1. The Internal Shari`ah Supervisory Committee shall prepare an annual Shari`ah report to be presented to the general assembly of the Islamic Financial Institution. The report shall be prepared in accordance with the template specified by the Higher Shari`ah Authority, and shall indicate the extent the management of such an institution is in compliance with the rules and principles of Islamic Shari`ah, in all activities and business it conducts, the products it offers, contracts it enters into, and the documentation it uses. It also includes all regulations, policies, procedures, accounting standards, technical and automated systems, electronic and digital applications, work charters, and codes of ethics that it implements. 2. The report referred to in item (1) of this article shall include the following: a. A statement on the extent of independence of the Internal Shari`ah Supervisory Committee when discharging its mandates. b. A statement on the extent of compliance of the concerned institution with the rules and principles of the Islamic Shari`ah during the financial year ending in regards to policies and regulations, accounting standards, financial products and services, operations and activities in general, together with the memorandum, articles of association, and financial statements of the concerned institution. c. The extent to which the distribution of profits, bearing of losses, costs, and expenses among shareholders and investment account holders, are in compliance with the rules and principles of the Islamic Shari`ah. d. A statement on the breaches of Islamic Shari`ah rules and principles and confirmation that corrective measures, if any, have been undertaken by the concerned institution. e. A statement of the extent of the concerned institution’s compliance with the resolutions and fatwas of the Higher Shari`ah Authority and the Internal Shari`ah Supervisory Committee. 3. The Internal Shari`ah Supervisory Committee’s report shall be submitted to the Higher Shari`ah Authority for approval before being presented to the concerned institution general assembly.
Interpretation and application must be checked against the official text and current version.