annual report 2009. sheikh nawaf al-ahmad al-jaber al-sabah crown prince of the state of kuwait h.h....

2009ANNUAL REPORT

TEL: +965 188 2233 - 2536 2330FAX: +965 2536 [email protected] BOX: 21816 SAFAT 13079 KUWAIT

H.H. Sheikh Sabah Al-Ahmad Al-Jaber Al-SabahAmir of the State of Kuwait

H.H. Sheikh Nawaf Al-Ahmad Al-Jaber Al-SabahCrown Prince of the State of Kuwait

H.H. Sheikh Nasser Al Mohammed Al Ahmad Al SabahPrime Minister of the State of Kuwait

contents

BOARD OF DIRECTORS 11EXECUTIVE MANAGEMENT 11CHAIRMAN’S LETTER 12 - 15INDEPENDENT AUDITORS’ REPORT 16 - 17CONSOLIDATED STATEMENT OF INCOME 18

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 19 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 20

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 21

CONSOLIDATED STATEMENT OF CASH FLOWS 22

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 23 - 5010 Annual Report 2009 11TAMDEEN REAL ESTATE COMPANY - KSCC

And subsidiaries - Kuwait

boardOF DIRECTORS

EXECUTIVEMANAGEMENT

Mohammed Jassim Al Marzouq - CHAIRMAN & CEOAli Yacoub Aryan - VICE CHAIRMANAbdul Wahab Marzouq Al Marzouq - BOARD MEMBERSheikh Majed Jaber Al Sabah - BOARD MEMBERMohammed Fouad Al Ghanim - BOARD MEMBEROsama Abdul Latif Al Abdul Jaleel - BOARD MEMBERZeyad Hassan Al Qaissy - BOARD MEMBER

Mohammed Jassim Al Marzouq - CHAIRMAN & CEOTareq Omar Darwish - GENERAL MANAGER - DEVELOPMENTSalah Abdulaziz Al Bahar - GENERAL MANAGER - ADMINISTRATIONKhalid Omar Abbas - GENERAL MANAGER - FINANCEMuath Bisher Al Roumi - CORPORATE MARKETING MANAGER

chairman’sletter

TAMDEEN REAL ESTATE COMPANY - K.S.C (CLOSED)AND SUBSIDIARIES - KUWAIT

HONORABLE SHAREHOLDERS,The adverse consequences of the global financial crisis continued during 2009 despite the relentless efforts carried out by the governments of the major countries to confine the impacts of this crisis. The cycle of collapse of large banks and companies around the world continued, fluctuation of exchange rates carried on, and plunge of the economic indicators of most world countries prolonged. In turn, all these factors adversely impacted the level of income and expenditure of the people of these countries. However thanks to God Almighty, the State of Kuwait holds financial reserves necessary to preserve the performance, effectiveness of the financial and

In The Name of God, Most Gracious, Most MercifulHONORABLE SHAREHOLDERS,OF TAMDEEN REAL ESTATE COMPANYPeace and God’s Mercy and Blessings be upon you, On behalf of my counterparts, members of the Board of Directors and myself, it gives me great pleasure to explore with you the Annual Report of Tamdeen Real Estate Company, which incorporates an overview of the Company’s performance during the year 2009, in addition to the financial statements and auditors’ report for the fiscal year ended on 31st December 2009.

banking sector, which ensured limiting the exposure of the national economy to the negative effects associated with such similar crises.

HONORABLE SHAREHOLDERS,The measures and plans adhered to by Tamdeen Group during the years 2008 and 2009 as general policy were quite rewarding, whereby the Group managed to carry on with implementing the strategic operational plans through its investment, developmental and service arms represented mainly in its affiliate and subsidiary companies.

During the second half of the year 2009, Tamdeen Shopping Centers Company (subsidiary company)

had managed to commence operating the first model of its distinguished projects in the domain of real estate development represented in the 360 Mall in Kuwait, with an investment size of nearly 96 Million Kuwaiti Dinars, which is deemed as one of the important additions to the concept of shopping in the State of Kuwait due to its unique design covering a leasing space of nearly 82 thousand square meters and encompasses multiple, best of its kind, commercial and entertainment outlets. Additionally, the Company was able to realize outstanding leasing rates vis-à-vis the circumstances this industry is going through, this reflects the distinctiveness of the Mall and also the trust of the tenants in its management.

In addition to the aforesaid, the owner - Tamdeen Shopping Centers Company carried on implementing its developmental plans of the other commercial locations in Salmiya, Jahra and Sulaibikhat districts in accordance with the most modern architectural designs, already completing the Salmiya Commercial Complex project; in which the leasing operations thereof have commenced from the end of year 2009 with high leasing rates. Furthermore, Tamdeen Shopping Centers Company has started the construction works of Sulaibkhat Commercial Complex project. Furthermore, preparation is now underway to commence work on the construction of the Jahra Complex project. Emanating from the Company’s belief in the importance of regional expansion, it acquired a significant stake in Barwa Al-Doha Real Estate Company, which is a Qatari company specialized in the domain of real estate investment, with

an investment size of nearly 20 Million Kuwaiti Dinars.

Additionally, Tamdeen Real Estate Company continued the implementation of the operational development plan by establishing (GLA Company), which is a subsidiary company specialized in the domain of managing and operating shopping centers, where this company retains several world professional calibers in this field, thereby making Tamdeen Shopping Centers Company profoundly efficient in the business of managing real estate assets.

With regards to the financial investment activity of the Group, Tamdeen Investment Company (subsidiary company) attained excellent performance as compared with the sluggish performance of the investment companies on both the domestic and international levels as they were largely affected by the repercussions of the global financial crisis. Thus, the

Company persisted in preserving a collection of outstanding local and Gulf financial investments that were selected on the basis of the Company’s undertaking of conservative investment parameters, the matter which had significant impact on achieving profits during year 2009.

In respect of Manshar Real Estate Company (subsidiary company), it resumed implementing its plans pertinent to studying the development of Manshar Complex and Towers, owned by them in the Fahaheel district, which is constructed on a land area of 40 thousand square meters. Thus, the Company prompted a study on the extent of utilizing the remaining leasing spaces in this project which amount to 61 thousand square meters out of the total area permissible for utilization of 117 thousand square meters.

In addition to the aforesaid, the Manshar Real Estate Company carried on activating the hospitality

12 Annual Report 2009 13TAMDEEN REAL ESTATE COMPANY - KSCCAnd subsidiaries - Kuwait

business by developing the performance of the owned Al Manshar Rotana Hotel. During the year 2009, this hotel has realized an occupancy rate that has surpassed the general average occupancy rates of all the hotels in Kuwait i.e. 59%, thus reflecting the uniqueness of this hotel’s performance and services.

Also, the Group ensured to enlarge its role in the entertainment business as being complementary to its main activity of developing and managing shopping centers; this was through providing entertainment services of distinct style and concept suitable for all age groups. As such, the Company made certain to acquire the latest technology in the entertainment industry on world level, this was obvious during the inauguration of its first entertainment project at 360 MALL, which comprises the following:

A Bowling Alley on an area of nearly 2500 square meters,

containing 16 playing alleys as well as 4 alleys of autonomous nature that provide greater amount of privacy for those fond of this sport.

Youth Entertainment Center on an area of nearly 1500 square meters, which contains the latest video games and also advanced simulation components.

Family Entertainment Center with an area of 5000 square meters, designed to provide complete family entertainment services suitable for all ages through a large number of modern games that were made available for the first time in the State of Kuwait. This center is expected to commence operation during the second half of year 2010.

In addition to the aforesaid and in continuation of the series of operational successes, FUCOM Supermarkets Company (subsidiary company) has inaugurated its first supermarket under the name of Geant at 360 Mall, Kuwait. At the

present time, the final processes are underway to open the second supermarket at Salmiya district during the second quarter of year 2010. There are also plans to open the third center, with God’s willing grace, during year 2011 at Sulaibikhat district.

HONORABLE SHAREHOLDERS,In continuation of what was achieved during the past years in the sphere of attaining distinctive international awards; during the year 2009, the Group was able to realize the award for “Best Real Estate Developer in Kuwait”. This award was presented by the internationally renowned financial “Euromoney Magazine” for the fourth year consecutively, which corroborates the persistent distinction of the Group’s projects on both domestic and world levels.

HONORABLE SHAREHOLDERS,Despite the unpleasant circumstances the investments and the companies are going through on the domestic and global levels, Tamdeen Group, with God Almighty’s grace and blessing, has managed to attain good financial results, thus achieved a profit rate of Fils 7.3. Besides, the Group has managed to realize operational revenues amounting to 13.7 Million Dinars i.e. 18% growth rate as compared with last year. In addition to the aforesaid, the Group was able to preserve attainment of growth rate on current assets at the rate of 94% as compared with last year, and also realized decline in its current liabilities at the rate of 14% as compared with the previous year.

Realization of such good results in light of the prolonging ramifications of the global financial crisis is considered an apparent indicator of the strength of the Company’s assets and also its efficiency.

As such the board of directors of the Company has suggested distribution of cash dividends for the fiscal year ended on 31st December 2009 at the rate of 10% of the paid up capital to the shareholders registered in the Company’s books as on the date of holding the general assembly.

HONORABLE SHAREHOLDERS,I would like to seize this opportunity to extend, on behalf of my counterparts the board members and myself, the higher verses of thanks and immense gratitude to His Highness the Amir Sheikh/ Sabah Al-Ahmad Al-Jaber Al-Sabah may God protect him, His Highness the Crown Prince Sheikh/ Nawaf Al-Ahmed Al-Jaber Al-Sabah may God protect him, and His Highness the Prime Minister Sheikh/ Naser Al-Mohammed Al-Ahmad Al-Sabah, may God protect him.

Also, I would like to extend my thanks to the honorable shareholders of the Company for the trust and support they provided us.

In conclusion, I would like to express my thanks and appreciation to the Company’s board members and its staff for the constructive efforts they put forth to achieve the aspired results for the Company during year 2009.

Peace and God’s mercy and blessings be upon you,

Mohammed JassimAl MarzouqCHAIRMAN & CEO



the parent company, as amended, have occurred during the year ended 31 December 2009 that might have had a material effect on the business of the group or on its financial position.

Abdullatif M. Al Aiban (CPA)(Licence No. 94-A)of Grant Thornton – Al Qatami,Al Aiban & Partners

Fawzia Mubarak Al Hassawi(Licence No. 80-A)of UHY-Fawzia Mubarak Al Hassawi

Kuwait 17 March 2010

independentauditors’ report

Auditors’ ResponsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audit. 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 auditors’ judgment, including

Management’s Responsibility for the Consolidated Financial StatementsThe parent company’s management 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.

TO THE SHAREHOLDERSOF TAMDEEN REAL ESTATE COMPANY - K.S.C (CLOSED) - KUWAITREPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS. We have audited the accompanying consolidated financial statements of Tamdeen Real Estate Company (A Kuwaiti Closed Shareholding Company) (the parent company) and its subsidiaries (the group), which comprise the consolidated statement of financial position as at 31 December 2009, and the related consolidated statements of income, comprehensive income, changes in equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.

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 auditors consider internal control relevant to the entity’s preparation and fair presentation of the 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 entity’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.

OpinionIn our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the group as at 31 December 2009, and its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards.

Report on Other Legal and Regulatory RequirementsIn our opinion proper books of account have been kept by the parent company and the consolidated financial statements, together with the contents of the report of the parent company’s board of directors relating to these consolidated financial statements, are in accordance therewith. We further report that we obtained all the information and explanations that we required for the purpose of our audit and that the consolidated financial statements incorporate all information that is required by the Commercial Companies Law of 1960, and by the parent company’s articles of association, as amended, that an inventory was duly carried out and that, to the best of our knowledge and belief, no violations of the Commercial Companies Law, nor of the articles of association of



IncomeIncomeOperational incomeOperational expensesNet operational income

Other operational incomeFees from management of real estate and investment portfoliosProfit from sale of investment propertiesImpairment in value of investment propertiesProfit from sale of investments in lands and real estate held for tradingProfit from sale of a share in an associated companyProfit from sale of a landNet income from investmentsShare of profit/(loss) in associated companiesImpairment in value of investments in an associated companyOther incomeForeign currency exchange loss

Expenses and other chargesStaff costsGeneral and administrative expensesFinance costs

Profit for the year before contribution to KFAS, contribution to Zakat, provision for NLST and Board of directors’ remunerationContribution to Kuwait Foundation for the Advancement of Sciences (KFAS)Contribution to ZakatProvision for National Labour Support Tax (NLST)Board of directors’ remunerationProfit for the year

Attributable to:Owners of the parent companyNon-controlling interests

EARNINGS PER SHARE ATTRIBUTABLE TO OWNERS OF THE PARENT COMPANY

The notes set out on pages 23 to 50 form an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF INCOMETAMDEEN REAL ESTATE COMPANY - K.S.C (CLOSED) AND SUBSIDIARIES - KUWAIT

18 Annual Report 2009 19

Notes

6

7

11 (a)148

1111 (c)

9

Year ended31 Dec. 2008

KD’000

11,676(5,655)6,021

422225

36,227(18,741)

39--

8,951(3,508)

-2,748

(90)32,294

3,7944,157

10,02817,979

14,315(143)(135)(328)(243)

13,466

13,593(127)

13,466

36.5 Fils


KD’000

13,735(4,558) 9,177

1,93572

---

3831,7773,0492,161

(2,488)1,623

(75)17,614

3,536 3,7869,221

16,543

1,071(25)(26)

(101)(124) 795

2,703(1,908)

795

7.3 Fils


(Restated)Year ended

31 Dec. 2008KD’000

13,466

599

(67,747)(3,540)

-(70,688)(57,222)

(57,095)(127)

(57,222)

Year ended 31 Dec. 2009

KD’000

795

948

(13,080)(978)1,511

(11,599)(10,804)

(8,896)(1,908)

(10,804)

Profit for the yearOther comprehensive income:Exchange differences arising on translation of foreign operationsAvailable for sale investments:- Net loss arising during the year- Transferred to consolidated statement of income on sale- Transferred to consolidated statement of income on impairment in valueTotal other comprehensive lossTotal comprehensive loss for the yearAttributable to:Owners of the parent companyNon-controlling interests

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMETAMDEEN REAL ESTATE COMPANY - K.S.C (CLOSED) AND SUBSIDIARIES - KUWAIT

TAMDEEN REAL ESTATE COMPANY - KSCCAnd subsidiaries - Kuwait

CONSOLIDATED STATEMENT OF CHANGES IN EQUITYTAMDEEN REAL ESTATE COMPANY - K.S.C (CLOSED) AND SUBSIDIARIES - KUWAIT


CONSOLIDATED STATEMENT OF FINANCIAL POSITION TAMDEEN REAL ESTATE COMPANY - K.S.C (CLOSED) AND SUBSIDIARIES - KUWAIT

Ali Yacoub Ghafil AryanVice Chairman

Mohammed Jassim Al MarzouqChairman and CEO



31 Dec. 2008KD’000

119,06552,668

80048,333

179,671802

401,339

11,21411,776

20422,2774,813

50,284451,623

37,31211,132

(475)730

6,8888,286(270)

17,24919,378

100,230125,050225,280

119,2503,697

470123,417

14,22120,53068,175

102,926226,343451,623

Notes

101112131415

1617

18

1919

20

212220

Year ended 31 Dec. 2009

KD’000

85,378

52,922841

124,61980,3963,104

347,260

13,593167995

29,05053,97897,783

445,043

37,31211,132

(201)732

7,1728,570

67813,7976,831

86,023114,464200,487

150,8474,173

570155,590

17,289 21,17050,50788,966

244,556445,043

AssetsNon-current assetsAvailable for sale investmentsInvestments in associated companiesInvestments in unconsolidated subsidiary companiesInvestment propertiesProjects in progressProperty, plant and equipment

Current assetsCash and bank balancesShort term depositsInvestments at fair value through statement of incomeAccounts receivable and other debit balancesInvestments in lands and real estate held for trading

Total assets

Equity and liabilities Equity attributable to owners of the parent companyShare capital Share premiumTreasury sharesReserve of profit on sale of treasury sharesLegal reserveVoluntary reserveForeign currency translation reserveRetained earningsCumulative changes in fair valueTotal equity attributable to owners of the parent companyNon-controlling interestsTotal equity

LiabilitiesNon-current liabilitiesTerm loansRefundable rental depositsProvision for end of service indemnity

Current liabilitiesBank facilitiesAccounts payable and other credit balancesCurrent portion of term loans

Total liabilitiesTotal equity and liabilities


37,312

-

-

37,312

--

-----

-

-

37,312

33,920

-3,392

-

---

3,392-

-

-

37,312

Share capital KD’000

11,132

-

-

11,132

--

-----

-

-

11,132

11,132

---

-----

-

-

11,132

Share premium

KD’000

(475)

-

-

(475)

-274

---

274-

-

-

(201)

(34)

--

(441)

---

(441)-

-

-

(475)

Treasury shares KD’000

730

-

-

730

--

2--2-

-

-

732

715

---

15--

15-

-

-

730

Reserveof profit

on sale of treasury

shares KD’000

6,888

-

-

6,888

--

-284

-284

-

-

-

7,172

5,451

---

-1,437

-1,437

-

-

-

6,888

Legal reserve KD’000

8,286

-

-

8,286

--

-284

-284

-

-

-

8,570

6,849

---

-1,437

-1,437

-

-

-

8,286

Voluntary reserve KD’000

(701)

87

344

(270)

--

-----

948

948

678

(868)

---

-----

167

167

(701)

Foreign currency

translation

reserve KD’000

17,249

-

-

17,249

--

-(568)

(5,587)(6,155)

2,703

-

2,703

13,797

13,313

-(3,392)

-

-(2,874)(3,391)(9,657)13,593

-

13,593

17,249

Retained earnings

KD’000

35,628

-

(16,250)

19,378

--

-----

(12,547)

(12,547)

6,831

122,679

---

-----

(87,051)

(87,051)

35,628

Cumulative

changes in fair values

KD’000

116,049

87

(15,906)

100,230

-274

2-

(5,587)(5,311)

2,703

(11,599)

(8,896)

86,023

193,157

--

(441)

15-

(3,391)(3,817)13,593

(86,884)

(73,291)

116,049

Sub-Total

KD’000

102,956

6,188

15,906

125,050

(8,678)-

---

(8,678)(1,908)

-

(1,908)

114,464

63,908

39,175--

---

39,175(127)

-

(127)

102,956

Non-controlling

interests KD’000

219,005

6,275

-

225,280

(8,678)274

2-

(5,587)(13,989)

795

(11,599)

(10,804)

200,487

257,065

39,175-

(441)

15-

(3,391)35,35813,466

(86,884)

(73,418)

219,005

TotalKD’000

Equity attributable to owners of the parent company

Balance as at 1 January 2009 as previously reportedThe adjustment resulting from consolidation of financial statements for subsidiary company (Note 31)Transferred to non-controlling interests (Note 31)

Balance restated as of 1 January 2009Change in non-controlling interestsNet change in treasury sharesNet change in reserve of profit on sale of treasury sharesTransferred to reserves (Note 19)Cash dividends (Note 23)Transactions with the ownersProfit/(loss) for the yearOther comprehensive income/(loss)Total comprehensive income/(loss) for the yearBalance as at 31 December 2009

Balance as at 1 January 2008Change in non-controlling interestsBonus shares Net change in treasury sharesNet change in reserve of profit on sale of treasury sharesTransferred to reserves (Note 19)Cash dividends (Note 23)Transactions with the ownersProfit/(loss) for the yearOther comprehensive income/(loss)Total comprehensive income/(loss) for the yearBalance as at 31 December 2008


The parent company is also engaged in the development of real estate projects and construction contracts of buildings, managing the properties of others, establishing and managing real estate investment funds, real estate studies and consultancy, and investing in companies with activities similar to its own and in financial portfolios managed by professional companies and authorities.

The address of the parent company’s registered office is PO Box 21816, Safat 13079, State of Kuwait.

The consolidated financial statements for the year ended 31 December 2009 were authorised for issue by the parent company’s board of directors on 17 March 2010 and are subject to the approval of the general assembly of the shareholders.

2. ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS2.1 The group has adopted the following new standards, interpretations and amendments to IFRS issued by International Accounting Standards Board, which are relevant to and effective for the group’s consolidated financial statements for the annual period beginning 1 January 2009. Certain other new standards and interpretations have been issued but are not relevant to the group’s operations and therefore not expected to have a material impact

on the group’s consolidated financial statements.

• Amendments to IFRS 7 Financial instruments: Disclosures

• IFRS 8 Operating Segments

• IAS 1 Presentation of Financial Statements (Revised)

• IAS 23 Borrowing Costs (Revised)

• Amendments to IAS 40 Investment Property

• Annual Improvements 2008

Significant effects on current, prior or future periods arising from the first-time application of these new requirements in respect of presentation, recognition and measurement are described below.

1. INCORPORATION AND ACTIVITIES OF THE PARENT COMPANYThe parent company was incorporated in Kuwait on 16 December 1982 in accordance with the Commercial Companies Law. Its shares are listed on the Kuwait Stock Exchange.

The principal activities of the parent company are represented in the real estate investments inside and outside the State of Kuwait, for the purposes of ownership, resale, leasing and renting.

notes to the consolidated financial statements31 DECEMBER 2009




KD'000


31 Dec. 2008KD'000Note

24


OPERATING ACTIVITIES

Profit for the year attributable to owners of the parent companyAdjustments:DepreciationProvision for end of service indemnityShare of profit in unconsolidated subsidiary companyNet unrealised loss from investments at fair value through statement of incomeNet loss from sale of investments at fair value through statement of incomeProfit from sale of investment propertiesImpairment in value of investment propertiesProfit from sale of investments in lands and real estate held for tradingProfit from sale of a land Impairment in value of projects in progressNet profit from sale of available for sale investmentsImpairment in value of available for sale investmentsNet income from investmentsShare of (profit)/loss in associated companiesImpairment in value of investments in an associated companyProfit from sale of a share in an associated companyFinance costs

End of service indemnity paid

Changes in operating assets and liabilities:Accounts receivable and other debit balancesAccounts payable and other credit balancesRefundable rental depositsNet cash from/(used in) operating activities

INVESTING ACTIVITIESProceeds from sale of investment propertiesNet purchase of investments at fair value through statement of incomeProceeds from sale of investments at fair value through statement of incomeNet purchase of available for sale investmentsProceeds from sale of available for sale investmentsInvestments in lands and real estate held for tradingProceeds from sale of investments in lands and real estate held for tradingInvestments in associated companiesProceeds from sale of a share in an associated companyInvestments in unconsolidated subsidiary companiesNet purchase of investment propertiesProjects in progressNet purchase of property, plant and equipmentNet income received from investmentsNet cash used in investing activities

FINANCING ACTIVITIESCash dividends to shareholdersChange in non-controlling interestsChange in bank facilitiesRepayment of bonds issuedNet change in treasury shares Change in term loansChange in foreign currency translation reserveFinance costs paidNet cash from financing activitiesNet (decrease)/ increase in cash and cash equivalentsCash and cash equivalents at the beginning of the yearCash and cash equivalents at the end of the year

Consolidated statement of cash flowsTAMDEEN REAL ESTATE COMPANY - K.S.C (CLOSED) AND SUBSIDIARIES - KUWAIT

2,703

1,445 174(41) 131 88

- - -

(1,777) -

(978) 1,511

(3,049)(2,161) 2,488(383)

9,221 9,372

(74) 9,298

(6,773) 640 476

3,641

-(3,088) 2,075

(2,887) 17,415(7,218)

-(12,538)

5,867 - -

(20,099)(829)

3,049(18,253)

(5,587)565

3,068 -

276 13,929 2,352

(9,221)5,382

(9,230) 22,990 13,760

13,593

2,415234

-37

452(36,227)18,741

(39)-

379(3,540)

-(8,951)3,508

--

10,028630

(166)464

(19,157)2,5021,620

(14,571)

55,000(4,424)3,748

(19,151)12,003(4,813)

68(3,725)

-(800)

(1,240)(93,107)

(369)8,951

(47,859)

(3,390)46,35410,049

(19,848)(426)

56,935(168)

(10,028)79,47817,0485,942

22,990


2.1.1 Amendment to IFRS 7: Financial Instruments: Disclosures

The amendments require additional disclosures for financial instruments that are measured at fair value in the consolidated statement of financial position. These fair value measurements are categorised into a three-level fair value hierarchy, which reflects the extent to which they are based on observable market data. A separate quantitative maturity analysis must be presented for derivative financial liabilities that shows the remaining contractual maturities, where these are essential for an understanding of the timing of cash flows. The group has taken advantage of the transitional provisions in the amendments and has not provided comparative information in respect of the new requirements.

2.1.2 IFRS 8 Operating Segments

The adoption of IFRS 8 has resulted in a redesignation of the group’s reportable segments, but has had no impact on the reported results or financial position of the group. Reported segment results are now based on internal management reporting information that is regularly reviewed by the chief operating decision maker. In the previous consolidated financial statements,

segments were identified by reference to the dominant source and nature of the group’s risks and returns.

2.1.3 IAS 1 Presentation of Financial Statements (Revised)

The adoption of IAS 1 (Revised 2007) makes certain changes to the format and titles of the primary consolidated financial statements and to the presentation of some items within these consolidated financial statements. It also gives rise to additional disclosures. The measurement and recognition of the group’s assets, liabilities, income and expenses is unchanged. However, some items that were recognised directly in equity are now recognised in other comprehensive income. IAS 1 affects the presentation of owner changes in equity and introduces a “Statement of comprehensive income”.

The revised standard also requires presentation of a comparative statement of financial position as at the beginning of the first comparative period, in some circumstances. Management considers that this is not necessary this year because the consolidated statement of financial position for the year 2007 is the same as that previously reported.

2.1.4 IAS 23 Borrowing Costs (Revised)

IAS 23 Borrowing Costs (Revised 2007) requires the capitalisation

of borrowing costs to the extent they are directly attributable to the acquisition, production or construction of qualifying assets that need a substantial period of time to get ready for their intended use or sale. The adoption of the revised standard did not have any effect on the measurement and recognition of the group’s assets, liabilities, income and expenses.

2.1.5 IAS 40 Investment Property

As part of Improvements to IFRSs (2008), IAS 40 has been amended to include within its scope investment property in the course of construction. Therefore, following the adoption of the amendments and in line with the group’s general accounting policy, investment property under construction is measured at fair value (where that fair value is reliably determinable), with changes in fair value recognised in the consolidated statement of income. The group has previously recorded these assets at cost less accumulated impairment loss in accordance with IAS 16 – property, plant and equipment.

2.2 At the date of authorisation of these consolidated financial statements, certain new

standards, amendments and interpretations to existing standards have been published but are not yet effective, and have not been adopted.

Management anticipates that all of the pronouncements will be adopted in the group’s accounting policies for the first period beginning after the effective date of the pronouncement. Information on new standards, amendments and interpretations that are expected to be relevant to the group’s consolidated financial statements is provided below. Certain other new standards and interpretations have been issued but are not relevant to the group’s operations and therefore not expected to have a material impact on the group’s consolidated financial statements.

• IFRS 3 Business Combinations (Revised)

• IFRS 9 Financial Instruments

• IAS 27 Consolidated and Separate Financial Statements (Revised)

• IAS 28 Investments in Associates (Revised)

• IFRIC 17 Distribution of Non Cash Assets to Owners

• Annual Improvements 2009

2.2.1 IFRS 3 Business Combinations (Revised) (effective from 1 July 2009)

The standard is applicable for business combinations occurring in reporting periods beginning on or after 1 July 2009 and will be applied prospectively. The new standard introduces changes to the accounting requirements for business combinations, but still requires use of the purchase method, and will have a significant effect on business combinations occurring in future reporting periods.

2.2.2 IFRS 9 Financial Instruments (effective from 1 January 2013 earlier application is permitted)

The IASB aims to replace IAS 39 Financial Instruments: Recognition and Measurement in its entirety by the end of 2010, with the replacement standard to be effective for annual periods beginning 1 January 2013. IFRS 9 is the first part of Phase 1 of this project. The main phases are as follows:

• Phase 1: Classification and Measurement

• Phase 2: Impairment methodology

• Phase 3: Hedge accounting

In addition, a separate project is dealing with derecognition.

Management has yet to assess the impact that this amendment is likely to have on the consolidated

financial statements of the group. However, they do not expect to implement the new standard until all chapters of the IFRS 9 have been published and the impact of all changes can be comprehensively assessed.

Although earlier application of this standard is permitted, the Technical Committee of the Ministry of Commerce and Industry of Kuwait decided on 30 December 2009, to postpone this early application till further notice, due to the non-completion of the remaining stages of the standard.

2.2.3 IAS 27 Consolidated and Separate Financial Statements (Revised) (effective from 1 July 2009)

The revised standard introduces changes to the accounting requirements for the loss of control of a subsidiary and for changes in the group’s interest in subsidiaries. These changes will be applied prospectively in accordance with the transitional provisions and so do not have an immediate effect on the group’s consolidated financial statements.

2.2.4 IAS 28 Investments in Associates (Revised) (effective from 1 July 2009)

The revised standard introduces changes to the accounting requirements for the loss of significant influence of an

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS31 DECEMBER 2009



associate and for changes in the group’s interest in associates. These changes will be applied prospectively in accordance with the transitional provisions and so do not have an immediate effect on the group’s consolidated financial statements.

2.2.5 IFRIC 17 Distribution of Non-Cash Assets to Owners

The Interpretation provides guidance on the appropriate accounting treatment when an entity distributes assets other than cash as dividends to its shareholders.

2.2.6 Annual Improvements 2009

The IASB has issued Improvements for International Financial Reporting Standards 2009 which have led to a number of changes in the detail of the group’s accounting policies – some of which are changes in terminology only, and some of which are substantive but have had no material effect on amounts reported. Most of these amendments become effective in annual periods beginning on or after 1 July 2009 or 1 January 2010.

3. SIGNIFICANT ACCOUNTING POLICIESPreparation of the consolidated financial statements

The consolidated financial statements which comprise the financial statements of the parent company and its subsidiaries have been prepared in accordance with International Financial Reporting Standards under the historical cost convention except for the investments measured at fair value as explained below.

Basis of consolidationThe consolidated financial statements comprise the financial statements of the parent company and its subsidiaries as of 31 December each year.

Subsidiaries are those enterprises controlled by the parent company. Control exists when the group has the power, directly or indirectly, to govern the financial and operating policies of an enterprise so as to obtain benefits from its activities. The financial statements of subsidiaries, other than those that are acquired with a view to disposal within twelve months from the date of acquisition, are included in the consolidated financial statements from the date that control effectively commences until the date that control effectively ceases.

The financial statements of the subsidiaries are consolidated on a line-by-line basis by adding together like items of assets, liabilities, income and expenses. All significant intra-group balances and transactions, and any unrealised gains and losses arising

from intra-group transactions, are eliminated upon consolidation. The financial statements of subsidiaries are prepared for the same reporting year as the parent company, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist.

Non-controlling interests represent the portion of profit or loss and net assets not held by the group and are presented separately in the consolidated statement of income and within equity in the consolidated statement of financial position, separately from shareholders’ equity of the parent company. Upon acquisition of a part of the non-controlling interests, equity of the parent company is accounted for by using the extension method, whereby, the difference between the consideration and the book value of the share in the net assets acquired is recognised as goodwill.

Recognition of income and expenditureProfits and losses on trade of investments are recognised as and when they are realized. Dividends income is recognised when the right to receive payment is established. Other income and expenditure are accounted for under the accrual basis.

Finance costsFinance costs are recognised in the consolidated statement of income for the year on a time proportion basis over the maturity period of the related liabilities.

Investments in associated companiesAssociates are enterprises in which the group exerts significant influence including a holding of 20% to 50% of the voting power of the investee company. The consolidated financial statements include the group’s share of the associates results using the equity method of accounting based on the latest audited financial statements.

Under the equity method of accounting, the initial investment in an associated company is recorded at cost and the carrying amount is increased or decreased to recognise the group’s share of profit or loss and other changes in the equity of the associated company. Distributions received from the associated company reduce the carrying amount of the investment.

An assessment of the investment in associated company is performed when there is an indication that the asset has been impaired or the impairment losses recognised in prior years no longer exist.

Investments in lands and real estate held for tradingTrading properties are stated at the lower of cost or net realisable value. Costs are those expenses incurred in bringing each property to its present condition including identifiable finance costs. Net realisable value is based on estimated selling price less any further costs expected to be incurred on completion and disposal.

Investments at fair value through statement of income“Investments at fair value through statement of income” are initially recognised at cost, excluding transaction costs relating to the investments. These investments are classified at initial recognition as “held for trading investments”.

“Held for trading investments” are acquired principally for the purpose of selling or repurchasing it in the near term or are a part of an investment portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short term profit taking.

After initial recognition, investments at fair value through statement of income are remeasured at fair value.

Gains or losses arising either from the sale or changes in fair value of “investments at fair value through statement of income” are recognised in the consolidated statement of income.

Available for sale investments“Available for sale investments” are initially recognised at cost plus transaction costs that are directly attributable to the acquisition.

After initial recognition, available for sale investments are remeasured at fair value except for investments in equity securities that do not have a quoted market price in an active market and whose fair value cannot be reliably measured, which are measured at cost less any impairment in value.

Unrealised gains or losses on remeasurement of available for sale investments to fair value is recognised directly in equity in “cumulative changes in fair value” account until the investment is derecognised or determined to be impaired, at which time the cumulative gains or losses previously recognised in equity is recognised in the consolidated statement of income.

Fair valueFair value is the amount for which an asset could be exchanged, or liability settled, between knowledgeable, willing parties in an arm’s length transactions.




For securities traded in organized financial markets, fair value is determined by reference to the bid prices of the last purchase orders shown in the stock exchange market at the close of business on the date of the consolidated statement of financial position.

For securities where there is no quoted market price, a reasonable estimate of the fair value is determined by reference to the current market value of another instrument which is substantially the same, or is based on the expected discounted cash flows, or determined by using valuations implied by significant financial events e.g. indicative bids, partial exits, or additional investments, or determined by using valuations implied by third party issuers having substantially the same line of business as the investee or other appropriate valuation techniques.

The determination of fair value is done for each investment individually.

Investment propertiesInvestment properties are valued at cost less accumulated depreciation and any impairment losses. Investment properties are valued on an individual basis annually by an independent evaluator.

Investment properties are derecognised when they have either been disposed of or when the investment property is permanently withdrawn from use and no future benefit is expected from its disposal. Any gains or

losses on the derecognising of an investment property are recognised in the consolidated statement of income in the year of derecoginition.

Treasury sharesThe parent company’s own shares are accounted for as treasury shares and are stated at cost. When the treasury shares are sold, gains are credited to a separate account in equity under “reserve of profit on sale of treasury shares” which is non distributable. Any realized losses are charged to the same account to the extent of the credit balance on that account. Any excess losses are charged to retained earnings then reserves. Gains realized subsequently on the sale of treasury shares are first included in the reserve accounts, then retained earnings, then in the reserve used to offset any previously recorded losses and the reserve of profit on sale of treasury shares. No cash dividends are distributed on these shares. The issue of bonus shares increases the number of treasury shares as per the dividends percentage and reduces the average cost per share without affecting the total cost of treasury shares.

Property, plant and equipmentProperty, plant and equipment are stated at cost less accumulated depreciation and any impairment losses. The parent company and its subsidiaries depreciate its property, plant and equipment according to the straight-line method at annual rates estimated to fully depreciate the cost of the assets over their expected useful lives.

Term loansTerm loans are carried on the date of the consolidated statement of financial position at their principal amounts. Interest is charged as an expense as it accrues, with unpaid amounts included in loans’ balances.

ProvisionsA provision (other than the provision for investments and loans receivable) is recognised in the consolidated statement of financial position when the group has a legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows that reflects current market assessments for such liabilities.

Impairment and uncollectability of financial assetsAn assessment is made at the date of each consolidated statement of financial position to determine whether there is objective evidence that a specific financial asset, or group of similar assets, may be impaired. If such evidence exists, the estimated recoverable amount of that asset

is determined and any impairment loss, based on the net present value of future anticipated cash flows, is recognised in the consolidated statement of income. For assets carried at amortized cost, future anticipated cash flows are discounted at the financial instrument’s original effective interest rate. For assets carried at fair value, impairment is the difference between cost and fair value.

Recognition and derecognition of financial assets and liabilitiesA financial asset or a financial liability is recognised when the group becomes a party to the contractual provisions of the financial instrument. A financial asset (in whole or in part) is derecognised either when the group has transferred substantially all the risks and rewards of ownership or when it has neither transferred nor retained substantially all the risks and rewards and when it no longer has control over the asset or a proportion of the asset. A financial liability is de-recognised when the obligation specified in the contract is discharged, cancelled or expired.

Trade and settlement date accountingAll ‘regular way’ purchases and sales of financial assets are recognised on the trade date i.e. the date that the entity commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame generally established by regulation or convention in the market place.

Use of estimatesThe preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of financial assets and liabilities at the date of the consolidated financial statements. The use of estimates is principally limited to the determination of fair valuation of unquoted investments and investment properties.

Related party transactionsRelated parties consist of the members of the board of directors, executive officers, their close family members and companies of which they are principal owners. All related party transactions are conducted on an arm’s length basis and in the ordinary course of business.

End of service indemnityProvision for end of service indemnity is computed on the basis of employees’ accumulated periods of service at the date of the consolidated statement of financial position, in accordance with Kuwait labour law for the private sector and bye-laws.

Contribution to Kuwait Foundation for the Advancement of SciencesThe Group is required to contribute to the Kuwait Foundation for the Advancement of Sciences (“KFAS”). The Group’s contribution to KFAS is recognised as an expense and is calculated @ 1 % of profit before transfer to legal reserve, Board of directors’ remuneration, National Labour Support Tax and Zakat.

Provision for National Labour Support TaxThe Group is required to contribute to the National Labour Support Tax (“NLST”). The Group’s contribution to NLST is recognised as an expense and is calculated in accordance with Ministry of Finance resolution No. 24/2009, law number 19/2000.

Contribution to ZakatThe Group is required to contribute to the Zakat. The Group’s contribution to Zakat is recognised as an expense and is calculated in accordance with Ministry of Finance resolution No. 58/2008 and 46/2006.




Foreign currenciesForeign currency transactions are converted into Kuwaiti Dinars at the rates of exchange prevailing at the time of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated into Kuwaiti Dinars using the rates of exchange ruling at the date of the consolidated statement of financial position. All currency exchange differences arising from translation are reflected in the consolidated statement of income.

At the date of consolidated financial statements, the assets and liabilities of foreign subsidiaries are translated into the parent company’s presentation currency (the Kuwaiti Dinars) at the rate of exchange ruling at the date of the consolidated statement of financial position, and their income statements are translated at the average exchange rates prevailing during the year. Foreign currency exchange differences arising on translation are taken directly to foreign currency translation reserve within equity. On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to the particular foreign currency is recognised in the consolidated income statement.

Cash and cash equivalentsCash and cash equivalents as stated in the consolidated statement of cash flows are represented by bank and cash balances and short term deposits.

4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTYIn the application of the group’s accounting polices, which are described in note 3, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Key sources of estimation uncertainty The key assumptions concerning the future and other key sources of estimation uncertainty at the date of the consolidated

statement of financial position, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

VALUATION OF UNQUOTED EQUITY INVESTMENTS

Valuation of unquoted equity investments is normally based on one of the following: • recent arm’s length market transactions;

• current fair value of another instrument that is substantially the same;

• an earnings multiple or industry specific multiple;

• the expected cash flows discounted at current rates applicable for items with similar terms and risk characteristics; or

• other valuation models.

The determination of the cash flows and discount factors for unquoted equity investments requires significant estimation.

Critical judgements in applying accounting policiesIn the process of applying the group’s accounting policies, management has made the following significant judgements, apart from those involving estimations, which have the most significant effect on the amounts recognised in the consolidated financial statements:

CLASSIFICATION OF REAL ESTATE PROPERTIES

Management decides on acquisition of a real estate property whether it should be classified as trading, property held for development or investment property. The group classifies property as investment property held for trading if it is acquired principally for sale in the ordinary course of business.

The group classifies property as property held for development if it is acquired with the intention to develop it.

The group classifies property as investment property if it is acquired to generate rental income or for capital appreciation, or for undetermined future use.

CLASSIFICATION OF INVESTMENTS

Management decides on acquisition of an investment whether it should be classified as held for trading, at fair value through statement of income or available for sale.

The group classifies investments as held for trading if they are acquired primarily for the purpose of making a short term profit by the dealers.




Classification of investments as investment at fair value through statement of income depends on how management monitors the performance of these investments. When they are not classified as held for trading but have readily available reliable fair values and the changes in fair values are reported as part of the consolidated statement of income in the management accounts, they are classified as designated at fair value through statement of income.

All other investments are classified as available for sale.

IMPAIRMENT IN VALUE OF AVAILABLE FOR SALE INVESTMENTS

The group treats available for sale equity investments as impaired when there has been a significant or prolonged decline in the fair value below its cost or where other objective evidence of impairment exists. The determination of what is “significant” or “prolonged” requires considerable judgments.

5. SUBSIDIARY COMPANIESInvestment in consolidated subsidiaries represents the parent company’s share in 51.37% of the share capital of “Tamdeen Investment Company – KSC (Closed) and Subsidiaries” (2008: 51.37%) which was acquired effectively at the beginning of 2003, in addition to the parent company’s share in 30% of the share capital of “Tamdeen Shopping Centers Company – KSC (Closed) and Subsidiaries” (2008: 30%) which was incorporated on 30 March 2005 and the parent company exercises control over this company according to the management contract dated 7 March 2005. Investment in subsidiaries also represents the parent company’s direct and indirect share in 75.685% of share capital of “Manshar Real Estate Company – KSC (Closed)” (2008: 75.685%).


10. AVAILABLE FOR SALE INVESTMENTS

Local managed portfolios and fundsParticipations in unquoted local companies sharesParticipations in capital of companies located outside Kuwait

Direct staff costsInvestment properties depreciation (Note 13)Other real estate expenses

Car parkings and yacht club membership revenueRental termination feesProjects management fees and consultanciesServices revenue – Al Kout ComplexOther miscellaneous revenue

Net loss from sale of investments at fair value through statement of incomeNet profit from sale of available for sale investmentsImpairment in value of available for sale investmentsNet unrealised loss from investments at fair value through statement of incomeDividends incomeInterest income





KD’000

8891,1762,4934,558


KD’000

30-

1,21243

6501,935


KD’000

(88) 978

(1,511)(131)

3,557 244

3,049

Year endedDec. 2009 31

2,703372,060 7.3 Fils


KD’000

6402,1522,8635,655


KD’000

1504

4876

144422


KD’000

(452) 3,540

-(37)

4,984 916

8,951


13,593372,75436.5 Fils

6. OPERATIONAL EXPENSES

7. OTHER OPERATIONAL INCOME

8. NET INCOME FROM INVESTMENTS

9. EARNINGS PER SHARE ATTRIBUTABLE TO OWNERS OF THE PARENT COMPANY

Profit for the year attributable to owners of the parent company (KD’000)Weighted average of outstanding shares number (excluding treasury shares) (in thousand)Earnings per share attributable to owners of the parent company

2009KD’000

79,410(26,488) 52,922

2,161

Direct & indirect

%

2911433321

--

3025

Direct & indirect

%

29184325211345

- -

ValueKD’000

9,80014,75611,533

4956,3703,5006,214

--

52,668

ValueKD’000

6,74416,27813,144

6333,953

- -

12,042 128

52,922

Place of incorporation

BahrainQatar

KuwaitKuwaitKuwaitKuwaitKuwaitKuwaitKuwait

(Restated) 2008

KD’000

64,944 (12,276)

52,668(3,508)

2009(Restated)2008

2008KD’000

20,2786,239

92,548119,065

2009KD’000

6,4425,372

73,56485,378

The item of participations in capital of companies located outside Kuwait includes the investments of one of the consolidated subsidiary companies [Tamdeen Investment Company – KSC (Closed)] and which are represented in quoted investments in foreign financial markets. Included in these participations, there is an investment by the subsidiary in the share capital of a Gulf quoted financial institution and which includes mortgaged participations with a total fair value of KD53,297 thousand (2008: KD54,102 thousand) against term loans (Note 20) and bank facilities (Note 21).

11. INVESTMENTS IN ASSOCIATED COMPANIESThis item comprises of the investments of the group in the following associated companies:

(Restated)

Company’s name

Ajmal Holding Company - BSCBarwat Al-Doha Real Estate Co. – WLL (b)Tamdeen Holding Co. – KSC (Closed)Fucom for Central Markets – KSC (Closed)Beyoo Leasing & Financing Co. – KSC (Closed) (c)British Industries for Printing & Packaging Co. – KSC (Closed) (a)Tamdeen Entertainment Co. – KSC (Closed) (b) Tamdeen Franchises Holding Company – KSC (Holding) (a)Tamdeen Resorts Company – WLL

AssetsLiabilitiesNet assetsProfit/(loss) for the year

As follows, the group’s share in the net assets and profit/(loss) for the year of the associated companies in the amount of the latest financial statements available at the date of the consolidated statement of financial position:



(A) During the year, the group sold its total share in British Industries for Printing & Packaging Co. – KSC (Closed) to Tamdeen Franchises Holding Company – KSC (Holding) (an associate) resulting in a net profit of KD383 thousand after the elimination of the group’s share of profit from this sale transaction.

(B) In addition, the group sold its total share in Barwat Al-Doha Real Estate Co. – WLL to Tadmeen Shopping Centers Company – KSC (Closed) (subsidiary company) resulting in a net profit of KD4,601 thousand, in addition to the sale of its total share in Tamdeen Entertainment Co. – KSC (Closed) to this subsidiary resulting in a net profit of KD154 thousand, and these amounts have been eliminated from the consolidated statement of income upon consolidation. During the year, one of the subsidiary companies [Tamdeen Shopping Centers Company – KSC (Closed)] has controlled Tadeem Entertainment Company – KSC (Closed) (an associate) after the acquisition of the total shares of this company from different related parties, and the financial statements of the company have been consolidated starting from the date that control effectively commences.

(C) During the year, one of the subsidiary companies [Tamdeen Investment Company – KSC (Closed)] has recorded an impairment loss in the value of its investment in Beyoo Leasing & Financing Co. – KSC (Closed) of amount KD2,488 thousand by reference to the current market circumstances.

12. INVESTMENTS IN UN-CONSOLIDATED SUBSIDIARY COMPANIESDuring the year 2008, one of the consolidated subsidiary companies [Tamdeen Shopping Centers Company – KSC (Closed)] completed the establishment of Tamdeen Bahraini Real Estate Company – BSC (Closed) of share capital amounting to Bahraini Dinar 40 million, and the subsidiary’s share in this company is 59%.

The financial statements of this Bahraini subsidiary company were not consolidated during the previous year since it did not start its activity yet at that time, but the financial statements of this subsidiary company have been consolidated upon the preparation of the consolidated financial statements for the year ended 31 December 2009 since it started its activity during this year. Furthermore, the group has completed the establishment of Tamdeen Housing Company – KSC (Closed) during the year 2008 of share capital amounting to KD1 million. The group’s share in this company is 80%, and also one of the associated companies [Tamdeen Holding Company – KSC (Closed)] owned 20% of this company’s share capital. The financial statements of this company were not consolidated during the current year since it did not start its principal activities yet.



13. INVESTMENT PROPERTIES

LandsKD’000

36,000 27,135

- 63,135

- - -

- - - -

63,135

BuildingsKD’000

29,35850,327

-79,685

18,741-

18,741

4,809 472

- 5,281

55,663

Machinery and

equipmentKD’000

7,742--

7,742

- - -

1,217 704

- 1,921

5,821

2009Total

KD’000

73,100 77,462

- 150,562

18,741 -

18,741

6,026 1,176

- 7,202

124,619 133,255

(Restated)2008Total

KD’000

94,906-

(21,806)73,100

-18,74118,741

8,1472,152

(4,273)6,026

48,33385,247

Investment properties include: Lands, buildings and its related machinery and equipment, and it is depreciated as follows:

The above fair value has been assessed by an independent external evaluator.

The investment properties are represented in properties related to the subsidiary companies [Manshar Real Estate Company – KSC (Closed)] and [Tamdeen Shopping Centers Company – KSC (Closed)] with net book value of KD124,619 thousand (2008: KD48,333 thousand) mortgaged for local banks against term loans (Note 20) and bank facilities (Note 21).

CostAt 1 JanuaryTransferred from projects in progress (Note 14)DisposalsAt 31 December

Impairment in valueAt 1 JanuaryCharge for the year At 31 December

Accumulated depreciationAt 1 JanuaryCharge for the year (Note 6)Relating to disposals At 31 December

Net book valueAt 31 DecemberFair value

Buildings

Machinery and equipment

20 to 50 years

15 to 25 years


37



14. PROJECTS IN PROGRESS 15. PROPERTY, PLANT AND EQUIPMENT

16. ACCOUNTS RECEIVABLE AND OTHER DEBIT BALANCES

CostAt 1 JanuaryAdditionsTransferred to investment properties (Note 13)Transferred from other debit balances Transferred from investments in lands and real estate held for trading (Note 17)Transferred to investments in lands and real estate held for trading (Note 17)Transferred to property, plant and equipment (Note 15)DisposalsAt 31 December

Impairment in valueAt 1 January Charge for the yearRelating to disposalsAt 31 December

Net book value at 31 December

2009KD’000

180,81741,479

(77,462)--

(41,947)(1,742)

(20,442) 80,703

1,146 -

(839) 307

80,396

(Restated)2008

KD’000

69,21793,107

-4,000

14,493---

180,817

767379

-1,146

179,671

The projects in progress includes project located in Messilah area of amount KD31,938 thousand (2008: KD86,725 thousand) and it is owned by one of the subsidiary companies [Tamdeen Shopping Centers Co. – KSC (Closed)]. It also includes projects with book value of KD72,411 thousand (2008: KD77,649 thousand) mortgaged or promised for mortgage to local banks against term loans (Note 20) and bank facilities (Note 21).

The sale of a land in a project located in Messilah area has resulted in a profit for the group during the year of total amount KD1,777 thousand.

CostAt 1 JanuaryAdditionsTransferred from projects in progress (Note 14)DisposalsAt 31 December

Accumulated depreciationAt 1 JanuaryCharge for the yearRelating to disposalsAt 31 December

Net book valueAt 31 December

The group depreciates its property, plant and equipment using the following annual rates:

Buildings 2% to 5%Machines and equipment 4% to 25%Vehicles 20% to 25%Furniture, fixtures and office equipment 20% to 33.33%

2009KD’000

2,064 250 343

5,143 36

12,874 9,389

30,099(1,049) 29,050

(Restated)2008

KD’000

1,096 260

1,498 143 196

- 19,753 22,946

(669) 22,277

Receivable from tenantsStaff receivablePrepaid expensesDue from related partiesAccrued incomePaid for the acquisition of property, plant and equipment (below)Other debit balances

Provision for doubtful debts

The item of the paid for the acquisition of property, plant and equipment is represented principally in the amount paid during the year by Tamdeem Bahraini Real Estate Company – BSC (Closed), a subsidiary company for one of the group’s companies [Tamdeen Shopping Centers Company – KSC (Closed)], in order to acquire a land in the State of Bahrain.

2009Total

KD’000

1,546 880

1,742(193)

3,975

744 269

(142) 871

3,104

(Restated)2008Total

KD’000

1,182374

-(10)

1,546

486263

(5)744

802

Furniture, fixtures and

office equipment

KD’000

792 757

-(149)

1,400

479 125

(103) 501

899

Machines and

equipmentKD’000

737 102 693(44)

1,488

251 129(39)

341

1,147

VehiclesKD’000

1721

--

38

142-

16

22

BuildingsKD’000

--

1,049-

1,049

-13

-13

1,036

36 Annual Report 2009 TAMDEEN REAL ESTATE COMPANY - KSCCAnd subsidiaries - Kuwait

17. INVESTMENTS IN LANDS AND REAL ESTATE HELD FOR TRADING

Additions to investments in lands and real estate held for trading are mainly represented by the amounts paid during the year by one of the group’s subsidiary companies [Manshar Real Estate Company – KSC (Closed)] in order to increase its share in a real estate portfolio, being lands and real estate properties in Kuwait for trading purposes.

During the year, lands included in the projects in progress and amounting to KD41,947 thousand were transferred to investments in lands and real estate held for trading for the purpose of resale.

At 1 JanuaryAdditionsDisposalsTransferred from projects in progress (Note 14)Transferred to projects in progress (Note 14)




(Restated)2008

KD’000

14,5224,813

(29)-

(14,493)4,813

2009KD’000

4,8137,218

-41,947

-53,978

18. TREASURY SHARESAt the date of the consolidated statement of financial position, the parent company owned 668,017 shares of the treasury shares (2008 : 1,478,017 shares) equivalent to 0.2% of the total shares of the issued share capital (2008 : 0.4%). The market value of these shares according to the last announced purchase price at the date of the consolidated statement of financial position was KD200 thousand (2008 : KD473 thousand).

19. RESERVESIn accordance with the Commercial Companies Law of Kuwait, 10% of the profit for each year before contribution to KFAS, contribution to Zakat, provision for NLST and Board of directors’ remuneration is transferred to the legal reserve until such time that the balance of the legal reserve account equals 50% of the balance of the paid up share capital.

Distribution of the legal reserve is limited to the amount required to enable the payment of dividends of 5% of paid-up share capital to be made in years when retained earnings are insufficient for the payment of dividends of that amount.

10% of the year’s profit before contribution to KFAS, contribution to Zakat, provision for NLST and Board of directors’ remuneration is transferred to the voluntary reserve, and this transfer could be ceased based on the decision of the parent company’s board of directors. Transfers to the voluntary reserve are made in accordance with the recommendation of the parent company’s board of directors to the general assembly.

The amounts transferred to the legal and voluntary reserves during the year have been calculated as follows:

Profit for the yearAdd:Loss attributable to the non-controlling interestsProfit attributable to owners of the parent companyAdd:Board of directors’ remuneration of the parent companyProvision for National Labour Support Tax (NLST) of the parent companyContribution to Zakat of the parent companyContribution to Kuwait Foundation for the Advancement of Sciences (KFAS) of the parent companyProfit attributable to owners of the parent company before contribution to KFAS, contribution to Zakat, provision for NLST and Board of directors’ remunerationTransferred to legal reserve (10%)Transferred to voluntary reserve (10%)

2008KD’000

13,466

12713,593

230308123120

14,3741,4371,437

2009KD’000

795

1,9082,703

70471013

2,843284284

20. TERM LOANSThe loans are due for repayment as follows:

Within one yearFrom one to five years

(Restated)2008

KD’000

68,175119,250187,425

2009KD’000

50,507150,847201,354

All the term loans are granted for the parent company and its subsidiary companies by local banks. These loans are denominated in Kuwaiti Dinars with annual interest rate ranging between 1% to 2.5% (2008: 1% to 2.5%) over the discount rate announced by the Central Bank of Kuwait. The total amount of the instalments relating to the loans which are due to be repaid within twelve months from the date of the consolidated statement of financial position is shown as a current liability.

The loans granted to the subsidiary companies are against the mortgage of shares included in investments with a fair value of KD53,297 thousand (2008: KD54,102 thousand) (Note 10) and mortgage of investment properties with net book value of KD124,619 thousand (2008: KD48,333 thousand) (Note 13), and mortgage or promise for mortgage of projects in progress with value of KD72,411 thousand (2008: KD77,649 thousand) (Note 14).





21. BANK FACILITIESThe bank facilities represent the balances of overdraft facilities which are granted to the parent company and its subsidiaries by local banks to finance the working capital and the real estate activities. They are completely repayable under demand with annual floating interest rate which is equal to current interest rate in market. The bank facilities are granted against mortgage of investment properties (Note 13) and available for sale investments (Note 10), and mortgage or promise for mortgage of projects in progress (Note 14).

24. CASH AND CASH EQUIVALENTSCash and cash equivalents included in the consolidated statement of cash flows comprise of the following balances of the consolidated statement of financial position:

Retentions for executed worksIncome received in advanceAccrued leave and expensesDue to related partiesUncollected dividends to shareholdersOther credit balances

(Restated)2008

KD’000

5,1022,2374,257

17235

8,68220,530

2009KD’000

5,6512,0385,0975,014

3233,047

21,170

22. ACCOUNTS PAYABLE AND OTHER CREDIT BALANCES

23. PROPOSED APPROPRIATIONSThe board of directors of the parent company proposed to distribute cash dividends of 10% or 10 Kuwaiti Fils per share from the paid-up share capital, and this proposal is subject to the approval of the general assembly of shareholders and control authorities.

On 19 May 2009, the general assembly of shareholders approved the cash dividends of 15% or 15 Kuwaiti Fils per share from the paid-up share capital to the shareholders registered at that date as per records for the year ended 31 December 2008 (10% or 10 Kuwaiti Fils per share as cash dividends and 10% bonus shares from the paid-up share capital to the shareholders for the year ended 31 December 2007).

(Restated)2008

KD’000

11,21411,77622,990

2009KD’000

13,593167

13,760

Cash and bank balancesShort term deposits

Year ended at 31 December 2009Gross income

Profit for the year attributable to owners of the parent company

Total assetsTotal liabilitiesNon-controlling interestsNet assets employed

Year ended at 31 December 2008 (restated)Gross income

Profit/(loss) for the year attributable to owners of the parent company

Total assetsTotal liabilitiesNon-controlling interestsNet assets employed

25. SEGMENTAL ANALYSISThe trading activities of the parent company and its subsidiaries are principally carried out within the State of Kuwait. With the exception of participations in capital of companies located outside Kuwait (Note 10), all of the assets and liabilities are located inside Kuwait.

A segmental analysis of gross income, profit for the year attributable to owners of the parent company, total assets, total liabilities, non-controlling interests and net assets employed by activity is as follows:

Real Estate KD’000

12,256

1,440

271,470(180,863)

(6,265) 84,342

25,640

13,998

266,315(153,765)

(13,094) 99,456

Investment KD’000

5,358

1,263

173,573(63,693)

(108,199) 1,681

6,654

(405)

185,308(72,578)

(111,956) 774

TotalKD’000

17,614

2,703

445,043(244,556)(114,464)

86,023

32,294

13,593

451,623(226,343)(125,050) 100,230





26. RELATED PARTY TRANSACTIONSIncluded in the transactions carried out by the group during the year, there are certain transactions with related parties within the normal activities of the group involving shareholders who are represented in the board of directors, in addition to other major shareholders. These transactions were incorporated in the consolidated financial statements as follows:

(Restated)2008

KD’000

13,5747,1701,908

39,559

-28

1,413832

-

56,095

2009KD’000

5,518 2,380 1,574 5,739

383 40

105 637 250

43,284

Consolidated statement of financial positionAccounts receivable and other debit balancesAccounts payable and other credit balancesCash at investment portfoliosProjects in progress

Consolidated statement of incomeProfit from sale of a share in an associated companyNet profit from sale of available for sale investmentsManagement fees income and consultancies General and administrative expenses (top management salaries and remunerations)Other income

Contra accounts – off consolidated statement of financial position itemsNet book value of customers’ portfolios (major shareholders)

27. COMMITMENTS AND CONTINGENT LIABILITIESAt the date of the consolidated statement of financial position, the parent company had commitments against outstanding letters of guarantee submitted in favour of third parties of KD4,919 thousand (2008: KD4,812 thousand). One of the subsidiary companies had contingent liabilities of KD11,488 thousand (2008: KD Nil).

28. CONTRA ACCOUNTS – OFF CONSOLIDATED STATEMENT OF FINANCIAL POSITION ITEMSOne of the subsidiary companies [Tamdeen Investment Co. – KSC (Closed)] manages investment portfolios for third parties which had a net book value of KD112,905 thousand at 31 December 2009 (2008: KD180,295 thousand). These balances are not included in the consolidated statement of financial position.

29. RISK MANAGEMENT OBJECTIVES AND POLICIESThe group’s activities expose it to variety of financial risks: market risk (including currency risk, interest rate risk, price risk), credit risk and liquidity risk.

The parent company’s board of directors are ultimately responsible for the overall risk management and for approving risk strategies and principles. The group’s risk management is carried out by investment management and audit committee and focuses on actively securing the group’s short to medium term cash flows by minimizing the potential adverse effects on the group’s financial performance through internal risk reports. Long term financial investments are managed to generate lasting returns.

The group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

The most significant financial risks to which the group is exposed to are as follows:

29.1 Market riskA) FOREIGN CURRENCY RISK

The group mainly operates in the Kuwait, GCC, Europe and other Middle Eastern countries, and is exposed to foreign currency risk arising from various foreign currency exposures, primarily with respect to US Dollar, Lebanese Lira, Qatari Riyal and Bahraini Dinar. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations.

To mitigate the group’s exposure to foreign currency risk, management works on maintaining a balanced exposure of assets and liabilities by currency to minimize fluctuations and enter into forward foreign exchange contracts, if needed, in accordance with the group’s risks management polices. Generally, the group’s risk management procedures distinguish short-term foreign currency cash flows (due within twelve months) from longer-term cash flows. Where the amounts to be paid and received in specific currency are expected to largely offset one another, no further hedging activity is undertaken. Forward foreign exchange contracts may be entered into for significant long-term foreign currency exposures that are not expected to be offset by other currency transactions.

The group had the following significant exposures denominated in foreign currencies, translated into Kuwaiti Dinar at the closing rate:

2008

5555

2009

55-5

US DollarQatari RiyalLebanese Lira Bahraini Dinar

2008KD’000

88,60816,427

404,855

2009KD’000

68,6123,805

-4,855

Exchange ratesensitivity %


The foreign currency sensitivity is determined on the following assumptions:





29. RISK MANAGEMENT OBJECTIVES AND POLICIES(continued)29.1 Market risk (continued)A) FOREIGN CURRENCY RISK (CONTINUED)

The above percentages have been determined based on the average market volatility in exchange rates in the previous twelve months. There has been no change during the year in the methods and assumptions used in the preparation of the sensitivity analysis.

If the Kuwaiti Dinar had strengthened against the foreign currencies assuming the above sensitivity with all other variables being constant then this would have the following impact on the profit/(loss) for the year and equity:



2008KD’000

4,387924

-243

5,554

2008KD’000

(4,387)(924)

-(243)

(5,554)

Equity

Equity

If the Kuwaiti Dinar had weakened against the foreign currencies assuming the above sensitivity with all other variables being constant then this would have the following impact on the (loss)/profit for the year and equity:

Exposures to foreign exchange rates vary during the year depending on the volume and nature of the transactions. Nonetheless, the analysis above is considered to be representative of the group’s exposure to the foreign currency risk.

B) INTEREST RATE RISK

Interest rate risk arises from the possibility that changes in interest rates will affect future profitability or the fair values of financial instruments. The group is exposed to interest rate risk with respect to its short term deposits and its borrowings. The borrowings mainly represent short and long term borrowings and bear fixed or variable rates of interest. The management has established levels of interest rate risk by setting limits on the interest rate gaps for stipulated periods.

Positions are monitored on a regular basis and hedging strategies maybe used to ensure positions are maintained within established limits.

2009KD’000

9---9

2008KD’000

15(116)

2-

(99)

2009KD’000

3,421190

-243

3,854

2008KD’000

(15)116

(2)-

99

(Loss)/profit for the year

Profit/(loss) for the year

2009KD’000

(3,421)(190)

-(243)

(3,854)

2009KD’000

(9)---

(9)

29. RISK MANAGEMENT OBJECTIVES AND POLICIES(continued)29.1 Market risk (continued)B) INTEREST RATE RISK (CONTINUED)

The effective interest rate (effective yield) of monetary financial instruments is the rate that, when used in a present value calculation, results in the carrying amount of the instrument. The rate is a historical rate for a fixed rate instrument carried at amortised cost and a current rate for a floating rate instrument or an instrument carried at fair value.

The group’s interest rate exposure based on earlier of contractual repricing arrangements and maturity at 31 December 2009 and 2008 was as follows:

1-3 monthsKD’000

-167

---------

167

------

-

3-12 monthsKD’000

-----------

-

17,289-

50,507---

67,796

Over1 year

KD’000

-----------

-

---

150,847--

150,847

Not exposed

to interest rate riskKD’000

13,593-

99529,05053,97885,37852,922

841124,61980,3963,104

444,876

-21,170

--

4,173570

25,913

TotalKD’000

13,593167995

29,05053,97885,37852,922

841124,61980,3963,104

445,043

17,28921,17050,507

150,8474,173

570

244,556

Effective Interest

rate %

-1 - 2.5

---------

6.3-

6.36.3

--

At 31 December 2009ASSETSCash and bank balancesShort term depositsInvestments at fair value through statement of incomeAccounts receivable and other debit balances Investments in lands and real estate held for tradingAvailable for sale investmentsInvestments in associated companiesInvestments in unconsolidated subsidiary companiesInvestment propertiesProjects in progressProperty, plant and equipment

Total assets

LIABILITIESBank facilitiesAccounts payable and other credit balancesCurrent portion of term loansTerm loansRefundable rental depositsProvision for end of service indemnity

Total liabilities



29. RISK MANAGEMENT OBJECTIVES AND POLICIES(continued)29.1 Market risk (continued)B) INTEREST RATE RISK (CONTINUED)

At 31 December 2008 (restated)ASSETSCash and bank balancesShort term depositsInvestments at fair value through statement of incomeAccounts receivable and other debit balances Investments in lands and real estate held for tradingAvailable for sale investmentsInvestments in associated companiesInvestments in unconsolidated subsidiary companiesInvestment propertiesProjects in progressProperty, plant and equipment

Total assets

LIABILITIESBank facilitiesAccounts payable and other credit balancesCurrent portion of term loansTerm loansRefundable rental depositsProvision for end of service indemnity

Total liabilities

1-3 monthsKD’000

-11,776

---------

11,776

------

-

3-12 monthsKD’000

-----------

-

14,221-

68,175---

82,396

Over1 year

KD’000

-----------

-

---

119,250--

119,250

Not exposed

to interest rate riskKD’000

11,214-

20422,2774,813

119,06552,668

80048,333

179,671802

439,847

-20,530

--

3,697470

24,697

TotalKD’000

11,21411,776

20422,277

4,813119,065

52,668800

48,333179,671

802

451,623

14,22120,53068,175

119,2503,697

470

226,343

Effective Interest

rate %

-1-4

---------

7-77--

The group does not have any financial instruments - off consolidated statement of financial position which are used to manage the interest rate risk.

The following table illustrates the sensitivity of the (loss)/profit for the year and equity to a reasonably possible change in interest rates of +5% and - 5% (2008: +5 % and - 5%) with effect from the beginning of the year. These changes are considered to be reasonably possible based on observation of current market condition. The calculations are based on the group’s financial instruments exposed to interest rate risk held at the date of the consolidated statement of financial position. All other variables are held constant. There has been no change during this year in the methods and assumptions used in preparing the sensitivity analysis.

(Loss)/profit for the yearEquity

2009 2008

-5%KD’000

461461

+5%KD’000

(461)(461)

+5%KD’000

(501)(501)

-5%KD’000

501501



29. RISK MANAGEMENT OBJECTIVES AND POLICIES(continued)29.1 Market risk (continued)C) PRICE RISK

The group is exposed to equity price risk with respect to its equity investments. Equity investments are classified either as investments at fair value through statement of income (including trading securities) and available for sale securities. The group’s investments are listed on the Kuwait Stock Exchange and other Gulf markets.

To manage its price risk arising from investments in equity securities, the group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the group.

The sensitivity analyses below have been determined based on the exposure to equity price risks at the date of the consolidated financial statements. There has been no changes in the methods and assumptions used in the preparation of the sensitivity analysis.

If equity prices had been 5% higher/lower, the effect on the profit/(loss) for the year and equity for the year ended 31 December would have been as follows:

Market Stock Exchange index + 5%Market Stock Exchange index – 5%

Profit/(loss) for the year Equity

2008KD’000

5,609(5,609)

2009KD’000

4,050(4,050)

2009KD’000

4,050(4,050)

2008KD’000

5,609(5,609)

29.2 CREDIT RISKCredit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The group’s credit policy and exposure to credit risk is monitored on an ongoing basis. The group seeks to avoid undue concentrations of risks with individuals or groups of customers in specific locations or busines s through diversification of its activities. It also obtains collateral security when appropriate.

The group’s exposure to credit risk is limited to the carrying amounts of financial assets recognised at the date of the consolidated statement of financial position, as summarized below:

Investments at fair value through statement of incomeAvailable for sale investments Cash and cash equivalentsAccounts receivable and other debit balances

(Restated)2008

KD’000

204119,065

22,99022,277

164,536

2009KD’000

99585,37813,76029,050

129,183



29. RISK MANAGEMENT OBJECTIVES AND POLICIES(continued)29.3 CONCENTRATION OF ASSETSThe distribution of assets by geographic region was as follows:

29. RISK MANAGEMENT OBJECTIVES AND POLICIES(continued)29.4 LIQUIDITY RISK (CONTINUED)The maturity profile of the assets and liabilities at 31 December 2009 and 2008 are as follows:



At 31 December 2009GEOGRAPHIC REGION:Cash and bank balancesShort term depositsInvestments at fair value through statement of incomeAccounts receivable and other debit balances Investments in lands and real estate held for tradingAvailable for sale investmentsInvestments in associated companiesInvestments in unconsolidated subsidiary companiesInvestment propertiesProjects in progressProperty, plant and equipment

At 31 December 2008 (restated)GEOGRAPHIC REGION:Cash and bank balancesShort term depositsInvestments at fair value through statement of incomeAccounts receivable and other debit balances Investments in lands and real estate held for tradingAvailable for sale investmentsInvestments in associated companiesInvestments in unconsolidated subsidiary companiesInvestment propertiesProjects in progressProperty, plant and equipment

KuwaitKD’000

13,593167995

29,05053,9786,482

29,900841

124,61980,3963,104

343,125

Other middle

eastern countries

KD’000

-----

78,89623,022

----

101,918

TotalKD’000

13,593167995

29,05053,97885,37852,922

841124,61980,3963,104

445,043

11,21411,776

20422,2774,813

28,47626,245

80048,33398,170

802253,110

-----

90,58926,423

--

81,501-

198,513

11,21411,776

20422,2774,813

119,06552,668

80048,333

179,671802

451,623

29.4 LIQUIDITY RISKLiquidity risk is the risk that the group will be unable to meet its liabilities when they fall due. To limit this risk, the group’s management has arranged diversified funding sources, manages assets with liquidity in mind, and monitors liquidity on a regular basis.

The table below summarises the maturity profile of the group’s assets and liabilities based on contractual repayment arrangements. The contractual maturities of assets and liabilities have been determined on the basis of the remaining period from the date of the consolidated statement of financial position to the contractual maturity date. Maturity periods for investments at fair value through statement of income and available for sale investments are based on planned exit dates.

-----

85,37852,922

841124,61980,3963,104

347,260

----

4,173570

4,743

-----

119,06552,668

80048,333

179,671802

401,339

----

3,697470

4,167

---

28,67153,978

------

82,649

17,28917,80050,507

---

85,596

---

20,7794,813

------

25,592

14,22111,59668,175

---

93,992

13,593167995

29,05053,97885,37852,922

841124,61980,3963,104

445,043

17,28921,17050,507

150,8474,173

570244,556

11,21411,776

20422,2774,813

119,06552,668

80048,333

179,671802

451,623

14,22120,53068,175

119,2503,697

470226,343

1-3 years

KD’000

------------

---

150,847--

150,847

------------

---

119,250--

119,250

13,593167995379

-------

15,134

-3,370

----

3,370

11,21411,776

2041,498

-------

24,692

-8,934

----

8,934

At 31 December 2009ASSETSCash and bank balancesShort term depositsInvestments at fair value through statement of incomeAccounts receivable and other debit balances Investments in lands and real estate held for tradingAvailable for sale investmentsInvestments in associated companiesInvestments in unconsolidated subsidiary companiesInvestment propertiesProjects in progressProperty, plant and equipmentTotal assets

LIABILITIESBank facilitiesAccounts payable and other credit balancesCurrent portion of term loansTerm loansRefundable rental depositsProvision for end of service indemnityTotal liabilities

At 31 December 2008 (restated)ASSETSCash and bank balancesShort term depositsInvestments at fair value through statement of incomeAccounts receivable and other debit balances Investments in lands and real estate held for tradingAvailable for sale investmentsInvestments in associated companiesInvestments in unconsolidated subsidiary companiesInvestment propertiesProjects in progressProperty, plant and equipmentTotal assets

LIABILITIESBank facilitiesAccounts payable and other credit balancesCurrent portion of term loansTerm loansRefundable rental depositsProvision for end of service indemnityTotal liabilities

1-3 monthsKD’000

TotalKD’000

2-12 monthsKD’000

Over 3 years

KD’000


50 Annual Report 2009

30. CAPITAL MANAGEMENT OBJECTIVESThe group’s capital management objectives are to ensure the group’s ability to continue as a going concern and to provide adequate return to its shareholders through the optimization of the capital structure.

The group manages the capital structure and makes adjustments in the light of changes in economic conditions and risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders, issue new shares or sell assets to reduce debt. The capital structure of the group consists of the following:


(Restated)2008

KD’000

14,221 2,057

119,250 68,175

(22,990) 180,713 100,230 125,050 405,993

Bank facilities (Note 21)Accounts payable against purchase of investmentsTerm loans (Note 20)Current portion of term loans (Note 20)Less: Cash and cash equivalents (Note 24)Net debtEquity attributable to owners of the parent companyNon-controlling interest Total capital

2009KD’000

17,289 -

150,847 50,507

(13,760) 204,883 86,023

114,464 405,370

Net debtTotal capitalGearing ratio

2009KD’000

204,883405,370

%51

(Restated)2008

KD’000

180,713405,993

%45

31. COMPARATIVE FIGURESA subsidiary of the group [Tamdeen Shopping Centers Company – K.S.C (Closed)] has not consolidated the financial statements of one of its subsidiaries [Tamdeen Bahraini Real Estate Company – B.S.C (Closed)] for the year ended 31 December 2008. Upon preparing the consolidated financial statements for the year ended 31 December 2009, the financial statements of that subsidiary have been consolidated with retroactive effect and the comparative figures have been restated. Further, the parent company’s interest of foreign exchange reserve and accumulated changes reserve in the fair value of available for sale investments has been separated from non-controlling interests at the end of that year. Re-classification due to consolidation with retroactive effect and separation of reserves have not affected the profits of the previous years. The following is a summary of the main items which have been restated:

The group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital as follows:

Before restated

KD’000 445,344 116,049 102,956 219,005 226,339 445,344

After restated

KD’000451,623

100,230 125,050 225,280 226,343 451,623

Total assetsTotal equity attributable to owners of the parent companyNon-controlling interestsTotal equityTotal liabilities Total equity and liabilities

2008


annual report 2009. sheikh nawaf al-ahmad al-jaber al-sabah crown prince of the state of kuwait h.h....

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