NIG Prospectus - London Stock Exchange

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Level: 8 – From: 8 – Thursday, August 9, 2007 – 2:20 pm – mac5 – 3776 Section 10c : 3776 Section 10c29 Cash and cash equivalents200511112200411112KD ‘000 KD ‘000Short-term deposits .................................................................................... 34,993 14,007Bank balance and cash .............................................................................. 8,712 4,686Due to banks .............................................................................................. (17,127)11112(11,773)1111226,578 111126,92011112Due to banks amounting to KD622 thousand (2004: KD1,148 thousand) along with the short-termSterling loan of KD504 thousand (2004: KD889 thousand) (see note 28) are secured againstproperty, plant and equipment with a book value of KD143 thousand (2004: KD1,774 thousand) andinventories and debtors with book values totalling to KD1,182 thousand (2004: KD262 thousand).30 Proposed dividendSubject to the requisite consent of the relevant authorities and approval from the generalassembly, the board of directors have proposed to distribute the following dividends for the yearended 31 December 2005 to the shareholders of record as of the date of the general assembly:– cash dividend of 60 Fils per share (2004: 30 Fils per share);– bonus shares of 10% (2004 : 5%) of paid-up share capital;– one share of the subsidiary, National Industries Company for Building Materials – SAK(Closed) for every 10 shares held in the parent company.The proposed cash dividend of 30 Fils per share and the proposed bonus shares of 5% for theyear ended 31 December 2004 were approved by the annual general assembly held on 4 May2005. Subsequently the proposed cash dividend was paid and bonus shares were issued.31 Defined benefit pensions schemesThe group has defined benefit pension schemes for the employees of certain subsidiaries in theUnited Kingdom. The following disclosures cover all the schemes on an aggregated basis. Actuarialcalculations have been made in order to determine pension liabilities and pension expenses inconnection with the group’s defined benefit pension schemes. The following assumptions havebeen used in calculating the liabilities and expenses incurred:200511112200411112Discount rate at 31 December.................................................................... 4.90% 5.30%Expected return on plan assets .................................................................. 5.70% 6.30%Future salary increases .............................................................................. N/A N/AFuture pension increases ............................................................................ 2.70% 2.70%Consolidated statement of income200511112200411112KD ‘000 KD ‘000Current service cost.................................................................................... – 111Interest cost................................................................................................ 1,613 1,732Expected return on assets.......................................................................... (1,453) (1,585)Actuarial loss .............................................................................................. 510 347Loss on curtailments and settlements ...................................................... 9721111235311112Net annual charge included in general and administrative expenses ........ 1,642 1111295811112F-75
Level: 8 – From: 8 – Thursday, August 9, 2007 – 2:20 pm – mac5 – 3776 Section 10c : 3776 Section 10cThe actuarial loss of the schemes in excess of 10% of the present value of the defined benefitobligations are being charged as an expense over periods up to 18 years.A reconciliation of the movement in the liability/asset for defined benefit pension scheme appearsas follows:Consolidated balance sheet200511112200411112KD ‘000 KD ‘000Brought forward asset ................................................................................ (666) (1,172)Consolidated statement of income (net) .................................................... 1,642 958Contributions .............................................................................................. (491) (391)Increase in unrecognisable asset................................................................ 6 7Foreign exchange adjustment .................................................................... 1311112(68)11112Carried forward liability/(asset) (Note 26).................................................... 504 11112(666)1111231 Defined benefit pensions schemes (continued)Reconciliation of consolidated balance sheet liability/asset200511112200411112KD ‘000 KD ‘000Present value of obligations........................................................................ 30,363 36,421Fair value of plan assets ............................................................................ (23,013) (27,734)Net plan deficit............................................................................................ 7,350 8,687Unrecognised actuarial losses .................................................................... (7,142) (9,681)Unrecognisable asset.................................................................................. 2961111232811112Net liability/(asset) recognised in the consolidated balance sheet (Note 26) 504 11112(666)1111232 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 4.25% (2004 : 4%) per annumand have a term of no longer than three months. The bank balances earn interest at an averagerate of 2.5% (2004: 2.5%) per annum. The due to banks are repayable upon demand and bearaverage interest rate of 1.5% (2004: 1.5%) per annum over the Central Bank of Kuwait and Bankof England discount rate. Lease creditors bear interest at fixed rates and the average rate duringthe year was 6.5% (2004 : 6.5%). The group is also exposed to interest rate risk on bonds payable,long-term borrowing and short-term borrowings (see notes 24, 25 and 28).F-76
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NIG Prospectus - London Stock Exchange

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