NIG Prospectus - London Stock Exchange

Level: 8 – From: 8 – Thursday, August 9, 2007 – 2:20 pm – mac5 – 3776 Section 10c : 3776 Section 10cMarket 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 activelymonitors the key factors that affect stock and bond market movements, including analysis of theoperational and financial performance of investees.Liquidity riskLiquidity risk is the risk that the group will be unable to meet its liabilities when they fall due. Tolimit this risk, management has arranged diversified funding sources, manages assets withliquidity in mind, and monitors liquidity on a daily basis.33 Segmental analysisFor management purposes the group’s primary format for reporting segment information isbusiness segments, with secondary information reported geographically.Business segmentsThe parent company and local subsidiaries primarily operate in two business segments:investment and building materials. The investment activities are both in and outside Kuwait. Thebuilding materials activities of the group are conducted wholly within the State of Kuwait.The major overseas subsidiary companies of the group principally operate in one businesssegment, the specialist engineering sector, the activities of which are conducted overseas,principally in Europe and the Americas.F-77