First: Foreign exchange rates:

Foreign exchange rates against Kuwaiti Dinar are approved in accordance with Central Bank of Kuwait instructions and the average of annual exchange rate shall be considered.

Second: Profits and losses of currency conversions:

These are payable or receivable currency differences arising from sale or purchase operations and recognized by the incorporated by as profit or loss as follows:

1. Currency differences profits are divided into:

   A - Realized profits of currency differences: The profits arising from the sale & purchase due to the difference in exchange rates on maturity date from exchange rates on repayment or collection date are allowed.

   B - Book profits of currency differences: These profits are not allowed since they are not real profits but arising from revaluation of assets and liabilities of the incorporated boy.

2. Currency differences losses are divided into:

   A - Realized losses of currency differences: these losses are accepted provided that the supporting documents are provided. These result from the sale and purchase transactions as a result of the exchange rates differences at the maturity date from the exchange rates in the payment or collection date.

   B - Book profits of currency differences: these losses are not deductible because they are not real, but result from revaluation of the assets and liabilities of Incorporated Body.

Third: Special and unique cases relating to profits and losses of currency differences are treated separately after consulting the Tax Department in this regard.