AL-SALAM REIT ANNUAL REPORT 2018

AL-SALĀM REIT ANNUAL REPORT 2018 114 1. CORPORATE INFORMATION Al-Salām Real Estate Investment Trust (the “Fund”) is a Malaysian domiciled Islamic Real Estate Investment Trust constituted pursuant to a Trust Deed dated 26 March 2015 between the Fund, Damansara REIT Managers Sdn Berhad (“the Manager”) and AmanahRaya Trustees Berhad (“the Trustee”). The Trust Deed was registered with the Securities Commission Malaysia (“SC Malaysia”) on 30 March 2015. The Fund is regulated by the Capital Markets and Services Act, 2007, SC Malaysia Guidelines on Real Estate Investment Trusts and Islamic Real Estate Investment Trusts (“the SC Guidelines”), the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Malaysia”), the Rules of the Depository, and taxation laws and rulings of Malaysia. The Fund will continue its operations until such time as determined by the Trustee and the Manager as provided under the provisions of the Trust Deed. The Fund commenced its business operations on 6 May 2015 and was listed on the Main Market of Bursa Malaysia on 29 September 2015. The principal activity of the Group and of the Fund is to invest in Shariah-compliant properties with the primary objective of providing unitholders with regular and stable income distributions, sustainable long term unit prices and distributable income and capital growth, while maintaining an appropriate capital structure. On 1 March 2018, the Fund has set up a wholly-owned subsidiary, ALSREIT Capital Sdn. Bhd., a company incorporated in Malaysia. The registered office of the Manager is located at Level 16, Menara KOMTAR, Johor Bahru City Centre, 80000 Johor Bahru, Johor, Malaysia. The principal place of business of the Manager is located at Unit 1-19-02, Level 19, Block 1, V SQUARE, Jalan Utara, 46200 Petaling Jaya, Selangor, Malaysia. The Fund has entered into several service agreements in relation to the management of the Fund and its property operations. The fees structure of these services is as follows: (a) Property manager’s fees Under a Property Management Agreement dated 6 May 2015 between the Fund, the Manager and Exastrata Solutions Sdn Bhd (“the Property Manager”), the Property Manager is entitled to receive property manager’s fees. The property manager’s fee was RM7,000 (excluding GST) per month for the months of May 2015 to August 2015. The property manager’s fee was increased to a ixed fee of RM22,500 (excluding GST) per month upon the listing of the Fund on the Main Market of Bursa Malaysia and on the completion of all acquisitions of investment properties by the Fund (Note 11) in 2015. Efective on 1 September 2018, Government of Malaysia has introduce the Sales and Service Tax (“SST”) whichwill supersede the GST implementation. During the period of 1 September to 31 December 2018, the property manager’s fee is subject to SST of 6%. The property manager’s fee for the current inancial year is RM270,000 (2017: RM270,000). (b) Manager’s fees Pursuant to the Trust Deed dated 26 March 2015, the Manager is entitled to receive the following fees from the Fund: (i) A base management fee of up to 1% per annum of total asset value (excluding cash and bank balances) of the Fund calculated on a monthly accrual basis. The Manager’s base management fee for the current inancial year is RM1,503,100 (2017: RM2,341,523). Notes To The Financial Statements For The Financial Year Ended 31 December 2018