Final Results

RNS Number : 7440R

Qatar Investment Fund PLC

16 September 2014

Qatar Investment Fund Plc

Final Results forthe year ended 30 June 2014

Qatar Investment Fund Plc (QIF), theLondon-listed fund established to invest in opportunities in Qatar and the Gulf Cooperation Council (GCC) region, announces its results for the year ended 30 June2014.

Nick Wilson, Chairman of the Qatar Investment Fund plc, said:

"Shareholders again enjoyed a very good return during the year. The Qatar Investment Fund plc share price rose 25.9% in the year, from $1.020 to $1.285. Including the 3.2c dividend, the total shareholder return was 29.1%, compared to 19.3% last year."

Highlights

· Qatar Investment Fund plc's NAV per share rose by 21.6% to $1.41, which compares with a rise of 23.9% in the Qatari stockmarket and a rise of 11.7% in the MSCI Emerging Markets Index.

· The Board proposes to pay a raised dividendfor the year of 3.5 cents per ordinary share (2013: 3.2c per share).

· Qatar's economic growth continued in the first quarter of 2014, with GDP rising 6.2% compared to the same period in 2013. Qatar's GDP is forecast to grow 6.3% in 2014 and 7.8% in 2015.

· Near to long-term growth prospects should remain healthy, driven by a strong infrastructure development pipeline, increased government spending and a growing population.

· An increase in many Qatari companies' foreign ownership limit from 25% to 49% should have a positive impact on Qatar's overall weight in the MSCI Emerging Markets Index.

Nick Wilson added:

"The Qatari economy continues to forge ahead with encouraging growth in the non-hydrocarbon Qatari economy, supportive demographics, and expansionary fiscal spending. The non-oil and gas sector of the economy is growing fast. It expanded 11.5% in the first quarter compared to 2013, with growth again expected to be in the double-digits in 2015. Combined with Qatar's upgrade into the MSCI Emerging Markets index this year, the company is well positioned to gain from the growth behind Qatar's vigorous economy."

For further information:

Qatar Investment Fund plc +44 (0) 1624 622 851

Nick Wilson

Panmure Gordon +44 (0) 20 7886 2500

Andrew Potts

Maitland +44 (0) 20 7379 5151

William Clutterbuck

Chairman's Statement

On behalf of your Board, I am pleased to present your Company's seventh Annual Report and Financial Statements for the year to 30 June 2014.

During the twelve months, your Company's Net Asset Value per Share ("NAV") rose by 21.6% to US$1.41, which compares with a rise of 23.9% in the Qatari stockmarket (Qatar Exchange Index) and a rise of 11.7% in the MSCI Emerging Markets Index. Following a narrowing of the discount at which the shares trade to NAV, the share price increased from US$1.020 to US$1.285, a rise of 25.9%, and Shareholders additionally received a dividend of 3.2c per share paid on 31 January 2014 making a total return of 29.1%.

Results

Results for the year ended 30 June 2014 showed a profit of US$45.9m generated from fair value adjustments, realised gains and dividend income. This is equivalent to basic earnings per share of 27.76 cents.

The Qatar Exchange performed well during the period buoyed by the MSCI upgrade to Emerging Market status, effective at the beginning of June 2014. The market peaked at the end of May 2014 as profit taking ensued, prompting a 16% correction, further aggravated by press allegations of bribery over Qatar's successful bid to host the World Cup in 2022.

The Company's Ongoing Charges (formerly Total Expense Ratio) fell to 1.66% from 1.93% in the previous year. The charges were calculated in accordance with the methodology recommended by The Association of Investment Companies.

Managing the discount between the share price and NAV

Discount management remains a priority for the Board and we continued to make use of the authority granted by Shareholders to buy back the Company's shares. During the period a total of 3,793,272 shares were bought back to be held in Treasury. 7,534,651 shares were cancelled as they had been held in Treasury for 12 months. For the year, the buybacks added over US$650k to net asset value. In addition to pursuing an active buyback policy, the Board works actively with the Investment Manager and the Brokers to raise the profile of the Company, giving frequent interviews to the financial press in order to raise the profile of the Company with institutional and private investors.

Tender Offer

As communicated in the circular sent to Shareholders in 2012, subject to Shareholder approval and the laws of the Isle of Man on distributable profits, there would be further tender offers in the fourth quarters of 2013 and 2014 on similar terms for up to 10% of the Company's issued Share Capital at those times (excluding treasury shares) in the event that the average discount to NAV per share at which the Company's shares trade in the twelve month periods to 3 December 2013 and 3 December 2014 exceeded 10 per cent. If the discount test is triggered, Shareholders will at that point be sent a separate circular explaining the process and seeking Shareholder approval.

Proposed Dividend

We aim to pay dividends from income received from companies in which the fund is invested. Since Qatari companies only pay dividends once a year, the Board will continue its policy of only declaring a final dividend and therefore no interim dividend was declared this year.

For the twelve months, the Board proposes to pay a dividend of 3.5 cents per ordinary share (2013 - 3.2c per share) and if the discount test described above is triggered, payable on the post tender offer share capital, with a record date and payment date after such tender offer. Subject to shareholder approval at the forthcoming Annual General Meeting, the dividend will be paid after the tender offer in 2015. Further details on the ex-date, record date and payment date will be made in due course.

Post Balance Sheet events

There have been no post balance sheet events.

Outlook, risks and uncertainties

The Qatari economy continues to forge ahead with the Ministry of Development Planning and Statistics forecasting GDP growth of 6.3% in 2014 and 7.8% in 2015. Double digit growth is expected for the non-hydrocarbon sector with over 14% expected for the construction sector both in 2014 and 2015. Qatar's population rose to 2.17 million between December 2013 and May 2014, an increase of 6.3%. The Company's Investment Adviser believes that near to long-term growth prospects should remain healthy driven by a strong infrastructure pipeline, expansionary fiscal spending and supportive demographics.

There are, of course, risks to investors. The Board believes these principally fall in the following categories; geopolitical events, market risks, investment and strategy risks, accounting, legal and regulatory risks, operational risks and financial risks. Information on each of these is given in the Business Review section of this Annual Report.

Looking to the future, the Board is confident that the Company is invested in companies with good prospects listed on the Qatar Exchange and elsewhere in the GCC region. The Company offers international investors one of the few practical ways to gain investment exposure to Qatar's vigorous economy.

The Board views the future of the Company with confidence and firmly believes that continued growth in the non-hydrocarbon Qatari economy combined with improving demographics the Board believes will lead to significant upside for the Company.

Annual General Meeting

I look forward to welcoming Shareholders to our seventh Annual General Meeting on 11 November 2014, which will be held at 1.00 pm, at the Company's registered office at Millennium House, 46 Athol Street, Douglas, Isle of Man.

Nicholas Wilson

Chairman

15 September 2014

Business Review

The following review is designed to provide information primarily about the Company's business and results for the year ended 30 June 2014. It should be read in conjunction with the Report of the Investment Manager and the Investment Adviser on pages 7 to 14 which gives a detailed review of the investment activities for the year and an outlook for the future.

Investment Objective and Strategy

The Company's investment objective is to capture, principally through the medium of the Qatar Exchange (formerly the Doha Securities Market), the opportunities for growth offered by the expanding Qatari economy by investing in listed companies or companies soon to be listed. The Company may also invest in listed companies, or pre-IPO companies, in other Co-operation Council for Arab States of the Gulf (GCC) countries.

The Company applies a top-down screening process to identify those sectors which should most benefit from sector growth trends. Fundamental industry and company analysis, rather than benchmarking, forms the basis for both stock selection and portfolio construction.

The Company's investment policy is on pages 15 to 17.

Performance Measurement and Key Performance Indicators

In order to measure the success of the Company in meeting its objectives and to evaluate the performance of the Investment Manager, the Directors take into account the following key performance indicators:

Returns and Net Asset Value

At each quarterly Board meeting the Board reviews the performance of the portfolio versus the Qatar Exchange (QE) Index (local benchmark) as well as the net asset value, income, share price and expense ratio for the Company.

Discount/Premium to Net Asset Value

At each quarterly Board meeting the Board monitors the discount/premium to net asset value. The Directors renew their authority at the annual general meeting in order to be able to make purchases through the market where they believe they can assist in narrowing the discount to net asset value. Any purchases will be made in accordance with the Listing Rules and the Law and ordinances made thereunder.

A Board member is responsible for close monitoring of our share price, and working with our broker to buy back shares when we believe appropriate so as to manage any discount to net asset value.

Yield

The Board monitors the dividend income of the portfolio and the amount available for distribution and considers the impact on the Company's annual dividend policy of future progressive dividend payments, subject to the absence of exceptional market events.

Principal Risks and Uncertainties

The Board confirms that there is an on-going process for identifying, evaluating and managing or monitoring the key risks to the Company. These key risks have been collated in a risk matrix document which is reviewed and updated on a quarterly basis by the Directors. The risks are identified and graded in this process, together with the policies and procedures for the mitigation of the risks.

The key risks which have been identified and the steps taken by the Board to mitigate these are as follows:

Market

The Company's investments consist of listed companies. There are no investments in companies soon to be listed. Market risk arises from uncertainty about the future prices of the investments. This is commented on in Note 15 on pages 59 to 63.

Investment and Strategy

The achievement of the Company's investment objective relative to the market involves risk. An inappropriate asset allocation may result in underperformance against the local index. Monitoring of these risks is carried out by the Board which, at each quarterly Board meeting, considers the asset allocation of the portfolio, the ratio of the larger investments within the portfolio and the management information provided by the Investment Manager and Investment Adviser, who are responsible for actively managing the portfolio in accordance with the Company's investment policy. The net asset value of the Company is published weekly.

Accounting, legal and regulatory

The Company must comply with the provisions of the Isle of Man Companies Acts 1931-2004 and since its shares are listed on the London Stock Exchange, the UK Listing Authority's Listing Rules and Disclosure and Transparency Rules ("UKLA Rules"). A breach of company law could result in the Company and/or the Directors being fined or the subject of criminal proceedings. A breach of the UKLA Rules could result in the suspension of the Company's shares. The Board relies on its Company Secretary and advisers to ensure adherence to company law and UKLA Rules. The Board takes legal, accounting or compliance advice, as appropriate, to monitor changes in the regulatory environment affecting the Company.

Operational

Disruption to, or the failure of, the Investment Manager, the Investment Adviser, the Custodian or Administrator's accounting, payment systems or custody records could prevent the accurate reporting or monitoring of the Company's financial position. Details of how the Board monitors the services provided by the Investment Manager and its other suppliers, and the key elements designed to provide effective internal control, are explained further in the internal control section of the Corporate Governance Report on pages 21 to 26.

Financial

The financial risks faced by the Company include market price risk, foreign exchange risk, credit risk, liquidity risk and interest rate risk. Further details are disclosed in Note 15 on pages 59 to 63.

Report of the Investment Manager and Investment Adviser

Regional Equity Market Overview

Indices	30-Jun-13	30-Jun-14	% Change
Qatar (DSM)	9,276	11,489	23.9%
Saudi (TASI)	7,497	9,513	26.9%
Dubai (DFMGI)	2,223	3,943	77.4%
Abu Dhabi (ADI)	3,551	4,551	28.2%
Kuwait (KWSE)	7,773	6,971	-10.3%
Oman (MSI)	6,338	7,008	10.6%
Bahrain (BAX)	1,188	1,428	20.2%

Source: Bloomberg

In the past twelve months to June 2014, the performance of all the GCC markets was good except for Kuwait. The Dubai, Abu Dhabi and Qatar markets did very well, gaining 77.4%, 28.2% and 23.9% respectively, largely due to an upgrade of these markets by MSCI from Frontier Markets to Emerging Markets. The outlook for GCC economies remained favourable, whereas other emerging market economies continued to show signs of weakness. Solid fiscal balances in the GCC economies, driven by high oil prices, continued to give a strong base for infrastructure and development spending. In the twelve months the Bloomberg GCC 200 index rose 23.9%.

That said, the UAE and Qatar markets retreated later Q2 2014 as profit-taking combined with the security crisis in Iraq and lower investment activity during Ramadan impacting fresh buying. The start of Ramadan/summer traditionally triggers profit-taking by retail investors. The Dubai market dropped 11.4% in Q2, while Abu Dhabi market retreated 7%. Construction major Arabtec declined 39% in Q2, after rising 108% in the first quarter. Despite this sell-off the UAE markets (Dubai and Abu Dhabi) were the best performing markets in the region.

During the period the Saudi market rose 26.9%, Oman rose 10.6% and Bahrain rose 20.2%. The Kuwait market was the laggard with a fall of 10.3%.

Looking ahead, the Investment Adviser believes that the Qatar market is better positioned than other GCC markets with large infrastructure investments underway, strong economic growth projections, and modest earnings growth. The attractive dividend pay-out and foreign investor interest should also help to drive progress.

2022 World Cup

Allegations relating to corruption in Qatar's 2022 World Cup bid coincided with the broader sell-off in the Qatar market. The Investment Adviser regards the 2022 World Cup as an important catalyst rather than the sole driver of growth. Qatar's non-oil GDP has grown at around 10%-11% per year since 2011 and has been the impetus behind recent economic expansion. Infrastructure spend of US$182 billion (c90% of 2013 GDP) in the pipeline means that non-oil GDP can continue to grow at the mid-teens levels over the next few years. The Investment Adviser believes that while the 2022 World Cup remains important in providing a timing discipline on infrastructure plans, it's worth remembering that most of this infrastructure spend (e.g. road/rail transport infrastructure, expansion of air/sea ports, healthcare/education investments) was already planned prior to the 2022 World Cup hosting decision and is likely

to go ahead even if the World Cup is moved elsewhere.

If the rights to host the 2022 World Cup were removed from Qatar, it is likely that some of the projects might be put on hold or cancelled altogether. The bulk of these would be stadia and related facilities. The Investment Adviser believes that with or without the World Cup, Qatar's economy will continue to prosper on the back of double digit non-hydrocarbon sector growth in coming years. The country would continue with its massive infrastructure development program.

Quarterly Performance of Regional Markets

Indices	30-Jun-13	30-Sep-13	31-Dec-13	31-Mar-14	30-Jun-14
Qatar (DSM)	8.1%	3.6%	8.0%	12.1%	-1.3%
Saudi (TASI)	5.2%	6.2%	7.2%	11.0%	0.4%
Dubai (DFMGI)	21.5%	24.3%	22.0%	32.1%	-11.4%
Abu Dhabi (ADI)	17.4%	8.2%	11.6%	14.1%	-7.0%
Kuwait (KWSE)	15.6%	-0.1%	-2.8%	0.3%	-7.9%
Oman (MSI)	5.8%	4.9%	2.8%	0.3%	2.2%
Bahrain (BAX)	8.8%	0.5%	4.6%	8.7%	5.2%

Source: Bloomberg

Qatar Economic Update

Qatar's economic growth continued in Q1 2014, with GDP rising 6.2% compared to Q1 2013, according to Qatar Statistics Authority (QSA). Compared to the previous quarter (Q4 2013) GDP grew 2.3%. Growth was mainly from the non-hydrocarbon sector, which expanded 11.5% in Q1 2014 compared to Q1 2013. Double digit growth was reported in the construction, trading, hospitality and financial sectors.

The hydrocarbon sector contracted 1.2% in Q1 2014 compared to Q1 2013, mainly due to lower crude oil production and flat gas production, also impacted by lower crude oil prices. Qatar's economic growth is expected to continue to be led by the non-hydrocarbon sector, as domestic demand should remain strong. Rising investment spending, the government's expansionary budget and population growth should maintain the momentum. According to the Ministry of Development Planning and Statistics (MDP&S), the country's economic growth is estimated at 6.3% in 2014, hitting 7.8% in 2015 on account of strong investment activity in the non-hydrocarbon sector and helped by the commissioning of the Barzan gas project.

Population is expected to grow further as large infrastructure projects require large number of workers. Steady growth in population and a rise in spending are encouraging for consumer and services sector companies.

Expansionary state budget for 2014-2015

Qatar's fiscal budget shows a commitment to speed up and complete planned infrastructure projects before the 2022 FIFA World Cup. The 2014-2015 budget assumes a conservative oil price of US$65 per barrel, unchanged from the previous budget, substantially lower than the current Brent Crude oil price of US$100 per barrel, and translating into budgeted revenue of QAR225.7 billion, an increase of 3.5% from the previous budget. Total government spending is expected to increase 3.7% to QAR218.4 billion, compared to QAR210.6 billion planned in the previous budget. The budget surplus is estimated at QAR7.3 billion.

Allocation to the education sector has increased by 7.3% from the previous budget to QAR26.3 billion in 2014-15, as the

government plans to build 85 new schools in the next 18 months. Total expenditure on the health sector is expected to rise 12.5% (to QAR15.7 billion). These include allocations to complete the Sidra medical and research centre, complete Hamad General Hospital and building the maternity hospital and 19 new health centres, including 6 that are already under construction. The budget has also allocated QAR3.3 billion (up 18% from 2013-2014) to provide housing for Qatari nationals 3,700 housing units which are under construction and to build additional 2,300 homes for 6,000 nationals, ensuring that there is no waiting list for housing.

Recent Developments

Strong infrastructure newsflow

Newsflow related to Qatar's infrastructure spending remains encouraging, with Qatar's central bank governor having revealed the government's plan to award contracts worth US$50 billion in 2014. The governor mentioned that projects would largely be awarded in the transport, energy and other sectors as the country prepares for the 2022 FIFA World Cup. Additionally, the recent budget has allocated US$24.03 billion for key projects, an increase of 16.8% from the previous budget. The Minister of Finance estimates that spending on projects would reach US$182.35 billion over the next five years.

In the 2014-2015 budget, investment in infrastructure and transport increased 22% to QAR75.6 billion from last year. A large amount of the spending would be used to complete ongoing projects and to initiate construction of eight new stadia for the World Cup. Furthermore, the government has allocated funds for the completion of the Hamad International Airport and the new Doha Port, for the rail and metro projects and roads. Additionally, the budget has allocated funds to upgrade the existing electricity and sewage system network to cope with the growing urbanization.

Changes to QE Index constituents and weightings

AlKhaliji Commercial Bank and Medicare Group joined the QE Index from 1 April, replacing National Leasing and Widam Food Company. Alkhaliji Commercial Bank will have a weight of approximately 2.7% and Medicare Group a weight of 0.67% in the Index. The QE All Share Index components remained unchanged from the previous review, with 40 stocks qualifying for inclusion. The Qatar Exchange caps the maximum weight a single stock can represent at 15% of the QE Index. Based on 1 April 2014 closing prices, Qatar National Bank (20.2% weight) and Industries Qatar (17.0% weight) were capped at 15%, with excess weights distributed proportionately among remaining QE Index constituents.

Qatar's construction sector to expand

Qatar's construction sector is poised for growth driven by heavy investments by the government in infrastructure, particularly local roads, expressways, the Doha metro and rail, and drains and sanitation. The construction sector in Qatar is estimated to grow by 14.1% in 2014 (13.6% growth reported in 2013) and accelerate in 2015 to 14.5%. The building of new healthcare centres and education facilities should entail heavy spending. Further impetus is expected from private construction activity in residential and commercial real estate development, including new malls, hotels and labour accommodation.

Tax exemption for foreign investors

Recently, the government's Advisory Council has approved a draft law to exempt foreign investors trading in the local market from paying tax on capital gains, dividend income and interest on bonds, including Sukuk bonds. The law covers foreign investment, mutual and portfolio funds. Once the law is implemented foreign companies or individuals participating in such mutual and portfolio funds are entitled for tax exemption on earnings.

Loan growth

According to Qatar Central Bank (QCB) data, Qatar's credit growth remained healthy with total loans increasing by 6.1% between December 2013 and June 2014. Public sector loan growth was relatively slower at 1.1%, while private sector reported strong growth of 8.6%. Total deposits grew 7.8% between December 2013 and June 2014. The banking sector's loans-to-deposit ratio (LDR) stood at 104% at the end of June 2014 compared to 105% at the end of December 2013.

An uptick in project / contract awards in the coming months should mean loan growth remains strong. Public sector and corporate sector are expected to be the drivers of loan book growth in 2014, with support from SMEs and consumer lending.

10 Qatari stocks in MSCI EM Index

Recently MSCI reclassified Qatar and the UAE as emerging markets from frontier-markets. Qatar has a 0.47% weighting in the MSCI EM Index with 10 companies qualifying for inclusion: QNB Group (QNBK), Industries Qatar (IQCD), Masraf Al Rayan (MARK), Ooredoo (ORDS), Vodafone Qatar (VFQS), Qatar Electricity & Water (QEWS), Qatar Islamic Bank (QIBK), Barwa Real Estate (BRES), Commercial Bank of Qatar (CBQK) and Doha Bank (DHBK).The UAE has a 0.58% weighting in the MSCI EM Index with 9 stocks qualifying for inclusion. At the end of Q2 2014, QIF held nine out of ten Qatari companies qualifying for inclusion, representing a weighting of 67.2% of QIF's NAV. Of the nine UAE stocks that have been qualified for the MSCI EM Index inclusion, QIF holds one - Emaar Properties (1.7% of QIF's NAV).

Foreign ownership limit increased to 49%

In May 2014, HE the Emir Sheikh Tamim bin Hamad al-Thani, President of the Supreme Council for Economic Affairs and Investment, issued a directive to increase foreign ownership limits in the Qatar Exchange listed companies to 49% of the capital from the traditional 25%. Investors outside the six-nation Gulf Cooperation Council (GCC) are now eligible to hold 49% in companies listed on the Qatar Exchange. Under this new directive, the share of foreign ownership would be calculated based on total Share Capital of each company and not on the available free float. An increase in foreign ownership limit should have a positive impact on Qatar's overall weight in the MSCI EM Index. This rise in foreign ownership limits is expected to take Qatar's MSCI EM Index weight from 0.47% to 0.62%, higher than 0.58% weight of UAE. That increased weight should attract around US$440 million of passive inflows to Qatar.

Qatar Exchange (QE) to launch margin trading, short selling

QE is working towards launching margin trading and covered short selling in the near future. The aim is to enhance investment opportunities, diversify the market and increase liquidity. The QE is in talks with the regulator to formulate rules and regulations to oversee these transactions.

QE to launch two ETFs

QE is planning to launch two exchange-traded funds (ETFs) over the next six months. One ETF is expected to be based on government fixed income securities, while the second would be based on the Qatar Exchange.

Valuations

Market	Market Cap.	Price/Earnings (x)		Price/Book (x)	Dividend Yield (%)
	US$ Mn	2014E	2015E	2014E	2014E
Saudi Arabia	517,973	14.7x	12.2x	2.7x	3.9%
UAE	193,202	14.6x	12.9x	1.9x	4.0%
Qatar	132,536	13.4x	11.5x	2.4x	4.6%
Kuwait	111,749	15.9x	12.0x	1.6x	4.0%
Oman	18,687	11.1x	10.4x	1.6x	5.1%
Bahrain	21,581	11.5x	10.0x	1.3x	4.8%
Egypt	28,342	15.4x	11.3x	7.2x	4.3%
Jordan	23,835	15.6x	12.8x	1.5x	3.4%
Overall MENA	1,047,906	14.6x	12.1x	2.4x	4.1%

Source: Bloomberg Finance LP, Deutsche Bank, Prices as of 30th June 2014

The Qatar market offers an attractive combination of appealing valuations, high dividend yields, and strong prospects for profit growth. The Qatar market is trading at 2014 price to earnings (P/E) of 13.4x, cheaper relative to its peers such as Saudi Arabia (14.7x), Kuwait (15.9x) and UAE (14.6x). The attractive valuation of the Qatar market is well supported by a significant dividend yield estimated at 4.6% for 2014, one of the highest dividend yields in the GCC.

Corporate Profitability

Sector Net Profit (QAR '000)	LTM 30/6/2013	LTM 30/6/2014	Change
Banks & Financial Services	16,925,545	18,002,275	6.4%
Insurance	1,734,141	2,669,056	53.9%
Services & Consumer Goods	1,504,393	1,987,259	32.1%
Industry	12,823,415	12,069,093	-5.9%
Real Estate	2,122,138	3,383,487	59.4%
Telecom	2,958,557	2,362,801	-20.1%
Transportation	1,808,780	1,826,253	1.0%
Total	39,876,969	42,300,224	6.1%

*Net profit calculation for the 12 months to 30 June 2013 is based on restated net profit numbers

LTM : Last Twelve Months

Source: Qatar Exchange

For the 12 months to 30 June 2014, the profitability of the Qatar Exchange (QE) listed companies improved moderately by 6.1% compared to 12 months to 30 June 2013. This growth takes into account the contribution from Mesaieed Petrochemical Holdings which completed its listing on the Qatar Exchange. The insurance, real estate and services & consumer goods sectors reported healthy double digit growth. All the sectors excluding the industry and telecom reported higher net profits.

The 43 listed companies on the QE posted an overall net profit of QAR42.3 billion (US$11.6 billion) for the year ended 30 June 2014 compared to QAR39.9 billion (US$11.0 billion) reported for the year ended 30 June 2013. Profits grew substantially in the insurance (net profit up 53.9%) and the real estate (net profit up 59.4%) sectors. All the companies in the insurance sector reported strong growth during the period. Qatar General Insurance and Reinsurance profits grew 69.8% year-over-year, on the back of one off gain reported by the Company in FY2013. Strong growth of over 32% was also reported in the services & consumer sector. Banking and financial services sector net profit growth was largely subdued at 6.4%, while the transportation sector reported mere 1% rise in net profit. The banking and financial services sector heavyweight Qatar National Bank reported a 9.5% rise in net profit. Industrial sector net profit plunged 5.9%, mainly due to dismal performance reported by the sector heavyweight company, Industries Qatar. Net profit at Industries Qatar declined 30% during the period on account of delayed and planned shutdowns at the company's various production units in the first half of FY2014. Telecom sector net profit also declined 20.1% during the period.

Going forward, the Investment Adviser believes that Qatari companies are likely to improve their earnings driven by higher project tendering, favourable demographics and healthy growth projected in the non-hydrocarbon sectors. This should help various domestic companies in the sectors such as banking, consumer, real estate and transportation.

Net profit growth of the Company's top 5 holdings (in QAR '000)

Company	LTM 30/6/2013	LTM 30/6/2014	Change
Qatar National Bank	8,959,940	9,810,202	9.5%
Industries Qatar	8,974,027	6,281,326	-30.0%
Commercial Bank of Qatar	2,019,282	1,604,296	-20.6%
Barwa Real Estate	742,871	1,398,026	88.2%
Doha Bank	1,313,452	1,351,262	2.9%

Source: Qatar Exchange

LTM : Last Twelve Months

Company Update

QIF's NAV increased 21.6% to US$1.41 at the end of June 2014 from US$1.16 at the end of June 2013. The NAV fell 1.3% in Q2 2014 compared to the previous quarter. At close of business on 30 June 2014, the QIF Share Price was at a 9.1% discount to NAV.

Industry Allocation

The banking sector (including financial services) remains the Investment Adviser's most favoured sector with a weighting of 43.5% of NAV. Qatar National Bank is QIF's largest single holding (15.1% of NAV), followed by Commercial Bank of Qatar (8.6%). Qatar's banking sector growth continues. Total assets grew 5.0% between December 2013 and June 2014, driven by a 6.1% expansion of the loan book. The outlook is good with additional lending growth as a result of increased investment spending and rising population. Lower provisioning and efficient cost management should also improve profitability.

The industrials sector remains the Company's second largest weighting at 16.7% (Q1 2014: 17.8%). Real estate increased to 12.1% (Q1 2014: 11.3%) of the Company, with telecoms decreasing to 6.7% from 7.8%. The insurance sector increased from 5.3% to 6.3% at the end of Q2 2014. Weighting in the transportation sector reduced marginally to 4.7%. Services and consumer goods sector weighting increased to 2.3% from 1.8%.

Embedded image removed - please refer to the Company's website www.qatarinvestmentfund.com for a chart depicting Industry allocation as a percentage of gross assets.

Portfolio Breakdown Top 5 Holdings

Company Name	Sector	% Share of NAV
Qatar National Bank	Banks & Financial Services	15.1%
Industries Qatar	Industry	10.8%
Commercial Bank of Qatar	Banks & Financial Services	8.6%
Barwa Real Estate	Real Estate	7.1%
Doha Bank	Banks & Financial Services	6.3%

Source: Bloomberg, Qatar Insurance Company

As at 30 June 2014, the top five investments of the Company constituted 47.9% of NAV, down from 56.4% as at 30 June 2013. The top 10 holdings represent 75.4% of the Company's NAV.

Country Allocation

At 30 June 2014, QIF had 27 holdings: 17 in Qatar, two in UAE, five in Oman and three in Kuwait. QIF's holdings outside Qatar represented 7.1% of NAV (Q1 2014: 6.6%). Cash represented 7.7% of NAV (Q1 2014: 2.1%). The cash balance at the end of the quarter is higher than in the previous quarter as we realised some profits on stocks that reached or exceeded our valuation levels which was driven by strong gains recorded by the Qatar market, which gained 17.6% between 31 March 2014 and 31 May 2014. Following the year end we have capitalised on the opportunity of a correction in the market and redeployed funds, as valuations returned to levels we were comfortable with.

Qatar remains the Investment Adviser's favourite market in the Gulf Cooperation Council (GCC) region because of the government's significant investment plans, relatively stable political environment, sizeable hydrocarbon reserves coupled with attractive valuations and strong yield.

Embedded image removed - please refer to the Company's website www.qatarinvestmentfund.com for a chart depicting Country breakdown as a percentage of NAVs.

Qatar National Bank (15.1% of NAV)

Qatar National Bank (QNB) is a high quality proxy stock for Qatari economic growth given its strong ties with the public sector and access to state liquidity. QNB is a dominant part state-owned participant in the banking sector and plays an important role in the development of the Qatari economy and in funding key infrastructure projects. The government is strongly committed to support QNB, thus enhancing its economic importance. QNB is the largest bank in Qatar with total assets of QAR466 billion (US$128 billion) as at 30 June 2014. For H1 2014, QNB reported a 7% rise in net profit to

QAR5.1 billion (US$1.4 billion). QNB is well positioned to reap the benefits of the rapid expansion of the domestic economy. The bank recently increased its presence to 26 countries, through its subsidiaries and associate companies. The Bank operates a large product distribution network in Qatar and overseas consisting of 600 locations and 1270 ATMs.

Industries Qatar (10.8% of NAV)

Industries Qatar (IQ) is the largest publicly traded company in Qatar. IQ is a holding company with interests in petrochemicals via 80% owned Qatar Petrochemical Co., fertilizers via 75% owned Qatar Fertilizer Co., steel via 100% owned Qatar Steel Co. and fuel additives via 50% owned Qatar Fuel Additives Co. Qatar Steel's green field melt shop project (EF5) commenced operations in February 2014, and should boost Qatar Steel's 2014 earnings through increased domestic sales of billets, and improved supply to the company's wholly-owned subsidiary in the UAE, Qatar Steel FZE. Additionally, Qatar Steel's 31.03% associate, SOLB Steel Company, started commercial operations in January 2013 with 1.0 million MT PA steel melt shop and a 0.5 million MT PA rolling mill. The steel melt shop and the rolling mill are operating at full capacity. Construction of a second rolling mill is underway and is likely to be completed in July 2014. Qatar Steel invested QAR 225.0 million in total for both phases. Industries Qatar's net profit fell 37.9% in H1 2014 compared to H1 2013, mainly due to extended planned shut-downs, product price deflation, and increased operating costs.

Commercial Bank of Qatar (8.6% of NAV)

Commercial Bank of Qatar (CBQ) was incorporated in 1975 as a full service commercial bank, offering a broad range of corporate, retail and investment banking products and services. CBQ is the second-largest commercial bank in Qatar with total assets of QAR112 billion (US$31 billion) as at 30 June 2014. CBQ offers retail, corporate and investment banking products in Qatar and through its associates also in the UAE, Turkey and Oman. For the first 6 months of 2014, CBQ reported a net profit of QAR1.0 billion (US$0.3 billion), flat as compared H1 2013.

Barwa Real Estate (7.1% of NAV)

Barwa Real Estate Company (BRE) is one of the major real estate developers in Qatar. BRE generates its revenue from sales of developed land, semi developed land, residential units, commercial units and office space. The company primarily operates in Qatar, but it is also expanding its footprint in other regional countries. Through its non-controlled subsidiary Barwa Bank, the company has extended its portfolio of businesses into the financial markets. BRE was created by the government-owned Qatari Diar Real Estate Investment Company in 2004 to focus on building medium-sized residential and tourism developments locally and abroad. For the first 6 months of 2014, BRE reported an 11.6% rise in net profit to QAR0.2 billion (US$0.06 billion), largely due to an increase in rental revenue by 7%.

Doha Bank (6.3% of NAV)

Doha Bank (DHBK) is the 5th largest bank in Qatar (by assets - US$19.8 billion as at June 2014). It is ranked fifth, with a loan book at US$12.5 billion (June 2014). The bank has international presence with operations in other parts of GCC such as Dubai, Abu Dhabi, Kuwait, and recently, it has been granted the license by the Reserve Bank of India (RBI) to start commercial banking operations in India. Of the total loan portfolio (as at December 2013), the bank has over 24% exposure to personal sector, about 22% exposure in the real estate sector and about 18% exposure in the contracting segment. The bank has relatively lower exposure to government and related agencies (8.1%). For the first 6 months of 2014, DHBK reported a 5.2% rise in net profit to QAR0.8 billion (US$0.2 billion).

Epicure Managers Qatar Limited Qatar Insurance Company S.A.Q.

15 September 2014 15 September 2014

Investment Policy

Investment Objective

The Company applies a top-down screening process to identify those sectors which should most benefit from sector growth trends. Fundamental industry and company analysis, rather than benchmarking, forms the basis of both stock selection and portfolio construction.

Assets or companies in which the Company can invest

The Company was established to invest primarily in quoted Qatari equities. The Company invests in listed companies on the Qatar Exchange in addition to companies soon to be listed. The Company may also invest in listed companies, or pre-IPO companies, in other GCC Countries.

Whether investments will be active or passive investments

In the ordinary course of events, the Company is not an activist investor, although the Investment Adviser will seek to engage with investee company management where appropriate.

Holding period for investments

In the normal course of events, the Company expects to be fully-invested, although the Company may hold cash reserves pending new IPOs or when it is deemed financially prudent. Although the Company is a long term financial investor, it will actively manage its portfolio.

Spread of investments and maximum exposure limits

The Company will invest in a portfolio of investee companies with restrictions in place to ensure a spread of investments and to ensure that there are maximum exposure limits in place (see investment guidelines under Investing Restrictions).

Policy in relation to gearing and derivatives

Borrowings will be limited, as at the date on which the borrowings are incurred, to 5% of NAV. Borrowings will include any financing element of a swap. The Company will not make use of hedging mechanisms.

The Company may utilise derivative instruments in pursuit of its investment policy subject to:

· such derivative instruments only being utilised in respect of investments listed on the Saudi Arabian stock exchange;

· such derivative instruments being designed to offer the holder a return linked to the performance of a particular underlying listed equity security;

· a maximum underlying equity exposure limit of 15 per cent. of NAV (calculated at the time of investment); and

· a policy of entering into derivative instruments with more than one counterparty in relation to an investment, where possible, to minimise counterparty risk.

Policy in relation to cross-holdings

Cross-holdings in other listed or unlisted closed-ended investment funds that invest in Qatar or other countries in the GCC region will be limited to 10% of NAV at any time (calculated at the time of investment).

Investing Restrictions

The investing restrictions for the Company are as follows:

(i) Foreign Ownership Restrictions

Investments in most Qatar Exchange listed companies by persons other than Qatari citizens have an ownership restriction wherein the law precludes persons other than Qatari citizens from acquiring a certain proportion of a company's issued Share Capital. It is possible that the Company may have problems acquiring stock if the foreign ownership interest in one or more stocks reaches the allocated upper limit. This may adversely impact the ability of the Company to invest in the local Qatari market and in other GCC markets.

(ii) Investment Guidelines

The Company has established certain investment guidelines. These are as follows (all of which are to be calculated at the time of investment):

· No single investment position in a QE Index constituent may exceed the greater of: (i) 15% of the NAV of the Company; or (ii) 125% of the constituent company's index capitalisation divided by the index capitalisation of the QE Index, as calculated by Bloomberg (or such other source as the Directors and Investment Manager may agree);

· No single investment position in a company which is not a QE Index constituent may exceed 15% of the NAV of the Company;

· No holding may exceed 5% of the outstanding shares in any one company; and

· The Company may hold up to a maximum of 15% of its NAV outside Qatar, within the GCC region, including investment in P-Notes or swaps structured financial products for investment in companies listed on the Saudi Arabian stock exchange.

(iii) Conflicts Management

The Investment Manager, the Investment Adviser, their officers and other personnel are involved in other financial, investment or professional activities, which may on occasion give rise to conflicts of interest with the Company. The Investment Manager will have regard to its obligations under the Investment Management Agreement to act in the best interests of the Company, and the Investment Adviser will have regard to its obligations under the Investment Adviser Agreement to act in the best interests of the Company, so far as is practicable having regard to their obligations to other clients, where potential conflicts of interest arise. The Investment Manager and the Investment Adviser will use all reasonable efforts to ensure that the Company has the opportunity to participate in potential investments that each identifies which fall within the investment objective and strategies of the Company. Other than these restrictions set out above, and the requirement to invest in accordance with its investing policy, there are no other investing restrictions.

Returns and Distribution Policy

The Company's investment objective is to achieve capital growth. However the Company paid a dividend for the year ended 30 June 2013 and has instituted an annual dividend policy. The quantum of the dividend is calculated based on a proportion of the dividends received during the year, net of the Company's attributable costs. Any undistributed income will be set aside in a revenue reserve in order to facilitate the Company's policy of future progressive dividend payments. This policy will be subject to the absence of exceptional market events.

Life of the Company

The Company currently does not have a fixed life but the Board considers it desirable that Shareholders should have the opportunity to review the future of the Company at appropriate intervals. Accordingly, at the annual general meeting of the Company in 2015, a resolution will be proposed that the Company ceases to continue in existence. Shareholders holding at least 51% of the ordinary shares must vote in favour of this resolution for it to be passed. If the resolution is not passed, a similar resolution will be proposed at every third annual general meeting thereafter. If the resolution is passed, the Directors will be required to formulate proposals to be put to Shareholders to reorganise, unitise or reconstruct the Company or for the Company to be wound up.

Report of the Directors

The Directors hereby submit their annual report together with the audited consolidated financial statements of Qatar Investment Fund plc (formerly Epicure Qatar Equity Opportunities plc) (the "Company") for the year ended 30 June 2014.

The Company

The Company is incorporated in the Isle of Man and has been established to invest primarily in quoted equities of Qatar and other Gulf Co-operation Council countries. The Company's investment policy is detailed on pages 15 to 17.

Results and Dividends

The results of the Company for the period and its financial position at the period end are set out on pages 36 to 45 of the financial statements.

The Directors manage the Company's affairs to achieve capital growth and the Company has instituted an annual dividend policy. The quantum of the dividend is calculated based on a proportion of the dividends received during the year, net of the Company's attributable costs. Any undistributed income will be set aside in a revenue reserve in order to facilitate the Company's policy of future progressive dividend payments. This policy will be subject to the absence of exceptional market events.

For the year ended 30 June 2013, the Directors declared a dividend of US$4,998,065 (3.2c per share) which was approved by Shareholders and paid by the Company in January 2014.

Directors

Details of Board members at the date of this report, together with their biographical details, are set out on page 27.

Director independence and Directors' and other interests have been detailed in the Directors' Remuneration Report on pages 31 and 32.

Creditor Payment Policy

It is the Company's policy to adhere to the payment terms agreed with individual suppliers and to pay in accordance with its contractual and other legal obligations.

Gearing Policy

Borrowings will be limited, as at the date on which the borrowings are incurred, to 5% of NAV (or such other limit as may be approved by the Shareholders in general meeting). The Company will not make use of any hedging mechanisms or leveraged derivative instruments.

There were no borrowings during the year.

Donations

The Company has not made any political or charitable donations during the year (2013: US$ nil).

Adequacy of the Information Supplied to the Auditors

The Directors who held office at the date of approval of this Directors' Report confirm that, so far as each is aware, there is no relevant audit information of which the Company's auditors are unaware; and each Director has taken all steps that he ought to have taken as a Director to make himself aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Statement of Going Concern

The Directors are satisfied that the Company and the Group have adequate resources to continue to operate as a going concern for the foreseeable future and have prepared the financial statements on that basis.

Independent Auditors

KPMG Audit LLC has expressed its willingness to continue in office in accordance with Section 12 (2) of the Companies Act 1982.

Annual General Meeting

The Annual General Meeting of the Company will be held on 11 November 2014 at the Company's registered office.

A copy of the notice of Annual General Meeting is contained within this Annual Report. As well as the business normally conducted at such a meeting, Shareholders will be asked to renew the authority to allow the Company to continue with share buy-backs.

The notice of the Annual General Meeting and the Annual Report are also available at www.qatarinvestmentfund.com.

Corporate Governance

Full details are given in the Corporate Governance Report on pages 21 to 26, which forms part of the Report of the Directors.

Substantial Shareholdings

As at 30 June 2014 the Company had been notified of the following holdings in its Share Capital.

	Ordinary Shares
Name	Number	%
City of London Investment Management Company	43,524,905	28.10
Qatar Insurance Company S.A.Q.	28,253,718	18.24
Qatar Holding LLC	17,690,654	11.42
1607 Capital Partners LLC	7,815,443	5.05
Advance Frontier Markets Fund Limited	6,091,852	3.93

The above percentages are calculated by applying the Shareholdings as notified to the Company to the issued Ordinary Share Capital as at 30 June 2014.

On behalf of the Board

Nicholas Wilson

Chairman

15 September 2014

Corporate Governance Report

Compliance with Companies Acts

As an Isle of Man incorporated company, the Company's primary obligation is to comply with the Isle of Man Companies Acts 1931 - 2004. The Board confirms that the Company is in compliance with the relevant provisions of the Companies Acts.

Compliance with the AIC Code of Corporate Governance

The Company is committed to high standards of corporate governance. The Board is accountable to the Company's shareholders for good governance and this statement describes how the Company applies the principles identified in the UK Corporate Governance Code 2010 ("UK Code") which is available on the Financial Reporting Council's website: www.frc.org.uk The Board confirms that the Company has complied throughout the accounting period with the relevant provisions contained within the UK Code.

The Board of the Company has considered the principles and recommendations of the AIC 2010 Code of Corporate Governance (AIC Code) by reference to the AIC Corporate Governance Guide for investment Companies (AIC Guide). The AIC Code, as explained by the AIC Guide, addresses all the principles set out in the UK Corporate Governance Code, as well as setting out additional principles and recommendations on issues that are of specific relevance to QIF plc.

The Board considers that reporting against the principles and recommendations of the AIC Code, and by reference to the AIC Guide (which incorporates the UK Corporate Governance Code), will provide better information to shareholders.

The Company has complied with the recommendations of the AIC Code and the relevant provisions of the UK Corporate Governance Code, except as set out below.

The UK Corporate Governance Code includes provisions relating to:

• the role of the chief executive

• executive directors' remuneration

• the need for an internal audit function

For the reasons set out in the AIC Guide, and as explained in the UK Corporate Governance Code, the Board considers these provisions are not relevant to the position of the Company, being an externally managed investment company. In particular, all of the Company's day-to-day management and administrative functions, with the exception of portfolio management, risk management and service provider performance management, are outsourced to third parties. As a result, the Company has no executive directors, employees or internal operations. The Company has therefore not reported further in respect of these provisions.

Directors

The Directors are responsible for the determination of the Company's investment policy and strategy and have overall responsibility for the Company's activities including the review of the investment activity and performance.

All of the Directors are non-executive. Save for Leonard O'Brien, the Board considers each of the Directors to be independent of, and free of any material relationship with, the Investment Manager and Investment Adviser.

The Board of Directors delegates to the Investment Manager through the Investment Management Agreement the responsibility for the management of the Company's assets in GCC securities in accordance with the Company's investment policy and for retaining the services of the Investment Adviser. The Company has no executives or employees.

The Articles of Association require that all Directors submit themselves for election by Shareholders at the first opportunity following their appointment and shall not remain in office longer than three years since their last election or re-election without submitting themselves for re-election.

The Board meets formally at least 4 times a year and between these meetings there is regular contact with the Investment Manager. Other meetings are arranged as necessary. The Board considers that it meets sufficiently regularly to discharge its duties effectively. The Board ensures that at all times it conducts its business with the interests of all Shareholders in mind and in accord with Directors' duties. Directors receive the relevant briefing papers in advance of Board and Board Committee meetings, so that should they be unable to attend a meeting they are able to provide their comments to the Chairman of the Board or Committee as appropriate. The Board meeting papers are the key source of regular information for the Board, the contents of which are determined by the Board and contain sufficient information on the financial condition of the Company. Key representatives of the Investment Manager attend each Board meeting. All Board and Board Committee meetings are formally minuted.

Board Composition and Succession Plan

Objectives of Plan

· To ensure that the Board is composed of persons who collectively are fit and proper to direct the company's business with prudence, integrity and professional skills

· To define the Board Composition and Succession Policy, which guides the size, shape and constitution of the Board and the identification of suitable candidates for appointment to the Board.

Methodology

The Board is conscious of the need to ensure that proper processes are in place to deal with succession issues and the Nomination Committee assists the Board in the Board selection process, which involves the use of a Board skills matrix.

The matrix incorporates the following elements: finance, accounting and operations; familiarity with the regions into which the Company invests; diversity (gender, residency, cultural background); Shareholder perspectives; investment management; multijurisdictional compliance and risk management. In adopting the matrix, the Nomination Committee acknowledges that it is an iterative document and will be reviewed and revised periodically to meet the Company's on-going needs.

The Nomination Committee monitors the composition of the Board and makes recommendations to the Board about appointments to the Board and its Committees.

Directors may be appointed by the Board, in which case they are required to seek election at the first AGM following their appointment and triennially thereafter. Directors who are not regarded as independent are required to seek re-election annually. In making an appointment the Board shall have regard to the Board skills matrix.

A Director's formal letter of appointment sets out, amongst other things, the following requirements:

· bringing independent judgment to bear on issues of strategy, performance, resources, key appointments and standards of conduct and the importance of remaining free from any business or other relationship that could materially interfere with independent judgement;

· having an understanding of the Company's affairs and its position in the industry in which it operates;

· keeping abreast of and complying with the legislative and broader responsibilities of a Director of a company whose shares are traded on the London Stock Exchange;

· allocating sufficient time to meet the requirements of the role, including preparation for Board meetings; and

· disclosing to the Board as soon as possible any potential conflicts of interest.

The Board authorises the Nomination Committee to:

· recommend to the Board, from time to time, changes that the Committee believes to be desirable to the size and composition of the Board;

· recommend individuals for nomination as members of the Board;

· review and recommend the process for the election of the Chairman of the Board, when appropriate; and

· review on an on-going basis succession planning for the Chairman of the Board and make recommendations to the Board as appropriate

The Plan will be reviewed by the Board annually and at such other times as circumstances may require (e.g. a major corporate development or an unexpected resignation from the Board). The Plan may be amended or varied in relation to individual circumstances at the Board's discretion.

Board Committees

The Board has established the following committees to oversee important issues of policy and maintain oversight outside the main Board meetings:

· Audit Committee

· Remuneration Committee

· Nomination Committee

· Management Engagement Committee

Throughout the year the Chairman of each committee provided the Board with a summary of the key issues considered at the meeting of the committees and the minutes of the meetings were circulated to the Board.

The committees operate within defined terms of reference. They are authorised to engage the services of external advisers as they deem necessary in the furtherance of their duties, at the Company's expense.

Audit Committee

The Board has established an Audit Committee made up of at least two members and comprises Paul Macdonald, Nicholas Wilson and Neil Benedict. The Audit Committee is responsible for, inter alia, ensuring that the financial performance of the Company is properly reported on and monitored. The Audit Committee is chaired by Paul Macdonald. The Audit Committee normally meets at least twice a year when the Company's interim and final reports to Shareholders are to be considered by the Board but meetings can be held more frequently if the Audit Committee members deem it necessary or if requested by the Company's auditors. The Audit Committee will, amongst other things, review the annual and interim accounts, results announcements, internal control systems and procedures, preparing a note in respect of related party transactions and reviewing any declarations of interest notified to the Committee by the Board each on six monthly basis, review and make recommendations on the appointment, resignation or dismissal of the Company's auditors and accounting policies of the Company. The Company's auditors are advised of the timing of the meetings to consider the annual and interim accounts and the auditors shall be asked to attend the audit committee meeting where the annual audited accounts are to be considered. The Audit Committee chairman shall report formally to the Board on its proceedings after each meeting and compile a report to Shareholders on its activities to be included in the Company's annual report. At least once a year, the Audit Committee will review its performance, constitution and terms of reference to ensure that it is operating at maximum effectiveness and recommend any changes it considers necessary to the Board for approval.

The terms of reference for the Audit Committee are available on the Company's website www.qatarinvestmentfund.com

Significant Issues

During its review of the Company's financial statements for the year ended 30 June 2014, the Audit Committee considered the following significant issues, in particular those communicated by the auditor during their reporting:

Completeness, Valuation, Existence and Ownership of Investments

The valuation of investments is undertaken in accordance with the accounting policies, disclosed in note 3.3 to the financial statements. The audit includes independent confirmation of the existence of all investments from the Company's custodian. All investments are considered liquid and quoted in active markets and have been categorised as Level 1 within the IFRS 13 fair value hierarchy and can be verified against daily market prices. The portfolio is reviewed and verified by the Manager on a regular basis and management accounts including a full portfolio listing are prepared each month and circulated to the Board. The Company uses the services of an independent Custodian HSBC Bank Middle East Limited to hold the assets of the Company. The investment portfolio is reconciled regularly by the Manager and a reconciliation is also reviewed by the Auditor.

Remuneration Committee

The Company has established a Remuneration Committee. The Remuneration Committee is made up of at least two members from amongst the non-executive Directors identified by the Board as being independent. Its members are Neil Benedict (Chairman), Nicholas Wilson and Paul Macdonald. The Remuneration Committee normally meets at least once a year and at such other times as the chairman of the Remuneration Committee shall require. The Remuneration Committee reviews the performance of the Directors and sets the scale and structure of their remuneration and the basis of their letters of appointment with due regard to the interests of Shareholders. In determining the remuneration of Directors, the Remuneration Committee seeks to enable the Company to attract and retain Directors of the highest calibre. No Director permitted to participate in any discussion of decisions concerning their own remuneration. The Remuneration Committee reviews at least once a year its own performance, constitutions and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the Board for approval.

The terms of reference for the Remuneration Committee are available on the Company's website www.qatarinvestmentfund.com

Nomination Committee

The Company has established a Nomination Committee which shall be made up of at least two members and which shall comprise all Independent Directors. The Nomination Committee comprises Nicholas Wilson (Chairman), Neil Benedict and Paul Macdonald. The Nomination Committee meets at least once a year prior to the first quarterly Board meeting and at such other times as the Chairman of the committee shall require. The Nomination Committee is responsible for ensuring that the Board members have the range of skills and qualities to meet its principal responsibilities in a way which ensures that the interests of Shareholders are protected and promoted and regularly review the structure, size and composition of the Board. The Nomination Committee shall, at least once a year, review its own performance, constitution and terms of reference to ensure that it is operating at maximum effectiveness and recommend any changes it considers necessary to the Board for approval.

The Nomination Committee will assess potential candidates on merit against a range of criteria including experience, knowledge, professional skills and personal qualities as well as independence, if this is required for the role. Candidates' ability to commit sufficient time to the business of the Company is also key, particularly in respect of the appointment of the Chairman. The Chairman of the Nomination Committee is primarily responsible for interviewing suitable candidates and a recommendation will be made to the Board for final approval.

Management Engagement Committee

The Company has established a Management Engagement Committee which is made up of at least two members and which shall comprise independent non-executive Directors. The Management Engagement Committee members are Neil Benedict (Chairman), Paul Macdonald and Nicholas Wilson. The Management Engagement Committee will meet at least quarterly and is responsible for reviewing the performance of the Investment Manager and other service providers, to ensure that the Company's management contract is competitive and reasonable for the Shareholders and to review and make recommendations to the Board on any proposed amendment to or material breach of the management contract and contracts with other service providers.

Board Attendance

The number of formal meetings during the year of the Board, and its Committees, and the attendance of the individual Directors at those meetings, is shown in the following table:

	Board	Audit Committee	Remuneration Committee	Nomination Committee	Management Engagement Committee
Total number of meetings in year	8	6	1	1	3
	Meetings Attended (entitled to attend)
Nicholas Wilson (Chairman and Chairman of Nomination Committee)	8 (8)	6 (6)	1 (1)	1 (1)	3 (3)
Neil Benedict (Chairman of Remuneration Committee and Chairman of Management Engagement Committee)	8 (8)	6 (6)	1 (1)	1 (1)	3 (3)
Leonard O'Brien	8 (8)	0 (0)*	0 (0)*	0 (0)*	0 (0)*
Paul Macdonald (Chairman of Audit Committee)	8 (8)	6 (6)	1 (1)	0 (0)*	3 (3)

*Not a member of the committee.

The Annual General Meeting was held on 4 November 2013.

Internal Control

The Board is responsible for the Company's system of internal control and for reviewing its effectiveness. Its review takes place at least once a year. Such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against material mis-statement or loss. The Board also determines the nature and extent of any risks it is willing to take in order to achieve its strategic objectives.

The Board has contractually delegated to external agencies, including the Managers, the management of the investment portfolio, the custodial services (which include the safeguarding of the assets), the registration services and the day-to-day accounting and Company Secretarial requirements. Each of these contracts was entered into after full and proper consideration by the Board of the quality and cost of services offered including the control systems in operation in so far as they relate to the affairs of the Company.

The Board, assisted by the Investment Manager and Investment Adviser, has undertaken regular risk and controls assessments. The business risks have been analysed and recorded in a risk and internal controls report which is regularly reviewed. The Board has reviewed the need for an internal audit function. The Board has decided that the systems and procedures employed by the Managers, including its internal audit function and the work carried out by the Company's external Auditor, provide sufficient assurance that a sound system of internal control, which safeguards Shareholders' investments and the Company's assets, is maintained. An internal audit function, specific to the Company, is therefore considered unnecessary.

The Board confirms that there is an on-going process for identifying, evaluating and managing the Company's principal business and operational risks that have been in place for the year ended 30 June 2014 and up to the date of approval of the annual report and financial statements.

Accountability and Relationship with the Investment Manager, the Custodian and the Administrator

The Statement of Directors' Responsibilities is set out on page 28.

The Board has delegated contractually to external third parties, including the Investment Manager, the Investment Adviser, the Custodian and the Administrator, the management of the investment portfolio, the custodial services (which include the safeguarding of the assets), the day to day accounting, company secretarial and administration requirements. Each of these contracts was entered into after full and proper consideration by the Board of the quality and cost of the services provided, including the control systems in operation in so far as they relate to the affairs of the Company.

The Investment Manager, the Investment Adviser and the Administrator ensure that all Directors receive, in a timely manner, all relevant management, regulatory and financial information. Representatives of the Investment Manager and the Administrator attend each Board meeting enabling the Directors to probe further on matters of concern.

Continued Appointment of the Investment Manager

The Board considers the arrangements for the provision of investment management and other services to the Company on an on-going basis. The Board reviews investment performance at each Board meeting and a formal review of the Investment Manager (and Investment Adviser) is conducted annually. As a result of their annual review, NAV performance has been found to be satisfactory and it is the opinion of the Directors that the continued appointment of the current Investment Manager (and Investment Adviser) on the terms agreed is in the interests of the Company's Shareholders as a whole.

Relations with Shareholders

The Chairman is responsible for ensuring that all Directors are made aware of Shareholders' concerns. The Shareholder profile of the Company is regularly monitored and the Board liaises with the Investment Manager to canvass Shareholder opinion and communicate views to Shareholders. The Company is concerned to provide the maximum opportunity for dialogue between the Company and Shareholders. It is believed that Shareholders have proper access to the Investment Manager at any time and to the Board if they so wish. All Shareholders are encouraged to attend annual general meetings. Together with the Investment Manager and Investment Adviser, regular investor presentations are held to promote a wider following for the Company.

On behalf of the Board

Nicholas Wilson

Chairman

15 September 2014

Board of Directors

Nicholas Wilson (Non-Executive Chairman)

Nick Wilson has over thirty years' experience in hedge funds, derivatives and global asset management. He has established and run offshore branch operations for MeesPierson Derivatives Limited, ADM Investor Services International Limited and several other London based brokerage companies. He was a Non-Executive Chairman of Alternative Investment Strategies Limited, the longest running London quoted fund of hedge funds and a constituent of the FTSE All Share Index. In addition, he sits on the boards of a number of other public companies, including RAB Special Situations Company Limited. He is resident in the Isle of Man.

Paul Macdonald (Non-Executive Director)

Paul Macdonald qualified as a chartered accountant in 1979. He worked for Pilkington plc for sixteen years, the last seven of these in Germany. In Germany he was Managing Director for Pilkington Deutschland GmbH (holding company) and Managing Director of both Flachglas AG (glass manufacturer) and Dahlbusch AG (property and holding company). For the last fourteen years Paul has been active in the private equity market and has been successful in developing a number of companies covering a number of industries including Sirona Beteiligungs GmbH (Germany), a leveraged buy-out from Siemens. He is currently the Geschäftsführer for Helvetica Deutschland GmbH and a Director of Helvetica Services GmbH and Helvetica Construction GmbH. Paul is a Non-Executive Director of PME African Infrastructure Opportunities plc.

Leonard O'Brien (Non-Executive Director)

Leonard O'Brien is Managing Director of the Salamander Fiduciary Services Group, which consists of Salamander Associates Limited and its two wholly owned subsidiaries. Len has had many years of experience in the fiduciary services industry including the Silex Trust Group, the Stonehage Financial Services Group and Barclays Bank. During this time he has served on the boards of trust companies in the British Virgin Islands, Jersey and Cayman Islands and has acted as a Membre de Direction of Barclays Bank (Suisse) SA, Geneva. Len qualified as a Chartered Accountant with KPMG in 1996. Len is also a Director of the Investment Manager.

Neil Benedict (Non-Executive Director)

Neil Benedict is based in the USA with over thirty years' experience of financial markets. He was formerly a Managing Director at Salomon Brothers, where he was Head of International Capital Markets, and, prior to that, the founder and head of the worldwide Currency Swaps group. Neil was also a Managing Director at Dillon Read and helped establish their Tokyo office. He is currently a Managing Director of Intelligent Edge Advisors, a New York advisory firm. Neil is a fellow member of the Institute of Chartered Accountants in England and Wales.

Statement of Directors' responsibilities in respect of the Annual Report and the Financial Statements

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare Group and Parent Company financial statements for each financial year, which meet the requirements of Isle of Man company law. In addition, the Directors have elected to prepare the Group and Parent Company financial statements in accordance with International Financial Reporting Standards.

The Group and Parent Company financial statements are required by law to give a true and fair view of the state of affairs of the Group and Parent Company and of the profit or loss of the Group and Parent Company for that period.

In preparing these financial statements, the Directors are required to:

· select suitable accounting policies and then apply them consistently;

· make judgements and estimates that are reasonable and prudent;

· state whether they have been prepared in accordance with International Financial Reporting Standards;

· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Parent Company will continue in business.

The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Parent Company and to enable them to ensure that its financial statements comply with the Companies Acts 1931 to 2004. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing the Directors' Report, the Corporate Governance Report and the Directors' Remuneration Report that comply with that law and those regulations.

The Directors confirm that they have complied with the above requirements in preparing the Annual Report and financial statements.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation governing the preparation and dissemination of financial statements may differ from one jurisdiction to another.

DTR Compliance statement

We confirm that to the best of our knowledge:

· the financial statements, prepared in accordance with International Financial Reporting Standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole;

· that in the opinion of the Directors, the Annual Report and Accounts taken as a whole, is fair, balanced and understandable and it provides the information necessary to assess the Company's performance, business model and strategy: and

· the Business Review, Report of the Investment Manager and Investment Adviser and the Report of the Directors include a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

On behalf of the Board

Nicholas Wilson

Chairman

15 September 2014

Audit Committee Report

An Audit Committee has been established in compliance with the FSA's Disclosure and Transparency Rule 7.1 and the UK Corporate Governance Code consisting of independent Directors. Its authority and duties are clearly defined within its written terms of reference. Paul Macdonald is Chairman of the Audit Committee, which also comprises Mr Nicholas Wilson and Mr Neil Benedict.

The Committee meets at least two times a year.

The Committee's responsibilities, which were discharged during the year, include:

• monitoring and reviewing the integrity of the interim and annual financial statements and the internal financial controls;

• reviewing the appropriateness of the Company's accounting policies;

• making recommendations to the Board in relation to the appointment of the external auditors and approving their remuneration and terms of their engagement;

• reviewing the external Auditor's plan for the audit of the Company's financial statements;

• developing and implementing policy on the engagement of the external auditors to supply non-audit services;

• reviewing and monitoring the independence, objectivity and effectiveness of the external auditors;

• reviewing the arrangements in place within the Administrator and Investment Manager/Adviser whereby their staff may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters insofar as they may affect the Company;

• performing the annual review of the effectiveness of the internal control systems of the Company;

• reviewing the terms of the Investment Management Agreement;

• considering annually whether there is a need for the Company to have its own internal audit function; and

• review the relationship with and the performance of the Custodian, the Administrator and the Registrar.

The Audit Committee does not award any non-audit work. The full Board has to approve any non-audit work and this includes confirmation that in all such work auditor objectivity and independence is safeguarded.

Owing to the nature of the fund's business, with all major functions being outsourced and the absence of employees, the Audit Committee do not feel it is necessary for the Company to have its own internal audit function. This situation is re-evaluated annually.

KPMG Audit LLC was re-appointed as auditor at the last AGM on 4 November 2013. The Audit Committee considered the experience and tenure of the audit partner and staff and the nature and level of services provided. The Audit Committee receives confirmation from the auditor that they have complied with the relevant UK professional and regulatory requirements on independence. The Company's Audit Committee meets representatives of the Administrator, who report as to the proper conduct of the business in accordance with the regulatory environment in which the Company, the Administrator, and the Investment Manager/Adviser operate. The Company's external auditor also attends this Audit Committee meeting at its request and reports if the Company has not kept proper accounting records, or if it has not received all the information and explanations required for its audit.

The Audit Committee also monitors the risks to which the Company is exposed and makes recommendations as to the mitigation of these risks. This task is facilitated by using an extensive risk matrix that enables the committee to make a quantitative analysis of the individual risks and to highlight those areas where risk is high or increasing.

This report was reviewed and approved by the Board on 15 September 2014.

Paul Macdonald

Chairman of the Audit Committee

15 September 2014

Management Engagement Committee Report

A Management Engagement Committee has been established in accordance with good corporate governance. Neil Benedict is chairman of the committee, which also comprises Paul Macdonald and Nicholas Wilson.

The function of the Management Engagement Committee is to monitor the performance of all the Company's service providers and in the particular the performance of the Investment Manager/Investment Adviser.

The performance of the Investment Manager/Investment Adviser is formally reviewed annually at the end of the Company's financial year. The Management Engagement Committee meets quarterly prior to the quarterly Board meetings and the chairman of the Management Engagement Committee monitors the performance periodically during the intervening periods.

As regards the Investment Manager/Investment Adviser, the Committee:

· monitors and evaluates the investment performance both in absolute terms and also by reference to peer group analysis prepared by the Investment Manager/Adviser and by the Company's broker;

· reviews the performance fee structure to ensure that it does not encourage excessive risk and that it rewards demonstrable superior performance;

· investigates any breaches of agreed investment limits and any deviation from the agreed investment policy and strategy;

· reviews the standard of any other services provided by the Investment Manager;

· evaluates the level and effectiveness of any marketing support provided by the Investment Manager, including but not limited to, their input into quarterly reports, handling investor relations and website monitoring and development;.

· assesses the level of fees charged by the Investment Manager and how these fees compare with those charged to peer group companies;

· compares the notice period on the Investment Management Agreement with industry norms;

· considers any other issues on the appointment of the Investment Manager.

As regards the other service providers to the Company, the Committee:

· monitors the terms on which they are retained and compares them to market rates;

· examines the effectiveness of the services provided;

· makes recommendations to the Board where changes are warranted.

At its most recent meeting, the Management Engagement Committee concluded that the performance of the Investment Manager/Investment Adviser had been satisfactory. The Investment Manager had adhered to the investment policy and policy limits.

The Committee was satisfied with the current performance of the Company's other service providers.

Neil Benedict

Chairman of the Management Engagement Committee

15 September 2014

Directors' Remuneration Report

This report meets the relevant rules of the Listing Rules of the Financial Services Authority and describes how the Board has applied the principles relating to Directors' remuneration. An ordinary resolution to receive and approve this report will be put to the Shareholders at the forthcoming Annual General Meeting.

Role of the Remuneration Committee

The role and make-up of the Remuneration Committee is more fully discussed on page 24.

The committee held two formal meetings during the year, during which it addressed all the matters under its remit.

Consideration by the Directors of Matters relating to the Directors' remuneration

As the Board is comprised entirely of non-executive Directors the Board as a whole consider the Directors' remuneration but it has appointed its Remuneration Committee to consider matters relating thereto.

Remuneration Policy

The Company's Articles of Association limit the basic fees payable to the Directors to £200,000 per annum in aggregate. Subject to this overall limit it is the Company's policy that the fees payable to the Directors should reflect the time spent by the Board on the Company's affairs and the responsibilities borne by the Directors and should be sufficient to enable candidates of high calibre to be recruited. The Directors are also entitled to receive reimbursement of any expenses incurred in relation to their appointment.

The policy is for the Chairman of the Board and Chairman of the Audit Committee to be paid a higher fee than the other Directors in recognition of their more onerous roles and more time spent.

In the year under review the Directors' fees were paid at the following annual rates: the Chairman £47,500 plus £10,000 with respect to the work involved in the share buy-back programme, the Chairman of the Audit Committee £32,500, the other Directors £30,000.

Directors' and officers' liability insurance cover is in place in respect of the Directors.

Reappointment

It is the Board's policy that non-independent Directors stand for re-election every year and independent Directors stand for re-election every three years.

Directors' fees

The fees expensed (including additional payments) by the Company in respect of each of the Directors who served during the year, and in the previous year, were as follows:

	30 June 2014	30 June 2013
	£	£
David von Simson (Chairman - Deceased)	-	16,386
Nicholas Wilson (Chairman)	57,500	51,997
Neil Benedict (Chairman of Remuneration Committee and Management Engagement Committee)	30,000	30,000
Leonard O'Brien	30,000	30,000
Paul Macdonald (Chairman of Audit Committee)	32,500	31,576
	150,000	159,959
US$ charge reflected in the financial statements	244,051	250,589

Expenses totalling US$149,171 (2013: US$129,098) were incurred by the Directors and reimbursed during the year.

No other remuneration or compensation (please see note above) was paid or payable by the Company during the period to any of the Directors.

Director independence

Except for Leonard O'Brien, the Board considers each of the Directors to be independent of, and free of any material relationship with, the Investment Manager and Investment Adviser.

Directors' and Other Interests

Leonard O'Brien is a Director of the Investment Manager.

Save as disclosed above, none of the Directors had any interest during the year in any material contract for the provision of services which was significant to the business of the Company.

Director holdings in Company:

	30 June 2014	30 June 2013
Director	Shares	Shares
Leonard O'Brien	26,087	28,985
Nicholas Wilson	45,000	50,000

For and on behalf of the Board

Neil Benedict

Chairman of the Remuneration Committee

15 September 2014

Report of the Independent Auditors, KPMG Audit LLC, to the members of Qatar Investment Fund plc

Opinions and conclusions arising from our audit

1. Our opinion on the financial statements is unmodified

We have audited the financial statements of Qatar Investment Fund plc for the year ended 30 June 2014 which comprise the Consolidated and Parent Company Income Statements, the Consolidated and Parent Company Statements of Comprehensive Income, the Consolidated and Parent Company Balance Sheets, the Consolidated and Parent Company Statements of Changes in Equity and the Consolidated and Parent Company Statements of Cash Flows and the related notes. In our opinion the financial statements:

· give a true and fair view of the state of the Group's and Parent Company's affairs as at 30 June 2014 and of the Group's and Parent Company's profit for the year then ended;

· have been properly prepared in accordance with International Financial Reporting Standards; and

· have been properly prepared in accordance with the provisions of the Companies Acts 1931 to 2004.

2. Our assessment of risks of material misstatement

In arriving at our audit opinion above on the financial statements, the risk of material misstatement that had the greatest effect on our audit was as follows:

Carrying amount of quoted equity investments

Refer to page 24 (Significant Issues identified by the Audit Committee), note 3.3 (accounting policy for financial assets at fair value through profit or loss) and note 15 (financial risk disclosures relating to financial instruments).

· The risk: The Group's quoted equity investment portfolio makes up 92.1% of total assets (by value) and is considered to be the key driver of the Group's capital and revenue performance. We do not consider these investments to be at high risk of significant misstatement, or to be subject to a significant level of judgment, because they comprise liquid, quoted investments. However, due to their materiality in the context of the financial statements as a whole, they are considered to be the area which had the greatest effect on our overall audit strategy and allocation of resources in planning and completing our audit.

· Our response: Our procedures over the completeness, valuation, ownership and existence of the Group's quoted equity investment portfolio included, but were not limited to:

· documenting and assessing the processes in place to record investment transactions and to value the portfolio;

· agreeing the valuation of 100% of portfolio investments to independent externally quoted prices; and

· agreeing 100% of portfolio investment holdings to independently received third party confirmations from the custodian.

3. Our application of materiality and an overview of the scope of our audit

The materiality for the financial statements as a whole was set at US$3,300,000. This has been determined with reference to a benchmark of Group total assets (of which it represents 1.5%). Total assets, which is primarily composed of the Group's investment portfolio, is considered to be the key driver of the Group's capital and revenue performance and, as such, we consider it to be one of the principal considerations for members of the Company in assessing the financial performance of the Group.

We agreed with the Audit Committee to report to it all corrected and uncorrected misstatements we identified through our audit with a value in excess of US$165,000, in addition to other audit misstatements below that threshold that we believe warranted reporting on qualitative grounds.

Our audit of the Group was undertaken to the materiality level specified above and was all performed at the head office of the administrator, Galileo Fund Services Limited, in the Isle of Man.

4. We have nothing to report in respect of the matters on which we are required to report by exception

Under ISAs (UK and Ireland) we are required to report to you if, based on the knowledge we acquired during our audit, we have identified other information in the annual report that contains a material inconsistency with either that knowledge or the financial statements, a material misstatement of fact, or that is otherwise misleading.

In particular, we are required to report to you if:

· we have identified material inconsistencies between the knowledge we acquired during our audit and the directors' statement that they consider that the annual report and financial statements taken as a whole is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group's performance, business model and strategy; or

· the Audit Committee Report does not appropriately address matters communicated by us to the Audit Committee.

Under the Companies Acts 1931 to 2004 we are required to report to you if, in our opinion:

· proper books of account have not been kept by the Parent Company and proper returns adequate for our audit have not been received from branches not visited by us; or

· the Parent Company's balance sheet and income statement are not in agreement with the books of account and returns; or

· certain disclosures of directors' remuneration specified by law are not made; or

· we have not received all the information and explanations we require for our audit.

Under the Listing Rules we are required to review:

· the part of the Corporate Governance Report on pages 21 to 26 relating to the Company's compliance with the nine provisions of the 2010 UK Corporate Governance Code specified for our review.

We have nothing to report in respect of the above responsibilities.

Respective responsibilities of Directors and Auditor

As explained more fully in the Directors' Responsibilities Statement set out on page 28, the Directors are responsible for the preparation of financial statements that give a true and fair view. Our responsibility is to audit, and express an opinion on, the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of an audit of financial statements performed in accordance with ISAs (UK and Ireland)

An audit in accordance with ISAs (UK and Ireland) involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Group's and Company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Directors; and the overall presentation of the financial statements. In addition we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Whilst an audit conducted in accordance with ISAs (UK and Ireland) is designed to provide reasonable assurance of identifying material misstatements or omissions it is not guaranteed to do so. Rather the auditor plans the audit to determine the extent of testing needed to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements does not exceed materiality for the financial statements as a whole. This testing requires us to conduct significant audit work on a broad range of assets, liabilities, income and expense as well as devoting significant time of the most experienced members of the audit team, in particular the engagement partner responsible for the audit, to subjective areas of accounting and reporting.

The purpose of this report and restrictions on its use by persons other than the Company's members as a body

This report is made solely to the Company's members, as a body, in accordance with Section 15 of the Companies Act 1982. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Simon Nicholas

Responsible Individual

For and on behalf of KPMG Audit LLC

Statutory Auditor

Chartered Accountants

Heritage Court

41 Athol Street

Douglas

Isle of Man

IM99 1HN

15 September 2014

Consolidated Income Statement

	Note	Year ended 30 June 2014	Year ended 30 June 2013
		US$'000	US$'000

Income
Dividend income on quoted equity Investments		9,258	9,658
Realised gain on sale of financial assets at fair value through profit or loss		26,510	11,447
Net changes in fair value on financial assets at fair value through profit or loss		13,737	14,537
Commission rebate income on quoted equity investments	7	177	166
Bond interest	6	17	-
Total net income		49,699	35,808

Expenses
Investment Manager's fees	8	2,437	2,621
Performance fees	8	-	-
Audit fees		27	27
Other expenses	8	1,311	1,293
Total operating expenses		3,775	3,941

Profit before tax		45,924	31,867

Income tax expense	14	-	-
Retained profit for the year		45,924	31,867

Basic earnings per share (cents)	12	27.76	16.15
Diluted earnings per share (cents)	12	27.76	16.15

The Directors consider that all results derive from continuing activities.

Consolidated Statement of Comprehensive Income

	Year ended 30 June 2014	Year ended 30 June 2013
	US$'000	US$'000

Profit for the year	45,924	31,867
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss:
Currency translation differences	(7)	20
Total items that are or may be reclassified subsequently to profit or loss	(7)	20
Other comprehensive (expense)/income for the year (net of tax)	(7)	20
Total comprehensive profit for the year	45,917	31,887

Company Income Statement

	Note	Year ended 30 June 2014	Year ended 30 June 2013
		US$'000	US$'000

Income
Net change in investment in and amounts due from subsidiary		41,697	26,531
Intercompany loan interest		5,328	6,423
Other income		2	-
Total net income		47,027	32,954

Expenses
Audit fees		27	27
Other expenses	8	1,083	1,040
Total operating expenses		1,110	1,067

Profit before tax		45,917	31,887

Income tax expense		-	-
Retained profit for the year		45,917	31,887

Company Statement of Comprehensive Income

	Year ended 30 June 2014	Year ended 30 June 2013
	US$'000	US$'000

Profit for the year	45,917	31,887
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss:
Currency translation differences	-	-
Total items that are or may be reclassified subsequently to profit or loss	-	-
Other comprehensive income for the year (net of tax)	-	-
Total comprehensive profit for the year	45,917	31,887

Consolidated Balance Sheet

	Note	At 30 June 2014	At 30 June 2013
		US$'000	US$'000

Financial assets at fair value through profit or loss	6(a)	202,703	197,676
Other receivables and prepayments		76	44
Cash and cash equivalents	9	17,295	8,257
Total current assets		220,074	205,977

Issued share capital	10	1,589	1,839
Retained earnings		216,938	202,223
Other reserves	11	788	545
Total equity		219,315	204,607

Current liabilities
Other payables and accrued expenses	13	759	1,370
Total liabilities		759	1,370
Total equity & liabilities		220,074	205,977

The financial statements were approved by the Directors on 15 September 2014 and signed on their behalf by:

Paul Macdonald Leonard O'Brien

Director Director

Company Balance Sheet

	Note	At 30 June 2014	At 30 June 2013
		US$'000	US$'000

Due from subsidiary	6(b)	218,149	203,247
Other receivables and prepayments		910	740
Cash and cash equivalents	9	366	783
Total current assets		219,425	204,770

Issued share capital	10	1,589	1,839
Reserves		217,726	202,768
Total equity		219,315	204,607

Other payables and accrued expenses	13	110	163
Total liabilities		110	163
Total equity & liabilities		219,425	204,770

The financial statements were approved by the Directors on 15 September 2014 and signed on their behalf by:

Paul Macdonald Leonard O'Brien

Director Director

Consolidated Statement of Changes in Equity

	Share Capital	Distributable Reserves		Retained Earnings		Other reserves (note 11)	Total
	US$'000	US$'000		US$'000		US$'000	US$'000
Balance at 01 July 2012	2,330	231,695		(6,957)		706	227,774
Total comprehensive income for the year
Profit for the year	-	-		31,867		-	31,867
Other comprehensive income
Foreign exchange translation differences	-	-		-		20	20
Total other comprehensive income	-	-		-		20	20
Total comprehensive income for the year	-	-		31,867		20	31,887
Contributions by and distributions to owners
Dividends paid	-	-		(5,417)		-	(5,417)
Expiration of option deed	-	-		672		(672)	-
Shares repurchased to be held in treasury	-	(6,867)		-		-	(6,867)
Shares subject to tender offer	(415)	(42,461)		-		415	(42,461)
Tender offer expenses	-	(309)		-		-	(309)
Shares in treasury cancelled	(76)	-		-		76	-
Total contributions by and distributions to owners	(491)	(49,637)		(4,745)		(181)	(55,054)
Balance at 30 June 2013	1,839	182,058		20,165		545	204,607
	Share Capital		Distributable Reserves		Retained Earnings	Other reserves	Total
	US$'000		US$'000		US$'000	US$'000	US$'000
Balance at 01 July 2013	1,839		182,058		20,165	545	204,607
Total comprehensive income for the year
Profit for the year	-		-		45,924	-	45,924
Other comprehensive income
Foreign exchange translation differences	-		-		-	(7)	(7)
Total other comprehensive income	-		-		-	(7)	(7)
Total comprehensive income for the year	-		-		45,924	(7)	45,917
Contributions by and distributions to owners
Dividends paid	-		-		(4,998)	-	(4,998)
Shares repurchased to be held in treasury	-		(4,144)		-	-	(4,144)
Shares subject to tender offer	(174)		(21,999)		-	174	(21,999)
Tender offer expenses	-		(68)		-	-	(68)
Shares in treasury cancelled	(76)		-		-	76	-
Total contributions by and distributions to owners	(250)		(26,211)		(4,998)	250	(31,209)
Balance at 30 June 2014	1,589		155,847		61,091	788	219,315

Company Statement of Changes in Equity

	Share Capital	Reserves	Total
	US$'000	US$'000	US$'000
Balance at 01 July 2012	2,330	225,444	227,774
Total comprehensive income for the year
Profit for the year	-	31,887	31,887
Total comprehensive income for the year	-	31,887	31,887
Contributions by and distributions to owners
Dividends paid	-	(5,417)	(5,417)
Shares repurchased to be held in treasury	-	(6,867)	(6,867)
Shares subject to tender offer	(415)	(42,046)	(42,461)
Tender offer expenses	-	(309)	(309)
Shares in treasury cancelled	(76)	76	-
Total contributions by and distributions to owners	(491)	(54,563)	(55,054)
Balance at 30 June 2013	1,839	202,768	204,607

	Share Capital	Reserves	Total
	US$'000	US$'000	US$'000
Balance at 01 July 2013	1,839	202,768	204,607
Total comprehensive income for the year
Profit for the year	-	45,917	45,917
Total comprehensive income for the year	-	45,917	45,917
Contributions by and distributions to owners
Dividends paid	-	(4,998)	(4,998)
Shares repurchased to be held in treasury	-	(4,144)	(4,144)
Shares subject to tender offer	(174)	(21,825)	(21,999)
Tender offer expenses	-	(68)	(68)
Shares in treasury cancelled	(76)	76	-
Total contributions by and distributions to owners	(250)	(30,959)	(31,209)
Balance at 30 June 2014	1,589	217,726	219,315

Consolidated Statement of Cash Flows

	Note	Year ended 30 June 2014	Year ended 30 June 2013
		US$'000	US$'000

Cash flows from operating activities
Purchase of investments		(74,863)	(57,725)
Proceeds from sale of investments		109,575	109,114
Interest received		20	-
Dividends received		9,255	9,658
Operating expenses paid		(3,906)	(4,019)
Commission rebate		177	166
Net cash generated from operating activities		40,258	57,194

Financing activities
Dividends paid		(4,998)	(5,417)
Cash used in tender offer		(21,999)	(42,461)
Tender offer expenses		(68)	(309)
Cash used in share repurchases		(4,144)	(6,867)
Net cash used in financing activities		(31,209)	(55,054)

Net increase in cash and cash equivalents		9,049	2,140
Effects of exchange rate changes on cash and cash equivalents		(11)	(12)
Cash and cash equivalents at beginning of the year		8,257	6,129
Cash and cash equivalents at end of the year	9	17,295	8,257

Company Statement of Cash Flows

	Note	Year ended 30 June 2014	Year ended 30 June 2013
		US$'000	US$'000

Cash flows from operating activities
Interest received		2	-
Due from subsidiary		31,966	53,561
Operating expenses paid		(1,170)	(1,045)
Net cash generated from operating activities		30,798	52,516

Financing activities
Dividends paid		(4,998)	(5,417)
Cash used in tender offer		(21,999)	(42,461)
Tender offer expenses		(68)	(309)
Cash used in share repurchases		(4,144)	(6,867)
Net cash used in financing activities		(31,209)	(55,054)

Net increase in cash and cash equivalents		(411)	(2,538)
Effects of exchange rate changes on cash and cash equivalents		(6)	(12)
Cash and cash equivalents at beginning of the year		783	3,333
Cash and cash equivalents at end of the year		366	783

Notes to the Consolidated Financial Statements

1 The Company

Qatar Investment Fund plc (formerly Epicure Qatar Equity Opportunities plc) (the "Company") was incorporated and registered in the Isle of Man under the Isle of Man Companies Acts 1931-2004 on 26 June 2007 as a public company with registered number 120108C.

Pursuant to an Admission Document dated 25 July 2007 there was an original placing of up to 171,355,000 Ordinary Shares, with Warrants attached on the basis of 1 Warrant to every 5 Ordinary Shares. Following the placing on 31 July 2007, 171,355,000 Ordinary Shares and 34,271,000 Warrants were issued the warrants expired on 16 November 2012.

The shares of the Company were admitted to trading on the AIM market of the London Stock Exchange ("AIM") on 31 July 2007, when dealings also commenced.

As a result of a further fund raising in December 2007, a further 76,172,523 Ordinary Shares were issued, which were admitted for trading on AIM on 13 December 2007.

On 4 December 2008, the Share Premium arising from the placing of shares was cancelled and the amount of the Share Premium account transferred to Retained Earnings.

The shares of the Company were admitted to trading on the Main Market of the London Stock Exchange on 13 May 2011.

In the year ended 30 June 2014, the Company purchased 3,793,272 of its Ordinary Shares for a total value of US$4,143,929 to be held in treasury. 7,534,651 shares had been repurchased in the year ended 30 June 2013 for treasury but had been held for over a year and were therefore cancelled in the current financial year. The buy-backs are effected through retained reserves.

On 10 January 2014 the Company completed a tender offer at a price of US$1.2674 per share. Under the offer 17,357,728 Shares were cancelled with US$21,998,837 being paid to participating Shareholders.

The Shareholders approved a dividend of 3.2 cents per share on 4 November 2013; this was paid to Shareholders on 31 January 2014.

The Company's agents and the Investment Manager perform all significant functions. Accordingly, the Company itself has no employees.

Duration

The Company currently does not have a fixed life but the Board considers it desirable that Shareholders should have the opportunity to review the future of the Company at appropriate intervals. Accordingly, at the annual general meeting of the Company in 2015 a resolution will be proposed that the Company ceases to continue in existence. Shareholders holding at least 51% of the shares must vote in favour of this resolution for it to be passed. If the resolution is not passed, a similar resolution will be proposed at every third annual general meeting of the Company thereafter. If the resolution is passed, the Directors will be required, within 3 months of the resolution, to formulate proposals to be put to Shareholders to reorganise, unitise or reconstruct the Company, or for the Company to be wound up.

2 The Subsidiary

The Company has the following subsidiary company:

	Country of incorporation	Percentage of shares held
Epicure Qatar Opportunities Holdings Limited	British Virgin Islands	100%

Epicure Qatar Opportunities Holdings Limited is a wholly owned subsidiary of the Company, and was incorporated in the British Virgin Islands on 4 July 2007 under the provisions of the Companies Act 2001, as a limited liability company with registration number 1415393.

3 Significant Accounting Policies

The consolidated financial statements of the Company for the year ended 30 June 2014 comprise the Company and its subsidiary, Note 2, (together referred to as the "Group").

3.1 Basis of presentation

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") and Isle of Man Companies Act 1931 - 2004. The financial statements have been prepared under the historic cost convention, as modified by the revaluation of financial assets held at fair value through profit or loss and investments in and amounts due from subsidiary which are stated at fair value..

Except as described below, the accounting policies applied in these financial statements are the same as those applied in the Group's consolidated financial statements as at the year ended 30 June 2013.

Changes in accounting policies

The Group has adopted the following new standards and amendments to standards, including any consequential amendments to other standards, with a date of initial application of 1 July 2013:

· IFRS 10 Consolidated Financial Statements (2011)

· IFRS 13 Fair Value Measurement (see (b))

The nature and the effect of the significant changes are further explained below.

(a) Subsidiaries

As a result of IFRS 10 (2011), the Group has changed its accounting policy for determining whether it has control over and consequently whether it consolidates its investee companies. IFRS 10 (2011) introduces a new control model that is applicable to all investee companies, by focusing on whether the Group has power over an investee company, exposure or rights to variable returns from its involvement with the investee company and ability to use its power to affect those returns. In particular, IFRS 10 (2011) requires that the Group consolidate investee companies that it controls on the basis of de facto circumstances.

In accordance with the transitional provisions of IFRS 10 (2011), the Group reassessed the control conclusion for its investee companies at 1 July 2013. No changes resulted from this reassessment.

(b) Fair value measurement

IFRS 13 establishes a single framework for measuring fair value and making disclosures about fair value measurements, when such measurements are required or permitted by other IFRSs. In particular, it unifies the definition of fair value as the price at which an orderly transaction to sell an asset or to transfer a liability would take place between market participants at the measurement date. It also replaces and expands the disclosure requirements about fair value measurements in other IFRSs, including IFRS 7 Financial Instruments: Disclosures.

In accordance with the transitional provisions of IFRS 13, the Group has applied the new fair value measurement guidance prospectively. Notwithstanding the above, the change had no significant impact on the measurements of the Group's assets and liabilities.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires the Board of Directors to exercise its judgement in the process of applying the Group's accounting policies. The financial statements do not contain any critical accounting estimates.

3.2 Basis of consolidation

Subsidiaries

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries and subsidiary undertakings). Control is achieved where the Company has power over an investee, exposure or rights to variable returns and the ability to exert power to affect those returns.

Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised gains or losses arising from intra-group transactions, are eliminated in the consolidated financial statements.

3.3 Financial assets at fair value through profit or loss

Investments are designated at fair value through profit or loss on initial recognition. The Group invests in quoted equities and quoted convertible bonds for which fair value is based on quoted market prices. The quoted market price used for financial assets held by the Group is the current bid price ruling at the year-end without regard to selling prices.

Purchases and sales of investments are recognised on trade date - the date on which the Group commits to purchase or sell the asset. Investments are initially recorded at fair value, and transaction costs for all financial assets and financial liabilities carried at fair value through profit and loss are expensed as incurred.

Gains and losses (realised and unrealised) arising from changes in the fair value of the financial assets are included in the income statement in the year in which they arise.

3.4 Foreign currency translation

The Qatari Riyal is the currency of the primary economic environment in which the entity operates ("the functional currency").

The US Dollar is the currency in which the financial statements are presented ("the presentational currency").

Monetary assets and liabilities denominated in foreign currencies as at the date of these financial statements are translated to Qatari Riyal at exchange rates prevailing on that date. Income and expenses are translated into Qatari Riyal based on exchange rates on the date of the transaction. All resulting exchange differences are recognised in the income statement.

The financial statements are presented in US Dollars by translating the assets and liabilities denominated in Qatari Riyal at the exchange rate prevailing on the balance sheet date. Items of income and expense are translated at exchange rates on the date of the relevant transactions or an average rate. Components of equity are translated at the date of the relevant transaction and not retranslated. All resulting exchange differences are recognised in other comprehensive income.

3.5 Dividend income

Dividend income is recognised when the right to receive payment is established.

3.6 Segment reporting

The Group has one segment focusing on maximising total returns through investing in quoted securities in Qatar and the GCC region. No additional disclosure is included in relation to segment reporting, as the Group's activities are limited to one business and geographic segment.

3.7 Cash and cash equivalents

Cash and cash equivalents comprise cash deposited with banks and bank overdrafts repayable on demand.

3.8 Investments in and amounts due from subsidiary

Investments in and amounts due from subsidiary in the Company balance sheet are stated at fair value.

3.9 Future changes in accounting policies

A number of new standards, amendments to standards and interpretation are not yet effective for year ended 30 June 2014, and have not been applied in preparing these financial statements. None of these are expected to have a significant effect on the measurement of the amounts recognised on the Company's financial statements; however, IFRS 9, Financial Instruments ("IFRS9") may change the classification of financial assets. This is first effective for accounting periods beginning on or after 1 January 2018.

There are no other standards, interpretations or amendments to existing standards that are not yet effective that would be expected to have a significant impact on the Company.

4 Net Asset Value per Share

The net asset value per share as at 30 June 2014 is US$1.4142 per share (30 June 2013: US$1.1610) based on 155,077,350 (30 June 2013: 176,228,350) Ordinary Shares in issue as at that date.

5 Fair Value Hierarchy

IFRS 13 requires the Company to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

• Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).

• Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).

• Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

All the Group's investments are classed as level 1 investments. The Company's investment in subsidiary and amounts due from subsidiary are also classified as level 1 investments.

All financial assets and liabilities not stated at fair value in the financial statements are categorised as level 2 in the fair value hierarchy.

6(a) Financial assets at fair value through profit or loss

Group

30 June 2014: Financial assets at fair value through profit or loss; all quoted equity securities.

Security name

Number

US$'000

Emaar Properties Company (EMAAR UH)

Emirates National Bank of Dubai (ENBD UH)

Mobile Telecommunications Company (ZAIN KK)

National Bank of Kuwait (NBK KK)

National Industries Group (NIND KK)

Al Batinah Power (BATP OM)

Al Suwadi Power (SUWP OM)

Bank Muscat (BKMB OM)

Oman Telecom (OTEL OM)

Sembcorp Salalah (SEMB OM)

Al Meera Consumer Goods (MERS QD)

Barwa Real Estate (BRES QD)

Commercial Bank of Qatar (CBQK QD)

Doha Bank (DHBK QD)

Ezdan Holdings (ERES QD)

Industries Qatar (IQCD QD)

Masraf al Rayan (MARK QD)

National Leasing (NLCS QD)

Ooreedo (ORDS QD)

Qatar Electricity and Water (QEWS QD)

Qatar Gas Transport (QGTS QD)

Qatar Insurance (QATI QD)

Qatar Islamic Bank (QIBK QD)

Qatar National Bank (QNBK QD)

Qatar Navigation (QNNS QD)

Qatar United Development Company (UDCD QD)

Widam Food Company (WDAM QD)

1,595,000

1,283,500

549,000

475,250

630,000

133,202

133,518

1,860,388

109,418

346,488

96,985

1,597,739

1,120,878

936,254

345,391

513,757

1,068,065

350,641

402,207

220,829

60,360

632,488

256,911

743,948

420,610

931,395

40,000

3,652

2,813

1,206

1,617

491

3,257

466

1,902

4,503

15,347

19,041

13,926

1,832

23,644

13,249

2,887

12,936

10,424

335

13,886

5,788

33,340

9,846

5,654

543

202,703

Group

30 June 2013: Financial assets at fair value through profit or loss; all quoted equity securities:

Security name	Number	US$'000
Dana Gas Company (DANA UH)	1,000,000	147
Drake and Scull International (DSI UH)	3,250,000	800
Dubai Islamic Bank (DIB UH)	850,000	708
Emaar Properties Company (EMAAR UH)	1,450,000	2,033
Emirates National Bank of Dubai (ENBD UH)	813,500	1,007
First Gulf Bank (FGB UH)	331,000	1,433
Union National Bank (UNB UH)	406,250	513
Kuwait Food Company (FOOD KW)	216,000	1,604
Bank Muscat (BKMB OM)	959,388	1,428
Bank Muscat 4.5% 20/03/2016*	1,925,514	524
Dhofar International Development and Investment (DIDI OM)	361,000	474
Galfar Engineering (GECS OM)	1,309,501	1,211
Al Meera Consumer Goods (MERS QD)	71,985	2,686
Barwa Real Estate (BRES QD)	1,890,486	13,774
Commercial Bank of Qatar (CBQK QD)	874,796	16,636
Doha Bank (DHBK QD)	699,050	8,997
Gulf International Services (GISS QD)	68,595	769
Industries Qatar (IQCD QD)	589,257	25,485
Masraf Al Rayan (MARK QD)	2,687,733	20,320
Mazaya Real Estate Development (MRDS QD)	215,210	664
National Leasing (NLCS QD)	258,343	2,626
Qatar Electricity and Water (QEWS QD)	265,754	11,552
Qatar Gas Transport (QGTS QD)	158,562	794
Qatar Insurance (QATI QD)	515,635	8,575
Qatar Islamic Bank (QIBK QD)	354,077	6,616
Qatar Meat and Livestock (QMLS QD)	244,176	4,221
Qatar National Bank (QNBK QD)	920,881	39,725
Qatar Navigation (QNNS QD)	431,467	8,431
Qatar Telecom (QTEL QD)	317,768	10,473
Qatar United Development Company (UDCD QD)	546,645	3,450
		197,676

*Bond interest amounting to US$17,401 was received in the year ended 30 June 2014, and this bond was also disposed of during the 2014 year.

6(b) Due from subsidiary

	30 June 2014	30 June 2013
	US$'000	US$'000

Investment in subsidiary	-	-
Amount due from subsidiary	218,149	203,247

The amount due from the subsidiary is subject to interest on the aggregate principal amount drawn down from 1 January 2011, at the US prime rate per annum. All loan repayments made by the subsidiary will first be deducted from the outstanding loan interest before being applied to the principal balance. The loan is secured by fixed and floating charges over the assets of the subsidiary and is repayable on demand.

7 Commission rebate

During the year the Group received 50% brokerage commission rebates for all trades done through its Qatar brokers. This arrangement is set to continue. For the year ended 30 June 2014 the Group received US$177,047 (2013: US$165,586).

8 Charges and Fees

	Group 30 June 2014	Company 30 June 2014	Group 30 June 2013	Company30 June 2013
	US$'000	US$'000	US$'000	US$'000
Investment Manager's fees (see below)	2,436	-	2,621	-
Performance fees (see below)	-	-	-	-
Administrator and Registrar's fees (see below)	315	277	319	281
Custodian fees (see below)	163	-	188	9
Directors' fees and expenses	393	393	380	380
Directors' insurance cover	43	43	44	44
Broker fees	70	70	83	83
Other	327	300	279	243
Other expenses	1,311	1,083	1,293	1,040

Investment Manager's fees

Annual fees

The Investment Manager was entitled to an annual management fee of 1.25% of the Net Asset Value of the Group, calculated monthly and payable quarterly in arrears. The current Investment Management Agreement was subject to termination on 31 October 2013 with a revised agreement coming into effect from 1 November 2013. The revised agreement sees the annual fee reduce to 1.05% of the net asset value of the Company further reducing to an annual fee of 1.0% of the net asset value of the Company from 1 November 2015.

Annual management fees for the year ended 30 June 2014 amounted to US$2,436,928 (30 June 2013: US$2,621,380) and the amount accrued but not paid at the year-end was US$631,046 (30 June 2013: US$642,428).

Performance fees

The performance fee structure is based upon the relative performance of the Company against the performance of the QE Index. The performance fee is payable by reference to the increase in Adjusted Net Asset Value per Ordinary Share in excess of the Target Net Asset Value per Ordinary Share (Opening Net Asset Value per Ordinary Share adjusted by the movement on the Qatar Exchange Index) over the course of a Performance Period.

The Investment Manager is entitled to a performance fee in respect of a Performance Period only if the Adjusted Net Asset Value per Ordinary Share at the end of the relevant Performance Period, after excluding dividends paid and received, exceeds the Target Net Asset Value per Ordinary Share.

If the performance test is met, the performance fee will be an amount equal to 15% of the amount by which the Adjusted Net Asset Value per Ordinary Share at the end of the relevant Performance Period exceeds the Target Net Asset Value per Ordinary Share multiplied by the time weighted average of the number of Ordinary Shares in issue in the Performance Period together, if applicable, with an amount equal to the VAT thereon.

In any Outperformance Period which follows any one or more Underperformance Periods, the performance fee payable shall be calculated by multiplying X minus Y by 15% (where X is the increase in the Adjusted Net Asset Value per Ordinary Share at the end of the relevant Outperformance Period above the Target Net Asset Value per Ordinary Share for that Performance Period and Y is the aggregate of the Shortfall Returns for the previous Underperformance Periods) and multiplied by the time weighted average of the number of Ordinary Shares in issue in the Performance Period. If X minus Y is a negative figure, no performance fee shall be payable.

If the Adjusted Net Asset Value per Ordinary Share at the end of the relevant Performance Period is higher than the Target Net Asset Value per Ordinary Share but is less than the Opening NAV, any accrued performance fee will be withheld and shall not be payable and will only become payable in the event that the Target Net Asset Value per Ordinary Share and the Opening NAV is exceeded in respect of a subsequent Performance Period. For the avoidance

of doubt, in the event that the Target Net Asset Value per Ordinary Share and the Opening NAV is exceeded in respect of a subsequent Performance Period, all accrued but unpaid performance fee(s) in respect of previous Performance Periods will become due and payable.

If there has been a Shortfall Return in respect of a Performance Period and performance fees have been accrued but withheld in respect of one or more prior Performance Periods, the accrued but withheld performance fees will be reduced by treating the prior Performance Period(s) and the current Performance Period as one Performance Period and calculating any performance fee due over that aggregated period. For the avoidance of doubt, in the event that the Target Net Asset Value per Ordinary Share and the Opening NAV is exceeded in respect of a subsequent Performance Period, all accrued but unpaid performance fee(s) in respect of previous Performance Periods will become due and payable.

The Investment Manager will not be entitled to such part of any performance fee to which it would otherwise be entitled if:

(i) payment of such part of any performance fee would cause the aggregate performance fee in respect of a Performance Period, excluding any accrued but unpaid performance fee in respect of previous Performance Periods, to exceed 1.5% of the Net Asset Value of the Company at the end of the relevant Performance Period (or, in the case of the any Performance Period of less than a year, 1.5% multiplied by the number of days in that Performance Period divided by 365); or

(ii) payment of such part within the Performance Period would have caused the performance test or Opening NAV not to be met.

Performance fees accrued but not paid during the year ended 30 June 2014 amounted to US$nil as the performance target was not reached (30 June 2013: US$nil).

The Investment Manager is responsible for the payment of all fees to the Investment Adviser.

Investment Management Agreement definitions

Adjusted Net Asset Value per Ordinary Share	at a particular time, the total of A minus B plus C where: (i) A is the Net Asset Value per Ordinary Share at that time calculated on a basis that does not recognise any liability of the Company to the Investment Manager in respect of any performance fee that is, or may become, payable; (ii) B is the sum of all dividends received by the Company since 1 January 2011 divided by the number of Ordinary Shares in issue at the time of each dividend; and (iii) C is the sum of all dividends paid by the Company since 1 January 2011 divided by the number of Ordinary Shares in issue at the time of each dividend; From 1 November 2013 this definition changed to:
Adjusted Net Asset Value per Ordinary Share	at a particular time, the sum of A plus B minus C minus D plus E where: (i) A is the Net Asset Value per Ordinary Share at that time calculated on a basis that does not recognise any liability of the Company to the Investment Manager in respect of any performance fee that is, or may become, payable; (ii) B is the amount by which any corporate action undertaken by the Company after 1 November 2013 (including, without limit, the issue of Ordinary Shares or rights to subscribe for, or convert into. Ordinary Shares, the issue of a scrip dividend, or the consolidation or sub-division of Ordinary Shares) results, at the time of calculation, in a dilution to the Net Asset Value per Ordinary Share divided by the number of Ordinary Shares in issue at the time of such corporate action; (iii) C is the amount by which any accretion to the Net Asset Value per Ordinary Share has arisen solely as a result of the repurchase by the Company of its Ordinary Shares or any return of capital by the Company to its shareholders since 1 November 2013 divided by the number of Ordinary Shares in issue at the time of such repurchase or return of capital; (iv) D is the sum of all dividends received by the Company since 1 January 2011 divided by the number of Ordinary Shares in issue at the time of each dividend; and (v) E is the sum of all dividends paid by the Company since 1 January 2011 divided by the number of Ordinary Shares in issue at the time of each dividend,

Performance Period	each period in respect of which the Company produces audited accounts and, if different, the final period for which the Investment Management Agreement subsists or any shorter period where there has been an issue of Ordinary Shares which exceeds 10% of the then existing Share Capital of the Company, subject always to the discretion of the Board. The first Performance Period commenced on date of the passing of the Resolution (17 March 2011).
Outperformance Period	any Performance Period in which the Adjusted Net Asset Value per Ordinary Share at the end of the relevant Performance Period exceeds the Target Net Asset Value per Ordinary Share.
Shortfall Return	the amount by which the Target Net Asset Value per Ordinary Share exceeds the Adjusted Net Asset Value per Ordinary Share in respect of a Performance Period.

Administrator and Registrar fees

The Administrator is entitled to receive a fee of 12.5 basis points per annum of the net asset value of the Company between US$0 and US$100 million, 10 basis points of the net asset value of the Company above US$100 million.

This is subject to a minimum monthly fee of US$15,000, payable quarterly in arrears.

The Administrator assists in the preparation of the financial statements of the Group and provides general secretarial services.

The Administrator may utilise the services of a CREST accredited registrar for the purposes of settling share transactions through CREST. The cost of this service will be borne by the Company. It is anticipated that the cost will be in the region of £12,000 per annum subject to the number of CREST settled transactions undertaken.

Administration fees paid for the year ending 30 June 2014 amounted to US$283,249 and US$32,141 for additional services (30 June 2013: US$286,115 and US$33,247 respectively).

Custodian fees

The Custodian is entitled to receive fees of US$7,200 per annum and US$25 per processed transaction from the Company.

In addition the Custodian is entitled to receive fees of 8 basis points per annum in respect of Qatari securities held by the Group and 10 basis points per annum in respect of non-Qatari, GCC securities held by the Group and $45 per settled transaction (Qatar)/$50 per settled transaction (GCC excluding Qatar). From 1 March 2013 the custodian agreed to a 25% reduction in custodian fees relating to the Qatari market.

Custodian and sub-custodian fees for the year ending 30 June 2014 amounted to US$163,201 (30 June 2013: US$188,351) and the amount accrued but not paid at the year-end was US$6,998 (30 June 2013: US$20,080).

9 Cash and Cash Equivalents

	Group 30 June 2014	Company 30 June 2014	Group 30 June 2013	Company 30 June 2013
	US$'000	US$'000	US$'000	US$'000
Bank balances	17,295	366	8,257	783
Cash and cash equivalents	17,295	366	8,257	783

10 Share Capital

	30 June 2014	30 June 2013
	US$'000	US$'000
Authorised 500,000,000 Ordinary shares of US$0.01 each	5,000,000	5,000,000
Issued, Called-up and Fully-Paid:
155,077,350 (2013: 176,228,350) Ordinary Shares of US$0.01 each in issue, with full voting rights	1551	1,763
3,793,272 (2013: 7,534,651) Ordinary Shares of US$0.01 each held in Treasury	38	76
Issued share capital	1,589	1,839

During the year to 30 June 2014 the Company repurchased 3,793,272 (2013: 7,534,651) Ordinary Shares, to be held in treasury, at a cost of US$4,143,929 (2013: US$6,867,087) and cancelled 7,534,651 (2013: 7,681,193) Ordinary Shares in treasury which had been held for more than one year. The Ordinary Shares held in treasury have no voting rights and are not entitled to dividends.

On 10 January 2014 the Company completed a tender offer at a price of US$1.2674 per share. Under the tender offer 17,357,728 shares were repurchased and cancelled.

During the year US$68,119 tender expenses were deducted from equity.

Capital management

The Board's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the Company. The Board manages the Group's affairs to achieve Shareholder returns through capital growth rather than income, and monitors the achievement of this through growth in net asset value per share.

Group capital comprises Share Capital and Reserves. Neither the Company nor its subsidiary is subject to externally imposed capital requirements. The Company also has an active share buyback program.

11 Reserves - Group

	Distributable Reserves	Retained Earnings	Foreign Currency Translation reserve	Capital Redemption Reserve	30 June 2014 Total
	US$'000	US$'000	US$'000	US$'000	US$'000

Balance at 1 July 2013	182,058	20,165	(91)	636	202,768
Dividends paid	-	(4,998)	-	-	(4,998)
Shares subject to tender offer	(21,999)	-	-	174	(21,825)
*Tender expenses	(68)	-	-	-	(68)
Foreign exchange translation differences	-	-	(7)	-	(7)
Retained earnings	-	45,924	-	-	45,924
Shares in treasury cancelled	-	-	-	76	76
Share buy-backs	(4,144)	-	-	-	(4,144)
Balance at 30 June 2014	155,847	61,091	(98)	886	217,726

*Exceptional expenses related to tender offer

The capital redemption reserve is created on the cancellation of shares equal to the par value of shares cancelled. This reserve is not distributable.

12 Earnings per Share

Basic and diluted earnings per share are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of Ordinary Shares in issue during the year.

	30 June 2014	30 June 2013

Profit attributable to equity holders of the Company (US$'000)	45,924	31,867
Weighted average number of Ordinary Shares in issue (thousands)	165,419	197,359
Basic and diluted earnings per share (cents per share)	27.76	16.15

13 Other payables and accrued expenses

Group

	30 June 2014	30 June 2013
	US$'000	US$'000
Due to broker	-	512
Management fee payable	631	642
Administration fee payable	82	63
Accruals and sundry creditors	46	153
	759	1,370

Company

	30 June 2014	30 June 2013
	US$'000	US$'000
Administration fee payable	75	57
Accruals and sundry creditors	35	106
	110	163

14 Taxation

Isle of Man taxation

The Company is resident for taxation purposes in the Isle of Man by virtue of being incorporated in the Isle of Man and is technically subject to taxation on its income but the rate of tax will be zero. The Company is required to pay an annual corporate charge of £250 per annum.

The Company became registered for VAT from 1 February 2011.

Qatar taxation

It is the intention of the Directors to conduct the affairs of the Company so that it is not considered to be either resident in Qatar or doing business in Qatar.

Qatar does not impose withholding tax on dividend distributions by Qatari companies to non-residents.

Capital gains made by the Company on disposal of shares in Qatari companies will not be subject to tax in Qatar.

There is no stamp duty or equivalent tax on the transfer of shares in Qatari companies.

Kuwait taxation

Since 1 January 2009 dividends paid on behalf of holdings in Kuwait have withholding tax deducted at 15%.

15 Financial instruments

The Group's activities expose it to a variety of financial risks: market price risk, foreign exchange risk, credit risk, liquidity risk and interest rate risk.

Market price risk

The Group's strategy for the management of investment risk is driven by the Group's investment objective. The main objective of the Group is to capture the opportunities for growth offered by the expanding Qatari economy by investing in listed companies or companies soon to be listed. This will be principally through the medium of the Qatar Exchange.

All investments present a risk of loss of capital through movements in market prices. The Investment Manager and Investment Adviser moderate this risk through a careful selection of securities within specified limits. The Investment Manager and the Investment Adviser review the position on a day to day basis and the Directors review the position at Board meetings.

The Group's market price risk is managed through the diversification of the investment portfolio. Approximately 99% of the net assets attributable to holders of Ordinary Shares is invested in equity securities, of which a maximum of 15% is to be invested outside Qatar. Investment opportunities are available in other Co-operation Council for Arab States of the Gulf (GCC).

At 30 June 2014, if the market value of the investment portfolio had increased/decreased by 9.0% with all other variables held constant, this would have increased/decreased net assets attributable to Shareholders by approximately US$18.2 million (30 June 2013 : 5.5% : US$10.8 million).

Foreign exchange risk

The Group's operations are conducted in jurisdictions which generate revenue, expenses, assets and liabilities in currencies other than Qatari Riyal. As a result, the Group is subject to the effects of exchange rate fluctuations with respect to these currencies.

The Group's policy is not to enter into any currency hedging transactions.

At the reporting date the Group had the following exposure:

Currency	30 June 2014	30 June 2013
	%	%

British Pound	0.01	(0.02)
Omani Rial	3.88	1.92
US Dollar	0.18	0.07
Qatari Riyal	89.16	91.45
Kuwaiti Dinar	1.79	0.97
UAE Dirham	4.98	5.61

The following table sets out the Group's total exposure to foreign currency risk and the net exposure to foreign currencies of the monetary assets and liabilities:

30 June 2014	Monetary Assets	Monetary Liabilities	Net Exposure
	US$'000	US$'000	US$'000

British Pound	27	(6)	21
Omani Rial	8,511	-	8,511
US Dollar	1,147	(753)	394
Qatari Riyal	195,532	-	195,532
Kuwaiti Dinar	3,931	-	3,931
UAE Dirham	10,926	-	10,926
	220,074	(759)	219,315
30 June 2013	Monetary Assets	Monetary Liabilities	Net Exposure
	US$'000	US$'000	US$'000

British Pound	15	(55)	(40)
Omani Rial	3,969	(31)	3,938
US Dollar	921	(772)	149
Qatari Riyal	187,632	(512)	187,120
Kuwaiti Dinar	1,971	-	1,971
UAE Dirham	11,469	-	11,469
	205,977	(1,370)	204,607

Foreign currency sensitivity risk - presentational currency

At 30 June 2014 had the US Dollar weakened/strengthened by 1% (2013 : weakened/strengthened 1%) in relation to all currencies, with all other variables held constant, net assets attributable to equity holders of the Company would have increased/decreased by the amounts shown below:

30 June 2014	US$'000
British Pound	-
Omani Rial	85
Kuwaiti Dinar	39
UAE Dirham	109
Effect on net assets	233

30 June 2013	US$'000
British Pound	-
Omani Rial	(39)
Kuwaiti Dinar	20
UAE Dirham	115
Effect on net assets	96

Foreign currency sensitivity risk - functional currency

As 89% of net assets are denominated in QAR and QAR is the functional currency there is no significant functional currency risk. The Qatari Real is pegged to the USD within a tight band and therefore it is not included in the sensitivity analysis.

In addition, since QAR is the functional currency of the Group and USD is the presentational currency any effect of changes in the foreign exchange rates between these currencies will be included in the translation reserve on consolidation.

Credit risk

Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Group.

The carrying amounts of financial assets best represent the maximum credit risk exposure at the balance sheet date. This relates also to financial assets carried at amortised cost.

At the reporting date, the Group's financial assets exposed to credit risk comprised the following:

	30 June 2014	30 June 2013
	US$'000	US$'000
Financial assets at fair value through profit or loss	202,703	197,676
Cash and cash equivalents	17,295	8,257
Other receivables	76	44
	220,074	205,977

The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet. Management does not expect any counterparty to fail to meet its obligations and there are no debts past their due dates as at the year-end.

Liquidity risk

The Group manages its liquidity risk by maintaining sufficient cash for operations and the ability to realise market positions. The Group's liquidity position is monitored by the Investment Manager and the Board of Directors.

The residual undiscounted contractual maturities of financial liabilities are in the table below:

30 June 2014	Less than 1 month	1-3 months	3 months to 1 year	1-5 years	Over 5 years	No stated maturity
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
Financial liabilities
Other creditors and accrued expenses	759	-	-	-	-	-
	759	-	-	-	-	-
30 June 2013	Less than 1 month	1-3 months	3 months to 1 year	1-5 years	Over 5 years	No stated maturity
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
Financial liabilities
Other creditors and accrued expenses	1,370	-	-	-	-	-
	1,370	-	-	-	-	-

Interest rate risk

The majority of the Group's financial assets are non-interest bearing. Cash held by the Group is invested at short-term market interest rates. As a result, the Group is not subject to fair value interest rate risk due to fluctuations in the prevailing levels of market interest rates. However it is subject to cash flow risk arising from changes in market interest rates.

The table below summarises the Group's exposure to interest rate risks. It includes the Group's financial assets and liabilities at the earlier of contractual re-pricing or maturity date, measured by the carrying value of assets and liabilities:

30 June 2014	Less than 1month	1-3 months	3 months to 1 year	1-5 years	Over 5 years	Non-interest bearing	Total
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
Financial Assets
Financial assets at fair value through profit or loss	-	-	-	-	-	202,703	202,703
Other receivables and prepayments	-	-	-	-	-	76	76
Cash	17,295						17,295
Total financial assets	17,295					202,779	220,074
Financial Liabilities
Other creditors and accrued expenses	-	-	-	-	-	(759)	(759)
Total financial liabilities	-	-	-	-	-	(759)	(759)

Total interest rate sensitivity gap	17,295

30 June 2013	Less than 1month	1-3 months	3 months to 1 year	1-5 years	Over 5 years	Non-interest bearing	Total
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
Financial Assets
Financial assets at fair value through profit or loss	-	-	-	-	-	197,676	197,676
Other receivables and prepayments	-	-	-	-	-	44	44
Cash	8,257	-	-	-	-	-	8,257
Total financial assets	8,257	-	-	-	-	197,720	205,977
Financial Liabilities
Other creditors and accrued expenses	-	-	-	-	-	(1,370)	(1,370)
Total financial liabilities	-	-	-	-	-	(1,370)	(1,370)

Total interest rate sensitivity gap	8,257

All interest received on cash balances are at variable rates. A sensitivity analysis for changes in interest rates on cash balances has not been provided as it is not deemed significant.

16 Related Party Transactions

Parties are considered to be related if one party has the ability to control the other party or to exercise significant influence over the other party in making financial or operational decisions.

The Investment Adviser is Qatar Insurance Company S.A.Q. The Group holds shares in Qatar Insurance Company S.A.Q. (see note 6). The Investment Adviser's fees are paid by the Investment Manager.

The Investment Manager, Epicure Managers Qatar Limited, is a related party by virtue of its ability to make operational decisions for the Company and through common Directors. Fees payable to the Investment Manager are disclosed in note 8.

Epicure Managers Qatar Limited is a wholly owned subsidiary of the Investment Adviser, Qatar Insurance Company S.A.Q.

Leonard O'Brien is a Director of the Company and of the Investment Manager.

17 Post Balance Sheet Events

There have been no post balance sheet events.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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