Microsoft Word - DMIT FINANCIAL STATEMENTS 2025-Final draft.

Dar Al-Maal Al-Islami Trust NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 in thousands of USD 35 4. Financial instruments (continued) B. Financial risk management (continued) iii. 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its payment obligations associated with its financial liabilities when they fall due and to replace funds when they are withdrawn.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 constantly monitors the liquidity mismatch arising in the normal course of the business. Periodic stress tests are carried out on liquidity positions to assess the ability of the Group to meet its liquidity mismatch. The stress testing also incorporates judgement based behavioural approach for various sources of funding, estimated inflows from disposal of assets. The table below presents the cash flows payable by the Group under financial liabilities by remaining contractual maturities or settlement dates at the statement of financial position date. The amounts disclosed in the table are the contractual undiscounted cash flows (except for long term lease liabilities), whereas the Group manages the inherent liquidity risk based on expected cash inflows. At 31 December 2025 Up to one month One- three months Three- twelve months One-five years Over five years Total Liabilities Due to customers 4,744,295 410,392 503,637 58,437 209,119 5,925,880 Due to banks and financial institutions 290,407 122,112 65,726 119,455 510,905 1,108,605 Derivative financial instruments - - 1,064 - 1,064 Deferred income - - 8,109 - 8,109 Accounts payable 120,727 119,196 41,009 16,975 70,376 368,283 Total liabilities liquidity risk 5,155,429 651,700 619,545 194,867 790,400 7,411,941