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Corporate Governance
The Manager was appointed in accordance with the terms of
the trust deed dated 29 October 2010 (as amended) (the “Trust
Deed”). The Trust Deed outlines certain circumstances under which
the Manager may be removed.
The Manager and its officers are licensed under the Securities and
Futures Act, Chapter 289 (“SFA”) to conduct real estate investment
trust management with effect from 2 November 2010.
The Manager is committed to good corporate governance as
it believes that such self-regulation is essential to protect the
interests of the Unitholders, as well as critical to the performance
of the Manager.
The Manager uses the Code of Corporate Governance 2005 (the
“Code”) as its benchmark for its corporate governance policies
and practices. The following segments describe the Manager’s
main corporate governance policies and practices.
The Manager of Sabana Shari’ah Compliant
REIT
The Manager has general power of management over the assets
of Sabana Shari’ah Compliant REIT.
The Manager’s main responsibility is to manage the assets and
liabilities of Sabana Shari’ah Compliant REIT for the benefit of its
Unitholders. The Manager’s key financial objectives are to provide
Unitholders with a competitive rate of return on their investment
by ensuring regular and stable distributions to Unitholders and
to achieve long-term growth in the net asset value of the Trust.
The Manager sets the strategic direction of Sabana Shari’ah
Compliant REIT and gives recommendations to HSBC Institutional
Trust Services (Singapore) Limited, as trustee of Sabana Shari’ah
Compliant REIT (the “Trustee”), on the acquisition, divestment
and enhancement of assets of Sabana Shari’ah Compliant REIT
in accordance with its stated investment strategy. The Manager is
also responsible for the risk management of the Trust.
Other functions and responsibilities of the Manager include:
• Using its best endeavours to carry on and conduct its business
in a proper and efficient manner and to conduct all transactions
with, or on behalf of, Sabana Shari’ah Compliant REIT at arm’s
length and on normal commercial terms.
• Preparing property plans on a regular basis, which may contain
proposals and forecasts on net income, capital expenditure,
sales and valuations, explanations of major variances from
previous forecasts, written commentary on key issues and
underlying assumptions on inflation, annual turnover and any
other relevant assumptions. The purpose of these plans is to
explain the performance of Sabana Shari’ah Compliant REIT’s
assets.
• Ensuring compliance with the applicable provisions of the SFA
and all other relevant legislation, the Listing Manual of SGX-ST,
the CIS Code issued by the MAS (including the Property Funds
Appendix), the Manager’s obligations under the Trust Deed,
Singapore Financial Reporting Standards, the tax ruling issued
by Inland Revenue Authority of Singapore and all relevant
contracts.
• Attending to all regular communications with Unitholders.
• Supervising the property manager, which performs the day-
to-day property management functions (including leasing,
accounting, marketing, promotion, co-ordination and
operations management) for Sabana Shari’ah Compliant
REIT’s assets pursuant to the respective property management
agreements.
Sabana Shari’ah Compliant REIT, constituted as a trust, is
externally managed by the Manager and accordingly, it has no
personnel of its own. The Manager appoints experienced and
well-qualified management to handle its day-to-day operations.
The Manager has put in place procedures to comply with existing
rules and regulations affecting listed real estate investment trusts.
A compliance officer was appointed in compliance with MAS
requirements.
The Manager is pleased to report on its application of the principles
and guidelines of the Code. For ease of reference, sections of the
Code under discussion are specifically identified. The Manager
confirms that it has adhered to the principles and guidelines as
set out in the Code where applicable. Any deviations from the
Code are explained.
Board Matters
The Board’s Conduct of Affairs
Principle 1: Every company should be headed by an
effective Board to lead and control the company.
The Board of Directors of the Manager (the “Board”) is entrusted
with the responsibility for the overall corporate governance
of the Manager including establishing goals for management
and monitoring the achievement of these goals. The Board is
also responsible for the strategic business direction and risk
management of Sabana Shari’ah Compliant REIT, and reviewing
and assessing management’s performance. All Board members
participate in matters relating to corporate governance, business
operations and risk assessments, financial performance, and the
nomination and review of Directors. The Board has established
a framework for the management of the Manager and Sabana
Shari’ah Compliant REIT, including a system of internal controls
and risk management processes.
SABANA SHARI’AH COMPLIANT REIT
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