DMIT_Annual_Report_2018_EN

Dar Al-Maal Al-Islami Trust 10 Index to the Consolidated Financial Statements Independent auditors’ report 11 Consolidated statement of financial position 14 Consolidated statement of income 15 Consolidated statement of comprehensive income 16 Consolidated statement of changes in equity 17 Consolidated statement of cash flows 18 Notes to the Consolidated Financial Statements 1. Formation and activities 21 2. Accounting policies 21 Basis of preparation 21 Impact of new accounting pronouncements and amended standards adopted 21 New and amended standards and interpretations 25 Summary of significant accounting policies 25 Measurement methods 25 Consolidation 26 Foreign currency translation 27 Derivative financial instruments and hedging 28 Income from investments with Islamic institutions and investments in financings 28 Fee and commission income 28 Sale and repurchase agreements 28 Accounting policies applied until year end 2017 28 Financial assets 28 Offsetting financial instruments 29 Impairment of financial assets 29 Impairment of non-financial assets 31 Intangible assets 31 Investment property 31 Property, plant and equipment and depreciation 31 Leases 32 Provisions 32 Non-current asset held for sale 32 Discontinued operations 33 Due to banks and financial institutions 33 Borrowings 33 Financial liabilities 33 Insurance liabilities 33 Retirement benefit plans 33 Taxation 34 Deferred income taxes 34 Trust capital and treasury stock 34 Acceptances 34 Cash and cash equivalents 34 Fiduciary activities 34 Accounting policies applied as of 1 January 2018 35 Financial assets 35 Financial liabilities 36 Financial guarantee contracts and loan commitments 37 3. Critical accounting estimates and judgements in applying accounting policies 37 Measurement of expected credit loss allowance 37 Fair value and impairment of available-for- sale equity investments 37 Fair value of investment properties 38 Income taxes 38 Consolidation of entities in which the Group holds less than 50% 38 Provisions 38 Impairment of associated companies 38 Estimated impairment of goodwill 38 Classification of financial assets 39 4. Financial instruments 39 Strategy in using financial instruments 39 Capital management 39 Financial risk management 40 Credit risk 40 Market risk 47 Liquidity risk 51 5. Cash and cash equivalents 55 6. Trading securities 55 7. Investments in financings 55 8. Collateral received and re-pledged 56 9. Allowance account from credit losses 57 10. Investment securities 58 11. Fair value of financial instruments 58 12. Accounts and other financial assets 62 13. Investment property 62 14. Fair values of land and buildings 63 15. Investments in associates 70 16. Property, plant and equipment 75 17. Intangible assets 76 18. Assets classified as held for sale 77 19. Accounts payable 77 20. Tax liability 78 21. Due to customers, banks and other financial institutions 78 22. Provisions 79 23. Collateralised borrowings 79 24. Net trading income 79 25. Income from investments in financings 79 26. Fee and commission income 80 27. Income from investments 80 28. Other income 80 29. Staff costs 80 30. General and administrative expenses 80 31. Proposed dividend 81 32. Taxes 81 33. Non-controlling interests 82 34. Funds under management 84 35. Retirement benefit plan 84 36. Related party transactions and balances 88 37. Contingent liabilities and commitments 89 38. Current and non-current assets and liabilities 90 39. Concentration of assets and liabilities 91 40. Maturities of assets and liabilities 93 41. Currency exposure 94 42. Trust capital 95 43. Date of authorisation for issue 95 44. Principal subsidiaries 95 45. Capital management 95 46. Contingency reserve 95