Board of Directors Chairman & Managing Director Deputy Chairman Board Member Board Member Board Member Board Member Board Member General Manager Shaikh. Mohammad J. Al-Sabah Eng. Saleh

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Declared Capital 10,000,000 Kuwaiti Dinars

Paid-up Capital 10,000,000 Kuwaiti Dinars

Commercial Registry Number 20953

Established in Kuwait in Oct. 26th, 1975

P.O.Box 23411 - Safat - 13095 - State of Kuwait

Tel: (965) 22448260 - (9 Lines) Fax: (965) 22434454 - 22434440

E m a i l : k r e i c . c o m

w w w . k r e i c . c o m

KUWAIT REAL ESTATE INVESTMENT CONSORTIUM - KSC. (CLOSED)

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The Amir of KuwaitH. H. Sheikh Sabah Al-Ahmed Al-Sabah

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The Crown Prince of KuwaitH. H. Sheikh Nawaf Al-Ahmed Al-Jaber Al-Sabah

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The Prime Minister of KuwaitH. H. Sheikh Nasser Al-Mohamed Al-Ahmed Al-Sabah

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Contents

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Board of Directors

Borad Members Report

Direct investment Department

Real estate & portfolio Department

Project management & maintenance

Financial Statement for the Year Ended 31 December 2008

Consolidated Balance Sheet as at 31 December 2008

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Board of Directors

Chairman & Managing Director

Deputy Chairman

Board Member

Board Member

Board Member

Board Member

Board Member

General Manager

Shaikh. Mohammad J. Al-Sabah

Eng. Saleh A. Al-Kouh

Ahmad T. R. Al-Tahous

Dr. Faisal A. Al-Kandari

Abdul-Rahman M. Al-Nassar

Mohammad M. Al-Ajmi

Dr. Haider H. Al-Jumah

Ali S. Al-Ghunaim

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Report of Board Members

Gentlemen shareholders : the board members of Kuwait Real Estate Investment Consortium have the pleasure to submit you the 32 annual report, including the results of annual performance , consolidated financial data and the report of the Independent Auditor’s report for the financial year 2008.

We have witnessed the second half of 2008 a significant reduction in the trading of international financial and economic repercussions of the inevitable consequence of the global financial crisis that led to the emergence of a greater global recession in decades, most of which required the intervention of the Governments of the States to a policy of financial reform and to reduce the negative impact on the social life of the citizens of those States.

The intervention of the Central Bank of Kuwait, the biggest impact project approval to ensure bank deposits with the Kuwaiti government’s decision to form a specialized technical committee to study the problems of the market and develop successful solutions to them. The impact of a se-vere financial crisis due to the Kuwaiti economy, which suffered the negative effects the oil sector, which is the lifeblood of all economic activities in Kuwait, and the decline of the price of crude oil by 71% (from U.S. $ 140 to U.S. $ 40).

In addition to the significant decline rates and the value of stocks traded on the Kuwait Stock Ex-change price index retreated significantly the loss of nearly 50% to close at 7782 points (15,054 points in June 2008).

Gentlemen shareholders. . . As for your Kuwait Real Estate Investment Consortium, despite the effects of global economic financial crisis and the withdrawal of the public for investment (Main owner) of the investment portfolio managed for the benefit owned by KREIC, the efforts of the solidarity of KREIC was able to executive management and employees to overcome those obstacles and the difficult economic circumstances

And was able to achieve a net profit of KD 1.1 million, despite the apparent decrease of the total annual revenues, which amounted to 3.38 million Kuwaiti dinars (5.24 million dinars in 2007) after KREIC with low values of some investments.

The items of income of KREIC focused on property management fees of $ 896 thousand non-

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Kuwaiti dinars, down 65.5% percent (2.6 million dinars in 2007) and the net rental income of KD 815 thousand, up 5.5% (772 thousand in 2007 to KD).

As for the results of KREIC’s share of associated companies, which rose by 63% to reach KD 718 thousand (486 thousand Kuwaiti dinars in 2007) as a result of the growing value of the company’s share of the Arab Group for the ceramics. In addition to the allocations, which no longer need the amount of KD 218 thousand.

This is in addition to bank interest income (246 thousand d. K) and the inclusion of non-real estate assessment (33 d A. K), as well as miscellaneous income, which reached the amount of KD 180 thousand (60 thousand in 2007 to KD), of which KD 142 thousand resulted from the col-lection of the output of the liquidation of the Arab Company for Top rental issues.

With regard to expenses and other charges, which amounted to KD 2.3 million, down 18% per hit (2.8 million dinars in 2007), of which 72% the cost of staff, down 11% from what it was in 2007, and public and administrative expenses amounted to KD 212 thousand, down 23% for the year 2007, and was dedicated to the formation of doubtful debts of $ 105 thousand dinars. In addition to the consumption of $ 206 thousand Kuwaiti dinars (KD 612 thousand in 2007), and there is evaluation of foreign exchange losses amounted to 55 thousand dinars (2007 to 28 thousand KD). The impact of financial crisis on investments was a negative loss amounted to KD 942 thousand.

Despite this progress, which we assure you the cash solvency of KREIC increased cash and cash equivalents of $ 5.1 million Kuwaiti dinars (3.6 million dinars in 2007), but the financial situ-ation And general economic and financial obligations resulting from the construction projects for the headquarters compound of KREIC and the investment Residential Tower- Bneid Al Gar , as well as the infrastructure of the tourism project Sofer of the Republic of Lebanon to prevent the distribution of cash to shareholders this year.

Accordingly, the Board of Directors recommends the deportation of the profits for this year to the rights of shareholders.

This makes the members of the Governing Council commended the executive management for the results achieved this year, as well as the gentlemen of brotherhood in the General Authority for Investment for their group of fruitful cooperation in order to achieve better results.

Finally, we ask Allah Almighty to safe guard His Highness Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah, His Highness the Crown Prince and His Highness the Prime Minister.God bless them all.

Mohammad Al-Jarrah Al-SabahChairman and Managing Director

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Direct investment Department

The activity of the direct investment the Department in KREIC based on the principle of

work and competitive edge, and the search for profitable investment opportunities within

and outside the State of Kuwait and to the continued development of existing investments,

according to the matching of events and expected economic trends and setting up com-

panies in collaboration with others as well as contributing to the companies to be agreed

with the KREIC’s activity and investing in investment funds and stocks.

The direct investment department is following a moderate, investment policy tries to seize

investment opportunities and remunerative.

Here some of outlines which have been contributed by KREIC and operate under the

direct investment department:-

Al-Safah real estate company:-

KREIC has been contributed in Safat Real Estate Company (K. S. C) which is designed to

sale and purchase of real estate, land and developing them within and outside Kuwait in

addition to managing real estate funds, which operate in accordance with the rules and

provisions of Islamic Sharia.

Al-Jadaf real estate company:-

KREIC has been contributed in Jadaf which

is belonged to Benaa & Enmaa Company for

investment and Development Company and

A’Ayan real estate, Jadaf Company has been

established specifically to acquire and develop

The Avenue project in the Emirate of Dubai -

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UAE. It has been initiated in the implementation of the project in 2007.Al-Asema real estate company:-

KERIC has been Contributed Asema real estate Company, which builds the Asema real

estate project in Sharq which is considered one of the largest real estate projects in

Kuwait, an area of 42 thousand square meters, the project will be managed and oper-

ated by the Kuwaiti Salhia company.

Lebanese Real Estate Investment Consortium:-

It has been established in 1994 and owns a land in the Sharon region Properties - Sofer

area 82146 square meters which is divided to 63 blocks have been completed of the

infrastructure works of the project to enable the establishment of a residential project

consisting of approximately 120 residential units on the ground.

Sofer / Sharon project-lebanon:-General description of the erea:

The property is located in the Sharon / Sofer district at an average 1,250 M above sea

level, at a distance of 30 KM from Beirut and reached via Beirut – Damascus interna-

tional high way.

General information of the property:-

The property is located in plot no.1627, which was sorting to 72 plots (66 plots intended

for sale and 6 plots have been customized as gardens and public services .during 2008,

the infrastructure of real estate has been implemented and the basic services have been

finalized, all have been prepared in order to implement of the second phase of the project.

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Dubai Water Front:-

The project is located in the Emirate of Dubai, and specifically in the Arab city near Palm

Jebel Ali and the total area of 28, 200 square meters.

The project consists of 4 residential towers of high-tech, it is estimated that the duration

of delivery between 24 to 30 months, is scheduled to start at the beginning of the month

of completion in June 2009.

The acquisition of project land has been done, and will be payable during the month of

March, this project will be financed according to Islamic law as well as an advance pay-

ments from customers.

The acquisition of plots in the same region as of next year has been made for the continu-

ity of the company’s activity. According to the financial statements, the profitability ratios

is encouraged despite the economic events

Sunset Hills – Bahrain:-

Sunset Hills was established as a Bahraini company to own real estate investment project

on an area of 43900 square meters and the project is located near the University of Bah-

rain and the Bahrain International Circuit and is located on the southern gate of the Al

Areen and the expected cost of up to 1.3 billion U.S. dollars. And lies about 35 kilometers

from Bahrain Airport, and covers an area

of the building 60 thousand square me-

ters including 49 thousand square meters,

represents the net area of the sale, the

project will be developed to include the

number of 10 villas and 200 apartments

and 41 houses and a health club and the

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number of retail outlets 4.

The process of developing the project has begun during the fourth quarter of 2007. The

first and second phases have been completed of the infrastructure works and expected

to be completed by the end of the entire project in 2009.

Investment Water Front Project:-

Investment Water Front Project consists of luxury Hotel and furnished apartments and a

commercial section and a spa services provided in addition to luxury apartments built

up area totaling 2.1 million square feet located on the front line in front of the sea along

the up to 150 meters.

Al-Shoroq project Management:-

KREIC has been contributed in Al-Shoroq project management of 3.5% of the capital

of KD 30 million in order to establish a portfolio of investments in listed shares of the

telecommunications sector in the Republic of India, which represents a good opportunity

to gain returns.

Group of Sharjah:

The company was founded for the purpose of investment in most business sectors, includ-

ing investment securities of all kinds in addition to the real estate sector and the tourism

and service, as well as industrial work, both within and outside the Emirate of Sharjah

National Investment Portfolio:-

In November 2007 KREIC entered into a management contract on behalf of an investment

portfolio with a national investment Kuwaiti investment firms specializing in investment

portfolios of domestic and foreign affairs for the benefit of others.

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Real Estate & Portfolios Department

Real Estate PortfolioThe loscal Real Estate Portfolio Consists of a variety of commercial and investment

building located in various areas in The State of Kuwait whom are distinguished by

their high occupancy rates.

The market value of the Real Estate Portfolio reached 12.2 million KD at 31 / 12 /

2008. Main while the Project & Maintenance Department conduct the maintenance

and the following up of the daily activities of these buildings.

KREIC also building the Ahmad Al-Jaber Office Tower, and plan to build a residen-

tial building in Bneid Al-Gar.

Real Estate EvaluationBecause of KREIC,s credibility, it has become one of the leading companies in Real

Estate Evaluation which apply scientific methods in real estate evaluation.

Some of KREIC main clients are local banks, government, investment and real estate

companies and many individuals. And to get acquitted with the market price ranges

of real estate visit our website www.kreic.com

KREIC First Real Estate FundThe Fund aims to aches in yield to those seeking investment opportunities in the real

estate sector through investing trading, developing and renting real estate proper-

ties with the Kuwait Real Estate Market.

The Fund NAV at 31 / 12 / 2008 priced at 1.242 KD where it capital con vary from

5 to 50 Million KD

Fund & Real Estate PortfoliosKREIC has invested in several fund and real estate portfolis managed by specialized

companies inside and outside Kuwait like Dubai Investment Park Business Center

portfolio, Marksz Reak Estate Fund, Al-Dar Real Estate Fund and other.

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Project management & maintenance

Local real estate portfolio:

Local real estate portfolio consists of a variety of real estate investment and commercial

distributed in different areas of Kuwait and is characterized by high occupancy thanks to

the efforts of management in the follow-up maintenance and leasing.

Management of other’s real estates:-

KREIC is currently running real estate portfolios for Kuwait investment authority and

settlement of governmental purchased debts office as well as the company is running the

first real estate fund and operating its properties.

Projects management:-

Projects management is one of the KREIC vital activities .the real estate and construc-

tion department is currently running many engineering projects. Most of the prominent

projects are done on behalf of the Kuwaiti ministry of foreign affairs in addition to the

offers for managing more projects soon,

The Department is also currently implementing a construction project and the completion

of a commercial tower in sharq – Ahmed Al-Jaber St The construction project and the

completion of a residential compound in a distinct area benaid Al-qar In addition to

some of the projects in order to develop some of the existing real estate.

Real Estate Services:

KREIC under the Convention on real estate services with KIA management and therefore

the sale of unused real estate diplomacy in a number of States has the sale of more than

90% of these being real estate and work on optimizing the disposition of other real

estate.

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Residential building bneid algar:-

The project is located in bneid algar at an area of

2940 m2 and overlooks three streets. The building

is consisting of 16 floors from 1st to the 14th floor

consists of 3 apartments, one of these consisting of

three bedrooms and maid room.

The other two apartments two-bedrooms and maid

room, the project provide many services such as

swimming pool , sport room , playground for children

and car park in addition to internet services and

central satellite.

It is expected that the project would be completed at

the end of 2010.

Sharq project:-

The project is located in sharq- ahmed al Jaber

Street at an area of 638 m2 the building consists of

25 floors each floor is of 250 m2 area. The project

will include all the technological services to become

a smart building.

It is expected that the project will be completed at

the beginning of 2010.

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Kuwait Real Estate Investment Consortium - KSC. (Closed) State of Kuwait

Consolidated Financial Statements andIndependent Auditor’s Report

31 December 2008

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INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERSReport on the Consolidated Financial StatementsWe have audited the accompanying consolidated financial statements of Kuwait Real Estate Investment Consortium K.S.C. – (Closed), “the Parent Company” and its subsidiaries (together referred to as the Group) which comprise the consolidated balance sheet as of 31 December 2008, and the consolidated statement of income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.The financial statements of a subsidiary operating outside the State of Kuwait, whose total assets is equivalent to KD 1,320 thousand as of 30 September 2008 (31 December 2007 – equivalent to KD 1,283 thousand) and whose revenues were equivalent to KD 973 thousand for the period ended 30 September 2008 (31 December 2007 – Losses equivalent to KD 8 thousand). These financial statements have been audited by an other auditor who issued an unqualified audit opinion. Our opinion insofar as it relates to the amounts included in the consolidated financial statements is based solely on the other auditor’s report.Management’s Responsibility for the Consolidated Financial StatementsManagement is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards. This responsibility includes, designing, implementing and maintaining internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.Auditor’s ResponsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audit. Except as discussed in the basis for qualified opinion paragraph, we conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Parent Company’s internal control.An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements.Basis for Qualified OpinionAs disclosed in note (6) to the accompanying notes to the consolidated financial statements, the Group

Kuwait Real Estate Investment Consortium - K.S.C. (Closed)And its subsidiaries Kuwait

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has recorded impairment losses of KD 307 thousand on investments classified at fair value through profit or loss with a carrying value of KD 2,942 thousand as of 31 December 2008. These losses have been determined based on the management’s estimates. Considering the global and regional market conditions, many financial institutions are facing difficulties in liquidity and in obtaining credit facilities due to the decline in the stock prices and shortage of liquidity in the credit markets. And no sufficient information is available to determine the recoverable amounts of such financial instruments, we could not determine whether all significant adjustments have been made to the carrying amounts of those investments as of 31 December 2008.Qualified OpinionIn our opinion, based on our audit and the other auditor’s report, and except for the effects of such adjustments if any as might have been determined to be necessary had we been able to satisfy ourselves as to the fair value of those investments classified at fair value through profit or loss as disclosed in the basis for qualified opinion paragraph, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of 31 December 2008, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.

Report on Other Legal and Regulatory Requirements

Furthermore, in our opinion, proper books of accounts have been kept by the Parent Company and the consolidated financial statements, together with the contents of the report of the Board of Directors relating to these financial statements, are in accordance therewith. We further report that we obtained the information that we required for the purpose of our audit and the consolidated financial statements incorporate all information that is required by the Commercial Companies Law of 1960, as amended, and by the Parent Company’s Article of Association, that an inventory count was duly carried out and that, to the best of our knowledge and belief, no violations of the Commercial Companies Law of 1960, as amended, or of the Article of Association of the Parent Company have occurred during the year ended 31 December 2008 that might have had a material effect on the business of the Group or on its consolidated financial position.

Bader A. Al WazzanLicense No. 62-A

Kuwait, 28 February 2009

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Note 2008 2007Assets Cash and cash equivalents 5 5,167 3,587Investments at fair value through profit and or loss 6 5,693 6,338Investments available for sale 7 3,055 3,261Receivables and other debit balances 8 616 201Due from related parties 9 216 2,467Held to maturity investments 29 29Land and real estate under development 10 4,354 3,271Investments in associates 11 1,990 1,352Investment properties 12 7,1412 7,712Property and equipment 20 39Total Assets 28,552 28,257 Liabilities and Equity Liabilities Payables and other credit balances 13 3,008 3,078Equity Share capital 14 10,000 10,000Statutory reserve 15 3,2513 3,137Voluntary reserve 16 3,2534 3,137Foreign currency translation reserve (449)(14) (315)-Change in fair value reserve (40) 49Group’s share in associate’s reserves (14) -Retained earnings 9,541539 9,171Total Equity 25,544 25,179Total liabilities and Equity 28,552 28,257

The accompanying notes form an integral part of these consolidated financial statements.

Sheikh Mohammad j. Al – Sabah Saleh Abd-Allah Al-Kooh Ali S. Al-Ghunaim Chairman and Managing Director Deputy Chairman General Manager

Consolidated Balance Sheet as at 31 December 2008(All amounts are in Thousand Kuwaiti Dinars)

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Note 2007 2006Revenue Management fees 9 896 2,598Net rental income of investment properties 815 772Income from selling investment properties 1,216 546Provisions no longer usedrequired 218 -Income from selling land and real estate held for trading - 4Income fees from valuation of properties owned by others 33 29Investments (loss)/ income 17 (942) 295Interest income 246 446Group’s share in associate’s result s 11 718 486Other income 11 180 60Total revenue 3,380 5,236Expenses and other charges General and administrative 18 212 274Staff costs 19 1,640 1,821Provisions for doubtful debts 9 105 -Staff costs 19 1,627 1,821Depreciation 20 206 612Foreign currency exchange differences 55 28Group share in associate reserve 14 -Kuwait Foundation for the Advancement of Science 11 23Zakat 21 145 2Board of Directors remuneration 35 35Total expenses and other charges 2,278 2,795 Net profit for the year 25 1,102 2,441Earnings per share (fils) 21 11.02 24.41


Consolidated Balance Sheet as at 31 December 2008(All amounts are in Thousand Kuwaiti Dinars)

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Consolidated Statment of Cash Flows the year Ended 31 December 2008(All amounts are in Thousand Kuwaiti Dinars)

Note 2008 2007Cash flows from operating activities Net profit for the year 1,102 2,441Adjustments: Gain on sale of investment properties (1,216) (546)Provision no longer usedrequired (218) -Investments (loss)/ income 942 (295)Interest income (246) (446)Group’s share of associates’ results (718) (486)Depreciation 206 612Provision of doubtful debts 105 -Provisions for liabilities - 527Operating(loss)/ profit before changes in operating assets and liabilities (43) 1,807Investments at fair value – income statementthrough profit or loss (587) (2,038)Receivables and other debit balances (414) (44)Due from related parties 2,860 (1,068)Land and real estate held for trading - 5Payables and other credit balances 148 224Provisions for liabilities used - (129)Net cash flows resulted from/ (used in)/ resulted from operating activities 1,964 (1,243)Cash flows from investing activities Purchase of available for sale investments - (2,754)Proceeds from sale of available for sale investments 80 67Paid for land and real estate under development (1,083) (303)Dividends received from associate 113 195Proceeds from sale of investment properties 495 2,410Purchase of investments properties (19) (45)Purchase of property and equipment (5) (24)Interest received 245 442Dividends received from investments 290 194Net cash flows from investing activities 116 182Cash flows from financing activities Dividends paid (500) (500)Net cash flows used in financing activities (500) (500)Net increase /(decrease) / increase in cash and cash equivalents 1,580 (1,561)Cash and cash equivalents at beginning of the year 3,587 5,148Cash and cash equivalents at end of the year 5 5,167 3,587


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1. Incorporation of the Group

Kuwait Real Estate Investment Consortium (“The Parent Company”) is a Kuwaiti Shareholding Com-pany (Closed) incorporated in 26 October 1975 and it is a subsidiary of Kuwait Investment Au-thority. The Company is engaged in carrying out real estate activities, investment in securities and investment portfolios management activities inside and outside Kuwait.The consolidated financial statements include the financial statements of the Pparent Company and its two subsidiaryies (Note 2.2) together referred as the “Group”.

Company name Legal Activity Incorporation Percentage of entity country ownership 2008 2007Kuwait Distinguished Real EstateConsortium Co. Lebanon Real Estate Investment WLL Real Estate Kuwait 100% 100%Consortium Co. LSC Real Estate Lebanon 100% 100%Audited financial statement for Lebanese Real Estate Investment Consortium Company for the pe-riod ended 30 September 2008 were used in the preparation of the consolidated financial state-ments for the Group.The Parent Company’s principle location is Al Sharq, Ahmed Al Jaber Street, P.O. Box 23411, Safat 13095, Kuwait.Kuwait Investment Authority owns 99.127% of the total shares of the Parent Company. The consolidated financial statements were authorised for issue by the Board of Directors on - - - -22 February 2009. The shareholders of the Parent Company have the authority to amend these financial statements at the annual general assembly meeting.

2. Basis of preparation and significant accounting policies2.1 Basis of preparation

The principle accounting policies applied in the preparation of these consolidated financial state-ments are set out below. These policies have been consistently applied to all the years presented.These The consolidated financial statements have been prepared in accordance with the Interna-tional Financial Reporting Standards (IFRS) issued by International Accounting Standards Board (IASB), . The financial statements have been prepared in accordance with International Financial Reporting Standards uunder the historical cost basis of measurement as modified by the revalua-tion of financial assets classified as “at fair value through profit or loss” ,and “available for sale” “and investment properties”. The financial statements have been presented in Kuwaiti Dinars.The preparation of financial statements in conformity with IFRS requires management to make es-timates and assumptions that may affect amounts reported in these financial statements, as actual results could differ from those estimates. It also requires management to exercise its judgment in the process of applying the accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note (204).The accounting policies are consistent with these used in the previous year except as follows:

(a) Adoption of amendments to IAS (39): Financial Instruments: Recognition and Measurement

On 13 October 2008, the International Accounting Standards Board (IASB) approved and pub-

Notes to the Consolidated Financial Statement 31 December 2008(All amounts are in Thousand Kuwaiti Dinars unless otherwise stated)

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lished amendments to IAS (39) Financial Instruments: Recognition and Measurement and IFRS (7) Financial Instruments: Disclosures to allow reclassification of certain financial instruments held for trading to either receivables or available for sale investments categories.

(b) (b)The following by Interpretations, thoughwere issued by International Financial Reporting Inter pretations Committee (IFRIC), and are effective from 1 January 2008 and have not been adopted by the Group as they are irrelevant to the Group’s operation.

• IFRIC 11, ‘IFRS 2 – Group and treasury share transactions’,• IFRIC 12, ‘Service concession arrangements’; • IFRIC 13, ‘Customer loyalty programmers’ and • IFRIC 14, ‘IAS 19 – The limit on a Defined Benefit Asset, Minimum Funding requirements and their Interaction’

(c) The following International Accounting Standard Board (IASB) standards and International Finan cial Reporting Interpretations Committee (IFRIC) Interpretations, though issued, are not yet man datory and have not yet been adopted by the Group.

• IAS 1: Presentation of financial statements (amended –effective 2009).• IAS 16 : Property, plant and equipment ( amended- effective 2009)• IAS 36 : Impairment of assets ( amended – effective 2009)• IFRS 8 : Operating segments ( effective 2009) • IAS 27 (Revised), ‘Consolidated and separate financial statements’, (effective 2009). • IFRS 3 (Revised), ‘Business combinations’ (effective 2009). • IAS 38 (Amendment), ‘Intangible assets’ (effective 2009). • IAS 40 (Amendment), ‘Investment property’ (and consequential amendments to IAS 16) (effective 2009).

The application of IAS (1) ( revised ), which will be effective for annual periods beginning on or after 1 January 2009, will impact the presentation of financial statements to enhance the usefulness of the information presented.The application of IFRS (8) which will be effective for annual periods beginning on or after 1 Janu-ary 2009 will result in disclosure of information to evaluate the nature and financial effects of the business activities in which the group engages and the economic environments in which it operates.

The application of IAS(40) (revised), which will be effective for annual period beginning or after 1 January 2009 will allows the inclusion of the real estate under development which will be used as investment property under IAS (40). It is not expected that this amendment will have a material impact on the financial statement of the Group on which the Group follows the cost model not the fair value in remeasuring its investment properties.The application of other standards and interpretations are not expected to have a material impact on the financial statements of the group. Additional disclosure will be made in the financial state-ments when these standards and interpretations become effective.

2.2 Basis of consolidationThe consolidated financial statements include the subsidiaries which are controlled by the parent company. The subsidiary is that enterprise controlled by the parent company, directly or indi-rectly to govern the financial and operating policies of an enterprise so as to obtain benefits from its activities, the control exists if the parent company has more than 50% of the voting rights in


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the subsidiary. Subsidiaries are fully consolidated from the date on which control is transferred to Parent Company. They are de-consolidated from the date that control ceases. Inter-company balances and transactions between the parent company and its subsidiariesy are eliminated on consolidation.Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.The subsidiaries that are immaterial to the Group and not consolidated are stated at cost less impairment losses. The subsidiary Company is Kuwait Distinguish Real Estate Group, W.L.L. the capital of which is KD 20,000 and the Parent Company owns a percentage of 100% of its capital. 1% from the subsidiary shares is registered in the name of a related party who is holding these shares as a nominee holder on account and for the benefit of the Parent Company.

AssociatesAssociates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights assumes existence of significant influence. Investments in associates are accounted for using the equity method of accounting and are initially recognised at cost. Investment balance includes goodwill net of impairment losses (if any).The Group’s share of its associates’ post-acquisition profits or losses is recognised in the income statement, and its share of post-acquisition movements in reserves is recognised in equity. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealized losses are also eliminated unless the transac-tion provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group.

2.3 Financial instrumentsClassificationThe Group classified its financial investments at the date of acquisition based on the purpose of acquiring these investments. The group had classified its financial assets as at fair value through profit and or loss, available for sale investment assets, andinvestments assets held to maturity, loans and receivables..

Financial assets at fair value through profit and loss This category has two sub-categories: financial assets held for trading, and those designated at fair value through profit or loss at inception. A financial asset is classified into this category if ac-quired principally for the purpose of selling in the short term or if so designated by management.The financial assets designated at fair value through profit and loss at inception are classified in this category, if they are managed and their performance is evaluated and internally reported on a fair value basis in accordance with a documented investment strategy.

Held to maturity assetsThese are non derivative financial assets with fixed or determinable payments, and the manage-ment has the intent and ability to hold them to their maturities.


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Loans & receivablesThese are non derivative financial assets with fixed or determinable payment that are not quoted in an active market. It is represented mainly in loans, receivables, due from related party and cash and cash equivalent.

Available for sale assetsThese are non derivative financial assets that are either designated in this category or not included in any of the above categories and are principally, those acquired be held for indefinite period of time which could be sold when liquidity is needed or upon changes in rates of profit.These financial assets represented in investments that are principally those acquired to be held for an indefinite period of time that are either designated in this category or not included in any of the above cat-egories.

Recognition and De-recognitionFinancial instruments are recognised when the Group becomes a party in a contractual agreement of financial instrument. Purchases and sale of financial assets are recognised at settlement date, the date on which the Group receive or deliver the financial assets.Financial assets are de-recognised when the rights to receive cash flows from the assets have ex-pired or when the Group has transferred substantially all risks and rewards or ownership to other party.

MeasurementFinancial assets are initially recognised at fair value (plus transaction costs for all financial as-sets not classified at fair value through profit or loss). Subsequently, financial assets at fair value through profit and loss and available for sale investments are carried at fair value. Unrealized gains or losses arising from changes in fair value of the financial assets at fair value through profit and loss are included in the statement of income. Gains or losses arising from change in fair value of the financial assets available for sale are recognised in changes in fair value reserve in equity except for the losses arising of impairment in value. When available for sale investments are sold, the accumulated changes in fair value recognised in equity are included in the income statement.The fair value of quoted investments is based on current bid prices.Held to maturity assets, loans and receivables are initially recognised at cost and subsequently remeasured at amortised cost using effective interest method less any impairment in value.Available for sale investments that their fair value cannot be determined are recorded at cost less impairment in value.

Fair valueFair values of quoted instruments are based on quoted closing bid prices or using the current mar-ket rate of return for that instrument. Fair values for unquoted instruments are based on net asset values provided by fund managers or are estimated using applicable price/earnings or price/cash flow ratios refined to reflect the specific circumstances of the issuer. The fair value of investments in mutual funds, unit trusts or similar investment vehicles are based on the last published bid price.The fair value of unquoted financial instruments is determined by reference to the market value of a similar investment, or the expected discounted cash flows, brokers’ quotes, or other appropriate valuation models.

Impairment loss of financial assetsAn assessment is made at each balance sheet date to determine whether there is objective evidence


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that a financial asset or group of financial assets is impaired. In the case of equity securities classi-fied as available for sale, a significant or prolonged decline in the fair value of the security below its cost is considered as an indicator that the securities are impaired. If any such evidence exists, the cumulative losses-measured as the difference between the acquisition cost and the current fair value less any impairment losses on that financial asset previously recognized in the profit or loss are removed from equity and recognized in the income statement. Impairment losses recognized in the income statement on equity instruments are not reversed through the income statement.For financial asset carried at cost, impairment is the difference between the carrying value and present value of future cash flows discounted at the current market rate of return for a similar fi-nancial assets.For financial assets bears fixed interest rates carried at amortised cost, impairment is the difference between the carrying value and the present value of the estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the original effective interest rate.

2.4 Cash and cash equivalentsCash and cash equivalents represent cash on hand, and at banks and time deposits that mature within three months from the date of placement.

2.5 Land and real estate held for tradingLand and real estate acquired for resale are stated at cost. Cost is determined for each individual asset and represented in fair value of the consideration given to acquire the land plus brokerages, registration and any other costs that are necessary to develop the real estate. Land and real estate held for trading are carried out at the lower of cost and net recoverable value on individual basis. Net recoverable value is the estimated selling price less estimated selling costs.

2.6 Land and real estate under developmentLand and real estate under development are recognized at cost, which includes development cost.When the development process is completed, the land and real estate are classified either as in-vestment properties or land and real estate held for trading according to the management’s inten-tion regarding the future use of these properties.

2.7 Investment properties Properties not occupied by the Group and acquired for long-term leases or for capital apprecia-tion in future are classified as investment properties. Investment properties except land are stated at cost less accumulated depreciation and impairment losses and they are depreciated over 25 years. The land is stated at cost less any accumulated impairment losses.

2.8 Property and equipmentProperty and equipment are stated at cost less accumulated depreciation and impairment losses. Cost comprises acquisition costs and all directly attributable costs of bringing the asset to working condition for its intended use. Depreciation is provided in equal instalments over the estimated useful lives of the assets.

2.9 Impairment of non financial assetsAssets that have an indefinite useful life are not subject to amortization and are tested annually for impairment. Assets that are subject to amortization are reviewed annually for impairment when-


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ever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Impairment losses are recognised in the income statement for the period in which they arise.

2.10 Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) arising from past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obliga-tion. Where the effect of the time value of money is material, the amount of a provision shall be the present value of the expenditures expected to be required to settle the obligation.

2.11 End of service’s indemnityThe Group is liable under Kuwait Labour Law to make payments under defined benefit plans to em-ployees at cessation of employment. The defined benefit plan is un-funded and is based on the li-ability that would arise on involuntary termination of all employees on the balance sheet date. This basis is considered to be a reliable approximation of the present value of the Group’s liability.

2.12 Share capitalOrdinary shares are classified as equity incremental costs directly attributable to the issue of shares are show in equity as deduction from the proceeds.2

2.13 Revenue recognition

• Revenue from management fees is recognised as it accrues based on rates specified in the port-folio management agreement. • Interest income is recognised as it accrues, taking into account the asset and the applicable interest rate. • Dividends income is recognised when right to receive payment is established. • Rent revenue is recognized on the accrual basis. • Revenue from sale of land and real estate is recognised on the completion of the sale contract.

2.14 Operating lease – where the Group is lessorThe rental income on leased assets is recorded on a straight line basis over the period of the lease agreement (Note 2.13).

2.15 Foreign currenciesThe functional currency of the Group is the Kuwaiti Dinar. Foreign currency transactions are re-corded in Kuwaiti Dinars at the rate of exchange prevailing at the time of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from transaction at the year-end exchange rates of monetary assets and liabilities denominated in foreign curren-cies are recognized in the statement of income. Non – Monetary assets and liabilities denominated in foreign currencies, which are stated at his-torical cost or amortized cost are translated at the foreign exchange rate prevailing at the date of translation. Non – Monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to Kuwaiti Dinars at the foreign exchange rates prevailing at the dates


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the values were determined.Net investments in foreign associates and subsidiaries are translated at the exchange rates pre-vailing at the date of the balance sheet. Revenues and expenses are translated at the average ex-change rates for the year. Gains and losses resulting from these transactions are directly included in shareholders’ equity in foreign currency translation reserve.

2.16 DividendsThe dividends attributable to shareholders of the Parent Company are recognized as liabilities in the consolidated financial statements in the period in which the approval of such dividends from the Parent Company’s shareholders takes place.

2.17 Fiduciary assetsAssets held in trust or in a fiduciary capacity are not treated as assets of the Group and accord-ingly are not included in these consolidated financial statements.

3. Financial risk management

3.1 Financial risk factorsThe Group’s activities expose it to a variety of financial risks: market risk including foreign curren-cy risk, fair value risk resulted from changes of interest rates, cash flow risk resulted from changes of interest rates, and price risk), credit risk and liquidity risk.The Group’s management of these financial risks areis concentrated ion diversifying its investments over the different sectors and currencies. The Group also prepares recent studies to monitor fluc-tuations expected in the market in order to preserve the Group’s assets and in order to reduce the bad effects to the possible lowest level (if any).

Market risk

- Foreign currency riskThe Group is exposed to the foreign currency risk as a result from dealing in foreign currencies mainly in Egyptian Pound and U.S Dollar. The foreign currency risk is resulted from the future transactions that take place on the Group’s net investments in the foreign associates with Egyptian Pound and some investments in US. Dollar.The Group’s exposure to this risk is considered immaterial as the total investment in foreign cur-rency is not considered material to the Group’s total investments. Nevertheless, the Group on regu-lar basis monitors the movement of the foreign exchange rates against Kuwaiti Dinar to identify the effect on its financial statements and to take the necessary procedures.

- Fair value risk• The Group is exposed to the risk of the fluctuation in the price of equity financial instruments as the Group has available for sale investments and investments at fair value through profit and loss.• In order for the Group to manage this risk, a monitoring of the market prices takes place on regular bases with following a diversification strategy in the investments.• The Group’s exposure to this kind of risk is considered minimal as most of the investments at fair value are concentrated in real estate funds. The percentage of the investments in real estate funds to total investments has amounted to 7228% as of 31 December 20078 (34% as of 31 December


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20067). The rest of investment, exposure to the risk of change in fair value is considered minimal as most of these investments had been acquired on the initial inspection of the investee.

- Interest rate riskAs the Group does not have financial assets bear interest rates, the Group is not exposed to the risk of changes in the fair value of financial instruments , neither nor exposed to the risk of fluctua-tions in the cash flows as a result from the change in the interest rates as the Group does not have liabilities carry interest rates.The Group exposed to the risk of cash flows fluctuation resulting from changes of interest rates on deposits, the exposure to this risk is minimal as the interest rates on deposits are fixed.

Credit riskCredit risk is highly concentrated in cash and cash equivalents and due from related parties; The Group holds the cash and cash equivalents at entities and financial institutions with high credit reputation. The amount due from related parties is concentrated in the ultimate parent company, which is a governmental body in the State of Kuwait.

Liquidity riskLiquidity risk management implies maintaining sufficient balance of cash and highly liquid market-able securities and the availability of finance resources to meet the needs of the Group’s liquidity.

Maturity profile of assets and liabilities at 31 December 2008:Liabilities Within 1 From 1 to From 3 to From 1 to Total month 3 months 1 year 5 years

Payables and other credit balances 9 78 151 2,547 2,785End of service indemnity - - - 223 223 9 78 151 2,770 3,008

Maturity profile of assets and liabilities at 31 December 2007:Liabilities Within 1 From 1 to From 3 to From 1 to Total month 3 months 1 year 5 years Payables and other credit balances 9 307 108 1,950 2,374End of service indemnity - - - 704 704 9 307 108 2,654 3,078

3.2 Capital risk managementThe Group’s objectives when managing capital are to safeguard the its ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. As followed by the other Companies in the same business, the company monitors capital on the basis of gearing ratio.Theص Parent Company manages this risk through monitoring the gearing ratio; the ratio is calcu-lated as net debt divided by total capital. Net debt s calculated as total borrowings less cash and cash equivalents. Total capital is calculated as equity as shown in the balance sheet plus net debt.


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As of 31 December 2008 and 2007 the group do not have any external debts as the group depends on its internal resources to finance its activities.

4. Significant accounting estimates and assumptionsThe Group makes estimates and assumptions related to future. It is rarely that the accounting estimates equal the actual results. The estimates and assumptions that may have significant risks related to adjustments that have impact on carrying values of assets and liabilities during the next financial year are as follows:

Fair values – investment in unquoted securitiesValuation techniques for unquoted equity investments is in which estimates are used representing the expected cash flows discount rates, return trades, adjusted local market prices, credit risks, related cost and other valuation techniques used by market participants. The Group calibrates the valuation techniques periodically and tests these for validity using either prices from observable current market transactions in the same instrument or other available observable market data.

Available for sale investments impairmentThe Group follows IAS (39) guidelines when determining whether there is impairment of available for sale investment. This requires financial judgment from the management, for providing such judgment, the Group assesses the extent of impairment period with the cost in addition to other factors including the financial position of the investee, performance rate of the industry and sec-tor of the investee belongs, the extent of technology changes and cash flows from operating and financing activities.

5. Cash and cash equivalents 2008 2007 Term deposits and call accounts 4,795 3,120Cash at banks 229 115Cash in portfolios 143 352 5,167 3,587

5.1 The effective interest rate on term deposits is - - -6% as of 31 December 2008 (5.5% - as at 31 December 2007)

5.2 Time deposits mature within three months from date of deposit.

5.3 The fair value for cash and cash equivalents is equal to its book value as of 31 December 2008 – and as of 31 December 2007.

5.4 Most of cash and cash equivalent balances are in Kuwaiti Dinars as of 31 December 2008/ 2007.

6. Investments at fair value through profit andor loss


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2008 2007 Investments in local real estate funds 2,440 4,577Investments in monetary funds 958 1,093Investments in unquoted shares 1,729 -Investments in quoted shares 566 668 5,693 6,338

6.1 All investments are in Kuwaiti Dinars as of 31 December 2008 and 2007.

6.2 The group has recorded impairment losses of KD 307 thousand Kuwaiti Dinars for some of its investments in local real estate funds and financial funds based on the Group’s management esti mates.7. Investments available for sale

This item is represented in the Group’s investment in local and foreign unquoted securities: 2008 2007 Local shares 1,492 1,578Foreign shares 1,563 1,683 3,055 3,261

7.1 The following is available for sale investments analysis with foreign currencies as of 31 Decem ber: 2008 2007 Kuwaiti Dinar 1,373 1,462US Dollar 1,673 1,790Other 9 9 3,055 3,261

7.2 Available for sale investments as of 31 December 2008 include investments amounted to KD 1,554 thousand recorded at cost less impairment losses (2007 – KD 383 thousands).

8. Receivables and other debit balances 2008 2007 Trade receivables 780 484Accrued revenues 90 90Others debit balances 253 134 1,123 708Impairment provision (507) (507) 616 201

8.1 The fair value of trade receivables as of 31 December 2008 and as of 31 December 2007 equals its book value as of those years.

8.2 The receivables and other debit balances includes amount by KD 266 thousand which is equiva lent to 1,455,672 Lebanese Lira as of 31 December 2008 (KD 3 thousand which is equivalent to 15,576,997 Lebanese Lira as of 31 December 2007).


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8.3 As follows the impairment provision movement: 2008 2007 Balance at the beginning of the year 507 521Provided - 38Utilization - (52)Balance at the end of the year 507 507

9. Related parties transactionsThis item represents transactions with the principle shareholder in Kuwait Real Estate Investment Consortium and the fund managed by the Groupit. The prices and settlement terms related to these transactions are approved by the Group’s management. 2008 2007Transactions Revenues Management fees for principle shareholder’s portfolio 857 2,553Management fees of first real estate fund 39 45 896 2,598 Board of Directors and executive committee remuneration 47 47The following are the baBalances due from the related parties as of 31 December: Balances due from the related parties as of 31 December: 2008 2007Balances Kuwait Investment Authority 280 2,421First Real Estate Fund 41 46 321 2,467Doubtful debts provision (105) - 216 2,467

Related parties transactions are subjected to the approval of shareholders in the General Assembly.

10. Land and real estate under developmentDuring the year ended 31 December 2007, the Group had decided to demolish some of its invest-ment properties for the purpose of re-development. This amount represents the cost of the land on which the demolished buildings were built in addition to some necessary costs to develop such properties.

11. Investments in associates Country of Ownership 2008 2007 incorporation %

Arab Brick Company - Egyptian Shareholding Company* Egypt 31.50% 1 1Arab Ceramic Company - Egyptian Shareholding Company Egypt 24.40% 1,988 1,350Financial Economic Development Company - Egyptian Shareholding Company Egypt 23.80% 1 1 1,990 1,352


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* Arab Bricks Company which had been impaired in full previously is under liquidation, upon the liquidation process the Group received an amount of KD 142 thousand. This amount have been included in the statement of income is other income.

11.1 The Group’s share in the net assets and the results of operations of Arab Ceramic Company ESC have been recorded based on the latest available unaudited financial statements as of 30 Septem ber 2008. The fair value of the investment in associate (which is quoted in Cairo Stock Exchange) equivalent to KD 3,183 thousand as of 31 December 2008.

11.2 The following is a summary of the financial information for the associate company as of 30 September 2008.

Total Assets Total Liabilities Total Revenue Net Profit

10,766 2,640 999 944

12. Investment propertiesThe fair value of the investment properties amounted KD 12.,19820 million as at 31 December 2008 (KD 13.57 million as at 31 December 2007) based on evaluation provided by a technical party.

13. Payables and other credit balances 2008 2007 Trade payables 130 183Amounts received in advance from customers 90 125Staff accruals 530 604Provisions for claims 750 1,152Other provision 120 120Contribution to KFAS 11 23Zakat 14 2Board of Directors remuneration 35 35Accrued expenses 105 130Employees end of service indemnity 1,223 704 3,008 13.1

13.1 Most of the payables and other credit balances are in Kuwaiti Dinars as of 31 December 2008/2007.

14. Share capital

The issued and fully paid up capital is amounting to KD 10 million as of 31 December 2008 and distributed over 100 million shares 100 fils per share (as of 31 December 2007 – KD 10 million distributed over 100 million shares of 100 fils per share).

15. Statutory reserves In accordance with the Commercial Companies Law for the year 1960 and the Parent Company’s Articles of Association, 10% of the net profit for the year before Kuwait Foundation for the Ad-vancement of Sciences, Board remuneration and Zakat expense is to be transferred to the statutory


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reserve. The shareholders may resolve to discontinue such annual transfers when the statutory re-serve reaches half of the share capital. Distribution of the statutory reserve is limited to the amount required to enable the payment of a dividend of 5% of share capital in years when retained earn-ings are not sufficient for the payment of a dividend of that amount. When the balance of the re-serve exceeds 50% of share capital, the General Assembly is permitted to utilize amounts in excess of 50% of the share capital in aspects seen appropriate for the benefit of the shareholders.

16. Voluntary reserveIn accordance with the Parent Company’s Articles of Association, 10% of the net profit before KFAS and Board of Directors Remuneration proposed by the Board of Directors and approved by the General Assembly is transferred to voluntary reserve. Such annual transfers may be discontin-ued by a resolution of the General Assembly based on the proposal put forward by the Board of Directors. The Board of Directors proposed to transfer 10% of the net profit before KFAS, BOD remuneration and Zakat to voluntary reserve.

17. Investments (loss)/ income 2008 2007

Available for sale investments 25 - Cash dividend - 67 Gain on sale 25 67

Investments at fair value through income statementprofit or loss 265 194Cash dividends (23) (56)LossesGainLoss from sale (1,209) 136Change in the fair value (967) 274

Investments in unconsolidated subsidiary - (46)Impairment of investments in unconsolidated subsidiary (942) 295

18. General and administrative 2008 2007

Rent expenses 81 84Maintenance expenses 13 41Other 118 149 212 274

19. Staff cost 2008 2007 Salaries and wages 764 749Employees end of service indemnity 217 194Accrued leaves 112 109Accrued bonus 180 200Social securities and other staff benefits 122 135Provision for claims and other provisions 245 434 1,640 1,821


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20. DepreciationDepreciation charged to the statement of income for the year ended 31 December 2007 includes KD 399 thousand representing the net book value of some group’s properties that had been de-molished during the year for the purpose of re-development.

21. Earnings per shareEarnings per share are calculated by dividing the net profit of the year by the weighted average number of outstanding shares during the year as follows:. 2008 2007 Net profit for the year (KD thousand) 1,102 2,441Weighted average No. of outstanding shares (shares) 100,000,000 100,000,000Earnings per share (fils) 11.02 24.41

22. Proposed dividends and Board of Directors remunerationThe Board of Directors proposed cash dividends of 5% with the total amount of KD 500,000 for theno distribution of dividends for the year ended 31 December 2008 (5% cash dividends with the total amount of KD 500,000 for the year ended 31 December 2007) as well as remuneration for the Board of Directors with an amount of KD 47 35 thousand for the year ended 31 December 2008 (KD 35 thousand for the year ended 31 December 2007). These proposals are subject to the ap-proval of the shareholders at the general assembly.

23. Contingent liabilities and commitments 2008 2007

Letters of guarantee 261 451Capital commitments on properties development contracts 3,523 310

24. Fiduciary assetsThe fiduciary assets have amounted KD 13,791 thousand as at 31 December 2008 (KD 202,468 thousand as at 31 December 20067).

25. Segment informationBusiness segment analysisThe primary segmental reporting for the Group is based on type of business which consists of commercial activityreal estate activity, investment activity and projects & maintenance activity as follows: Investment Real estate Projects & Total management management maintenance management 2008 2007 2008 2007 2008 2007 2008 2007 Segment revenue 2,1236 4,173 904 1,063 340 - 3,380 5,236Segment results 942 2,457 117 44 103 - 1,162 2,501Unallocated expenses (60) (60) Net profit for the year 1,102 2,441


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Geographical segment analysisThe secondary segment reporting in the group is the geographical distribution, which consists of:

Kuwait Middle East Total (Except Kuwait) 2008 2007 2008 2007 2008 2007 Total revenue 1,119 4,155 2,261 1,081 3,380 5,236Total assets 21,012 23,779 7,540 4,478 28,552 28,257Total liabilities 2,882 2,868 126 210 3,008 3,078

26. Comparative figuresCertain comparative figures have been reclassified to conform with the presentation of the financial statements for the year ended 31 December 2008.


Documents

Board of Directors Chairman & Managing Director Deputy Chairman Board Member Board Member Board Member Board Member Board Member General Manager Shaikh. Mohammad J. Al-Sabah Eng. Saleh