RESEARCH

GCC EQUITYREPORT
NEUTRAL
Quarterly Update

Zain (ZAIN.KW)
CMP Target Upside KWD 1.200 KWD 1.210 0.8%

MSCI GCC Index Kuwait Stock Exchange Index 425.24 6,442.50

Zain reported revenues of KWD 1,352 million for 2010, up 7.0% YoY. Net profit jumped over five-fold to KWD 1,063 million from KWD 195 million, supported by gains from the sale of its African operations. We have revised our revenue estimate to KWD 1,502 million. Our net profit estimate stands at KWD 601 million due to lower operating expenses and finance costs. We are maintaining our earlier NEUTRAL recommendation on Zain with a revised DCF target price of KWD 1.210, implying an upside of 0.8%.

Key Stock Data

Overview
Sector Reuters Code Bloomberg Code Net Out. Shares (bn) Market Cap (KWD bn) Market Cap (USD bn) Avg. 12m Vol. (mn) Volatility (30 day) Volatility (180 day) Telecom ZAIN.KW ZAIN KK Equity 3.872 4.646 16.789 3.638 56.399 37.225 KWD Million Revenue EBITDA EBITDA Margin Net Profit NPM Adj.EPS (KWD) Total Assets Stock Performance (%) 52 week high / low (KWD) 1M Absolute (%) Relative (%) -9.1 -10.7 1.560 / 1.040 3M -16.7 -10.8 12M -9.1 2.4 RoAE 2009A 1,263 587 46.4% 195 15.4% 0.050 5,697 8.6% 2010A 1,352 622 46.0% 1,063 78.6% 0.275 3,710 43.0% 2011E 1,502 695 46.3% 601 40.0% 0.155 3,954 23.5% 2012E 1,634 760 46.5% 450 27.6% 0.116 4,356 17.3% 2013E 1,755 821 46.8% 489 27.8% 0.126 4,876 17.0%

Shareholding Pattern Corporate Government Public ZAIN and KSE Index movement

(%) 17.17 24.61 58.22

Revenue During 2010, total revenues reached KWD 1,352 million, increasing 7.0% from KWD 1,263 million in 2009. Segmental revenues from Kuwait dropped 1.9% to KWD 345 million because of strong local competition. Accordingly, contribution to total sales declined 231 bps to 25.5% from 27.8%. Meanwhile, revenue from Sudan increased 14.6% to KWD 328 million, thereby increasing its share in total revenues by 161 bps to 24.3% from 22.7% in 2009. Jordan posted 6.6% increase to KWD 147 million from KWD 138 million last year. Revenue from Iraq advanced 11.2% to KWD 430 million, whereas that from Bahrain declined 5.2% to KWD 71 million. Lebanon registered an increase of 18.0% to KWD 31 million from KWD 26 million during the previous year.

Expenses Cost of revenue rose 9.0% to KWD 355 million from KWD 326 million during 2009. Consequently, as a percentage of total revenue, costs increased 48 bps to 26.3% from 25.8%. Distribution, marketing, and operating expenses were up 12.6% to KWD 267 million, expanding as a percentage of revenue by 98 bps to 19.7% from 18.8%. On the other hand, general and administrative expenses declined 5.2% to KWD 108 million from KWD 114 million. Further, finance costs plunged 41.1% to KWD 55 million from KWD 94 million in 2009.

Net Profit and Margins

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Net Profit and Margins Gross profit increased 6.3% to KWD 997 million, attributable to higher revenues. However, gross margin narrowed 48 bps to 73.7% due to higher cost of revenues vis--vis revenues. In addition, operating profit rose 3.6% to KWD 450 million from KWD 434 million in 2009. Investment losses plunged 76.4% to KWD 2 million from KWD 8 million. Gains from foreign currency revaluation stood at KWD 13 million as against a loss of KWD 0.05 million in 2009. The share of loss from associates declined 26.4% to KWD 45 million from KWD 61 million, while the share of loss of jointly controlled entities expanded 14.4% to KWD 5 million from KWD 4 million. Net profit, attributable to shareholders, increased more than five-fold to KWD 1,063 million from KWD 195 million due to a KWD 742 million profit from discontinued operations.

Peer Comparison
We have considered National Mobile Telecommunication Company (NMTC) as Zains core competitor in Kuwait. Financial Performance of Telecom Companies
NMTC 2009 2010 ZAIN 2009 2010

(KWD Million)
Sales YoY change EBITDA YoY change Net Profit YoY change Total Assets YoY change Shareholders' Equity YoY change Ratios: Total Assets Turnover Ratio (x) EBITDA Margin Net Profit Margin RoAE RoAA Market Indicators: Adj. EPS (KWD) P/E (x) Adj. BVPS (KWD) P/BV (x) Current Market Capitalisation (KWD Million) Source: Zain & NMTCs financial Statements 0.216 8.89 0.90 2.13 962 0.156 12.33 1.00 1.91 962 0.050 23.82 0.59 2.02 4,646 0.275 4.37 0.68 1.76 4,646 0.53 47.9% 22.8% 26.3% 12.2% 0.57 37.5% 14.5% 16.3% 8.2% 0.23 46.4% 15.4% 8.6% 3.5% 0.29 46.0% 78.6% 43.0% 22.6% 475 -0.1% 228 29.9% 108 31.4% 888 -0.6% 452 22.1% 539 13.5% 202 -11.1% 78 -28.0% 1,005 13.1% 503 11.2% 1,263 -36.9% 587 -22.2% 195 -39.4% 5,697 3.3% 2,297 3.5% 1,352 7.0% 622 6.0% 1,063 445.0% 3,710 -34.9% 2,647 15.3%

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New Projects and Updates

In April 2011, Zain signed a non-binding term sheet with Bahrains Batelco and Saudi-based Kingdom Holding to sell its 25% stake in Zain Saudi Arabia. Earlier in March 2011, the companys Iraqi unit launched telecom services in all the provinces of the Kurdistan region - the first phase of a project that will cover all the Northern provinces in Iraq. The second phase will include remote villages. During the same month, the unit received a seven-year USD 400 million-debt facility to expand operations in the country. Further, Zain has signed an agreement with the Lebanese Ministry of Telecommunication extending the management of the mtc touch network on behalf of the Lebanese government for another year, beginning February 01, 2011.

Risks and Concerns to Valuation:

Zain is a multi-country operator, is exposed to political and regulatory regimes in different countries, and is vulnerable to foreign currency fluctuations as well.

Valuation Methodology:
We have used the DCF valuation method to arrive at the fair value of Zain, as explained below: Assumptions: (i) Risk free Rate (Rf) of 3.16%, equivalent to 12-months average yield on a 10-year US T-bill; (ii) Levered Beta of 1.67; (iii) Terminal growth rate of 2.0%. Based on the above and using the Capital Asset Pricing Model (CAPM), we have arrived at a Cost of Equity of 12.73% and a WACC of 12.28%.

DCF Calculation
DCF Valuation (FCFF Model)
(KWD Million) Operating Profit Zakat on EBIT Effective Zakat Rate NOPAT Add: Depreciation and Amortization Less: Capex Less: Change in Net Working Capital Operating Free Cash Flows to Firm Non-Operating Income Tax on Non-Operating Income Add: Non-Operating cash flows Free Cash Flow to Firm WACC (Ko) Present Value / Discount Factor Long-Term Growth Rate (g) Terminal Multiple Nominal Terminal Value Present Value of Free Cash Flows 276 349 377 326 2011E 480 45 9% 434 215 287 72 290 21 2 19 310 12.28% 0.8906 2012E 515 49 9% 466 245 307 -13 418 25 2 22 440 12.28% 0.7932 2013E 542 51 9% 491 279 345 -84 509 27 3 25 534 12.28% 0.7064 2014E 565 53 9% 511 312 346 -14 492 30 3 27 519 12.28% 0.6292 2015E 589 56 9% 533 343 312 -13 576 33 3 30 606 12.28% 0.5603 2.00% 9.92 6,014 340

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Calculation of Equity Value and Fair Value Per Share

NPV of Free Cash Flows (during Explicit Forecast Period) Terminal Value: Residual Cash Flow (FCFF of 2015E) WACC Long-Term/Terminal Growth Rate (g) Divided by Capitalisation Rate (WACC - g) Equals Nominal Terminal Value Implied Multiple of 2015E EBITDA Times PV/Discount Factor Present Value of Terminal/Residual Value Enterprise Value Implied Multiple of 2015E EBITDA Less: Market Value of Long-term Debt Less: Minority Interest Add: Surplus Cash* Equity Value Net shares outstanding (Million) Fair Value Per Share (KWD) * Surplus cash adjusted for 200 fils cash dividend that was approved by shareholders in the AGM on April 12, 2011 ** figures in KWD Million unless specified 12.28% 2.00% 10.28% 6,014 6.86 0.56 3,370 5,038 5.75 121 101 -130 4,686 3,872 1.210 606 1,668

Sensitivity Analysis
The following tables present a sensitivity analysis and indicate the probable nominal terminal value, discounted terminal value and enterprise value, given different growth rate and WACC assumptions. The shaded areas represent the most probable outcomes. Sensitivity Analysis of Nominal Terminal Value (KWD Million)
Long-Term Growth Rate Discount Factor 10.28% 11.28% 12.28% 13.28% 14.28% 1.00% 6,597 5,955 5,427 4,985 4,610 1.50% 7,007 6,290 5,707 5,223 4,814 2.00% 7,466 6,662 6,014 5,481 5,035 2.50% 7,985 7,076 6,352 5,763 5,274 3.00% 8,575 7,540 6,727 6,073 5,535

Sensitivity Analysis of Discounted Terminal Value (KWD Million)

Long-Term Growth Rate Discount Factor 10.28% 11.28% 12.28% 13.28% 14.28% 1.00% 4,044 3,490 3,041 2,672 2,365 1.50% 4,295 3,686 3,198 2,800 2,470 2.00% 4,577 3,904 3,370 2,938 2,583 2.50% 4,895 4,146 3,560 3,089 2,706 3.00% 5,257 4,418 3,770 3,255 2,839

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Sensitivity Analysis of Enterprise Value (KWD Million)

Long-Term Growth Rate Discount Factor 10.28% 11.28% 12.28% 13.28% 14.28% 1.00% 5,807 5,204 4,709 4,296 3,946 1.50% 6,058 5,401 4,866 4,423 4,050 2.00% 6,340 5,618 5,038 4,561 4,163 2.50% 6,658 5,861 5,228 4,713 4,286 3.00% 7,020 6,133 5,438 4,879 4,420

Investment Opinion
The telecom industry in Kuwait is highly developed with penetration rates peaking above 100% - although lower than other Gulf countries. Though Kuwait does not have an independent telecom regulatory authority, competition has been increasing in recent years. Kuwait is among the first countries in the region to liberalise its telecom sector and award multiple licences in the mobile sector. The government, which solely dominates the fixed-line sector via the Ministry of Communication (MoC), has announced plans to privatise the sector in the next two years. Kuwaits leading mobile operators are Zain, Wataniya Telecom and Kuwait Telecom Co. (Viva). Going forward, the telecom players will focus on the broadband segment, as penetration rates are relatively low in Kuwait. Currently, there are four internet service providers (ISPs) in Kuwait. In November 2010, the MoC suspended plans to issue licences for new ISPs until the establishment of a separate telecom regulator. Zain is one of the largest mobile operators in the Middle East with over 37 million customers. Shifting from its expansion strategy, the company sold its African (excluding Sudan and Morocco) assets to the Indian telecom company Bharti Airtel for USD 10.70 billion. The sale will allow Zain to focus on its more profitable markets. The companys footprint now covers a licensed population of around 115 million people with over 9,150 network sites. To increase its operational capacity, Zain has adopted the latest standard in mobile telephony and has achieved data transmission speeds of 150 mbps during LTE (Long-Term Evolution) trials. It is the first telecom company to start work on LTE trials in Kuwait and has already conducted pre-launch tests in some of its other markets, including Bahrain and Saudi Arabia. Despite strong domestic competition, the company captured 44% share of the Kuwaiti mobile market, following net additions of 32,000 customers during 2010. In addition, the company has improved its network performance with the number of total sites at 1,738 by end 2010. Going forward, Zain will continue to invest in the deployment of value-added services domestically. During 4Q10, the operator launched an Apple iPhone and iPad application, enabling customers to manage their accounts and pay invoices directly. Meanwhile, Iraq is the largest contributor to the group in terms of customers and revenues, at 32.4% and 31.8% respectively. During 2010, the company rolled out 203 new sites, taking the total number of sites on air to 2,908. Recently, the operator launched telecom services in all the provinces of the Kurdistan region. However, the telco is likely to face stiff competition in the northern Iraqi region, as France Telecom recently announced plans to buy a 44% stake in Korek Telecom. Moreover, the Iraqi government plans to award the fourth mobile phone operator license. As a result, the companys ARPU may come under pressure. In Sudan, Zain continued to be the largest mobile operator with a market share of 59%. The operators total subscribers in Sudan registered a 22.6% YoY growth, while total revenues increased 14.6% YoY to KWD 328 million during 2010. On the other hand, the companys Bahraini operations recorded a sharp drop with market share declining to 32% during 2010 from 49% in 2009, owing to strong competition coupled with intense price promotions. The units total subscribers plunged 24.6% to 0.50 million from 0.66 million in 2009, while total revenues declined 5.2% to KWD 71.17 million. Nonetheless, moving forward, the company aims to capitalise on recent investments in the 3G and 3.5G infrastructures, increase value through smart acquisitions, and engage in other revenue streams to become a full-fledged telecom provider. Besides, the group recently signed a non-binding agreement with Batelco and Kingdom Holding to sell its 25% stake in Zain Saudi Arabia. Going ahead, the company expects to expand its customer-base to 52 million subscribers by 2014, while it guides total revenue of USD 6.3 billion and net profit of USD 2.1 billion by 2014. Given the strong balance sheet following the disposal of its African assets, Zain is well positioned for future acquisitions on its own. Although the strategic and capital-intensive investments in the Middle East will support Zain over the upcoming years, we recommend a hold on the stock in the short-term, given its strong run in the recent past. We had updated Zain on November 11, 2010 with a NEUTRAL recommendation (target price of KWD 1.434 and an upside of 2.4%). Currently, the companys stock is trading at a P/E multiple of 7.73x and 10.31x on 2011E and 2012E earnings, and at a P/BV multiple of 1.88x and 1.70x on 2011E and 2012E BVPS, respectively. Meanwhile, the stock has dropped 9.1% in the last twelve months as compared to an 11.1% decline posted by the Kuwait Stock Exchange Index. After adjusting for the recently approved cash dividend of 200 fils per share, our revised price target is KWD 1.210, implying a 0.8% upside over the closing price of KWD 1.200 (as on April 21, 2011). Accordingly, we are reiterating our earlier NEUTRAL rating on the stock.

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Financial Statements
Consolidated Income Statement
(KWD Million) Revenue Cost of sales Gross Profit Operating expenses General and administrative expenses Provision for doubtful debts Depreciation and amortization Operating Profit EBITDA Investment income Share of (loss)/ profit of associates (net) Other income Gain from currency revaluation Board of Directors remuneration National labour Support Tax Contribution to Kuwait Foundation Interest income Finance cost Profit before tax Income tax expense Profit from continuing operations Profit/loss for the year from discontinued operations Profit for the year Minority interest Profit to the shareholders 2009A 1,263.04 -325.54 937.50 -237.08 -113.85 -3.11 -149.67 433.79 586.58 -8.23 -61.15 14.37 -0.05 -0.03 -7.69 -1.82 11.17 -93.74 282.39 -36.76 245.63 -34.39 211.24 16.23 195.01 2010A 1,351.68 -354.84 996.85 -266.96 -107.95 -6.18 -166.28 449.48 621.94 -1.95 -45.02 20.04 12.52 -0.03 -8.24 -2.34 17.81 -55.25 382.18 -36.17 346.01 741.81 1,087.82 25.01 1,062.81 2011E 1,502.34 -394.54 1,107.81 -292.96 -119.83 0.00 -215.26 479.76 695.02 -0.94 11.61 22.27 0.00 0.00 -10.53 -2.78 18.99 -7.87 511.31 -80.43 430.88 203.28 634.16 33.21 600.95 2012E 1,633.64 -429.18 1,204.46 -314.47 -130.14 0.00 -245.29 514.56 759.84 0.35 19.16 24.22 0.00 0.00 -11.47 -3.03 24.65 -5.59 564.07 -88.73 475.35 0.00 475.35 24.89 450.45 2013E 1,755.44 -461.36 1,294.09 -333.53 -139.67 0.00 -278.95 541.94 820.89 1.20 29.37 26.02 0.00 0.00 -12.30 -3.25 32.75 -5.71 611.72 -96.22 515.50 0.00 515.50 27.00 488.50

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Consolidated Balance Sheet
(KWD Million) ASSETS Current Assets Cash and bank balances Trade and other receivables Inventories Investment securities at fair value Total Current Assets Non-Current Assets Deferred tax assets Investment securities available for sale Investment in associates SMTC Interest in a jointly controlled entity Loan to an associate Property and equipment Intangible assets Other financial assets Total Non-Current Assets Total Assets LIABILITIES AND EQUITY Current Liabilities Trade and other payables Due to banks Total Current Liabilities Non-Current Liabilities Due to banks Deferred tax liabilities Other non-current liabilities Total Non-Current Liabilities Total Liabilities Minority interest Equity Share capital Treasury shares Share premium Legal reserve Voluntary reserve Foreign currency translation reserve Treasury shares reserve Equity issue transaction cost of associate Investment fair valuation reserve Share based compensation reserve Hedge reserve Retained earnings Shareholders' Equity Total Liabilities and Equity 428.29 -567.83 1,691.11 147.99 63.09 -21.17 1.97 -1.81 -7.72 18.36 -49.30 593.64 2,296.60 5,696.76 429.74 -567.83 1,697.79 214.87 0.00 -143.77 1.97 -1.78 4.53 7.39 -2.52 1,006.61 2,646.99 3,709.94 429.74 -567.83 1,697.79 251.82 0.00 -143.77 1.97 -1.78 4.53 7.39 -2.52 796.27 2,473.60 3,953.53 429.74 -567.83 1,697.79 279.51 0.00 -143.77 1.97 -1.78 4.53 7.39 -2.52 1,025.44 2,730.47 4,356.36 429.74 -567.83 1,697.79 309.55 0.00 -143.77 1.97 -1.78 4.53 7.39 -2.52 1,290.32 3,025.38 4,876.23 1,615.99 38.70 87.17 1,741.86 3,218.28 181.88 94.73 0.00 149.13 243.87 962.02 100.93 118.42 0.00 506.30 624.72 1,345.80 134.14 121.38 0.00 539.01 660.39 1,466.87 159.03 123.81 0.00 578.22 702.02 1,664.82 186.03 939.94 536.47 1,476.42 593.22 124.93 718.15 721.08 0.00 721.08 806.48 0.00 806.48 962.80 0.00 962.80 134.05 98.49 165.77 44.06 142.00 2,151.77 2,245.45 2.54 4,984.13 5,696.76 0.38 98.64 116.10 40.27 187.26 793.69 1,304.45 31.65 2,572.43 3,709.94 0.00 114.88 127.71 41.08 202.24 910.75 1,288.40 31.65 2,716.71 3,953.53 0.00 124.07 146.86 42.31 214.38 1,018.08 1,272.02 31.65 2,849.38 4,356.36 0.00 134.00 176.23 44.00 222.95 1,130.67 1,255.32 31.65 2,994.83 4,876.23 267.18 405.43 32.55 7.46 712.63 644.22 472.57 13.26 7.47 1,137.51 668.57 545.82 14.59 7.84 1,236.83 866.74 615.90 15.72 8.62 1,506.99 1,168.88 685.87 16.73 9.92 1,881.40 2009A 2010A 2011E 2012E 2013E

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Consolidated Cash Flow Statement
(KWD Million) Cash Flows from Operating Activities Profit for the year before income tax Adjustments for: Depreciation, amortization and goodwill written off Interest income Investment income Share of loss/ (profit) of associates Finance cost Loss on sale of property and equipment Gain from disposal of subsidiary Share of loss of Jointly controlled entity Gain from currency revaluation Operating profit before working capital changes (Increase)/decrease in trade and other receivables Increase in inventories Increase in trade and other payables Deferred Tax considerations Payments: Income tax Board of Directors remuneration Kuwait Foundation for Advancement of Sciences National Labour Support Tax Net cash from operating activities Cash flows from investing activities Proceeds from sale of investment securities Acquisition of investments Proceeds from sale of subsidiaries Acquisition of property and equipment (net) Acquisition of intangible assets Interest received Dividend received Net cash used in investing activities Cash flows from financing activities Proceeds from bank borrowings (net) Loan to an associate Proceeds from issue of share capital Dividends paid Dividends paid to minority shareholders Finance cost paid Net cash from financing activities Net increase/(decrease) in cash and cash equivalents Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period 184.31 -59.25 0.91 -191.09 -9.36 -178.77 -253.25 -1,342.77 -9.04 7.91 -653.93 -10.48 -80.76 -2,089.07 -101.25 -14.98 0.00 -774.34 0.00 -7.87 -898.45 2.96 -12.13 0.00 -193.59 0.00 -5.59 -208.35 2.43 -8.58 0.00 -193.59 0.00 -5.71 -205.44 5.56 -1.40 0.00 -469.39 -7.07 24.89 2.22 -709.00 0.31 0.00 2,277.43 -269.69 -37.79 19.52 1.64 1,809.25 -16.61 0.00 203.28 -83.96 -29.03 18.99 -0.94 90.92 -9.98 0.00 0.00 -306.63 -29.61 24.65 0.35 -322.45 -11.22 0.00 0.00 -345.65 -30.20 32.75 1.20 -354.81 -12.69 0.00 -2.84 -6.25 847.58 -38.63 -0.03 -4.16 -5.53 527.99 -80.43 0.00 0.00 0.00 831.89 -88.73 0.00 0.00 0.00 728.97 -96.22 0.00 0.00 0.00 862.39 250.67 1,119.80 511.31 564.07 611.72 2009A 2010A 2011E 2012E 2013E

420.96 -13.37 8.23 61.15 160.71 -0.01 0.00 4.23 38.17 930.73 -83.93 -1.15 23.70 0.00

280.34 -19.94 1.95 45.02 78.61 -0.02 -778.13 4.84 -3.29 729.17 -305.70 2.74 150.13 0.00

215.26 -18.99 0.94 -11.61 7.87 0.00 -203.28 0.00 0.00 501.50 -73.25 -1.33 127.86 0.38

245.29 -24.65 -0.35 -19.16 5.59 0.00 0.00 0.00 0.00 770.79 -70.08 -1.12 85.40 0.00

278.95 -32.75 -1.20 -29.37 5.71 0.00 0.00 0.00 0.00 833.06 -69.97 0.00 156.32 0.00

-114.67 13.98 367.87 267.18

248.17 -52.00 267.18 463.35

24.36 0.00 463.35 487.71

198.17 0.00 487.71 685.88

302.14 0.00 685.88 988.02

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Financial Ratios
2009A Liquidity Ratios: Current Ratio (x) Quick Ratio (x) Inventory Conversion Period (Days) Average Collection Period (Days) Length of Operating Cycle (Days) Average Payment Period (Days) Length of Cash Cycle (Days) 0.48 0.46 35 110 145 1071 -926 1.58 1.57 24 119 142 789 -646 1.72 1.69 13 124 137 608 -471 1.87 1.85 13 130 143 650 -507 1.95 1.94 13 135 148 700 -552 2010A 2011E 2012E 2013E

Activity Ratios: Inventory Turnover Ratio (x) Debtors Turnover Ratio (x) Creditors' Turnover Ratio (x) Total Assets Turnover Ratio (x) Net Fixed Assets Turnover Ratio (x) Working Capital Turnover Ratio (x) Capital/Equity Turnover Ratio (x) 10.34 3.32 0.34 0.23 0.60 -1.44 0.56 15.49 3.08 0.46 0.29 0.92 -2.15 0.55 28.33 2.95 0.60 0.39 1.76 -7.96 0.59 28.32 2.81 0.56 0.39 1.69 -10.24 0.63 28.44 2.70 0.52 0.38 1.63 -8.43 0.61

Profitability Ratios: Gross Profit Margin EBITDA Margin Operating Profit Margin Net Profit Margin RoAE RoAA 74.2% 46.4% 34.3% 15.4% 8.6% 3.5% 73.7% 46.0% 33.3% 78.6% 43.0% 22.6% 73.7% 46.3% 31.9% 40.0% 23.5% 15.7% 73.7% 46.5% 31.5% 27.6% 17.3% 10.8% 73.7% 46.8% 30.9% 27.8% 17.0% 10.6%

Leverage Ratios: Debt to Equity (D/E) Ratio (x) Shareholders' Equity to Total Assets Ratio (x) Total Liabilities to Total Assets Ratio (x) Current Liabilities to Equity Ratio (x) 0.94 0.40 0.56 0.64 0.08 0.71 0.26 0.27 0.05 0.63 0.34 0.29 0.04 0.63 0.34 0.30 0.04 0.62 0.34 0.32

Growth Rates: YoY Growth in Revenue YoY Growth in Net Operating Income YoY Growth in Net Income YoY Growth in Total Assets YoY Growth in Shareholders' Equity -36.9% 13.9% -39.4% 3.3% 3.5% -19.4% -0.5% 231.7% -15.0% 67.3% 11.1% 6.7% -43.5% 6.6% -6.6% 8.7% 7.3% -25.0% 10.2% 10.4% 7.5% 5.3% 8.4% 11.9% 10.8%

Ratios used for Valuation: EPS (KWD) BVPS (KWD) P/E Ratio (x) P/BV Ratio (x) Current Market Price (KWD)** **Price as on April 21, 2011 0.050 0.593 23.82 2.02 1.200 0.275 0.684 4.37 1.76 1.200 0.155 0.639 7.73 1.88 1.200 0.116 0.705 10.31 1.70 1.200 0.126 0.781 9.51 1.54 1.200

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DISCLAIMER: All reasonable care has been taken to ensure that the information contained herein is not misleading or untrue at the time of publication, but we make no representation as to its accuracy or completeness. All information is for the private use of the person to whom it is provided without any liability whatsoever on the part of TAIB Securities WLL, any associated company or the employees thereof. Nothing contained herein should be construed as an offer to buy or sell or a solicitation of an offer to buy or sell. The value of any investment may fall as well as rise. Past performance is no guide to the future. The rate of exchange between currencies may cause the value of the investment to increase or diminish. Consequently, investors may not get back the full value of their original investment