PROFILE OF THE BOARD OF DIRECTORS - malaysiastock.biz Alina Hashim (Alternate Director to Dato’...

PROFILE OF THE BOARD OF DIRECTORS

18 AmanahRaya • REIT

Sitting from left to right:

Dato’ Ahmad Rodzi Pawanteh

Tuan Haji Ahmad Kamal Abdullah Al-Yafii

Tan Sri Datuk (Dr) Arshad Ayub (Chairman)

Datuk Mohamed Adnan Ali

Dato’ Dr. Mohd Irwan Serigar Abdullah

Standing from left to right:

Sharizad Jumaat

Tuan Haji Rozan Mohd Sa’at

Tai Siong Choi

Datuk Mohamed Azahari Mohamed Kamil

(Managing Director)

AmanahRaya • REIT 19

PROFILE OF THE BOARD OF DIRECTORS CONT’D

Tan Sri Datuk (Dr) Arshad AyubChairman (Independent Non-Executive)

Tan Sri Datuk (Dr) Arshad Ayub, Malaysian wasappointed to the Board on 11 October, 1995. He obtained a Diploma in Agriculture from College of Agriculture, Malaya, Serdang, Selangor in 1954 and a Bachelor of Science (Hons) Degree in Economicsand Statistics from University College of Wales,Aberystwyth, United Kingdom in 1958. In 1964 heobtained a postgraduate Diploma in BusinessAdministration (IMEDE), Switzerland.

He joined the Malaysian Civil Service upon hisgraduation and had a successful career. He was DeputyController, Industrial Development Division Ministry ofCommerce and Industry (Ministry of Trade and Industry)from 1961 to 1965. He was the First Director of MaraInstitute of Technology for 10 years from 1965 to 1975,Deputy Governor of Bank Negara Malaysia from 1975 to 1977, Deputy Director General in the EconomicPlanning Unit of the Prime Minister's Department from1977 to 1978. He was Secretary General to the Ministryof Primary Industries (1978), Ministry of Agriculture(1979 to 1981) Ministry of Land and RegionalDevelopment (1981 to 1983). He also sat on a numberof committees at National and International level. Hewas a Member of Justice Harun's Salaries Commissionfor Statutory bodies and Local Government.

He sits on the Board of Directors of several public listedcompanies. He is a Chairman of Malayan Flour MillsBerhad, LBI Capital Berhad and Tomypak HoldingsBerhad. He is a Director of Kulim (M) Berhad, KPJHealthcare Bhd, Sindora Berhad and Top GloveCorporation Berhad. He also sits on the Board ofDirectors on several private companies, among othersPFM Capital Holdings Sdn Bhd, Ladang Moccis SdnBhd, CSR Building Materials Sdn Bhd, Pelaburan JohorBerhad, Bistari Johor Berhad, Land Rover (M) Sdn Bhd,Bata (M) Sdn Bhd and Zalaraz Sdn Bhd. He is also aChairman of Koperasi MOCCIS Berhad.

He currently serves as President of the MalaysianRubber Products Manufactures Association (MRPMA),Chairman of Malaysian Rubber Export Promotion

Council (MREPC) and a Member of Lembaga GetahMalaysia (LGM). He is Pro Chancellor of UiTM, Chairmanof University Malaya Board and a member of theCouncil of Cooperative College Malaysia. He was amember of the Council of Kolej Ugama Sultan ZainalAbidin (KUSZA) and Institute Professional Bailtulmal.

Datuk Mohamed Azahari Mohamed KamilManaging Director

Datuk Mohamed Azahari, graduated from the InstitutTeknologi Mara (UiTM) in Shah Alam with a Diploma inBanking in 1980 and subsequently obtained his BBA(Finance) from the Western Michigan University in1982. He obtained his MBA (Finance) from the CentralMichigan University in the US in 1984.

He started his career with the Malaysian French Bank in 1984 as a Credit and Marketing Officer, after whichhe joined Malaysian Industrial Development FinanceBerhad in 1985 as a Project Officer. In 1988, he joinedMIDF Corporate Consultancy Services Sdn Bhd as aManager, Public Issues and Marketing. From 1989 to1992, he was attached to Bapema Corporation SdnBhd as a Senior Manager, Investment and CorporatePlanning. From January 1993 to May 1993, he was theAssistant General Manager of Business Developmentfor Island and Peninsular Berhad. From June 1993 toMarch 1994 he was attached to Kimara Equities SdnBhd as an Executive Director, after which he joined PB Securities Sdn Bhd in April 1994 as a CorporateInstitutional Dealer until October 1994.

In November 1994, he established JMF AssetManagement Sdn Bhd assuming the role of ManagingDirector. In September 2005, Amanah Raya Berhadacquired 70% of JMF-Asset Management and DatukAzahari was appointed Managing Director of the newly-formed entity AmanahRaya-JMF AssetManagement Sdn. Bhd.

He is a Director of Sapura Technology Berhad, Al-NibrasLtd and PA Resources Bhd.

He has been a Licensed Fund Manager’sRepresentative under the Securities Industry Act (1983) since 1995.


Dato’ Ahmad Rodzi PawantehDirector (Non-Independent Non-Executive)

Dato’ Ahmad Rodzi holds an MBA (GeneralManagement) from Southern Cross University, Australiaand an MBA (Banking & Finance) from the University of Hull, UK. He graduated from the University of Malayawith a Bachelor of Economics in Accounting and also from the University of Wolverhampton, UK with aBachelor of Laws (Hons).

He is the Group Managing Director of Amanah RayaBerhad since July 2004. He is also a member of theChartered Institute of Marketing, UK and was a Directorand EXCO Member of KUB Malaysia Berhad. He is alsoa Registered Financial Planner.

Datuk Mohamed Adnan AliDirector (Independent Non-Executive)

Datuk Mohamed Adnan is a Fellow of the CharteredInstitute of Management Accountants, UK.

He was formerly Accountant-General of Malaysia. He has served as Accountant with various Ministriessuch as the Ministry of Trade and Industry and theMinistry of Energy and Public Works. He was also aSenior Manager, Investment with the EmployeesProvident Fund (EPF), Bursar of Universiti TeknologiMalaysia and Treasurer of International IslamicUniversity Malaysia.

Tuan Haji Rozan Mohd Sa’atDirector (Non-Independent Non-Executive)

Tuan Haji Rozan holds a Bachelor of Economics (Hons)degree with a major in Statistics from UniversitiKebangsaan Malaysia.

He was appointed to the Board of Sindora Berhad on 23 May 2002 and assumed the position ofManaging Director of Sindora Berhad on 1 September2002. He was appointed to the Board of JMF AssetManagement Sdn. Bhd. on 17 April 2003.

He started his career in 1983 as an AdministrativeOfficer in the Corporate Planning & ResearchDepartment of Johor Corporation before beingseconded as an Operations Manager at Sergam Berhad (a subsidiary of Johor Corporation) in 1986.From 1988 to 1993, he was Executive Director ofseveral subsidiaries in Johor Corporation Group and in 1994, he was appointed as the General Manager of Johor Corporation’s Tourism Division beforeassuming the post as Chief Executive of the sameDivision in 1996. Prior to his appointment as theManaging Director of Sindora Berhad, he served as theSenior General Manager, Business Development ofJohor Corporation from 1999 until August 2002.

Dato’ Dr. Mohd Irwan Serigar AbdullahDirector (Non-Independent Non-Executive)

Dato’ Dr. Mohd Irwan Serigar Abdullah graduated from the University of Malaya, Kuala Lumpur with aBachelor of Arts (Hons) in Demography in 1982 andsubsequently obtained his Masters of Science inEnergy, Management and Policy from the University ofPennsylvania, Philadelphia USA. He obtained his Ph.Din Economics from International Islamic UniversityMalaysia, Kuala Lumpur.

He started his career in the Prime Minister’sDepartment as Assistant Director in 1984, after whichhe was posted to the Industry Division of the EconomicPlanning Unit in 1986, being later promoted to Senior Assistant Director. In 2003, he was posted tothe Economics and International Division, Ministry ofFinance as a Principal Assistant Secretary. From 2004to 2006, he headed the Econometrics Section of the Economics and International Division, Ministry of Finance. He is currently the Deputy Under Secretary, Economics and International Division,Ministry of Finance.

He is a Director of Universiti Putra Malaysia (UPM),Institute of Strategic and International Studies (ISIS)Malaysia and Pendinginan Megajana Sdn Bhd. He serves as a member of the Blue Ocean StrategyGroup of the Economic Planning Unit, SteeringCommittee of the PRO3-Based Learning Project,German-Malaysia Institute as well as the Strategic KPIand Panel on Strategic Planning, Ministry of Finance.


PROFILE OF THE BOARD OF DIRECTORS CONT’D


Sharizad JumaatExecutive Director

Sharizad Jumaat holds an MBA (Finance) from MichiganState University, USA and a BSc (Hons) in Biochemistryfrom Universiti Kebangsaan Malaysia.

She has been in the fund management industry for over 18 years. She has accumulated enormousexperience in the area of fixed income and equities,having started her career with Permodalan NasionalBerhad (PNB) and later moved to the EmployeesProvident Fund (EPF). At EPF, she managed a portfolioof fixed income and equities amounting to RM100billion and RM45 billion respectively. Her lastappointment was General Manager, Equity Investmentof EPF.

She has been a Licensed Fund Manager’sRepresentative under the Securities Industry Act (1983) since 2004.

Alina Hashim(Alternate Director to Dato’ Ahmad Rodzi Pawanteh)

Alina holds a Bachelor of Business (Accounting) from Chisholm Institute of Technology, Melbourne,Australia (presently known as “Monash University”)and is a Certified Practicing Accountant of CPAAustralia, a Chartered Accountant of MalaysianInstitute of Accountants (MIA) and a Certified FinancialPlanner of Financial Planning Association of Malaysia.She sat as a council member of MIA from 2005 to 2007and at the same time served as the Vice President of the Malaysian Association of AccountingAdministrators, a company sponsored by MIA.

She started her career in 1990 as an Account Officer in TDM Berhad and later migrated to the bankingindustry in 1992 by joining Southern Finance Berhad.She joined Amanah Raya Berhad in August 2004 andpresently holds a post of Chief Operating Officer. She is responsible for the overall operational functionof the Branches and Finance and Accounts Department.

Tuan Haji Ahmad Kamal Abdullah Al-YafiiDeputy Chairman (Independent Non-Executive)

Tuan Haji Ahmad Kamal is a Fellow of the Institute of Chartered Accountants, England and Wales. He is a Chartered Accountant by training, with more than 42 years experience in accounting andmanagement consulting.

He has held senior managerial positions in local andmultinational public listed companies. He was aPartner of Hanafiah, Raslan & Mohamad, an accountingfirm, from 1970 to 1999 and was Financial Controller of Malayawata Steel Berhad from 1968 to 1970. He is a Board Member of Chase Perdana Berhad Group,Keramat Tin Dredging Berhad, Sitt Tatt Berhad Groupand Integrated Rubber Berhad.

Tai Siong ChoiExecutive Director

Tai Siong Choi possesses a Banking Diploma from theInstitute of Bankers, London and is an associatemember of the Institute.

He is the co-founder and Executive Director of JMFAsset Management Sdn. Bhd. He has more than 20years experience in managing funds for investments inthe Malaysian equity market. Prior to this, he was theGroup Treasurer of Kumpulan Guthrie from 1988 to1994, where he managed an investment portfolioexceeding RM300 million. He has also had exposure to equity markets in the USA, Japan, Hong Kong,Singapore and Thailand. From 1970 to 1976, heworked as a bank officer in the foreign exchange andmoney market department of a local bank in Malaysia.

He has been a Licensed Fund Manager’sRepresentative under the Securities Industry Act (1983)since 1995.

MESSAGE FROM THE CHAIRMANFOR THE FINANCIAL PERIOD ENDED 31 DECEMBER 2007


Tan Sri Datuk (Dr) Arshad AyubChairmanAmanahRaya-JMF Asset Management Sdn Bhd

On behalf of the Board of Directors of AmanahRaya-JMF AssetManagement Sdn Bhd (“AmanahRaya-JMF”), it is my pleasure to present to you the Annual Report and audited financial statements of the AmanahRaya Real Estate Investment Trust (“ARREIT” or the “Trust”)for the financial period ended 31 December 2007.

BACKGROUNDDespite challenging conditions, I am happy to record that ARREIT had achieved sterling results

in its first ten months.

Ever since the sub-prime lending crisis became a global issue in July 2007, the economic

climate has been difficult. Fortunately, though the crisis has affected local market sentiment,

Malaysia is not directly exposed, and the fallout has largely been offset by the rise in oil prices.

The fundamentals of the Malaysian economy remain solid with GDP growth for 2008 expected

to reach 6%, while the Government’s capital market liberalisation programme is attracting

increased investment from abroad.

Meanwhile, Malaysia’s REIT market is steadily maturing, as investors become more aware of

the benefits of REITs as a relatively high-yield, low risk investment.

Against this background, ARREIT has performed strongly since listing on the Main Board of

Bursa Malaysia Securities Bhd on 26 February 2007. The Trust initially consisted of eight

anchor properties with a total book value of RM337 million. These properties are located

throughout the country with a broad diversification encompassing the commercial, industrial,

hospitality and educational sectors. I am delighted to report that during the year the Trust was

further strengthened by the injection of five more prime properties bringing the total number of

properties to 13.

At the initial launch of the fund, more than 60% of the units offered under private placement

were subscribed by foreign investors.

FINANCIAL PERFORMANCE

ARREIT is designed to meet the needs of both institutional and retail investors who wish to

preserve their asset value while achieving both a stable yield and medium to long term capital

growth. Since our institutional investors have an obligation to pay dividends to their clients,

they require a certain basic level of returns. Therefore, from day one, the Trust declared its

intention to pay out 100% of its distributable income to unitholders for the first three years.

To date, ARREIT has met the projection since our initial public offering (“IPO”) on 26 January

2007. As at the year end, the total book value of the investment properties of ARREIT stood

at RM645.52 million, while total net income was RM10,646,633 with the existing leases

delivering a healthy rental income.


MESSAGE FROM THE CHAIRMAN CONT’D

FOR THE FINANCIAL PERIOD ENDED 31 DECEMBER 2007

The acquisitions are in line with the objectives of ourgrowth strategy, and all the master tenants of the five new properties are public listed companies inMalaysia. Although the five properties are largely single master tenant and single purpose industrialproperties, they provide the ARREIT property portfoliowith vertical diversity.

The acquisitions were funded by a combination of bankborrowings, a private placement of 98.9 million newunits in ARREIT, and the issuance of consideration units with no liabilities including contingent liabilitiesand guarantees, to be assumed by ARREIT arising from the acquisitions. In addition to part-financing the acquisitions, the placement of new units increasedthe fund size and improved the trading liquidity ofARREIT units.

As well as boosting the value of the Trust’s investmentproperties to RM645.52 million, these acquisitionsreduced the gearing of ARREIT to below 40% (as against 49% on the launch of the REIT in February).The new total of 13 properties is expected to enhanceARREIT’s net property yield to 7.4% based on theplacement price of RM0.94 per unit.


0n 14 January 2008, the Board was pleased toannounce the third interim income distribution of0.2563 sen per unit, payable on 25 February 2008.This was in addition to a first interim incomedistribution of 2.37 sen per unit paid on 16 October2007, and a second interim income distribution of 2.8149 sen per unit which was announced on 10 December 2007 and paid on 25 January 2008,giving our unitholders a total distribution of 5.4412sen per unit for the financial period under review.

FUND DEVELOPMENT

ARREIT focuses on high quality properties with strongrecurring rentals. We are currently concentratingexclusively on the Malaysian market so as to enableour unitholders to capitalise on the robust growth inlocal property development and on the NorthernCorridor, East Coast and Iskandar Development Region projects.

The Trust has recently added five new high-yielding and diversified properties to its portfolio, making itMalaysia’s second largest REIT in terms of value of theproperties. The new properties, valued at RM308.67 million, are Tamadam Bonded Warehouse in PortKlang, Silver Bird factory in Shah Alam, AIC factory in Shah Alam, SEGi Campus College in Kota Damansaraand an Automotive Warehouse in Gurun. No other local REIT has made an asset injection just ten months after listing.

With this positive outlook – coupled with ouraggressive and proactive asset and capitalmanagement and long term acquisition plans – we are confident of ARREIT’s ability to build its assetsize and deliver enhanced returns.

In the year ahead we will continue to focus ongenerating optimal returns for our unitholders. To accomplish this, we will be innovative and dynamicin terms of moving into new products. Our strategy willbe to identify high-yielding properties at the initialstage and later inject them into ARREIT when they are fully developed.

THANKS

On behalf of the Board of Directors of AmanahRaya-JMFAsset Management Sdn Bhd, I wish to offer heartfeltthanks for the outstanding support we received duringthe year from our unitholders, our business partnersand various Government authorities. I would also liketo take this opportunity to express my profoundappreciation of the skill and dedication so consistentlydisplayed by all the members of the Board and theentire management team of AmanahRaya-JMF, beingARREIT’s manager.

Tan Sri Datuk (Dr) Arshad Ayub

6 February 2008


As at the time of writing, we have identified and areevaluating several more properties for injection intothe Trust in 2008.

CORPORATE GOVERNANCE

We are committed to the highest standards ofprofessionalism, transparency and governance for aGovernment-owned corporation. All AmanahRaya-JMFSdn Bhd’s staff are expected to demonstrateresponsibility, diligence and absolute integrity in theirbusiness dealings. In addition, ARREIT is the onlyMalaysian REIT to have an independent investmentcommittee to advise on acquisitions and disposals and to monitor transactions. By having ARREIT rated by an international rating agency, we are also fulfillingthe Government’s objective of creating a transparentinvestment instrument.

PROSPECTS

The outlook is good for Malaysia’s property sector and, in 2008, the property market should continue to benefit from increased Government incentives.

The average occupancy rate for all ARREIT propertiescurrently stands at 100%, with an upward rentalrevision to occur every two to five years for all theproperties except Wisma Amanah Raya Berhad, whoserental revision is annual.

MANAGING DIRECTOR’S STATEMENTFOR THE FINANCIAL PERIOD ENDED 31 DECEMBER 2007


Throughout the financial period under review, all of the ARREITproperties performed at optimum level, with low and cost-effectivemaintenance and a healthy income stream.

During the financial period, we initiated a programme of enhancement works on existingproperties. This included the construction of additional villas and a new swimming pool at Holiday Villa Resort, Langkawi and the expansion of facilities at the Permanis Factory. The extension of the Permanis Factory has increased the net lettable area, resulting in a higher rental income from which the Trust is now benefiting. Ongoing enhancements at otherproperties include replacing the existing mechanical and electrical equipment and reinstatingthe buildings in enhanced condition. The Manager continuously monitors the management andmaintenance of all assets to ensure that the property values are preserved in the long term.

The objectives of ARREIT’s growth strategy are to provide unitholders with stable incomedistributions and to achieve growth in Net Asset Value by acquiring yield-accretive assets and good quality properties with steady, recurring rental income. To achieve these objectives,ARREIT employs a number of key acquisition and management strategies.

INVESTMENT STRATEGIES

ARREIT’s dynamic acquisition strategy is designed to continuously improve the yield and valueof the unit. The strategy involves:

Asset ManagementTo ensure that all properties are efficiently managed and maintained to maximize yields, whileproactively identifying avenues for asset enhancement.

Yield EnhancementTo progressively inject yield-accretive assets in order to maintain stability of income distribution.

Capital ManagementTo optimise ARREIT’s capital structure by minimising the cost of funding in order to maximisereturns to unitholders.

We are actively seeking new asset acquisitions. Our acquisition strategy focuses on sectoraldiversification. ARREIT thus includes assets from different industries, namely the commercial,industrial, hospitality and educational. As each sector moves in a different cycle, bydiversifying its asset classes, ARREIT reduces its risk exposure.

There is stiff competition among Malaysia’s nine REITs to acquire quality buildings. Under thecurrent guidelines, REITs are allowed to invest only in completed properties. As a result, Amanah Raya at its Group level has initiated several projects as part of its downstreamactivities to readily create sources of assets for future injection into ARREIT. For example, in August 2007, Amanah Raya Bhd (AmanahRaya) and Kuwait Finance House (M) Bhdcollaborated to launch Al-Nibras, a US$200million real estate fund focusing on real estatedevelopment projects in Malaysia and the region.


Datuk Mohamed Azahari Mohamed KamilManaging DirectorAmanahRaya-JMF Asset Management Sdn Bhd


MANAGING DIRECTOR’S STATEMENT CONT’D

FOR THE FINANCIAL PERIOD ENDED 31 DECEMBER 2007

MANAGEMENT STRATEGIES

To ensure a strong, stable and secure income stream,ARREIT applies a variety of carefully coordinatedmanagement strategies:

Quality LesseesARREIT is highly selective in its choice of Lessees. To maximise security and stability of income, it leasesout its properties mainly to public-listed or relatedcompanies with a solid track record, lease profile andtenant base.

Single LesseesMost of ARREIT properties are leased by a singlecompany, since it is more efficient to deal with a singlerather than multiple Lessees.

Long Term, “Triple Net” LeasesTo ensure long term sustainability of income, ARREITproperties are leased for a period of between six tofifteen years. This minimises the disruption of having to constantly find new tenants. In addition, most leases are on a triple net basis by which the Lesseesare responsible for the maintenance and propertyexpenses such as utilities, quit rent, assessment,insurance premiums and other operating costs. This ensures that the income received by ARREIT is nett of all expenses.

High Security DepositsMost Lessees are required to provide a security depositof at least two to three years since a strong Lessee islikely to fulfil its obligations and remain in business forthe duration of the lease. The deposit is forfeited in theunlikely event that the Lessee fails to honour itsobligations under the lease. Should the Lessee default,ARREIT can also claim rental from any sub-tenants.

ARREIT also requires a restoration deposit for industrialbuildings so that even specialised buildings can bemade tenantable quickly in case the current Lesseesvacate the premises.

HUMAN CAPITAL DEVELOPMENT

AmanahRaya-JMF benefits tremendously from thetransfer of knowledge resulting from Amanah Raya’sstrategic collaborations with global partners such asAsian Finance Bank, Kuwait Finance House, GoldmanSachs, Macquarie Group, Royal Bank of Scotland andSwiss-based Faisal Private Bank. It is through thesestrategic collaborations, rather than through organicgrowth, that the transfer of knowledge and expertisecan be achieved rapidly.

CONCLUSION

At the end of our first ten months of operation, we arebullish about our future growth story. We recognizethat, ultimately, the prosperity of ARREIT depends onour ability to attract high quality Lessees. Their successdetermines the success of ARREIT, and the quality ofour assets can only be maintained if our partnersperform well in their business. We are thereforecommitted to treating our Lessees as our partners inthe quest to develop ARREIT.

With this as our core philosophy, we look forward tothe coming year with confidence and dynamism.

Datuk Mohamed Azahari Mohamed Kamil6 February 2008

AMANAHRAYA REIT INVESTMENTCOMMITTEE MEMBERS


From left to right:

Tengku Dato’ Hasmuddin Tengku Othman

Dato’ Mani Usilappan

Datuk Yahya Ya’acob (Chairman)

Sudirman Masduki

Mahadzir Azizan

Datuk Yahya Ya’acobChairman

Datuk Yahya Ya’acob was appointed as an Independent

Investment Committee Member on 27 December 2006.

He has served in various positions in government

departments and ministries, including as the Secretary

General of the Ministry of Information and the Secretary

General of the Ministry of Works. His academic

qualifications include a Bachelor of Arts, a Diploma in

Public Administration and a Masters in Business

Management. He is a director of various companies,

including listed companies such as IJM Corporation

Berhad, LBI Capital Berhad and Damansara Realty

Berhad. He is also chairman of a number of companies,

including Rangkaian Segar Sdn Bhd, which is the

operator of the Touch ‘n Go electronic payment system.

AMANAHRAYA REIT INVESTMENTCOMMITTEE MEMBERS CONT’D


Dato’ Mani Usilappan

Dato’ Mani Usilappan was appointed as an

Independent Investment Committee Member on

27 December 2006. He is a member of the Royal

Institution of Chartered Surveyors. He has vast

experience in the field of property valuation. He holds

a Masters in Property Development from the Southbank

University in London. He was the Director General of

the Valuation and Property Services Department in

the Ministry of Finance. He has also held various posts

in various academic and professional institutions in

Malaysia, such as the President of the Institution

of Surveyors Malaysia. His current academic posts

include being an Adjunct Professor in University of

Malaya’s Faculty of Built Environment and Universiti

Tun Hussein Onn. In addition, he has written various

books and articles on property valuation. He is also

active in research and development in areas relating

to the property sector.

Tengku Dato’ Hasmuddin Tengku Othman

Tengku Dato’ Hasmuddin Tengku Othman was

appointed as an Independent Investment Committee

Member on 27 December 2006. He is a practicing

lawyer and is currently the principal partner of Messrs

Hisham, Sobri & Kadir. His areas of expertise include

the various expects of Islamic banking and finance,

corporate banking and project financing, corporate

matters, corporate Muamalat Islamic banking and

litigation as well as matters relating to Syariah. He is a

director of a number of companies, including Aliran

Ihsan Resources Berhad. He is also a member and

adviser to the Labuan Offshore Financial Services

Authority as well as an adviser to the Association of

Islamic Banking Institutions.

Mahadzir Azizan

Mahadzir Azizan was appointed as an Independent

Investment Committee Member on 27 December 2006.

He is a Barrister-at-law from Lincoln’s Inn, London.

He was called to the bar of England & Wales in 1978

and had served in various capacities in government

and private sector. He served as Federal Counsel

and Legal Adviser in the Ministry of Trade & Industry

in 1978-1979 after which he served as Assistant

Company Secretary / Legal Adviser of Malaysia

International Shipping Corporation Berhad (MISC).

In 1983 he joined Island & Peninsular Berhad

(“I&P”), a property development company within the

Permodalan Nasional Berhad (“PNB”) Group as Group

Company Secretary and Legal Adviser subsequently

he was promoted to Director, Corporate Affairs in

1994 and held the position until April 2007.

He currently sits on the Boards of various companies

namely ECM Libra Avenue Bhd, Avenue Invest Bhd,

TH Properties Sdn Bhd and Syarikat Takaful Malaysia

Berhad and was a member of the Board of Majlis

Amanah Rakyat (MARA) from 2000 to 2003.

Sudirman Masduki

Sudirman Masduki was appointed as a Non

Independent Investment Committee Member on

27 December 2006. He holds a Master of Business

Administration from Universiti Kebangsaan Malaysia

and he is a Fellow of the Association of Chartered

Certified Accountants, United Kingdom. He has vast

experience in the field of finance and accounting from

his service in Jabatan Akauntan Negara Malaysia and

the Inland Revenue Board of Malaysia. He was the

General Manager of Corporate Services responsible

for the overall function of the Finance and Accounts

Department, Information Technology Department,

Management Services Department and Human

Resource Department of Amanah Raya Berhad.


STATEMENT OF CORPORATE GOVERNANCE


STATEMENT OF CORPORATE GOVERNANCE

The AmanahRaya Real Estate Investment Trust (“ARREIT”) was established on 10 October

2006 pursuant to a trust deed (the “Deed”) entered into between AmanahRaya-JMF Asset

Management Sdn Bhd (“ARJMF” or the “Manager”) and CIMB Trustee Berhad (the “Trustee”).

ARREIT was listed on the Main Board of Bursa Malaysia Securities Berhad (“Bursa Securities”)

on 26 February 2007.

ARJMF as the Manager of ARREIT has established policies and procedures to ensure that

effective corporate governance is adopted throughout the organization and its activities.

ARJMF has an obligation to act professionally, with due care and diligence, and in the best

interest of ARREIT unitholders. This obligation ties in with the Manager’s responsibility in


DIRECTORS OF THE MANAGER

The Board

The Board of Directors of the Manager (the “Board”) is

responsible for the effective management and control

of the Manager.

The responsibility of the Board includes:

• Formulating corporate policies and strategies;

• Overseeing and evaluating the conduct of the

Manager’s activities;

• Identifying principal risks and ensuring the

implementation of appropriate systems to manage

these risk; and

• Reviewing and approving key matters such as

financial results, investments and divestments,

acquisitions and disposals, and other major

capital expenditure.

Board Balance

The Board currently has nine Directors, with an

alternate director, comprising three executive members

and six non-executive members. Three members of the

Board are independent to ensure compliance with the

requirement of at least one-third of the Board to be

independent.

The Chairman leads the Board and is responsible for

the vision and strategic direction of the Manager.

The Managing Director is responsible for implementing

the policies and decisions of the Board, overseeing the

day-to-day operations, setting the plan, direction,

benchmark and targets for the Manager, tracking the

compliance and progress of the operation, initiating

innovative business ideas to create competitive edge,

and developing asset enhancement strategies with the

aim of enhancing unitholder returns.

managing the assets and liabilities of ARREIT for the

benefit of unitholders, and the Manager will endeavour

to continue enhancing returns to unitholders.

In ensuring the implementation and operation of

good corporate governance, ARJMF is guided by the

measures recommended by the Securities Comission

Guidelines on Real Estate Investment Trusts (“SC’s

Guidelines”), the Malaysian Code on Corporate

Governance and the Listing Requirements of

Bursa Securities.

THE MANAGER OF ARREIT

ARREIT is externally managed by the Manager and as a

result has no employees. The Manager has appointed

experienced and well qualified personnel to manage its

day to day operations. All Directors and employees of

the Manager are remunerated by the Manager and not

by the Fund.

The Manager is responsible for the following:

• Developing business plans and strategic and

investment policies for ARREIT;

• Providing to the Board recommendations on the

acquisition, divestment or enhancement of

ARREIT’s assets;

• Monitoring compliance with all legislation, rules

and guidelines issued by the Securities Comission

(“SC”) and Bursa Securities as well as ARREIT's

Deed;

• Ensuring appropriate record keeping;

• Formulating risk management policies, and

supervising the Property Manager.

Board MeetingsBoard meetings are scheduled at least once everyquarter.

Since the listing of ARREIT on 26 February 2007, up to31 December 2007, three Board meetings were heldand the details of attendance are as follows:

Name AttendanceTan Sri Datuk (Dr) Arshad Ayub 3Datuk Mohamed Azahari Mohamed Kamil 3Tuan Haji Ahmad Kamal Abdullah Al-Yafii 2Datuk Mohamed Adnan Ali 3Dato’ Ahmad Rodzi Pawanteh 2Alina Hashim 1(as alternate Director to Dato’ Ahmad Rodzi Pawanteh)

Tuan Haji Rozan Mohd Sa’at 2Tai Siong Choi 3Sharizad Jumaat 2Dato’ Dr. Mohd. Irwan Serigar Abdullah 1(appointed on 29 November 2007)

Access to and Supply of Information and AdviceAll Board members are supplied with information in a timely manner. Board reports are circulated prior to Board meetings and the reports provide,among others, financial and corporate information,information on significant operational, financial andcorporate issues, and on the performance of ARREIT,and management proposals which require the approvalof the Board.

All directors have access to the advice and services of the Investment Committee, the Audit, RiskManagement & Compliance Committee, the RiskManagement Department, the Compliance & LegalDepartment, and the Company Secretary as well as to independent professional advisors.

Appointments to the BoardAll new nominations are assessed and approved by the entire Board in line with its policy of ensuringnominees are persons of sufficient calibre andexperience.

Additionally, the Manager, being a licensed FundManager under the purview of the SC, has to obtainpost-appointment approval from the SC for theappointment of any new members of the Board.

Committees under the BoardThe Board has established the following committees toassist it in discharging its duties in relation to ARREIT.The committees are:

• The Audit, Risk Management & ComplianceCommittee; and

• The Investment Committee.

AUDIT, RISK MANAGEMENT & COMPLIANCE COMMITTEE

The Audit, Risk Management & Compliance Committee(“ARCC”) was formed on 27 January 2006. It operatesunder authority delegated by the Board and in line with the Malaysian Code on Corporate Governanceand consists of three non-executive directors. The Chairman of the ARCC is a Fellow of the CharteredInstitute of Management Accountants and was theformer Accountant-General of Malaysia. As such he can effectively read, analyze and interpret financialstatements to effectively discharge the functions of the ARCC.

The duties and responsibilities of the ARCC include:

• Overseeing compliance with applicable laws and regulations;

• Ensuring the performance, qualifications andindependence of the external auditors and thatthe results of the internal and external auditfindings are brought to the highest level ofconsideration;

• Safeguarding the integrity of financial reporting;• Recognizing and managing risk; and• Identifying and recommending the

implementation of best practices in order to addvalue to the company.

INVESTMENT COMMITTEE

The Investment Committee ("IC") for ARREIT was formed on 4 August 2006. It operates under authoritydelegated by the Board and is represented by fully-independent members from various fields includinglegal and property.

STATEMENT OF CORPORATE GOVERNANCE CONT’D


The duties and responsibilities of the IC include:

• Reviewing, deliberating and deciding on any

investment made by ARREIT;

• Reviewing, assessing and deciding on any fund

raising exercise to be undertaken by the REIT;

• Reviewing and deliberating on the following

reports:

- Property Market and Outlook Report

- REIT Performance Report

- Statutory Report

• Reviewing compliance of ARREIT’s Investment

Policies & Guidelines.

ACCOUNTABILITY AND AUDIT

Financial Reporting

The Board is responsible for ensuring the proper

maintenance of accounting records for ARREIT and

that appropriate accounting policies are consistently

applied.

Internal Control

The Board has the overall responsibility of maintaining

a system of internal control which covers financial and

operational controls and risk management. The system

provides reasonable but not absolute assurance

against material misstatement of management and

financial information and against financial losses

and fraud.

Relationship with Auditors

An external auditor, independent of the Management

and Trustee, has been appointed. The appointment

was nominated by the Manager and approved by the

Trustee. The remuneration of the Auditor is approved

by the Trustee.

Compliance & Legal Department

The Manager, being a licensed fund manager, has a

registered compliance officer and a department

dedicated to working towards ensuring compliance

with all legislation, rules and guidelines issued by the

SC and Bursa Securities as well as ARREIT's Deed.

RELATED PARTY TRANSACTIONS AND CONFLICTS OF INTEREST

The Manager has established procedures to ensure

that related party transactions and conflict of interest

issues are handled in full compliance with the SC’s

Guidelines, ARREIT’s Deed and the Listing Requirement

of Bursa Securities.

The policies adopted by the Manager to deal with

potential conflict of interest issues include:

• Transactions being on an arm’s length basis and

on normal commercial terms which are no more

favourable than those extended to related third

parties;

• ARREIT's cash or other liquid assets being placed

in a current or deposit account of institutions

licensed or approved to accept deposits; and

• The Manager not acting as principal in the sale

and purchase of real estate, securities and any

other assets to and from ARREIT.

RISK ASSESSMENT AND MANAGEMENT OF BUSINESS RISK

The Manager operates within overall guidelines and

specific parameters set by the Board. Responsibility for

managing risk lies initially with the Risk Management

Department, working within the overall strategy

outlined by the Board.

COMMUNICATION WITH UNITHOLDERS

The Board acknowledges the importance of regular

communication with unitholders and investors via

annual reports, circulars and quarterly financial

reports. Various announcements were also made

during the period, giving unitholders and investors an

overview of ARREIT’s performance and operation.

Additionally, the Managing Director regularly meets

with analysts, institutional unitholders and investors.


AMANAHRAYA-JMF ASSETMANAGEMENT TEAM


From left to right

Sharizad Jumaat

Datuk Mohamed Azahari

Mohamed Kamil (Managing Director)

Tai Siong Choi

Mohd Zamri Shariff

Azlan Azizuddin


From left to right

Zaffarin Haji Zanal

Lee Wei Chung

From left to right

Tai Ai Ngoh

Rizal Abdullah

PROFILE OF THE BOARD OF DIRECTORS - malaysiastock.biz Alina Hashim (Alternate Director to Dato’...

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