Notes to the Consolidated Financial Statements
(Thousands of US dollars)
35
Dar Al-Maal Al-Islami Trust
Annual Report 2012
4. Financial instruments
(continued)
E. Market risk
The Group takes on exposure to
market risks, which is the risk that
the fair value or future cash flows of
a financial instrument will fluctuate
because of changes in market
prices. Market risks arise from open
positions in currency, equity, profit
rate and other products, all of which
are exposed to general and specific
market movements and changes in
the level of volatility of market rates
or prices such as profit rates, credit
spreads, foreign exchange rates and
equity prices. The Group separates
exposures to market risk into either
trading or non-trading portfolios.
The market risks, arising from
trading and non-trading activities,
are monitored by individual entities
within the Group. Regular reports
are submitted to management.
Investments in financings and receivables past due but not
impaired
Investments in financings and receivables less than 90 days past due are
not considered impaired, unless other information is available to indicate
the contrary. The gross amount of investments in financings by class and
receivables that were past due but not impaired were as follows:
2012
Investments in financings
Banks and other
Government/
Corporate
Financial
Agricultural Consumer
Public
Other
Accounts Total
financing institutions financing financing
financing financing receivable
Past due up to 30 days
-
-
-
20
-
-
286 306
Past due from 31 to 90 days
650
-
21 844
-
-
2,747 4,262
Past due greater than 90 days 30,419
-
-
2,533
-
-
830 33,782
Total
31,069
-
21 3,397
-
-
3,863 38,350
Fair value collateral
94,618
-
8,365 9,151
-
-
- 112,134
2011
Past due up to 30 days
232,043
- 13,575 6,683
-
-
79 252,380
Past due from 31 to 90 days
93,394
-
825 4,445
-
-
5,038 103,702
Past due greater than 90 days 24,117
-
-
8,449
-
28 2,032 34,626
Total
349,554
- 14,400 19,577
-
28 7,149 390,708
Fair value collateral
474,319
- 71,870 25,389
-
-
- 571,578
The collateral comprises $111.4 million (2011: $ 571.6 million) relating to
financings of $66.6 million (2011: $355.6 million) where the coverage of
client exposure is 100% or greater; and $0.7 million (2011: $Nil million)
relating to financings of $7.2 million (2011: $Nil million) where the coverage
is less than 100%.
Upon initial recognition of investments in financings, the fair value of collateral
is based on valuation techniques commonly used for the corresponding assets.
In subsequent periods, the fair value is updated by reference to market price or
indexes of similar assets.
