Final Results

RNS Number : 0301Q

Qatar Investment Fund PLC

07 September 2017

Qatar Investment Fund Plc ('QIF' or 'the company')

Annual Report for the year ended 30 June 2017

London-listed Qatar Investment Fund plc (LSE: QIF) invests in Qatar and the Gulf Cooperation Council (GCC) region, with exposure to economic growth in the area. QIF invests in companies on the Qatar Exchange, with a possible allocation of up to 15% in other listed companies in the GCC.

Nicholas Wilson, Chairman of Qatar Investment Fund plc commented:

"The year to 30 June 2017 was one of mixed fortunes for Qatar. During the period, the country adjusted well to the realisation that oil prices will remain lower for longer. However, in the latter months, a trade and travel ban by four other Gulf Cooperation Council (GCC) countries was imposed that has hindered growth. Qatar is working to mitigate negative impacts of this, including prudent management of its resources and by forming other international alliances.

"Qatar Investment Fund plc is confident that Qatar still has good prospects for economic growth. The rift with Saudi Arabia, UAE, Bahrain and Egypt is expected to continue for some time and will have a negative impact on economic performance. Assuming an eventual resumption of trade and travel links our investment adviser believes that medium to long-term growth prospects should remain healthy driven by a strong infrastructure pipeline and supportive demographics.

"We will continue to monitor the situation to take advantage of opportunities in Qatar as well as the wider GCC region."

· Net Asset Value per share (NAV) fell by 8.4% to US$1.1113, compared with a fall of 8.6% in the Qatar Exchange Index

· Share price fell more than Qatar Exchange Index from US$1.0313 to US$0.899 as discount to NAV widened

· Board proposes a dividend of 3.0c per share (2016: 4.0 cents)

· Loss of US$6.64m arising from fair value adjustments on holdings and realised losses on holdings sold, equivalent to basic loss per share of 3.60 cents

For further information:

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

Nicholas Wilson

Panmure Gordon +44 (0) 20 7886 2500

Andrew Potts

Maitland +44 (0) 20 7379 5151

William Clutterbuck / Cebuan Bliss

Chairman's Statement

On behalf of your Board, I am pleased to present your Company's tenth Annual Report and Financial Statements for the year to 30 June 2017.

During the twelve months, your Company's Net Asset Value per Share ("NAV") fell by 8.4% to US$1.1113 which compares with a fall of 8.6% in the Qatari stock market (Qatar Exchange Index) and a gain of 21.2% in the MSCI Emerging Markets Index. Following a widening of the discount at which the shares trade to NAV, the shares fell from US$1.0313 to US$0.899, a fall of 12.8%. Shareholders received a dividend of 4.0c per share with an ex-dividend date of 31 January 2017.

Results

Results for the period under review showed a loss of US$6.64m generated from fair value adjustments, realised losses and dividend income. This is equivalent to basic loss per share of 3.60 cents.

A growing realisation that hydrocarbon prices were going to be lower for longer kept pressure on Qatari stocks for most of the twelve-month period. On 5 June, Saudi Arabia, the United Arab Emirates, Bahrain and Egypt broke off diplomatic relations with Qatar and took further steps to isolate the country. This prompted a sharp sell-off on the Qatar Stock Exchange and took shares to the lowest level for the year.

At the end of the period we had a total of 26 holdings: 19 in Qatar (82.9%) and 7 in the UAE (7.1%). Banking and financial services remains our largest sectoral holding at 37.8%. Cash balances increased to 9.3%.

The Company's Ongoing Charges (formerly Total Expense Ratio) fell to 1.70% from 1.77% in the previous year. The charges were calculated in accordance with the methodology recommended by The Association of Investment Companies. The decrease was largely attributable to the revised investment management agreement, effective 1 November 2016. As part of this agreement in the Investment Manager's annual fee was reduced from 1.0% to 0.9%.

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 493,445 shares were bought back to be held in Treasury and 2,102,373 shares were cancelled, as they had been held in Treasury for 12 months. The board works with the Investment Manager and the broker 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. An extensive roadshow was carried out in March visiting existing shareholders and potential investors.

Tender Offer

On 19 October 2016, the board announced a proposed tender offer for 12% of the issued share capital to be voted on by shareholders at an extraordinary general meeting to be held on 18 November. The resolution was passed by 100% of those voting. On 12 December, the Company announced that 14,045,544 shares tendered would be cancelled and payment made by 19 December.

Proposed Dividend

The Board is please to recommend to shareholders a dividend of 3c per share. Subject to shareholder approval at the forthcoming Annual General Meeting, the dividend will be paid in January 2018. Further details on the ex-date, record date and payment date will be made in due course.

Directorate Change

In May of this year, we were pleased to welcome David Humbles to the Board. David's skills and experience have already proved very helpful and we look forward to working with him in the future. As a new director joins the board, I am sad to say that Leonard O'Brien has decided not to stand for re-election to the board at the forthcoming Annual General Meeting.

Leonard joined the board at inception and has been exemplary in his contribution to the Company. We wish him all the very best for the future.

Post Balance Sheet events

There have been no post balance sheet events.

Outlook, risks and uncertainties

The Qatari economy slowed during the period with 2016 GDP growth of 2.2% and a further decline is expected for 2017. After 15 years of budget surpluses, 2016 showed a deficit of USD9.2bn with a further deficit forecast for 2017.

The ongoing rift with Saudi Arabia, UAE, Bahrain and Egypt is expected to continue for some time and will inevitably have a negative impact on economic performance. Although any sustained recovery in hydrocarbon prices is not expected, the lifting of the LNG development moratorium with a 30% increase in LNG production is expected to have a positive effect on the economy. Assuming an eventual resolution of the diplomatic rift, our investment adviser believes that medium to long-term growth prospects should remain healthy driven by a strong infrastructure pipeline, strong 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.

Annual General Meeting

I look forward to welcoming shareholders to our tenth Annual General Meeting on 16 November 2017, which will be held at 11.00 am, at the Company's registered office at Millennium House, 46 Athol Street, Douglas, Isle of Man.

Nicholas Wilson

Chairman

6 September 2017

Business Review

The following review is designed to provide information primarily about the Company's business and results for the year ended 30 June 2017. It should be read in conjunction with the Report of the Investment Manager and the Investment Adviser on pages 7 to 16 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 17 to 18.

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

On a weekly basis, 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 and where it is accretive to net asset value per share.

On 9 August 2016, and updated on 22 February 2017, the Company announced the details of its annual share buy-back programme. Pursuant to, and during the term of this share buy-back programme, the Company may purchase ordinary shares provided that:

1) the maximum price payable for an ordinary share on the London Stock Exchange is an amount equal to the higher of:

a. 105 per cent. of the average market value of the Company's ordinary shares as derived from the London Stock Exchange Daily Official List for the five business days immediately preceding the day on which such share is contracted to be purchased; and

b. In order to benefit from the exemption laid down in Article 5(1) ofRegulation (EU) No 596/2014, the Company will not purchase shares at a price higher than the higher of the price of the last independent trade and the highest current independent purchase bid on the trading venue where the purchase is carried out; and

2) the aggregate number of ordinary shares which may be acquired on behalf of the Company in connection with this share buy-back programme shall not exceed 17,548,355 ordinary shares.

Due to the limited liquidity in the ordinary shares, a buy-back of ordinary shares pursuant to the share buy-back programme on any trading day is likely to represent a significant proportion of the daily trading volume in the ordinary shares on the London Stock Exchange (and is likely to exceed the 25% limits of the average daily trading volume as laid down in Article 5(1) of Regulation (EU) No 596/2014 and as such the Company will not benefit from this exemption).

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 1(a) and 2 on pages 49 to 53.

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 to 2004 and since its shares are listed on the London Stock Exchange, the UK Listing Authority's Listing Rules and Disclosure Guidance 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.

From 3 July 2016 the Company must also comply with the Market Abuse Regulation (MAR) which contains prohibitions for insider dealing and market manipulation, and provisions to prevent and detect these.

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 27.

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 Notes 1(a), 2, 6 and 8 on pages 51 to 53.

Report of the Investment Manager and Investment Adviser

Regional Equity Market Overview

Indices	30-Jun-16	31-Dec-16	% Change (H2 2016)	30-Jun-17	% Change (H1 2017)	% Change (LTM to 30-Jun-17)
Qatar (DSM)	9,885	10,437	5.6%	9,030	-13.5%	-8.6%
Saudi (TASI)	6,500	7,210	10.9%	7,426	3.0%	+14.2%
Dubai (DFMGI)	3,311	3,531	6.6%	3,392	-3.9%	+2.4%
Abu Dhabi (ADI)	4,498	4,546	1.1%	4,425	-2.7%	-1.6%
Kuwait (KWSE)	5,365	5,748	7.1%	6,763	17.7%	+26.1%
Oman (MSI)	5,777	5,783	0.1%	5,118	-11.5%	-11.4%
Bahrain (BAX)	1,118	1,220	9.1%	1,310	7.3%	+17.1%
BGCC200 Index	60	65	8.2%	64	-1.3%	+6.8%

Source: Bloomberg; LTM (Last Twelve Months)

In the 12 months to 30 June 2017, global equity markets witnessed several unexpected events, with the win in the US elections being the most prominent. Additionally, OPEC member countries agreed to collectively reduce oil production by 1.2 million barrels per day (bpd) to 32.5 million bpd and the US Federal Reserve raised its benchmark interest rate multiple times during the period on indications that the American economy is expanding at a healthy pace. Following the Fed rate hikes in December 2016 and March 2017, several central banks in the GCC followed suit and raised benchmark rates. The GCC index (Bloomberg GCC200) rose 6.8% during the period, as oil prices recovered following the production cut agreement.

In the latter half of FY 2016, all GCC equity markets rose as oil prices recovered following the production cut agreement between OPEC countries and non-OPEC oil producers. Saudi Arabia was the strongest performer in the period, up 10.9%, after the successful raising of USD 17.5 billion in the largest emerging markets bond issuance to date. The Bahrain and Kuwait equity markets followed Saudi Arabia, up 9.1% and 7.1%, respectively. Dubai, Abu Dhabi and Oman were up 6.6%, 1.1% and 0.1% respectively. Qatar market was up 5.6%, after the successful inclusion of Qatar in the FTSE "secondary emerging market" category. Overall, the Bloomberg GCC index rose 8.2%.

The decision to cut ties with Qatar by the governments of Saudi Arabia, Bahrain, the UAE and Egypt, closing their land, air and sea borders, was the major event of the first half of the calendar 2017. Falling oil prices added to the market pressure, as crude prices fell c.15% during the period, with continuing expansion in US shale drilling leading to high global supplies, despite the OPEC-led agreement to cut production. The Qatari market dropped 13.5% on investor concerns about Qatar's trade, labour market and liquidity conditions in the light of the blockade. The Bloomberg GCC index also fell 1.3% during the period. However, Saudi Arabia continued its rising trend in H1 2017, following the news of its inclusion in MSCI Emerging Markets watchlist and the promotion to Crown Prince of former Deputy Crown Prince, Mohammed bin Salman. Kuwait and Bahrain stock markets joined Saudi Arabia and ended the period in green.

Arab neighbours cut ties with Qatar

On 5 June 2017, the governments of Saudi Arabia, Bahrain, the UAE and Egypt cut ties with Qatar, accusing it of supporting terrorism. These countries closed land, air and sea borders with Qatar, giving Qatari nationals within their borders two weeks to leave and instructing their own nationals in Qatar to leave immediately. Yemen, the Maldives and the Tobruk government in Libya subsequently joined the boycott. The four Arab nations issued a 13-point list of demands to Qatar on June 22, which included shutting down of Al Jazeera news channel, toning down its relationship with Iran, cutting ties with certain political groups and shutting down the Turkish military base in Doha. Qatar was asked to respond in ten days, which was later extended by another 48 hours at the request of Kuwait. The deadline ended on 4 July 2017. On 5 July 2017, Saudi led allies decided to continue the blockade after Qatar refused to agree to the demands.

Qatar's export dependence on its GCC neighbours is relatively limited; however, imports could become costlier in the near term

Total exports from Qatar to Bahrain, Egypt, Saudi Arabia and the UAE contributed about 3% of Qatar's gross domestic product (GDP) in 2016. Qatar continues to supply gas to the UAE through the Dolphin gas pipeline, despite the severing of diplomatic ties. It pumps around 2 billion cubic feet of gas per day to the UAE.

The majority of Qatari exports are destined for Asia: Japan (20% of total exports in 2015), South Korea (19%), India (12%) and China (6%). Asian countries account for a majority of LNG exports (c.67% in 2016) while the MENA region accounts for a lower share (c.9%). The Investment Adviser does not envisage significant disruption in exports to the Asian region from the current stand-off.

Embedded image removed - please refer to the Company's website www.qatarinvestmentfund.com for a chart depicting Qatari exports and imports (as % of GDP) to its neighbours.

Imports from Bahrain, Egypt, Saudi Arabia and the UAE accounted for about 3% of Qatar's GDP in 2016. A substantial portion of Qatari imports of consumer and industrial goods (c.17%) arrive in the form of re-exports from UAE ports and other GCC countries. To tackle the land and sea blockade, Qatar has diverted its trade from UAE's Dubai port to Oman's Sohar and Salalah ports.

Qatar has one-year reserve of primary materials needed for major construction projects. The Investment Adviser considers the near and medium-term impact on the infrastructure programme is manageable. However, if the current conditions continue, Qatar will have to source building materials from elsewhere, which could possibly widen the budget deficit.

The airspace blockade has forced Qatar Airways to shut down 52 routes and incur additional costs from diverting flights on other routes. Qatar has approached the International Civil Aviation Organization's (ICAO) to resolve the airspace dispute.

Qatar seeks to limit damage from the stand-off with Saudi led allies

While the sanctions have disrupted flows of imports and other materials into Qatar from these neighbouring countries, Qatar has moved to address any potential food and material shortage by sourcing alternative sources of supply.

Qatar is heavily dependent on Saudi Arabia for its food imports (it imports roughly 40% of its food overland through Saudi Arabia), but the Qatari authorities have routed shipments through Iran, India and Turkey, mitigating the impact on food supplies and other materials.

Qatar's Central bank should be able to handle tightening of liquidity

The Saudi central bank has ordered Saudi banks not to increase their exposure to Qatari clients and not to process payments in Qatari riyals. The UAE Central Bank has asked local lenders to run an enhanced customer due diligence for any accounts held in the six Qatari banks.

December 2016 data from the seven Qatari listed banks shows deposits and other funding from GCC countries accounted for c.8.2% of total liabilities (QAR 88.9 billion). At the end of April 2017, Qatari banks' net external debt totaled about USD 50 billion and had an average maturity of less than one year. With a significant portion of this debt in Europe and Asia, Qatari banks should be able to handle any possible withdrawal of Gulf deposits. Moreover, Qatar Investment Authority (QIA) has injected billions of dollars of cash in Qatari banking system to shore up liquidity.

Embedded image removed - please refer to the Company's website www.qatarinvestmentfund.com for a chart depicting Qatar banking system liabilities by geography

Expect a negotiated settlement, at some point

The Investment Adviser considers the near and medium term economic impact from the current stand-off for Qatar is largely manageable, given the country's small size (2.7 million population), its wealth (GNI/capita of USD 84,000) and net foreign assets (reserves and investment funds are more than 250% of GDP), as well as its relatively limited trade ties with the blockading nations.

There is room for both sides to come to a settlement, however, the timing of this is uncertain. In the meantime, the Qatari market is expected to remain volatile, depending on news flow. The Investment Adviser still sees most businesses in Qatar functioning as relatively normally.

OPEC and non-OPEC members agree to extend production cuts for nine months

OPEC and non-OPEC members, agreed to extend the production cut agreement to March 2018, to help balance the oil market. However, supplies remain high and production from non-participating countries, including the U.S., has risen, capping crude prices far below the USD 60 a barrel level earmarked by the OPEC. Brent crude oil dropped to its lowest level this year on the day of the meeting, as traders expected deeper reductions or a longer duration for the cut. Rising output from Libya and Nigeria (both exempt from the deal to cut production) also contributes. Moreover, the International Energy Agency sees new supplies from competitors of OPEC and its allies outpacing global demand growth next year, making the objective of a balance in demand-supply harder to achieve. Industry experts fear that although the extension of the deal to March 2018 is a good indication, but is insufficient as muted demand would not be able to balance supply until at least the end of 2019.

Macroeconomic Update

According to the Ministry of Development Planning and Statistics (MDPS), the Qatari economy continued to grow in Q1 2017, with GDP rising 2.5% compared to Q1 2016. The non-hydrocarbon sector GDP grew 4.9% YoY, mainly driven by an expansion in construction, financial and insurance services, and real estate activities. The hydrocarbon sector remained flat during the quarter.

The population in Qatar grew by 7.3% YoY in FY16 and 4.0% YTD to 2.7 million at the end of May 2017, an all-time high, driven by the continued influx of expatriates. Population growth is expected to remain strong as large projects continue although we have not yet seen the impact of the blockade on population numbers. Personal consumption is expected remain high and to continue to benefit domestic and services sector companies.

Qatar's recent decision to lift the moratorium on new gas development at North Field could give it a competitive edge after 2020, when the global LNG market is expected to tighten as current low LNG prices are anticipated to deter investment in high cost competing projects, leading to tighter supply and better prices. Qatar's low-cost base gives it a competitive advantage over other established LNG suppliers.

Earlier this year, International Monetary Fund (IMF) indicated that it anticipates economic growth in Qatar to remain the strongest (at 3.4%) in the region in 2017, as preparations in the run-up to the 2022 FIFA World Cup continue to have a positive impact on the economy. However, the economic impact of current situation on Qatar and the region will depend on how deep and sustained the disruptions to trade and financing flows are.

Going forward, the Investment Adviser believes that Qatar's real GDP growth will remain robust in the long term, driven by strong growth in the non-hydrocarbon sector. However, in the near-term economic growth will probably be impacted.

Other Recent Developments

S&P downgrades Qatar

S&P Global Ratings has lowered Qatar's long-term rating to 'AA-' from 'AA', due to the GCC dispute. Tension between the Arab nations could weigh on Qatar's economic growth and fiscal metrics in the near-term, as related revenues from regional trade will weaken. Given the uncertainties regarding Qatar's response and the measures that may be imposed, S&P will review the impact of the diplomatic rift again on 25 August.

Qatar to boost its LNG output by 30% to 100 mtpa

Qatar which previously announced new gas development at the North Field, plans to raise its LNG capacity by 30% in the next five to seven years. The new project in the southern section is expected to raise Qatar's total LNG production capacity to 100 million tonnes from the current 77 million tonnes per annum.

Qatar's non-oil exports reach QAR 6.3 billion in the first four months of 2017

Qatar's non-oil exports in April 2017 stood at QAR 1.3 billion, while the total volume of non-oil exports in the first four months of 2017 reached QAR 6.3 billion, according to Qatar Chamber's monthly report. As per the report, non-oil exports fell 27.3% MoM and 18.4% YoY in April 2017.

Qatar introduces a new index to measure production volume of industrial products

Qatar has introduced a new Industrial Production Index (IPI), an index that measures the changes in the volume of production of a selected basket of industrial products. The index consists of four main components: mining (with a weight of 83.6%), manufacturing (15.2%), electricity (0.7%) and water (0.5%).

Qatar's IPI grew 0.6% QoQ in Q1 2017, mainly on account of production increases in crude and natural gas, as well as of refined petroleum products and basic metals. On a yearly basis, the IPI fell 0.2% in Q1 2017, primarily on lower production in the manufacturing segment.

Local banks account for 97% of total QAR 762.2 billion deposits in Qatar

Total deposits in Qatar's banking system stood at QAR 762.2 billion as of May 2017, almost 97% was with local lenders and just over 3% with foreign banks, according to QCB data. Of the total deposits, the private sector share stood at QAR 377.5 billion (c.50%), followed by the public sector at QAR 200.2 billion (26%) and non-residents at QAR 184.6 billion (24%). Moreover, of the total deposits, QAR 519.6 billion (71%) was with conventional lenders and QAR 217.0 billion (29%) with Islamic banks.

Qatar's inflation may rise to an average of 2.8% in 2017 on subsidy cuts, new taxes

According to Fitch Group's BMI Research, Qatar's inflation is expected to average 2.8% in 2017 (2.7% in 2016), as the government has removed long-standing energy subsidies and linked domestic petrol and diesel prices to global markets. The government has announced plans to implement higher taxes on goods deemed harmful to health or the environment and on certain luxury items. BMI expects an interest rate hike of 25 basis points in 2017 and another two similar hikes in 2018 and 2019.

Qatar construction market set to record double-digit growth

According to BMI, Qatar will be among the fastest-growing construction markets globally over the next five years, recording double-digit growth, as the government is committed to meet its infrastructure needs. Qatar's construction market, with a projected 12.1% growth over 2017-21, will benefit from investment into preparations for hosting the FIFA World Cup 2022.

QSE removed Ezdan from the QSE indices

The Index Committee of the Qatar Stock Exchange (QSE) temporarily removed Ezdan Holding Group from the QSE indices, after the company transformed itself into a private joint stock company and is in the process of delisting from QSE. The removal came into effect from May 29, after QFMA approval. Ezdan's weight was proportionately redistributed to the remaining index constituents of the QE Index and the QE Al Rayan Islamic Index. QIF has no holding in Ezdan.

Qatar sells QAR 5.6 billion of government bonds, focuses on long end of the yield curve

On 17 April 2017, QCB announced that it had sold QAR 5.6 billion (USD 1.5 billion) of domestic bonds, with the issuance heavily focused on the long end of the yield curve. The QCB sold QAR 150 million of three-year bonds at a yield of 2.75%, QAR 800 million of five-year at 3.35%, QAR 1.7 billion of seven-year at 4.0%, and QAR 2.9 billion of 10-year at 4.5%.

Qatargas has signed a new SPA with Shell

Qatargas has signed a new sale and purchase agreement (SPA) with Shell, under which it will deliver up to 1.1 million tonnes of LNG a year to Shell for five years.

Qatar sees 7% growth in tourist arrivals to May

The number of tourist arrivals to Qatar increased by 7% to May 2017, compared to the same period last year. Americans and Europeans arrivals contributed most, with a rise of 9% and 14%, respectively.

Leisure visitors increased 27%, demonstrating the success of the diverse leisure options for tourists. We have yet to see the impact of the blockade on tourist numbers.

Qatar's power generation capacity to rise 50% in two years

Qatar's power generation capacity is projected to increase by 50% in the next two years. Plans are in place to increase the country's power capacity to 13.1 GW by 2018. Qatar needs USD 9 billion investment in its power sector from 2016-20, Mena project tracker Venturesonsite noted in its GCC Power Market report.

Qatar's current capacity is 8.8 GW and demand is around 8.2 GW. With the completion of ongoing projects, including the Umm Al Houl plant, the estimated installed capacity is expected to exceed about 11,000 MW of electricity and 490 MIGD of water by the end of 2018.

FTSE Russell has doubled the weight of 20 QSE firms from 20th March 2017

FTSE Russell (part of London Stock Exchange) has doubled the investible weight of 20 of the 22 selected QSE-listed companies, effective from 20th March. This was the second tranche of the FTSE's Qatar emerging market upgrade as announced in FY16. In September 2016, FTSE Russell confirmed the inclusion of all the earlier indicated 22 stocks in its secondary emerging market index. Analysts estimated the increased weightings could attract over USD 300m of fresh, passive funds to Qatar.

Global LNG demand reaches 265 million tonnes in FY16: Shell

Global demand for LNG saw imports increasing by 17 million tonnes to reach 265 million tonnes in FY16. The demand increase was due to the addition of six new importing countries since FY15: Colombia, Egypt, Jamaica, Jordan, Pakistan and Poland. LNG demand is expected to grow at the rate of 4-5% between FY15 and FY30, according to Shell.

Qatar is expected to target a number of key LNG import growth markets in emerging Asia and Latin America, according to BMI Research. In BMI's view, Qatar's expanding investments abroad allows the country to overcome domestic production constraints, diversify its production base and secure entry into new international markets.

Corporate Profitability

Sector Net Profit (QAR '000)	LTM 6/30/2016	LTM 6/30/2017	% Change
Banks & Financial Services	20,426,110	19,861,369	-2.8%
Insurance	2,139,976	1,274,120	-40.5%
Services & Consumer Goods	2,171,195	1,810,140	-16.6%
Industry	8,692,753	6,352,023	-26.9%
Real Estate	3,118,177	3,959,307	27.0%
Telecoms	2,112,302	1,600,740	-24.2%
Transportation	2,187,476	1,497,843	-31.5%
Total	40,847,989	36,355,542	-11.0%

Source: QE website

Net profit calculation for the 12 months ending 30 June 2017 is based on restated net profit numbers.

For the 12 months up to 30 June 2017, net profits of the Qatar Exchange (QE) listed companies declined substantially by 11.0% compared to the 12 months ending 30 June 2016. All the sectors reported reduced profits except for the Real Estate sector. This decline can be majorly attributed to the fall in net profits of the industrial sector, whose performance was affected due to weaker oil prices.

The 44 companies listed on the QE reported an overall net profit of QAR 36.4 billion (US$10.0 billion) for the year ended 30 June 2017, as against QAR 40.8 billion (US$11.2 billion) reported for the year ended 30 June 2016. The net profit of the Banking & Financial Services sector dropped 2.8%, mainly driven by the fall in profits of listed Qatari banks (net profit at Qatari listed banks decreased 3.2% during the period). The performance of Qatari listed banks was affected due to significant rise in loan loss provisions during the period. However, the banking & financial services sector heavyweight, Qatar National Bank, continued to report strong performance, with a 7.1% rise in net profit during the said period. Industrial sector net profit declined 26.9% due to a dismal performance by the sector heavyweight, Industries Qatar. Net profit at Industries Qatar fell 36.1% in the 12 months to 30 June 2017, on weaker product prices and lower demand for its products. Mesaieed Petrochemical Holding Company reported a 17.1% drop net profits. Gulf International Services reported losses during the said period, primarily on lower utilisation & day rates and also due to impairments & write-offs relating to assets. The net profit of the Insurance sector declined 40.5%, led by a sharp fall in net profit of Qatar General Insurance and Re-insurance Company. Transportation sector' net profit declined by 31.5%. Net profit of the Telecom sector declined by 24.2%, led by a sharp fall in net profit at Ooredoo QSC (the net profit was lower as the company had made substantial gains from forex in the 12 months ending 30 June 2016). Services & consumer goods sector reported a 16.6% fall in net profit during the period, as sector heavyweight, Qatar Fuel Company, witnessed a 31.8% decline in its net profit. The Real Estate sector was the only sector to report higher profit during the period (up 27.0%), led by net profit growth reported by Barwa Real Estate, Ezdan Holding and United Development Company.

Looking ahead, the Investment Adviser believes that some form of negotiated settlement would be reached between Qatar and its neighbours over time, to resolve the current standoff. Hence, while the near-term earnings growth in Qatari listed companies will probably be impacted adversely, the outlook for earnings growth over the medium to long-term is robust. Increasing infrastructure spending, growing population, improved oil prices, robust growth in the non-hydrocarbon sectors and new developments in the hydrocarbon sector are key positives for domestic companies especially in the banking, real estate, consumer and transportation sectors.

Portfolio Structure

Country Allocation

As at 30 June 2017, QIF had 26 holdings: 19 in Qatar and 7 in the UAE (Q1 2017: 24 holdings: 18 in Qatar and 6 in the UAE). The Investment Adviser decreased exposure to the UAE to 7.1% of NAV from 7.9%, while exposure to Qatar was reduced to 82.9% of NAV from 84.3%. Cash at 30 June was 10.0% of NAV (Q1 2017: 7.8%).

Embedded image removed - please refer to the Company's website www.qatarinvestmentfund.com for a chart depicting Country Allocation as at 30 June 2017.

Source: QIC

Sector Allocation

Embedded image removed - please refer to the Company's website www.qatarinvestmentfund.com for a chart depicting Sector Allocation as at 30 June 2017.

The Banking sector (including Financial Services) remains a priority sector for QIF at 37.8% of NAV (Q1 2017: 38.8%). QIF tactically went underweight on the sector vs. QE index weighting of 46.4% (Q1 2017: 39.8%), as valuations for some banks look expensive. The index weighting in the banking sector also increased during the quarter following the removal of Ezdan whose weight was redistributed proportionately to the remaining constituents. Qatar National Bank remains QIF's largest holding (13.9% of NAV). For the period between December 2016 to May 2017, credit in Qatar continued to grow (up 5.0%) driven by the public sector (up 12.2%). The Investment Adviser believes that loan growth will continue in the medium to long term, as the Qatari government is expected to continue with its infrastructure development plans, notwithstanding the current standoff. Qatar is also expected to invest hugely on new development projects in North Field in an effort to significantly increase LNG output.

Industrials remain QIF's second largest exposure at 23.3% of NAV (Q1 2017: 23.7%), led by Industries Qatar (10.9% of NAV). The holding in Gulf International Services decreased to 3.4% from 4.5%.

Exposure to the Real Estate sector fell to 10.1% from 11.7%, while holdings in the Telecom sector rose to 7.7% from 5.7%. The exposure to the Transportation and Services & Consumer Goods sectors decreased to 5.9% and 2.3% from 6.8% and 2.6%, respectively. Exposure to the Insurance sector reduced marginally to 2.9% (Q1 2017: 3.0%).

Top 10 Holdings

Company Name	Sector	% share of NAV
Qatar National Bank	Banks & Financial Services	13.9%
Masraf Al Rayan	Banks & Financial Services	11.9%
Industries Qatar	Industrials	10.9%
Ooredoo	Telecoms	6.6%
Qatar Electricity & Water Co	Industrials	5.7%
Barwa Real Estate	Real Estate	5.6%
Qatar Gas Transport	Transportation	4.6%
Commercial Bank of Qatar	Banks & Financial Services	4.4%
Gulf International Services	Industrials	3.4%
Qatar National Cement Co	Industrials	3.3%

Source: QIC

In Q2, the Investment Adviser increased the cash holding to 10.0% of NAV, as the Qatari market is expected to remain volatile until a settlement on the rift with the nation's neighbours is reached. The weighting of top 10 holdings is reduced to 70.4% from 71.0% in Q1 2017, primarily due to lower holdings in Qatar National Bank and Gulf International Services.

Profile of Top Five Holdings (As at 30 June 2017):

Qatar National Bank (13.9% 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 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 largest shareholder in QNB is the Government of Qatar through the Qatar Investment Authority (QIA), with a 50% equity stake. The government is strongly committed to support QNB, thus enhancing its economic importance. QNB is the largest bank in Qatar with total assets of QAR 768.1 billion (USD 211.0 billion) as at 30 June 2017. For the H1 2017, QNB reported a 6.5% YoY growth in net profit to QAR 6.7 billion (USD 1.8 billion). QNB is well positioned to reap the benefits of the rapid expansion of the domestic economy and has been growing its presence in overseas markets as well. The bank, through its subsidiaries and associate companies, operates in more than 31 countries, through more than 1250 branches, supported by more than 4,300 ATMs and employs more than 27,900 staff.

Masraf Al Rayan (11.9% of NAV)

Masraf Al Rayan (MARK) was incorporated as a Qatari Shareholding Company under Qatar Commercial Company law on 4 January 2006. It is licensed by the Qatar Central Bank and began commercial operations in October 2006. The bank has three main business divisions, namely retail banking, wholesale banking and private banking. Besides this, the bank offers investment banking and treasury products. As of December 2016, MARK had a network of 13 branches in strategic locations across Qatar, and a total of 80 ATMs. As at the end of June 2017, its financing assets stood at QAR 68.0 billion (USD 18.7 billion). In H1 2017, MARK reported a net profit of QAR 1.0 billion (USD 0.3 billion).

Industries Qatar (10.9% of NAV)

Industries Qatar (IQCD) is a holding company with interests in petrochemicals via 80% owned Qatar Petrochemical Co., fertilizers via 75% owned Qatar Fertilizer Co., steel via its wholly owned subsidiary Qatar Steel Co. and fuel additives via 50% owned Qatar Fuel Additives Co. For H1 2017, the company's net profit declined 19.1% YoY to QAR 1.6 billion (USD 0.4 billion), majorly on lower steel revenues. Additionally, the operational performance of polyethylene and fertilizer segments was affected due to some planned and unplanned maintenance during H1 2017. IQCD expects operational performance to improve with the on-going cost optimization programs. Moreover, IQCD is closely monitoring the effect of the blockade and is accordingly amending the flow of operations and activities.

Ooredoo (6.6% of NAV)

Ooredoo (ORDS) is a leading international communications company delivering mobile, fixed, broadband internet and corporate managed services tailored to the needs of consumers and businesses across markets in the Middle East, North Africa and Southeast Asia. Serving consumers and businesses in 10 countries, Ooredoo delivers leading data experience through a broad range of content and services via its advanced, data-centric mobile and fixed networks. Ooredoo has a presence in several markets such as Qatar, Kuwait, Oman, Algeria, Tunisia, Iraq, Palestine, the Maldives, Myanmar and Indonesia. The company reported revenues of QAR 16.3 billion (USD 4.5 billion) and net profit of QAR 1.1 billion (USD 0.3 billion) in H1 2017 and had a consolidated global customer base of 149 million customers as at 30 June 2017.

Qatar Electricity & Water Co. (5.7% of NAV)

Qatar Electricity & Water Co. (QEWS) was established in 1990 as the first private sector company engaged in electricity production and water desalination businesses. The company is the second largest utility company in the North Africa and Middle East region. In Qatar, the company enjoys a ~62% market share in the electricity business, while in the water desalination business it commands a 79% market share. Over the past decade, the company has been the key beneficiary of rapid development in Qatar, coupled with the growth in population, resulting in increased demand for electricity and water. Additionally, the company has entered into overseas markets with the establishment of Nebras Power Company (60% owned by QEWS), which invests globally in new and existing power generation and water desalination projects. QEWS has a low risk profile due to its exposure in the infrastructure and utilities sector in Qatar. For H1 2017, the company reported 2.4% rise in its net profit to QAR 0.8 billion (USD 0.2 billion).

Embedded image removed - please refer to the Company's website www.qatarinvestmentfund.com for a chart depicting QIF Performance.

On 30 June 2017, the QIF share price was trading at a 19.1% discount to NAV per share.

Historic Performance

	2007 5M	2008	2009	2010	2011	2012	2013	2014	2015	2016	H1 2017
QIF NAV*	13.9%	-36.4%	10.4%	29.9%	1.3%	-4.7%	24.2%	20.6%	-14.6%	-2.6%	-11.0%
QE Index	27.0%	-28.8%	1.1%	24.8%	1.1%	-4.8%	24.2%	18.4%	-15.1%	0.1%	-13.5%
QIF Share Price	15.5%	-67.5%	97.3%	23.0%	-2.3%	2.4%	26.4%	17.4%	-17.0%	-4.5%	-16.0%

Source: Bloomberg, QIC; Note: *Net of dividends paid

Valuations

Market	Market Cap.	PE (x)		PB (x)	Dividend Yield (%)
	USD million	2017E	2018E	2017E	2017E
Qatar	103,824	13.52	11.83	1.70	3.69
Saudi Arabia	469,991	14.86	13.29	1.56	3.03
Dubai	79,807	10.35	8.60	1.14	4.30
Abu Dhabi	115,908	11.93	10.95	1.32	4.47
Oman	15,121	9.67	9.07	0.90	NA

Source: Bloomberg, Prices as of 29 June 2017

Outlook

The Investment Adviser believes that Qatar is well positioned for continued long-term growth as macroeconomic fundamentals remain strong. However, if the stand-off between Qatar and its neighbours continues, it could have short term impact on economic growth. While the Investment Adviser believes that there is room for both sides to come to a conclusion, the timing of normalisation in ties is uncertain. A peaceful resolution is most likely and anticipated to happen gradually.

Oil prices above budgeted levels (USD 45) would provide the Qatari government flexibility in continuing its commitment to planned major infrastructural projects in line with the Qatar National Vision 2030. Additionally, Qatar's fiscal buffers and sizeable assets should help it maintain its stable position in the GCC region.

The Qatari government is likely to continue with its investment spending program despite the current situation as it prepares for FIFA 2022, driving the nation's non-hydrocarbon sector growth. Moreover, Qatari authorities plan to invest heavily on new development of gas projects in the North field is expected to improve the contribution to GDP from the hydrocarbon sector.

The Investment Adviser believes that although the Qatari economy is strong enough to sustain the current challenging situation, markets could be volatile until a settlement is reached. Meanwhile, the QIF portfolio is positioned conservatively, with cash having been increased to about 10% to help limit volatility.

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

6 September 2017 6 September 2017

Investment Policy

Investment Objective

The Company's investment objective is to capture, principally through the medium of the Qatar Exchange, 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 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 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. In accordance with the annual dividend policy the Company paid a dividend for the year ended 30 June 2016. 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 the 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 2018, 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 and Company financial statements of Qatar Investment Fund plc (the "Company") for the year ended 30 June 2017.

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 17 to 18.

Results and Dividends

The results of the Company for the year and its financial position at the year- end are set out on pages 38 to 48 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 2016, the Directors declared a dividend of US$4,116,639 (4.0c per share) which was approved by Shareholders and paid by the Company in January 2017.

Directors

Details of Board members at the date of this report, together with their biographical details, are set out on page 28.

Director independence and Directors' and other interests have been detailed in the Directors' Remuneration Report on pages 32 and 33.

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 (2016: US$ nil).

Donations

The Company has not made any political or charitable donations during the year (2016: 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, however Shareholders will be given the opportunity to vote for the continued existence of the Company at the annual general meeting (AGM) in 2018 and every third AGM thereafter.

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 16 November 2017 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 27, which forms part of the Report of the Directors.

Substantial Shareholdings

As at the date of publication of this annual report, the Company had been notified, or the Company is aware of the following significant holdings in its Share Capital.

	Ordinary Shares
Name	%
City of London Investment Management Company	29.98
Qatar Insurance Company S.A.Q.	17.90
Qatar Investment Authority	11.66
Lazard Asset Management	9.18
1607 Capital Partners LLC	8.89
Centrum Bank	4.37

The above percentages are calculated by applying the Shareholdings as notified to the Company or the Company's awareness to the issued Ordinary Share Capital as at 30 June 2017.

On behalf of the Board

Nicholas Wilson

Chairman

6 September 2017

Millennium House

46 Athol Street

Douglas

Isle of Man

IM1 1JB

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 to 2004. The Board confirms that the Company is in compliance with the relevant provisions of the Companies Acts.

Compliance with the Association of Investment Companies (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 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 2014 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 regularly enough 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 2017, the Audit Committee considered the following significant issues, in particular those communicated by the auditor during their reporting:

Carrying value of quoted equity investmentss

The valuation of investments is undertaken in accordance with the accounting policies, disclosed in note 1(a) 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 is 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(8)	6(6)	1(1)	2(2)	4(4)
	Meetings Attended (entitled to attend)
Nicholas Wilson (Chairman and Chairman of Nomination Committee)	7 (8)	6 (6)	1 (1)	2 (2)	4 (4)
Neil Benedict (Chairman of Remuneration Committee and Chairman of Management Engagement Committee)	8 (8)	6 (6)	1 (1)	2 (2)	4 (4)
Leonard O'Brien	8 (8)	0 (0)*	0 (0)*	0 (0)*	0 (0)*
David Humbles	1 (1)	0 (0)*	0 (0)*	0 (0)*	0 (0)*
Paul Macdonald (Chairman of Audit Committee)	8 (8)	6 (6)	1 (1)	2 (2)	4 (4)

*Not a member of the committee.

The Annual General Meeting was held on 17 November 2016.

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.

Internal Control continued

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 2017 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 29.

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.

Viability statement

The Board makes an assessment of the longer term prospects of the Company beyond the timeframe envisaged under the going concern basis of accounting having regard to the Company's current position and the principal risks it faces.

The Company is a long term investment vehicle and the directors, therefore, believe that it is appropriate to assess its viability over a long term horizon. The Board considers that assessing the Company's prospects over a period of five years is appropriate given the nature of the Company and the inherent uncertainties of looking out
over a longer time period. The directors believe that a five year period appropriately reflects the long term strategy of theCompany and over which, in the absence of any adverse change to the regulatory environment, they do not expect there to be any significant change to the current principal risks and to the adequacy of the mitigating controls in place.

Notwithstanding the above the Company's Shareholders will have the opportunity to vote for the cessation of the Company at the annual general meeting in 2018. Shareholders holding at least 51% of the ordinary shares must vote in favour of this resolution in order for it to pass, if it is not passed, a similar cessation vote will be proposed at every third annual general meeting thereafter.

On behalf of the Board

Nicholas Wilson

Chairman

6 September 2017

Board of Directors

Nicholas Wilson (Non-Executive Chairman)

Nicholas Wilson has over 40 years of experience in hedge funds, derivatives and global asset management. He has run offshore branch operations for Mees Pierson Derivatives Limited, ADM Investor Services International Limited and several other London based financial services companies. He is a director of EPE Special Opportunities PLC and until recently was chairman of Alternative Investment Strategies Limited. He is a resident of 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.

David Humbles (Non-Executive Director)

David Humbles was born in 1960 and is British. He has 3 children and two grandchildren and has recently been widowed. He worked in the downstream oil industry for 25 years and relocated to the Isle of Man in 1998 as Director of Total. In 2003, David purchased Abbey Properties Ltd and St Paul's Property Services Ltd. These companies own & manage a property complex in the north of the island incorporating residential apartments, retail units & office accommodation. Also in 2003 David formed Westminster Properties Ltd to manage a large portfolio of residential and commercial properties on the island. David has been Managing Director of Oakmayne since 2006. This company is a residential developer in the London market. See www.oakmayneproperties.com. David was Chairman of Epicure Berlin Property Company until February 2017, a large private property fund which owns residential property in Berlin. He has served on the board of two AIM listed companies.

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. Under the law they have elected to prepare the Group and Parent Company financial statements in accordance with International Financial Reporting Standards (IFRSs).

Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and parent Company and of their profit or loss for that period. In preparing each of the Group and parent Company financial statements, the directors are required to:

· select suitable accounting policies and then apply them consistently;

· make judgements and estimates that are reasonable, relevant and reliable;

· state whether they have been prepared in accordance with IFRSs;

· assess the Group and parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

· use the going concern basis of accounting unless they either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the parent Company and enable them to ensure that its financial statements comply with the Companies Acts 1931 to 2004. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and 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 a Directors' Report and Corporate Governance Statement that complies with that law and those regulations.

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.

Disclosure Guidance and Transparency Rules responsibility 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 position, 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

6 September 2017

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 17 November 2016. 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 6 September 2017.

Paul Macdonald

Chairman of the Audit Committee

6 September 2017

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

6 September 2017

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. At the AGM too be held on [16 November 2017] Mr Nicholas Wilson, Mr Paul Macdonald, Mr Neil Benedict and Mr David Humbles will be retiring in accordance with the Articles of Association and standing for re-election. . Mr Leonard O'Brien who retires in accordance with the corporate governance codes adopted by the Nomination Committee of the Company has decided not to stand for re-election as a director of the Company.

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 2017	30 June 2016
	£	£
Nicholas Wilson (Chairman)	57,500	57,500
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	32,500
David Humbles (joined Board 15 May 2017)	3,874	-
	153,874	150,000
US$ charge reflected in the financial statements	201,621	222,014

Expenses totalling US$95,424 (2016: US$116,385) were incurred by the Directors and reimbursed during the year.

No other remuneration or compensation was paid or payable by the Company during the period to any of the Directors.

Director independence

Mr Nicholas Wilson and Mr Paul Macdonald have each served as independent Non-executive Directors of the Company for more than nine years, and Mr Wilson has served as non-executive Chairman since 13 November 2012. Notwithstanding the length of their service, Mr Wilson and Mr Macdonald continue to demonstrate their commitment to fulfilling their role as non-executive Chairman and Non-executive Director respectively, and satisfy the independence factors set out in Code Provision B.1.1 of the Code except for the length of their service.

They are not involved in the daily management of the Company nor in any relationships or circumstances which might possibly interfere with their exercise of independent judgment. In addition, they continue to demonstrate the attributes of independent Non-executive Directors and there is no evidence that their tenure has had any adverse impact on their 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 2017	30 June 2016
Director	Shares	Shares
Leonard O'Brien	31,840	36,182
Nicholas Wilson	44,000	43,000

For and on behalf of the Board

Neil Benedict

Chairman of the Remuneration Committee

6 September 2017

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 is unmodified

We have audited the financial statements of Qatar Investment Fund plc ("the Company") for the year ended 30 June 2017 which comprise the Consolidated and Parent Company Income Statements, Statements of Comprehensive Income, Balance Sheets, Statements of Changes in Equity and Statements of Cash Flows, and the related notes and accounting policies.

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 2017 and of the Group's and Parent Company's loss 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.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our responsibilities are described below. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. Our audit opinion is consistent with our report to the audit committee.

We were appointed as auditor by the shareholders on 31 October 2008. The period of total uninterrupted engagement is the 10 financial years ended 30 June 2017. We have fulfilled our ethical responsibilities under, and we remain independent of the Group in accordance with, UK ethical requirements including the FRC Ethical Standard as applied to listed public interest entities. No non-audit services prohibited by that standard were provided.

2. Key audit matters: our assessment of risks of material misstatement

Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the financial statements and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. We summarise below the key audit matter (unchanged from 2016) in arriving at our audit opinion above, together with our key audit procedures to address that matter and, as required for public interest entities, our results from those procedures. This matter was addressed, and our results are based on procedures undertaken, in the context of, and solely for the purpose of, our audit of the financial statements as a whole, and in forming our opinion thereon, and consequently are incidental to that opinion, and we do not provide a separate opinion on this matter.

2. Key audit matters: our assessment of risks of material misstatement continued

The risk

Our response

Carrying amount of quoted equity investments (US$102.1m; 2016: US$141.2m)

Refer to page 24 (Significant Issues identified by the Audit Committee), notes 1(a), 2 and 8 (accounting policy for financial assets at fair value through profit or loss and financial risk disclosures relating to financial instruments).

The company's portfolio of quoted investments makes up 88.6% of the company's total assets (by value) and is considered to be the key driver of results. We do not consider these investments to be at a high risk of significant misstatement, or to be subject to a significant level of judgement because they comprise liquid, quoted investments as at 30 June 2017. 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 procedures included:

- Control design: Documenting and assessing the processes in place to record investment transactions and to value the portfolio;

- Tests of detail: Agreeing the valuation of 100 per cent of investments in the portfolio to externally quoted prices; and

- Enquiry of custodians: Agreeing 100 per cent of investment holdings in the portfolio to independently received third party confirmations from investment custodians.

Our results: No exceptions were identified.

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

Materiality for the group financial statements as a whole was set at US$1,150,000 (2016: US$1,400,000), determined with reference to a benchmark of group total assets, of which it represents 1% (2016: 1%).

Materiality for the parent company financial statements as a whole was set at US$1,140,000 (2016: US$1,400,000), determined with reference to a benchmark of company total assets, of which it represents 1% (2016: 1%).

We agreed to report to the Audit Committee any corrected or uncorrected identified misstatements exceeding US$57,500 for both the group and parent company financial statements, in addition to other identified misstatements that warranted reporting on qualitative grounds.

The group's one subsidiary was subjected to full scope audit for group purposes by the Group team and subject to the same materiality level as the group and parent company audits.

4. We have nothing to report on going concern

We are required to report to you if:

· we have anything material to add or draw attention to in relation to the directors' statement in note 13.1 to the financial statements on the use of the going concern basis of accounting with no material uncertainties that may cast significant doubt over the Group and Company's use of that basis for a period of at least twelve months from the date of approval of the financial statements; or

· the related statement under the Listing Rules set out in the Report of the Directors on page 20 is materially inconsistent with our audit knowledge.

We have nothing to report in these respects.

5. We have nothing to report on the other information in the Annual Report

The directors are responsible for the other information presented in the Annual Report together with the financial statements. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon.

5. We have nothing to report on the other information in the Annual Report continued

Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work we have not identified material misstatements in the other information.

Directors' report

Based solely on our work on the other information:

· we have not identified material misstatements in the directors' report;

· in our opinion the information given in the directors' report for the financial year is consistent with the financial statements; and

· in our opinion the directors' report has been prepared in accordance with the Companies Acts 1931 to 2004.

Disclosures of principal risks and longer-term viability Based on the knowledge we acquired during our financial statements audit, we have nothing material to add or draw attention to in relation to:

· the directors' confirmation within the viability statement on page 28 that they have carried out a robust assessment of the principal risks facing the Group, including those that would threaten its business model, future performance, solvency and liquidity;

· the principal risks disclosures describing these risks and explaining how they are being managed and mitigated; and

· the directors' explanation in the viability statement of how they have assessed the prospects of the Group, over what period they have done so and why they considered that period to be appropriate, and their statement as to whether they have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions.

Under the Listing Rules we are required to review the viability statement. We have nothing to report in this respect.

Corporate governance disclosures

We are required to report to you if:

· we have identified material inconsistencies between the knowledge we acquired during our financial statements 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 position and performance, business model and strategy; or

· the section of the annual report describing the work of the Audit Committee does not appropriately address matters communicated by us to the Audit Committee.

We are required to report to you if the Corporate Governance Statement does not properly disclose a departure from the eleven provisions of the UK Corporate Governance Code specified by the Listing Rules for our review.

We have nothing to report in these respects.

6. We have nothing to report on the other matters on which we are required to report by exception

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 financial statements 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.

6. We have nothing to report on the other matters on which we are required to report by exception continued

We have nothing to report in these respects.

7. Respective responsibilities

Directors' responsibilities

As explained more fully in their statement set out on page 29, the directors are responsible for: the preparation of the financial statements including being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing the Group and parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud, other irregularities, or error, and to issue our opinion in an auditor's report. Reasonable assurance is a high level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud, other irregularities or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. The risk of not detecting a material misstatement resulting from fraud or other irregularities is higher than for one resulting from error, as they may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control and may involve any area of law and regulation not just those directly affecting the financial statements.

A fuller description of our responsibilities is provided on the FRC's website at www.frc.org.uk/auditorsresponsibilities.

8. The purpose of our audit work and to whom we owe our responsibilities

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.

Nicholas Quayle

Responsible Individual

For and on behalf of KPMG Audit LLC

Statutory Auditor

6 September 2017

Chartered Accountants

Heritage Court

41 Athol Street

Douglas

Isle of Man

IM99 1HN

Consolidated Income Statement

	Note	Year ended 30 June 2017	Year ended 30 June 2016
		US$'000	US$'000

Income
Dividend income on quoted equity investments		4,707	5,551
Realised loss on sale of financial assets at fair value through profit or loss		(3,922)	(4,268)
Net changes in fair value on financial assets at fair value through profit or loss		(4,912)	(36,278)
Commission rebate income on quoted equity investments		15	-
Net foreign exchange loss		(181)	-
Total net expense		(4,293)	(34,995)

Expenses
Investment Manager's fees	7	1,281	1,722
Performance fees	7	-	-
Other expenses	7	1,061	1,230
Total operating expenses		2,342	2,952

Loss before tax		(6,635)	(37,947)

Income tax expense	9	-	-
Loss for the year		(6,635)	(37,947)

Basic loss per share (cents)	4	(6.06)	(30.03)
Diluted loss per share (cents)	4	(6.06)	(30.03)

The Directors consider that all results derive from continuing activities.

Consolidated Statement of Comprehensive Income

	Year ended 30 June 2017	Year ended 30 June 2016
	US$'000	US$'000

Loss for the year	(6,635)	(37,947)
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss:
Currency translation differences	(3)	(33)
Total items that are or may be reclassified subsequently to profit or loss	(3)	(33)
Other comprehensive expense for the year (net of tax)	(3)	(33)
Total comprehensive loss for the year	(6,638)	(37,980)

Company Income Statement

	Note	Year ended 30 June 2017	Year ended 30 June 2016
		US$'000	US$'000

Income
Net change in investment in and amounts due from subsidiary		(8,848)	(40,372)
Intercompany loan interest income		2,969	3,551
Total net expense		(5,879)	(36,821)

Expenses
Expenses	7	759	1,159
Total operating expenses		759	1,159

Loss before tax		(6,638)	(37,980)

Income tax expense		-	-
Loss for the year		(6,638)	(37,980)

Company Statement of Comprehensive Income

	Year ended 30 June 2017	Year ended 30 June 2016
	US$'000	US$'000

Loss for the year	(6,638)	(37,980)
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 loss for the year	(6,638)	(37,980)

Consolidated Balance Sheet

	Note	At 30 June 2017	At 30 June 2016
		US$'000	US$'000

Current Assets
Financial assets at fair value through profit or loss	1(a)	102,124	141,242
Other receivables and prepayments		2,468	346
Cash and cash equivalents		10,670	1,447
Total current assets		115,262	143,035

Equity
Issued share capital	5	1,032	1,194
Retained earnings		25,425	36,177
Distributable reserves		86,486	103,904
Other reserves		1,227	1,068
Total equity		114,170	142,343

Current liabilities
Other payables and accrued expenses	6	1,092	692
Total current liabilities		1,092	692
Total equity and liabilities		115,262	143,035

The financial statements were approved by the Directors on 6 September 2017 and signed on their behalf by:

Paul Macdonald Leonard O'Brien

Director Director

Company Balance Sheet

	Note	At 30 June 2017	At 30 June 2016
		US$'000	US$'000

Current assets
Due from subsidiary	1(b)	113,276	141,041
Other receivables and prepayments		848	1,002
Cash and cash equivalents		199	398
Total current assets		114,323	142,441

Equity
Issued share capital	5	1,032	1,194
Reserves		113,138	141,149
Total equity		114,170	142,343

Current liabilities
Other payables and accrued expenses	6	153	98
Total current liabilities		153	98
Total equity and liabilities		114,323	142,441

The financial statements were approved by the Directors on 6 September 2017 and signed on their behalf by:

Paul Macdonald Leonard O'Brien

Director Director

Consolidated Statement of Changes in Equity

	Share Capital (note 10)	Distributable Reserves	Retained Earnings	Foreign Currency Translation Reserve	Capital Redemption Reserve	Total
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
Balance at 1 July 2015	1,396	131,559	78,866	(180)	1,079	212,720
Total comprehensive income for the year
Loss for the year	-	-	(37,947)	-		(37,947)
Other comprehensive income					-
Foreign exchange translation differences	-	-	-	(33)	-	(33)
Total other comprehensive expense	-	-	-	(33)	-	(33)
Total comprehensive expense for the year	-	-	(37,947)	(33)	-	(37,980)
Contributions by and distributions to owners
Dividends paid	-	-	(4,742)	-	-	(4,742)
Shares repurchased to be held in treasury	-	(2,399)	-	-	-	(2,399)
Shares subject to tender offer	(193)	(25,141)	-	-	193	(25,141)
Tender offer expenses	-	(115)	-	-	-	(115)
Shares in treasury cancelled	(9)	-	-	-	9	-
Total contributions by and distributions to owners	(202)	(27,655)	(4,742)	(33)	202	(32,397)
Balance at 30 June 2016	1,194	103,904	36,177	(213)	1,281	142,343

	Share Capital (note 10)	Distributable Reserves	Retained Earnings	Foreign Currency Translation Reserve	Capital Redemption Reserve	Total
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
Balance at 1 July 2016	1,194	103,904	36,177	(213)	1,281	142,343
Total comprehensive income for the year
Loss for the year	-	-	(6,635)	-	-	(6,635)
Other comprehensive income
Foreign exchange translation differences	-	-	-	(3)	-	(3)
Total other comprehensive expense	-	-	-	(3)	-	(3)
Total comprehensive expense for the year	-	-	(6,635)	(3)	-	(6,638)
Contributions by and distributions to owners
Dividends paid	-	-	(4,117)	-	-	(4,117)
Shares repurchased to be held in treasury	-	(543)	-	-	-	(543)
Shares subject to tender offer	(140)	(16,817)	-	-	140	(16,817)
Tender offer expenses*	-	(58)	-	-	-	(58)
Shares in treasury cancelled	(22)	-	-	-	22	-
Total contributions by and distributions to owners	(162)	(17,418)	(4,117)	-	162	(21,535)
Balance at 30 June 2017	1,032	86,486	25,425	(216)	1,443	114,170

*Exceptional expenses relating to tender offer

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

Company Statement of Changes in Equity

	Share Capital	Reserves	Total
	US$'000	US$'000	US$'000
Balance at 1 July 2015	1,396	211,324	212,720
Total comprehensive income for the year
Loss for the year	-	(37,980)	(37,980)
Total comprehensive expense for the year	-	(37,980)	(37,980)
Contributions by and distributions to owners
Dividends paid	-	(4,742)	(4,742)
Shares repurchased to be held in treasury	-	(2,399)	(2,399)
Shares subject to tender offer	(193)	(24,948)	(25,141)
Tender offer expenses	-	(115)	(115)
Shares in treasury cancelled	(9)	9	-
Total contributions by and distributions to owners	(202)	(32,195)	(32,397)
Balance at 30 June 2016	1,194	141,149	142,343

	Share Capital	Reserves	Total
	US$'000	US$'000	US$'000
Balance at 1 July 2016	1,194	141,149	142,343
Total comprehensive income for the year
Loss for the year	-	(6,638)	(6,638)
Total comprehensive expense for the year	-	(6,638)	(6,638)
Contributions by and distributions to owners
Dividends paid	-	(4,117)	(4,117)
Shares repurchased to be held in treasury	-	(543)	(543)
Shares subject to tender offer	(140)	(16,677)	(16,817)
Tender offer expenses	-	(58)	(58)
Shares in treasury cancelled	(22)	22	-
Total contributions by and distributions to owners	(162)	(21,373)	(21,535)
Balance at 30 June 2017	1,032	113,138	114,170

Consolidated Statement of Cash Flows

	Note	Year ended 30 June 2017	Year ended 30 June 2016
		US$'000	US$'000

Cash flows from operating activities
Purchase of investments		(62,272)	(105,650)
Proceeds from sale of investments		90,788	131,172
Dividends received		4,707	5,551
Operating expenses paid		(2,357)	(3,125)
Commission rebate		15	-
Net cash generated from operating activities		30,881	27,948

Financing activities
Dividends paid		(4,117)	(4,742)
Cash used in tender offer		(16,817)	(25,141)
Tender offer expenses		(58)	(115)
Cash used in share repurchases		(543)	(2,399)
Net cash used in financing activities		(21,535)	(32,397)

Net increase/(decrease) in cash and cash equivalents		9,346	(4,449)
Effects of exchange rate changes on cash and cash equivalents		(123)	(60)
Cash and cash equivalents at beginning of the year		1,447	5,956
Cash and cash equivalents at end of the year		10,670	1,447

Company Statement of Cash Flows

	Note	Year ended 30 June 2017	Year ended 30 June 2016
		US$'000	US$'000

Cash flows from operating activities
Due from subsidiary		22,162	32,605
Operating expenses paid		(824)	(1,038)
Net cash generated from operating activities		21,338	31,567

Financing activities
Dividends paid		(4,117)	(4,742)
Cash used in tender offer		(16,817)	(25,141)
Tender offer expenses		(58)	(115)
Cash used in share repurchases		(543)	(2,399)
Net cash used in financing activities		(21,535)	(32,397)

Net decrease in cash and cash equivalents		(197)	(830)
Effects of exchange rate changes on cash and cash equivalents		(2)	-
Cash and cash equivalents at beginning of the year		398	1,228
Cash and cash equivalents at end of the year		199	398

Notes to the Consolidated Financial Statements

1(a) 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

Group

30 June 2017: Financial assets at fair value through profit or loss; all quoted equity securities.

Security name

Number

US$'000

Qatar National Bank (QNBK QD)

Masraf Al Rayan (MARK QD)

Industries Qatar (IQCD QD)

Ooredoo (ORDS QD)

Qatar Electricity & Water Co (QEWS QD)

Barwa Real Estate (BRES QD)

Qatar Gas Transport (QGTS QD)

Commercial Bank of Qatar (CBQK QD)

Gulf International Services (GISS QD)

Qatar National Cement Co (QNCD QD)

Emaar Properties Company (EMAAR UH)

Qatar Insurance (QATI QD)

Qatar United Development Company (UDCD QD)

Al Meera Consumer Goods Co (MERS QD)

ABU DHABI Commercial Bank (ADCB UH)

Dubai Islamic Bank (DIB UH)

Gulf Warehousing (GWCS QD)

Qatar Islamic Bank (QIBK QD)

Vodaphone Qatar (VFQS QD)

Emirates National Bank of Dubai (ENBD UH)

First Abu Dhabi Bank (FAB UH)

DXB ENTERTAINMENTS (DXB UH)Doha Bank (DHBK QD)

National Leasing (NLCS QD)

Union National Bank (UNB UH)

Al Khaleej Bank (KCBK QD)

475,653

1,307,544

496,285

313,557

130,960

754,724

1,170,619

626,605

714,227

218,303

1,288,408

185,453

541,612

58,402

1,098,579

1,060,000

121,250

120,645

552,351

300,000

180,000

2,395,627

51,303

65,678

150,000

34,968

16,088

13,798

12,595

7,598

7,153

6,482

5,329

5,022

3,912

3,837

2,718

2,585

2,473

2,123

2,096

1,642

1,540

1,251

1,247

653

510

493

415

248

190

126

102,124

Group

30 June 2016: Financial assets at fair value through profit or loss; all quoted equity securities:

Security name

Number

US$'000

Qatar National Bank (QNBK QD)

Industries Qatar (IQCD QD)

Masraf Al Rayan (MARK QD)

Qatar Electricity & Water Co (QEWS QD)

Qatar Islamic Bank (QIBK QD)

Gulf International Services (GISS QD)

Ooredoo (ORDS QD)

Commercial Bank of Qatar (CBQK QD)

Qatar United Development Company (UDCD QD)

Qatar Gas Transport (QGTS QD)

Emaar Properties Company (EMAAR UH)

Gulf Warehousing (GWCS QD)

Qatar Insurance (QATI QD)

Qatar National Cement Co (QNCD QD)

Barwa Real Estate (BRES QD)

Al Meera Consumer Goods Co (MERS QD)

Vodaphone Qatar (VFQS QD)

ABU DHABI Commercial Bank (ADCB UH)

National Leasing (NLCS QD)

First Gulf Bank (FGB UH)

Dubai Parks & Resorts (DUBAIPARKS UH)

Al Khaleej Bank (KCBK QD)

Qatar First Bank (QFBQ QD)

683,713

572,193

1,524,260

190,508

374,001

888,779

338,144

713,923

1,310,961

845,564

3,013,500

311,235

204,421

142,268

306,692

30,874

567,971

775,000

217,437

250,000

1,780,725

152,060

90,000

26,339

15,385

14,135

10,541

9,810

8,900

8,212

7,247

6,837

5,399

5,077

4,918

4,044

3,326

2,743

1,780

1,644

1,274

1,041

854

783

672

281

141,242

Risks relating to financial instruments comprise market price risk, credit risk, interest rate risk and foreign currency risk. These are detailed below and in notes 2, 6 and 8.

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 2017	30 June 2016
	US$'000	US$'000
Financial assets at fair value through profit or loss	102,124	141,242
Cash and cash equivalents	10,670	1,447
Other receivables	2,468	346
	115,262	143,035

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. All amounts are due within one month of the year end.

Investments are held by the Custodian, HSBC Bank (Middle East) Ltd.

The Group uses the banking services of HSBC (Middle East) Ltd and Barclays (Isle of Man) PLC. HSBC has a credit rating of A2 assigned by Moody and Barclays has a credit rating of A- from Standard and Poors.

Other receivables principally comprise unsettled trades.

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 2017	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	-	-	-	-	-	102,124	102,124
Other receivables and prepayments	-	-	-	-	-	2,468	2,468
Cash	10,670	-	-	-	-	-	10,670
Total financial assets	10,670	-	-	-	-	104,592	115,262
Financial Liabilities
Other creditors and accrued expenses	-	-	-	-	-	(1,092)	(1,092)
Total financial liabilities	-	-	-	-	-	(1,092)	(1,092)

Total interest rate sensitivity gap	10,670	-	-	-	-

Interest rate risk continued

30 June 2016	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	-	-	-	-	-	141,242	141,242
Other receivables and prepayments	-	-	-	-	-	346	346
Cash	1,447	-	-	-	-	-	1,447
Total financial assets	1,447	-	-	-	-	141,588	143,035
Financial Liabilities
Other creditors and accrued expenses	-	-	-	-	-	(692)	(692)
Total financial liabilities	-	-	-	-	-	(692)	(692)

Total interest rate sensitivity gap	1,447	-	-	-	-

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.

1(b) Investments and amount due from subsidiary

	30 June 2017	30 June 2016
	US$'000	US$'000

Investment in subsidiary	-	-
Amount due from subsidiary	113,276	141,041

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.

2 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.

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

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 89% 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 2017, if the market value of the investment portfolio had increased/decreased by 0.87% (as per the movement in the Qatar Exchange Index post year-end) with all other variables held constant, this would have increased/decreased net assets attributable to Shareholders by approximately US$0.88 million (30 June 2016 : 6.5% : US$9.2 million).

3 Net Asset Value per Share

The net asset value per share as at 30 June 2017 is US$1.1113 per share (30 June 2016: US$1.2138) based on 102,734,713 (30 June 2016: 117,273,702) Ordinary Shares in issue as at that date.

4 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 2017	30 June 2016

Loss attributable to equity holders of the Company (US$'000)	(6,635)	(37,947)
Weighted average number of Ordinary Shares in issue (thousands)	109,498	126,353
Basic and diluted (loss)/earnings per share (cents per share)	(6.06)	(30.03)

5 Share Capital

	30 June 2017	30 June 2016
	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:
102,734,713 (2016: 117,273,702) Ordinary Shares of US$0.01 each in issue, with full voting rights	1,027	1,173
493,445 (2016: 2,102,373) Ordinary Shares of US$0.01 each held in Treasury	5	21
Issued share capital	1,032	1,194

During the year to 30 June 2017 the Company repurchased 493,445 (2016: 2,102,373) Ordinary Shares, to be held in treasury, at a cost of US$542,871 (2016: US$2,339,545) and cancelled 2,102,373 (2016: 890,509) 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 12 December 2016 the Company completed a tender offer at a price of US$1.1973 per share (7 December 2015: US$1.3004 per share). Under the tender offer 14,045,544 shares (7 December 2015: 19,333,165) were repurchased and cancelled.

During the year US$58,373 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 Group. 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.

6 Other payables and accrued expenses

Group

	30 June 2017	30 June 2016
	US$'000	US$'000
Due to broker	649	221
Management fee payable	278	357
Administration fee payable	56	56
Accruals and sundry creditors	109	58
	1,092	692

Company

	30 June 2017	30 June 2016
	US$'000	US$'000
Administration fee payable	50	50
Accruals and sundry creditors	103	48
	153	98

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 2017	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	1,092	-	-	-	-	-
	1,092	-	-	-	-	-
30 June 2016	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	692	-	-	-	-	-
	692	-	-	-	-	-

7 Charges and Fees

	Group 30 June 2017	Company 30 June 2017	Group 30 June 2016	Company 30 June 2016
	US$'000	US$'000	US$'000	US$'000
Investment Manager's fees (see below)	1,281	-	1,722	-
Performance fees (see below)	-	-	-	-
Administrator and Registrar's fees (see below)	225	199	261	233
Audit fees	28	28	34	34
Custodian fees (see below)	119	4	139	7
Directors' fees and expenses	297	297	338	338
Directors' insurance cover	31	31	37	37
Broker fees	51	51	59	59
Other	310	149	362	451
Other expenses	1,061	759	1,230	1,159

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 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 0.90% of the net asset value of the Company from 1 November 2016,subject to termination on 31 October 2019.

Annual management fees for the year ended 30 June 2017 amounted to US$1,281,315 (30 June 2016: US$1,722,189) and the amount accrued but not paid at the year-end was US$277,684 (30 June 2016: US$356,885).

Performance fees

From 1 November 2016 the Investment Manager was no longer entitled to a performance fee.

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 2017 amounted to US$225,086 and US$32,838 for additional services (30 June 2016: US$261,255 and US$33,061 respectively). Outstanding Administration fees at the year end amounted to US$56,747 (30 June 2016: US$56,320).

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 2017 amounted to US$118,780 (30 June 2016: US$139,116) and the amount accrued but not paid at the year-end was US$4,034 (30 June 2016: US$5,615).

8 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") as reporting to shareholders is in US Dollars and the shares are quoted in US Dollars..

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 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.

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 2017	30 June 2016
	%	%

British Pound	(0.03)	0.02
Omani Rial	0.00	0.00
US Dollar	0.41	0.02
Qatari Riyal	88.19	93.79
Kuwaiti Dinar	0.00	0.00
UAE Dirham	11.43	6.17

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 2017	Monetary Assets	Monetary Liabilities	Net Exposure
	US$'000	US$'000	US$'000

British Pound	20	(59)	(39)
US Dollar	852	(384)	468
Qatari Riyal	100,689	-	100,689
UAE Dirham	13,052	-	13,052
	114,613	(443)	114,170
30 June 2016	Monetary Assets	Monetary Liabilities	Net Exposure
	US$'000	US$'000	US$'000

British Pound	26	(5)	21
US Dollar	497	(466)	31
Qatari Riyal	133,504	-	133,504
UAE Dirham	8,787	-	8,787
	142,814	(471)	142,343

Foreign currency sensitivity risk - presentational currency

At 30 June 2017 had the US Dollar weakened/strengthened by 1% (2016 : 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 2017	US$'000
British Pound	-
Kuwaiti Dinar	-
UAE Dirham	130
Effect on net assets	130

30 June 2016	US$'000
British Pound	-
Kuwaiti Dinar	-
UAE Dirham	88
Effect on net assets	88

Foreign currency sensitivity risk - functional currency

As 88% of net assets are denominated in QAR and QAR is the functional currency there is no significant functional currency risk. The Qatari Riyal 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 is included in the translation reserve on consolidation.

9 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/United Arab Emirates(U.A.E.) 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/U.A.E. or doing business in Qatar/U.A.E.

Qatar/U.A.E. does not impose withholding tax on dividend distributions by Qatar/U.A.E. companies to non-residents.

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

There is no stamp duty or equivalent tax on the transfer of shares in Qatar/U.A.E. companies.

Kuwait taxation

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

10 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 1(a)). 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 7.

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.

11 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 to 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 2017, the Company purchased 493,445 (2016: 2,102,373) of its Ordinary Shares for a total value of US$542,871 (2016:US$2,339,545) to be held in treasury. 2,102,373 shares had been repurchased in the year ended 30 June 2016 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 12 December 2016 the Company completed a tender offer at a price of US$1.1973 per share (previous offer US$1.3004 per share). Under the offer 14,045,544 shares were cancelled (previous offer 19,333,165 shares) with US$16,816,730 being paid to participating shareholders (previous offer US$25,140,848).

The shareholders approved a dividend of 4.0 cents per share on 17 November 2016 (previous dividend 4.0 cents per share); this was paid to shareholders on 31 January 2017.

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 2018 a resolution will be proposed that the Company ceases to continue in existence.

12 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 BVI Companies Act 2001, as a limited liability company with registration number 1415393. The principal activity of the subsidiary is holding investments on behalf of the Company.

13 Significant Accounting Policies

The consolidated financial statements of the Company for the year ended 30 June 2017 comprise the Company and its subsidiary, Note 1(b), (together referred to as the "Group").

Accounting policies for certain items have been included in the relevant note.

13.1 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 to 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.

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 2016.

These consolidated financial statements have been prepared on the going concern basis, as the Board of Directors has a reasonable expectation that the Group and Company have the resources to continue in business for the foreseeable future. In making this assessment, the Directors have considered a wide range of information relating to present and future conditions, including the date of the next continuation vote for the Company (as described in the Investment Policy), future projections of profitability, cash flows and capital resources.

The Group's principal activities, investment objective and strategy and principal risks and uncertainties are described in the Chairman's Statement, Business Review, Investment Policy and Corporate Governance Report.

The Group's approach to capital management is described in note 5. The Group's objectives, policies and processes for managing credit, foreign exchange, liquidity and market risk along with the are described in Notes 1(a), 2, 6 and 8 of the financial statements.

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.

13.2 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.

13.2 Basis of consolidation continued

Transactions eliminated on consolidation

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

13.3 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.

13.4 Investments in and amounts due from subsidiary

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

13.5 Treasury shares

In accordance with shareholder authority shares continue to be bought back to be held in treasury in order to manage the discount between share price and NAV.

13.6 Cash and Cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short-term highly liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of changes in value.

13.7 Future changes in accounting policies

A number of new standards, amendments to standards and interpretation are not yet effective for year ended 30 June 2017, 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.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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