Dear Shareholders,

It is my pleasure to present to you the 32nd Annual Report of the UIC for the financial year ended December 31, 2010, and to review major developments and events during the year in review and the financial statements.In the wake of the global financial crisis which struck towards the end of 2008, many corporations- if not all- operating across sectors were affected; as the crisis had an adverse effect on the performance of many of these corporations, including UIC; and the adverse effects continued to present itself in the results of 2009.

The management of UIC, consulting and coordinating with parent company, Kuwait Projects Company (Holding) the largest shareholder in the company- implemented a medium-range strategy and an ambitious practical action plan that is applicable in the current circumstances, and one that positively reflects on the future and the status of UIC in addition to realizing some of the results we are striving for.

During the year, the management monitored the performance of its operating investments, both in Kuwait and abroad, with the aim of developing these investments on one side and to mitigate the challenges that may hinder the progress of others in view of current circumstances. These efforts have paid off where significant improvements was achieved in a number of these investments, as operational capacity have increased recording positive gains in the financial statements of UIC, as seen in the Group performance. As for our other contributions, work is in progress to determine the best means to bring matters back on track.

Following are several significant achievements for the year under review:

Following the restructuring of the Board of Directors in Q1, I was assigned with the duties of the Chairman of the Board in addition to my duties as CEO, taking over from Sheikh Khalifa Abdullah Al Jaber Al Sabah, who became the Vice Chairman

In Q1, SADAFCO sold one of its investments, which reflected positively on the financial statements of UIC recording a profit of KD 3.3 million.

In Q2, UIC successfully increased its capital by 100%, from KD 24.8 million to KD 49.6 million. The decision to increase the capital came after a comprehensive feasibility study and a thorough review of the best options that would best support and enhance the company's future activities, as well as covering financial commitments/short-term loans. This increase was followed by increasing Kuwait Projects Company (Holding) contribution in UIC from 43.54% to 71.76%.

To complete the implementation of the action plan and strategy, in Q2 UIC made a significant acquisition of Kuwait National Industrial Projects Company the holder of 18.46% shares of Al Qurain Petrochemical Industrial Company. Following the acquisition and restructuring of the company, KNIPC became UIC subsidiary.

The actions taken and the implementation of the aforementioned steps, as well as the performance results of our strategic investments, have had a direct impact on our financial statements and our performance results for the year in review, as follows:

Total borrowings were reduced from KD 97.45 million to KD 69.95 million, after paying 28% (KD 27.5 million) of the total loans highlighted in the consolidated financial statements, including repayment of bonds of KD 15 million paid back during Q1 for the year under review. Also the company has finalized the negotiation and agreed with bank to reschedule a loan of KD 22.5 million Share of income from associates increased by 140% to KD 4.997 million during 2010, compared to KD 2.09 million for 2009. Total revenue KD 9.7 million, compared to KD 1.404 million recorded in losses in 2009 recording an increase of 791%. Operating profit KD 4.263 million after deducting expenses, compared to a loss of KD 8.207 million recorded in 2009 an increase of 152%.

Net profit KD 4.045 million, compared to KD 7.36 million in losses recorded in 2009, bringing earnings per share to 10.89 Fils noting that the earning per share is calculated on the basis of current capital of UIC which is KD 49.6 million compared to 29.9 Fils losses last year representing an increase of 155%.

Consolidated investments increased by 82% (KD 77.7 million) to reach KD 172.6 million, while assets increased to KD 178.1 million from KD 130 million in 2009 representing an increase of 37%. Finally, shareholders equity increased by 42% to 97.3 million for the year ended in 31 December 2010 from 68.3 million in 2009.

A word of Gratitude and Appreciation

I would like to conclude by expressing my sincere gratitude to all of the Members of the Board for their trust and their continuous support. I would like to extend my gratitude to Sheikh Khalifa Abdullah Al Jaber Al Sabah, the Vice Chairman, for his efforts and distinguished contributions for seven years as Chairman of the Board of Directors.

We pray to God Almighty to grant us success in our future endeavors, and that our efforts be rewarded.

Essa Khaled Al-Essa
Chairman and CEO