IIG Prospectus - London Stock Exchange

International Investment Group Company (K.S.C.C.)Notes to the Financial StatementFor the year ended 31 December 2006(All amounts are in Kuwaiti Dinars unless otherwise stated)8. Investments in associatesThe following is a summary of the company’s shares in associates:-Ownership%2006 Ownership%2005Ta’ajeer Company - S.S.C - - 27.79 3,468,402Grand Real Estate Projects Company – K.S.C.C 19.43 18,944,677 20.00 7,068,719Gulf Petroleum Investment Company – K.S.C.C 34.29 15,609,540 20.00 3,130,734Ajal Holding Company – K.S.C.C 36.32 29,356,320 42.83 13,412,903Management Services Group company – W.L.L 60.00 650,000 - -Oscar for General Trading and Constructions - W.L.L. 28.34 673,712 - -65,234,249 27,080,7588.1 The investment in Grand Real Estate Projects Company (K.S.C.C.) includes an amount of KD 4,496,007representing the resultant Goodwill as of 31 December 2006. The Company has recorded its share ofthe results of this associate based on unaudited interim financial statements for the period ended 30September 2006.During the year, the Company did not subscribe to the increase of the associate’s share capital,therefore, the Company’s share in this associate decreased to 19.43%. This dilution has resulted torecording gain amounted to KD 2,576,916 reflected in the statement of income for the current year.8.2 The investment in Gulf Petroleum Investment Company (K.S.C.C.) includes an amount of KD 9,594,365representing the resultant Goodwill as of 31 December 2006. The Company has recorded its share ofthe results of this associate based on unaudited interim financial statements for the period ended 30September 2006.8.3 During the year ended 31 December 2006, Ajal Holding Company increased its share capital by 60% andthe Company subscribed to this increase in full and then sold a portion of its holding resulting in adecrease in its share in associate and recogniztion of a gain of KD 2,605,984. The Company has recordedits share in results of this associate based on audited financial statements for the year ended 31December 2006.8.4 During the year ended 31 December 2006, the Company has participated in establishing new associates,Oscar for General Trading and Constructions Company (K.S.C.) and Management Services GroupCompany (W.L.L.).The investments in those associates are recorded at cost, as these associates did not commence itsoperation yet.8.5 Although, the Company owns 60% of the share capital of Management Services Group Company (WLL),it does not control the operating and financial policies of that company. However the Company hassignificant influence and therefore has classified this investment as investment in associates.8.6 During the year, there were some transactions between the Company and its associates, Ajal Holdingand Oscar Company. Unrealised gain of KD 2,382,278 is eliminated to the extent of the Company’sinterest in the associates.8.7 The following is a summary of the Company’s shares in result of operation of the associates:2006 2005Ta’ajeer Company - S.S.C. (220,573) 248,420Grand Real Estate Projects Company - K.S.C.C 4,681,649 3,576,796Gulf Petroleum investment Company - K.S.C.C 341,899 602,707Ajal Holding Company – K.S.C.C 9,128,978 -13,931,953 4,427,92311F-26