BASREC

We have improved our profitability as compared to the last year.

The Company has built up satisfactory liquid funds reserves and our historical policy of placing these funds on fixed deposits primarily with one bank has been changed. Due to very depressed rate of interest from this single source, the Directors decided to diversify the placement of these funds on fixed deposits with other reputed banks with considerably improved interest rates and this change in our policy has been implemented and will continue to prevail in the immediate future.

In the prevailing economic situation in the area and in the absence of any major projects being undertaken, the profit achieved is considered very satisfactory.

The Management, staff and work force has worked very hard throughout the year and are in the process in consolidating the main core business of the Company which is full ship repairs and conversion.

Our wholly owned subsidiary “Marine and Industrial Pump Repair Gulf S.P.C.” has not been able to improve its operating results which is mainly due to absence of any major development projects both in the Government and Public Sector. This situation is being kept under constant watch by the Management and all efforts are being put in to improve the situation.

Regarding our Container Repair Division, we have relocated our Repair Depot within the confines of Mina Salman, outside the Security Zone. This is still unofficial due to the fact that we have so far not been presented any official documents from General Organisation of Sea Ports, to confirm the final arrangements.

One important factor should be kept in mind that the Mina Salman “Flyover” and other connected developments coming up shortly will cause traffic congestion in the area which is already difficult. Our Company is already offering our container inspection and repair services in our Depot in Mina Salman area and the pre-gate area at Khalifa Bin Salman Port. The transition period is going to be difficult and strenuous. The management is determined to make this operation a success.

The Management have presented to the Board of Directors a number of development projects within the Company for expansion and improvement of existing facilities which are under the active consideration of the Board and hopefully, the decision will be made during the year 2011.