DMIT Annual Report 2017

Dar Al-Maal Al-Islami Trust 4 CHAIRMAN’S MESSAGE Dear Participants, May the peace, blessings and mercy of Allah be upon you. On behalf of the Board of Supervisors, I am pleased to present the thirty-six annual report of Dar Al-Maal Al-Islami Trust for the financial year ended 31 December 2017. The Group continued to perform well during 2017, with notable achievements despite the persisting uncertainty in many of our markets and increasing level of headwinds in the MENA region. During 2017, there was a change at top management, commencing a new era of adherence to good corporate governance practices. Global economic growth has risen from 3.2% in 2016 to approximately 3.8% in 2017 and a further improvement to 3.9% is expected for the year 2018. The growth in advanced economies rebounded to around 2.2% in 2017, driven by investment recovery, external demand and continuation of loose monetary policies. Economic growth in Eurozone was stronger than forecast. The outlook for 2018 may appear a bit cloudy, particularly due to fear of trade barriers, though even on worse-case scenario the impact may be a reduction of 0.2% to 0.3% GDP growth in emerging markets and developing economies accelerated to 4.6% in 2017 primarily due to solid growth and a firming of commodity exports. However, there was a significant slowdown in GDP growth for the year in the GCC from 2.2% in 2016 to 0.5% in 2017. No doubt that growth was impacted by oil production cuts and fiscal consolidation mainly through spending cuts, which largely negated the positive impact on non-oil growth, which rose by 2.6% in 2017 from 1.8% in 2016. In 2017, the Group embarked on two major initiatives; cost rationalization and expansion in retail network in Pakistan, Egypt and Bahrain, pursuant to positioning Group in the market and capturing opportunities. The Group in 2017 managed to reduce the net loss attributable to Unit-holders to US$ 14.6 million from $36.4 million in 2016, due to improvement in operating income by 9.4%, to $ 256 million compared with $ 234 million in 2016. During 2017, the Group recognized an impairment of $ 112 million on its investment in Ithmaar Holding B.S.C. and resolved the write off of intangibles of $14.5 million arising from acquisition of the Islamic Investment Company of the Gulf (Bahamas) Limited, which is no longer supported by economic value, in addition to fair value adjustments on investments of $ 9 million. Accordingly, the Trust capital has decreased from $295 million at the end of 2016 to $289 million in 2017. The value of each participation unit decreased from $74.51 in 2016 to $73.06 in 2017. The Group continued to develop opportunities for clients and their communities. Considering the economic outlook and pursuing this strategy, maintenance of resources remains critical.