According to the report no significant remarks have been noted to impact the alignment of the Company’s operation with Shariaa and its classification according to the Shariaa Standard (21) issued by the Accounting & Auditing Organization for Islamic Financial Institution (AAOIFI) and pursuant to Shariaa opinion issued by the consultancy Shariaa Committee for the Council of Saudi Chambers. Below a summary of the main points discussed in the Shariaa Review Report:

The Company’s main activity in the manufacturing and trading of gold and diamonds jewelry is considered fundamentally compliant with the Shariaa requirements and there are no significant notes that can affect its classification according to the Shariaa standard.

The consolidated interim financial statements have been reviewed and the results of the examination did not show any prohibited proceeds from the cash balances at banks.

All the company’s finance and credit facilities through the banks during the reviewed period are fully compliant with the Shariaa provisions.

Cash sales through the company’s retail outlets, as well as the wholesale cash sales are compliant with the Shariaa requirements.

Regarding the credit wholesale for jewelry, L’azurde Company for jewelry has adopted the view of Shaykh al-Islam Ibn Taymiyah. This view has also been adopted by several modern scholars some of them are members of the Accounting & Auditing Organization for Islamic Financial Institution (AAOIFI). They all believe that gold jewelry can be traded on credit basis without compromising the compliance of the Company with neither the Shariaa provisions nor its classification according to the Shariaa Standard.

Worthy to mention that this shariaa approach that allows dealing in gold jewelry on credit has been confirmed through issued Shariaa opinion on 12 May 2019 by Shariaa committee consisting of five high scholars specialized in the jurisprudence of Islamic financial transactions. This committee has been appointed by the Council of Saudi Chambers for consideration of a number of inquiries made by the Committee of Precious Metals and Precious Stones regarding the dealing in gold jewlery through credit transactions.

In the light of the above, a number of local Islamic banks in 2019 amended their Shariaa classification of the shares of L’azurde Company and included it in the list of Shariaa compliance of listed companies in the Saudi market allowing customers to trade the share of L’azurde Company through their banking platforms.

“Al Sayari” will continue to examine and review the Company’s operations to confirm they continue to be comply with the Shariaa provisions. “Al Sayari” will achieve this while performing the required auditing to assess the compliance of the Company with the policies, procedures, controls and requirements of the Shariaa institutions and notify in case there is any improper implementation in that regard.