DMIT Annual Report 2017

N OTES TO THE C ONSOLIDATED F INANCIAL S TATEMENTS (Thousands of US dollars) Dar Al-Maal Al-Islami Trust 77 34. Funds under management Islamic Investment Company of the Gulf (Bahamas) Limited (“IICG”), a subsidiary of the Group, as the Fund Manager, manages Funds Under Management (FUM) totalling USD 2.1 billion (2016: USD 2.2 billion) of which USD 1.7 billion (2016: USD 1.8 billion) has been marketed in Saudi Arabia by the Private Offices of His Royal Highness Late Prince Mohamed Al Faisal Al Saud. In February 2016, IICG communicated to its investors in Saudi Arabia that it intended to wind up IICG’s Funds Under Management (“FUM”) in Saudi Arabia as the regulator, Capital Markets Authority (“CMA”), declined to grant any exemptions with respect to the registration and transfer of such FUM to a CMA registered subsidiary of IICG. The FUM has commenced distribution of the disposal proceeds of the underlying assets to the investors as and when such proceeds are realised. The final liquidation proceeds will only be known upon completion of the liquidation process which may take several years. As a part of winding up of the operations, IICG’s management recognises that claims may be initiated against IICG by investors who are unlikely to recover the full value of their investments. As of the date of these financial statements, eighty two investors (2016: thirty nine) have filed legal claims in Saudi Arabian courts against IICG claiming refund of the full value of their investments totalling to USD 23.3 million (2016: USD 6.9 million). Of the eighty two legal cases, the court has rendered judgment in fifteen legal claims (2016: one) amounting to USD 2.5 million (2016: USD 0.13 million). IICG has challenged such judgments in the Appeal Court. The Appeal Court has rendered its judgement in two cases amounting to USD 0.2 million (2016: Nil). IICG has challenged the judgement of the Appeal Court in the Royal Court. The Royal Court has referred one appeal amounting to USD 0.13 million to Supreme Court for further consideration. Management believes that the risk of loss arising from these or similar claims attaching to the IICG’s FUM activities is less than probable because of the uncertainty surrounding the interpretations of the underlying agreements used for FUM activities. The value of future claims of similar nature cannot be reasonably estimated. Therefore, IICG does not carry any provision for any such claims. 35. Retirement benefit plans The Group has a set retirement benefit plan. The assets of the funded plans are held in separate trustee administered funds. These plans are valued by independent actuaries every year using the projected unit credit method. For the other subsidiaries within the Group, defined contribution plan applies. The table below outlines the group’s post-employment amounts and activity included in the financial statements. 2017 2016 Balance sheet obligations for pension benefits (448) 3,629 Income statement charge for pension benefits (2,369) 1,188 Remeasurements for pension benefits (4,045) (3,872) The amounts recognised in the balance sheet are determined as follows: 2017 2016 Present value of funded obligations 41,655 43,179 Fair value of plan assets (42,104) (39,550) Deficit of funded plans (448) 3,629 Liability in the balance sheet (448) 3,629