Tamdeen Shopping Centre Development Co.. Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah The Crown Prince Of The State Of Kuwait H.H. Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah The Amir Of The

Tamdeen Shopping Centre Development Co. annual report 2006

H.H. Sheikh Nawaf Al-Ahmad Al-Jaber Al-SabahThe Crown Prince Of The State Of Kuwait

H.H. Sheikh Sabah Al-Ahmad Al-Jaber Al-SabahThe Amir Of The State Of Kuwait

H.H. Sheikh Nasser Al-Mohamad Al-Ahmad Al-SabahThe Prime Minister Of The State Of Kuwait

Tamdeen Shopping Centre Development Company

P.O Box 29060 Safat Postal Code 13151 Kuwait

T: +965-3930100 F: +965-3930050

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Contents

Chairman’s letter 9Board of directors 13Executive management 15Independant auditor’s report 19Balance sheet 21Statement of income 22Statement of changes in equity 23 Statement of cash flows 24Notes to the financial statements 25

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We bring together a team of highly experienced and

qualified professionals that is committed to achieving

the highest standards in managing and developing

shopping centres.

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Chairman’s letter

On behalf of my colleagues, Members of the Board and myself, I am pleased to welcome you and present to you the first Annual Report for the company for the period from 1 March 2005 to 31 December 2006.This period was the basis to the first launch of Tamdeen Shopping Centre Development Company, during which the strategies and general policies of the company have been planned and adopted to emphasize the substantial role and objectives of its incorporation, represented by the development and management of the shopping centers owned by the company and other parties.

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our strategy to achieve our goals. And we still have more projects, programs and plans which will be

beneficial and fruitful to our customers and shareholders in the future.

Finally, I would like to avail this opportunity to express my utmost gratitude to His Highness the Amir,

Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah and His Highness the Crown Prince, Sheikh Nawaf Al-Ahmad

Al-Jaber Al-Sabah and His Highness the Prime Minister, Sheikh Naser Al-Mohammed Al-Ahmad Al-Sabah.

I also wish to praise the vital supporting role of our parent company for its sincere effort and loyalty and

their constant endeavor to achieve our prospects and objectives. Wishing Tamdeen Shopping Centre

Development Company management and staff the best of success, progress and prosperity.

Marzouk Jasim Khaled Al Marzouk

Chairman.

50million

increased capital in 2006

invested in Tamdeen Entertainment Company

25Honorable Shareholders,

In the forthcoming period, our efforts shall be focused on the implementation of these strategies by

completing the company’s projects currently under development, one of the most significant being

360° Kuwait - an investment of K.D. 80 million with a gross leasable area reaching approximately 75,000

square meters which is located in the South Surra area at the intersection of the Sixth Ring Road and

King Faisal Highway. Its construction is expected to be completed by the end of 2008. Further, the

preparation of designs for the properties purchased in Salmiya, Suleibikhat and Jahra is in progress.

In addition, Tamdeen Shopping Centre Development invested 25% of the capital in the newly

established Tamdeen Entertainment Company.

In view of the foregoing projects, the company decided to increase its capital from K.D. 30 million to

K.D. 50 million, which was completed in 2006.

Further, an agreement was made between Tamdeen Shopping Centre Development Company and Kuwait

National Cinema Company and Tamdeen Real Estate Company to manage and develop their existing and

future shopping centers, represented by Al-Fanar Complex in Salmiya, Madinat Al-Fahaheel project which

includes Al-Fahaheel Water Front –Al Kout and Al-Manshar Towers and Complex in addition to the Mall

of Kuwait project. And there are several other important projects in Kuwait and abroad which are still

under study and research.

Honorable Shareholders,

The revenues realized by the company last year were generated from the management of assets and

complexes of a third party which contributed significantly towards reducing the expenditures incurred

by the company.

Honorable Shareholders,

Based on these achievements which we have promised to accomplish, we shall spare no effort in keeping

up our endeavors and continuous development to realize the company’s vision and ambitions to

occupy a leading position in the field of our specialization in The shopping center sector, and

attain a pioneering status in this sector locally and regionally, emphasizing that we still have more

to offer, particularly given that the last period witnessed the first inception of our journey to implement

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Marzouk J. Al Marzouk Chairman

Mohammed J. Al Marzouk Vice Chairman

Ahmad A. Al Sarawi Managing Director

Hisham F. Al Ghanim Board Member

Shavak Srivastava Board Member

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Board members

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Executive management

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David Boesley GM - Operations & Marketing

Walid Abu Zaid GM - Finance

Tarek Gaffar Sr. HR & Administration Manager

Tarek Darwish GM - Development & Projects

Muath B. Al-Roumi D. GM - Marketing

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Not only unique shopping destinations, but also complete and

unforgettable experiences.

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Reports on the Financial StatementsWe have audited the accompanying financial statements of Tamdeen Shopping Centre Development Company (K.S.C.C), "the Company" which comprise the balance sheet as of 31 December 2006 and the statements of income, changes in equity and cash flows for the period from 1 March 2005 to 31 December 2006, and a summary of significant accounting policies and other explanatory notes.

Management’s Responsability for the Financial StatementsManagement is responsible for the preparation and fair presentation of these 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 financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s ResponsabilityOur responsibility is to express an opinion on these 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 financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the 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 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 financial statements present fairly, in all material respects, the financial position of the Company as of 31 December 2006, and of its financial performance and its cash flows for the period from 1 March 2005 to 31 December 2006 in accordance with International Financial Reporting Standards.

Report on Other Legal and Regulatory RequirementsFurthermore, in our opinion, proper books of accounts have been kept by the Company and the financial statements, together with the contents of the report of the Board of Directors relating to these financial statements, are in accordance therewith. We further report that we obtained all the information and explanations that we required for the purpose of our audit and that the financial statements incorporate all information that is required by the Commercial Companies Law of 1960, as amended, and by the Company's Articles of Association; that an inventory was duly carried out; and that to the best of our knowledge and belief, no violation of the Commercial Companies Law of 1960, as amended, or of the Articles of Association of the Company have occurred during the period from 1 March 2005 to 31 December 2006 that might have had a material effect on the business of the Company or on its financial position.

Kuwait, 30 January 2007

Independent auditor's report to the shareholders

Bader A. Al-Wazzan Licence No 62.A PricewaterhouseCoopers

Tamdeen Shopping Centre Development Company (K.S.C.C)Kuwait

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Notes 31 Dec. 2006

KDAssets

Non- current assets

Property and equipment 3 118,445

Projects under construction 4 50,094,860

Intangible assets 5 103,226

50,316,531

Current assets

Inventories 41,734

Trade and other receivables 6 1,390,220

Available for sale investments 7 5,221,360

Cash and cash equivalents 8 6,154,805

12,808,119

Total asset 63,124,650

Equity and liabilities

Equity

Share capital 9 47,503,295

Change in fair value reserve (305,512)

Accumulated loss (569,663)

Total equity 46,628,120

Liabilities

Non-current liabilities

Loans and bank facilities 10 11,700,000

Post employment benefits 60,114

Current liabilities 11,760,114

Trade and other payables 11 2,359,255

Loans and bank facilities 10 2,377,161

4,736,416

Total liabilities 16,496,530

Total equity and liabilities 63,124,650

Ahmed Abdul Aziz Al SarawiMarzouk Jassim Khaled Al-Marzouk

Managing DirectorChairman

The accompanying notes are an integral part of these financial statements.

Balance sheet As at 31 December 2006

Uniquedesign that captures the imagination of the nation,

to become an iconic landmark for Kuwaitand a fitting tribute to the country’s grand vision.

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Balance sheetStatement of incomeStatement of changes in equity Statement of cash flowsNotes to the financial statements

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Share capital

Change in fairvalue reserve

Accumulated loss Total

KD KD KD KD

Capital payment 47,503,295 - - 47,503,295

Change in fair value of available for sale investments - (305,512) - (305,512)

Net loss recognized directly in equity - (305,512) - (305,512)

Net loss for the period - - (569,663) (569,663)

Total recognized loss for the year - (305,512) (569,663) (875,175)

Balance as at 31 December 2006 47,503,295 (305,512) (569,663) 46,628,120

Statement of changes in equity For the period from 1 March 2005 to 31 December 2006


Distinctive and leisure experience like no other.

Notes

Period from 1 March 2005 to

31 December 2006KD

RevenuesProperty management fees 461,688Interest income 307,663Gains from investments of fair value through profit or loss 12 98,006Other income 330,230

1,197,587Expenses General and administrative expenses 13 1,767,250Net loss for the period (569,663)

Statement of income For the period from 1 March 2005 to 31 December 2006


shapes & exciting interiors, every corner holds a surprise that will make your shopping

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1. Constitution and activities

Tamdeen Shopping Centre Development (K.S.C.C) was incorporated on 1 March 2005 according to establishment contract registered by No. 148/C/part (1). The Company is located in Qebla – Area No. (8), Al Kuwait Real Estate Company Compound, P.O. Box 29060 – Safaa – 13151 Kuwait.

The objectives of the Company are : 1 - Owning, sale and purchase of lands and properties and development thereof for the Company inside and outside

Kuwait, and management of third party properties.

2 - Owning, sale and purchase of shares and bonds in real estate companies for the company's account only inside and outside Kuwait.

3 - Conducting studies and providing advisory services in all of the real estate fields, provided that the conditions applicable to such service provider should be met.

4 - Owning, managing and operating hotels, healthy clubs and touristic facilities, and renting in and renting out thereof.

5 - Carrying on maintenance works required for properties and buildings owned by the Company and third parties.

6 - Owning the commercial markets and residential complexes, and management thereof.

7 - Establishment and management of the real estate funds (subject to approval of the Central Bank of Kuwait).

8 - Utilization of the surplus funds by investing these funds in portfolios managed by specialized entities.

9 - Participating in setting up the infrastructures of BOT based residential, commercial and industrial areas and projects and real estate facility management.

The Company may have interest, whatsoever, or participate or get involved with corporations whose business nature is similar to that of the company, or which may assist the company in achieving its objectives inside Kuwait or outside. The company may establish, hold interest in or purchase, such entities or make them affiliates thereto.

The financial year of the Company commences from January 1st and end on December 31st every year, except for the first financial year, which shall commence from March 1st, 2005 and expire on December 31st, 2006.

The Company is 49.73% owned by Kuwait National Cinema Company K.S.C.C, which assigned the right of Management and operation to Tamdeen Real Estate Company K.S.C (a Shareholder of 20%), the parent company.

The financial statements were authorized for issue by the Board of Directors on 30 January 2007. The shareholders’ General Assembly has the authority to amend these financial statements after issuance.

Notes to the financial statements For the period from 1 March 2005 to 31 December 2006

Al Manshar Rotana Hotel

Al Kout

Al Manshar Towers & Complex

Statement of cash flows For the period from 1 March 2005 to 31 December 2006

Period from 1 March 2005 to

31 December 2006

KD

Cash Flows from operating activities

Net loss for the year (569,663)

Adjustments for:

Depreciation and amortization 61,129

Gains from investments at fair value through profit or loss (98,006)

Interest income (307,663)


Operating loss before changes in working capital (854,089)

Inventories (41,734)

Trade and other receivables (1,390,220)

Investments at fair value through profit or loss (7,594)

Trade and other payables 1,106,347

Net cash generated from operating activities (1,187,290)

Cash flows from investing activities

Acquisition of property and equipment (139,050)

Acquisition of projects under construction (48,841,952)

Acquisition of intangible assets (143,750)

Acquisitions of available for sale investments (5,526,872)

Interest received 307,663

Dividends received 105,600

Net cash used in investing activities (54, 238,361)

Cash flows from financing activities

Proceeds from capital increase 47,503,295

Net proceeds from loans and bank facilities 14,077,161

Net cash proceed from used in financing activities 61,580,456

Net increase in cash and cash equivalents 6,154,805

Cash and cash equivalents at beginning of the period -

Cash and cash equivalents at end of the period (Note 8) 6,154,805

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2.3 Projects under constructionThe cost of property and equipment under preparation are included in projects under construction at the balance sheet until they are completed and ready for their intended use. At that time they are reclassified under property and equipment and the depreciation is calculated since then.

Property that is being constructed or developed for future use as investment property is classified as work in progress and stated at cost until construction or development is complete, at which time it is reclassified as investment property.

2.4 Investments propertyInvestment property held by the Company for capital appreciation or to earn rental are classified as non current assets. Investment property is carried at historical cost less accumulated depreciation and impairment losses. Depreciation is charged on a straight line method over their estimated useful lives.

2.5 Intangible assetsIntangible assets represents paid key money. Intangible assets are stated at cost less accumulated amortization and impairment losses. Intangible assets are amortized over the lower of their estimated useful life (5 years) and lease period.

2.6 Investment in associatesAssociates are all entities over which the Company has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights assumes existence of significant influence.

Investments in associates are accounted for using the equity method of accounting and are initially recognised at cost. The Company’s investment in associates includes goodwill net of any accumulated impairment loss (if any). The Company’s share of its associates’ post-acquisition profits or losses is recognised in the statement of income, and its share of post-acquisition movements in reserves is recognised in equity.

Unrealised gains on transactions between the Company and its associates are eliminated to the extent of the Company’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates are changed where necessary to ensure consistency with the policies adopted by the Company.

2.7 Impairment of non financial assetsAssets that have an indefinite useful life are not subject to amortization and are tested annually for impairment. Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Impairment losses are recognized in the statement of income for the period in which they arise.

In case that any indication arise for impairment loss which previously recorder that is no longer exist or they have declined, the revenue immediately recognized in the period which is discovered and should not exceed. The net

Notes to the financial statements For the period from 1 March 2005 to 31 December 2006 (continued)

2. Significant accounting policies

2.1 Basis of preparationThe financial statements have been prepared in accordance with International Financial Reporting Standards under the historical cost convention, as modified by the revaluation at fair value of investments at fair value through profit or loss and available for sale investments.

The preparation of financial statements in conformity with IFRS requires management to make significant estimates and assumptions, also requires management to exercise its judgment in the process of applying the accounting policies. These estimates may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The areas involving a higher degree of judgment or complexity, or areas where assumption and estimate are significant to the financial statements are disclosed in Note (17).

The following IASB standards and Interpretations have been issued but are not yet mandatory, and have not yet been adopted by the Company.

- IFRS "7" Financial Instruments: Disclosures.

- IAS "1" Capital disclosur.

- IFRIC Interpretation "10" Interim Financial Reporting and Impairment.

The application of such amendments and Interpretations will be effective starting from next financial year, and is not expected to have a material impact on the financial statements of the Company.

2.2 Property and equipmentProperty and equipment are stated at cost less accumulated depreciation and impairment losses. Property and equipment are depreciated on the straight-line method over their estimated useful lives.

The estimated useful lives of property and equipment are as follows:

Estimated useful life

Machinery and equipment 4 years

Furniture and fixtures 4 years

Computers and airconditions 4 years

The estimated useful lives of property and equipment are reviewed periodically and effect of any such changes is recognized prospectively in the statement of income.

Gain or losses resulting from the disposal of property and equipment is included in the statement of income being the difference between the selling price and carrying value of the property and equipment at the date of sale.


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Loans and receivablesThese are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. These are subsequently measured and carried at amortised cost using the effective yield method less impairment provision.

Available for saleThese are non-derivative financial assets that are principally acquired to be held for an indefinite period of time, which may be sold in response to needs for liquidity or changes in profit rates.

Subsequently, financial assets available for sale investments are carried at fair value. Changes in fair value recorded directly to equity. When available for sale investments are sold or impaired, the related accumulated changes in fair value recognized in equity are transferred to the statement of income.

Financial liabilitiesFinancial liabilities "other than at fair value through profit or loss" are subsequently measured and carried at amortized cost using the effective yield method.

Fair valueThe fair value of quoted investments is based on quoted closing bid prices. If the market for a financial asset is not active or the financial instrument is unquoted, fair value is derived from recent arm's length transactions, discounted cash flow analysis, other valuation techniques commonly used by market participants or determined with reference to market values of similar instruments. The fair value of financial instruments carried at amortised cost is estimated by discounting the future contractual cash flows at the current market interest rates for similar financial instruments.

The Fair value of unquoted investments is derived from market value of similar investment, discount estimated cash flows, other valuation techniques or using prices available by mediators.

For the equity securities, for which fair value have not been reliably determined, are carried at cost less impairment losses.

Impairment of financial assetsA financial asset is impaired if its carrying amount is greater than its estimated recoverable amount. An assessment is made at each balance sheet date to determine whether there is objective evidence that a financial asset or a group of similar financial assets may be impaired. If such evidence exists, impairment loss is recognized in the statement of income.

A specific provision for impairment of receivables and loans are established when there is objective evidence that the Company will not be able to collect all amounts. The amount of specific provision is the difference between the asset’s carrying amount and its recoverable amount, which represents the present value of the estimated future cash flows, discounted at the effective interest rate. The amount of the provision is recognized in the statement of income.


Dynamicexperiences in the unparalleled

mix of leisure, business, hospitality and residential facilities.

book value of the item on which the value must be in the case of non-registration of loss reduction.

If an indication exists that an impairment loss recognized for an asset in prior years may no longer exist or may have decreased, that loss is reversed and recognized as income in the statement of income. However, the increase in the carrying amount of the asset shall not exceed the carrying amount that would have been determined as if no impairment loss been recognized in prior years.

2.8 InventoriesInventories are stated at the lower of weighted average cost or net realizable value.

2.9 Financial instruments – Recognition and de-recognition, classification and measurementIn the normal course of business, the Company uses financial instruments, principally cash and cash equivalents, investments at fair value through profit of loss, available for sale investment trade and other receivables, and trade and other payables.

Recognition and de-recognitionA Financial instruments are recognized when the Company becomes a party to the contractual provisions of the financial instrument. All regular way purchases and sale of financial assets are recognized using purchase date, the date on which the company obligate to sale or purchase the assets. Financial assets are de-recognized when the right to receive cash flows from the financial assets have expired or, when the Company transfers substantially all the risks and rewards of ownership. A financial liability is derecognized when the obligation specified in the contract is discharged, cancelled or expired.

Classification and MeasurementsThe Company classified its financial assets at the date of acquisition based on the purpose of acquiring these assets. The Company classified its financial assets as investment at fair value through profit or loss, available for sale investments, loans and receivables. And financial liabilities are classified as "other than at fair value through profit or loss".

Financial assets and Liabilities are initially recognized at fair value (transaction costs are added) except for those financial instruments classified as "at fair value through profit or loss". Gain or losses arising from change in fair value of the available for investments are taken directly to the statement of income.

Financial assets at fair value through profit or lossThis category has two subcategories: financial assets held for trading and those designated at fair value through profit or loss at inception. A financial asset held for trading are those assets acquired principally for the purpose of acquire profit from changes in prices in the short term also classify at fair value through profit or loss at initial recognition if classify in this category by management at initial recognition also managed and their performance is evaluated and internally reported on a fair value basis in accordance with documented strategic risk management or investment strategy.

Subsequently, financial assets at fair value through profit or loss are carried at fair value. Unrealized gains or losses arising from changes in the fair value are included in the statement of income.


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3. Property and equipment

Machinery and equipment

Furniture and fixtures

Computers and airconditions Total

KD KD KD KD

Cost as at 31 December 2006 2,742 115,306 20,887 138,935

Accumulated depreciation as at 31 December 2006 (1,330) (11,427) (7,733) (20,490)

Net book value as at 31 December 2006 1,412 103,879 13,154 118,445

4. Projects under construction

Lands and leasehold lands Projects under construction Total

KD KD KD

360° Kuwait project 27,135,000 10,576,927 37,711,927

Al Solybikhat Project 5,226,012 9,383 5,235,395

Al Salmiya Project 3,893,382 8,439 3,901,821

AL Jahraa Project 2,488,768 6,949 2,495,717

Other Projects 750,000 - 750,000

39,493,162 10,601,698 50,094,860

- The cost of 360° Kuwait project represents amounts paid to construct, execute entertainment center, cinema and shops on area of 30,015 m2 at South Sorra area.

This project is pledged to one of the banks against bank facilities (Note 10).

The cost of land and leasehold land include value of land and buildings purchased from Kuwait National Cinema (a shareholder with percentage of 49.73%) with an amount of K.D 38,550,410. The remaining cost represents registration fees of K.D 192,752.

- Other projects represent Company’s share of 25% in a leasehold land in Shuwaikh area, which is purchased from a related party. This leasehold expires on 19 February 2014 and the Company’s management believes that it is renewable.

5. Intangible assets

31 December 2006

KD

Cost of key money 143,750

Amortization for the period (40,524)

Net Book Value 103,226

Al Manshar Rotana Hotel

Al Kout


Al Manshar Towers & Complex

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

2.11 Post employment benefitsThe Company is liable under Kuwait Labor Law to make payments under defined benefit plans to employees at cessation of employment. The defined benefit plan is unfunded and is based on the liability that would arise on involuntary termination of all employees on the balance sheet date. This basis is considered to be a reliable approximation of the present Value of this liability.

2.12 Revenue recognition• Interest income is recognized on a time proportion basis.

• Dividend income is recognized when the right to receive it is established.

• Other Revenue is recognized on accrual basis.

2.13 Operating leaseLeases of property under which, all the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases.

Payments made under operating leases are charged to the statement of income on a straight line basis over the period of the lease.

When an operating lease is terminated before the lease period has expired and the company is liable to pay penalties, these payments are recognized as expenses in the same year in which termination takes place.

2.14 Foreign currenciesThe company‘s functional currency is the Kuwaiti Dinars. Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies, are translated at the rate of exchange prevailing at the balance sheet date. Resultant gains and losses are taken to the statement of income.

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10. Loans and bank facilities

31 December 2006

KD

Short term

Loans 1,800,000

Overdrafts 577,161

2,377,161

Long term

Loans 11,700,000

14,077,161

Loans and bank facilities are granted from local banks against pledging the project of 360° Kuwait at South of Sorra area (Note 4). The effective interest rate for loans and bank facilities is 8.5% as of 31 December 2006.

11. Trade and other payables

31 December 2006

KD

Trade payables 685,845

Retention payable 606,407

Due to related parties 875,513

Accrued leave 33,371

Accrued expenses 155,092

Other credit balances 3,027

2,359,255

12. Gains from investments at fair value through profit or loss

Period from 1 March 2005 till

31 December 2006

KD

Trading Loss (7,594)

Cash dividends 105,600

98,006

This item represents gains from investments at fair value through profit or loss, which were acquired and sold during the period.


6. Trade and other receivables

31 December 2006

KD

Due from Related Parties 1,109,554

Payment for acquiring an investment* 250,000

Prepaid expenses 10,613

Accrued Revenue 13,074

Other debit balances 6,979

1,390,220

* This amount represents the Company's share in the share capital of an under establishment company. This amount will be transferring to the investment account

when this company is established.

7. Available for sale investments

Available for sale investments represent in investments in quoted local shares, which include investments mounting

to KD 800,000 in Kuwait National Cinema Company (a shareholder with percentage of 49.73%).

8. Cash and cash equivalents

31 December 2006

KD

Bank - current accounts 1,082,451

Time deposit (mature within 3 months) 5,066,000

Cash on hand 5,200

Cash at investment portfolio 1,154

6,154,805

9. Share capital

The Company's issued and fully paid up share capital amounted to KD 30,000,000 comprising of 300,000,000 shares

of 100 fils each. On 20 September 2006 the General Assembly decided to Increase the Company's share capital to

KD 50,000,000 comprising of 500,000,000 shares of 100 fils each. Company is in the process to register this increase

in Commercial Register. Accordingly, Company's share capital as of 31 December 2006 is as follow:

31 December 2006

Share KD

Issued share capital 500,000,000 50,000,000

Subscribed Capital 482,632,950 48,263,295

Unpaid portion (7,600,000) (760,000)

Paid up capital 475,032,950 47,503,295

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16. Financial instruments and related risk management

The Company's financial instruments are represented in the financial assets and financial liabilities. The financial assets include cash and cash equivalents, investments, receivables and due from a related party. Financial liabilities include loans, bank overdrafts and payables.

Fair value of financial instrumentsFair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties on an arm’s length transaction. The fair value of the financial instruments carried at amortized cost is not significantly different from their book values at the balance sheet date.

Credit riskCredit risk is the risk that one party to a financial instrument will fail to discharge an obligation causing the other party to incur a financial loss. Financial assets exposed to credit risk consist principally of trade receivables. To limit this risk the Company provides short term credit.

Interest rate riskInterest rate risk is the risk that value of a financial instrument will fluctuate due to changes in market interest rates. The Company is exposed to interest rate risk on its interest bearing assets and liabilities mainly bank deposits and loans and bank overdrafts. The Company manages interest rate risk by placing with banks its deposits on a short-term basis and borrowing primarily at floating rates of interest.

Foreign exchange riskForeign exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The majority of the Company's transactions are in Kuwaiti Dinars. The Company is not significantly exposed to currency risk as the Kuwaiti Dinars are effectively pegged to the US Dollar.

17. Significant accounting judgments and estimates

In accordance with the accounting policies contained in IFRS and adopted by the Company, management has made the following judgments and estimations that may affect the carrying values of assets and liabilities.

JudgmentsClassification of investmentsThe management decide when acquire the investment whether classified as investment at fair value through profit or loss, available for sale or "loans and receivables". For reaching such decision the management considering the main purpose from acquiring the financial instrument and how manage and reporting the performance of that instrument. This decision has deciding if subsequently will re-measure the financial instrument with fair value or cost or whether the changes in fair value will be recorded in the statement of income or in equity.

ImpairmentWhen there is a significant or prolonged decline in the value of an available for sale quoted investment security management uses objective evidence to judge if it may be impaired.


Innovativethinking and artistic design are applied,

to give our visitors a taste of what the shopping centers should be like.

13. General and administrative expensesPeriod from

1 March 2005 till 31 December 2006

KD

Salaries and wages 775,742

Leave expenses 58,141


Advertising expenses 505,906

Rent expenses 72,330

Transportation and residence expenses 51,434

Subscription and other fees 30,188

Other expenses 204,855

1,767,250

14. Staff CostsPeriod from

1 March 2005 till 31 December 2006

KD

Salaries and wages 775,742

Leave expenses 58,141


902,537

Number of employees (Employee) 49

15. Related parties transactions

In the Company's ordinary course of business, there are some transactions with related parties (who represent major shareholders, managers and companies owned or being influenced by those managers).

Conditions and prices of those transactions have been approved by the Company’s management.

The following is the major transactions and the related balances:31 December 2006

KD

Transactions with related parties

Acquiring lands (Note 4) 38,550,410

Acquiring leasehold lands (Note 4) 750,000

Property management fees and other revenues 637,150

Purchase of inventories 43,898

Key money 100,000

Key management compensation 191,291

31 December 2006

KD

Balances arising from transactions

Due from Related parties (Note 6) 1,109,554

Due to Related Parties (Note 11) 875,513


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At each balance sheet date, management assesses whether there is any indication that inventories, and properly and equipment are impaired. The determination of impairment requires considerable judgment and involves evaluating factors including, industry and market conditions.

Sources of estimation uncertaintyFair values - investments in unquoted securitiesThe valuation techniques for unquoted investments make use of estimates such as future cash flows, discount factors, yield curves, current market prices adjusted for market, credit and model risks and related costs and other valuation techniques commonly used by market participants where appropriate.

Useful lives of property and equipmentThe Company’s management determines the estimated useful lives and related depreciation charges for its property and equipment. Management will increase the depreciation charge where the useful lives are less than previously estimated lives, or it will write-off or write-down technically obsolete or non-strategic assets that have been abandoned or sold.

18. Future commitments

The future commitment for estimated and contracted for capital expenditure amounting to K.D 30,592,989 at the balance sheet date.


Documents

Tamdeen Shopping Centre Development Co.. Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah The Crown Prince Of The State Of Kuwait H.H. Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah The Amir Of The