CONFIDENTIAL AND PROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of Standard & Poor’s. Copyright © 2009 Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc. All rights reserved. S&P/EGX ESG Index Robert Shakotko MD, Index Services Standard & Poor’s 23 rd March 2010

Introduction and Highlights The Egyptian Institute of Directors in collaboration with Standard & Poor’s and CRISIL have created an Environment, Social and Governance (ESG) index for Egypt. The Index is the first of its kind in Egypt. The purpose of the index is to raise the profile of those companies that perform well along the three parameters of ESG compared to peers. A rigorous, quantitative approach is used in evaluating ESG scoring, minimizing the impact of subjective judgments. The index is comprised of the highest scoring companies, with the highest scoring companies carrying more weight, while ensuring adequate liquidity.

ESG Basic Concepts Business performance can be assessed in social and environmental terms, as well as in traditional financial terms. There is great debate about how ESG factors are interlinked with a company’s near and longer term financial performance. Traditionalists see corporate social responsibility as a potential distraction and loss of focus from fiduciary duty to the company and its shareholders. Corporate social responsibility advocates focus on the need for companies to focus on its broader social role, particularly with regard to key external stakeholders. They tend to be in two different (but not mutually exclusive) camps: values driven (doing the right thing) enlightened self interest (the right thing makes the most financial sense for investors)

The Case for ESG Indices An Index relates companies ESG performance to stock market performance An index can incorporate several subtleties, e.g. rules and rewards for performance relative to certain indicators An Index can create incentives for companies to improve ESG performance An index has assets attached to it, raising the cost of capital for those that aren’t on the index An index creates a public list of leaders and therefore laggards, driving companies to be on “the list”

Parameters of Index Construction A liquid tradable index with 30 stocks which are the highest scoring companies on the combined ESG scale The index weights are primarily determined by ESG scores of a company This takes away the size impact of companies and the index measures performance on ESG basis This index structure differentiates between a standard market capitalization weighted index performance and an ESG based performance Performance history has been calculated from June 2007.

Index Construction The universe of eligible constituents is derived from the top 100 companies, by total market capitalization, listed on the Egyptian Stock Exchange. All 100 companies are subjected to an ESG screening process and ranked in descending order of ESG scores. A company’s liquidity by value traded for the last twelve months is computed. The 30 highest scoring companies are selected each year, provided they have traded a minimum of EGP 1 million in the last twelve months. To limit turnover, a company will not be excluded from the index if its score varies by 10% or less from previous year The weight of the company in the index is based on its score adjusted weight factor score.

Index Maintenance Reconstitution of the index occurs once a year on the first business day of July. New scores for the entire pool of 100 companies are calculated once a year Each quarter, companies in the index will be reviewed for any changes in behavior which could cause their score to go lower If the score is reduced, then the weight of the company can be adjusted downward, or if there is a serious enough concern which causes the score to fall steeply, the company may be removed. At the time of the reconstitution, value traded will be reviewed again to ensure adequate liquidity If stocks are removed intra year either due to corporate activity or due to lowered scores, the stock is not replaced immediately and the index will be calculated with fewer stocks

Index Performance

Index Sector Weights

Top Constituent Comparison

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