Dear Shareholders....

On behalf of myself, and members of the board, I am delighted to present the annual report which includes highlights on activities and achievements in addition to the financial statements for the fiscal year ended in 31 December 2009.

The fiscal year 2009 was extremely difficult and challenging for the oil sector in Kuwait; as the economic downturn adversely affected investments in the oil and gas sector; several large projects have been deferred, cancelled or rescheduled which have added to the intensity of the economic scene. As a consequence to this unstable economic scene throughout the year 2009, the performance of the companies operating in the sector suffered immensely; from sharp fluctuations in oil prices and the slowdown in trade tempo to the contractions of growth indicators.

During 2009, we continued to focus on strengthening the value of our operations and our investments in projects developments as well as seeking new promising investment opportunities, by assessing its potential, profitability and risk mitigation.

In view of such exceptional circumstances, we have not witnessed the favorable results we aspired to as targeted. The increasingly challenging and competitive marketplace adversely affected the performance of some sectors in the company; as new competition have surfaced on the new tender’s front and we had to devise a strategy to strengthen the company’s competitive capabilities for bidding in future tenders.

The company’s financial performance have improved compared to previous year performance, in spite of the challenging environment, as United Oil Projects registered 334 thousand Kuwaiti Dinars profits. This represents an increase of 119% compared to previous year. We have a positive outlook for the year ahead, one which will be marked by adapting a prudent investment strategy which will enable us to secure higher and long term value for our investors.

In view of the current situation, the Board of Directors has made recommendations to the Annual General Assembly to withhold any dividend in respect of the financial year ended 31 December 2009.

Sales revenues decreased to KD 2.1 million Kuwaiti Dinars compared to KD 3.6 million Kuwaiti Dinars for the previous year. The decrease in revenue was mainly attributed to the continued intense domestic and regional market competitions and the economic global slowdown. The management looks forward to more consolidated efforts to achieve better results in the near future, provided the economic factors prevailing in the market will develop positively.

Income from Associates United Precision Drilling Company (UPDC) was above budget at KD 407,023 Kuwaiti Dinars. This represents an increase of 6.7% compared to previous year.

On the other hand investment revenues from Al- Khorayef Company - for selling, maintenance and fixing oil drilling equipment - KD 130,739 Kuwaiti Dinars. This represents an increase of 156% compared to previous year.

On behalf of the Board of Directors, we are sincerely thankful for your continued support and confidence in us. I would like to seize the opportunity to extend my gratitude and appreciation to Senior Management, Officers and Staff and to pledge our commitment to sound corporate governance and steering a continued path towards increasing long term shareholders value.

Sincerely

Khalid Rashed Al Haroon
Chairman