NIG Prospectus - London Stock Exchange

Level: 8 – From: 8 – Thursday, August 9, 2007 – 2:20 pm – mac5 – 3776 Section 10b : 3776 Section 10bFor the parent company and the local subsidiaries the provision for staff indemnity is computedbased on employees’ accumulated periods of service at the balance sheet date in accordance withthe Kuwait labour law for the private sector and the companies’ bye-laws.Provision for land fill expensesProvision for land fill expenses is calculated based on the expected cost which is required torestore the leased sites, used by the group for extracting raw materials for its operations, to itsoriginal condition.PensionsContributions are paid to both defined benefit and defined contribution pension schemes inaccordance with the recommendations of independent actuaries and advisers.Defined contribution schemesContributions to defined contribution schemes are charged to the consolidated statement ofincome on an accrual basis.Defined benefit schemesIn respect of defined benefit schemes a defined benefit liability (or asset) is recognised in theconsolidated balance sheet and it is calculated as the present value of the defined benefitobligation using the projected unit credit method plus any unrecognised actuarial gains or lossesless any past service cost not recognised less the market value of the plan assets.Pension expense is charged to the consolidated statement of income and is calculated as theaggregate of current service cost (using the projected unit credit method), an interest cost on thediscounted defined benefit obligation, the expected return on plan assets, recognised actuarialgains and losses, recognised past service costs and the effect of curtailments or settlements.Defined benefit schemes (continued)Actuarial gains or losses are recognised as income or expense if the net cumulative unrecognisedactuarial gains or losses at the end of the previous reporting period exceeded the greater of:– 10% of the present value of the defined benefit obligations; and– 10% of the fair value of plan assets.The portion of actuarial gains and losses recognised, is the excess determined above, divided bythe expected average remaining service lives of scheme employees of 18 years.Fiduciary assetsAssets held in a trust or fiduciary capacity are not treated as assets of the group and, accordingly,they are not included in these consolidated financial statements.Foreign currenciesFunctional and presentation currencyThe consolidated financial statements are presented in Kuwaiti Dinars, which is the parentcompany’s functional and presentational currency. Each entity in the group determines its ownfunctional currency and items included in the financial statements of each entity are measuredusing that functional currency.F-28