NIG Prospectus - London Stock Exchange

Level: 8 – From: 8 – Thursday, August 9, 2007 – 2:19 pm – mac5 – 3776 Section 06 : 3776 Section 06for sale investments as the Group no longer had significant influence. Further, NIG also disposedof 66.5 per cent. of its stake in its 97.5 per cent. owned subsidiary, Kuwait Privatization ProjectHolding Company for a net cash consideration of KD 14.346 million which resulted in a profit ofKD 275 thousand and the remaining 31 per cent. was transferred to investment in associates. Inthe same year NIG also disposed of a 0.8 per cent. stake in its 75 per cent. owned subsidiary,National Industries Company for Building Materials SAK for a net cash consideration of KD 780thousand which resulted in a profit of KD 542 thousand. Finally, NIG disposed of 47.65 per cent.stake in its wholly owned subsidiary Noor Financial Investment Company for a net cashconsideration of KD 15.943 million which resulted in a profit of KD 441 thousand.Share of profits in associates and joint venturesFor accounting purposes, associated companies are those companies over which NIG exercisessignificant influence but does not control the financial and operating decisions. In general,significant influence exists when NIG holds between 20 per cent. and 50 per cent. of the votingrights of the relevant company. The consolidated financial statements of NIG for 2004, 2005, and2006 include NIG’s share of the results and assets and liabilities of the associates using the equitymethod of accounting from the date of commencement of significant influence until the date suchinfluence effectively ceases.The following table sets out the share of associates’ assets and liabilities and revenue and profitfor each of the years ended 31 December 2006, 2005 and 2004.200611112200511112200411112(KD’000)Share of associates’ assets and liabilitiesAssets .................................................................................... 144,865 140,308 71,436Liabilities ................................................................................ 18,953 19,397 8,808Share of associates’ revenue and profitRevenue.................................................................................. 23,765 23,510 11,133Profit ...................................................................................... 9,522 15,193 5,152In 2006, investment in quoted associates with a carrying value of KD 77,587 thousand (comparedto KD 75,580 thousand in 2005 and KD 58,954 thousand in 2004) had a fair value of KD 152,215thousand (compared to KD 179,747 thousand in 2005 and KD 147,299 thousand in 2004).In 2005, NIG sold 4 per cent. of its stake in its 20 per cent. owned associate, Kuwait National RealEstate Investment and Services Company KSC, for a cash consideration of KD 4,131 thousandresulting in a profit of KD 2,302 thousand. In the same year NIG also disposed of 3 per cent. of its31 per cent. owned associate, Kuwait Privatization Project Holding Company, for a cashconsideration of KD 4,597 thousand resulting in a profit of KD 2,910 thousand. Finally, in 2005 NIGsold 35 per cent. of its investment in Mabanee Company SAK for a cash consideration of KD95,550 thousand, resulting in a profit of KD 70,286 thousand.In 2004, NIG sold 2 per cent. of its stake in its 22 per cent. owned associate Kuwait CementCompany for a cash consideration of KD 5,575 thousand which resulted in a net profit of KD 3,481thousand. In the same year NIG sold 1.6 per cent. of its stake in its 49 per cent. owned associateMabanee Company, for a cash consideration of KD 2,483 thousand which resulted in a net profitof KD 1,706 thousand.Statement of Income for 2006, 2005 and 2004Net ProfitsNIG’s net profit in 2006 amounted to KD 141.994 million compared to KD 198.554 million in 2005and KD 44.277 million in 2004.61