Performance at UGB's major subsidiaries and associates has been strong and has contributed substantially to UGB’s revenues.

Subsidiaries

KIPCO Asset Management Company (KAMCO), Kuwait
UGB Consolidated Subsidiary based in Kuwait Established in 1998, KAMCO is a leading asset management and financial institution in Kuwait. Its three principal business lines are asset management, financial services and investments, and investment advisory research services, which are offered to a diverse local, regional and international client base. During 2012, KAMCO continued its programme of strategic realignment, organisational restructuring and cost reduction. The benefits of these initiatives will be realised in 2013, with an expected return to profitability. The restructuring during the year resulted in a reduction of assets to US$ 274 million (KD 77 million) at the end of 2012 from US$ 523 million (KD 147 million) at the end of the previous year. During 2012, KAMCO optimised its capital structure and focused on its core activities of asset management and advisory services. Operational revenues (excluding revenues/losses related to available-for-sale assets, subsidiaries and associates) grew considerably in 2012 – a significant improvement given the challenging capital market conditions that faced the financial and investment sector. Total assets under management (AUM) increased to US$ 8.6 billion (KD 2.41 billion) compared to US$ 7.7 billion (KD 2.17 billion) in 2011, constituting a growth of 11%. UGB owns 86% of KAMCO, which is listed on the Kuwait Stock Exchange. For more information visit www.kamconline.com

United Gulf Financial Services Company North Africa (UGFS-NA)
UGB Consolidated Subsidiary based in Tunisia UGFS-NA was established in November 2008 as an asset management entity. It is primarily involved in three main activities of providing Fund Services, Portfolio Management Services, and Corporate Finance Services. In terms of Fund Services, UGFS-NA has launched five funds to date and manages a total AUM of US$ 11.3 million (TND 17.4 million). In 2012, the Company was officially mandated by the Islamic Development Fund and the CDC Sovereign Tunisian Fund to set up as a fund manager, a US$ 32.3 million (TND 50 million) new Sharia-compliant private equity fund (the Theemar Investment Fund) and an additional start-up fund. These two funds are expected to be launched during the first half of 2013. In terms of Portfolio Management and Corporate Finance Services, at the end of 2012, UGFS-NA managed a total AUM of US$ 2.6 million (TND 4.1 million), with a client base of 20 institutions and individuals in portfolio management services. Under corporate finance, UGFSNA successfully completed a number of equity /debt mandates, and has built a healthy pipeline of financial advisory transactions. As at 31 December 2012, UGB’s consolidated shareholding in UGFS-NA stood at 85%. Its shares are not listed.  For more information visit www.ugfsnorthafrica.com.tn

Associates

Financial Services

Burgan Bank (BB)
UGB Associate Company based in Kuwait
Established in 1975, Burgan Bank (BB) is regulated by the Central Bank of Kuwait. Over the years it has acquired a leading role in the retail, corporate and investment banking sectors in the MENA region. Its achievements in product innovation, information technology, efficiency, quality and corporate governance have been recognised by numerous awards, with several of them being either first or unique in the region. BB is also the first bank in the GCC to achieve ISO 9001:2008 accreditation. In 2012, the Bank reported a net income of US$ 197.9 million compared with US$ 181.5 million in 2011. UGB has an equity stake of 18% in Burgan Bank, which provides it with a stable and recurring revenue stream, and the opportunity to access BB’s regional client base. The Bank’s shares are listed on the Kuwait Stock Exchange. For more information visit www.burgan.com

Manafae Investment Company (Manafae)
UGB Associate Company based in Kuwait
An Islamic investment company established in 2005, Manafae offers a wide range of Sharia compliant products and services, including asset management, investment services, extension of financing and credit, and advisory services. The Firm was one of the first to launch an Islamic mutual fund in 2007. The Manafae First Fund invests in listed and private companies, incorporated primarily in Kuwait and the GCC. As at 31 December 2012, UGB’s consolidated shareholding in Manafae stood at 33%. Its shares are listed on the Kuwait Stock Exchange. For more information visit www.manafae.com

North Africa Holding Company (NorAH)
UGB Associate Company based in Kuwait
Established in 2006, NorAH focuses on acquiring significant stakes in companies in Morocco, Algeria, Tunisia, Libya and Egypt that have demonstrated the ability, or have the potential, to deliver real value. The Company is regulated by the Ministry of Commerce and Industry, Kuwait. In 2012, NorAH reported a net loss of US$ 1.8 million compared with a net loss of US$ 3.7 million in 2011. At the end of the year, total assets stood at US$ 291 million (2011: US$ 287 million). As at 31 December 2012, UGB’s consolidated shareholding in NorAH stood at 42%. Its shares are not listed. For more information visit www.northafricaholding.com

Syria Gulf Bank (SGB)
UGB Associate Company based in Syria
SGB was licensed in 2006 and commenced operations in June 2007. The Bank offers a range of retail and commercial banking services through a number of branches across the country. SGB was named ‘Best Bank in Syria 2009’ by The Banker magazine. Despite the current circumstances in Syria, SGB is operational, with a focus on maintaining adequate capital and liquidity. UGB owns 31% of SGB, which is listed on the Damascus Securities Exchange. For more information visit www.sgbsy.com

Takaud Savings & Pensions Company (Takaud)
Joint Venture based in Bahrain
Incorporated in Bahrain in 2011, Takaud Savings & Pensions is a 50:50 joint venture between KIPCO and UGB. The objective of this new entity – one of the first of its kind in the region – is to specialise in offering savings and private pension products engineered and conceived primarily for customers in the MENA region. The overall scheme of the regional operation will involve either establishing specialised companies in different countries within MENA, or entering into distribution agreements. During 2012, the Company launched its initial product in Bahrain – Takaud End of Service Benefits Plan – which brings investment expertise, choice, and customer centric service to companies seeking to explore models for managing end of service benefits liabilities. Takaud plans to launch its services in Kuwait, Jordan and Egypt in 2013. Its shares are not listed. For more information visit www.takaud.com

Al Sharq Financial Brokerage Company (Al Sharq)
UGB Associate Company based in Kuwait
Established in 1985, Al Sharq has grown to become one of the largest brokerage firms I Kuwait, as measured by the number of transactions conducted on the Kuwait Stock Exchange. In 2012, Al Sharq increased its brokerage revenues by 17% and net income by 30%. Total assets at the end of the year stood at US$ 21.4 million (KD 6 million), while equity was US$ 18.9 million (KD 5.3 million). The paid up capital of Al Sharq is US$ 8.9 million (KD 2.5 million). UGB owns 19% of the firm through its subsidiary KAMCO on a consolidated basis. Its shares are not listed. For more information visit www.sharqetrade.com

Non Financial Core Investments

United Real Estate Company (URC)
UGB Associate Company based in Kuwait
Established in 1973, URC is involved in real estate activities that include the purchase, sale, leasing and renting of land and buildings. The Company handles the construction of private and public buildings and projects; and manages third party properties in Kuwait, Egypt, Lebanon and Jordan. The Company’s real estate portfolio includes commercial complexes, hotels, resorts, residential buildings, high rise office buildings as well as mixed-use developments. In Kuwait, these include KIPCO Tower, Marina Mall and Marina Hotel. Regionally, URC is developing Abdali Mall in Jordan, Salalah Gardens Mall, Salalah Mall Residences, and Junoot in Oman; as well as Raouche View in Lebanon. URC recorded a net profit of US$ 80 million in 2012 compared with US$ 36 million the previous year. UGB owns a 21% stake in URC, which is listed on the Kuwait Stock Exchange. For more information visit www.urc.com.kw

United Real Estate Company Syria (URCS)
UGB Associate Company based in Syria
Established in 2007, URCS is primarily engaged in the purchase, development, management and trade of real estate. The Company is involved in various real estate projects aimed at developing the Abdali and Aqaba zones, as well as contributing to the development of residential and leisure properties in Jordan. Two of its main urban development activities are the construction, leasing and management of the Pedestrian Spine (Boulevard) project and the Mall project in downtown Amman. UGB owns 20% of URCS on a consolidated basis. The Company’s shares are not listed.

United Capital Transport Company (UNICAP)
UGB Associate based in Kuwait
UNICAP was established in 2011 as a joint venture between UGB’s subsidiary KAMCO, and ANHAM – a leading contracting firm working throughout the MENA region, Central Asia and Europe. The Company is a leasing solutions provider to governments, international oil companies, and various construction, mining and industrial services businesses. UNICAP offers timely, efficient and customer focused equipment and logistical support services to a variety of clients and markets across the MENA, GCC and Central Asia regions. Customised leasing, transportation and financing solutions are provided to vendors and customers to meet their specific needs within geographically-diverse and strategically-challenging markets. UGB owns 40% of the company on a consolidated basis through its subsidiary KAMCO. UNICAP’s shares are not listed.