Cendana Sejati Sdn Bhd IMTN Sukuk MYR 360,000,000 - Information Memorandum

Transcription

1. STRICTLY CONFIDENTIAL – DO NOT FORWARD PLEASE FIND ATTACHED AN ELECTRONIC COPY OF THE INFORMATION MEMORANDUM DATED 22 SEPTEMBER 2014 (THE "INFORMATION MEMORANDUM"), IN RELATION TO THE PROPOSED ISSUE OF FOR SUBSCRIPTION OR PURCHASE OF OR INVITATION TO SUBSCRIBE FOR OR PURCHASE OF SENIOR ISLAMIC MEDIUM TERM NOTES OF UP TO RM360.0 MILLION IN NOMINAL VALUE ("SENIOR SUKUK") BASED ON THE SHARIAH PRINCIPLES OF MURABAHAH VIA A TAWARRUQ ARRANGEMENT PURSUANT TO AN ISLAMIC MEDIUM TERM NOTE PROGRAMME ("SENIOR SUKUK PROGRAMME") BY CENDANA SEJATI SDN BHD (COMPANY NO. 1051796-P) ("THE ISSUER") AND ORIGINATED BY MASRAF AL BARAKAH SDN BHD (COMPANY NO. 977659-W) ("THE ORIGINATOR"). THE INFORMATION MEMORANDUM IS STRICTLY CONFIDENTIAL AND DOES NOT CONSTITUTE AN OFFER TO SUBSCRIBE FOR OR PURCHASE ANY OF THE SECURITIES DESCRIBED HEREIN ("SECURITIES") OR ANY INVITATION TO SUBSCRIBE FOR OR PURCHASE OF ANY OF THE SECURITIES TO ANY PERSON OR TO THE PUBLIC GENERALLY OTHER THAN TO THE INTENDED RECIPIENT. DISTRIBUTION OR REPRODUCTION IN ANY MANNER AND FORM OF THE INFORMATION MEMORANDUM OR ANY OF ITS CONTENTS TO ANY PERSONS, OTHER THAN TO THE PERSON RECEIVING THIS ELECTRONIC TRANSMISSION ("RECIPIENT") FROM THE ISSUER, THE ORIGINATOR, THE PRINCIPAL ADVISER, THE LEAD ARRANGER, THE LEAD MANAGER AND/OR THEIR RESPECTIVE AGENTS IS UNAUTHORISED. THE RECIPIENT IS PROHIBITED FROM DISCLOSING THE INFORMATION MEMORANDUM OR ANY OF ITS CONTENTS IN ANY MANNER OR FORM, ALTERING ANY OF THE CONTENTS OF THE INFORMATION MEMORANDUM OR FORWARDING A COPY OF THE INFORMATION MEMORANDUM OR ANY PORTION THEREOF BY ELECTRONIC MAIL OR OTHERWISE TO ANY PERSON. BY OPENING AND ACCEPTING THIS ELECTRONIC TRANSMISSION OF THE INFORMATION MEMORANDUM, THE RECIPIENT AGREES TO THE FOREGOING. THE INFORMATION MEMORANDUM IS NOT A PROSPECTUS AND HAS NOT BEEN REGISTERED NOR WILL IT BE REGISTERED AS A PROSPECTUS UNDER THE CAPITAL MARKETS AND SERVICES ACT 2007 ("CMSA"), AS AMENDED FROM TIME TO TIME. THE INFORMATION MEMORANDUM HAS NOT BEEN AND WILL NOT BE MADE TO COMPLY WITH THE LAWS OF ANY FOREIGN JURISDICTION AND HAS NOT BEEN AND WILL NOT BE REGISTERED, LODGED OR APPROVED PURSUANT TO OR UNDER ANY LEGISLATION OF (OR WITH OR BY ANY REGULATORY AUTHORITIES OR OTHER RELEVANT BODIES IN) ANY FOREIGN JURISDICTION AND IT DOES NOT CONSTITUTE AN ISSUE OR OFFER OF, OR AN INVITATION TO SUBSCRIBE FOR OR PURCHASE THE SECURITIES OR ANY OTHER SECURITIES OF ANY KIND BY ANY PARTY IN ANY FOREIGN JURISDICTION. AT ISSUANCE, THE SECURITIES MAY ONLY BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED DIRECTLY OR INDIRECTLY TO A PERSON WHO WOULD FALL WITHIN ANY ONE OF THE CATEGORIES OF PERSONS SPECIFIED IN SCHEDULE 6 OR SECTION 229(1)(b) OF THE CMSA AND SCHEDULE 7 OR SECTION 230(1)(b) OF THE CMSA, READ TOGETHER WITH SCHEDULE 9 OR SECTION 257(3) OF THE CMSA; AND AFTER ISSUANCE, THE SECURITIES MAY ONLY BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED DIRECTLY OR INDIRECTLY TO A PERSON TO WHOM AN OFFER OR INVITATION TO PURCHASE THE SECURITIES WOULD FALL WITHIN SCHEDULE 6 (OR SECTION 229(1)(b)) OF THE CMSA, READ TOGETHER WITH SCHEDULE 9 (OR SECTION 257(3) OF THE CMSA) AND TO WHOM ANY ISSUE,
2. OFFER OR INVITATION TO SUBSCRIBE FOR OR PURCHASE THE SENIOR SUKUK DOES NOT CONSTITUTE AN OFFER TO THE PUBLIC WITHIN THE CATEGORIES SET OUT IN SECTION 4 (6) OF THE COMPANIES ACT 1965 ("SELLING RESTRICTIONS"). BY ACCEPTING THIS E-MAIL AND ACCESSING THE INFORMATION MEMORANDUM, YOU SHALL BE DEEMED TO HAVE REPRESENTED TO US THAT (1) YOU ARE PERSONS FALLING WITHIN THE SELLING RESTRICTIONS; AND (2) YOU CONSENT TO THE DELIVERY OF THE INFORMATION MEMORANDUM BY E-MAIL. YOU ARE REMINDED THAT THE INFORMATION MEMORANDUM HAS BEEN DELIVERED TO YOU ON THE BASIS THAT YOU ARE A PERSON INTO WHOSE POSSESSION THE INFORMATION MEMORANDUM MAY BE LAWFULLY DELIVERED IN ACCORDANCE WITH THE LAWS OF THE JURISDICTION IN WHICH YOU ARE LOCATED AND YOU MAY NOT NOR ARE YOU AUTHORISED TO DELIVER OR DISCLOSE THE CONTENTS OF THE INFORMATION MEMORANDUM TO ANY PERSON. IF THIS IS NOT THE CASE, YOU MUST IMMEDIATELY DELETE THE SOFT COPY OF THE INFORMATION MEMORANDUM AND DESTROY ALL PRINTOUTS OF IT. TRANSMISSION OVER THE INTERNET MAY BE SUBJECT TO INTERRUPTIONS, TRANSMISSION BLACKOUT, DELAYED TRANSMISSION DUE TO INTERNET TRAFFIC, INCORRECT DATA TRANSMISSION DUE TO THE PUBLIC NATURE OF THE INTERNET, DATA CORRUPTION, INTERCEPTION, UNAUTHORISED AMENDMENT, TAMPERING, VIRUSES OR OTHER TECHNICAL, MECHANICAL OR SYSTEMIC RISKS ASSOCIATED WITH INTERNET TRANSMISSIONS. THE ISSUER, THE ORIGINATOR, THE PRINCIPAL ADVISER/LEAD ARRANGER, THE LEAD MANAGER AND/OR THEIR RESPECTIVE AGENTS HAVE NOT ACCEPTED AND WILL NOT ACCEPT ANY RESPONSIBILITY AND/OR LIABILITY FOR ANY SUCH INTERRUPTION, TRANSMISSION BLACKOUT, DELAYED TRANSMISSION, INCORRECT DATA TRANSMISSION, CORRUPTION, INTERCEPTION, UNAUTHORISED AMENDMENT, TAMPERING, VIRUSES, TECHNICAL, MECHANICAL OR SYSTEMIC RISKS OR ANY CONSEQUENCES THEREOF. THE FOREGOING IS IN ADDITION TO AND WITHOUT PREJUDICE TO ALL OTHER DISCLAIMERS AND AGREEMENTS AS PROVIDED IN THE INFORMATION MEMORANDUM WHICH DISCLAIMERS AND AGREEMENTS, THE RECIPIENT SHALL BE DEEMED TO HAVE AGREED TO OR BE BOUND BY. (The remainder of this page is intentionally left blank)
3. STRICTLY PRIVATE AND CONFIDENTIAL STRICTLY PRIVATE AND CONFIDENTIAL STRICTLY PRIVATE AND CONFIDENTIAL STRICTLY PRIVATE AND CONFIDENTIAL STRICTLY PRIVATE AND CONFIDENTIAL Serial No . Serial No. Serial No. Serial No. Serial No. Serial No. (Company No. 1051796-P) Serial No. STRICTLY PRIVATE AND CONFIDENTIAL (Incorporated under the Companies Act 1965 in Malaysia) Serial No. (Company No. 1051796-P) (Company No. 1051796-P) (Incorporated under the Companies Act 1965 in Malaysia) STRICTLY PRIVATE AND CONFIDENTIAL STRICTLY PRIVATE AND CONFIDENTIAL (Incorporated under the Companies Act 1965 in Malaysia) (Company No. 1051796-P) (Incorporated under the Companies Act 1965 in Malaysia) (Company No. 1051796-P) (Incorporated under the Companies Act 1965 in Malaysia) INFORMATION MEMORANDUM INFORMATION MEMORANDUM INFORMATION MEMORANDUM (Company No. 1051796-P) INFORMATION MEMORANDUM IN RELATION TO THE PROPOSED ISSUANCE (Incorporated under the Companies Act 1965 in Malaysia) OF (Company No. 1051796-P) INFORMATION MEMORANDUM (Company No. 1051796-P) IN RELATION TO THE MEDIUM PROPOSED ISSUANCE SENIOR ISLAMIC TERM NOTES OF under Companies ActAct 1965 in in Malaysia) IN(Incorporated RELATION TO the THE PROPOSED ISSUANCE OF (Incorporated under the Companies 1965 Malaysia) SENIOR ISLAMIC MEDIUM NOTES OF UP TO RM360.0 MILLION IN TERM NOMINAL VALUE SENIOR ISLAMIC MEDIUM TERM NOTES OF IN RELATION TO THE PROPOSED ISSUANCE INFORMATION MEMORANDUM OF UP TO MILLION IN NOMINAL PURSUANT TO ANRM360.0 ISLAMIC MEDIUM TERM NOTEVALUE PROGRAMME OF UP TO RM360.0 MILLION IN NOMINAL VALUE SENIOR ISLAMIC MEDIUM TERM NOTES PURSUANT TO AN ISLAMIC MEDIUM TERMISSUANCE NOTE PROGRAMME MEMORANDUM IN INFORMATION RELATION TO THE PROPOSED OF INFORMATION MEMORANDUM PURSUANT TO ANRM360.0 ISLAMIC MEDIUM TERM NOTEVALUE PROGRAMME OF UP TO MILLION IN NOMINAL SENIOR ISLAMIC MEDIUM TERM NOTES PURSUANT TOTO ANRM360.0 ISLAMIC MEDIUM NOTEVALUE PROGRAMME OFRELATION UP MILLION INTERM NOMINAL IN TO THE PROPOSED ISSUANCE OF Principal Adviser/ Lead Arranger/ Lead Manager PURSUANT TO AN ISLAMIC MEDIUM NOTE PROGRAMME SENIOR ISLAMIC MEDIUMTERM TERM NOTES ININRELATION TO THE PROPOSED ISSUANCE OF RELATION TO THE PROPOSED ISSUANCE OF Principal Adviser/ Lead Arranger/ Lead Manager OFSENIOR UPPrincipal TO RM360.0 MILLION IN NOMINAL VALUE Adviser/ Lead Arranger/ Lead Manager ISLAMIC MEDIUM TERM NOTES SENIOR ISLAMICMEDIUM MEDIUMTERM TERMNOTE NOTES PURSUANT TO AN ISLAMIC PROGRAMME OF UP TO RM360.0 MILLION IN NOMINAL VALUE Adviser/ Lead Arranger/ Lead Manager OF UPPrincipal TO RM360.0 MILLION IN NOMINAL VALUE PURSUANT AN PURSUANTTO TO ANISLAMIC ISLAMICMEDIUM MEDIUMTERM TERMNOTE NOTEPROGRAMME PROGRAMME Principal Adviser/ Lead Arranger/ Lead Manager Principal Adviser/ Lead Arranger/ Lead Manager Principal Adviser/ Lead Arranger/ Lead Manager Principal Adviser/ Lead Arranger/ Lead Manager Kenanga Investment Bank Berhad (Company No. 15678-H) Kenanga Investment Bank Berhad Kenanga Investment Bank Berhad (Company No. 15678-H) (Company No. 15678-H) Kenanga Investment Bank Berhad (Company No. 15678-H) Kenanga Investment Bank Berhad (Company No. 15678-H) Kenanga Investment Bank Berhad Kenanga Investment Bank Berhad (Company No. 15678-H) Kenanga Investment Bank Berhad Kenanga Investment Bank Berhad (Company No. 15678-H) (Company No. 15678-H) This Information Memorandum is dated 22 September 2014 This Information Memorandum is dated 22 September 2014 This Information Memorandum is dated 22 September 2014 This Information Memorandum is dated 22 September 2014 This Information Memorandum is dated 22 September 2014 This Information Memorandum is dated 22 September 2014
4. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM RESPONSIBILITY STATEMENTS This information memorandum ("Information Memorandum") has been approved by the directors of Cendana Sejati Sdn Bhd (Company No. 1051796-P) ("Issuer") and Masraf Al Barakah Sdn Bhd (Company No. 977659-W) ("Masraf" or "Originator"), respectively and they collectively and individually accept full responsibility for the accuracy of all the information given (other than information obtained from public sources) and confirm that, after having made all reasonable enquiries, and to the best of their information and belief, there are no false or misleading statements or other facts, the omission of which would make any statement in this Information Memorandum false or misleading and there is no material omission in this Information Memorandum, and that the opinions and intentions expressed in the information contained in this Information Memorandum are honestly held. Enquiries have been made by the Issuer and the Originator to ascertain all material facts have been disclosed and to verify the accuracy of all such information and statements. In this context, the Issuer and the Originator accept full responsibility for such information contained in this Information Memorandum. IMPORTANT NOTICE AND GENERAL STATEMENT OF DISCLAIMER This Information Memorandum is in connection with the proposed issuance of senior Sukuk Murabahah of up to RM360.0 million in nominal value ("Senior Sukuk") pursuant to a Sukuk Murabahah medium term note programme ("Senior Sukuk Programme"). The issuance of Senior Sukuk under the Senior Sukuk Programme will be based on the Shariah principles of Murabahah via a Tawarruq arrangement. Each of the Issuer and the Originator acknowledges that it has authorised Kenanga Investment Bank Berhad (Company No. 15678-H) as the principal adviser/lead arranger and the lead manager ("Principal Adviser/Lead Arranger/Lead Manager") to distribute this Information Memorandum, which is now being furnished on a private and confidential basis solely to the prospective investors, for the sole purpose of assisting them to decide whether to subscribe for or purchase the Senior Sukuk, whom at the point of issuance of the Senior Sukuk, would fall within the categories of persons specified in Schedule 6 or Section 229(1)(b) and Schedule 7 or Section 230(1)(b) of the Capital Markets and Services Act 2007, as amended from time to time ("CMSA"), read together with Schedule 9 or Section 257(3) of the CMSA, and after issuance of the Senior Sukuk, it is a person whom would fall within Schedule 6 or Section 229(1)(b), read together with Schedule 9 or Section 257(3) of the CMSA, to consider the offer or invitation to purchase the Senior Sukuk and to whom any issue, offer or invitation to subscribe for or purchase the Senior Sukuk does not constitute an offer to the public within the categories set out in Section 4(6) of the Companies Act 1965. No application is being made to list or quote the Senior Sukuk on any stock exchange, nor is any such application contemplated. This Information Memorandum may not be, in whole or in part, reproduced or used for any other purpose, or shown, given, copied to or filed with any other person including, without limitation, any government or regulatory authority except with the prior consent of the Issuer, the Originator and the Principal Adviser/Lead Arranger/Lead Manager and as required under the Malaysian laws, regulations or guidelines. None of the information or independently verified by representation or warranty, Adviser/Lead Arranger/Lead data contained in this Information Memorandum has been the Principal Adviser/Lead Arranger/Lead Manager. No express or implied, is given or assumed by the Principal Manager as to the authenticity, origin, validity, accuracy or I
5. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM completeness of information and data contained in this Information Memorandum or that the information or data remains unchanged in any respect after the relevant date shown in this Information Memorandum . The Principal Adviser/Lead Arranger/Lead Manager have not accepted and will not accept any responsibility for the information and data contained in this Information Memorandum or otherwise in relation to the Senior Sukuk Programme and shall not be liable for any consequences of reliance on any of the information or data in this Information Memorandum, except as provided by Malaysian laws. No person is authorised to give any information or data or to make any representation or warranty other than as contained in this Information Memorandum and, if given or made, any such information, data, representation or warranty must not be relied upon as having been authorised by the Issuer, the Originator, the Principal Adviser/Lead Arranger/Lead Manager or any other person. The information in this Information Memorandum supersedes all other information and material previously supplied (if any) to the recipients. By taking possession of this Information Memorandum, the recipients are acknowledging and agreeing and are deemed to have acknowledged and agreed that they will not rely on any previous information supplied (if any). This Information Memorandum has not been and will not be made to comply with the laws of any jurisdiction other than Malaysia (each such jurisdiction a "Foreign Jurisdiction"), and has not been and will not be lodged, registered or approved pursuant to or under any legislation (or with or by any regulatory authorities or other relevant bodies) of any Foreign Jurisdiction and it does not constitute an issue or offer of, or an invitation to apply for, the Senior Sukuk or any other securities of any kind by any party in any Foreign Jurisdiction. The distribution or possession of this Information Memorandum in Malaysia or in any Foreign Jurisdiction may be restricted or prohibited by law. Each recipient is required by the Issuer, the Originator, the Principal Adviser/Lead Arranger/Lead Manager to seek appropriate professional advice regarding, and to observe, any such restriction or prohibition. Neither the Issuer, the Originator, nor the Principal Adviser/Lead Arranger/Lead Manager accept any responsibility or liability to any person in relation to the distribution or possession of this Information Memorandum in Malaysia or in any Foreign Jurisdiction. This Information Memorandum is not and is not intended to be a prospectus and has not been registered or lodged under the laws of Malaysia or of any Foreign Jurisdiction as a prospectus. By accepting delivery of this Information Memorandum, each recipient agrees to the terms upon which this Information Memorandum is provided to such recipient as set out in this Information Memorandum, and further agrees and confirms that: (a) it will keep confidential all of such information and data; (b) it is lawful for the recipient to subscribe for or purchase (h) at the point of issuance of the Senior Sukuk, it is a person to whom an issue, offer or invitation to subscribe or purchase the Senior Sukuk would fall within any one of the categories of persons specified in Schedule 6 or Section 229(1)(b) of the CMSA and Schedule 7 or Section 230(1)(b) of the CMSA, read together with Schedule 9 or Section 257(3) of the CMSA; and after the issuance of the Senior Sukuk, it is a person to whom an issue or offer of the Senior Sukuk would fall within any one of the categories of persons specified in Schedule 6 or Section 229(1)(b) of the CMSA, read together with Schedule 9 or Section 257(3) of CMSA and to whom any issue, offer or invitation to subscribe for or purchase the Senior Sukuk does not constitute an offer to the public within the categories set out in Section 4(6) of the Companies Act 1965. Each recipient is solely responsible for seeking all appropriate expert advice as to the laws of all jurisdictions to which it is subject to. For the avoidance of doubt, this Information Memorandum shall not constitute an offer or invitation to subscribe or purchase the Senior Sukuk in relation to any recipient who does not fall within the categories of persons specified in item (h) above. II
6. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM This Information Memorandum or any document delivered under or in relation to the issue , offer and sale of the Senior Sukuk is not, and should not be construed as, a recommendation by the Issuer, the Originator, the Principal Adviser/Lead Arranger/Lead Manager to subscribe for or purchase the Senior Sukuk. This Information Memorandum is not a substitute for, and should not be regarded as, an independent evaluation and analysis and does not purport to be all-inclusive. Each recipient should perform and is deemed to have made its own independent investigation and analysis of the Issuer, the Originator, the Senior Sukuk and all other relevant matters, and each recipient should consult its own professional advisers. All information and statements herein are subject to the detailed provisions of the respective agreements referred to herein and are qualified in their entirety by reference to such documents. Neither the delivery of this Information Memorandum nor the offering, sale, transfer, delivery or otherwise disposal of any Senior Sukuk shall in any circumstance imply that the information contained herein concerning the Issuer and/or the Originator is correct at any time subsequent to the date hereof or that any other information supplied in connection with the Senior Sukuk is correct as of any time subsequent to the date indicated in the document containing the same. The Principal Adviser/Lead Arranger/Lead Manager expressly does not undertake to review the financial condition or affairs of the Issuer or the Originator during the tenor of the Senior Sukuk Programme or to advise any investor of the Senior Sukuk of any information coming to its attention. The recipient of this Information Memorandum or potential investors should review, inter alia, the most recently published documents when deciding whether or not to subscribe for or purchase the Senior Sukuk. This Information Memorandum includes forward looking statements. These statements include, among other things, discussion on the projected cash flows of the Senior Sukuk Programme. All these statements are based on estimates and assumptions made by the Issuer that, although believed to be reasonable, are subject to risks and uncertainties that may cause actual events and the future results of the Issuer to be materially different from that expected or indicated by such statements and estimates and no assurance can be given that any of such statements or estimates will be realised. In light of these and other uncertainties, the inclusion of a forward looking statement in this Information Memorandum should not be regarded as a representation or warranty by the Issuer or any other person that the plans and objectives of the Issuer will be achieved. This Information Memorandum may include certain historical information, estimates, projections or reports thereon derived from sources mentioned in this Information Memorandum and other parties with respect to the Malaysian economy and certain other matters. Such information, estimates, projections or reports have been included solely for illustrative purposes. No representation or warranty is made as to the accuracy or completeness of any information, derived from such and other third party sources. The Issuer, the Originator, the Principal Adviser/Lead Arranger/Lead Manager and certain other parties referred to in this Information Memorandum are companies limited by share incorporated under the Companies Act 1965 ("Companies Act"). Substantially all the directors, officers and employees and certain professional advisers referred to in this Information Memorandum are residents of Malaysia and a substantial portion of the assets of such companies and persons are located in Malaysia. Any person seeking to take any legal action against such companies or persons outside Malaysia will have to establish that a court outside Malaysia has jurisdiction in respect of such action and, even if such court decides that is has the relevant jurisdiction, it may be difficult for that party to effect service of process outside Malaysia or to enforce judgments obtained from such court predicated upon such liability and/or provisions of laws of foreign countries. III
7. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM All discrepancies (if any) in the tables included in this Information Memorandum between the listed amounts and totals thereof are due to, and certain numbers appearing in this Information Memorandum are shown after, rounding. Where this Information Memorandum contains or refers to a summary of a document or agreement, the summary is not meant to be exhaustive and potential investors should refer to or read the document or agreement in its entirety. STATEMENTS OF DISCLAIMER BY THE SECURITIES COMMISSION MALAYSIA Subject to completion, a copy of this Information Memorandum will be deposited with the Securities Commission Malaysia in accordance with the CMSA, who takes no responsibility for its contents. The authorisation of the Securities Commission Malaysia for the issue of the Senior Sukuk was granted on 21 April 2014. A recipient of this Information Memorandum acknowledges and agrees that the authorisation of the Securities Commission Malaysia shall not be taken to indicate that the Securities Commission Malaysia recommends an investment in or purchase of the Senior Sukuk. The Securities Commission Malaysia shall not be liable for any non-disclosure on the part of the Issuer and/or the Originator and assumes no responsibility for the correctness of any statements made or opinions or reports expressed or contained in this Information Memorandum. STATEMENTS OF DISCLAIMER ON SHARIAH PRONOUNCEMENTS Datuk Dr. Mohd Daud Bakar as the Shariah adviser ("Shariah Adviser") has approved the structure and mechanism of the Senior Sukuk and their compliance with Shariah principles. However, the approval is only an expression of the view of the Shariah Adviser based on his experience in the subject. There can be no assurance that the structure of the Senior Sukuk and the trading of the Senior Sukuk will meet each investor’s Shariah standards of compliance and none of the Issuer, the Originator, the Principal Adviser/Lead Arranger/Lead Manager nor any other person makes any representation as to the same. Investors are reminded that, as with any Shariah views, differences in opinion are possible. Investors are advised to obtain their own independent Shariah advice as to whether the structure meets their individual standards of compliance and make their own determination as to the future tradability of the Senior Sukuk on any secondary market. EACH ISSUE OF THE SENIOR SUKUK WILL CARRY DIFFERENT RISKS AND ALL INVESTORS SHOULD EVALUATE EACH ISSUE ON ITS MERITS AND RISKS. INVESTORS SHOULD RELY ON THEIR OWN EVALUATION TO ASSESS THE MERITS AND RISKS OF THEIR INVESTMENT IN THE SENIOR SUKUK. INVESTORS SHOULD READ THIS ENTIRE INFORMATION MEMORANDUM CAREFULLY AND AS A WHOLE, INCLUDING THE APPENDICES. IT IS RECOMMENDED THAT PROSPECTIVE INVESTORS CONSULT THEIR FINANCIAL, LEGAL, SHARIAH AND OTHER ADVISERS BEFORE PURCHASING OR ACQUIRING OR SUBSCRIBING FOR THE SENIOR SUKUK. (The remainder of this page is intentionally left blank) IV
8. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM CONFIDENTIALITY This Information Memorandum and its contents are strictly confidential and are provided strictly on the basis that the recipient shall ensure the same remain confidential . Accordingly, this Information Memorandum and its contents, or any information, which is made available in connection with any further enquiries, must be held in complete confidence. This Information Memorandum is provided to prospective investors solely with reference to their own evaluation of the Senior Sukuk. In the event that there is any contravention of this confidentiality undertaking or there is reasonable likelihood that this confidentiality undertaking may be contravened, the Issuer and/or the Originator may, at its discretion, apply for any remedy available to the Issuer and/or the Originator whether at law or equity, including without limitation, injunctions. The Issuer and/or the Originator is entitled to fully recover from the contravening party all cost, expenses and losses incurred and/or suffered, in this regard. For the avoidance of doubt, it is hereby deemed that this confidentiality undertaking shall be imposed upon the recipient, the recipient's professional advisers, directors, employees and any other persons concerned with the Senior Sukuk. The recipient must return this Information Memorandum and all reproductions thereof whether in whole or in part and any other information in connection therewith to the Principal Adviser/Lead Arranger/Lead Manager promptly upon the request of the Principal Adviser/Lead Arranger/Lead Manager, unless the recipient provides proof of a written undertaking satisfactory to the Principal Adviser/Lead Arranger/Lead Manager with respect to destroying these documents as soon as reasonably practicable after the said request from the Principal Adviser/Lead Arranger/Lead Manager. (The remainder of this page is intentionally left blank) V
9. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM TABLE OF CONTENTS Heading Page RESPONSIBILITY STATEMENTS .......................................................................................................... I IMPORTANT NOTICE AND GENERAL STATEMENT OF DISCLAIMER ............................................. I STATEMENTS OF DISCLAIMER BY THE SECURITIES COMMISSION MALAYSIA IV STATEMENTS OF DISCLAIMER ON SHARIAH PRONOUNCEMENTS IV CONFIDENTIALITY ................................................................................................................................V TABLE OF CONTENTS ........................................................................................................................VI GLOSSARY OF DEFINITIONS AND ABBREVIATIONS ....................................................................VII SECTION1 EXECUTIVE SUMMARY ................................................................................................... 1 1.1 INTRODUCTION........................................................................................................................ 1 1.2 BRIEF BACKGROUND OF THE ISSUER ................................................................................. 1 1.3 BRIEF BACKGROUND OF THE ORIGINATOR ....................................................................... 1 1.4 BRIEF DESCRIPTION OF THE TRANSACTION STRUCTURE .............................................. 2 1.5 UTILISATION OF PROCEEDS .................................................................................................. 4 1.6 RATING ...................................................................................................................................... 4 1.7 SELLING RESTRICTIONS ........................................................................................................ 4 1.8 REGULATORY APPROVAL ...................................................................................................... 5 SECTION 2 SUMMARY OF PRINCIPAL TERMS AND CONDITIONS OF SENIOR SUKUK PROGRAMME ................................................................................................................. 6 SECTION 3 THE SECURITISATION STRUCTURE .......................................................................... 63 3.1 SALE OF THE PORTFOLIO .................................................................................................... 63 3.2 ISSUANCE OF SENIOR SUKUK AND JUNIOR SUKUK ........................................................ 64 3.3 SERVICING FUNCTION .......................................................................................................... 69 3.4 TRANSACTION STRENGTHS ................................................................................................ 70 SECTION 4 PORFOLIO INFORMATION ........................................................................................... 72 4.1 ELIGIBILITY CRITERIA ........................................................................................................... 72 4.2 REPURCHASE ........................................................................................................................ 73 4.3 ASSET QUALITY ..................................................................................................................... 74 SECTION 5 INVESTMENT CONSIDERATIONS ............................................................................... 78 5.1 RISKS RELATED TO LIMITED RECOURSE OBLIGATIONS............................................... 78 5.2 RISKS ASSOCIATED WITH AN INVESTMENT IN THE SENIOR SUKUK ..................... 79 5.3 RISKS RELATED TO THE RECEIVABLES........................................................................... 80 5.4 RISKS RELATED TO THE PARTIES ...................................................................................... 82 5.5 OTHER RISKS ......................................................................................................................... 83 SECTION 6 BACKGROUND INFORMATION OF THE GROUP....................................................... 85 6.1 BACKGROUND OF THE GROUP ........................................................................................... 85 6.2 SHARE CAPITAL AND SHAREHOLDING OF CMA ............................................................... 88 6.3 PROFILE OF DIRECTORS OF CMA ...................................................................................... 89 SECTION 7 BACKGROUND INFORMATION OF THE ISSUER ...................................................... 90 7.1 BACKGROUND OF THE ISSUER........................................................................................... 90 7.2 SHARE CAPITAL AND SHAREHOLDING STRUCTURE OF THE ISSUER .......................... 90 7.3 PROFILE OF DIRECTORS OF THE ISSUER ......................................................................... 91 7.4 BORROWINGS OF THE ISSUER ........................................................................................... 91 7.5 MATERIAL CONTRACTS ........................................................................................................ 91 7.6 MATERIAL LITIGATION .......................................................................................................... 92 SECTION 8 BACKGROUND INFORMATION OF THE ORIGINATOR ............................................. 93 8.1 BACKGROUND OF THE ORIGINATOR ................................................................................. 93 8.2 SHARE CAPITAL AND SHAREHOLDING STRUCTURE OF THE ORIGINATOR................. 93 8.3 PROFILE OF DIRECTORS OF THE ORIGINATOR ............................................................... 93 8.4 KEY MANAGEMENT TEAM OF THE ORIGINATOR .............................................................. 94 8.5 BUSINESS OVERVIEW OF MASRAF .................................................................................... 95 8.6 MATERIAL CONTRACTS ........................................................................................................ 96 8.7 MATERIAL LITIGATION .......................................................................................................... 96 APPENDIX 1 AUDITED FINANCIAL STATEMENTS OF THE ORIGINATOR FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013 ....................................................................................... 97 VI
10. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM GLOSSARY OF DEFINITIONS AND ABBREVIATIONS In this Information Memorandum , unless the subject of context otherwise requires, the following words and expressions shall have the following meanings: AG Accountant General's Department; BNM Bank Negara Malaysia; CMSA Capital Markets and Services Act 2007, as the same may be amended, supplemented or replaced from time to time; Collaboration Agreement the collaboration agreement dated 6 June 2012 (as amended, varied and/or supplemented) entered into between Masraf and Coshare as Collection Agent relating to Masraf's collaboration and participation in "Program Ansuran Coshare" which authorises Coshare to undertake and implement a salary deduction programme for eligible civil servants employed by the Government; Collections shall have the meaning as ascribed to it under item (y)(C)(ii) of Section 2 below; Collection Account shall have the meaning as ascribed to it under item (n) of Section 2 below; Commodities means Shariah-compliant commodities (which shall, inter alia, exclude ribawi items in the category of medium of exchange such as currency, gold and silver) which are provided by the commodity supplier; Commodity Purchaser shall have the meaning as ascribed to it under item (c)(vii) of Section 2 below; Commodity Supplier shall have the meaning as ascribed to it under item (c)(v) of Section 2 below; Companies Act Companies Act 1965, as amended from time to time; Coshare or Collection Agent Coshare Holdings Berhad (Company No. 447108-C); Credit Sales Agreement the credit sales agreement entered into or to be entered into between Masraf and the Obligors at any time or from time to time in connection with the Deferred Payment Programme; Declaration of Trust shall have the meaning as ascribed to it under Section 1.4 of this Information Memorandum; Deemed Acceptance shall have the meaning as ascribed to it under Section 1.4 of this Information Memorandum; Deferred Payment Programme the provision of credit sales to eligible civil servants for the purchase of products under a deferred payment terms through non-discretionary salary deduction mechanism; VII
11. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM Deferred Sale Price means the aggregate of the principal amount equivalent to the Purchase Price and the profit portion to be agreed between the Purchaser and the Wakeel (acting for and on the behalf of the Sukuk Trustee) as the seller; Designated Account means collectively the Collection Account, Liquidity Reserve Account and Prepayment Account all of which shall be operated solely by the Security Trustee at all times; Dissolution Event means any of the events specified in item (v) of Section 2 below; Distribution FSCR shall have the meaning as ascribed to it under item (j) of Section 2 below; Drawdown Availability Period means the Senior Sukuk Programme is available for issue/drawdown for a period of two (2) years from the date of the first issue of Senior Sukuk from the Senior Sukuk Programme; Eligibility Criteria means the eligibility criteria specified in item (y)(B)(ii) of Section 2 below; Facility Agent Kenanga Investment Bank Berhad (Company No. 15678-H) and includes its successors in title and any other successor appointed as the facility agent in respect of the Senior Sukuk Programme; FAST the Fully Automated System for Issuing/Tendering operated by BNM for the tendering of private debt securities and Islamic securities, and any replacement system thereof; FYE financial year ended/ending, as the case may be; Government the Government of Malaysia; Issuer or Cendana Cendana Sejati Sdn Bhd (Company No. 1051796-P); Ineligible Receivable shall have the meaning as ascribed to it under item (y)(B)(ii) of Section 2 below; Junior Sukuk the subordinated Sukuk Murabahah to be issued pursuant to the Junior Sukuk Programme based on the Shariah principles of Murabahah via a Tawarruq arrangement; Junior Sukuk Programme the issuance of Junior Sukuk of up to RM40.0 million in aggregate value pursuant to a Sukuk Murabahah medium term note programme; Junior Sukukholder means the Originator in its capacity as the holder of the Junior Sukuk who may not, directly or indirectly, offer, sell, transfer or otherwise dispose of the Junior Sukuk or any part thereof to any parties; VIII
12. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM Kenanga IB Kenanga Investment Bank Berhad (Company No. 15678-H); Lead Arranger or Principal Adviser Kenanga IB; Lead Manager Kenanga IB and/or such other financial institutions to be appointed by the Issuer (as the case may be); Liquidity Reserve Account shall have the meaning as ascribed to it under item (n) of Section 2 below; Mandatory Redemption in Full shall have the meaning as ascribed to it under item (y)(A)(x) of Section 2 below; Masraf or Originator Masraf Al Barakah Sdn Bhd (Company No. 977659-W); Material Adverse Effect means any material adverse effect on the business or condition (financial or otherwise) or result of the operations of the Issuer and/or the Originator or the occurrence of any event which, in either case, may materially and adversely affect the ability of the Issuer and/or the Originator to perform any of their obligation under any of the Transaction Documents; Minimum Required Balance shall have the meaning as ascribed to it under item (n) of Section 2 below; MOF Ministry of Finance; MyClear Malaysian Electronic Clearing Corporation Sdn. Bhd. (Company No. 836743-D) and includes its successors in title and assigns in such capacity; MyClear Procedures the Operational Procedures for Securities Services and the Operational Procedures for Malaysian Ringgit (MYR) Settlement in Real Time Electronic Transfer of Funds and Securities System (RENTAS) issued by MyClear and as modified or revised or substituted from time to time by MyClear; MyClear Rules the Participation and Operation Rules for Payment and Securities Services or the replacement thereof, issued by MyClear and as modified or revised or substituted from time to time by MyClear; MyClear Rules and Procedures collectively, MyClear Rules and MyClear Procedures, as amended or substituted from time to time; Obligor an eligible civil servant identified by Masraf to whom Deferred Payment Programme is granted and "Obligors" shall be construed accordingly; OC Ratios means Tranche OC Ratio and Portfolio OC Ratio; IX
13. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM Payment shall have the meaning as ascribed to it under item (w)(ii)(i) of Section 2 below; Prepayment Account shall have the meaning as ascribed to it under item (n) of Section 2 below; Portfolio means a pool of Shariah-compliant receivables which comply with the Eligibility Criteria pursuant to the Deferred Payment Programme granted by the Originator to the Obligor; Portfolio OC Ratio the ratio of: (i) The sum of the remaining aggregate monthly instalments to be received from the Obligors of all outstanding Portfolio purchased from the Originator by the Issuer and all credit balances in the Designated Accounts at the point of calculation; to (ii) The aggregate outstanding nominal value of the Senior Sukuk issued under the Senior Sukuk Programme; of at least 1.73 times. The calculation of the Portfolio OC Ratio shall be done by the Servicer, duly confirmed by the Issuer, approved by its board of directors and verified by its external auditor prior to the issuance of each Tranche. The Issuer shall arrange for the said confirmation to be forwarded to the Facility Agent, Security Trustee and Sukuk Trustee; Purchase Order means a purchase order to be issued by the Purchaser to the Wakeel pursuant to item (c)(ii) of Section 2 below; Purchase Request shall have the meaning as ascribed to it under Section 1.4 of this Information Memorandum; Purchase Request Date shall have the meaning as ascribed to it under Section 1.4 of this Information Memorandum; Rating Agency RAM Rating Services Berhad (Company No. 763588-T), the credit rating agency of the Senior Sukuk Programme and includes its successors in title and assigns in such capacity; Receivable means a Shariah-compliant receivable which complies with the Eligibility Criteria pursuant to the Deferred Payment Programme granted by the Originator to the Obligor and shall be construed accordingly; Reduction Schedule shall have the meaning as ascribed to it under item (f) of Section 2 below; X
14. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM Relevant Issue Date shall have the meaning as ascribed to it under Section 1 .4 below; Replacement Receivable shall have the meaning as ascribed to it under item (y)(B)(ii)(a) of Section 2 below; Replacement Servicer shall have the meaning as ascribed to it under item (y)(C)(iv) of Section 2 below; RENTAS the scripless book-entries securities trading and funds transfer system known as Real Time Electronic Transfer of Funds and Securities operated by BNM as varied, upgraded or substituted from time to time; Reporting Accountant Crowe Horwath (AF 1018); RM, Ringgit and sen Ringgit Malaysia and sen respectively, the lawful currency of Malaysia; SAC means the Shariah advisory council of the SC; Securities Commission or SC the Securities Commission Malaysia; Security Documents the security documents in relation to the Senior Sukuk Programme specified in item (l) of Section 2 below; Security Trustee TMF Trustees Malaysia Berhad (Company No.610812-W); Senior Sukuk the senior Sukuk Murabahah to be issued pursuant to the Senior Sukuk Programme based on the Shariah principles of Murabahah via a Tawarruq arrangement; Senior Sukuk Programme the issuance of Senior Sukuk of up to RM360.0 million in aggregate value pursuant to a Sukuk Murabahah medium term note programme; Senior Sukukholders the several persons who are for the time being the beneficial holders of the Senior Sukuk, and reference to "Senior Sukukholder" shall mean any one of them; Servicer Masraf as the servicer and administrator of the Portfolio sold to and purchased by the Issuer and includes its successors in title and permitted assigns in such capacity; Servicer Dissolution Event shall have the meaning as ascribed to it under item (y)(C)(v) of Section 2 below; Servicer Fee shall have the meaning as ascribed to it under item (y)(C)(iv) of Section 2 below; Servicing Agreement the servicing agreement entered or to be entered into between the Servicer and the Issuer relating to the servicing and administering of the Portfolio by the Servicer; XI
15. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM Shariah Adviser Datuk Dr . Mohd Daud Bakar; Solicitors Sukuk Guidelines Messrs. Shook Lin & Bok; the Guidelines on Sukuk issued by the SC (as revised, varied, amended, supplemented and/or replaced from time to time); Sukuk Trustee AmanahRaya Trustees Berhad (Company No. 766895-T); Transaction Documents the transaction documents in relation to the Senior Sukuk Programme specified in item (y)(A)(iii) of Section 2 below; Tranche(s) shall have the meaning as ascribed to it under Section 1.4 below; Tranche OC Ratio means the ratio of: (i) The aggregate of the advance installment received and monthly installments to be received from the Obligors pursuant to the Credit Sales Agreements in relation to each Portfolio to be purchased from the Originator; to (ii) The aggregate nominal value of the Senior Sukuk to be issued under each Tranche; of at least 1.73 times. The calculation of the Tranche OC Ratio shall be done by the Servicer, duly confirmed by the Issuer, approved by its board of directors and verified by its external auditor prior to the issuance of each Tranche. The Issuer shall arrange for the said confirmation to be forwarded to the Facility Agent, Security Trustee and Sukuk Trustee; Trigger Events means any of the events specified in item (y)(A)(iv) of Section 2 below; Trust Deed means the trust deed to be entered into between the Issuer, the Sukuk Trustee and the Security Trustee in relation to the Senior Sukuk Programme (as amended, revised or supplemented from time to time); Trustee’s Reimbursement Account means a Shariah-compliant account for Senior Sukukholders’ actions in the name of the Sukuk Trustee with a bank to be appointed by the Issuer which is acceptable to the Sukuk Trustee with a balance sum of Ringgit Malaysia Thirty Thousand (RM30,000) to be set up from the proceeds received by the Issuer when the Senior Sukuk is issued; Underwriting Criteria shall have the meaning as ascribed to it under Section 4.3.4 below; XII
16. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM Wakeel means the Facility Agent acting as the buying and selling agent of the Commodities for and behalf of the Sukuk Trustee ; Words denoting (a) the singular shall, where applicable, include the plural and vice versa; (b) one gender only shall include the other gender; and (c) a person includes any individual, company, unincorporated association, government, state agency, international organisation or other entity. Unless otherwise indicated, any reference in this Information Memorandum to any legislation (whether primary legislation or regulations or other subsidiary legislation made pursuant to primary legislation), rules, statute or statutory provision shall be construed as a reference to any statutory modification or re-enactment thereof or any statutory instrument, order or regulation made thereunder or under any such modification or re-enactment. (The remainder of this page is intentionally left blank) XIII
17. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM SECTION 1 EXECUTIVE SUMMARY The following summary is qualified in its entirety by the more detailed information , the audited financial statements and notes thereto appearing elsewhere in this Information Memorandum. Prospective investors should read the full text of this Information Memorandum before deciding whether or not to invest in the Senior Sukuk Programme. 1.1 INTRODUCTION Masraf Al Barakah Sdn Bhd (“the Originator” or “Masraf”) has appointed Kenanga Investment Bank Berhad as the Principal Adviser/Lead Arranger and Lead Manager for the issuance of the following: a. Senior Sukuk Murabahah of up to RM360.0 million in aggregate nominal value (“Senior Sukuk”) pursuant to a Sukuk Murabahah medium term note programme (“Senior Sukuk Programme”); and b. Subordinated Sukuk Murabahah of up to RM40.0 million in aggregate nominal value (“Junior Sukuk”) pursuant to a Sukuk Murabahah medium term note programme (“Junior Sukuk Programme”). 1.2 BRIEF BACKGROUND OF THE ISSUER The Issuer was incorporated in Malaysia on 27 June 2013 under the Companies Act as a private limited company under the name of Cendana Sejati Sdn Bhd. The Issuer is a special-purpose company which has been incorporated to undertake the issuance of debentures or Islamic securities and/or establish debentures or Islamic securities programme. The Issuer is a wholly-owned subsidiary of Masraf. For further background information of the Issuer, please refer to Section 7 of this Information Memorandum. 1.3 BRIEF BACKGROUND OF THE ORIGINATOR The Originator was incorporated in Malaysia on 10 February 2012 under the Companies Act as a private limited company under the name of Masraf Al Barakah Sdn Bhd. Masraf is principally engaged in the provision of credit sales to eligible civil servants for purchase of products under a deferred payment terms through non-discretionary salary deduction mechanism ("Deferred Payment Programme"). The collection and salary deduction is administered by Coshare, the sister company to the Originator. (The remainder of this page is intentionally left blank) 1
18. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM An illustration of the Originator ’s business model is as follows:Diagram 1: Originator’s Business Model For further background information of the Originator, please refer to Section 8 of this Information Memorandum. 1.4 BRIEF DESCRIPTION OF THE TRANSACTION STRUCTURE The Issuer proposes to issue Senior Sukuk of up to RM360.0 million in aggregate value pursuant to a Senior Sukuk Programme and issue Junior Sukuk of up to RM40.0 million in aggregate value pursuant to a Junior Sukuk Programme. The Senior Sukuk Programme and Junior Sukuk Programme shall have tenure of up to ten (10) years from the date of first issue of the Senior Sukuk and Junior Sukuk respectively. The Senior Sukuk may be issued with maturities of more than one (1) year and up to ten (10) years and the Junior Sukuk with maturities of up to ten (10) years, provided that the final maturities of any of the Senior Sukuk and Junior Sukuk shall not exceed the tenure of the Senior Sukuk Programme and Junior Sukuk Programme respectively. Under the Senior Sukuk Programme and Junior Sukuk Programme, the Issuer will at any time and from time to time throughout the Drawdown Availability Period (as defined hereinafter) purchase from the Originator a portfolio of Shariah-compliant receivables pursuant to the Deferred Payment Programme granted by the Originator to the eligible civil servants (the “Obligor”). The Issuer will issue the Senior Sukuk and Junior Sukuk and will utilise the proceeds to purchase from the Originator a portfolio of Shariah-compliant receivables which comply with the pre-determined eligibility criteria (each a "Receivable", collectively referred to as the “Portfolio”). The Senior Sukuk Programme is available for issue/drawdown for a period of two (2) years from the date of the first issue of Senior Sukuk (“Drawdown Availability Period”). Subject to the conditions described herein, the Originator shall, from time to time issue purchase request ("Purchase Request", with the date of each Purchase Request being referred to herein as the "Purchase Request Date") specifying details 2
19. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM relevant to the Portfolio to the Issuer to request the Issuer to buy the Portfolio from the Originator . Each Portfolio shall be deemed to have been purchased by the Issuer on the Purchase Request Date provided that no objection is received or communicated from the Issuer within the Purchase Request Date ("Deemed Acceptance"). The Purchase Request will also provide for a declaration of trust ("Declaration of Trust") in favour of the Issuer whereby the Originator irrevocably and unconditionally declares inter alia that the relevant Portfolio which has been sold to and purchased by the Issuer pursuant to the Deemed Acceptance, shall together with the present and future rights and interest under or arising from or in connection with such Portfolio and the Collaboration Agreement relating to such Portfolio, be held on trust by the Originator as the bare trustee for the Issuer as the absolute beneficial owner without any encumbrances whatsoever. The Senior Sukuk together with the Junior Sukuk will be issued in multiple tranches from time to time ("Tranche(s)" and each a "Tranche") to fund the purchase of each Portfolio. The Issuer shall issue the Senior Sukuk and Junior Sukuk under each Tranche on the relevant issue date ("Relevant Issue Date"). The amount of the Junior Sukuk to be issued under each Tranche shall not be less than ten per cent (10%) of the principal amount of the Senior Sukuk under the relevant Tranche. Please refer to the following diagram for a graphical illustration of the transaction structure. Diagram 2: Transaction Overview For the detailed terms and conditions of the transaction structure, please refer to Section 2 of this Information Memorandum. 3
20. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM 1 .5 UTILISATION OF PROCEEDS Details on utilisation of proceeds by the Issuer The proceeds from the issue of the Senior Sukuk and the Junior Sukuk will be used by the Issuer to deposit a sum of RM30,000 into the Trustees’ Reimbursement Account and towards payment to the Originator for the purchase of the Portfolio. Details on utilisation of proceeds by the Originator The Originator will use the monies derived from the issuance of Senior Sukuk and Junior Sukuk for its working capital requirements which shall be Shariah-compliant. 1.6 RATING RAM has assigned a preliminary rating of AA1 with stable outlook for the Senior Sukuk Programme. The AA1 preliminary rating indicates that the issuance of Senior Sukuk has a high safety for payment of financial obligations and the Issuer is resilient against adverse changes in circumstances, economic conditions and/or operating environments. Meanwhile, the Junior Sukuk will be solely issued to Masraf. For clarification, the Junior Sukuk Programme is not required to be rated because the Junior Sukuk is non-transferable and non-tradable; and investor of Junior Sukuk i.e. Masraf do not require a rating. 1.7 SELLING RESTRICTIONS The Senior Sukuk may not be offered or sold, directly or indirectly, nor may any document or other material in connection therewith be distributed in Malaysia, including this Information Memorandum, other than to persons to whom the offer or invitation to purchase would fall within: (a) At the point of issuance, Schedule 6 or Section 229(1)(b) and Schedule 7 or Section 230(1)(b) of the CMSA, read together with Schedule 9 or Section 257(3) of the CMSA; and (b) After the issuance, Schedule 6 or Section 229(1)(b) of the CMSA, read together with Schedule 9 or Section 257(3) of the CMSA; and to whom any issue, offer or invitation to subscribe for or purchase the Senior Sukuk does not constitute an offer to the public within the categories set out in Section 4(6) of the Companies Act. Each Senior Sukukholder may not sell, transfer or otherwise dispose of all or any part of its legal or beneficial interests in the Senior Sukuk to another person or persons nor offer to do so, unless such sale, transfer, disposal for offer, is subject to the condition that such person(s) shall undertake or otherwise be bound to observe the restrictions set out above. The Junior Sukuk will only be issued to the Originator who may not, directly or indirectly, offer, sell, transfer or otherwise dispose of them to any other parties. 4
21. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM 1 .8 REGULATORY APPROVAL By a letter dated 21 April 2014 issued by the SC to the Principal Adviser/Lead Arranger, the SC has authorised the Senior Sukuk Programme, upon the terms and subject to the conditions therein contained. The Junior Sukuk Programme does not require the SC's authorisation as it is exempted pursuant to Paragraph 2(k) of Schedule 5 to the CMSA. (The remainder of this page is intentionally left blank) 5
22. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM SECTION 2 SUMMARY OF PROGRAMME PRINCIPAL TERMS AND CONDITIONS OF SENIOR SUKUK Words and expressions used and defined in this section shall , in the event of any inconsistency with the Definitions and Abbreviation section of this Information Memorandum, be applicable for this section only. (a) Names of parties (i) Principal adviser : Kenanga Investment Bank Berhad (Company No. 15678-H) (“Kenanga IB” or “PA/LA”). (ii) Lead arranger : Kenanga IB. (iii) Co-arranger : Not applicable. (iv) Solicitors : Messrs. Shook Lin & Bok (“Solicitors”). (v) Financial adviser : Not applicable. (vi) Technical adviser : Not applicable. (vii) Sukuk trustee : AmanahRaya Trustees Berhad (Company No. 766894-T) (“Sukuk Trustee” acting on behalf of the Senior Sukukholders (as defined in item (c) below)). (viii) Shariah adviser : Datuk Dr. Mohd Daud Bakar. (ix) Guarantor : Not applicable. (x) : Not applicable. : Kenanga IB. Valuer (xi) Facility agent (xii) Primary subscriber : (under a bought-deal arrangement) and amount subscribed I) Senior Sukuk Programme The primary subscribers will be determined prior to the issuance, where applicable. II) Junior Sukuk Programme Masraf will subscribe to one hundred per cent (100%) of the nominal value of the Junior Sukuk to be issued from time to time under a private placement arrangement. (xiii) Underwriter and : amount underwritten Not applicable. (xiv) Central depository : Bank Negara Malaysia (“BNM”). (xv) Paying agent : BNM. (xvi) Reporting accountant : Crowe Horwath (AF 1018). 6
23. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM (xvii) Calculation agent; and : Not applicable. : Kenanga IB and/or such other financial institution(s) to be appointed by the Issuer (as the case may be).  Servicer : Masraf.  Obligor : Eligible civil servant identified by the Originator to whom Deferred Payment Programme is granted.  Security Trustee : TMF Trustees Malaysia Berhad (Company No. 610812-W) (“Security Trustee”).  Collection Agent : Coshare Holdings Berhad (Company No. 447108-C) (“Coshare”), a company incorporated in Malaysia under the Companies Act 1965 which is authorised by the Accountant General’s Department (“AG”) and the Ministry of Finance (“MOF”) to provide salary deduction services for eligible civil servants. Coshare provides processing, activation and collection services via monthly salary deduction to its business partners.  Tax Adviser : Crowe Horwath KL Tax Sdn Bhd (Company No. 10709-X). (xviii) Others  Lead Manager(s) (b) Islamic principle used : The issuance of the Senior Sukuk (as defined in item (c) below) and Junior Sukuk (as defined in item (c) below) will be based on the Shariah principles of Murabahah via a Tawarruq arrangement, which are the Shariah principles and concepts approved by the Shariah Advisory Council (“SAC”) of the Securities Commission Malaysia (“SC”). (c) Facility Description : I) Senior Sukuk Programme Issuance of senior Sukuk Murabahah of up to RM360.0 million in aggregate nominal value (“Senior Sukuk”) pursuant to a Sukuk Murabahah medium term note programme (“Senior Sukuk Programme”). II) Junior Sukuk Programme Issuance of subordinated Sukuk of up to RM40.0 million in nominal value (“Junior Sukuk”) a Sukuk Murabahah medium 7 Murabahah aggregate pursuant to term note
24. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM programme (“Junior Sukuk Programme”). Under the Senior and Junior Sukuk Programmes, Issuer will at any time and from time to time throughout the Drawdown Availability Period (as defined at the end of this paragraph) purchase from the Originator a portfolio of Shariah-compliant receivables which comply with the Eligibility Criteria (as defined in item (y)(B)(ii)) pursuant to the Deferred Payment Programme granted to the Obligor (each a “Receivable”, collectively referred to as “Portfolio”). The Senior Sukuk Programme is available for issue/drawdown for a period of two (2) years from the date of the first issue of Senior Sukuk from the Senior Sukuk Programme (“Drawdown Availability Period”). Subject to the conditions described herein, the Originator shall, from time to time, issue Purchase Requests (each a “Purchase Request” with the date of each Purchase Request being referred to herein as the “Purchase Request Date”) specifying details relevant to the Portfolio to the Issuer to request the Issuer to buy the Portfolio from the Originator. Each Portfolio shall be deemed to have been purchased by the Issuer on the Purchase Request Date provided that there is no objection received/ communicated from the Issuer within the Purchase Request Date ("Deemed Acceptance"). The Purchase Request will also provide for a declaration of trust ("Declaration of Trust") in favour of the Issuer whereby the Originator irrevocably and unconditionally declares inter alia that the relevant Portfolio which has been sold to and purchased by the Issuer pursuant to the Deemed Acceptance, shall, together with the present and future rights and interests under or arising from or in connection with such Portfolio and the Collaboration Agreement (as defined herein) relating to such Portfolio. The aforesaid will be held on trust by the Originator as the bare trustee for the Issuer as the absolute beneficial owner without any encumbrances whatsoever. The “Collaboration Agreement” is an agreement dated 6 June 2012 (as 8
25. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM amended , varied and/or supplemented) entered between Masraf and Coshare as the Collection Agent where Masraf collaborates and participates in "Program Ansuran Coshare" which authorises Coshare to undertake and implement a salary deduction programme for eligible civil servants employed by Government of Malaysia (“GOM”). The Senior Sukuk together with the Junior Sukuk will be issued in multiple tranches from time to time (“Tranche(s)”) to fund the purchase of each Portfolio. The Issuer shall issue the Senior Sukuk and Junior Sukuk under each Tranche on the relevant issue date (the “Relevant Issue Date”). The amount of the Junior Sukuk to be issued under each Tranche shall not be less than ten per cent (10%) of the principal amount of the Senior Sukuk under the relevant Tranche. The issuance of Senior Sukuk and Junior Sukuk under each Tranche shall be effected as follows: i. The Sukuk Trustee (acting on behalf of the investor(s) of the Senior Sukuk (“Senior Sukukholders”)) and the investor of the Junior Sukuk (“Junior Sukukholder”) shall appoint the Facility Agent as the buying and selling agent (“Wakeel”) of Shariah-compliant commodities (“Commodities”). ii. The Issuer shall issue a purchase order (the “Purchase Order”) to the Wakeel and the Sukuk Trustee (acting on behalf of the Senior Sukukholders) for the purchase of the Commodities. The Purchase Order which is based on an undertaking (wa’ad) constitutes a unilateral binding promise by the Issuer to purchase the said Commodities at a sale price to be paid on a deferred payment basis (“Deferred Sale Price”). The Deferred Sale Price represents the principal amount equivalent to the Purchase Price (as defined in the paragraph below) and the profit portion to be agreed between the Issuer as the purchaser and the Wakeel who represents the Senior and Junior Sukukholders as the seller. 9
26. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM iii . The Issuer shall issue and the respective Senior and Junior Sukukholders shall subscribe, to the respective Senior and Junior Sukuk issued by the Issuer to evidence the Senior and Junior Sukukholders’ ownership of the Commodities and subsequently, represent the Senior and Junior Sukukholders’ entitlement to receive the Deferred Sale Price once the Commodities are sold to the Issuer. iv. Pursuant to the Purchase Order, the Senior and Junior Sukukholders shall pay the purchase price (the “Purchase Price”) of the Commodities which is equivalent to the relevant Senior and Junior Sukuk proceeds. v. Upon receipt of the Purchase Price, the Wakeel, on behalf of the Senior and Junior Sukukholders shall then purchase the Commodities from a commodity supplier acceptable to the Shariah Adviser (“Commodity Supplier”) on a spot basis. vi. Upon completion of the purchase, the Wakeel, on behalf of the Senior and Junior Sukukholders, shall sell the Commodities to the Issuer at the Deferred Sale Price. The Issuer shall pay the Deferred Sale Price via the Wakeel to the Senior and Junior Sukukholders. vii. Thereafter, the Issuer shall sell the Commodities to commodity purchaser acceptable to the Shariah Adviser (“Commodity Purchaser”) on a spot basis at an amount equivalent to the Purchase Price. viii. Throughout the tenure of the Senior Sukuk Programme and Junior Sukuk Programme, the Issuer shall pay the relevant profit payment (subject to the fulfilment of the relevant provisions and conditions set out in item (j) and item (w)(ii)(i) below) to the Senior and Junior Sukukholders with the principal amount being paid on the relevant maturity date via the Wakeel. 10
27. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM Please refer to Appendix 1 of this Principal Terms and Conditions (“PTC”) for a diagrammatic illustration of the transaction above. (d) Identified assets : Shariah-compliant commodities (which shall, inter alia, exclude ribawi items in the category of medium of exchange such as currency, gold and silver) which are provided by the Commodity Supplier. (e) Purchase and selling price/ : rental (where applicable) To be determined prior to each issuance of the Senior Sukuk and Junior Sukuk which shall be in compliance with the asset pricing requirement under the Sukuk Guidelines. (f) Issue/ size sukuk programme : Facility Senior Programme Junior Programme Issue size (RM) Sukuk Sukuk Up to 360.0 million Up to 40.0 million The Issuer has the option to increase the size of the Senior Sukuk Programme subject to the following: (i) Approval from the SC for the proposed upsizing has been obtained; (ii) The Issuer has obtained consent from the relevant parties, including the Senior Sukukholders for the proposed upsizing and in obtaining consent from the Senior Sukukholders, the voting for the Senior Sukuk Programme is carried out on a “per series” basis and not on a collective basis; and (iii) The Issuer must ensure that any exercise to upsize the Senior Sukuk Programme shall not unfairly discriminate against or is otherwise prejudicial to existing Senior Sukukholders of the Senior Sukuk Programme. For the avoidance of doubt, the Senior Sukuk Programme is subject to the following reduction schedule (“Reduction Schedule”) below: 11
28. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM Reduction Period (from first issuance date of Senior Sukuk) Senior Sukuk Programme Available Limit (RM million) By the 5th anniversary date 300.0 By the 6th anniversary date 240.0 By the 7th anniversary date 180.0 By the 8th anniversary date 120.0 By the 9th anniversary date 60.0 By the 10th anniversary date 0.0 In the event of an upsize of the Senior Sukuk Programme (as the case maybe), the Reduction Schedule will be amended accordingly subject to the consent from the Senior Sukukholders and in obtaining consent from the Senior Sukukholders, the voting for the Senior Sukuk Programme is carried out on a “per series” basis and not on a collective basis. (g) Tenure of programme issue/ sukuk : I) Senior Sukuk Programme Tenure of the Senior Sukuk Programme Up to ten (10) years from the date of first issue under the Senior Sukuk Programme. Tenure of the Senior Sukuk Each Senior Sukuk shall have a tenure of more than one (1) year and up to ten (10) years. Provided always that the Senior Sukuk shall mature on or prior to the expiry of the Senior Sukuk Programme. II) Junior Sukuk Programme Tenure of the Junior Sukuk Programme Up to ten (10) years from the date of first issue under the Junior Sukuk Programme. Tenure of the Junior Sukuk Each Junior Sukuk shall have a tenure of up to ten (10) years. For the avoidance of doubt, the maturity date of each of the Junior Sukuk shall fall on the maturity date of the Junior Sukuk Programme. Provided always that the Junior Sukuk under the Junior Sukuk Programme shall mature on or after the maturity of the Senior Sukuk Programme. (h) Availability period of sukuk : programme I) Senior Sukuk Programme The Senior Sukuk Programme is available 12
29. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM for utilisation upon compliance of all conditions precedent to the satisfaction of the PA /LA. For the avoidance of doubt, the Senior Sukuk Programme is only available for drawdown for a period of two (2) years from the date of the first issue of Senior Sukuk from the Senior Sukuk Programme provided that the first issue shall not be later than two (2) years from the date of the written authorisation issued by the SC. II) Junior Sukuk Programme The Junior Sukuk Programme is available for utilisation upon compliance of all conditions precedent to the satisfaction of the PA/LA. (i) Profit/ coupon/ rental rate : I) Senior Sukuk Programme To be determined closer to the point of issuance of the relevant Senior Sukuk. II) Junior Sukuk Programme The Junior Sukuk will bear a cumulative profit rate of ten per cent (10%) per annum. However, the profit payment amount is subject to the provisions stipulated in item (j) and item (w)(ii)(i) below. (j) Profit/ coupon/ payment frequency rental : I) Senior Sukuk Programme Profit on the Senior Sukuk shall be payable semi-annually in arrears with the first profit payment to be made six (6) months from the issue date of each Senior Sukuk. II) Junior Sukuk Programme Subject to meeting the conditions as described herein in item (w)(ii)(i), profit on the Junior Sukuk shall be payable annually in arrears in accordance to the following schedule and the maximum amount: Profit Payment Date (from first issuance date of Junior Sukuk) 1st and 2nd anniversary date 13 Maximum Amount of Profit Payment Zero per annum.
30. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM 3rd , 4th and anniversary date 5th The lower following: of the (a) RM3.0 million per annum; or (b) Amount of profit payment based on the profit rate of 10% per annum of the total outstanding Junior Sukuk on the relevant profit payment date. 6th anniversary date The lower following: of the (a) RM2.0 million per annum; or (b) Amount of profit payment based on the profit rate of 10% per annum of the total outstanding Junior Sukuk on the profit payment date. 1 December of each calendar year following the 7th, 8th and 9th anniversary date The amount of profit payable is subject to meeting the finance service coverage ratio (“Distribution FSCR”) of at least 2.30 times after such proposed distribution as described in item (y)(A)(v) below. Such profit amount payable is limited to the amount of profit payment based on the profit rate of 10% per annum of the total outstanding Junior Sukuk on the relevant profit payment date. For the avoidance of doubt, the profit payment after the 6th anniversary date (from first issuance date of the Junior Sukuk) onwards shall be subject to Issuer making available its audited financial statement for the relevant financial year ended prior to the respective profit payment date . Any unpaid profit on the Junior Sukuk for any particular year shall be accumulated and payable after all the outstanding Senior Sukuk under the Senior Sukuk Programme has been fully redeemed. 14
31. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM (k) Profit/ coupon/ payment basis rental : I) Senior Sukuk Programme The profit of the Senior Sukuk will be calculated on the basis of the actual number of days elapsed and a year of 365 days (actual/365 days). II) Junior Sukuk Programme The profit of the Junior Sukuk will be calculated on the basis of the actual number of days elapsed and a year of 365 days (actual/365 days). (l) Security/ collateral, where : applicable I) Senior Sukuk Programme The security for the Senior Sukuk is as follows: (a) Assignment (incorporating a power of attorney) of all of the Issuer’s rights, title, benefit and interest in, to and under the Transaction Documents (as described in item (y)(A)(iii) below) and the Portfolio and any payments or amounts due from time to time to the Issuer; (b) First fixed charge (incorporating a power of attorney) over all of the Issuer’s right, title, benefit and interest in, to and under the Designated Accounts (as defined in item (n) below) including monies standing to the credit of the same; (c) First fixed and floating charge (incorporating a power of attorney) over the whole of the Issuer’s undertaking and all of its other property, assets and rights, both present and future; (d) Third party first fixed charge (incorporating a power of attorney) by Masraf over the entire issued paid-up share capital of the Issuer; (e) Assignment (incorporating a power of attorney) of all the Originator’s rights, title, benefit and interest in, to and under the Credit Sales Agreement in respect of each Receivable forming part of the Portfolio and any security documents (if any) given pursuant thereto. For the 15
32. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM avoidance of doubt and notwithstanding that each Tranche is to purchase an identified pool of Portfolio , each identified Portfolio for each Tranche will not only secure the relevant Senior Sukuk issued pursuant to such Tranche forming its purchase but also to secure all the other Senior Sukuk issued or to be issued pursuant to all the other Tranches on a pari passu basis; (f) Assignment (incorporating a power of attorney) of all the Originator's rights, title, benefit and interest in, to and under the Collaboration Agreement; (g) Assignment of Declaration of Trust; and (h) Assignment of Servicing Agreement (as defined in item (y)(C)(i) below). (collectively, the "Security Documents). II) Junior Sukuk Programme Nil. (m) Details on utilisation of : proceeds by issuer/obligor and originator (in the case of ABS). If proceeds are to be utilised for project or capital expenditure, description of the project or capital expenditure, where applicable Details on utilisation of proceeds by the Issuer The proceeds from the issue of the Senior Sukuk and the Junior Sukuk will be used by the Issuer to deposit a sum of RM30,000 into the Trustees’ Reimbursement Account and towards payment to the Originator for the purchase of the Portfolio. Details on utilisation of proceeds by the Originator The Originator will use the monies derived from the issuance of Senior Sukuk and Junior Sukuk for its working capital requirements which shall be Shariahcompliant. (n) Sinking fund and : designated accounts, where applicable I) Senior Sukuk Programme The Issuer is required to open and maintain three (3) Shariah-compliant designated accounts with a financial institution (with a minimum rating of A3/P1 or its equivalent) acceptable to the PA/LA as follows:(i) Collection Account; (ii) Liquidity Reserve Account; and 16
33. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM (iii) Prepayment Account; (collectively, the “Designated Accounts”). The Designated Accounts shall be operated solely by the Security Trustee. All withdrawals from the Designated Accounts shall be accompanied by the relevant supporting documents (in form and substance satisfactory to the Security Trustee). Upon full settlement of all Senior Sukuk and the cancellation of the Senior Sukuk Programme, all the Designated Accounts will be closed and the remaining monies will be transferred to the Issuer. Collection Account The Collection Account shall capture the following:(a) Remittance by Coshare of the monthly instalments in relation to the Portfolio after the relevant Purchase Request Date; (b) Remittance from the Prepayment Account of the prepayment (if any) received from the Obligors in relation to the Portfolio; (c) Remittance by the Originator of the one advance instalment from the Obligors and any monies received in relation to each Portfolio after the Purchase Request Date to the period immediately preceding the Relevant Issue Date; (d) The repurchase consideration received from the Originator for the Mandatory Redemption in Full (as defined in item (y)(A)(x) below); (e) The amount recovered defaulted Receivable; from any (f) The amount in excess of the Minimum Required Balance (as defined in the subparagraph “Liquidity Reserve Account”) from the Liquidity Reserve Account; (g) An amount equal to the total credit balance in the Liquidity Reserve Account upon full redemption of the Senior Sukuk or upon the declaration of 17
34. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM a Dissolution Event (as defined in item (v)), as the case may be; (h) If any, all financing income earned on the funds in Permitted Investments (as defined in item (y)(A)(ix) below); (i) The excess funds (if any) from the issue proceeds. Before Dissolution Event Prior to the declaration of a Dissolution Event , all monies from time to time and at any time standing to the credit of the Collection Account will be applied in the following order and priority: (aa) to pay taxes and meet other statutory payment (if any) falling due and payable; (bb) to pay the Issuer’s operating expenses and administrative expenses (comprising fees and expenses relating to the Senior and Junior Sukuk Programmes) based on the annual budget prepared by the Issuer, approved by its board of directors to the satisfaction of the Sukuk Trustee; (cc) to pay the Servicer Fee (as defined in item (y)(C)(iv) below) if the Servicer is not a related corporation of Masraf; (dd) to pay the profit due and payable in respect of the Senior Sukuk; (ee) to pay the principal due and payable in respect of the Senior Sukuk; (ff) to top up and/or to maintain the Minimum Required Balance in the Liquidity Reserve Account; (gg) to pay the Servicer Fee, if the Servicer is Masraf itself or the Replacement Servicer is a related corporation of Masraf (as the case may be); (hh) if applicable, to pay the recovery costs to the Servicer in relation to any defaulted Receivable up to a maximum amount of RM10,000 per 18
35. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM Obligor ; (ii) to pay the profit, in full or in part, in respect of the Junior Sukuk annually, subject to the provisions and conditions stipulated in item (j) and item (w)(ii)(i) herein. Upon Dissolution Event Upon the declaration of a Dissolution Event, the funds in the Collection Account shall be utilised for payment in the following order:(i) To pay taxes and meet other statutory payment (if any) falling due and payable; (ii) To pay the Issuer’s operating expenses and administrative expenses (comprising fees and expenses relating to the Senior and Junior Sukuk Programmes) based on the annual budget prepared by the Issuer, approved by its board of directors to the satisfaction of the Sukuk Trustee; (iii) To pay the Servicer Fee if the Servicer is not a related corporation of Masraf; (iv) To pay the profit in respect of the Senior Sukuk on a pro-rata basis; (v) To redeem the outstanding principal amount in respect of the Senior Sukuk on a pro-rata basis; (vi) to pay the Servicer Fee, if the Servicer is Masraf itself or the Replacement Servicer is a related corporation of Masraf (as the case may be); (vii) To pay the profit in respect of the Junior Sukuk on a pro-rata basis; (viii) To redeem the principal amount in respect of the Junior Sukuk on a prorata basis (where applicable). 19
36. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM Liquidity Reserve Account The Liquidity Reserve Account capture : shall (a) the progressive remittance of funds from the Collection Account in accordance with the schedule as set out below; and (b) the sum of not less than Ringgit Malaysia One Million (RM1,000,000.00) deposited by the Originator and/or the Issuer as referred to in item (t)(p) below. In respect of profit payments due and payable on each Senior Sukuk, the Issuer shall maintain the minimum balances in the Liquidity Reserve Account (“Minimum Required Balance”) in accordance with the schedule as follows: Month(s) before the profit payment date of the relevant Senior Sukuk Minimum Balance Required 5 20% of the profit payment due on the relevant Senior Sukuk 4 40% of the profit payment due on the relevant Senior Sukuk 3 60% of the profit payment due on the relevant Senior Sukuk 2 80% of the profit payment due on the relevant Senior Sukuk 1 100% of the profit payment due on the relevant Senior Sukuk In respect of principal payments due and payable on each Senior Sukuk, monies shall be transferred from the Collection Account into the Liquidity Reserve Account as follows: Months before the principal payment date of the relevant Senior Sukuk 6 20 Minimum Balance Required 20% of the principal payment due on the relevant Senior Sukuk
37. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM 5 40 % of the principal payment due on the relevant Senior Sukuk 4 60% of the principal payment due on the relevant Senior Sukuk 3 80% of the principal payment due on the relevant Senior Sukuk 2 100% of the principal payment due on the relevant Senior Sukuk The monies in the Liquidity Reserve Account shall be withdrawn only for the purpose of meeting profit and principal payments in respect of the Senior Sukuk in the event that the amount in the Collection Account is not sufficient to meet the relevant profit and principal payments due and payable in respect of the Senior Sukuk. In the event that the balance held in the Liquidity Reserve Account is less than the Minimum Required Balance, the shortfall shall be topped up from the Collection Account immediately. Any failure to meet the Minimum Required Balance shall constitute a Trigger Event (as defined in item (y)(A)(iv)). However, if the balance held in the Liquidity Reserve Account is more than the Minimum Required Balance, the amount exceeding the Minimum Required Balance shall be transferred back to the Collection Account. Upon full redemption of the Senior Sukuk or the declaration of a Dissolution Event, as the case may be, the funds in the Liquidity Reserve Account shall be transferred to the Collection Account and shall be applied in accordance with the order of priority stipulated in the relevant provisions in respect of the Collection Account. Prepayment Account The Prepayment Account shall capture any prepayment received from the Obligors in relation to the Portfolio after the Purchase Request Date and for this purpose, the notice to be given by the Originator/Security Trustee to the Obligors on the sale and purchase of the Portfolio between the Originator and the Issuer shall also provide that any prepayment shall be deposited 21
38. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM directly into the Prepayment Account . All monies from time to time and at any time standing to the credit of the Prepayment Account will be transferred to the Collection Account and shall be applied in accordance with the order of priority stipulated in the relevant provisions (both before and after the declaration of a Dissolution Event) in respect of the Collection Account. II) Junior Sukuk Programme Not applicable. (o) Rating   (p) Credit rating assigned : and whether the rating is final or indicative. In the case of a Sukuk programme where the credit rating is not assigned for the full amount, disclosures set out in paragraph 9.04 of these Guidelines must be made; and I) Senior Sukuk Programme Name of credit rating : agencies RAM Rating Services Berhad (Co. No. 763588-T) (“RAM”). Mode of Issue : Indicative rating of AA1. II) Junior Sukuk Programme Not rated. The Junior Sukuk which is nontransferrable and non-tradable will be solely issued to Masraf. I) Senior Sukuk Programme Private placement or book running on best efforts basis or bought deal without prospectus. Issuance of the Senior Sukuk under the Senior Sukuk Programme shall be in accordance with (i) the Participation and Operation Rules for Payments and Securities Services issued by Malaysian Electronic Clearing Corporation Sdn Bhd (“MyClear”)(“MyClear Rules”); and (ii) the Operational Procedures for Securities Services issued by MyClear (“MyClear Procedures”) or their replacement thereof (collectively referred to as “MyClear Rules and MyClear Procedures”) applicable from time to time. 22
39. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM II ) Junior Sukuk Programme Private placement without prospectus. (q) Selling Restrictions, : including tradability, i.e. whether tradable or nontradable I) Senior Sukuk Programme The Senior Sukuk are tradable but shall not be offered or sold, directly or indirectly, nor may any document or other material in connection therewith be distributed in Malaysia, other than to persons to whom the offer or invitation to purchase the Senior Sukuk would fall within: At the point of issuance: Schedule 6 or subsection 229(1)(b); Schedule 7 or subsection 230(1)(b), read together with Schedule 9 or subsection 257(3) of the Capital Markets and Services Act 2007 (“CMSA”); After the issuance: Schedule 6 or subsection 229(1)(b) read together Schedule 9 or subsection 257(3) of the CMSA; and to whom any issue, offer or invitation to subscribe for or purchase the Senior Sukuk does not constitute an offer to the public within the categories set out in Section 4(6) of the Companies Act, 1965 (as amended from time to time). The Senior Sukuk are tradable and transferable subject to the selling restrictions set out in the preceding paragraph. II) Junior Sukuk Programme The Junior Sukuk will only be issued to the Originator who shall not, directly or indirectly, offer, sell, transfer or otherwise dispose of them to any other parties. (r) Listing status and types of : listing, where applicable The Senior Sukuk and the Junior Sukuk will not be listed or quoted on the Bursa Malaysia Securities Berhad or any other stock exchanges. (s) Other regulatory approvals : required in relation to the issue, offer or invitation to None. 23
40. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM subscribe or purchase Sukuk , and whether or not obtained (t) Conditions precedent : I) Senior Sukuk Programme Conditions precedent to the Senior Sukuk Programme include but not limited to the following: (a) Satisfactory completion and execution of all legal and security documentation and any other necessary documents in relation to the Senior Sukuk Programme, including but not limited to the Transaction Documents, with such documents being duly endorsed as exempted from stamp duty under Stamp Duty Exemption (No. 23) Order 2000 (as amended by Stamp Duty (Exemption) (No.3) (Amendment) Order 2005), and presented for registration (if applicable); (b) Evidence of authorisation from the SC in relation to the Senior Sukuk Programme; (c) Satisfactory company and winding-up search in respect of the Originator and the Issuer; (d) Evidence that the Senior Sukuk Programme has received the required rating as stated herein; (e) Evidence of confirmation from the Shariah Adviser that the structure and mechanism of the Senior Sukuk Programme and the Transaction Documents are in compliance with Shariah; (f) Documentary evidence that the Designated Accounts and the Trustees’ Reimbursement Account have been opened; (g) Certified true copy of board resolution(s) of the Issuer and the Originator authorising, among others, the issuance of the Senior Sukuk under the Senior Sukuk Programme and the execution of the Transaction 24
41. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM Documents and all other documents relevant thereto ; (h) Receipt of certified true copies of the Issuer’s and the Originator’s latest Forms 24, 44 and 49, Annual Return, Memorandum and Articles of Association, Certificate of Incorporation, subsisting Forms 34 and 40 and a list of authorised signatories and their specimen signatures; (i) Receipt of a certified true copy of the Collaboration Agreement; (j) Receipt of a legal opinion from the Solicitors confirming, based upon the terms of the Senior Sukuk Programme and the Junior Sukuk Programme, that the Issuer will have no recourse to the Originator for the Receivable forming part of the Portfolio to be sold from time to time by the Originator to the Issuer save and except for: (i) occurrence of a breach of any condition, representations and warranties given by the Originator in relation to the Portfolio; (ii) any receivable forming part of the Portfolio that fails to comply with any of the Eligibility Criteria from the Purchase Request Date up to and including the date on which the first schedule salary deduction by the Collection Agent or the first schedules salary deduction is not received by on or prior to the scheduled date of deduction whereby the Originator will replace such Ineligible Receivable (as defined in item (y)(B)(ii) below); and (iii) occurrence of relevant events under Mandatory Redemption in Full which obliges the Originator to repurchase the entire Portfolio; (k) Delivery of a satisfactory legal opinion from the Solicitors, addressed to the PA/LA as to (i) the legality, validity and enforceability of the Transaction Documents; and (ii) that all the 25
42. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM conditions precedent under the Transaction Documents have been fulfilled unless waived by the PA /LA; (l) Documentary evidence that relevant notices of the assignment under relevant Transaction Documents shall have, to the extent that such conditions precedent are to be confirmed by the Solicitors, been served upon the relevant parties with the relevant acknowledgement thereof duly signed and returned; (m) Receipt of an undertaking addressed to the Security Trustee and/or the Sukuk Trustee in form and substance acceptable to the PA/LA from the Originator whereby the Originator will irrevocably undertake to inter alia deposit and/or procure the Collection Agent to deposit all or any proceeds relating to each Receivable forming part of the Portfolio sold to and purchased by the Issuer from the Originator into the Collection Account; (n) Evidence of payment or arrangement for payment by the Originator of all relevant upfront fees and amounts due by the Issuer in connection with the Senior Sukuk Programme; (o) Receipt of an undertaking addressed to the Security Trustee and/or the Sukuk Trustee in form and substance acceptable to the PA/LA from Coshare as the Collection Agent that it will irrevocably undertake to deposit and remit all proceeds received from the Obligors into the Collection Account; (p) Confirmation by the Issuer, approved by its board of directors and verified by the external auditor that the minimum Over-Collateralisation Ratio for each tranche (“Tranche OC Ratio”) (as described in item (y)(A)(vi)) and OverCollateralisation Ratio for the Portfolio (“Portfolio OC Ratio”) (as described in item (y)(A)(vii)) as determined by RAM (the Tranche OC Ratio and Portfolio OC Ratio are collectively referred to as “OC Ratios”) are fulfilled prior to the first issuance; 26
43. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM (q) Documentary evidence satisfactory to PA/LA that a sum of not less than Ringgit Malaysia One Million (RM1,000,000.00) has been deposited in the Liquidity Reserve Account by the Originator and/or the Issuer; and (r) Such other conditions precedent as advised by the Solicitors and agreed between the Issuer and the PA/LA. Conditions precedent to the issuance of each Tranche include but are not limited to the following:(a) No Trigger Event and/or Dissolution Event has occurred; (b) If applicable, receipt of a redemption statement cum undertaking from the existing financier of the Originator in form and substance acceptable to the PA/LA; (c) Documentary evidence that the advance instalments from the Obligors in relation to each Receivable forming part of the Portfolio to be purchased have been paid to the Issuer’s Collection Account; (d) Confirmation by the Issuer, approved by its board of directors and verified by the external auditor that the OC Ratios are fulfilled at the point of issuance of each Tranche; (e) Confirmation that all conditions precedent under the Junior Sukuk Programme, save and except for the condition precedent relating to the Senior Sukuk Programme, have been met; and (f) Such other conditions precedent as advised by the Solicitors and agreed between the Issuer and the PA/LA. II) Junior Sukuk Programme (a) Confirmation that all conditions precedent under the Senior Sukuk Programme, save and except for the condition precedent relating to the 27
44. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM Junior Sukuk Programme , have been met; (u) Representations warranties (i) (b) Satisfactory completion and execution of all legal documentation and any other necessary documents in relation to the Junior Sukuk Programme, including but not limited to the Transaction Documents, with such documents being duly stamped and endorsed and presented for registration (if applicable); (c) Evidence of confirmation from the Shariah Adviser that the structure and mechanism of the Junior Sukuk Programme and the Transaction Documents are in compliance with Shariah; (d) Certified true copy of board resolution(s) of the Issuer and the Originator authorising, amongst others, the issuance of the Junior Sukuk under the Junior Sukuk Programme and the execution of the Transaction Documents and all other documents relevant thereto; (e) Evidence of payment or arrangement for payment by the Originator of all relevant upfront fees and amounts due by the Issuer in connection with the Junior Sukuk Programme; and (f) Such other conditions precedent as advised by the Solicitors and agreed between the Issuer and the PA/LA. and Representations and : warranties of the Originator The Originator will make certain representations and warranties in the Declaration of Trust with respect to the Portfolio and the contracts in relation thereto including, but not limited to: (a) the Originator has obtained all appropriate authorisations required under law to enable it to perform its obligations under the Declaration of Trust; (b) the 28 execution, delivery and
45. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM performance of the Declaration of Trust will not constitute a Dissolution Event under any agreement to which it is party and are in compliance with all applicable laws ; (c) the Originator is not in violation of any order of any governmental agency and there are no actions, suits, litigation or proceedings against the Originator that could have a material adverse effect on the sale and transfer of the Portfolio to the Issuer; (d) no litigation or other proceedings is in progress or pending against the Originator that could have a material adverse impact on the Originator or the Portfolio; (e) no steps for the winding-up of the Originator has been taken; (f) the Originator is a going concern on the Purchase Request Date, being the date the Portfolio is sold to the Issuer under the Declaration of Trust; (g) the Declaration of Trust when executed constitutes the legal valid, binding and enforceable obligation of the Originator; (h) the Originator is, if applicable subject to the encumbrances created in favour of its financier and to be redeemed through the proceeds received from the issuance of the Senior Sukuk, the absolute legal and, prior to the sale of the Portfolio to the Issuer, beneficial owner of the Portfolio, free from all encumbrances; and (i) each Receivable forming part of the Portfolio sold and forming part of the Declaration of Trust complies with the Eligibility Criteria during the period from the Purchase Request Date up to the first scheduled salary deduction by the Collection Agent. The Originator will indemnify the Issuer against all damages, losses, and claims 29
46. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM awarded against or incurred by the Issuer resulting from the breach of any representation , warranty or indemnity made by the Originator in the relevant Transaction Documents. Save as aforesaid and any breach of the Eligibility Criteria in relation to any Receivable forming part of the Portfolio sold, the Originator shall not be liable for any loss arising from the Portfolio. (ii) Representations Warranties of Issuer and : the The representations and warranties by the Issuer shall include but not limited to the following: (a) the Issuer is a company with limited liability duly incorporated and validly existing under the relevant laws, has full power to carry on its business and to own its property and assets, and to enter into, exercise its rights and perform its obligations under the Transaction Documents, and has full beneficial ownership of all its property and assets; (b) its memorandum and articles of association incorporate provisions which authorise, and all necessary corporate and other relevant actions have been taken to authorise, and all relevant consents and approvals of any administrative, governmental or other authority or body have been duly obtained and are in full force and effect which are required to authorise it to execute, deliver and perform the transactions contemplated in the Transaction Documents in accordance with their terms; (c) the Senior Sukuk and the Junior Sukuk and the Transaction Documents are or will be when executed and/or issued, as the case may be, in full force and effect and constitute its valid and legally binding obligations enforceable in accordance with the terms of the Senior Sukuk and the Junior Sukuk respectively and the Transaction Documents; (d) the issuance of the Senior Sukuk and the Junior Sukuk, the execution and delivery of any of the Transaction Documents, and the performance of 30
47. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM any of the transactions contemplated by the Transaction Documents by it , did not and does not as at the date this representation and warranty is made or repeated: (i) contravene or constitute a default under any provision contained in any agreement, instrument, law, ordinance, decree, judgment, order, rule, regulation, licence, permit or consent by which it or any of its property or assets are bound or which is applicable to it or any of its property or assets, or (ii) cause any limitation on it or the powers of its directors, whether imposed by or contained in its memorandum and articles of association or in any agreement, instrument, law, ordinance, decree, order, rule, regulation, judgment, licence, permit, consent or otherwise, to be exceeded, or (iii) cause the creation or imposition of any security interest or restriction of any nature on any of its property or assets; (e) no authorisation, approval, consent, licence, exemption, registration, recording, filing, permit, order or notarisation and no payment of any duty or tax and no other action whatsoever which has not been duly and unconditionally obtained, made or taken is necessary or desirable to ensure the legality, validity and enforceability of its liabilities and obligations or the rights of the Sukuk Trustee under the Transaction Documents or the rights of the Senior and Junior Sukukholders under the respective Senior and Junior Sukuk Programmes; (f) no litigation or arbitration is current or, to its knowledge, is threatened, which if adversely determined will have a material adverse effect on the ability of the Issuer to perform any of its obligations under any of the Transaction Documents to which it is 31
48. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM a party ; (g) each of the Transaction Documents is or will when executed and/or issued, be in full force and effect and constitutes or will when executed or issued, constitutes or its valid and legally binding obligations enforceable in accordance with its terms; (h) (1) the Senior Sukuk constitute direct, unconditional, secured and unsubordinated obligations of Issuer and shall at all times rank pari passu without discrimination, preference or priority among themselves and at least pari passu with all other unsecured and unsubordinated obligations of the Issuer, subject to the provisions of the Transaction Documents and those preferred by law; (2) the Junior Sukuk shall rank after and in any event be subordinated to the Senior Sukuk and subject to the provisions of the Transaction Documents and those preferred by law. Save and except for this, the Junior Sukuk shall constitute direct, unconditional, unsecured and unsubordinated obligations of Issuer and shall at all times rank pari passu without discrimination, preference or priority among themselves and at least pari passu with all other unsecured and unsubordinated obligations of the Issuer; (i) all consents, licences, approvals and authorisations of governmental authorities which are required in connection with the issue and sale by the Issuer of the Senior Sukuk and Junior Sukuk or the performance of its obligations thereunder or under the Transaction Documents have been duly obtained and complied with and are in full force and effect; (j) the information memorandum issued in connection with the Senior and Junior Sukuk Programmes (“Information Memorandum”) (i) does not contain any statement or 32
49. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM information which is false or misleading or from which there is a material omission and all expressions of expectation , intention, belief and opinion contained therein were honestly made on reasonable grounds after due and careful inquiry by it; and (ii) contains all information that an investor would reasonably expect to find in the Information Memorandum; (v) Events of default, : dissolution event and enforcement event, where applicable (k) its audited financial statements have been or will be prepared in accordance with approved accounting standards in Malaysia and in accordance with all procedures required by their memorandum and articles of association and by-laws (as the case may be) and the laws of Malaysia and have been audited and certified by qualified auditors; (l) the information furnished by the Issuer or on its behalf and with the knowledge of the Issuer, in connection with the Senior Sukuk Programme, the Junior Sukuk Programme and the Transaction Documents does not contain any false or misleading statement or any material omission and any opinions contained therein were honestly made on reasonable grounds after its due and careful enquiry; (m) no Dissolution Event or Trigger Event has occurred and is continuing or would occur as a result of the issuance of the Senior Sukuk and the Junior Sukuk respectively; (n) it is in compliance with all applicable laws and regulatory requirements; and (o) such other representations and warranties as may be advised by the Solicitors and are mutually agreed to by the PA/LA and the Issuer. The dissolution events (“Dissolution Events”) in respect of the Senior Sukuk Programme shall include but are not limited to the following: (a) the Issuer fails to pay any amount 33
50. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM due on the Senior Sukuk under the Transaction Documents on the due date and such failure is not remedied by the Issuer within seven (7) business days; or (b) breach of the representations and warranties by the Issuer as set forth under item (u) above and in the opinion of the Sukuk Trustee such event has a Material Adverse Effect on the ability of the Issuer and/or the party that provides security under item (l) above (“Security Provider”) to perform its/their obligations under the relevant Transaction Documents to which it is a party; or For the purpose of this PTC, "Material Adverse Effect" means any material adverse effect on the business or condition (financial or otherwise) or result of the operations of the Issuer and/or the Security Provider or the occurrence of any event which, in either case, may materially and adversely affect the ability of the Issuer and/or the Security Provider to perform any of their obligation under any of the Transaction Documents; (c) the Issuer and/or the Security Provider breaches its obligations and undertakings under any of the Transaction Documents to which it is/ they are a party (other than that stated in paragraph (a) above) which in the opinion of the Sukuk Trustee, is capable of remedy, is not remedied to the satisfaction of the Sukuk Trustee within thirty (30) days from the date the Issuer and/or the Security Provider becomes aware of such breach or is notified of such breach; or (d) it becomes unlawful for the Issuer and/or the Security Provider to perform its/their obligations under the Transaction Documents to which it is a party; or (e) the Issuer changes the nature or scope of its business, suspends, 34
51. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM ceases or threatens to suspend or cease a substantial part of its business operations ; or (f) a winding up order has been made against the Issuer or a resolution to wind up the Issuer has been passed; or (g) the Issuer becomes insolvent; or (h) the Issuer fails to satisfy any judgment obtained against it and in the opinion of the Sukuk Trustee such event has a Material Adverse Effect on the ability of the Issuer to perform its obligations under the Transaction Documents; or (i) the Issuer and/or the Security Provider repudiates or purports to repudiate to which it is or they are a party to any of the Transaction Documents; or (j) any party to the Transaction Documents (other than, the Sukuk Trustee, the Facility Agent, the Paying Agent and the Security Trustee) breaches its representations or warranties, obligations and undertakings under such documents and if capable of remedy, is not remedied within thirty (30) days from the date such party becomes aware or is notified of such breach and such unremedied breach has in the opinion of the Sukuk Trustee a Material Adverse Effect; or (k) revocation, withholding or modification of any relevant licence, consent, authorisation or approval which materially and adversely impairs the Issuer’s and/or the Security Provider's ability to comply with the terms and conditions of any of the Transaction Documents; or (l) any of the provisions in the Transaction Documents becomes ineffective, invalid or unenforceable; or (m) any other indebtedness of the Issuer 35
52. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM (other than indebtedness in respect of the Senior Sukuk and Junior Sukuk issued in relation to the respective programmes) becomes due and payable prior to its stated maturity or where the security (if any) for such indebtedness becomes enforceable; or (n) a scheme of arrangement under section 176 of the Companies Act 1965 has been instituted by or against the Issuer; or (o) a receiver has been appointed over the whole or a substantial part of the assets of the Issuer; or (p) any of the assets, undertakings, rights or revenue of the Issuer are, or threatened in writing to be seized, nationalised, expropriated or compulsorily acquired by or under the authority of any governmental body which in the reasonable opinion of the Sukuk Trustee may have Material Adverse Effect; or (q) any provision of any of the agreements entered into or to be entered into between Coshare and the Issuer and/or the Security Provider in relation to the Senior or Junior Sukuk Programmes, as the case may be, is or becomes for any reason whatsoever invalid or unenforceable in Malaysia, or any other persons challenges or repudiates or revokes or terminates or suspends any of the agreements or does or cause to do any act or thing evidencing an intention to challenge or repudiate or revoke or terminate or suspend such agreement or the validity or enforceability of any of the agreements is contested, revoked, suspended, terminated or disaffirmed by any person; or (r) revocation, withholding or modification of the salary deduction code owned by Coshare which materially and adversely impairs the Issuer's ability to comply with the 36
53. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM terms and conditions of any of the Transaction Documents ; or (s) the Originator fails, refuses, omits and/or neglects to repurchase the relevant Portfolio pursuant to a Mandatory Redemption in Full; or (t) any other Dissolution Events as may be advised by the Solicitors. Upon the occurrence of a Dissolution Event, no new Tranche can be issued under the Senior Sukuk Programme and subject to any remedy period, where relevant, the Sukuk Trustee may at its sole and absolute discretion and shall, if so directed by an extraordinary resolution of the holders of the Senior Sukuk, issue a notice declaring that a Dissolution Event has occurred and all accrued profit and principal in respect of the outstanding Senior Sukuk are immediately due and payable and the holders of the Senior Sukuk, shall have recourse against the Security/Collateral (as defined in item (I) above). For the avoidance of doubts, non-payment or partial payment of any amounts due and payable under the Servicer Fee shall not constitute a Dissolution Event unless:(i) the Servicer is not corporation of Masraf; or a related (ii) if the Servicer is Masraf or a related corporation of Masraf (as the case may be), all moneys due or owing or payable in respect of the outstanding Senior Sukuk have been paid or settled in full. (w) Covenants (i) Positive Covenants : Positive covenants under the Senior Sukuk Programme, include but not limited to covenants that the Issuer shall: (a) perform all its obligations and promptly comply with all applicable provisions of the Transaction Documents and terms and conditions of the Senior Sukuk; (b) redeem in full all outstanding Senior Sukuk in accordance with the terms 37
54. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM and conditions of the Transaction Documents ; (c) at all times exercise reasonable care and diligence in carrying out its business in a proper and efficient manner and obtain, preserve and keep in full force and effect all necessary consents, approvals, rights or relevant licences for the conduct of its/their respective business; (d) at all times maintain a paying agent in Malaysia and shall cause and procure such paying agent to notify the Sukuk Trustee (through the Facility Agent) in the event the paying agent does not receive payment from the Issuer on the due dates as required under the Senior Sukuk; (e) at all times keep and maintain proper financial books and accounts in accordance with the relevant laws and to provide the Sukuk Trustee and any person appointed by it (e.g. auditors) access to such books and accounts to the extent permitted by law and upon written notice from the Sukuk Trustee requesting the same; (f) deliver to the Sukuk Trustee as soon as they become available (and in any event within one hundred and eighty (180) days of the end of each of its respective financial year) its audited financial statements, and within ninety (90) days of the expiration of each half of its respective financial year, its respective unaudited financial statements for that period; (g) utilise the proceeds from the issuance of Senior Sukuk and Junior Sukuk for the purpose as represented herein; (h) shall deliver to the Sukuk Trustee any information which the Sukuk Trustee may require in order to discharge its duties and obligations under the trust deed governing the Senior Sukuk Programme (the “Trust Deed”); (i) deliver, on a continuous and timely basis, to RAM any information which it 38
55. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM may require in order for it to continuously make available to the Senior Sukukholders the rating for the Senior Sukuk under the Senior Sukuk Programme ; (j) ensure that the terms in any of the applicable Transaction Documents do not contain any matter which is inconsistent with the provisions of the Information Memorandum; (k) immediately inform the Sukuk Trustee in the event that it/they becomes aware of the following: i. any Dissolution Event or any Trigger Event or any other right or remedy under the terms, provisions and covenants of the Transaction Documents has occurred or become enforceable; ii. any circumstance that has occurred may in the opinion of the Sukuk Trustee have a material adverse effect; iii. any substantial change in the nature of its respective business; iv. any change in its withholding tax position or taxing jurisdiction; v. any change in the utilisation of proceeds from the issuance of the Senior Sukuk and Junior Sukuk; vi. any other matter that may materially prejudice the interests of the Senior Sukukholders; vii. any change in its respective name; (l) deliver to the Sukuk Trustee any other accounts, report, notice, statement or circular issued to shareholders which the Sukuk Trustee shall at its respective discretion circulate to the Senior Sukukholders as well as RAM; (m) deliver to the Sukuk Trustee at least annually a certificate that it has/they have complied with its respective obligations under the Transaction 39
56. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM Documents and the terms and conditions of the Senior Sukuk and that there did not exist or had not existed , from the issuance date of the Senior Sukuk or the date of the previous certificate as the case may be, any Dissolution Event, where applicable and if such is not the case, to specify the same; (n) the Issuer covenants that it shall maintain at all times throughout the tenure of the Senior Sukuk Programme, the Trustees’ Reimbursement Account with a sum of RM30,000.00 to be set up from the moneys received by the Issuer when the Senior Sukuk is issued; (o) take such steps as may have been notified by the Sukuk Trustee following the occurrence of a Dissolution Event to remedy or mitigate the effect of the Dissolution Event or any other step as the Sukuk Trustee may request; (p) make available for inspection by the Sukuk Trustee and RAM all reports received by the Issuer from the Servicer and provide to the Sukuk Trustee and, at the request of RAM, to RAM copies of all reports received by the Issuer from the Servicer; (q) exercise its rights under the Transaction Documents to require repurchase or compensation by the Originator of any Portfolio in accordance with the instructions of the Sukuk Trustee; (r) (ii) Negative Covenants : any other covenants as advised by the Solicitors and to be mutually agreed between the PA/LA and the Issuer. Negative covenants usual and customary for an issuance of this nature, including but not limited to covenants that the Issuer shall not, without the prior written consent of the Sukuk Trustee, for so long as any Senior Sukuk is outstanding: (a) add to, delete, vary, amend or substitute its respective memorandum 40
57. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM and articles of association in any manner prejudicial to the interest of the holders of the Senior Sukuk or may affect its ability to perform its obligation under the Transaction Documents ; (b) enter into a transaction, whether directly or indirectly with interested persons (including a director, major shareholder and chief executive) unless: (i) such transaction shall be on terms that are no less favourable to the Issuer than those which could have been obtained in a comparable transaction from persons who are not interested persons; and (ii) with respect to transactions involving an aggregate payment or value equal to or greater than RM1,000,000 the Issuer shall obtain certification from an independent adviser that the transaction is carried out on fair and reasonable terms; PROVIDED that the Issuer certifies to the Sukuk Trustee that the transaction complies with paragraph (i) above, that the Issuer has received the certification referred to in paragraph (ii) (where applicable) and that the transaction has been approved by the majority of the board of directors or shareholders in a general meeting as the case may require; (c) create or permit to exist any encumbrance, mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment by way of security, trust arrangement for the purpose of providing security or other security interest of any kind including, without limitation, title transfer and/or retention arrangement having a similar effect or any agreement to create any of the foregoing, but excluding liens arising in the ordinary course of business by operation of law and not by way of contract and such security to be provided for in the Senior Sukuk Programme; 41
58. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM (d) undertake any activity other than those contemplated under the Transaction Documents; (e) incur or assume additional indebtedness save and except for the indebtedness incurred or to be incurred in connection with the issuance of the Senior Sukuk and Junior Sukuk and in any event all indebtedness shall at all times be subordinated to the Senior Sukuk; (f) amalgamate, consolidate or merge with any other person or convey or transfer its respective properties or assets substantially as an entirety to any person; (g) decrease or in any way whatsoever reduce its/their respective authorised or issued capital; (h) declare or pay any dividends or make any distribution whether income or capital in nature to its shareholders, or make any payments (whether in relation to principal, interest or otherwise) to its shareholders in connection with any loans or advances from its shareholders; (i) allow any profit payment to the holder of the Junior Sukuk (“Payment”) if: 1) any of the Trigger Event or Dissolution Event has occurred, or 2) the balance standing to the credit of the Liquidity Reserve Account is less than the Minimum Required Balance stipulated in the provisions in respect of the Liquidity Reserve Account; or 3) the Payment on the relevant profit payment date of the Junior Sukuk will result in a drop in the credit rating of Senior Sukuk and/or there has been a drop in the credit rating of Senior Sukuk to A1 or below; (j) agree to any change to the terms and conditions of the documentation relating to any Receivable forming part of the Portfolio or agree to the exercise 42
59. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM by the Originator of any rights thereunder which may be prejudicial to the interest of holders of the Senior Sukuk or may affect its /their ability to perform its/their obligations under the Transaction Documents; (k) vary or waive any terms or conditions of any of the Transaction Documents or grant any time or indulgence to or release or vary the liability of any person from time to time liable thereunder in any manner which may be prejudicial to the interest of holders of the Senior Sukuk or may affect its/their ability to perform its/their obligations under the Transaction Documents; (l) transfer, assign, relinquish or otherwise dispose of (other than as provided under the security documents), any of its/their respective rights and interests under the Transaction Documents; (m) give any financing to its/their respective directors, shareholder(s) or related or associated companies; (n) change the utilisation of proceeds from the issuance of the Senior Sukuk and the Junior Sukuk; (o) any other covenants as advised by the Solicitors and to be mutually agreed between the PA/LA and the Issuer. (x) Provisions on buy-back and early redemption of Sukuk (i) Buy-back : I) Senior Sukuk Programme The Issuer or any of its subsidiaries or agents or any interested person of the Issuer, which includes the directors, major shareholders and chief executive officer may, at any time, purchase any outstanding Senior Sukuk at any price in the open market by way of private treaty. Any Senior Sukuk so purchased by the Issuer or any of its subsidiaries or agents acting for the redemption or purchase are to be surrendered for cancellation and shall 43
60. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM not be reissued or resold . Any Senior Sukuk held by any interested person of the Issuer (who shall include directors, major shareholders and chief executive officer) shall not entitle such interested person to vote at any of the meetings of the holders of Senior Sukuk and will not be deemed to be outstanding for the purpose of determining the total votes exercisable by the holders of Senior Sukuk whenever such determination is required under the Transaction Documents. II) Junior Sukuk Programme The Junior Sukuk shall not be transferable and tradable in the secondary market as such, the Issuer or any of its subsidiaries or agent(s) of the Issuer may not purchase the Junior Sukuk in the open market or by way of private treaty. (ii) Early Redemption : Not applicable. (y) Other principal terms and : conditions for the proposal (A) General Terms (i) Redemption : Unless previously redeemed or cancelled, any series of the Senior Sukuk and Junior Sukuk will be redeemed by the Issuer at one hundred per cent (100%) of their nominal value on maturity date. (ii) Status : I) Senior Sukuk Programme The Senior Sukuk issued and/or to be issued under the Senior Sukuk Programme will constitute direct, unconditional, unsubordinated and secured obligations of the Issuer and shall at all times rank pari passu without discrimination, preference or priority among themselves, but subject to payments preferred under law and the Transaction Documents. For the avoidance of doubt and notwithstanding that each Tranche is to purchase an identified pool of Portfolio, each identified Portfolio from each Tranche will not only secure the relevant Senior Sukuk issued pursuant to such Tranche forming its purchase but also 44
61. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM secure all the other Senior Sukuk issued or to be issued pursuant to all the other Tranches on a pari passu basis II ) Junior Sukuk Programme The Junior Sukuk issued and/or to be issued under the Junior Sukuk Programme will constitute direct, unconditional and unsecured obligations of the Issuer and shall at all times, be subordinated to the Senior Sukuk and rank pari passu without discrimination, preference or priority subject to the payments preferred under law and the Transaction Documents. For the avoidance of doubt, and for so long as any amount of the Senior Sukuk issued shall remain outstanding or payable, the holder of the Junior Sukuk should not be entitled to decide and/or declare the occurrence of a Dissolution Event and/or to grant any indulgence or modification or waiver to any terms and conditions of the Junior Sukuk Programme and/or the Transaction Documents. (iii) Transaction Documents : Completion, execution and delivery of all documentation in connection with the Senior Sukuk Programme and Junior Sukuk Programme which include inter-alia the following documents: (a) Senior Sukuk and Junior Programme Agreements; Sukuk (b) Trust Deed for Senior Sukuk; (c) Commodities Murabahah Sale Agreement including Purchase Order; (d) Securities Lodgement Form; (e) Security Documents for Senior Sukuk; (f) Such other relevant documentation which may be advised by the Solicitors. (the above documents are hereinafter collectively referred to as the “Transaction Documents”). (iv) Trigger Events : Trigger Events shall include, but are not limited to the following: 45
62. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM (a) occurrence of a Servicer Dissolution Event (as defined in item (y)(C)(v) below); or (b) failure by the Issuer to meet the Minimum Required Balance as stipulated in the provisions in relation to the Liquidity Reserve Account above; or (c) failure by the Originator to replace the Ineligible Receivable; or (d) any other Trigger Event as may be advised by the Solicitors and PA/LA. Upon the occurrence of a Trigger Event, the Issuer or the Originator may remedy it to the satisfaction of the Sukuk Trustee. For the avoidance of doubt, upon the occurrence of a Trigger Event and for so long as the Trigger Event subsist; no new Tranche can be issued under the Senior Sukuk Programme. Furthermore, no monies in the Collection Account are allowed to be used for any profit payment, in full or in part, in respect of the Junior Sukuk. In the event that a Trigger Event has been remedied by the Issuer or the Originator to the satisfaction of the Sukuk Trustee, the Trigger Event shall cease to exist and the restriction mentioned above shall not apply. (v) Distribution FSCR : The Distribution FSCR is the ratio of Available Cash Flow (as defined hereunder) to the aggregate of: a. all principal obligations payable by the Issuer on the outstanding Senior Sukuk for the next twelve (12) months; plus b. all profit payments payable on the outstanding Senior Sukuk for the next twelve (12) months. Available Cash Flow In any annual period, the sum of: i. ii. all collections received by the Issuer in relation to each Portfolio; and all credit balances in the Designated Accounts and the amount utilised from 46
63. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM the Designated Accounts for Permitted Investments at the beginning of the relevant twelve (12) month period; and Less: i. ii. iii. iv. proposed distribution to the holder of Junior Sukuk; and the total amount spent on management, administrative and operation of the Issuer; taxes paid or such other statutory contributions paid by the Issuer to GOM; and recurring fees relating to the Senior and Junior Sukuk Programmes. The Distribution FSCR calculations shall be duly confirmed by the Issuer’s external auditor and the Issuer’s board of directors as per the latest audited financial statements of the Issuer of the financial year ended prior to the relevant Junior Sukuk’s profit payment date. Such calculations would be made as and when they are required to be made under the terms of the Transaction Documents. The Issuer shall arrange for the said confirmation to be forwarded to the Facility Agent, Security Trustee and Sukuk Trustee. For the avoidance of doubt, any double counting shall be disregarded. (vi) Tranche OC Ratio : The Tranche OC Ratio is the ratio of: The aggregate of the advance instalment received and monthly instalments to be received from the Obligors pursuant to the Credit Sales Agreement in relation to each Portfolio to be purchased from the Originator; to The aggregate nominal value of the Senior Sukuk to be issued under each Tranche. The calculation of the Tranche OC Ratio shall be done by the Servicer, duly confirmed by the Issuer, approved by its board of directors and verified by its external auditor prior to the issuance of each Tranche. The Issuer shall arrange for the said confirmation to be forwarded to the 47
64. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM Facility Agent , Security Trustee and Sukuk Trustee. (vii) Portfolio OC Ratio : The Portfolio OC Ratio is the ratio of: The sum of (i) the remaining aggregate monthly instalments to be received from the Obligors of all outstanding Portfolio purchased from the Originator by the Issuer and (ii) all credit balances in the Designated Accounts at the point of calculation; to The aggregate outstanding nominal value of the Senior Sukuk issued under the Senior Sukuk Programme. The calculation of the Portfolio OC Ratio shall be done by the Servicer, duly confirmed by the Issuer, approved by its board of directors and verified by its external auditor prior to the issuance of each Tranche. The Issuer shall arrange for the said confirmation to be forwarded to the Facility Agent, Security Trustee and Sukuk Trustee. (viii) Trustees’ Reimbursement Account : The Issuer shall open and maintain a Shariah-compliant account designated as “Trustees’ Reimbursement Account” (as required under the SC’s Trust Deeds Guidelines revised on 12 July 2011 and effective on 12 August 2011), in which a sum of RM30,000.00 from the monies received by the Issuer when the Senior Sukuk under the Senior Sukuk Programme are first issued are to be deposited. The Trustees’ Reimbursement Account shall be operated by the Sukuk Trustee and the monies shall only be used strictly by the Sukuk Trustee in carrying out its duties in relation to the occurrence of Dissolution Events which are to be provided in the Trust Deed for the Senior Sukuk. The sum of RM30,000.00 in the Trustees’ Reimbursement Account shall be maintained at all times throughout the tenure of the Senior Sukuk Programme. (ix) Permitted Investments : The funds standing to the credit of the Designated Accounts may be placed in permitted investments limited to the 48
65. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM following (“Permitted Investments”) which shall comprise investment products approved by the SAC, BNM’s Shariah Advisory Council and/or other recognised Shariah authorities from time to time but shall not include any product of investment on a profit and/or loss sharing scheme. Permitted Investments are as follows: (a) Shariah-compliant deposits with licensed financial institutions in Malaysia with a minimum rating of A3/P1 or its equivalent; (b) Shariah-compliant money market instruments by licensed financial institutions with a short-term rating of P1 and a minimum long-term rating of AA3, or their equivalent; (c) Shariah-compliant treasury bills, Islamic money market instruments, and other Islamic securities or Sukuk issued by BNM or the GOM; (d) Sukuk issued by quasi-government or government related entities with a short-term rating of P1 and a minimum long-term rating of AA3, or their equivalent, or debt securities guaranteed by GOM; (e) Sukuk issued by corporations with a short-term rating of P1 and a minimum long-term rating of AA3, or their equivalent, or by financial institutions or guaranteed by licensed financial institutions with a short-term rating of P1 and a minimum long-term rating of AA3, or their equivalent; or (f) Any Shariah-compliant fund approved by the SC and to be agreed by RAM which invests in any of the instruments above. Provided that the maturity of the Permitted Investments shall fall on a date, which is at least five (5) business days before the next profit or principal payment date of the Senior Sukuk, whichever is earlier. However, the maturity of the Permitted Investments in money market instruments of a financial institution and accounts 49
66. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM maintained with financial institutions shall fall on a date , which is at least three (3) business days before the next profit or principal payment date of the Senior Sukuk, whichever is earlier. (x) Mandatory Redemption : in Full The Issuer shall redeem all outstanding series of Senior Sukuk of any Tranches, in whole and not in part, on their respective profit payment dates falling after the date on which the Originator repurchases the outstanding Portfolio. The occurrence of any of the following events which in the opinion of the Issuer affects the entire Portfolio will, by written notice from the Issuer to the Originator, oblige such repurchase by the Originator: (a) the failure by the Originator to comply with any applicable law with respect to the Portfolio; (b) the failure to vest and maintain vested in the Issuer on absolute beneficial ownership interest in the Portfolio free and clear of any encumbrances; (c) any successful dispute, claim or defence of any of the Obligors as to the legality and enforceability of any Receivable and such dispute, claim or defence would be applicable to all Portfolio; and (d) any successful attempt by any person to avoid, rescind or set aside any transfer by the Originator to the Issuer of any Receivable under any law, including any bankruptcy law or other insolvency law and such avoidance, rescission or setting aside would be applicable to all Portfolio. In the case of the Senior Sukuk, such redemption shall be at par value, on a pro rata basis among all outstanding Senior Sukuk. Subject to the availability of funds and upon full redemption of the Senior Sukuk as well as all conditions described herein, redemption of Junior Sukuk shall be at par value, on a pro rata basis among all 50
67. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM outstanding Junior Sukuk . (xi) Repurchase Price of : Portfolio The price payable by the Originator to repurchase or purchase the Portfolio under the Mandatory Redemption in Full shall be equal to the aggregate of:(a) The outstanding principal component of such Portfolio as at the date of repurchase; (b) The amount of all accrued and unearned profit on such Portfolio up to the date of repurchase; and (c) All other ancillary costs which shall include, but are not limited to, late payment charges (if any) on any delinquent Portfolio. The Originator shall remit the repurchase consideration, as quantified using the above formula to the Issuer within a period of ten (10) business days from the date of repurchase or such longer period as may be mutually agreed between the Issuer and the Originator. (xii) Compensation for late : and default payments (“Ta’widh”) In the event of any overdue payments of the Deferred Sale Price, the Issuer shall pay the compensation on such overdue amounts at the rate and manner prescribed by the SAC from time to time in accordance with Shariah. (xiii) Ibra’ (Release from : Debt Obligation) I) Senior Sukuk Programme Not applicable. II) Junior Sukuk Programme In respect of the Junior Sukuk, the holder of Junior Sukuk shall undertake to release the Issuer’s obligation to settle the outstanding Deferred Sale Price in the event the Issuer has no ability to settle such amount at the end of the tenure of Junior Sukuk. Ibra’ refers to the act of surrendering one’s claims and rights, such as a creditor writing off the debts of a debtor either fully or partly. 51
68. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM (xiv) Taxation (xv) Governing Law Jurisdiction (xvi) Voting by Sukukholders (B) The Portfolio (i) Portfolio (ii) Eligibility Criteria : All payments by the Issuer in respect of the Senior Sukuk and Junior Sukuk shall be made in full without any withholding or deductions for or on account of any present and future tax, duty, or charge of whatsoever nature imposed or levied by law or on behalf of any authority having power to tax, unless such withholding or deduction is required by law, in which event the Issuer shall be required to gross up in connection with such withholding or deduction on these payments or distributions. and : The Senior Sukuk, Junior Sukuk and all of the Transaction Documents will be governed by the laws of Malaysia and the parties thereto will submit to the nonexclusive jurisdiction of the Malaysian courts. Senior : Once the option to upsize is exercised and implemented by the Issuer with the requisite approvals, moving forward, all matters/resolutions which require the consent from the Senior Sukukholders shall only be carried out if the consent from the Senior Sukukholders have been obtained through voting that is carried out on a “per series” basis. : The Portfolio will be a static portfolio and shall comprise of the Shariah-compliant receivables which comply with the Eligibility Criteria pursuant to the Deferred Payment Programme granted to the Obligors(each a “Receivable”, collectively referred to as “Portfolio”). : There are Eligibility Criteria for each Receivable forming part of the Portfolio. The Eligibility Criteria in relation to each Receivable that must be satisfied from the Purchase Request Date up to and including the date on which the first scheduled salary deduction is to be made by the Collection Agent are: (i) It is legally and beneficially owned by the Originator and, if applicable subject to the encumbrances created in favour of the Originator’s financier and to be redeemed through the proceeds received from the issuance 52
69. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM of the Senior Sukuk , free from all encumbrances; (ii) It has been originated in the ordinary course of business of the Originator in accordance with its credit sales policy; (iii) It was created in accordance with credit standards no less stringent than those generally applied by the Originator in its ordinary course of business; (iv) It has not been classified as having been written-off by the Originator in accordance with its usual practices generally applicable to its business; (v) It has arisen and is covered under the relevant credit sales agreements entered into and/or to be entered into between Originator and the relevant Obligors in connection with the Deferred Payment Programme (“Credit Sales Agreement”); (v) The Obligor must be a salaried civil servant of the GOM; (vi) Evidence that the repayment by the Obligors has been approved and accepted for deduction at source by the Collection Agent; (vii) One advance instalment has been received from each of the Obligors in relation to each receivable by the Originator; (viii) The Obligor must be a citizen and resident of Malaysia and to the best knowledge of the Originator, is not a person identified in the records of the Originator as (a) being or having been the subject of bankruptcy proceedings or is an undischarged bankrupt; (b) having been convicted of any offence capable of resulting in imprisonment; (c) being deceased; or (d) being a retiree; (ix) 53 Its repayment and all other amounts to be accrued and/or to be realised thereof shall be payable in Ringgit
70. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM Malaysia ; (x) Its relevant Credit Sales Agreement provides for settlement of amounts due from the Obligor by equal monthly instalments save and except for the final instalment and the Originator has not waived any material terms of the relevant Credit Sales Agreement from the date of the initial creation thereof; (xi) It is not a defaulted receivable in respect of which instalments are due more than three (3) months in arrears on a cumulative basis; (xii) It is a receivable where no prepayment (other than the first advance instalment) shall have been received on or prior to the Purchase Request Date and that, to the best knowledge of the Originator, the Obligor has not exercised or indicated an intention to exercise any option of early settlement/prepayment, any right of rescission, set-off, counterclaim or defence (including the defence of usury); (xiii) It is not included in any other pool of receivables for the purpose of any other securitisation or financing; (xiv) It is and will at all relevant times be capable of being segregated and identified for ownership purposes; (xv) It is not the subject of any adverse claim or set-off or security claim by any party and no circumstances exist, to the best of knowledge of the Originator, which would give the Obligor the right to refuse to make any payment under the relevant Credit Sales Agreement; (xvi) It is a receivable where the relevant Credit Sales Agreement and all other documents relating to it, have been duly authorised and executed, are in full force and effect, and constitute legal, valid and binding obligations of the relevant Obligor enforceable against the relevant Obligor in 54
71. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM accordance with their terms ; (xvii) It is a receivable where there is no prohibition or restriction on, or requirement for consent to be obtained or notice to be given (other than pursuant to Section 4(3) of the Civil Law Act 1956) for, any assignment, transfer or sale of the receivable; and (xviii) Such other criteria which may be set out in the Transaction Documents (if any). If any of the receivables forming part of the Portfolio fails to comply with any of the Eligibility Criteria from the Purchase Request Date up to and including the date on which the first scheduled salary deduction is to be made by the Collection Agent or the first scheduled salary deduction is not received by the Collection Agent on or prior to the scheduled date of deduction (“Ineligible Receivable”), then the Originator shall, pursuant to a written notice from the Issuer, replace the Ineligible Receivable, failing which it will be a Trigger Event. For the avoidance of doubt:(a) the replacement Receivable (“Replacement Receivable”) shall:(1) comply Criteria; with the Eligibility (2) have had the first salary deduction made by the Collection Agent; (3) be of an outstanding amount which is no less than the outstanding amount payable by the relevant Obligor under the Ineligible Receivable; and (4) form part and parcel of the relevant Declaration of Trust to which the Ineligible Receivable relates to as if the Replacement Receivable had formed part of the trust assets since the date of such Declaration of Trust; 55
72. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM (iii) Sale of the Portfolio (b) the Credit Sales Agreement relating to the Replacement Receivable shall form part and parcel of the assigned property under the Assignment of the Credit Sales Agreement in favour of the Security Trustee as if such Credit Sales Agreement had formed part of the assigned property since the date of the Assignment of the Credit Sales Agreement; (c) the relevant notice of the sale and purchase of the Replacement Receivable and assignment of the Credit Sales Agreement to which the Replacement Receivable relates to shall be given to the relevant Obligor; and (d) for the purposes of items (a) and (b) above, the Originator shall forthwith upon its receipt of the written notice from the Issuer and in any event not later than thirty (30) days from such receipt deliver to the Security Trustee the relevant documents relating to the Replacement Receivable and deposit or cause to be deposited into the Collection Account all proceeds received from the Obligors relating to the Replacement Receivable, together with an irrevocable written confirmation in favour of the Security Trustee confirming the matters stated in items (a) and (b) above. : From time to time during the Drawdown Availability Period, the Originator will pursuant to the Declaration of Trust, transfer all of its rights, title and interest in, to and under the Portfolio, to the Issuer. The Issuer will issue a new Tranche to finance the purchase of such Portfolio. : Pursuant to a servicing agreement entered or to be entered into between the Servicer and the Issuer (“Servicing Agreement”),the Servicer will be responsible for servicing and administering the Portfolio and these include but are not limited to: (C) Servicing the Portfolio (i) Servicing (a) instruct the Collection Agent to remit 56
73. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM all payments in relation to the Portfolio to the Issuer ’s Collection Account; (ii) Periodic Payment : (b) provision of monthly servicer report to the Issuer, Facility Agent, RAM and Sukuk Trustee setting forth, inter alia, the amount of collections, prepayments and any other payments received, and delinquency information; (c) where relevant, maintaining the relevant takaful/insurance policies; (d) keeping of records as required under the Servicing Agreement and maintain such books of account, records and data (including electronic) as will enable a substitute servicer, if appointed, to determine the status of each Portfolio at the time of such appointment; (e) communicating with and, where appropriate or required, providing billing records to Obligors and responding to inquiries of Obligors with respect to the Portfolio; (f) sending any required notices and/or requests for acknowledgements to Obligors, whether required hereunder, pursuant to the Credit Sales Contracts or under any applicable Malaysian laws or regulations; (g) where any payment in respect of any Receivable forming part of the Portfolio is not made on the due date for payment, investigating the cause of the delay thereof and taking steps to recover such payment; (h) calculate the Tranche OC Ratio and Portfolio OC Ratio; and (i) any other duties stipulated under the Servicing Agreement to be entered between the Issuer and the Servicer. The Collection Agent will make payment of collections in relation to the Portfolio (the “Collections”) into the Collection Accounts on a weekly basis. 57
74. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM Within seven (7) business days after receipt by the Collection Agent of the Collections from the respective Obligors, the Collection Agent shall provide to the Issuer, a collection activities report in relation to the Collections in an agreed format and medium (whether electronic or otherwise and if electronic, in readable form) to enable a verification by the Issuer of the Collections for the relevant Tranche of Senior Sukuk and Junior Sukuk. In the event of any errors detected by the Collection Agent and/or the Issuer, the Collection Agent and the Issuer shall take all necessary actions to correct such errors. (iii) Monthly Report : On a monthly basis, the Servicer will deliver to the Issuer, the Facility Agent, RAM, the Sukuk Trustee and the Security Trustee a report setting forth, among other things, the total collections including prepayments, delinquencies and defaults; and certain portfolio performance statistics of the Portfolio, if any and where applicable, have been satisfied. (iv) Servicer Fee : Masraf as the Servicer will receive as compensation for its services, a fee of up to 0.5% of the total collection of amounts due under the Portfolio per annum, payable semi-annually in arrears (the “Servicer Fee”). The Servicer Fee is non-cumulative in nature with non-payment of any amount due shall not be carried forward into the next payment date. For the avoidance of doubt, non-payment of the Servicer Fee to Masraf or a related corporation of Masraf (as the case may be) or any part thereof shall not constitute a Dissolution Event. The Servicer Fee payable to any replacement Servicer (“Replacement Servicer”) will be subject to the mutual agreement of the relevant parties. (v) Servicer Dissolution Events : If any of the following events (each, a “Servicer Dissolution Event”) occurs: (a) the Servicer fails to effect transfer or deposit any payment as required under the Servicing Agreement; 58
75. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM (b) the Servicer fails to perform any of its obligations under the Servicing Agreement or breaches any of the terms of the Servicing Agreement and (except where in the opinion of the Issuer such failure is not capable of remedy) does not remedy such default within fourteen (14) days after the earlier of (i) receipt of written notice thereof from the Issuer or the Sukuk Trustee; and (ii) having actual knowledge thereof; (c) any indebtedness of the Servicer to the Issuer is not paid after a period of thirty (30) days as notified by the Issuer in writing; (d) a distress or execution or other legal process is levied or enforced or taken out upon or against any part of the undertaking, property, assets or revenues of the Servicer and is not discharged or stayed within thirty (30) days of having been so levied or enforced or taken out; (e) an encumbrancer takes possession of, or a provisional injunction, order for attachment or order for preservative measure is issued in relation to, or a receiver is appointed for the whole or any part of the undertaking, property, assets or revenues of the Servicer; (f) an order is made or an effective resolution is passed for the winding up or dissolution of the Servicer; (g) any governmental authority or agency has condemned, seized, compulsorily purchased or expropriated all or a material part of the undertaking, property, assets or revenues of the Servicer; (h) the Servicer changes the nature or scope of its business, or suspends or ceases or threatens to change, suspend or cease its present business operations; 59
76. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM (i) any material adverse change in the financial condition or operations of the Servicer or any other event which will materially and adversely affect the Servicer’s ability to perform its obligations under the Servicing Agreement; and (j) any other Servicer Dissolution Event as may be advised by the Solicitors and PA/LA. If any of the above events occurs, the Issuer or the Sukuk Trustee shall appoint a Replacement Servicer acceptable to the Sukuk Trustee to replace the Servicer. [the rest of this page has been intentionally left blank] 60
77. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM APPENDIX 1 STEPS The Sukuk Trustee (acting on behalf of the investor(s) of the Senior Sukuk (“Senior Sukukholders”)) and the investor of Junior Sukuk (“Junior Sukukholder”) shall appoint the Facility Agent as the buying and selling agent (“Wakeel”) of Shariah-compliant commodities (“Commodities”). 1 The Issuer shall issue a purchase order (the “Purchase Order”) to the Wakeel and the Sukuk Trustee (acting on behalf of the Senior Sukukholders) for the purchase of the Commodities. The Purchase Order which is based on an undertaking (wa’ad) constitutes a unilateral binding promise by the Issuer to purchase the said Commodities at a sale price to be paid on a deferred payment basis (“Deferred Sale Price”). The Deferred Sale Price represents the principal amount equivalent to the Purchase Price (as defined below) and the profit portion to be agreed between the Issuer as the purchaser and the Wakeel who represents the Senior and Junior Sukukholders as the seller. 2 The Issuer shall issue and the Senior and Junior Sukukholders shall subscribe, to the respective Senior and Junior Sukuk issued by the Issuer to evidence the Senior and Junior Sukukholders’ ownership of the Commodities and subsequently, represent the Senior and Junior Sukukholders’ entitlement to receive the Deferred Sale Price once the Commodities are sold to the Issuer. 3 Pursuant to the Purchase Order, the Senior and Junior Sukukholders shall pay the purchase price (the “Purchase Price”) of the Commodities which is equivalent to the relevant Senior and Junior Sukuk proceeds. 4 Upon receipt of the Purchase Price, the Wakeel, on behalf of the Senior and Junior Sukukholders shall then purchase the Commodities from a commodity 61
78. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM supplier acceptable to the Shariah Adviser (“Commodity Supplier”) on a spot basis. 5 Upon completion of the purchase, the Wakeel, on behalf of the Senior and Junior Sukukholders, shall sell the Commodities to the Issuer at the Deferred Sale Price. The Issuer shall pay the Deferred Sale Price via the Wakeel to the Senior and Junior Sukukholders. 6 Thereafter, the Issuer shall sell the Commodities to a commodity purchaser acceptable to the Shariah Adviser (“Commodity Purchaser”) on a spot basis at an amount equivalent to the Purchase Price. 7 Throughout the tenure of the Senior Sukuk Programme and the Junior Sukuk Programme, the Issuer shall pay the profit payment to Senior and Junior Sukukholders in accordance with the terms and conditions of this PTC with the principal amount being paid on the relevant maturity date via the Wakeel. (The remainder of this page is intentionally left blank) 62
79. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM SECTION 3 THE SECURITISATION STRUCTURE The Senior Sukuk Programme is to facilitate the securitisation of the Receivables forming part of the Portfolio originated by the Originator . The Issuer will fund the purchase through the issuance of the Tranches in aggregate of up to RM360.0 million. 3.1 SALE OF THE PORTFOLIO 3.1.1 Nature of Sale The Originator shall, from time to time, issue Purchase Requests with Purchase Request Date specifying details relevant to the Portfolio to the Issuer to request the Issuer to buy the Portfolio from the Originator. Each Portfolio shall be deemed to have been purchased by the Issuer on the Purchase Request Date provided that there is no objection received/ communicated from the Issuer within the Purchase Request Date. The Purchase Request will also provide for a Declaration of Trust in favour of the Issuer whereby the Originator irrevocably and unconditionally declares inter alia that the relevant Portfolio which has been sold to and purchased by the Issuer pursuant to the Deemed Acceptance, shall, together with the present and future rights and interests under or arising from or in connection with such Portfolio and the Collaboration Agreement (as defined herein) relating to such Portfolio. The aforesaid will be held on trust by the Originator the bare trustee for the Issuer as the absolute beneficial owner without any encumbrances whatsoever. The Senior Sukuk together with the Junior Sukuk will be issued in multiple Tranches from time to time to fund the purchase of each Portfolio. The Issuer shall issue the Senior Sukuk and Junior Sukuk under each Tranche on the Relevant Issue Date. The amount of the Junior Sukuk to be issued under each Tranche shall not be less than ten per cent (10%) of the principal amount of the Senior Sukuk under the relevant Tranche. The Originator also agrees to service and administer the Portfolio sold to and purchased by the Issuer in accordance with the terms of the Servicing Agreement in its role as the Servicer. 3.1.2 Legal True Sale Messrs Shook Lin & Bok, in its capacity as the solicitors for the Principal Adviser/Lead Arranger/Lead Manager in respect of the Senior Sukuk Programme, has furnished an opinion confirming that the Issuer will have no recourse to the Originator for the Receivables forming part of the Portfolio to be sold from time to time by the Originator to the Issuer save and except for: (a) occurrence of a breach of any condition, representations and warranties given by the Originator in relation to the Portfolio; (b) any receivable forming part of the Portfolio that fails to comply with any of the Eligibility Criteria from the Purchase Request Date up to and including the date on which the first schedule salary deduction by 63
80. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM the Collection Agent or the first schedules salary deduction is not received by on or prior to the scheduled date of deduction whereby the Originator will replace such Ineligible Receivable ; and (c) 3.2 occurrence of relevant events under Mandatory Redemption in Full which obliges the Originator to repurchase the entire Portfolio. ISSUANCE OF SENIOR SUKUK AND JUNIOR SUKUK 3.2.1 Description of Senior Sukuk and Junior Sukuk The Senior Sukuk Programme and Junior Sukuk Programme shall have tenure of up to ten (10) years from the date of first issue of the Senior Sukuk and Junior Sukuk respectively. The Senior Sukuk may be issued with maturities of more than one (1) year and up to ten (10) years and the Junior Sukuk with maturities of up to ten (10) years, provided that the final maturities of any of the Senior Sukuk and Junior Sukuk shall not exceed the tenure of the Senior Sukuk Programme and Junior Sukuk Programme respectively. The Senior Sukuk and Junior Sukuk will be issued within two (2) years from the date of SC’s authorisation. 3.2.2 Status of the Senior Sukuk The Senior Sukuk issued and/or to be issued under the Senior Sukuk Programme will constitute direct, unconditional, unsubordinated and secured obligations of the Issuer and shall at all times rank pari passu without discrimination, preference or priority among themselves, but subject to payments preferred under law and the Transaction Documents. For the avoidance of doubt and notwithstanding that each Tranche is to purchase an identified pool of Portfolio, each identified Portfolio from each Tranche will not only secure the relevant Senior Sukuk issued pursuant to such Tranche forming its purchase but also secure all the other Senior Sukuk issued or to be issued pursuant to all the other Tranches on a pari passu basis. 3.2.3 Mandatory Redemption in Full The Issuer shall redeem all outstanding series of Senior Sukuk of any Tranches, in whole and not in part, on their respective profit payment dates falling after the date on which the Originator repurchases the outstanding Portfolio. The occurrence of any of the following events which in the opinion of the Issuer affects the entire Portfolio will, by written notice from the Issuer to the Originator, oblige such repurchase by the Originator: (a) the failure by the Originator to comply with any applicable law with respect to the Portfolio; 64
81. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM (b) (c) (d) the failure to vest and maintain vested in the Issuer on absolute beneficial ownership interest in the Portfolio free and clear of any encumbrances; any successful dispute, claim or defence of any of the Obligors as to the legality and enforceability of any Receivable and such dispute, claim or defence would be applicable to all Portfolio; and any successful attempt by any person to avoid, rescind or set aside any transfer by the Originator to the Issuer of any Receivable under any law, including any bankruptcy law or other insolvency law and such avoidance, rescission or setting aside would be applicable to all Portfolio. In the case of the Senior Sukuk, such redemption shall be at par value, on a pro rata basis among all outstanding Senior Sukuk. Subject to the availability of funds and upon full redemption of the Senior Sukuk as well as all conditions described herein, redemption of Junior Sukuk shall be at par value, on a pro rata basis among all outstanding Junior Sukuk. 3.2.4 Designated Accounts The Issuer is required to open and maintain three (3) Shariah-compliant designated accounts with a financial institution (with a minimum rating of A3/P1 or its equivalent) acceptable to the Principal Adviser/ Lead Arranger as follows:(i) (ii) (iii) Collection Account; Liquidity Reserve Account; and Prepayment Account; The Designated Accounts shall be operated solely by the Security Trustee. All withdrawals from the Designated Accounts shall be accompanied by the relevant supporting documents (in form and substance satisfactory to the Security Trustee). Upon full settlement of all Senior Sukuk and the cancellation of the Senior Sukuk Programme, all the Designated Accounts will be closed and the remaining monies will be transferred to the Issuer. (i) Collection Account The Collection Account shall capture the following:(a) (b) (c) (d) (e) Remittance by Coshare of the monthly instalments in relation to the Portfolio after the relevant Purchase Request Date; Remittance from the Prepayment Account of the prepayment (if any) received from the Obligors in relation to the Portfolio; Remittance by the Originator of the one advance instalment from the Obligors and any monies received in relation to each Portfolio after the Purchase Request Date to the period immediately preceding the Relevant Issue Date; The repurchase consideration received from the Originator for the Mandatory Redemption in Full; The amount recovered from any defaulted Receivable; 65
82. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM (f) (g) (h) (i) The amount in excess of the Minimum Required Balance (as defined in the subparagraph “Liquidity Reserve Account”) from the Liquidity Reserve Account; An amount equal to the total credit balance in the Liquidity Reserve Account upon full redemption of the Senior Sukuk or upon the declaration of a Dissolution Event, as the case may be; If any, all financing income earned on the funds in Permitted Investments; The excess funds (if any) from the issue proceeds. Before Dissolution Event Prior to the declaration of a Dissolution Event, all monies from time to time and at any time standing to the credit of the Collection Account will be applied in the following order and priority: (aa) to pay taxes and meet other statutory payments (if any) falling due and payable; (bb) to pay the Issuer’s operating expenses and administrative expenses (comprising fees and expenses relating to the Senior and Junior Sukuk Programmes) based on the annual budget prepared by the Issuer, approved by its board of directors to the satisfaction of the Sukuk Trustee; (cc) to pay the Servicer Fee if the Servicer is not a related corporation of Masraf; (dd) to pay the profit due and payable in respect of the Senior Sukuk; (ee) to pay the principal due and payable in respect of the Senior Sukuk; (ff) to top up and/or to maintain the Minimum Required Balance in the Liquidity Reserve Account; (gg) to pay the Servicer Fee, if the Servicer is Masraf itself or the Replacement Servicer is a related corporation of Masraf (as the case may be); (hh) if applicable, to pay the recovery costs to the Servicer in relation to any defaulted Receivable up to a maximum amount of RM10,000 per Obligor; (ii) to pay the profit, in full or in part, in respect of the Junior Sukuk annually, subject to the provisions and conditions stipulated in Section 4 of this Information Memorandum. Upon Dissolution Event Upon the declaration of a Dissolution Event, the funds in the Collection Account shall be utilised for payment in the following order:(i) (ii) (iii) To pay taxes and meet other statutory payment (if any) falling due and payable; To pay the Issuer’s operating expenses and administrative expenses (comprising fees and expenses relating to the Senior and Junior Sukuk Programmes) based on the annual budget prepared by the Issuer, approved by its board of directors to the satisfaction of the Sukuk Trustee; To pay the Servicer Fee if the Servicer is not a related corporation of Masraf; 66
83. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM (iv) To pay the profit in respect of the Senior Sukuk on a pro-rata basis; (v) To redeem the outstanding principal amount in respect of the Senior Sukuk on a pro-rata basis; (vi) to pay the Servicer Fee, if the Servicer is Masraf itself or the Replacement Servicer is a related corporation of Masraf (as the case may be); (vii) To pay the profit in respect of the Junior Sukuk on a pro-rata basis; (viii) To redeem the principal amount in respect of the Junior Sukuk on a pro-rata basis (where applicable). (ii) Liquidity Reserve Account The Liquidity Reserve Account shall capture: (a) (b) the progressive remittance of funds from the Collection Account in accordance with the schedule as set out below; and the sum of not less than Ringgit Malaysia One Million (RM1,000,000.00) deposited by the Originator and/or the Issuer. In respect of profit payments due and payable on each Senior Sukuk, the Issuer shall maintain the minimum balances in the Liquidity Reserve Account (“Minimum Required Balance”) in accordance with the schedule as follows: Month(s) before the profit payment date of the relevant Senior Sukuk Minimum Required Balance 20% of the profit payment due on the relevant Senior Sukuk 40% of the profit payment due on the relevant Senior Sukuk 60% of the profit payment due on the relevant Senior Sukuk 80% of the profit payment due on the relevant Senior Sukuk 100% of the profit payment due on the relevant Senior Sukuk 5 4 3 2 1 In respect of principal payments due and payable on each Senior Sukuk, monies shall be transferred from the Collection Account into the Liquidity Reserve Account as follows: Months before the principal payment date of the relevant Senior Sukuk Minimum Required Balance 20% of due on Sukuk 40% of due on Sukuk 6 5 67 the principal payment the relevant Senior the principal payment the relevant Senior
84. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM 60 % of the principal payment due on the relevant Senior Sukuk 80% of the principal payment due on the relevant Senior Sukuk 100% of the principal payment due on the relevant Senior Sukuk 4 3 2 The monies in the Liquidity Reserve Account shall be withdrawn only for the purpose of meeting profit and principal payments in respect of the Senior Sukuk in the event that the amount in the Collection Account is not sufficient to meet the relevant profit and principal payments due and payable in respect of the Senior Sukuk. In the event that the balance held in the Liquidity Reserve Account is less than the Minimum Required Balance, the shortfall shall be topped up from the Collection Account immediately. Any failure to meet the Minimum Required Balance shall constitute a Trigger Event (as defined in item (y)(A)(iv)) of Summary of Principal Terms and Conditions of the Senior Sukuk Programme in Section 2 of this Information Memorandum. However, if the balance held in the Liquidity Reserve Account is more than the Minimum Required Balance, the amount exceeding the Minimum Required Balance shall be transferred back to the Collection Account. Upon full redemption of the Senior Sukuk or the declaration of a Dissolution Event, as the case may be, the funds in the Liquidity Reserve Account shall be transferred to the Collection Account and shall be applied in accordance with the order of priority stipulated in the relevant provisions in respect of the Collection Account. (iii) Prepayment Account The Prepayment Account shall capture any prepayment received from the Obligors in relation to the Portfolio after the Purchase Request Date and for this purpose, the notice to be given by the Originator/Security Trustee to the Obligors on the sale and purchase of the Portfolio between the Originator and the Issuer shall also provide that any prepayment shall be deposited directly into the Prepayment Account. All monies from time to time and at any time standing to the credit of the Prepayment Account will be transferred to the Collection Account and shall be applied in accordance with the order of priority stipulated in the relevant provisions (both before and after the declaration of a Dissolution Event) in respect of the Collection Account. 68
85. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM 3 .3 SERVICING FUNCTION 3.3.1 Servicing by the Originator Pursuant to the Servicing Agreement, the Servicer will provide certain services to the Issuer in relation to the Portfolio sold to and purchased by the Issuer and these include but are not limited to:(a) (b) (c) (d) (e) (f) (g) (h) (i) instruct the Collection Agent to remit all payments in relation to the Portfolio to the Issuer’s Collection Account; provision of monthly servicer report to the Issuer, Facility Agent, RAM and Sukuk Trustee setting forth, inter alia, the amount of collections, prepayments and any other payments received, and delinquency information; where relevant, maintaining the relevant takaful/insurance policies; keeping of records as required under the Servicing Agreement and maintain such books of account, records and data (including electronic) as will enable a substitute servicer, if appointed, to determine the status of each Portfolio at the time of such appointment; communicating with and, where appropriate or required, providing billing records to Obligors and responding to inquiries of Obligors with respect to the Portfolio; sending any required notices and/or requests for acknowledgements to Obligors, whether required hereunder, pursuant to the Credit Sales Agreement or under any applicable Malaysian laws or regulations; where any payment in respect of any Receivable forming part of the Portfolio is not made on the due date for payment, investigating the cause of the delay thereof and taking steps to recover such payment; calculate the Tranche OC Ratio and Portfolio OC Ratio; and any other duties stipulated under the Servicing Agreement entered into between the Issuer and the Servicer. 3.3.2 Servicer Dissolution Event If any of the following events (each, a “Servicer Dissolution Event”) occurs: (a) (b) (c) (d) the Servicer fails to effect transfer or deposit any payment as required under the Servicing Agreement; the Servicer fails to perform any of its obligations under the Servicing Agreement or breaches any of the terms of the Servicing Agreement and (except where in the opinion of the Issuer such failure is not capable of remedy) does not remedy such default within fourteen (14) days after the earlier of (i) receipt of written notice thereof from the Issuer or the Sukuk Trustee; and (ii) having actual knowledge thereof; any indebtedness of the Servicer to the Issuer is not paid after a period of thirty (30) days as notified by the Issuer in writing; a distress or execution or other legal process is levied or enforced or taken out upon or against any part of the undertaking, property, assets or revenues of the Servicer and is not discharged or stayed within thirty (30) days of having been so levied or enforced or taken out; 69
86. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM (e) (f) (g) (h) (i) (j) an encumbrance takes possession of, or a provisional injunction, order for attachment or order for preservative measure is issued in relation to, or a receiver is appointed for the whole or any part of the undertaking, property, assets or revenues of the Servicer; an order is made or an effective resolution is passed for the winding up or dissolution of the Servicer; any governmental authority or agency has condemned, seized, compulsorily purchased or expropriated all or a material part of the undertaking, property, assets or revenues of the Servicer; the Servicer changes the nature or scope of its business, or suspends or ceases or threatens to change, suspend or cease its present business operations; any material adverse change in the financial condition or operations of the Servicer or any other event which will materially and adversely affect the Servicer’s ability to perform its obligations under the Servicing Agreement; any other Servicer Dissolution Event as may be advised by the Solicitors and Principal Adviser/ Lead Arranger. the Issuer or the Sukuk Trustee shall appoint a Replacement Servicer acceptable to the Sukuk Trustee to replace the Servicer. 3.4 TRANSACTION STRENGTHS There are various forms of credit enhancement in this Senior Sukuk Programme in so far as they provide a certain level of credit protection for the redemption of the Senior Sukuk. These include the following: 3.4.1 Credit Enhancement from Collateralisation Each Tranche of Senior Sukuk will be supported by credit enhancement in the form of collateralisation of Receivables, of at least 1.73 times. This level of collateralisation acts as a buffer against potential cash flow loss due to default, commingling and dilution events. It also takes into account the potential cash flow loss from the Receivables that may fall outside the tenure of the Senior Sukuk Programme. While each Tranche of issued Senior Sukuk will be backed by a portfolio of Receivables, all Receivables will be crosscollateralised for all issues. To prevent dilution of collateral coverage, a Portfolio OC Ratio of 1.73 times must be met prior to each new drawdown of the Senior Sukuk. 3.4.2 Non-discretionary salary deductions Repayment under the Program Ansuran Coshare is non-discretionary, i.e. payments are automatically deducted at source from the obligors' monthly salaries through Coshare, thus reducing Cendana’s exposure to their credit risk. Furthermore, Receivables purchased under the Senior Sukuk Programme must meet specific eligibility criteria (Refer to Section 4.1 of this Information Memorandum). This includes the Receivable being a performing account and having already paid one advance instalment. In addition, Masraf will replace any receivable for which the first scheduled deduction has not been made, thereby reducing cashflow loss due to fraud and administrative delays. 70
87. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM 3 .4.3 Transactional structure features The transaction is structured to incorporate features that provide liquidity support and protection against deterioration in the transaction. These include the following: (a) Liquidity Support The Issuer is required to maintain Liquidity Reserve Account to capture the progressive build-up of funds to meet the principal and profit payments on the Senior Sukuk. The build-up schedule is to ensure that the funds for the principal and profit payments in respect of the Senior Sukuk will be available in the Liquidity Reserve Account two (2) months and one (1) month respectively before the due date. The transaction is also structured to minimise potential cash outflow from the profit payments of the Junior Sukuk. The Junior Sukuk’s annual 10% profit payments (cumulative) can only be made from the 3rd anniversary date from its first issuance date onwards. These will be capped at RM3.0 million per annum between 3rd and 5th anniversary dates, RM2.0 million on 6th anniversary date and from 7th anniversary date onwards, the amount of profit payable is subject to meeting the minimum Distribution FSCR of 2.30 times after such payment. The profit payments on the Junior Sukuk are also dependent on further covenants, including no occurrence of Trigger Events and a minimum balance in the Liquidity Reserve Account. Any unpaid profit will be payable upon full settlement of the outstanding Senior Sukuk. (b) Amortisation schedule The outstanding Senior Sukuk must not exceed the Senior Sukuk Programme limit of RM360.0 million, which amortises progressively by the 5th anniversary date of the Senior Sukuk. Based on Masraf’s business plan, it expects to fully issue the Senior Sukuk within two (2) years, with each issuance amounting to RM30.0 million. (c) Trigger Events to signal transaction deterioration. There are events that will restrict further issuance of Senior Sukuk for the purchase of Receivables upon deterioration of the transaction. These Trigger Events include failure to maintain the required Minimum Required Balance and failure to replace the Ineligible Receivables. A default by the Servicer will also constitute a Trigger Event. [the rest of this page has been intentionally left blank] 71
88. SECTION 4 PORFOLIO INFORMATION 4 .1 ELIGIBILITY CRITERIA There are Eligibility Criteria for each Receivable forming part of the Portfolio. The Eligibility Criteria in relation to each Receivable that must be satisfied from the Purchase Request Date up to and including the date on which the first scheduled salary deduction is to be made by the Collection Agent are: (i) It is legally and beneficially owned by the Originator and, if applicable subject to the encumbrances created in favour of the Originator’s financier and to be redeemed through the proceeds received from the issuance of the Senior Sukuk, free from all encumbrances; (ii) It has been originated in the ordinary course of business of the Originator in accordance with its credit sales policy; (iii) It was created in accordance with credit standards no less stringent than those generally applied by the Originator in its ordinary course of business; (iv) It has not been classified as having been written-off by the Originator in accordance with its usual practices generally applicable to its business; (v) It has arisen and is covered under the relevant Credit Sales Agreement; (vi) The Obligor must be a salaried civil servant of the Government; (vii) Evidence that the repayment by the Obligors has been approved and accepted for deduction at source by the Collection Agent; (viii) One advance instalment has been received from each of the Obligors in relation to each receivable by the Originator; (ix) The Obligor must be a citizen and resident of Malaysia and to the best knowledge of the Originator, is not a person identified in the records of the Originator as (a) being or having been the subject of bankruptcy proceedings or is an undischarged bankrupt; (b) having been convicted of any offence capable of resulting in imprisonment; (c) being deceased; or (d) being a retiree; (x) Its repayment and all other amounts to be accrued and/or to be realised thereof shall be payable in Ringgit Malaysia; (xi) Its relevant Credit Sales Agreement provides for settlement of amounts due from the Obligor by equal monthly instalments save and except for the final instalment and the Originator has not waived any material terms of the relevant Credit Sales Agreement from the date of the initial creation thereof; (xii) It is not a defaulted receivable in respect of which instalments are due more than three (3) months in arrears on a cumulative basis; (xiii) It is a receivable where no prepayment (other than the first advance instalment) shall have been received on or prior to the Purchase Request Date and that, to the best knowledge of the Originator, the Obligor has not 72
89. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM exercised or indicated an intention to exercise any option of early settlement /prepayment, any right of rescission, set-off, counterclaim or defence (including the defence of usury); (xiv) It is not included in any other pool of receivables for the purpose of any other securitisation or financing; (xv) It is and will at all relevant times be capable of being segregated and identified for ownership purposes; (xvi) It is not the subject of any adverse claim or set-off or security claim by any party and no circumstances exist, to the best of knowledge of the Originator, which would give the Obligor the right to refuse to make any payment under the relevant Credit Sales Agreement; (xvii) It is a receivable where the relevant Credit Sales Agreement and all other documents relating to it, have been duly authorised and executed, are in full force and effect, and constitute legal, valid and binding obligations of the relevant Obligor enforceable against the relevant Obligor in accordance with their terms; (xviii) It is a receivable where there is no prohibition or restriction on, or requirement for consent to be obtained or notice to be given (other than pursuant to Section 4(3) of the Civil Law Act 1956) for, any assignment, transfer or sale of the receivable; and (xix) Such other criteria which may be set out in the Transaction Documents (if any). If any of the receivables forming part of the Portfolio fails to comply with any of the Eligibility Criteria from the Purchase Request Date up to and including the date on which the first scheduled salary deduction is to be made by the Collection Agent or the first scheduled salary deduction is not received by the Collection Agent on or prior to the scheduled date of deduction (“Ineligible Receivable”), then the Originator shall, pursuant to a written notice from the Issuer, replace the Ineligible Receivable, failing which it will be a Trigger Event. 4.2 REPURCHASE The Issuer shall redeem all the outstanding Senior Sukuk of any Tranches, in whole and not in part, on their respective Profit Payment Dates falling after the date on which the Originator repurchases the outstanding Portfolio ("Mandatory Redemption in Full"). The occurrence of any of the following events which in the opinion of the Issuer affects the entire Portfolio (including the Portfolio which was purchased pursuant to the proceeds received under the Junior Sukuk Programme), will, by written notice from the Issuer to the Originator ("Notice"), oblige such repurchase by the Originator: (a) the failure by the Originator to comply with any applicable law with respect to the Portfolio; (b) the failure to vest and maintain vested in the Issuer on absolute beneficial ownership interest in the Portfolio free and clear of any encumbrances; 73
90. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM (c) any successful dispute, claim or defence of any of the Obligors as to the legality and enforceability of any Receivable and such dispute, claim or defence would be applicable to all Portfolio; and (d) any successful attempt by any person to avoid, rescind or set aside any transfer by the Originator to the Issuer of any Receivable under any law, including any bankruptcy law or other insolvency law and such avoidance, rescission or setting aside would be applicable to all Portfolio. In the case of the Senior Sukuk, such redemption shall be at par value, on a pro rata basis among all outstanding Senior Sukuk. The price payable by the Originator to repurchase or purchase the Portfolio under the Mandatory Redemption in Full shall be equal to the aggregate of: (a) the outstanding principal component of such Portfolio as at the date of repurchase; (b) the amount of all accrued and unearned profit on such Portfolio up to the date of repurchase; and (c) all other ancillary costs which shall include, but are not limited to, late payment charges (if any) on any delinquent Portfolio. The Originator shall remit the repurchase consideration, as quantified using the above formula to the Issuer within a period of ten (10) business days from the date of the Notice. 4.3 ASSET QUALITY As at 30 June 2014, Masraf has originated RM21.7 million of deferred-payment products to eligible civil servants, which comprises of 342 accounts. These products are offered to the eligible civil servants based on profit rate of 3.99% per annum. The characteristic of this portfolio of receivables are as follows: 4.3.1 Portfolio of Receivables by Financing Amount, Instalment Amount and Tenure The minimum and maximum credit limit allowed by Masraf is RM5,000 and RM200,000 respectively. The average financing amount per customer is at RM63,450. Average tenure for each deferred-payment products is 207 months. This translates into an average monthly payment of RM554. The following table shows the detailed breakdown of customers by financing amount, instalment amount and tenure. Table 1: Summary of Obligors by Age, Financing and Monthly Instalment Amount and Tenure of Deferred Payment Terms 74
91. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM 4 .3.2 Breakdown by Age of Obligors About 52% of the existing customers falls into the age category of less than or equal to 30 years. The second largest exposure is to Obligors between the age of 30 to 40 years. The graph below shows the detailed breakdown of Obligors by age category. Graph 1: Number of Credit Sales Accounts by Age Group as at 30 June 2014 4.3.3 Largest Single Obligor Concentration The largest single Obligor is RM200,000 which is 0.92% of the total receivable of RM21.7 million. 4.3.4 Credit Approval Process Masraf has a credit approval process based on pre-determined underwriting and approval criteria (“Underwriting Criteria”). A summary of its Underwriting Criteria to be adopted for the creation of receivables under the Senior Sukuk Programme is shown in Table 2. In considering whether to extend credit to a potential Obligor, Masraf performs an internal credit analysis and evaluation based on a number of factors and sources of information. Potential customers are typically required to submit amongst others, latest salary slip, respective officer /head of division/department’s confirmation/verification letter on the employment status. Masraf will conduct due diligence investigations, bankruptcy searches, analyse and evaluate the applicant’s credit standing. While Masraf is not a cooperative, it still subscribes to Sistem Online Angkasa (“SOLA”) services as an external party via an agreement with RAM Credit Information Sdn Bhd. The SOLA system is the primary system where the majority of personal-financing lenders are able to assess the customer’s eligibility against the 60% deduction limit. SOLA operates on a real-time basis and can be accessed online, enabling co-operatives to submit loan-deduction applications via the Internet. SOLA checks are performed before financing approval, to ensure that there is no other deduction and the 60% threshold is not breached. 75
92. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM Table 2 : Underwriting Criteria of Masraf 1. 2. Criteria Credit Sales Limits Credit Sales Tenure Description  Minimum amount of credit sales is RM1,000  Maximum amount of credit sales is RM200,000 Minimum 1 year; maximum up to 10 years or 1 year before retirement age of the applicant, whichever is earlier. Note: With effect 1st January 2012, retirement age for government employee is 60 years old 3. 4. 5. Customer Segment Minimum Employment Tenure of the Applicant Age  Primary – Employee of the Federal Government  Secondary – Employee of selected statutory bodies and the state Government  All applicants must be a Malaysian citizen  Deferred payment to be applied under single applicant. Joint applicants are not allowed  Must be eligible for Coshare deduction Minimum 6 months in the service and permanent status. Applicant with employment on contractual basis shall not be allowed to apply.  Minimum 19 years at the time of application  Maximum up to 1 year before retirement age of applicant Note: The date of final payment not later than the customer’s age of 1 year before retirement, subject to the maximum tenure, whichever is earlier 6. Income Minimum gross monthly income of RM1,000/month Note: The gross monthly salary is computed based on salary plus any fixed allowances. 7. 8. 9. Eligibility Verification (Debt Service Ratio) Group Term Takaful Income Derivation / Supporting documents  Eligibility for deduction criteria.  Maximum deduction against gross salary is capped at 60%. Compulsory. As a minimum: Identity Card (My Card)/Non Civilian Identity Card  Latest salary slip  Evidence of registration of salary deduction to Coshare  Respective Officer /Head of division/department’s confirmation/verification letter on the employment status.  10. CTOS Any other documents stipulated and agreed with referral agent. CTOS criteria: No adverse record with outstanding amount of more than RM25,000.  11. Advance Payment Otherwise, refer to Credit Sales Approval Deviation Guidelines 1 month advance instalment 76
93. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM 4 .3.5 Static Pool Analysis of the Performance of the Receivables Masraf has originated 342 accounts totalling RM21.7 million between September 2012 until June 2014. During that period, there had been one (1) occurrence of early settlement and no occurrence of non-payment. (The remainder of this page is intentionally left blank) 77
94. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM SECTION 5 INVESTMENT CONSIDERATIONS An investment in the Senior Sukuk involves certain risks . Prospective investors of the Senior Sukuk should consider carefully, in the light of their own financial circumstances and investment objectives, the following factors, in addition to the matters set forth elsewhere in this Information Memorandum, prior to investing in the Senior Sukuk. The Issuer and the Originator each believes that the factors described below represent the principal risks inherent in investing in the Senior Sukuk. However, neither the Issuer, the Originator, nor the Principal Adviser/Lead Arranger and Lead Manager represents that the statements below regarding the risks of investing in any of the Senior Sukuk are complete or exhaustive. Prospective investors are strongly encouraged to undertake their own investigations and analysis on the Issuer and/or the Originator, their respective business and risks associated with the Senior Sukuk Programme as they may consider necessary including, but not limited to, consulting websites maintained by reputable organisations for further information on, inter alia, the industry/ industries that the Originator and the Issuer are each in. Prospective investors should read the detailed information set out elsewhere in this Information Memorandum and reach their own views prior to making any investment decision. Words and expressions defined elsewhere in this Information Memorandum, in particular Section 2, shall have the same meanings in this Section 5. 5.1 RISKS RELATED TO LIMITED RECOURSE OBLIGATIONS (a) There is no recourse against the Originator in respect of defaults by the Obligors in respect of their obligations under the Receivable forming part of the Portfolio to be sold from time to time by the Originator to the Issuer save and except for: (i) occurrence of a breach of any condition, representations and warranties given by the Originator in relation to the Portfolio; (ii) any receivable forming part of the Portfolio that fails to comply with any of the Eligibility Criteria from the Purchase Request Date up to and including the date on which the first schedule salary deduction by the Collection Agent or the first scheduled salary deduction is not received by on or prior to the scheduled date of deduction whereby the Originator will replace such Ineligible Receivable; and (iii) occurrence of relevant events under Mandatory Redemption in Full (set out in item (y)(A)(x) of the Section 2 of this Information Memorandum) which obliges the Originator to repurchase the entire Portfolio. The Senior Sukukholders bear the risk of any default by the Obligors in making payment of their monthly instalments. There is no recourse against the Originator in respect of such default. The Senior Sukuk do not represent in any way obligations of the Originator nor does the Originator provide any guarantee or other assurance in respect of the Issuer’s obligations on the Senior Sukuk. 78
95. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM (b) The Issuer’s ability to make payments on the Senior Sukuk depends upon the collection of amounts owing by the Obligors in respect of the Receivables forming part of the Portfolio. Obligors may fail to pay monthly instalments due from them on time or at all in the event of the Obligors’ resignation, termination of service and incidences of no-pay leave; this is likely to affect the timing and amounts of the Obligors’ payments. A significant increase in defaults or delinquencies by the Obligors could lead to a default or delay in the making of payment of profit on or redemption of the Senior Sukuk. 5.2 RISKS ASSOCIATED WITH AN INVESTMENT IN THE SENIOR SUKUK (a) No prior market for the Senior Sukuk The Senior Sukuk may be considered a new issue of securities for which there is currently no established secondary market. There can therefore be no assurance that a secondary market will develop or, if a secondary market does develop, as to the liquidity of that market for the Senior Sukuk or that it will continue for the entire tenor of the Senior Sukuk, as to the ability of the Senior Sukukholders to sell their Senior Sukuk, or the prices at which the Senior Sukukholders would be able to sell the Senior Sukuk. There is also no assurance that the price of the Senior Sukuk in any Tranche will not be adversely affected by the issue of future Tranches under the Senior Sukuk Programme by the Issuer. (b) The market value of the Senior Sukuk may be subject to fluctuation Trading prices of the Senior Sukuk may be influenced by numerous factors, including the operating results and/or financial condition of the Issuer, political, economic, financial and any other factors that can affect the capital markets, the industry, the Issuer. Adverse economic developments could have a material adverse effect on the market value of the Senior Sukuk. (c) An investment in the Senior Sukuk is subject to profit rate risk Senior Sukukholders may suffer unforeseen losses due to fluctuations in profit rates. The Senior Sukuk is fixed income securities and may therefore see their prices fluctuate due to fluctuations in profit rates. Generally, a rise in profit rates may cause a fall in bond/sukuk prices. The Senior Sukuk may be similarly affected resulting in a capital loss for the Senior Sukukholders. Conversely, when profit rates fall, bond/sukuk prices and the prices at which the Senior Sukuk trade may rise and the Senior Sukukholders may enjoy a capital gain but profit received may be reinvested for lower returns. (The remainder of this page is intentionally left blank) 79
96. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM (d) An investment in the Senior Sukuk is subject to inflation risk The Senior Sukukholders may suffer erosion on redemption due to inflation. The Senior Sukukholders would have an anticipated rate of return based on expected inflation rates on the purchase of the Senior Sukuk. An unexpected increase in inflation could reduce the actual return. (e) Consequence of Dissolution Event in respect of all Tranches In a case of a Dissolution Event which including but not limited to failure of the Originator to repurchase the relevant Portfolio pursuant to a Mandatory Redemption in Full in respect of all Tranches and subject to any remedy period, the Sukuk Trustee may at its discretion and shall, if so directed by an extraordinary resolution of the Senior Sukukholders, issue a notice declaring that a Dissolution event has occurred whereupon:- (f) (a) all accrued profit and principal in respect of the outstanding Senior Sukuk are immediately due and payable; and (b) the Senior Sukukholders shall have recourse against the Security Documents. The rating on the Senior Sukuk may be changed at any time and this may adversely affect the market value of the Senior Sukuk The Rating Agency has assigned a preliminary rating of AA1 for the Senior Sukuk. A rating is not a recommendation to purchase, hold or sell the Senior Sukuk as such rating does not comment as to the market price or suitability for a particular investor. There is no assurance that a rating will remain in effect for any given period of time or that a rating will not be lowered, suspended or withdrawn entirely by an assigning rating organisation in the future, if, in its judgment, circumstances in the future so warrant. In such circumstances, the market price and liquidity of the Senior Sukuk may decrease, and no person or entity would be obligated to provide any additional credit enhancement with respect to the Senior Sukuk. Any reduction, suspension or withdrawal of a rating of the Senior Sukuk will not constitute a Dissolution Event with respect to the Senior Sukuk. 5.3 RISKS RELATED TO THE RECEIVABLES (a) The Issuer’s ability to make payments on the Senior Sukuk are dependent upon timely and complete payment by the Obligors and in the event a Receivable becomes delinquent, the Issuer’s ability to make payments on the Senior Sukuk on a timely basis may depend upon the timing and the amount of the realisations from any recovery proceedings commenced in respect of the Receivables. There is no assurance, in the event of a default by an Obligor that the cash flow generated by the Receivables will be timely or sufficient to ensure payment when due, or at all, of principal and profit due on the Senior Sukuk. The Issuer may be dependent on the timely resolution of, and the amount of 80
97. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM realisations from , recovery proceedings commenced in respect of the Receivables. Nevertheless, this risk is mitigated by ensuring the minimum required balance is maintained in the Liquidity Reserve Account. The Liquidity Reserve Account shall capture the RM1.0 million deposited by the Originator and/or the Issuer and the remittance of funds from the Issuer’s Collection Account. The progressive build-up in the Liquidity Reserve Account is intended to meet any liquidity shortfall in the payment of principal and profit obligations under the Senior Sukuk. For more details on the Liquidity Reserve Account, please refer to item 3.2.4(ii) of this Information Memorandum. (b) Delay in the Collections As the collections of Receivables are carried out by Coshare via direct salary deduction, the collections are subsequently transferred to the Coshare's account before they are eventually credited into the Issuer’s Collection Account, the flow of funds through Coshare inherently possesses a risk of delay. Although a part of this process would be automated, it is foreseeable that human errors such as wrong data entry may contribute to a disruption of the flow of funds. Nonetheless, as at 30 June 2014, there has not been any delay in the collections of Receivable due to human error. Nevertheless, this risk is mitigated by having the Servicer to ensure that the Collection Agent make payment of collections ("Collection") in relation to the Portfolio into the Issuer’s Collection Account on a weekly basis. A collection activities report in relation to the Collections will be given by the Collection Agent to the Issuer to enable verification by the Issuer of the Collection for the relevant Tranches of Senior Sukuk. Furthermore, on a monthly basis, the Servicer will deliver to the Issuer, the Facility Agent, RAM, the Sukuk Trustee and the Security Trustee a report setting forth, among other things, the total collections including prepayments, delinquencies and defaults; and certain portfolio performance statistics of the Portfolio, if any and where applicable, have been satisfied. (c) There is no assurance that all of the Receivables meet the Eligibility Criteria or that the details provided by the Originator regarding the Receivables are correct. Each Portfolio will consist of thousands of individual Receivables. It is not practical to undertake a due diligence review of all such Receivables nor has any such attempt been made. No assurance can be or is given (save for certain representations and warranties from the Originator) with regard to details of the Receivables nor as to their conformity with the Eligibility Criteria. However, the Originator will provide all the necessary assistance and co-operation including appointing an independent accountant to verify any information and/or documents relating to each Portfolio, as far as practicable to ensure that the Portfolio to be sold to the Issuer meets the required Eligibility Criteria. In addition, the Originator is required to replace any receivable that fails to comply with any of the Eligibility Criteria as explained in item 6.1(a) above 81
98. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM of this Information Memorandum . (d) In the event any Receivable goes into default which including but not limited to the Obligors cease to become a civil servant through resignation, termination of service or incidences of no-pay leave, reliance will be placed on the Servicer to take enforcement proceedings. Among the responsibilities of the Servicer is the taking of actions or proceedings in the event of a default by an Obligor in the performance of her/his obligations under a Receivable. In the undertaking of such responsibility, a recovery costs will be paid from the Collection Account to the Servicer in relation to any defaulted Receivable up to a maximum amount of RM10,000 per Obligor. The Servicer may also be faced with capability constraints if a significant number of actions or proceedings need to be undertaken by it. No assurance is given that there will be no delays or even failure in performance by the Servicer in the taking of such actions or proceedings. (e) Timing of Potential Claims The Originator requires the Obligors to obtain takaful/insurance to protect the Originator from failure to pay monthly instalments due to the death of any of the Obligors. In making claims against the takaful/insurance providers, the Originator is dependent upon the Obligors or their personal representatives, in the case of the death of the Obligor, to furnish complete and timely details and evidence to support a claim against the takaful/insurance providers. Delays in obtaining such details or evidence could compromise a claim or the amount that may be claimed against the takaful/insurance providers and result in losses. 5.4 RISKS RELATED TO THE PARTIES (a) Risks Related to the Issuer The Issuer is a bankruptcy remote special purpose vehicle The Issuer is restricted in its business activities by its Memorandum of Association to the purchase of Receivables originated from the Originator. The Issuer will seek to purchase most (if not all) of such Receivables originated and/or to be originated by the Originator during the Drawdown Availability Period. Although the structures of the Issuer and the Senior Sukuk Programme are designed to minimise the likelihood of the Issuer’s insolvency or its liquidation, no assurance is given that the Issuer will not become insolvent or be the subject of a winding-up or liquidation. In the event of insolvency, winding-up or a liquidation of the Issuer, the interests of the Senior Sukukholders may be affected. 82
99. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM (b) Dependence on the Servicer The collection of payments from the Receivables is dependent upon the proper performance by the Servicer of its obligations under the Servicing Agreement. The performance by the Servicer of its obligations is to a certain extent dependent upon the performance of its employees and the continued services of these employees. Like other employers, the Servicer has to manage its employees and is dependent on its success in recruiting and retaining its employees. Additionally, in the event that the Servicer for any reason whatsoever is no longer capable of performing any of its functions under the Servicing Agreement, the availability of the Replacement Servicer may be limited given that the necessary infrastructure and experience in managing the Receivables available to the Servicer may not be easily available to or duplicated for use by another entity. (c) Dependence on the Collection Agent Pursuant to the authorisation given to Coshare by the AG and the MOF to provide salary deduction services for eligible civil servants, the remittance of the relevant payments to the Collection Account by Coshare is dependent upon inter alia, the proper performance of Coshare as the Collection Agent under the Collaboration Agreement with Masraf. In the event the Collaboration Agreement is terminated for any reason whatsoever, Coshare shall, if required by Masraf, continue to perform its obligations and responsibilities as the Collection Agent and shall ensure that all relevant payments are remitted to the Collection Account accordingly. 5.5 OTHER RISKS (a) Change in Law The structure of the transaction and the issuance are based on Malaysian law, tax and administrative practice as at the date of this Information Memorandum. No assurance can be given that Malaysian law, tax (or changes in tax rates) or administrative practice will not change after the date hereof or that such change will not adversely impact the structure of the transaction and the treatment of the Senior Sukuk. In particular, changes in tax laws may result in a service and/or consumption tax, such as goods service tax or value added tax, being imposed in respect of payments of the fees by Issuer. In the event such service or consumption tax is imposed, the Issuer will be liable to pay the same and this has not been factored into the cash flows. (b) Change in Political, Economic and Social Factors Given the nature of the industry in which the Originator and the Issuer operate, their business operations are closely linked to the political, 83
100. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM economic and social developments in Malaysia . Any adverse developments or uncertainties in the political, economic and social developments in Malaysia may adversely affect the performance of the Originator and the Issuer. Examples of these political, economic and social uncertainties include but are not limited to changes in risk of war, riots, expropriation, nationalisation, renegotiation or nullification of existing contracts and arrangements, unfavourable changes in government policy, interest rates, inflation rate, global economic downturn, changes in regulations or other legal, administrative, political, economic or social development. Notwithstanding this, there have not been any significant adverse developments in political and economic conditions in the recent past that had adversely affected the business, financial performance and results of the industry. However, no assurance can be given that there will be no adverse political or developments and/or changing economic conditions which will affect the Originator’s and the Issuer’s performance. (The remainder of this page is intentionally left blank) 84
101. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM SECTION 6 BACKGROUND INFORMATION OF THE GROUP 6 .1 BACKGROUND OF THE GROUP CMA I Capital Sdn Bhd (“CMA” or “the Group”) was incorporated in Malaysia under the Companies Act on 30 May 2005 with both authorised and paid-up capital of RM100,000.00. The board of directors of CMA then were Dato’ Termuzi Bin Abdul Aziz and En Norazmi Bin Termuzi (the son of Dato’ Termuzi Bin Abdul Aziz) and both directors are shareholders with equal equity interest in CMA. Since its inception, CMA as an investment holding company, has focused its resources towards developing a strong and resilient distribution channel for consumer products. CMA believes that distribution is the key success factor in its business model and acknowledged the potential of owning a reliable, efficient and cost effective distribution channel, capable of penetrating, capturing and sustaining its presence in the consumer retail market. In January 2008, CMA acquired the entire equity interest in Barakah Wealth Sdn Bhd (“Barakah”) (formally known as Spiral Wealth Sdn Bhd prior to June 2011) and Spiral Pristine Sdn Bhd (“Spiral”). Barakah and Spiral were shelf companies incorporated by Companies Commission of Malaysia. On 30 May 2008, Encik Adlin Bin Shaharudin was appointed to the board of directors of CMA and was tasked to develop strategic businesses regionally and to groom and develop suitable talent in particular the key management and operational personnel, to set up and manage a distribution channel and an information technology business. On 22 December 2008, both Encik Adlin Bin Shaharudin and Encik Azrul Bin Shaharudin acquired 100% equity interest of CMA from the existing shareholders for cash. Encik Azrul Bin Shaharudin was subsequently appointed to the board of directors of CMA. Encik Adlin Bin Shaharudin has almost 15 years of finance and corporate finance experience and exposure in various sectors of industry. Meanwhile, Encik Azrul Shaharudin has almost 13 years of experience in heavy steel works and fabrication industries. Encik Azrul Bin Shaharudin is the brother to Encik Adlin Bin Shaharudin. The management team of CMA, helmed by Encik Adlin Bin Shaharudin, has positioned Barakah to be the distribution channel between the manufacturer, wholesaler, retailer and the customer. Over the years, Barakah has distributed a range of products to the retail consumer market (i.e. private and government sectors) via various distribution methods such as brochure, website, mail, telemarketing and through sales representatives. Today, Barakah has eight (8) distribution branches nationwide dedicated for training and recruitment of sales personnel. These branches are strategically located at Kota Damansara, Putrajaya, Temerloh, Sungai Petani, Ipoh, Johor Bahru, Kota Bharu and Kota Kinabalu. Meanwhile, Spiral is positioned to provide information technology (“IT”) support for the Group. Spiral has implemented proprietary IT solutions to meet various requirements of the Group which complement the Group’s business objectives. CMA further established Kasturi Kekal Sdn Bhd (“Kasturi”) on 8 July 2009 and Armani Abadi Sdn Bhd (currently known as Coshare EZ Sdn Bhd) (“Coshare EZ”) on 13 October 2009. Realizing the growing need of customers seeking for options to 85
102. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM purchase products via instalment payments , Kasturi is tasked to collaborate, develop and/or acquire entities with retail collection capabilities. Meanwhile, Coshare EZ is tasked to strategically collaborate with merchant partners to widen the range of products. On 25 June 2010, Kasturi acquired the entire equity interest of Coshare Holdings Berhad (“Coshare”) a company that has collection capability for government employees through direct salary deduction via AG and MOF. By end of 2011, the Group has been offering a range of services from distribution and collection capabilities and infrastructures as well as product variety as servicer to its business partners which include financial institutions in Malaysia. In February 2012, CMA incorporated Masraf Al Barakah Sdn Bhd (“Masraf”), a company tasked to originate deferred sales which capitalizes on the underlying strength of the Group in distribution and collection. The Group corporate structure as at 30 June 2014 is as below: Diagram 3: The Group Corporate Structure [the rest of this page has been intentionally left blank] 86
103. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM Masraf Al Barakah Sdn Bhd Masraf Al Barakah Sdn Bhd (“Masraf”) was incorporated in Malaysia on 10 February 2012 under the Companies Act 1965. As at 30 June 2014, its authorised and fully paid-up capital is RM10,000,000. Masraf is principally involved in providing credit sales facilities to eligible civil servants for the purchase of products under deferred payment terms through nondiscretionary salary deduction mechanism. Masraf acts as the deferred payment facility provider for the Group where all applications received from eligible civil servants will be collated and undergo an initial vetting process. All Credit Sales Agreements are executed between the respective Obligors and Masraf. As at 30 June 2014, Masraf has provided up to RM21.7 million deferred payment programme to eligible civil servants through non-discretionary salary deduction mechanism administered by Coshare. Coshare Holdings Berhad Coshare Holdings Berhad (“Coshare”) was incorporated in Malaysia on 17 September 1997 under the Companies Act 1965 and is formerly known as Unimaya Berhad. Its authorised and fully paid-up capital is RM10,000,000 and RM5,000,000 respectively. Coshare is authorised by the AG and the MOF to provide salary deduction services for eligible civil servants. Coshare provides processing, activation and collection services via monthly salary deduction to its business partners. Currently Coshare has secured collaboration agreements with financial institutions namely, Kuwait Finance House (M) Berhad and Al Rajhi Banking and Investment Corporation (M) Berhad to provide processing, activation and collection services of monthly salary deductions (i.e. monthly collections). Over the years, Coshare has been able to grow its operations to suit the strict requirements of its business partners. Coshare’s current staff strength is around 150 operations staffs which are divided into several departments such as Operational Support Department, Credit Processing Department, Disbursement and Collection Department, IT Department and Human Resource and Administration Department. As 30 June 2014, Coshare has processed a total of RM2.150 billion or 33,102 civil servants’ applications and currently administering the salary deduction for 18,966 accounts worth RM1.263 billion. Coshare acts as the collection agent of the Group by virtue of the authorisation given to it by the AG and MOF. Coshare and Masraf has entered into the Collaboration Agreement where Masraf participates in “Program Ansuran Coshare” which authorises Coshare to undertake and implement a salary deduction programme for eligible civil servants employed by Government on behalf of Masraf. [the rest of this page has been intentionally left blank] 87
104. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM Barakah Wealth Sdn Bhd Barakah Wealth Sdn Bhd (“Barakah”) was incorporated in Malaysia on 19 July 2007 under the Companies Act with an authorised and paid-up capital of RM3,000,000. As at 30 June 2014, Barakah has eight (8) distribution branches nationwide to cater for its business partners’ sales targets. These branches are strategically located at Kota Damansara, Putrajaya, Temerloh, Sungai Petani, Ipoh, Johor Bahru, Kota Bharu and Kota Kinabalu. Barakah employs 138 full time sales personnel and more than 450 commissionbased sales personnel. Barakah also has a telesales department to market products. Apart from that, Barakah also administers about 25 sales agencies which are strategically located all over Malaysia with registered sales agents of more than 2,500 personnel. Since inception to 30 June 2014, Barakah has marketed a total of RM2.15 billion consisting 33,102 civil servants out of which a total of RM1.99 billion or 30,748 civil servants eligible for salary deduction were recommended to financial institutions for approval and disbursement. Barakah acts as the sales and distribution arm of the Group and complements Masraf’s activities as its sales and distribution channel to build the targeted amount of credit sales receivables to be securitised under the Senior Sukuk Programme and the Junior Sukuk Programme. 6.2 SHARE CAPITAL AND SHAREHOLDING OF CMA As at 30 June 2014, CMA had an authorised share capital of RM100,000 comprising of 100,000 ordinary shares of RM1.00 each and an issued and paid up-capital of RM100,000 comprising of 100,000 ordinary shares of RM1.00 each. Details of the CMA's shareholding structure as at 30 June 2014 are summarised as follows: No. of shares Name of shareholder Ordinary shares of RM1.00 each in the share capital of CMA Total (RM) (%) Adlin Bin Shaharudin 99,999 99,999 99.99 Azrul Bin Shaharudin 1 1 0.001 TOTAL 100.00 88
105. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM 6 .3 PROFILE OF DIRECTORS OF CMA The board of directors of CMA are as follows: Adlin Bin Shaharudin Director Encik Adlin Bin Shaharudin, a Malaysian, aged 41, holds a degree in Accountancy from University Malaya, he served almost seven (7) years in the Audit and Corporate Finance of KPMG Peat Marwick, where he was exposed to various sectors of industries. Immediately after, he spearheaded a capital market origination team for three (3) years in an investment bank before he left for Singapore to advise on several mergers and acquisitions as well as international fund raising transactions for an asset management company based in Singapore. On 30 May 2008, Encik Adlin Bin Shaharudin was appointed to the board of CMA and was tasked to develop strategic businesses regionally and to groom and develop suitable talent in particular the key management and operational personnel, to set up and manage a distribution channel and an information technology business. Azrul Bin Shaharudin Director Encik Azrul Bin Shaharudin, a Malaysian, aged 39, holds a certificate as qualified welder for shipbuilding by American Bureau of Shipping in 2009. He subsequently completed his vocational training at Akademi Bina Malaysia where he was certified by TWI, United Kingdom in the field of Welding Inspection and Non Destructive Test in 2012. He has over thirteen years’ experience in the business of providing steel structure and precession fabrication industry. He was one of the shareholders and a director of Amage Corporation Sdn Bhd in 2000, where he served almost three (3) years in the business of providing steel structure and precession fabrication for building and construction project. In 2003, he joined Kejuruteraan Seiring Sepakat Sdn Bhd, where he is responsible until today to coordinate, manage and supply specialized manpower in steel structure and precession fabrication throughout Malaysia. He is also a qualified internal auditor for ISO 9001/2008 for Quality Management System Awareness for precession industry. (The remainder of this page is intentionally left blank) 89
106. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM SECTION 7 BACKGROUND INFORMATION OF THE ISSUER 7 .1 BACKGROUND OF THE ISSUER The Issuer was incorporated on 27 June 2013 under the Companies Act as a private limited company under the name of Cendana Sejati Sdn Bhd. The Issuer's registered office is located at 568-9-9 Kompleks Mutiara 3 ½ Miles, Jalan Ipoh, 51200 Kuala Lumpur. The Issuer is established as a special purpose company to undertake the issuance of debentures or Islamic securities and/or establish debentures or Islamic securities programme. The Issuer is a 100% owned subsidiary of the Originator. The principal activities of the Issuer are: 7.2 (a) to purchase the Portfolio from the Originator under the terms of the debenture or Islamic securities programme; (b) to raise financing via the issuance of debentures or Islamic securities for the purpose of financing the purchase of the Portfolio; (c) to collect income derived from the Portfolio or any part thereof and to subcontract to third parties all services that may be required in order to maintain the Issuer and its assets and to remunerate such parties for the services rendered or to be rendered pursuant to the terms and conditions of the debenture or Islamic securities programme. SHARE CAPITAL AND SHAREHOLDING STRUCTURE OF THE ISSUER As at 30 June 2014, the Issuer had an authorised share capital of RM400,000 comprising 400,000 ordinary shares of RM1.00 each and an issued and paid-up capital of RM2.00 comprising two (2) ordinary shares of RM1.00 each. Details of the Issuer's shareholding structure as at 30 June 2014 are summarised as follows: No. of shares Name of shareholder Ordinary shares of RM1.00 each in the share capital of the Issuer Total (RM) (%) 2 2.00 100 Masraf Al Barakah Sdn Bhd TOTAL 100 (The remainder of this page is intentionally left blank) 90
107. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM 7 .3 PROFILE OF DIRECTORS OF THE ISSUER The board of directors of the Issuer as at 30 June 2014 are as follows: Ismawadee Bin Ismail Independent Non-Executive Director Encik Ismawadee Bin Ismail, a Malaysian, aged 46, was appointed to the Board of Extol MSC Berhad since 20 May 2011 as an Independent Non-Executive Director. He is also the Chairman of the Audit Committee and a member of the Remuneration and Nomination Committees of the Extol MSC Berhad. He is a member of Malaysian Institute of Accountants (MIA) and member of Certified Practising Accountant of CPA Australia Ltd. He has over eighteen years' experience in providing audit, account, tax and business advisory services to a wide range of Malaysian and multinational clients. He also has wide range of experience in handling the audits of various organisations which includes those in the telecommunication, manufacturing, services and construction industries in Malaysia. Abdul Rahim Bin Embi Independent Non-Executive Director Encik Abdul Rahim Bin Embi, a Malaysian, aged 57, holds a Bachelor Degree in Accountancy in 1982 and a Master of Business Administration in 1995 from University Kebangsaan Malaysia. He served almost twenty three years in various government agencies including Jabatan Akauntan Negara as an Accountant and an Auditor. After leaving the government agencies, he was involved in many areas which among others was his appointment as a board member of Indasia Security Services Sdn Bhd on 11 April 2005. Adlin bin Shaharudin Non-Independent Executive Director Please refer to Section 6.3 for Encik Adlin Bin Shaharudin's profile. 7.4 BORROWINGS OF THE ISSUER As at 30 June 2014, the Issuer has not incurred any borrowings. 7.5 MATERIAL CONTRACTS As at 30 June 2014, the Issuer has not entered into any material contracts which are outside its ordinary course of business. 91
108. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM 7 .6 MATERIAL LITIGATION As at 30 June 2014, the Issuer is not engaged in any material litigation, either as plaintiff or defendant in any legal action, proceeding, arbitration or prosecution for any criminal offence. The directors do not know of any proceedings pending or threatened or of any fact likely to give rise to any proceedings, which may materially and adversely affect the position of the business of the Issuer. (The remainder of this page is intentionally left blank) 92
109. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM SECTION 8 BACKGROUND INFORMATION OF THE ORIGINATOR 8 .1 BACKGROUND OF THE ORIGINATOR The Originator was incorporated in Malaysia on 10 February 2012 under the Companies Act as a private limited company under the name of Masraf Al Barakah Sdn Bhd. The Originator's registered office is located at 568-9-9 Kompleks Mutiara 3 ½ Miles, Jalan Ipoh, 51200 Kuala Lumpur. The Originator is principally engaged in the provision of credit sales to eligible civil servants for purchase of products under a deferred payment terms through nondiscretionary salary deduction mechanism ("Deferred Payment Programme"). 8.2 SHARE CAPITAL AND SHAREHOLDING STRUCTURE OF THE ORIGINATOR As at 30 June 2014, the Originator had an authorised share capital of RM10,000,000 comprising 10,000,000 ordinary shares of RM1.00 each and an issued and paid-up capital of RM10,000,000 comprising 10,000,000 ordinary shares of RM1.00 each. Details of the Issuer's shareholding structure as at 30 June 2014 are summarised as follows: No. of shares Name of shareholder Ordinary shares of RM1.00 each in the share capital of the Originator Total (RM) (%) 9,999,950 9,999,950 99.9995 50 50 0.0005 CMA I Capital Sdn Bhd Adlin Bin Shaharudin TOTAL 8.3 100 PROFILE OF DIRECTORS OF THE ORIGINATOR Adlin Bin Shaharudin Non-Independent Executive Director Please refer to Encik Adlin's profile as stated in Section 6.3 of this Information Memorandum. Tengku Eliza Binti Tengku Mohamed Shihabudin Non-Independent Executive Director Tengku Eliza Binti Tengku Mohamed Shihabudin, a Malaysian, aged 50, holds a diploma in Secretarial Sciences from Universiti Teknologi Mara (UiTM) and served 21 years in various government agencies. 93
110. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM After leaving the government agencies , she spearheaded the development and distribution of various deferred payment programmes from retail consumer products to micro takaful. She co-founded Barakah Wealth Sdn Bhd, a company providing nationwide multidimensional sales and marketing channels for various product owners. 8.4 KEY MANAGEMENT TEAM OF THE ORIGINATOR The key management team of Masraf comprises the following individuals: Adlin Bin Shaharuddin Director and Chief Executive Officer Please refer to Encik Adlin's profile as stated in Section 6.3 of this Information Memorandum. Amir Bin Awang Hamad Chief Operating Officer Encik Amir Bin Awang Hamad, aged 54, graduated from University Technology Mara in Business Administration. He started his carrier with Gas Pantai Timur Sdn Bhd, where he spearheads the industrial gas sales division for three (3) years. He then served in Juasa Holdings Sdn Bhd, an investment company of Utusan Melayu Berhad for three (3) years as the Project Manager, where he led a number of start-ups for Utusan Melayu Berhad’s overseas ventures. Thereafter, he joined Land & General Berhad to spearhead the Marketing Division of Sri Damansara Club Berhad for four (4) years and later in Sri Damansara Sdn Bhd planning department for another two (2) years. He then established UBM Solutions Sdn Bhd, an IT consultancy company, where the company was the sole partner to Microsoft (Malaysia) for online learning programme and the sole developer for Malaysia National Insurance Bhd and TM Net Sdn Bhd members data exchange platform. While in Coshare, he developed the Coshare Standard Operating Procedures and enhanced Coshare’s transparency and corporate governance by engaging PricewaterhouseCoopers as Financial Monitoring Accountants for Coshare Collection Account. Amir Syarizal Bin Amri Vice President, Sales and Marketing Encik Amir Syarizal Bin Amri, aged 41, graduated in Economics from the University of Iowa, USA in 1996. In addition he also holds the Certificate of Credit Professional (CCP) from Institute Bank-Bank Malaysia (IBBM) and Certificate of Islamic law (CIL) from International Islamic University of Malaysia (IIUM). He began his career with the Arab-Malaysian Group in 1996 and subsequently spent close to eight (8) years in credit control before moving to Asset Financing and Small 94
111. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM Business Department . His last position in AmBank Berhad was as Head of AmMikro Unit (Mikro Financing). After more than 11 years with AmBank Group, he joined OCBC Al-Amin Bank Berhad as Vice President in Consumer Financial Services Department. In 2009, he rejoined AmBank Group under its subsidiary, AmIslamic Bank Berhad as Head of Product & Business Development Department before accepting the offer as Vice President, Direct Sales Division at Barakah Wealth Sdn Bhd. Azeiz Badlei Syah Bin Hj Ibrahim Senior Manager, Credit Processing Department Encik Azeiz Badlei Syah Bin Hj Ibrahim, aged 41, graduated in Information Technology from University Utara Malaysia, with vast experience in system engineering and automation. His last position was as Senior Manager, Coshare Credit Processing Department before being transferred to Masraf in January 2013. Abd Aziz Ibrahim Credit and Supervision Manager Encik Abdul Aziz Bin Ibrahim, aged 63, graduated in Economics from University Malaya in 1980. He started his carrier as sub-accountant with Malayan Banking before moved to Bank Pertanian Malaysia as Credit Officer. In 1983 he joined Bank Bumiputra Malaysia Berhad (now known as CIMB Bank Berhad) as an Internal Auditor. After 12 years in Internal Audit, he was promoted to Branch Manager and later as Area Manager before retiring from CIMB Bank Berhad in 2008. After retirement, he worked with a number of corporations before joining Masraf in 2012. 8.5 BUSINESS OVERVIEW OF MASRAF The Originator is principally engaged in the provision of credit sales to eligible civil servants for purchase of products under deferred payment terms through nondiscretionary salary deduction mechanism ("Deferred Payment Programme"). The Deferred Payment Programme commences upon execution of the Collaboration Agreement between the Originator and Coshare on 1 June 2012. The amount of credit sales ranges from RM1,000 to a maximum of RM200,000 subject to eligibility. The operational business procedures of Masraf are summarised as follows: (i) Masraf’s sales personnel shall approach the Obligor (government employees) to sell merchant products (listing of merchant’s products are via product catalogue or brochure and websites). (ii) Upon agreement to purchase the product the Obligor will submit its application to Masraf for deferred payment plan. (iii) Upon approval of the deferred payment plan, a Credit Sales Agreement will be entered into between Masraf and the Obligor. 95
112. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM 8 .6 (iv) Masraf shall then purchase the product from the merchant for the Obligor. Delivery of the product will be undertaken by the merchant. Upon confirmation of the delivery acceptance by Obligor, Masraf shall immediately pay the merchant. (v) Concurrently, upon completion of the above Masraf will instruct Coshare, the Collection Agent to activate the salary deduction of the Obligor with the AG. MATERIAL CONTRACTS There are no material contracts (not being contracts entered into in the ordinary course of business) which has been entered into by the Originator as at 30 June 2014. 8.7 MATERIAL LITIGATION As at 30 June 2014, the Originator is not engaged in any material litigation, either as plaintiff or defendant in any legal action, proceeding, arbitration or prosecution for any criminal offence. The directors do not know of any proceedings pending or threatened or of any fact likely to give rise to any proceedings, which may materially and adversely affect the position of the business of the Originator. (The remainder of this page is intentionally left blank) 96
113. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM APPENDIX 1 Audited Financial Statements of the Originator for the Financial Year Ended 30 June 2013 97
137. CENDANA SEJATI SDN BHD INFORMATION MEMORANDUM ISSUER ORIGINATOR CENDANA SEJATI SDN BHD No 25-G Pusat Perdagangan Kota Damansara Jalan PJU 5 /20A, The Strand, PJU 5 47810 Petaling Jaya Selangor MASRAF AL BARAKAH SDN BHD c/o Coshare Holdings Berhad No 25-G Pusat Perdagangan Kota Damansara Jalan PJU 5/20A, The Strand, PJU 5 47810 Petaling Jaya Selangor PRINCIPAL ADVISER/LEAD ARRANGER/LEAD MANAGER SHARIAH ADVISER KENANGA INVESTMENT BANK BERHAD 10th Floor, Kenanga International Jalan Sultan Ismail 50250 Kuala Lumpur DATUK DR MOHD DAUD BAKAR Level 33, Menara Binjai No 2 Jalan Binjai Off Jalan Ampang 50450 Kuala Lumpur SOLICITORS SUKUK TRUSTEE SHOOK LIN & BOK 20th Floor, AmBank Group Building 55, Jalan Raja Chulan 50200 Kuala Lumpur AMANAHRAYA TRUSTEES BERHAD Tingkat 2, Wisma TAS No. 21, Jalan Melaka 50100 Kuala Lumpur FACILITY AGENT SECURITY TRUSTEE KENANGA INVESTMENT BANK BERHAD 10th Floor, Kenanga International Jalan Sultan Ismail 50250 Kuala Lumpur TMF TRUSTEES MALAYSIA BERHAD Level 10, Menara Hap Seng No. 1 & 3, Jalan P. Ramlee 50250 Kuala Lumpur