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 10b34 Related party transactionsRelated party transactions are entered on terms approved by the group’s management. Significantrelated party transactions and balances included in the consolidated financial statements are asfollows:200611112200511112KD ‘000 KD ‘000Balance sheetDue from associates and joint ventures (see note 17) .............................. 3,234 2,285Due from Key management personnel ...................................................... 312 539Income statementProfit on partial disposal of subsidiaries .................................................... 2,904 –Purchase of raw materials........................................................................ 8,248 7,157Compensation of key management personnel of the groupShort term employee benefits .................................................................... 3,338 6,338End of service benefits .............................................................................. 511 879Cost of share based payments .................................................................. 58 1,25435 Contingent liabilitiesAt 31 December 2006 the group had contingent liabilities in respect of outstanding bankguarantees amounting to KD1,774 thousand (2005: KD328 thousand).36 Fiduciary assetsOne of the subsidiaries of the group manages portfolios on behalf of related and third parties, andmaintains securities in fiduciary accounts which are not reflected in the group’s balance sheet.Assets under management at 31 December 2006 amounted to KD10,974 thousand (31 December2005 : KD7,745 thousand) of which assets managed on behalf of related parties amounted toKD5,438 thousand (31 December 2005 : KD1,544 thousand).37 Capital commitmentsAt the balance sheet date the group had commitments for the purchase of investments and theacquisition of property, plant and equipment totalling KD57,092 thousand (2005: KD16,966thousand).38 Fair value of financial instrumentsFair value represents amounts at which an asset could be exchanged or a liability settled on anarm’s length basis. In the opinion of the group’s management, except for certain available for saleinvestments which are carried at cost less impairment for reasons specified in Note 2 to thefinancial statements (under the heading “Estimation uncertainty”) the carrying amounts offinancial assets and liabilities as at 31 December 2006 and 2005 approximate their fair values.39 Comparative amountsCertain comparative amounts have been reclassified in order to conform with the presentation forthe current year. Such reclassifications do not affect previously reported net profit or equity.F-47
Level: 8 – From: 8 – Thursday, August 9, 2007 – 2:20 pm – mac5 – 3776 Section 10c : 3776 Section 10cAuditors’ reportTo the shareholders ofNational Industries Group Holding – SAKKuwaitWe have audited the accompanying consolidated balance sheet of National Industries GroupHolding (A Kuwaiti Shareholding Company) “the parent company” and Subsidiaries “the group” asat 31 December 2005, and the related consolidated statements of income, changes in equity andcash flows for the year then ended. These consolidated financial statements are the responsibilityof the parent company’s management. Our responsibility is to express an opinion on theseconsolidated financial statements based on our audit.We conducted our audit in accordance with International Standards on Auditing. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether theconsolidated financial statements are free of material misstatement. An audit includes examining,on a test basis, evidence supporting the amounts and disclosures in the consolidated financialstatements. An audit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion.In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of National Industries Group Holding – SAK and Subsidiaries as at 31 December2005, and the results of its operations and its cash flows for the year then ended in accordancewith International Financial Reporting Standards.Furthermore, in our opinion proper books of account have been kept by the parent company andthe consolidated financial statements, together with the contents of the report of the board ofdirectors relating to these consolidated financial statements, are in accordance therewith. Wefurther report that we obtained all the information and explanations that we required for thepurpose of our audit and that the consolidated financial statements incorporate all information thatis required by the Commercial Companies Law of 1960, as amended, and by the parent company’sarticles of association, that an inventory was duly carried out and that, to the best of ourknowledge and belief, no violations of the Commercial Companies Law, as amended, nor of theparent company’s articles of association have occurred during the year ended 31 December 2005that might have had a material effect on the business of the group or on its financial position.Anwar Y. Al-Qatami, F.C.C.A.(Licence No. 50-A)of Grant Thornton – Anwar Al-Qatami & Co.Abdullatif A.H. Al-Majid(Licence No. 70-A)of Allied AccountantsKuwait18 March 2006F-48
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NIG Prospectus - London Stock Exchange

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