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SABANA SHARI’AH COMPLIANT REIT
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• Transactions (either individually or as part of a series or
if aggregated with other transactions involving the same
interested person during the same financial year) equal to
or exceeding 5% of the value of Sabana Shari’ah Compliant
REIT’s net tangible assets will be reviewed and approved prior
to such transactions being entered into, on the basis described
in the preceding paragraph, by the Audit Committee which
may, as it deems fit, request advice on the transactions from
independent advisers, including the obtaining of valuations
from independent professional valuers. Furthermore, under
the Listing Manual of the SGX-ST and the Property Funds
Appendix, such transactions would have to be approved by
the Unitholders at a meeting of Unitholders duly convened and
held in accordance with the provisions of the Trust Deed; and
• Aggregate value of Related Party Transactions entered into
during the financial year under review will be disclosed in the
Annual Report.
For Related Party Transactions entered into or to be entered
into by the Trustee, the Trustee is required to consider the terms
of such transactions to satisfy itself that such transactions are
conducted on arm’s length basis and on normal commercial
terms, are not prejudicial to the interests of Sabana Shari’ah
Compliant REIT and the Unitholders, and are in accordance with
all applicable requirements of the Property Funds Appendix and/
or the Listing Manual of the SGX-ST relating to the transaction in
question. Further, the Trustee has the ultimate discretion under
the Trust Deed to decide whether or not to enter into a Related
Party Transaction. If the Trustee is to sign any Related Party
Transaction contract, the Trustee will review the contract to ensure
that it complies with the requirements relating to Related Party
Transaction as well as such other guidelines as may from time to
time be prescribed by the MAS and the SGX-ST to apply to real
estate investment trusts.
Role of the Audit Committee for Related Party Transactions
All Related Party Transactions will be subjected to regular periodic
reviews by the Audit Committee. The Manager’s internal control
procedures are intended to ensure that Related Party Transactions
are conducted on arm’s length basis and on normal commercial
terms and are not prejudicial to the interest of Unitholders.
The Manager will maintain a register to record all Related Party
Transactions which are entered into by Sabana Shari’ah Compliant
REIT. The Manager will incorporate into its internal audit plan a
review of all Related Party Transactions entered into by Sabana
Shari’ah Compliant REIT. The Audit Committee shall review
the internal audit reports to ascertain that the guidelines and
procedures established to monitor Related Party Transactions
have been complied with. In addition, the Trustee will also have
the right to review such audit reports to ascertain that the Property
Funds Appendix have been complied with. The Audit Committee
will periodically review all Related Party Transactions to ensure
compliance with the Manager’s internal control procedures and
with the relevant provisions of the Property Funds Appendix and/
or the Listing Manual of the SGX-ST. The review will include the
examination of the nature of the transactions and its supporting
documents or such other data deemed necessary by the Audit
Committee.
If a member of the Audit Committee has an interest in a transaction,
he is required to abstain from participating in the review and
approval process in relation to that transaction.
Management of Business Risk
Effective risk management is a fundamental part of Sabana
Shari’ah Compliant REIT’s business strategy. Recognising
and managing risk is central to the business and to protecting
Unitholders’ interests and value. Sabana Shari’ah Compliant
REIT operates within overall guidelines and specific parameters
set by the Board. Each transaction is comprehensively analysed
to understand the risks involved. Responsibility for managing risk
lies initially with the business unit concerned, working within the
overall strategy outlined by the Board.
The Board meets quarterly, or more often if necessary, and reviews
the financial performance of the Manager and Sabana Shari’ah
Compliant REIT against a previously approved budget. The Board
will also review the business risks of Sabana Shari’ah Compliant
REIT, examine liability management and act upon any comments
from the auditors of the Trust. In assessing business risk, the
Board considers the economic environment and risks relevant to
the property industry. The Board reviews management reports
and feasibility studies on individual investment projects prior
to approving major transactions. Management meets regularly
to review the operations of the Manager and Sabana Shari’ah
Compliant REIT and discuss any disclosure issues.
For more information on risk management framework, please refer
to “Risk Management” on page 61 of the Annual Report.
Whistle-Blowing Policy
The Audit Committee has put in place procedures to provide
employees of the Manager with well-defined and accessible
channels to report on suspected fraud, corruption, dishonest
practices or other similar matters relating to Sabana Shari’ah
Compl iant REIT or the Manager, and for the independent
investigation of any reports by employees and appropriate follow-
up action. The aim of the whistle-blowing policy is to encourage
the reporting of such matters in good faith, with the confidence
that employees making such reports will be treated fairly, and to
the extent possible, be protected from reprisal.
Corporate Governance
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