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Dar Al-Maal Al-Islami (DMI) Trust is an Islamic financial institution founded in 1981. It was formed by Indenture under the laws of the Commonwealth of the Bahamas. It has an extensive network stretching over four continents, with its administrator, Dar Al-Maal Al-Islami S.A. located in Geneva. DMI operates in three financial business sectors: Islamic Banking. Islamic investment and Islamic insurance and re-insurance. Trust capital consists of 2.97 million Participation Units, each with a book value of US$72.54 (1999: US$75.60). The Year in Brief Net loss for the year to 31 December 2000 was US$9.5 million, US$21.8 million less than the US$12.3 million profit in 1999. The Group operated in difficult external economic conditions, and experienced difficulties in sourcing suitable investment and financing opportunities. In addition, valuations within the existing investment portfolio were reduced, reflecting stock market declines. Total income was down by 12.1% at US$149.9 million (1999: US$170.5 million). Within this total, short-term investment income was 39.7% lower at US$44.1 million (1999: US$73.0 million), due partly to mark-downs in capital market investments and a reduced deposit base in Pakistan, while income from fees and commissions was 28.8% lower at US$16.3 million (1999: US$22.9 million), largely due to lower activity in investment banking. More positively, income from fund management and services was 28% higher at US$40.8 million (1999: US$31.8 million) and long-term investment income was 13.2% higher at US$47.5 million (1999: US$41.9 million). After income distributions to account holders of US$70.6 million (1999: US$77.5 million), Operating Income was US$13.7 million or 14.8% lower at US$79.3 million (1999: US$93.0 million). Total Expenses were 1.5% or US$0.99 million higher, with personnel expense 6% higher at US$40.0 million (1999: US$37.7 million). The average number of employees was 979 (1999: 992). The ratio of total expense to operating income was 85.12 (1999: 71.49). No dividend is proposed for the year (1999: US$9.7 million). The fiduciary risk reserve established in the financial years 1998 and 1999 amounting to US$1.234 million was not increased during the year. The effect of taxation was a material component of the net loss, with a charge of US$3.7 million incurred, primarily from operations in Pakistan. The comparative figure in 1999 was a tax credit of US$4.7 million Business Highlights A major restructuring program was undertaken during the year, to address the material concerns relating to the need for additional investment in staff and technology to ensure that financial products offered are of the highest quality, and competitive in the marketplace. The strategy is to streamline the Group to concentrate resources in areas of strength and competitive advantage. The merger of the Group's two main banking subsidiaries in Bahrain was completed in June, with the establishment of Shamil Bank of Bahrain E.C., with the Group holding a 60% interest. The investment in Faisal Finance (Maroc) S.A. was sold to a modaraba managed by the Group, while the shareholdings in the Group's Takafol interests were reorganised. Marketing activities in Saudi Arabia were also reorganised, with the establishment of a unified sales organisation distributing Group products throughout the Kingdom. The Islamic Investment Company of the Gulf, Sharjah and Bahamas had a successful year, concentrating on investment management and structured finance, as did Faysal Bank Limited and Al-Faysal Investment Bank Limited, the Group's two subsidiaries in Pakistan.
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