Posted Date: March 24, 2021

MARC has assigned a "Gold" Sustainability Sukuk Assessment to Agroto Business (M) Sdn Bhd's (Agroto) ASEAN Sustainability Sustainable and Responsible Investment (SRI) Sukuk Programme Framework (Framework). The assessment is driven by our expectation that the net proceeds of the sukuk to be issued will be directed towards qualifying capital expenditures on the issuer's sustainable and modern integrated farm that comply with green and social project categories recognised by the ASEAN Green Bond Standards, ASEAN Sustainability Bond Standards and Securities Commission Malaysia's SRI Sukuk Framework. The eligible project categories are the environmentally sustainable management of living natural resources and land use, as well as food security.

The assessment also reflects the alignment of Agroto's Framework with the ASEAN Sustainability Bond Standards, ASEAN Green Bond Standards and ASEAN Sustainability Bond Standards, in addition to Securities Commission Malaysia's SRI Sukuk Framework. Importantly, Agroto's environmental policy, environment management frameworks and sustainable farming practices provide a sound base for the identification of material project-related common environmental and social (E&S) risks, safeguards and mitigation strategies.

Agroto currently produces highland vegetables for domestic consumption and export. Its contract farming model of crop production is supported by the implementation of modern farming techniques and compliance with certification standards recognised across the globe as a hallmark of good agricultural practice. The modern controlled environment farming (CEF), as practised by Agroto enables the sustainable intensification of production with a reduced carbon, land and water footprint.

MARC's assessment also reflects the rating agency's understanding of Agroto's procedures and processes around proceeds management, evaluating and selecting qualifying expenditures and reporting on the use of funds. Sustainability sukuk proceeds will be credited to a separately created disbursement account to be solely operated by the sukuk's security trustee with reporting on use of proceeds. Until full allocation of the net sukuk proceeds, Agroto will provide annual reporting of the amounts disbursed, the allocation of proceeds and where such unutilised amount is placed or invested pending utilisation, and relevant sustainability impact metrics on a designated website.

The principal methodology used in this assessment is MARC's Impact Bond Assessments (IBA) criteria published in December 2019, accessible from MARC's official website at The Impact Assessment is not a credit rating and is arrived independently of the credit rating process of the sukuk. Agroto's pre-issuance external review report can be accessed at

+603-2717 2915/