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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Formation and activities
Dar Al-Maal Al-Islami Trust (DMI)
was formed by indenture under
the laws of the Commonwealth of
The Bahamas for the purpose of
conducting business affairs in
conformity with Islamic law,
principles and traditions. DMI
subsidiaries and associates offer a
wide range of Islamic financial
services including investment,
commercial and private banking,
private equity, public and private
issue of securities, mergers and
acquisitions advice, takaful,
equipment leasing real estate
development and modarabas which
are similar to investment funds. The
modarabas, being separate entities,
do not have their funds consolidated
in the annexed financial statements.
They are included in off-balance
sheet accounts as disclosed in
note 33.
2. Accounting policies
The principal accounting policies
adopted in the preparation of these
consolidated financial statements
are set out below. These policies
have been consistently applied to
all the years presented, unless
otherwise stated.
Basis of preparation
The consolidated financial statements
of DMI and its subsidiaries
(the Group) are prepared in
accordance with International
Financial Reporting Standards
(IFRS) and IFRS interpretations. The
consolidated financial statements are
prepared under the historical cost
convention, as modified by the
revaluation of available-for-sale
financial assets, trading securities,
financial assets and financial
liabilities held at fair value through
profit or loss, derivative instruments
and investment property.
The preparation of financial
statements in conformity with IFRS
requires the use of certain critical
accounting estimates. It also requires
management to exercise its
judgement in the process of applying
the Group’s accounting policies. The
areas involving a higher degree of
judgement or complexity, or areas
where assumptions and estimates
are significant to the consolidated
financial statements, are disclosed in
note 3.
Impact of New Accounting
Pronouncements:
International Financial
Reporting Standards
New and amended
standards adopted by the
Group
The following new standards and
amendments to standards are
mandatory for the first time for the
financial year beginning 1 January
2011.
There are no IFRS or IFRIC
interpretations that are effective for
the first time for the financial year
beginning on or after 1 January
2011 that would be expected to
have a material impact on the
Group.
Annual improvement 2010 to
IAS 1, ‘Presentation of financial
statements’ – Clarifies that an entity
will present an analysis of other
comprehensive income for each
component of equity, either in the
statement of changes in equity or in
the notes to the financial statements.
Effective date 1 January 2011.
Applied retrospectively.
Amendment to IAS 24 – ‘Related
party disclosures’ (revised 2009) –
Amends the definition of a related
party and modifies certain
related-party disclosure requirement
for government-related entities.
Effective date 1 January 2011.
Annual improvement 2010 to IAS
27, ‘Consolidated and separate
financial statements’ – Clarifies that
the consequential amendments
from IAS 27 made to IAS 21, ‘The
effect of changes in foreign
exchange rates’, IAS 28,
‘Investments in associates’, and IAS
31, ‘Interests in joint ventures’,
apply prospectively for annual
periods beginning on or after
1 July 2009 or earlier when
IAS 27 is applied earlier. Applicable
to annual periods beginning on
or after 1 July 2010. Applied
retrospectively.
Amendment to IAS 32, ‘Financial
i ns t r umen t s : P r e s en t a t i on ’ –
Classification of rights issues’
Allows rights, options or warrants
to acquire a fixed number of the
entity’s own equity instruments for a
fixed amount of any currency to
be classified as equity instruments
provided the entity offers the rights,
options or warrants pro rata to all of
its existing owners of the same
class of its own non-derivative
equity instruments. Effective date
1 February 2010.
Annual improvement 2010 to
IFRS 3 ‘Business combinations’,
(a) Transition requirements for
contingent consideration from a
business combination that occurred
before the effective date of the
revised IFRS: Clarifies that the
amendments to IFRS 7, ‘Financial
instruments: Disclosures’, IAS 32
‘Financial instruments: Presentation’
and IAS 39, ‘Financial instruments:
Recognition and measurement’,
that eliminate the exemption for
contingent consideration, do not
apply to contingent consideration
that arose from business
combinations whose acquisition
dates precede the application of
IFRS 3 (as revised in 2008).
Applicable to annual periods
beginning on or after 1 July 2010.
Applied retrospectively.
(b) Measurement of non-controlling
interests: The choice of measuring
non-controlling interests at fair value
or at the proportionate share of the
acquiree’s net assets applies only to
instruments that represent present
ownership interests and entitle
their holders to a proportionate
share of the net assets in the event
of liquidation. All other components
of non-controlling interest are
measured at fair value unless
another measurement basis is
required by IFRS. Applicable to
annual periods beginning on or
after 1 July 2010. Applied
prospectively from the date the
entity applies IFRS 3.
(c) Un-replaced and voluntarily
replaced share-based payment
awards: The application guidance
in IFRS 3 applies to all share-
based payment transactions that
are part of a business combination,
including un-replaced and voluntarily
replaced share-based payment
18
Dar Al-Maal Al-Islami Trust
Annual Report 2011