1. FINANCIAL INSTITUTIONS ENERGY INFRASTRUCTURE AND COMMODITIES TRANSPORT TECHNOLOGY United Kingdom: First Corporate Sukuk Shatha Ali Associate Norton Rose LLP 28 October 2010 Shatha Ali Associate Norton Rose LLP 28 October 2010

2. Features of Islamic Finance Riba (usury or unjust enrichment) Gharar (uncertainty) Maisir (speculation) Assured Profit Unethical Investment

3. The basic difference* Bank Client Conventional Islamic BankClient money money + money (interest) Goods & Services Source: Sheikh Nizam Yaquby – 24 March 2005 Training course *Courtesy of Sheikh Nizam Yaquby Permission to reprint or distribute any content from this presentation requires the prior written approval of Norton Rose

4. Sukuk: What is it? AAOIFI definition: ‘certificates of equal value representing undivided shares in the ownership of tangible assets, usufructs and services or (in the ownership of) the assets of particular projects or special investment activity’

5. Sukuk: Main Structures Ijara (lease) Musharaka (joint venture or co-ownership financing) Mudarabah (trust/participation financing) Wakala (investment)

6. First UK Corporate Sukuk Arranged by International Innovative Technologies Limited (IIT) –technology development company –requirement for Sukuk driven by investor Sukuk Al-Musharaka US$10,000,000 issue Convertible

7. Sukuk Structure Investments as per Musharaka Business Plan IIT Target Company Issuer/Trustee Pursuant to Declaration of Trust Sukukholder Declaration of Trust Purchase Undertaking Musharaka Agreement Musharaka Capital Management Agreement Musharaka Entity Managing Partner IIT (Target Company) Cash Proceeds Distribution Contribution in-kind Distribution Contribution in-cash Return on Investment

8. Going forward: Regulation Financial Services and Markets Act (Regulated Activities) (Amendment) Order 2010 Changes legislative framework to align regulatory treatment of alternative finance investment bonds (AFIBs) –AFIBs as specified investments on same basis as instruments creating / acknowledging debt –excludes AFIBs from definition of “collective investment schemes”

9. Going forward: Tax Finance Acts since 2003 removed tax barriers Finance Act 2009 - three further measures: –relief from stamp duty land tax for transactions undertaken as part of property AFIB –relief from capital gains tax for transfers of land to and from sukuk issuance vehicles –person obtaining financing continue to be entitled to claim capital allowance

10. Sukuk issued by UK Government? Considered by HM Treasury Previous position that it “would not offer value for money at the present time” Situation under review

11. Our international practice

12. Presentation 1No individual who is a member, partner, shareholder, employee or consultant of, in or to any constituent part of Norton Rose Group (whether or not such individual is described as a “partner”) accepts or assumes responsibility, or has any liability, to any person in respect of this presentation. 2Any reference to a partner means a member of Norton Rose LLP or Norton Rose Australia or a consultant or employee of Norton Rose LLP or one of its respective affiliates with equivalent standing and qualifications. 3This presentation contains information confidential to Norton Rose Group. Copyright in the materials is owned by Norton Rose Group and the materials should not be copied or disclosed to any other person without the express authorisation of Norton Rose Group 4This presentation is not intended to give legal advice and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and practice in this area. Readers must take specific legal advice on any particular matter which concerns them. If you require any advice or information, please speak to your usual contact at Norton Rose Group.

13. FINANCIAL INSTITUTIONS ENERGY INFRASTRUCTURE AND COMMODITIES TRANSPORT TECHNOLOGY BD-#12119706