SHARIAH PRONOUNCEMENT

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1 SHARIAH PRONOUNCEMENT In the name of Allah, the Most Gracious, the Most Merciful All praise is due to Allah, the Cherisher of the world, and peace and blessing upon The Prophet of Allah, on his family and all his companions EXCHANGEABLE TRUST CERTIFICATES OF S$600 MILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR ( TRUST CERTIFICATES OR SUKUK ) CIMB Islamic Bank Berhad as Shariah Adviser ( Shariah Adviser ) has reviewed the structure and mechanism to be entered into in respect of the Sukuk by Indah Capital Ltd. ( Issuer ) with recourse to Khazanah Nasional Berhad ( Khazanah or Obligor ) to ensure compliance with Shariah. Except where defined herein, defined terms used in this Shariah Pronouncement have the meanings given to them in the Offering Circular in connection with the Sukuk. 1. STRUCTURE AND MECHANISM The detailed descriptions of the Sukuk structure and its mechanics are outlined below: 1.1 The Sukuk Structure The Issuer shall issue Sukuk to the investors ( Trust Certificateholders ) and the Sukuk will be constituted by a trust deed ( Trust Deed ), pursuant to which the Issuer will invest the Sukuk proceeds in a wakalah venture ( Wakalah Venture ) which shall comprise investments in certain Shariah-compliant Shares (initially referred to 185,487,700 units of IHH Healthcare Berhad shares ( IHH Shares )) and the Commodity Murabahah Investment.. The Trust Certificates will represent the Trust Certificateholders undivided proportionate beneficial ownership interest in the Trust Asset (as defined herein) The Issuer and Khazanah shall enter into a Wakalah Agreement, whereby the Issuer (acting on behalf of the Trust Certificateholders) will appoint Khazanah as the Wakeel to manage the Wakalah Venture in accordance with the terms of Wakalah Agreement. The Issuer shall declare a trust over the assets which comprised (i) all of the Issuer s rights, title, interest, entitlement and benefit in, to and under the Wakalah Venture; (ii) all of the Issuer s rights, title, interest, entitlement and benefit, in, to and under the Transaction Documents (as defined herein); and (iii) all proceeds of the foregoing (the Trust Assets ) On the Closing Date, the Wakeel shall use at least 51% of the Sukuk proceeds to acquire IHH Shares pursuant to a Sale and Purchase Agreement between Issuer and Pulau Memutik Ventures Sdn. Bhd, by way of transfer beneficial ownership at their fair market value calculated in accordance with the Valuation Principles. During the term of the Sukuk, the Wakeel to ensure that the value of the Shariah-compliant shares in the Wakalah Venture is at least equal to one third of the value of the Wakalah Venture as a whole, all as valued in accordance with the Valuation Principles The remaining Sukuk proceeds (no more than 49%) shall be invested in the Commodity Murabahah investment whereby the Issuer will purchase Shariah-compliant commodities from the relevant commodity broker(s) at the purchase price and subsequently sell to Khazanah, as a buyer, at the Aggregate Deferred Sale Price (and payable in accordance with the terms of the Commodity Murabahah Investment Agreement Pursuant to the Wakalah Agreement, the Wakeel is required to perform certain duties in respect of the Wakalah Venture in accordance with the Wakalah Agreement and the Investment Plan set out thereto. The Investment Plan requires that (i) the Issuer invest the Proceeds on the Closing Date in a Wakalah Venture and (ii) the Investments included

2 in the Wakalah Venture comply with the Investment Conditions. Any loss incurred under the Wakalah Venture shall be borne by the Trust Certificateholders in proportion to the Nominal Value of the Trust Certificates held by such Trust Certificateholder. 1.2 Scheduled Dissolution Date The Aggregate Deferred Sale Price payable under the Commodity Murabahah Investment Agreement shall be utilised to pay all amounts payable to the Trust Certificateholders on the Scheduled Dissolution Date or, if earlier, the Dissolution Event Redemption Date or on the relevant date fixed for redemption in respect of other redemption events. Pursuant to the Commodity Murabahah Investment Agreement, Khazanah shall pay the Deferred Sale Price in relation to all of the Sukuk outstanding On the Scheduled Dissolution Date, Khazanah shall purchase the Shariah-compliant Shares from the Issuer pursuant to the Purchase Undertaking at the Purchase Price The Purchase Price payable by Khazanah pursuant to the Purchase Undertaking and the Aggregate Deferred Sale Price payable under the Commodity Murabahah Investment Agreement shall be utilised to pay the Scheduled Dissolution Amount or the Early Dissolution Amount, as the case maybe, due from each Sukuk. Any excess shall be retained by the Wakeel as a Final Incentive Fee. 1.3 Exchange Mechanism The terms of the Sukuk shall include an Exchange Right i.e. the right of the Trust Certificateholders to exchange the Sukuk for an agreed number of IHH Shares comprised in the Wakalah Venture provided, however, that if the Obligor exercises its rights under the Cash Settlement Purchase Right Deed, the Obligor shall settle in cash to the Issuer on the date specified in the Cash Settlement Notice in accordance with the terms of the Cash Settlement Purchase Right Deed. 1.4 Final Incentive Fee Pursuant to the Wakalah Agreement, the Wakeel shall be entitled to the Final Incentive Fee payable from all amounts due and payable under the Commodity Murabahah Investment Agreement and all amounts due and payable under the Purchase Undertaking in respect of the excess. 2. IMPORTANT HIGHLIGHTS 2.1 Exchangeable Sukuk features: It refers to sukuk which give the investors the right (but not the obligation) to exchange the Sukuk with an agreed number of shares in a company at a pre-determined exchange price, but the exchange Sukuk into shares can also involve other third party shares held by the Issuer. 2.2 The Wakeel shall follow the criteria and tests set in the Wakalah Agreement and certain additional documents entered into in ensuring that the Wakalah Venture is Shariahcompliant. The Shariah Board of the Sukuk ( Shariah Board ) has agreed that it shall, on and agreed date, assess the shares comprised in the Wakalah Venture and certify to the Issuer, the Trustee, the Wakeel and the Obligor whether or not in its opinion they continue to be Shariah-compliant Shares. Business Activity Test for Shariah-compliant Shares: With respect to a company which shares are comprised in the Trust Assets, such company which satisfy the following test: 2

3 (i) Business Activity Test, i.e. not involved in the following non-shariah compliant businesses Alcohol; Tobacco; Pork-related products; Conventional financial services (banking, insurance, etc.); Weapons and defence; and Entertainment (hotels, casinos/gambling, cinema, pornography, music, etc.) (ii) Financial Ratio Test Dow Jones Islamic Market Indexes Financial Ratio: All of the following must be less that 33% Total debt divided by trailing 24-month capitalization The sum of a company s cash and interest-bearing securities divided by trailing 24-month average market capitalization Accounts receivables divided by trailing 24-month average market capitalization FTSE Shariah Global Equity Index Series Financial Ratio: Total debt is less than 33% of total assets Total cash and Interest bearing items are less than 33% of total assets Total accounts receivable and cash are less than 50% of total assets Total interest and non compliant activities income should not exceed 5% of total revenue 2.3 Utilization of Proceeds: For Khazanah additional working capital and for other general corporate purposes relating to its principal business activities which are Shariahcompliant. 2.4 Underlying Asset: Shariah-compliant shares in one or more companies, whether listed or not listed on any stock exchange, identified by the Wakeel in its discretion and approved by the Shariah Board as Shariah-compliant from time to time throughout the term of the Trust Certificates, and as approved by the Shariah Board as Shariahcompliant on the Closing Date, and in all cases satisfy the Business Activity Test and the Financial Ratio Test. 2.5 Isqat Haq: On the Issue date, the Issuer shall use at least 51% of the Sukuk proceeds to acquire Shariah-compliant Shares. The value of the Shariah-compliant Shares will be at the market value based on agreed valuation calculated based on the Valuation Principles. In relation to the surrender or transfer of all and any voting rights attached to the Shariahcompliant Shares, it is agreed upon between the issuer (on behalf of Trust Certificateholders) and Khazanah based on mutual agreement which they agrees and decides to give up all and any voting rights attached to the Shariah-compliant Shares. 3. DOCUMENTATION 3.1 The Shariah Adviser has reviewed the Shariah aspects of the following documentation in respect of the Sukuk: 3

4 ISSUANCE DOCUMENTS Agency Agreement Trust Deed Costs Undertaking Deed ISLAMIC DOCUMENTS Wakalah Agreement Sale and Purchase Agreement Closing Date Deed of Surrender Cash Settlement Purchase Right Deed Commodity Murabahah Investment Agreement Purchase Order Issuer Undertaking Form of Letter of Acceptance and Offer Buyer Agency Letter Obligor Undertaking Purchaser Undertaking 4. APPROVAL 4.1 The Shariah Adviser is of the view that, given the prevailing circumstances, the structure and mechanism as set out above are acceptable within the principles of Shariah, the jurisdiction in which the Issuer of the Sukuk operates and the Sukuk is issued and that the documents referred to in clause 3.1 above (the Documents ) reflects the above structure and mechanism. The Shariah Adviser hereby approves the Documents for the Sukuk, subject to proper execution of the same. 4.2 In arriving at the decision, the Shariah Adviser also took into consideration of the following issues: a) The legal constraints under which the proposed Sukuk is being developed; b) The need to develop the Islamic finance industry, particularly in respect of the issuance of Islamic securities; c) The need to facilitate the increasing need of corporates and financiers to mobilise funds according to Shariah principles; and d) The prevailing conditions and affairs of the Ummah and the need to remove them from the shackles of riba. And He knows best. On behalf of SHARIAH ADVISER ABDUL GHANI ENDUT Head, Shariah Department Group Islamic Banking Division ZARIZAN IBRAHIM Manager, Shariah Research and Secretariat, Shariah Department Group Islamic Banking Division 4

Duly endorsed by all members of the CIMB Islamic Shariah Committee. PROF. DR. MOHAMMAD HASHIM KAMALI Member Shariah Committee DR. HJ. MOHD NA IM HJ. MOKHTAR Member Shariah Committee ASSOC. PROF. DR. SHAFAAI MUSA Member Shariah Committee PROF.

5 Duly endorsed by all members of the CIMB Islamic Shariah Committee. PROF. DR. MOHAMMAD HASHIM KAMALI Member Shariah Committee DR. HJ. MOHD NA IM HJ. MOKHTAR Member Shariah Committee ASSOC. PROF. DR. SHAFAAI MUSA Member Shariah Committee PROF. DR. NOOR INAYAH YAAKUB Member Shariah Committee SHEIKH NEDHAM YAQOOBI Member Shariah Committee DR. YOUSEF ABDULLAH AL SHUBAILY Member Shariah Committee Date: 23 October

SHARIAH PRONOUNCEMENT

SHARIAH PRONOUNCEMENT In the name of Allah, the Most Gracious, the Most Merciful All praise is due to Allah, the Cherisher of the world, and peace and blessing upon The Prophet of Allah, on his family