and

verified by the Compliance Officer.

Storage and Marking of Files

Files are required to be stored in a standardised format on GCR‘s server, arranged by

Analytical Sector and appropriately subdivided thereafter. As necessary, files are labelled to

indicate the subject matter and the relevant time period of their contents.

The majority of GCR‘s analytics-related documents are sourced in electronic copies. However,

meeting notes are often handwritten and, on occasion, GCR receives only a physical copy of

certain data. In such instances, the Analyst is required to scan copies of such

documents and store these electronically for the relevant time period (typically a

rolling 7-year period).

To protect confidential data received and to control the release of Credit Rating research and

Credit Rating Announcements, GCR maintains firewalls between Analytical Sectors. These limit

access to data in any one Sector to Ratings Employees operating in that Sector, while

confidential information is marked as such and stored separately in electronic copy only.


Offsite Storage

GCR does not maintain any offsite copies of physical documents and records. However, all

electronic information relating to Credit Rating Activities is subject to periodic backup and

offsite storage (in an encrypted format). Such backups are stored with a third party custodian.

Information Technology

Ratings Employees are required to appropriately purge e-mails no longer required to be

maintained under this Policy.

Implementation and Audit

Sector Heads are responsible for the implementation and maintenance of this policy within

their respective departments, while the implementation and compliance with this policy will be

periodically reviewed by the Compliance Officer.

Exceptions

Requests for exceptions from this policy must be submitted to the relevant Sector Head for

approval, in consultation with the Compliance Officer. All approved exceptions must be

recorded in an exceptions log maintained by the Compliance Officer.

Interpretation

The relevant Sector Heads, in consultation with the Compliance Officer, shall be responsible for

interpreting any elements of this Policy in a fair and practical manner as they may apply to

specific situations.

Retention Periods and Obsolete or Duplicate Information

Retention Periods

Unless obsolete, electronic information is maintained in GCR‘s database indefinitely. However,

information that is older than 7 years and no longer valid to an existing Credit Rating is

archived annually and stored in GCR‘s archived database (copies of which are stored both

onsite and offsite).

Obsolete or Duplicate Information

Obsolete documents shall be discarded in a manner that maintains the security of the

information contained therein.

The creation and retention of duplicate files and other records is avoided, with Analysts

expected to delete/destroy duplicated records when they are no longer being used.

E-mails - Each Lead Analyst is responsible for ensuring that e-mails regarding Ratings

Activities are maintained in terms of this policy. Analysts email files are automatically backed

up to ensure redundancy in this regard.

Threats to Independence and Complaints against the Analytical Process

Threats to the Independence of GCR’s Credit Rating Process

GCR documents (and retains information associated with) significant threats to the

independence of its Credit Rating Activities, as well as GCR‘s response to such threats.

Complaints Concerning GCR’s Analytical Process


Correspondence or other communications involving complaints concerning GCR are managed

in accordance with GCR‘s ‗Procedure for Managing Analytical Complaints Policy’.

Security, Confidentiality, Access and Document Disposal

Access to Electronic Files

Network and electronic files and records are maintained on limited access shared drives. Such

files are maintained on GCR‘s active databases until a Credit Rating is discontinued, where

after such files are archived (for a minimum of 7 (seven) years). Both the active database and

archived database are periodically backed up, with password-encrypted copies maintained

offsite.


Section 8: File Maintenance and Recordkeeping Policy for Commercial

Employees

All documents pertaining to Commercial Activities are ring-fenced from those relating to

Ratings Activities, and are not accessible to Ratings Employees.

The following business and relationship management documents shall be permanently

maintained in GCR‘s commercial databases:

• Engagement Letter/Rating or Subscription contracts;

• A record of the solicited and unsolicited status of each Credit Rating; and

• Executed confidentiality agreements.

The following documents/communications will be maintained for seven (7) years from the date

of creation or receipt:

• Electronic or written communications received/sent by GCR and its Commercial Employees

concerning fee negotiations;

• All marketing materials including issuer and banker presentations shown to any external

party.


Section 9: Procedure for Managing Analytical Complaints

This document outlines the typical process for addressing complaints of all types received by

GCR. Complaints are classified, following which a determination of the validity of a complaint

will be made. Operational and documentation steps are outlined by each type of Complaint.

A ―Complaint‖ is defined as an objection made to GCR from a third party regarding a perceived

breach in GCR's policies, and/or procedures, laws, regulation. Complaints will broadly fall into

one of five categories:

1. Alleged violations of law or regulation, including securities laws, or any of GCR‘s policies;

2. Ratings of a Rated Entity/Issuer;

3. Failure to operate as per GCR‘s policies and procedures;

4. Application of criteria or models, or the analytical performance of an Analyst; and

5. Complaints relating to fees or complaints regarding an unsolicited ratings assignment.

Any Complaint alleging a violation of law or regulation, including securities laws, or any of

GCR‘s policies is referred directly to GCR‘s Compliance Officer.

Any person receiving any oral Complaint including the failure to follow operational processes,

application of criteria or models or fees and unsolicited ratings assignments should request the

party (complainant) to provide a written description of the basis of his/her Complaint using the

facility provided on GCR‘s website.

A paper trail of all Complaints, the decisions surrounding their validity, dates and resolutions

should be maintained by the person(s) responsible for reviewing the Complaint.

Any Complaint threatening legal action against GCR must be referred immediately to the

Managing Director in addition to being otherwise addressed under this policy.

Allegations of a Violation of Regulations, Laws or GCR’s Code of Ethics

All complaints must be treated by the Managing Director as Valid, who is required to review

and remediate the complaint as necessary.

Complaints related to the Ratings of a Rated Entity

Such Complaints are handled by the Lead Analyst and the relevant Sector Head.

Valid Complaints

- Complaints concerning the rating level, the outlook or watch status made by the

Issuer/Rated Entity, or its agents, are addressed by the appeal process as per GCR‘s Credit

Ratings‘ Process and Ratings Panel documents.

- If an additional valid complaint arises after the completion of the appeal process, the Valid

Complaint should be forwarded to the Managing Director for review.

Invalid Complaints

- The Sector Head may determine that a Complaint is an invalid Complaint based on the

judgment that there is either no analytical basis for the Complaint, the complainant is being

unreasonable, the complainant is posturing or trying to manipulate the system (i.e.


inappropriately slowing the Ratings Process, making allegations that are unrelated to the

analytic processes used to assign a rating, etc.).

Failure to follow GCR’s Policies and Procedures

Such Complaints are registered by the relevant Lead Analyst and Sector Head, and assessed

by the Managing Director.

Valid Complaints

- Non-compliance with any of GCR‘s policies or procedures, even if previously approved

internally as an exception, are considered valid Complaints. This includes insufficient time in

availing Credit Ratings Actions and/or rationale to the Rated Entity/Issuer before

publication, or disclosure of confidential information.

- The Managing Director will then determine whether any corrective action is necessary, and

provide a summary response to the complainant as appropriate.

- Responses to complainants and corrective action should be completed within 10 business

days after receipt of the Complaint.

- The Managing Director must maintain all records regarding the Complaint and the review. In

addition, exceptions are maintained in an exception log and should include exceptions

relating to valid Complaints. All exceptions are monitored by the Compliance Officer.

Invalid Complaints

- Complaints that allege untimely publication of Credit Rating Activities or actions that

negatively impact bond prices are invalid Complaints, unless these have contravened GCR‘s

Ratings Communication Policy or Ratings Process Policy.

- As bond or issue prices are a function of the market, Complaints regarding the impact of

Credit Ratings Actions on security prices are invalid Complaints.

Misapplication of Criteria, Models, or Analytical Performance of an Analyst

Such Complaints are required to be directed to a Sector Head, who is in turn required to refer

the Managing Director.

Valid Complaints

- Valid Complaints arise if the Managing Director and/or Sector Head believe a potential

misapplication of criteria or model has occurred or that the relevant Analyst may have

inappropriately analysed information.

- The Managing Director shall immediately initiate a review of Valid Complaints in accordance

with GCR‘s rating policy.

- The Managing Director will review the matter in consultation with the applicable Sector

Head, speak to all relevant parties and take any actions deemed appropriate.

- The Managing Director will prepare a written summary of the review detailing for the

relevant Complaint:

a. How the review was conducted, and the conclusions reached;

b. Any recommendations for remedial action; and,

c. Send the summary to the appropriate Ratings Analyst and Sector Head.


- The Report and all related documents gathered during the Review shall be retained per

GCR‘s File Maintenance and Recordkeeping Policy.

- The relevant Sector Head and Analyst shall acknowledge receipt of the final report by email,

respond to the Report‘s conclusions, agree to the remedial action or propose an alternative

and provide a timeline for completion of any remedial action and report that all was

completed by the due date.

- Any dispute between recommended actions by the Managing Director and those proposed

by the Sector Head will be discussed and final action agreed amongst the Managing

Director, Sector Head and Ratings Analyst. Actions may include rerating an Issuer or

issuance, in which instance a Rating Watch may be assigned prior to completing a full

assessment.

- The Sector Head shall confirm in writing to the Managing Director when the remedial

actions, if any, are fully implemented and the Managing Director shall add such confirmation

to the complaint log.

Non-Valid Complaints

If the Managing Director determines the Complaint is an invalid Complaint, an explanation will

be noted in the complaint log. The Sector Head will save a copy of this written

acknowledgment within his/her record. The Sector Head will communicate the conclusions to

the complainant in writing shortly after completing the review.

Complaints Regarding a Fee or an Unsolicited Rating Assignment

Such Complaints are always referred to GCR‘s relevant Commercial Employees.

- All such Complaints in this category should be forwarded to the relevant Commercial

Employee within two days of receipt.

- The Commercial Employee will determine any response or action to be taken. If it is

determined that any Complaint regarding assignment of an unsolicited rating actually

relates to a potential breach in GCR‘s analytical process (as opposed to Complaints

questioning why the issuer was selected for an unsolicited rating), the Complaint should be

referred to the relevant Sector Head. The Sector Head will consider which of the

aforementioned categories the Complaints relates to.

Record of Complaints

All complaints are recorded in the Complaints Register, the custodian of which is the Chief

Executive Officer of GCR. The register is updated every six months and has an age analysis of

24 months, where after it may be removed to offsite storage for a period of 5 years.

- The feedback loop period is within 10 working days from receipt of a complaint.

- Feedback must always be in writing, a copy thereof to be kept in the form of an annexure

referencing to the complaint


Section 10: Whistleblowing Policy and Procedure

1. Policy Statement

1.1 GCR is committed to achieving and maintaining high standards with regard to behaviour at

work, and in all its working practices. Employees are expected to conduct themselves with

integrity, impartiality and honesty. GCR seeks to develop a culture where inappropriate

behaviour at all levels is challenged. In order to achieve this GCR encourages the reporting of

genuine concerns about malpractice, illegal and / or unethical acts, Acts of Conflict of Interest

or failures to comply with recognised standards of work without fear of reprisal or

victimisation.

1.2 GCR has established ways and procedures by which you can raise issues that concern you

at work and these can be acted upon, at the same time striving to reassure you that in raising

concerns you will not be opening yourself to victimisation, detriment, or risking your job

security.

1.3 This policy is accompanied by a procedure that should be followed when "blowing the

whistle". The policy is designed to give you that opportunity and protection.

1.4 GCR will not tolerate harassment or victimisation of a genuine whistle blower (including

informal pressures) and will treat such conduct as gross misconduct, which if proven, may

result in dismissal.

2. What is whistleblowing?

2.1 Whistleblowing means a disclosure of information made by an employee or body where

they reasonably believe or have reasonable suspicion that one or more of the following is

currently happening or took place in the past and or is likely to happen in the future:

A criminal offence;

A failure to comply with a legal obligation (e.g. breach of a contractual or other common

law obligation, statutory duty or requirement or administrative requirement, including

suspected fraud, or breach of a code of ethics / conduct);

A deliberate concealment of information tending to reveal any of the above.

A situation that is or may give rise to an actual or potential Conflict of Interest.

The dishonest, partial and / or unethical behaviour of an employee.

2.2 Only genuine concerns should be reported. Disclosures must be made in good faith with a

reasonable belief that any information and/or allegation is substantially true, and that the

disclosure is not made primarily or solely for personal gain. Malicious or false allegations will

be treated as a serious disciplinary offence and may lead to dismissal.

3. Who does the policy apply to?

3.1 This policy applies to all employees, including full time, part time and temporaries

(regardless of length of service).


4. The Whistleblowing Procedure

Employees raising a concern

4.1 Employees should first raise their concern to the the Managing Director. If for any reason

they find this difficult, they should report the matter by using the designated letter box.

4.2 Alternatively, they may wish to discuss their concerns, in confidence, with their direct line

of reporting who is in a position of fiduciary or trust.

4.3 Anonymous allegations are not automatically disregarded but given the safeguards that are

in place for those making allegations under this policy, anonymous tipoffs must be very

informative and adequate, clearly stating, what, who, when and how and not be based on

speculation or rumour mongering.

4.4 If, exceptionally, the disclosure is about a Director or Senior Executive, an employee

should report their concerns directly to the Chairman of the Board, who will decide how the

investigation should proceed.

4.5 If in doubt, you should speak to the other line of reporting (any of the sector heads) .Your

conversation will be treated in absolute confidence.

The investigation

4.6 The Company will decide how to respond in a responsible and appropriate manner under

this policy. An investigation will be conducted as speedily and sensitively as possible. An official

written record will be kept at each stage of the procedure.

A decision as to whether a preliminary investigation should be carried out will be made within

two weeks of the complaint having been received. Where this is not possible, the person

making the complaint will receive an explanation on the delay.

4.7 Your line manager or the person to whom you have raised the concern will investigate your

concern/s as follows:

• If appropriate, arrange an initial interview with you within 7 days of the complaint to

ascertain your area/s of concern. This interview will remain confidential.

• The notes taken during the interview will be sent to you to approve as an accurate record of

what was discussed.

• You will be asked whether you want your identity to be disclosed and will be reassured about

protection from possible victimisation or possible reprisals.

• You will be asked if you are prepared to make a verbal or written statement (if you have not

already done so).

In order for the investigation to continue, all evidence and any supporting documents of the

allegation/s made must be provided to the person conducting the investigation.


If it is not possible to comply with the timescale set out above, you will be informed and given

a revised one.

Outcome of the investigation

4.8 If there is a case to answer, and if appropriate, the disciplinary procedure will be initiated

against the person/s who are the subject of the allegation/s.

4.9 You will be informed of the outcome of the investigation within 5 working days of

completion of the investigation. The exact nature of any disciplinary action taken against any

person will remain confidential.

4.10 Whether or not there was a case to answer and provided that your disclosure was made

in good faith because you reasonably believed it to be true, the Company will ensure that you

are protected from reprisal or victimisation as a result of your complaint.

4.11 Only where it is established that your allegations were false and made maliciously will

disciplinary action be taken against you. Such disclosures will be treated as gross misconduct

and may result in your dismissal or disciplinary action.

4.12 If, as a result of investigations you are implicated in some way in any wrong doings

disciplinary action may be taken against you. The fact that you have blown the whistle will be

taken into account if an action is considered.

Conclusion

GCR reserves the right to amend the rating policy and procedure as necessary to meet any

change in requirements.