NIG Prospectus - London Stock Exchange

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Level: 8 – From: 8 – Thursday, August 9, 2007 – 2:20 pm – mac5 – 3776 Section 10b : 3776 Section 10bA reconciliation of the movement in the liability/ (asset) for defined benefit pension schemeappears as follows:Consolidated balance sheet200611112200511112KD ‘000 KD ‘000Brought forward liability/(asset) .................................................................. 504 (666)Consolidated statement of income (net) .................................................... 398 1,642Contributions .............................................................................................. (404) (491)Increase in unrecognisable asset................................................................ 6 6Foreign exchange adjustment .................................................................... 63111121311112Carried forward liability (Note 26) .............................................................. 567 1111250411112Reconciliation of consolidated balance sheet liability200611112200511112KD ‘000 KD ‘000Present value of obligations........................................................................ 32,830 30,363Fair value of plan assets ............................................................................ (26,842) (23,013)Net plan deficit............................................................................................ 5,988 7,350Unrecognised actuarial losses .................................................................... (5,760) (7,142)Unrecognisable asset.................................................................................. 3391111229611112Net liability recognised in the consolidated balance sheet (Note 26) ........ 567 1111250411112Changes in the present value of the defined benefit obligation200611112200511112KD ‘000 KD ‘000Opening defined benefit obligation ............................................................ 30,363 36,421Interest cost................................................................................................ 1,410 1,613Actuarial (losses)/gains................................................................................ (1,502) 3,326Liabilities extinguished on settlement ........................................................ – (5,594)Benefits paid .............................................................................................. (1,173) (1,079)Foreign exchange adjustment .................................................................... 3,73211112(4,324)11112Closing defined benefit obligation .............................................................. 32,830 1111230,36311112F-43
Level: 8 – From: 8 – Thursday, August 9, 2007 – 2:20 pm – mac5 – 3776 Section 10b : 3776 Section 10bChanges in the fair value of the plan assets200611112200511112KD ‘000 KD ‘000Opening fair value of plan assets................................................................ 23,013 27,734Expected return .......................................................................................... 1,243 1,453Actuarial gains ............................................................................................ 400 1,893Assets distributed on settlements.............................................................. – (4,195)Contributions by employer.......................................................................... 404 491Benefits paid .............................................................................................. (1,173) (1,079)Foreign exchange adjustment .................................................................... 2,95511112(3,284)11112Closing fair value of plan assets ................................................................ 26,842 1111223,01311112The fair value of the plan assets, category is as follows:200611112200511112KD ‘000 KD ‘000Plan assets:Equities ...................................................................................................... 13,070 9,382Bonds ........................................................................................................ 13,524 13,267Other assets .............................................................................................. 248111123641111226,842 1111223,0131111232 Risk managementCredit riskThe group is exposed to credit risk in respect of losses that would be recognised if counter partiesfail to perform as contracted. The group’s exposure to credit risk is primarily in respect of bankbalances, short-term deposits and accounts receivable and other assets. The group’s bankbalances and short-term deposits are placed with high credit quality financial institutions, whilstaccounts receivable and other assets are presented net of appropriate provisions.Interest rate riskThe group’s short-term deposits earn interest at an average rate of 6.75% (2005 : 4.25%) perannum. The bank balances earn interest at an average rate of 2.5% (2005: 2.5%) per annum. Thedue to banks are repayable upon demand and bear average interest rate of 1.5% (2005: 1.5%) perannum over the Central Bank of Kuwait and Bank of England discount rate. Lease creditors bearinterest at fixed rates and the average rate during the year was 6.5% (2005 : 6.5%). The group isalso exposed to interest rate risk on bonds payable, long-term borrowing and short-termborrowings (see notes 24, 25 and 28).Market riskMarket risk is the risk that the value of a financial instrument will fluctuate as a result of changesin market prices, whether those changes are caused by factors specific to the individual security,or its issuer, or factors affecting all securities traded in the market.The group is exposed to market risk with respect to its investments.The group limits market risk by maintaining a diversified portfolio and by continuous monitoring ofdevelopments in local and international equity and bond markets. In addition, the group activelyF-44
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NIG Prospectus - London Stock Exchange

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