DMIT_Annual_Report_2018_EN

N OTES TO THE C ONSOLIDATED F INANCIAL S TATEMENTS (Thousands of US dollars) Dar Al-Maal Al-Islami Trust 50 Price risk Price risk is the risk that the fair values of the equities or the managed funds increase or decrease as a result of changes in the corresponding value of equity indices or the value of individual equity stocks held at fair value through other comprehensive income. The table below summarises the impact of increase/decrease of equity indices on the Group’s post tax profit for the year and on other components of equity. The analysis is based on the assumptions that equity indices increased/decreased by 10% with all other variables held constant and all the Group’s equity instruments moved according to the historical correlation with the indices. Other components of equity 2018 2017 Pakistan stock exchange (+/-10%) 4,615 3,233 Cairo stock exchange (+/-10%) 525 454 Impact on post tax profit 2018 2017 Bahrain Bourse (+/-10%) 136 122 Saudi Stock exchange (+/-10%) 437 432 F. Liquidity risk Liquidity risk is the risk that the Group is unable to meet its payment obligations associated with its financial liabilities when they fall due and to replace funds when they are withdrawn. The consequence may be the failure to meet obligations to repay investors and fulfil commitments to lend. Liquidity risk management process The Group’s liquidity risk management process, as carried out within the Group and monitored by management in individual entities within the Group, includes: (i) Day-to-day funding, managed by monitoring future cash flows to ensure that requirements can be met. This includes replenishment of funds as they mature or are borrowed by customers. The Group maintains an active presence in money markets to enable this to happen; (ii) Maintaining a portfolio of highly marketable assets that can easily be liquidated as protection against any unforeseen interruption to cash flow; (iii) Monitoring statement of financial position liquidity ratios against internal and regulatory requirements; and (iv) Managing the concentration and profile of debt maturities. Monitoring and reporting of treasury and capital market maturities is done through monitoring of daily maturities. Similarly the overall liquidity maintenance is done through monthly maturity gap analysis at balance sheet level. Hence, monitoring and reporting takes the form of regular and periodic cash flow measurement and projections. The starting point for those projections is an analysis of the contractual maturity of the financial liabilities and the expected collection date of the financial assets. The Group also monitors unmatched medium term assets.