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1 Minutes UK Green Investment Bank plc ( the Company ) Minutes of a Meeting of the Board of Directors of the Company held at 9.30am on Thursday 19 May 2016 at Atria One, 144 Morrison Street, Edinburgh EH3 8EX Present: Lord Smith (in the chair) Baroness Brown of Cambridge Shaun Kingsbury Peter Knott Laurence Mulliez Tom Murley David Nish Anthony Odgers (by telephone) Tony Poulter Professor Isobel Sharp Tessa Tennant In Attendance: Dr Irene Adams Andrea Echberg Euan McVicar Ed Northam In part: Sara Arhaim Rob Mansley Jacqueline Redmond Bill Rogers Chris Saunders John Stuart Gavin Templeton 1. Notice and Quorum It was noted that a quorum was present, that due notice of the meeting had been given to all Directors, and that the meeting had been duly convened in accordance with the articles of association of the Company. 2. Directors Duties and Interests Save for those matters each of the Directors present confirmed that for the purposes of section 177 of the Companies Act 2006 there had been no change to the general notice given to the Company and authorisation given by the Board and that there were no new transactions or arrangements that require notification and approval by the Company that could conflict with the business of the meeting. 3. Documents The following documents were produced to the meeting: a) Minutes of the Meetings of the Board on 10 March, 30 March, 29 April and 3 May 2016; b) Minutes of the Meeting of the Audit & Risk Committee on 9 March 2016; c) Minutes of the Meeting of the Remuneration Committee on 9 March 2016; Page 1 of 6

2 d) Minutes of the Meeting of the Valuation Committee on 10 March 2016; e) A paper entitled Share Issue ; f) A paper entitled Moore Transaction Documents ; g) A paper entitled Going Concern and Viability Statement Assessment ; h) A paper entitled LTIP Rules ; i) A paper entitled Update on Annual Reporting and Permission to call Annual General Meeting ; j) A paper entitled Modern Slavery Act Statement ; k) A paper entitled CEO Update ; l) A paper entitled Project Moore Budget ; m) A paper entitled Creating Options in Developing Markets ; n) A paper entitled Culture Report ; o) A paper entitled Annual Subsidiary Group Governance Report ; p) A paper entitled Green Impact Board Pack ; q) A paper entitled Finance Report ; r) A paper entitled Risk Report ; s) An additional paper relating to Project Moore; t) A paper entitled Personal Liability of Directors in Relation to Annual Report and Financial Statements ; and u) A paper entitled Quarterly Valuation Memorandum. 4. Board The Board reviewed the minutes of the meetings referred to at item 3a) above and considered that they were a true and accurate record of those meetings save that the attendance of Ed Northam at the meetings of the 29 April 2016 and 3 May 2016 should be noted. 5. Audit & Risk Committee The Board reviewed the minutes of the meeting referred to at item 3b) above and noted that they had been approved by the Audit and Risk Committee as a true and accurate record of that meeting. David Nish gave an update on the meeting of the Audit and Risk Committee held the previous day, 18 May Remuneration Committee The Board reviewed the minutes of the meeting referred to at item 3c) above and noted that they had been approved by the Remuneration Committee as a true and accurate record of that meeting. Isobel Sharp gave an update on the Remuneration Committee meeting held that morning, 19 May It was noted that at the Board meeting of 10 March 2016 the Board had Page 2 of 6

3 delegated authority to the Remuneration Committee to finalise the business performance score for financial year 15/16 following substantial completion of the audit for the financial year and that the committee had resolved to approve a business performance score of 63% subject only to no changes in the scores being identified on substantial completion of the audit for the relevant financial year. Isobel Sharp spoke to the paper referred to at item 3 h) above and noted that the Remuneration Committee had agreed to approve those changes and now asked the Board to approve the changes set out in the paper subject to any further changes approved by a majority of Remuneration Committee members considered by committee members desirable to ensure that any stub-year payments should only be payable in respect of the stub year period and not any remainder period. A paper entitled 2016/17 KPI Approval was then produced to the meeting. It was noted that authority to approve these business objectives had been delegated to the Chair of the Remuneration Committee and that these were now agreed. It was noted however that these objectives may need to be revisited if it were unlikely that a Stub Year would occur within the current financial year. 7. Valuation Committee The Board reviewed the minutes of the meeting referred to at item 3d) above and noted that they had been approved by the Valuation Committee as a true and accurate record of that meeting. John Stuart joined the meeting by video-conference for this item. The Chairman updated the board on the Valuation Committee meeting held on 13 May It was noted that the Valuation Committee was recommending the valuations as tabled in the paper referred to item 3 u) above. John Stuart tabled and spoke to a paper updating certain internal rate of return figures in the paper. The Board discussed the paper and the update. Following discussion it was RESOLVED to adopt the valuations as at 31 March 2016 recommended by the Valuation Committee. 8. Nomination Committee The Chairman gave an update on the meeting of the Nomination Committee held that morning, 19 May It was noted that the Nomination Committee had recommended that Tony Poulter be re-appointed as Senior Independent Director on expiry of his current contract subject to Shareholder approval in accordance with the Articles of the Company. Tony Poulter excused himself from participation in the discussion relating to this matter. Following due consideration it was RESOLVED to re-appoint Tony Poulter as Senior Independent Director for a further term of 3 years on expiry of his current contract and that any director (other than Tony Poulter) be authorised to execute a replacement contract for that further term following receipt of the necessary shareholder approval. Page 3 of 6

4 It was also noted that the Chairman had carried out annual performance reviews of all other directors and that Tony Poulter as Senior Independent Director had, in consultation with the other non-executive directors, carried out a review of the Chairman s performance. 9. Share Issue Euan McVicar spoke to the paper referred to at item 3e) above. After due consideration the Board RESOLVED subject to receiving the necessary shareholder consent under the Company s Articles to approve the issue to the Secretary of State for Business, Innovation and Skills 145,000,000 ordinary shares of 1 each in the Company and to authorise the Secretary and / or any director to execute the necessary documentation and make the necessary filings. 10. Moore Transaction Documents & Budget Rob Mansley, Bill Rogers and Chris Saunders joined the meeting and spoke to the paper referred to at item 3 f) above. The Board discussed the paper, noting the update on progress and the matters currently outstanding on draft transactions documents. It was noted that an update on the status of such outstanding matters was to be made to the Board as soon as possible. The Board noted and discussed the paper referred to at item 3 s) above. Peter Knott spoke to the paper referred to at item 3 l) above which was noted. 11. Going Concern and Viability Statement Assessment Peter Knott and Bill Rogers spoke to the paper referred to at item 3 g) above. The Board discussed the paper and tasked the executive with bringing revised versions to the Audit and Risk Committee for review having first consulted with the Company s shareholder on the drafts. 12. Update on Annual Reporting and Permission to call Annual General Meeting Euan McVicar spoke to the papers referred to at items 3 i) and t) above. After due discussion the Board RESOLVED that the Secretary be authorised to call an annual general meeting at which approval for resolutions to re-appoint the auditors, re-elect the current directors, receive the annual report and financial statements, approve the Director s Remuneration Report and Remuneration Policy (each in the form approved by the Board and to seek the consent of the shareholder to hold that meeting at short notice. The Board further RESOLVED that a committee consisting of the Chairman, Chief Executive, Chief Financial Officer, Chair of the Audit and Risk Committee, Chair of the Remuneration Committee and Tessa Tennant be authorised to approve the final form of the Company s Annual Report and Financial Statements. Page 4 of 6

5 13. Modern Slavery Act Statement Euan McVicar spoke to the paper referred to at item 3 j) above. The Board discussed the paper and considered that it would be benefit from being reduced in length and AUTHORISED the Secretary to revise the statement and approve the final form on behalf of the Company. 14. CEO Update Shaun Kingsbury spoke to the paper referred to at item 3 k) above. Ed Northam gave an update on transactions the Company was pursuing. It was noted that Investment Committee had been approached for budget to explore certain sectoral opportunities outside of the Company s core market. After discussion the Board RESOLVED that this expenditure should be regarded as incidental and ancillary to the Company s principal objects. 15. Creating Options in Developing Markets Shaun Kingsbury spoke to the paper referred to at 3 m) above. The Board noted the paper and discussed in particular resourcing and timing issues set out in the paper. 16. Culture Report Sara Arhaim spoke to the paper referred to at 3 n) above. The Board discussed the paper and in particular discussed the ongoing work that would be carried out to monitor cultural issues and maintain the Company s high performance culture 17. Annual Subsidiary Group Governance Report Euan McVicar spoke to this paper referred to at 3 o) above. The Board noted the report on subsidiary governance and agreed that no further changes to the Scheme of Subsidiary Governance were required and further RESOLVED to ratify the appointment of John Stuart to the board of UK Green Community Lending Limited in place of Richard Braakenburg and the appointment of Rob Mansley to the board of UK Green Investment (OSW) GP Limited. 18. Green Impact Board Pack The Board considered the paper referred to at item 3 p) above. Gavin Templeton spoke to the paper, which was noted by the Board. The Board discussed in particular the scope of Project Spring. 19. Finance Report The Board noted the paper referred to at item 3 q) above, which Peter Knott spoke to. Page 5 of 6

6 20. Risk Report The Board noted the paper referred to item 3 r) above, which Jacqueline Redmond spoke to. 21. Close of Meeting There being no further business the meeting was concluded. Page 6 of 6