Corporate governance

Legal Statement

MIIF is a Bermudian mutual fund company incorporated under the Bermuda Companies Act 1981 on 7 January 2005. MIIF was listed on the Singapore Exchange Securities Trading Limited (SGX-ST) on 27 May 2005.

MIIF is externally managed by Macquarie Infrastructure Management (Asia) Pty Limited (MIMAL) which was appointed as MIIF’s sole and exclusive manager pursuant to a management agreement. MIMAL is incorporated in Australia and is a wholly owned subsidiary of Macquarie Group Limited (MQG).

Singapore Code of Corporate Governance

In conjunction with the Singapore code of corporate governance (the Code), the SGX-ST requires all listed companies to describe their corporate governance practices with specific reference to the Code in their annual report, as part of their continuing obligations under the SGX-ST listing manual.

MIIF’s corporate governance practices reflect the requirements of the Macquarie Infrastructure and Real Assets (MIRA) management activity policy described below, and conform largely to the requirements of the Code. Deviations from the Code are noted and explained in the following statement.

MIRA Management Activity Policy

To safeguard the interests of investors, MIRA has applied a governance framework to its specialist funds activities, including infrastructure funds such as MIIF. This framework is known as the funds management activity policy (the MIRA Fund policy).

Key elements of the MIRA Fund policy

• The boards of listed MIRA-managed funds will comprise at least 50% independent directors. The Code’s definition of independence is consistent with MIRA’s definition.
• Related party transactions with Macquarie entities are clearly identified and governed by rules requiring they be undertaken on an arm’s-length basis.
• Only independent directors make decisions about transactions which involve Macquarie or its affiliates as counterparties. Macquarie directors do not vote on related party matters.
• All related party transactions are tested by reference to whether they meet market standards. In particular, fee schedules and mandate terms and conditions are subject to third-party expert review unless the independent directors determine otherwise.
• There is a separate MIRA division and staff in this area are dedicated to the funds management business. They serve the interests of investors and the boards of the funds.
• All recommendations to fund boards are prepared by funds management staff and all information and analysis supporting the recommendations to the boards are reviewed or prepared by funds management staff.
• Each listed Macquarie-managed vehicle that invests in operating businesses has its own dedicated managing director or chief executive officer.
• There is a “Chinese wall” operating between the MIRA business and other parts of MQG.

MIIF’s corporate governance policy framework is provided below and further details can be found in the Prospectus:

• Principle 1: The board's conduct of affairs
• Principle 2: Board composition and guidance
• Principle 3: Chairman and chief executive officer
• Principle 4: Board membership
• Principle 5: Board performance
• Principle 6: Access to information
• Principle 7: Procedures for developing remuneration policies
• Principle 8: Level and mix of remuneration
• Principle 9: Disclosure on remuneration
• Principle 10: Accountability
• Principle 11: Audit committee
• Principle 12: Internal controls
• Principle 13: Internal audit
• Principle 14: Communication with shareholders

Securities trading

MIIF has a Securities (Window) Trading Policy with respect to dealings in securities by directors and officers of MIIF and the manager. This policy means that trading in both securities and derivatives of the company can only occur during the four-week window commencing on the day after:

1. the release of annual or quarterly results;
2. the AGM; or
3. lodgement of a disclosure document for a capital raising.

The trading window is not to be opened until the day after these events to enable the market to digest the information that has been disclosed.

If the trading window is not opened after these events for any reason, a special trading window may be permitted at a later date.