NIG Prospectus - London Stock Exchange

More documents

Recommendations

Info

Level: 8 – From: 8 – Thursday, August 9, 2007 – 2:20 pm – mac5 – 3776 Section 10c : 3776 Section 10cNotes to the consolidated financial statements31 December 20051 Incorporation and ActivitiesNational Industries Group Holding – SAK (‘the parent company’) was incorporated in 1961 as aKuwaiti shareholding company in accordance with the Commercial Companies Law in the State ofKuwait and in April 2003, its status was transformed to a ‘Holding Company’. The parentcompany’s shares are traded on the Kuwait <strong>Stock</strong> <strong>Exchange</strong>.The main objectives of the parent company are as follows:– Owning stocks and shares in Kuwaiti or non-Kuwaiti shareholding companies and shares inKuwaiti or non-Kuwaiti limited liability companies and participating in the establishment of,lending to and managing of these companies and acting as a guarantor for these companies.– Lending money to companies in which it owns 20% or more of the capital of the borrowingcompany, along with acting as guarantor on behalf of these companies.– Owning industrial equities such as patents, industrial trade marks, royalties, or any otherrelated rights, and franchising them to other companies or using them within or outside theState of Kuwait.– Owning real estate and moveable property to conduct its operations within the limits asstipulated by law.– Employing excess funds available with the company by investing them in investment andreal estate portfolios managed by specialised companies.The address of the parent company’s registered office is PO Box 417, Safat 13005, State of Kuwait.The board of directors of the parent company approved these consolidated financial statementsfor issue on 18 March 2006.2 Significant Accounting PoliciesBasis of preparationThe consolidated financial statements of the group are prepared in accordance with InternationalFinancial Reporting Standards issued by the International Accounting Standards Board (IASB).The consolidated financial statements are prepared under the historical cost convention modifiedto include the revaluation of freehold and leasehold properties, and the measurement at fair ofinvestment securities and investment properties.The consolidated financial statements have been presented in Kuwaiti Dinars.Basis of preparation (continued)In 2003 and 2004, International Accounting Standards Board (IASB) issued a series of newInternational Financial Reporting Standards (IFRS) and revised International Accounting Standards(IAS). The new IFRS and revised IAS became effective for annual periods beginning 1 January2005. All new IFRS and revised IAS have been adopted by the group but have either no orinsignificant impact except for IFRS 2 : “Share-based Payment”, IFRS 3: “Business Combination”and IAS 39 : “Financial instruments, recognition and measurement”.The adoption of revised IAS 1 : “Presentation of financial statements” has resulted inamendments to presentation of minority interest. Minority interest is now presented withinequity.F-55
Level: 8 – From: 8 – Thursday, August 9, 2007 – 2:20 pm – mac5 – 3776 Section 10c : 3776 Section 10cThe accounting polices used are consistent with those used in the previous year except asdiscussed below.Effect of change in accounting policiesIFRS 2 ‘Share-based Payment’The revised accounting policy for share-based payment transactions is described below under“Share based payment”. The main impact of IFRS 2 on the group is the recognition of an expenseand a corresponding entry to equity for the staff bonus shares scheme described in Note 22.The adoption of the revised policy for share based payments resulted in:– A transfer of KD500 thousand from “staff bonus shares” account to retained earningsrepresenting an amount equal to the nominal value of the 5,000,000 unvested shares at 1January 2005 which was previously appropriated from retained earnings to “staff bonusshares” account.– a decrease in the current year profit by KD2,325 thousand (31 December 2004 : Nil) due toan increase in the employee benefits expense charged to general and administrativeexpenses with a corresponding increase in equity.IFRS 3 “Business combinations and IAS 36 “Impairment of assets”.The group has adopted IFRS 3 “Business Combinations” and revised IAS 36 “Impairment ofAssets” and consequently changed its accounting policy for goodwill. The adoption of IFRS 3 andIAS 36 (revised) has resulted in the Group ceasing annual goodwill amortisation and commencingtesting for impairment at the cash generating unit level annually (unless an event occurs during theyear which requires goodwill to be tested more frequently) from 1 January 2005.IAS 39 “Financial Instruments: Recognition and Measurement”In accordance with the transitional provisions of the revised IAS 39, the group reclassified certain“trading investments” to “available for sale investments” which were carried at 31 December2004 at KD26,413 thousand and the remaining “trading investments” were reclassified into“investments at fair value through statement of income”.The reclassification from “trading investments” to “available for sale investments” resulted in,changes in fair value of trading investments amounting to KD12,481 thousand at 31 December2004 and KD5,779 thousand at 31 December 2003 previously reported in the consolidatedstatement of income being recorded in ‘cumulative changes in fair value’ within equity at 1January 2005 and 1 January 2004 respectively. Further this reclassification resulted in a decreasein the net profit for the year attributable to the shareholders of the parent by KD34,041 thousand(a decrease in net profit for the previous year attributable to the shareholders of the parent byKD6,702 thousand) with a corresponding change in “cumulative changes in fair value” account.The above changes have been accounted for with retrospective effect and the comparatives havebeen restated accordingly.Basis of consolidationThe consolidated financial statements incorporate the financial statements of the parent company,National Industries Group Holding – SAK, and of its subsidiary companies for the year ended 31December 2005 and 2004. The details of the significant subsidiary companies are set out in Note3 to the consolidated financial statements.Subsidiaries are those enterprises controlled by the parent company. Control exists when theparent company has the power, directly or indirectly, to govern the financial and operating policiesF-56
Page 1 and 2:
Level: 8 - From: 8 - Thursday, Augu
Page 3 and 4:
Page 5:
Page 9 and 10:
Page 11 and 12:
Page 13 and 14:
Page 15 and 16:
Page 17 and 18:
Page 19:
Page 22:
Page 25 and 26:
Page 27 and 28:
Page 29 and 30:
Page 31 and 32:
Page 33 and 34:
Page 35 and 36:
Page 37 and 38:
Page 39 and 40:
Page 41 and 42:
Page 43 and 44:
Page 45 and 46:
Page 47 and 48:
Page 49 and 50:
Page 52 and 53:
Page 54 and 55:
Page 56 and 57:
Page 58 and 59:
Page 60 and 61:
Page 62 and 63:
Page 64 and 65:
Page 66 and 67:
Page 68 and 69:
Page 70 and 71:
Page 72 and 73:
Page 74 and 75:
Page 76 and 77:
Page 78 and 79:
Page 80 and 81:
Page 82 and 83:
Page 84 and 85:
Page 86 and 87:
Page 88 and 89:
Page 90 and 91:
Page 92 and 93:
Page 94 and 95:
Page 96 and 97:
Page 98 and 99:
Page 100 and 101:
Page 102 and 103:
Page 104 and 105:
Page 106 and 107: Level: 8 - From: 8 - Thursday, Augu
show all

NIG Prospectus - London Stock Exchange

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?