Dear Shareholders,
The strategy of our company is based mainly upon the principles of conservative investing and risk mitigation, seizing of investment and real estate opportunities, and geographical expansions to achieve the highest possible growth and profits where the diversification of our investments and the sources of revenues from these activities proved to be fruitful during the year, as clearly reflected in the achievement of higher returns.
The net profit of the company has increased by KD 2.5 million from KD 33.1 million in 2005 to KD 35.6 million in 2006, while shareholders’ equity has increased by KD 4 million, from 194.7 million KD in 2005 to 198.7 million KD in 2006. with a growth rate of 2% compared to 2005. The total assets of the company increased from KD 284 million in 2005 to KD 311 million in 2006.
Based on the financial results achieved during 2006, the Board of Directors is recommending the distribution of cash dividend of 12% of the shares par value and stock dividends of 8% of the company’s capital. The Board’s of Directors recommendation regarding the distribution of profits is based on the company’s business activities, the growth in revenues and it’s reflections on the continuation of profit realization during the previous and future periods. Our clear objective is to create added value to the shareholders through the achievement of high returns on their investments and to protect them from the market risks and fluctuations.
The strategy of the company is continually monitored, reviewed, and developed to cope with the trends and directions of growth and development in the markets. And we are continuously pursuing to secure better investment opportunities to achieve higher gains with the highest of applicable standards. The implementation of this strategy has a positive effect on the performance of the company. Also, a major factor that really reflected on performance are the alliances with strategic partners, in Kuwait and GCC. The expansion of our investments with our strategic partners is for the purpose of diversified investment sources, creation of new business channels, seizing the best of the newly created investment opportunities in targeted markets, after performing the required due diligence and feasibility studies. Where all of that had led us to a group of projects in the region, such as Hajar Tower and Maqam Tower where all are located within Al-Bait Towers Complex in the Holy City of Makkah in the Kingdom of Saudi Arabia. The Commercial Real Estate Company has also worked with other consortium of GCC companies to be qualified for the project of the development of the central business district of the city of Jeddah. This consortium is responsible for preparing all the required master plans and studies for this project. Furthermore, the Commercial Real Estate Company with the same consortium were qualified to carry out the development of one of the most attractive tourist destinations in the Kingdom of Saudi Arabia, which is the Abha city central business district in Aseer Region.
The Commercial Real Estate Company had established the Commercial Venture Real Estate Company with a group of local and GCC companies in the Kingdom of Bahrain to be the real estate investment arm of the company in the Kingdom of Bahrain. The activities of the company were also extended to the United Arab Emirates, particularly in Abu Dhabi, by establishing Que Parks and Commercial Markets Company with a group of strategic partners. To complete our investment objectives and seize the best opportunities, we are in the process of finalizing all the requirements necessary for the establishment of the legal entity of our activities in the Kingdom of Morocco in an alliance with a consortium of local and Gulf partners. This new company will be the investment arm for our activities in Morocco.
Our involvement in major investment projects with this level of expansion has been a result of the continuous efforts of the members of the Board of Directors which enabled the development of a strategy based on the awareness and realization of the ambitious objectives of our company, which added more flexibility and transparency in its activities for the purpose of creating a pioneering role for your company in various areas and sectors on the local, regional and international levels. The Board of Directors also played a very important and vital role for the company in supporting the staff which played an important and effective role in achieving the objectives of the company and implementing its strategy to achieve these results, as our staff is a very important asset of our company. We depend on them for the implementation of our strategic plans to achieve the outstanding results of the company. We always do our best to develop our human resources by using various modern development and training methods. The company will soon start the implementation of the first stage of the Employees Stock Options Program which was designed and developed according to internationally recognized standards and based on the requirements of the local authorities which is backed by the decision of the general assembly last year, and is increased the capital of the company by 2% and waved its rights in the mentioned increase and directed it to the ESOP. The company has always been utilizing distinguished and experienced consultation services firms whether locally or internationally for its development. Lately, the internationally recognized firm of Booz Allen Hamilton was commissioned to review and develop the organizational structure of the company to prepare the staff to function in an efficient and effective way, to prepare the staff for the future which will be full of major projects and to set an appropriate work atmosphere ready to handle the promising moves of your company.
We depend upon Allah the Almighty and the efforts of the members of the Board to set forth a methodology for the development of our business in accordance with their experiences in various sectors and fields to set the path for the company’s development. The expansion of our business is considered one of the basis of our work for continuous development and growth, and for the development of the performance of our company and away from market risks and fluctuations. We renew our promises and we are confident to achieve them in accordance with the methodology and policy of our company.
Last but not least, I would like to express my deepest gratitude to you all for your confidence and support of our ever continuing march, and I would also like to have your opinions and sound advice always and as usual so all of our efforts will be consolidated to achieve our targeted objectives. Our practical slogan in the management of our company is the open door policy as we always believe in transparency in the information we provide.
Finally, I would like to express my thanks and appreciation to all the Members of the Board, executive management, and the staff for their outstanding performance. We ask Allah the Almighty to grant us success for the achievement of the objectives and guide our steps for the benefit of our company and our country Kuwait under the high directions and the wisdom of His Highness the Amir of the State of Kuwait, Sheikh Sabah Al-Ahmed Al-Jaber Al-Sabah, His Highness the Crown Prince, Sheikh Nawaf Al-Ahmed Al-Jaber Al-Sabah, and His Highness the Prime Minister, Sheikh Nasser Al-Muhammad Al-Ahmed Al-Jaber Al-Sabah for their wise governance and leadership.
May god bless us all, and thank you very much.
Abdul Fatah M. R. Marafie
Chairman & Managing Director
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