NIG Prospectus - London Stock Exchange

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Level: 8 – From: 8 – Thursday, August 9, 2007 – 2:19 pm – mac5 – 3776 Section 06 : 3776 Section 06SalesNIG’s sales amounted to KD 99.741 million in 2006 compared to KD 104.740 million in 2005 andKD 106.987 million in 2004.In order to ensure that NIG can file its consolidated financial statements with the DFM within thenecessary time period subsequent to the end of each financial year, during 2006, NIG decided tochange the annual accounting period of its foreign subsidiaries for the purpose of consolidation to30 November 2006, whereas in the previous year it was 31 December 2005. Consequently, during2006 NIG consolidated the foreign subsidiaries for the eleven months ended 30 November 2006whereas in the comparative information for 2004 and 2005, respectively, these subsidiaries havebeen consolidated for the year ended 31 December 2004 and 31 December 2005, respectively.Income from investments and profit on partial disposal of associatesNIG’s income from investments amounted to KD 90.772 million in 2006 compared to KD 173.076million in 2005 and KD 54.017 million in 2004. In addition, NIG’s profit on partial disposal ofassociates amounted to KD 559 thousand in 2006 compared to KD 72.124 million in 2005 and KD5.187 million in 2004. See “Key Factors affecting Profit” above.Share of profits of associates and joint venturesNIG’s share of profits from associates and joint ventures amounted to KD 9.522 million in 2006compared to KD 15.193 million in 2005 and KD 5.152 million in 2004. See “Key Factors affectingProfit” above.Net profit/(loss) on disposal of subsidiaries/businessesNIG’s net profit on the disposal of subsidiaries/businesses amounted to KD 69.605 million in 2006compared to a net loss of KD 2,357 million in 2005 and a net profit of KD 560 thousand in 2004.See “Key Factors affecting Profit” above.ExpensesNIG’s total expenses in 2006 amounted to KD 55.621 million compared to KD 72.800 million in2005 and KD 39.417 million in 2004.Finance costsFinance costs were KD 30.990 million in 2006 compared to KD 18.735 million in 2005 and KD10.193 million in 2004.General, administrative and other expensesGeneral, administrative and other expenses were KD 16.815 million in 2006 compared to KD28.079 million in 2005 and KD 13.163 million in 2004.Distribution costsDistribution costs were KD 6.556 million in 2006, KD 7.014 million in 2005 and KD 6.956 million in2004.62
Level: 8 – From: 8 – Thursday, August 9, 2007 – 2:19 pm – mac5 – 3776 Section 07 : 3776 Section 07DESCRIPTION OF NATIONAL INDUSTRIES GROUP HOLDING COMPANY S.A.K.BACKGROUND AND HISTORYNational Industries Group Holding Company S.A.K. (NIG or the Company) is the largest listedinvestment holding company on the Kuwait Stock Exchange (KSE) in terms of total assets andshareholders’ equity. NIG’s two largest shareholders are Public Institute of Social Security andKuwait Cement Company SAK, holding respectively 5 per cent. and 8 per cent. of the totaloutstanding shares of NIG.NIG was incorporated in 1961 as a closed Kuwaiti shareholding company in accordance with theCommercial Companies Law (Law No. 15/1960 of Kuwait). NIG’s initial paid up capital was 20million rupees (the equivalent of approximately KD 1.5 million).NIG was established to participate in developing Kuwait’s infrastructure and promote its industrialadvancement through the development of the building materials industry in Kuwait. NIG’sfounding shareholders included the Government of Kuwait (the Government). NIG was maderesponsible for the operation of two manufacturing plants owned by the Government since 1955,one producing cement based products and the other producing bricks and limestone basedproducts. In 1962, NIG diversified into the manufacturing of pipes and fittings for water andsewage through the incorporation of Kuwait Asbestos Industries Company KSCC.NIG was instrumental in the development of Kuwait’s industrial base in the 1960s and 1970sthrough its participation in the establishment and development of companies such as KuwaitCement Company SAK and Kuwait Metal Pipes Industries SAK and Contracting and MarineServices Company KSCC as well as Gulf Cables Company KSCC. NIG’s rate of growth acceleratedin the 1960s and its production capacity and turnover expanded significantly in the mid-1970s withthe establishment of two complexes which continue to constitute its principal operations in thebuilding materials sector today: Sulaibiya complex which specialises in cement based productsand the Mina Abdullah complex which specialises in limestone based products and plastics.In the 1970s, NIG diversified into the production of household goods such as washing detergentsunder licence from Henkel (Germany) as well as the production of automotive batteries. Otherindustries in which it became involved in the 1970s included tyre production and fibre glass. Thisbroad spread of businesses was consistent with NIG’s public sector ownership and its role infostering the process of industrialisation in Kuwait.Also during the 1970s NIG’s operations extended to other Arab Gulf Co-operation Council (GCC)countries, particularly Saudi Arabia and the United Arab Emirates (UAE). It was a foundingshareholder in Saudi Sand Lime Bricks & Building Materials Company (a Saudi Arabian company),Gulf Gravel Company (a UAE company) and the National Quarries Company (a UAE company).By the 1980s, NIG had established itself as a broad based industrial conglomerate with a strategyof identifying sectors for development both nationally and regionally in other GCC countries. Itsexpansion involved extending its product range through adding new plants at the Mina Abdullahcomplex for the production of plastic pipes and fittings and aerated concrete blocks.Following its decision to draw back from certain sectors of the national economy, the KuwaitiGovernment divested its ownership of NIG through the flotation of its 51 per cent. shareholding,on the KSE in 1995. At the same time, NIG embarked on a strategy of industrial specialisationwhile divesting of some of its less profitable non-core operations through disposals and plantclosures.In March 1996, NIG acquired BI Group plc (BI Group), a London Stock Exchange listed specialistengineering group with operations in the US, Europe, the UK, the Middle East and the Far East ata purchase price of approximately £101 million. BI Group develops specialist engineering solutionsin a number of sectors including oil and gas, medical instruments, aerospace, plastics and metals.In 1997, NIG made a complementary acquisition when it purchased Cortworth plc and integrated63
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NIG Prospectus - London Stock Exchange

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