Page 61 - 12Mar_Sabana AR 2011 Cover.pdf, page 1 @ Preflight ( 12Mar_S

ANNUAL REPORT 2011 59
Shari’ah Compliance
Sabana Shari’ah Compliant REIT is being offered as a Shari’ah
compliant REIT so as to offer conventional and Shari’ah investors
the potential for regular and stable distributions and long-term
growth in NAV and DPU, and hence the traditional characteristics
of listed equity.
In order to be a Shari’ah compliant REIT, Sabana Shari’ah
Compliant REIT will be managed by the Manager in accordance
with Shari’ah principles and shall adhere to such investment
principles in addition to the laws, rules and regulations of any other
relevant regulatory or supervisory body or agency applicable to
Sabana Shari’ah Compliant REIT.
To enable Sabana Shari’ah Compliant REIT to comply with
Shari’ah investment principles and procedures, the Manager has,
through the Shari’ah Adviser, appointed the Independent Shari’ah
Committee to provide on-going advice on Shari’ah compliance
by the Trust.
For further details on the Shari’ah Adviser and Independent
Shari’ah Committee, please refer to “Shari’ah Compliance” on
page 47 of the Annual Report.
Shari’ah Compliance Procedure
The Shari’ah compliance procedure of Sabana Shari’ah Compliant
REIT was considered and adopted by the Independent Shari’ah
Committee.
Although Sabana Shari’ah Compliant REIT is not required to be
governed by the accounting, auditing, governance, ethics and
Shari’ah standards of the Auditing and Accounting Organisation
of the Islamic Financial Institutions (“AAOIFI”) and/or the Islamic
Financial Services Board (“IFSB”), both of which are international
bodies that issue standards to promote the soundness and stability
of the Islamic financial services industry, the Independent Shari’ah
Committee will look to the recommendations of AAOIFI and IFSB
and will apply them if deemed relevant, appropriate and possible.
The Shari’ah Adviser has taken into account the Shari’ah standards
promulgated by the AAOIFI and IFSB to draw up the Shari’ah
compliance procedure of Sabana Shari’ah Compliant REIT. The
procedure for assessing the on-going Shari’ah compliance of the
Trust prior to the issuance of the annual Shari’ah Certification is
as follows:
• The Independent Shari’ah Committee and the Shari’ah Adviser
will conduct periodic and ad hoc reviews at least once a year to
ensure that Sabana Shari’ah Compliant REIT remains Shari’ah
compliant;
• The Shari’ah Adviser will visit the properties in the property
portfolio of Sabana Shari’ah Compliant REIT (including future
acquisitions) on an ad hoc basis and as part of the annual audit
for the Independent Shari’ah Committee to issue the Shari’ah
Certification to ensure that the activities at these premises are
Shari’ah compliant and match the respective tenancy and
leasing agreements; and
• In the event that there is a change resulting in unavoidable
non-Shari’ah compliant activities, the Independent Shari’ah
Committee has to ensure that the due cleansing procedure
is applied to the additional non-Shari’ah compliant activities
before any distributions are made to Unitholders.
The Independent Shari’ah Committee and the Shari’ah Adviser,
in undertaking the above procedures, will require the Manager to:
• Provide the Independent Shari’ah Committee and/or the
Shari’ah Adviser with all relevant data reasonably required by
them for inspection at any time;
• Appoint a single contact point who will act as a liaison officer
between the Manager, the Independent Shari’ah Committee
and Shari’ah Adviser; and
• Highlight, as soon as practicable, to the Independent Shari’ah
Committee and the Shari’ah Adviser, any event of deviation
or changes in the operations, financing, deposit, investment,
insurance or risk management activities that may affect the
Shari’ah compliance of Sabana Shari’ah Compliant REIT.
On completion of the annual audit in connection with the issuance
of the Shari’ah Certification, the Independent Shari’ah Committee
will issue and sign-off on an annual audit report to be submitted
to the Manager annually.
The compliance officer of the Manager will act as the liaison officer
between the Manager, the Independent Shari’ah Committee and
the Shari’ah Adviser.
Shari’ah Remedial Process
The Independent Shari’ah Committee will convene periodically (at
least once annually) to deliberate over the compliance of Sabana
Shari’ah Compliant REIT and decide whether to issue the Shari’ah
Certification confirming the Trust’s Shari’ah compliant status.
If any of the Shari’ah Guidelines are breached, the Manager must
disclose such breach to the Independent Shari’ah Committee
and the Shari’ah Adviser as soon as practicable. Such disclosure
should include details of the nature of the breach and the
circumstances leading to the breach. All relevant information and
documents must also be provided alongside such disclosure.