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Report of the auditor on the Consolidated Financial Statements
We have audited the accompanying consolidated financial statements of Dar Al-Maal Al-Islami Trust
and its subsidiaries (the “Group”), which comprise the consolidated statement of financial position
as at 31 December 2011, and the consolidated statement of income, consolidated statement of
comprehensive income, consolidated statement of change in equity and consolidated statement of
cash flows for the year then ended, and a summary of significant accounting policies and other
explanatory notes.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with International Financial Reporting Standards (IFRS), and for such
internal control as management determines is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our
audit. Except as discussed below, we conducted our audit in accordance with International
Standards on Auditing. Those standards require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance about whether the consolidated financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the consolidated financial statements. The procedures selected depend on the
auditor’s judgment, including the assessment of the risks of material misstatement of the
consolidated financial statements, whether due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the Group’s preparation and fair presentation of the
consolidated financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s
internal control. An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of accounting estimates made by management, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our qualified audit opinion.
Basis for Qualified Opinion
As indicated in note 14 to the consolidated financial statements, on accounting for its acquisition
of a controlling stake in Ithmaar Bank B.S.C. (“Ithmaar”) during the year 2010, management
determined the fair value of the Group’s previously held interest on the basis of an independent
valuation which used an average of a peer group market analysis of similar banks listed on the
Bahrain stock exchange and a discounted cash flow, adjusted for an estimated control premium.
This methodology was accepted by management on the basis that it does not consider that an
active market existed for the shares of Ithmaar and therefore the quoted market price was ignored.
In our opinion, this valuation methodology was not in accordance with IFRS which stipulates that
the most recent transaction prices should be taken into consideration as an input in the valuation
model, unless it can be demonstrated that these transactions related to distressed sales. Had
the quoted market price been used as an input into what we believe is an acceptable valuation
methodology that market participants would consider in valuing the Group’s previously held in
interest in Ithmaar, this would have resulted in a valuation of US$ 483.6 million rather than
US$ 587.1 million, and led to a decrease in the consolidated retained earnings for the year ended
31 December 2011 and to a decrease in the consolidated net profit for the year ended 31 December
2010 in the amount of US$ 103.5 million and a corresponding decrease in goodwill and non-
controlling interests in the amounts of US$ 111.6 million and US$ 8.1 million respectively for
both years.
In addition, as indicated in note 3 to the consolidated financial statements, management determined
the value in use of Islamic Investment Company of the Gulf (Bahamas) Limited exceeded its
carrying value as at 31 December 2011 and as such no impairment has been recognised on the
related goodwill and intangible balances of US$ 32.2 million and US$ 23.2 million, respectively.
In our opinion, the attached financial statements have not properly disclosed nor considered the
significant uncertainty surrounding the valuation of the entity as a result of the performance of the
underlying funds under management. As such, there is a significant risk that the goodwill and
intangibles of a combined amount of US$ 55.4 million might be impaired.
Qualified Opinion
In our opinion, except for the effects of the matters described in the Basis for qualified opinion
paragraph above, the consolidated financial statements present fairly, in all material aspects, the
financial position of the Group as of 31 December 2011, and of its financial performance and its
cash flows for the year then ended in accordance with International Financial Reporting Standards.
PricewaterhouseCoopers SA
Alex Astolfi
Eric Maglieri
Geneva, 14 June 2012
REPORT OF THE AUDITOR
To the Bearers and Owners of Equity Participations of Dar Al-Maal Al-Islami Trust
11
Dar Al-Maal Al-Islami Trust
Annual Report 2011