Half Yearly Report

RNS Number : 3420Y

Qatar Investment Fund PLC

21 February 2013

 



Qatar Investment Fund plc

Interim Results for the six months ended 31 December 2012

Qatar Investment Fund plc ("QIF") the London main market listed fund established to invest in Qatar and the Gulf Co-operation Council region, announces interim results for the six months ended December 2012.

Nicholas Wilson, Chairman of Qatar Investment Fund plc, said:

"The Qatar Exchange Index remained fairly stable over the six months, continuing to show low volatility relative to other global markets.  Although the outlook for company profits is good, the Qatar market underperformed broader global indices. However, the Board believes that it is merely a question of time before the increase in corporate profits translates into higher share prices. Qatar's near to long-term growth prospects remain compelling, largely driven by a strong infrastructure pipeline of US$150 billion as the country prepares for the 2022 FIFA World Cup, coupled with record budget spending plans during 2013, supportive demographics and improving spending trends."

Highlights

·     For the six months QIF showed a profit after tax of US$3.78m, generated from fair value adjustments and realised gains, and equivalent to basic earnings per share of 1.75 cents.

·     Net Asset Value per Share (NAV) at 31 December 2012 was US$1.0022 and over the period fell slightly by 0.8%, as against a rise of 2.3% in the Qatar Exchange Index.

·     During the period a dividend of 3.0 cents was declared.

·     The share price rose by 3.4% and the discount narrowed to 9.2%.

Nicholas Wilson, Chairman of Qatar Investment Fund plc, added

"For the Qatari economy the outlook is excellent with real GDP expected to rise by 5% in 2013, which makes it the fastest growing economy in the Gulf Co-operation Council region. Qatar can look forward to massive infrastructure spending of around US$30 billion earmarked for major projects - annually - over the next three years. The population of Qatar rose 6.56% in the year to the end of December 2012. Continued growth in the non-hydrocarbon Qatari economy combined with improving demographics should lead to significant improvements in corporate profitability.

"The Investment Adviser is forecasting earnings per share growth of 12-15% for our portfolio companies and a steady stream of newsflow about major infrastructure projects being started in the first half of 2013."

Discontinuation Vote and Tender Offer

·     At the Annual General Meeting on 14th November, the resolution for the Company to cease to continue was defeated with 98.4% of the votes cast being against discontinuation.

·     At the same meeting, shareholders overwhelmingly approved the revised investment policy enabling the Company to gain exposure to Saudi Arabian companies.

·     41 million shares were tendered in the tender offer at US$1.0219 per share, equating to 93.5% of the shares available under the tender offer.

Nicholas Wilson, Chairman of Qatar Investment Fund plc, added:

"During the period good progress was made in reducing our expenses, with savings in custody and transaction costs, as well as a reduction in the basis on which the administrator's fee is calculated. These cuts combined with a number of other measures lead us to believe that there will be a reduction in the total expense ratio for the next financial year to below 2%."

For further information:

Qatar Investment Fund Plc -  [phone] Nicholas Wilson Panmure Gordon - [phone] Andrew Potts

Maitland - [phone]

William Clutterbuck

Chairman's Statement

On behalf of the Board, I am pleased to present the interim results for Qatar Investment Fund Plc for the six-month period ending 31 December 2012.

Results

Results for the six months showed a profit after tax of US$3.78m, generated from fair value adjustments and realised gains, and equivalent to basic earnings per share of 1.75 cents. Net Asset Value per Share (NAV) fell slightly by 0.8%, as against a rise of 2.3% in the Qatar Exchange Index over the same period. During the period a dividend of 3.0 cents was declared with an ex-dividend date of 12 December. The share price rose by 3.4% following a narrowing of the discount to 9.2%.

The Qatar Exchange Index remained fairly stable over the six months, continuing to show low volatility relative to other global markets. Although the outlook for corporate profitability remains favourable, the Qatar market underperformed broader global indices. However, the Board along with the Investment Manager and Adviser consider that it is merely a question of time before the increase in corporate profits translates into higher share prices.

At the Company's Annual General Meeting on 14^th November, the resolution for the Company to cease to continue in existence was defeated with 98.4% of the votes cast being against discontinuation.

At the Extraordinary General Meeting held on the same day, shareholders approved a resolution authorising the Company to make market purchases under the 20% tender offer announced on 17 October. This was conditional upon the defeat of the discontinuation resolution and resulted in  41,552,272 shares being tendered and repurchased by the Company and cancelled; this equating to 18.7% of the shares in issue as at 17 October (excluding treasury shares) and 93.54% of the shares available under the Tender Offer. On 7 December, the Board announced that that Tender Price was US$1.0219 per share.

At the same meeting, shareholders overwhelmingly approved the Revised Investment Policy enabling the Company to use derivative instruments to gain exposure to companies listed on the Saudi Arabian Stock Exchange.

Following the defeat of the discontinuation resolution, the Company entered into a new investment management agreement with the Investment Manager for a one year term expiring on 31 October 2013, with the same fee arrangements as the previous investment management agreement.

The Company's warrants, which had a term of five years, expired on 16 November 2012 with no warrants exercised. The warrants were cancelled from listing on 19 November 2012.

During the period good progress was made in reducing the expenses of the Company, with savings in custody and transaction costs, as well as a reduction in the basis on which the administrator's fee is calculated. These cuts combined with a number of other cost saving measures lead the Board to believe that there will be a reduction in the total expense ratio of the Company for the next financial year to below 2%.

Share buybacks

The Board continued to make use of its shareholder authority to buy back the Company's shares. During the period, a total of 3,657,131 ordinary shares were bought back to be held in treasury. 1,202,714 shares had been repurchased into treasury in the year ended 30 June 2012 but had been held for over a year and were therefore cancelled in the period.

Related Party Transactions

Details of related party transactions are contained in the Annual Report as well as being addressed in note 14 of this interim report.

Post balance sheet events

Details of these can be found in note 15 below

Outlook, risks and uncertainties

The outlook for the Qatari economy is excellent with real GDP expected to rise by 5% in 2013, which makes it the fastest growing economy in the Gulf Co-operation Council ("GCC") region. The country can look forward to significant infrastructure spending of around US$30 billion earmarked for major projects annually over the next three years. The Company's Investment Adviser is forecasting earnings per share growth of 12-15% for our portfolio companies and we expect a steady stream of newsflow about major projects being started in the first half of 2013.

Geopolitical risks remain on the agenda, as the aftermath of the Arab Spring continues to reverberate around the Middle East and North Africa, although Qatar remains a beacon of political stability among the uncertainties in the region.

The Board believes that the principal risks and uncertainties faced by the Company continue to 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 our Annual Report each year.

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

David von Simson

As shareholders will be aware, my predecessor as Chairman of your Company, David von Simson, died suddenly on 11 November. David chaired the Board for over five years with great leadership and wisdom. He will be sadly missed.

Nicholas Wilson

Chairman

20 February 2013

Director's Responsibility Statement

The Directors confirm that, to the best of their knowledge:

a)             the condensed set of financial statements has been prepared in accordance with IAS 34;

b)             the interim management report and Chairman's statement include a fair review of the information required by the Disclosure and Transparency Rule 4.2.7R (indication of important events during the first six months and a description of the principal risks and uncertainties for the remaining six months of the year respectively);

c)             in accordance with Disclosure and Transparency Rule 4.2.8R there have been no related party transactions during the six months to 31 December 2012 and therefore nothing to report on any material effect by such a transaction on the financial position or the performance of the Company during that period; and there have been no changes in this position since the last Annual Report that could have a material effect on the financial position or performance of the Company in the first six months of the current financial year.

The interim financial report has not been audited by the Company's Independent Auditor.

Nicholas Wilson

Chairman

20 February 2013

Report of the Investment Manager and the Investment Adviser

Market Overview

The performance of the major GCC markets is shown below:

Index	30-Jun-12	31-Dec-12	% Change
Qatar (DSM)	8,123	8,359	2.9%
Saudi Arabia (TASI)	6,586	6,801	3.3%
Dubai (DFMGI)	1,452	1,623	11.8%
Abu Dhabi (ADI)	2,448	2,631	7.5%
Kuwait (KWSE)	5,789	5,934	2.5%
Oman (MSI)	5,690	5,761	1.2%
Bahrain (BAX)	1,127	1,066	-5.4%

Source: Bloomberg

Global equity markets overcame their muted performance of 2011 with a strong rebound in 2012. During the year major financial markets worldwide showed a marked improvement on the end of 2011. Significant steps were taken in 2012 in Europe to avert a Eurozone crisis. In the United States, growth figures improved marginally in the last few months of 2012 and stock markets performed relatively well.

Gulf Cooperation Council (GCC) markets performed well in 2012, this was in line with global markets and against the backdrop of a relatively stable political and regional environment after the political unrest that swept across the Middle East. This was further supported by robust oil prices, government support for key economic sectors, the attractive investment opportunities driven by the favourable demographic profile and steady growth in corporate earnings. During the year several key developments took place in the GCC markets, which include the implementation of the bylaws and regulations of the Capital Markets Law issued by the Capital Markets Authority in Kuwait, the recovery of the real estate sector in Dubai and the decision by the Saudi Capital Markets Authority to allow listings by foreign companies that are already listed elsewhere.

In the past 12 months the Dubai market has generated the highest returns (+19.9%) buoyed by the local economy's resilient fundamentals. This was followed by Abu Dhabi with a 9.5% gain and Saudi with + 6.0%. The performance of the Qatar market was muted in the past 12 months compared to the other GCC markets. For the second half of 2012, all GCC markets ended on a positive note, except Bahrain. The Dubai market was the best performer during the six month period, growing 11.8%, followed by the Abu Dhabi market with 7.5% gains. The Qatar market returned +2.9% for the second half of 2012, with the market capitalization of the listed companies reaching US$126.3 billion at the end of 2012. Bahrain reported a dismal performance falling 5.4% in the second half of the year.

The Investment Adviser believes that Qatar's economy is largely driven by government and general infrastructure spending as the country prepares for the FIFA World Cup in 2022. Despite lower investor enthusiasm in 2012, economic statements and forecasts remained optimistic. The tripling of LNG sales to China partially offset delays in a number of expected tenders. The Investment Adviser believes that the long term growth story of Qatar remains intact, supported by massive hydrocarbon resources, significant government infrastructure spending, large currency reserves, domestic spending and the strong government balance sheet. Valued on the PEG ratio basis (which assesses valuation and future growth), the Investment Adviser believes that the Qatar market is the most attractive in the GCC region. Further support comes from the significant dividends paid by Qatari companies, with an estimated market dividend yield of 5.2% in 2012.

Macroeconomic Update

The Investment Adviser has a positive stance on GCC economies, particularly Qatar and Saudi Arabia. This upbeat outlook arises from the positive policy stance of GCC governments. High energy prices mean that GCC governments are expected to enjoy budget surpluses. Reports indicate the value of GCC oil output is expected to reach around US$1 trillion over 2010-2014, equivalent to the aggregate production over the preceding fifteen years. The leading oil producers are expected to enjoy continuing budget and current account surpluses, despite higher spending, allowing them to further strengthen their already robust balance sheets. Overall GCC states should generate a current account surplus of US$600 billion in 2013-4, equivalent to over 20% of GDP (source: HSBC). GCC governments are expected to continue with their expansionary budget plans, with increased spending on physical infrastructure and human resources. This in turn is likely to boost the profitability of regional companies, improving investor sentiment.

Qatar's nominal GDP up 5.9% in Q3 2012 versus Q3 2011

According to the Qatar Statistics Authority (QSA), Qatar's nominal GDP for Q3 2012 is estimated to have grown 5.9% compared to Q3 2011, to QAR175.29 billion, while compared to Q2 2012, growth was 1.3%. This was largely driven by non-oil and gas sectors such as Manufacturing, Government Services and Finance, Real Estate, Insurance & Business Services.

In inflation-adjusted terms Qatar's economy grew 3.9% to QAR87.05 billion in Q3 2012 compared to Q3 2011. The Mining and Quarrying sector (Oil and Gas sector) reported a decline of 0.8%. This slowdown was primarily caused by the shutdown of some LNG trains for maintenance. Overall non-oil real GDP increased 7.7% to QAR49.97 billion, with the Manufacturing sector reporting double digit growth. The Manufacturing sector generated 13.6% growth in gross value added (GVA) driven by higher production in Petrochemicals, Fertilizer, Aluminium and Gas to Liquids (GTL) products. Ahead of the 2022 World Cup, construction sector output rose 9.4% in Q3 2012 compared to Q3 2011.

According to the IMF, Qatar's real GDP is expected to grow 6.3% in 2012 and 4.9% in 2013. Growth in the near and long term is driven by government infrastructure spending under plans to boost non-hydrocarbon growth and prepare the country for 2022. The Investment Adviser expects project tenders and awards to commence in 2013. Qatar is expected to award projects to the tune of QAR90 billion in 2013, according to MEED.

Consumer Price Index (CPI) up 2.6% year-on-year to 112.4 in November 2012

Annual inflation in Qatar eased from 2.7% in October 2012 to 2.6% in November 2012. As compared to CPI in the previous month, prices reduced in several areas such as Garments & Footwear, Food, Beverages & Tobacco, Furniture, Textiles & Home appliances and Transport & Communications. Prices in the Rent, Fuel & Energy group increased from 1.3% in November 2012 compared to October. The CPI excluding the "Rent, Fuel and Energy" group reached 124.5, showing a decrease of 0.4% compared to October 2012.

The IMF expects inflation to remain moderate at 2.0% in 2012, increasing to 3.0% in 2013, driven largely by government spending leading to higher consumption growth.

Population up 7.1% year-on-year to 1.85 million in November 2012

The Qatar population continues to grow steadily, rising by 7.1% from November 2011 to November 2012. The Investment Adviser believes that the steady rise in the population is very encouraging and should drive domestic spending, improving the profitability of Qatari companies further. Qatar's population has grown over 18% in the 4 years to the end of December 2012, according to the QSA.

Strong infrastructure pipeline and buoyant construction sector growth

According to the recent BMI (Business Monitor International) report, Qatar's construction sector growth is expected to remain buoyant, driven by large infrastructure projects. According to the report, construction and energy projects to the tune of US$150 billion are in the pipeline. However, it is expected that margins of the Construction sector companies might decline because of rising construction costs.

Additionally, a report published by economic journal MEED Insight stated that Qatar will need additional power capacity of 8,216MW at a cost of US$10 billion by 2019 in order to meet rising electricity demand. Further, the Real Estate sector in Qatar is witnessing a boom, backed by growth in real estate transactions, which almost doubled in 2012. This led to a rise in land prices near existing and planned development projects across the country. Market reports stated that a steady rise in the price of land has been seen, particularly in Doha and other suburbs.

The Hospitality sector in Qatar has also reported impressive growth in 2012, largely driven by the opening of 18 new hotels with a total of 2,863 rooms. The total number of hotel rooms in Qatar has increased from 11,500 in 2011 to 14,363 in 2012. The strong infrastructure and construction pipeline is expected to favour selected Real Estate and Infrastructure companies and domestic banks in the near to long term.

Changes to QE Index Constituents and Weightings

Following the recent semi-annual review of QE Index constituents, the Qatar Exchange announced that from 1 October 2012, Al Meera and Qatar Insurance will not be a part of the QE Index and they will be replaced by The Investors and Mazaya. Also, after the scheduled review of the QE All Share Index, Al Ahli Bank has been added. The Qatar Exchange caps the maximum weight a single stock can represent on the QE Index at 15%. Based on 16 September 2012 closing prices, Qatar National Bank and Industries Qatar were both above this cap at 20.5% and 16.8% respectively. Accordingly their weights have been capped at 15% and excess weights have been distributed proportionately among the remaining QE Index constituents.

9M 2012: Corporate profitability increased by 1.8% year-on-year

Qatari companies continued to improve profitability during the first nine months of 2012, reporting an aggregate net profit of QAR28.53 billion (US$7.83 billion), up 1.8% compared to the same period in 2011. The growth was mainly driven by increased profits in the Banking and Financial Services sector and growing earnings in Industrials. During the period, the Insurance and Real Estate sectors reported a poor performance. During Q3 2012, Qatari companies reported a combined net profit of QAR10.16 billion (US$2.79 billion), representing a marginal rise of 0.4% for Q3 2012.

For the first 9 months of 2012, of the 41 listed Qatari Exchange companies (excluding Vodafone Qatar), 28 companies reported growth in earnings, 12 companies reported a decline and the remaining one company incurred losses. Strong growth was seen in the Telecommunications sector (+12.6%), followed by the Banking and Financial Services sector (+9.5%).

Financial Performance of Qatar's Market Sectors for 9M 2012 (Net Profit/Loss US$ '000s)

Sectors	9M 2011	9M 2012	% Change	Q3 2011	Q3 2012	% Change
Banking & Financial	3,148,639	3,448,985	9.5%	1,086,083	1,160,663	6.9%
Insurance	192,320	175,591	-8.7%	42,326	36,723	-13.2%
Industrial	2,300,586	2,466,005	7.2%	770,872	941,325	22.1%
Services & Consumer Goods	327,864	331,878	1.2%	104,922	115,789	10.4%
Real Estate	787,957	401,490	-49.0%	455,534	100,168	-78.0%
Telecoms	590,494	664,883	12.6%	202,908	326,027	60.7%
Transportation	344,788	345,963	0.3%	116,816	109,207	-6.5%
Total	7,692,649	7,834,795	1.8%	2,779,461	2,789,902	0.4%

Source: Qatar Exchange, QIC

Banking and Financial Services Sector

Banks in Qatar continued their strong performance during Q3 2012, driven by growth in lending underpinned by massive domestic infrastructure spending. Project tendering and awards are expected to start in 2013 and should create further opportunities for the domestic banking sector. Qatari banks' profits rose 9.5% in the 9 months to December 2012, reaching QAR12.34 billion (US$3.39 billion), compared to QAR11.27 billion (US$3.10 billion) recorded for 9M 2011, accounting for 43.3% of the total profit of the Qatar stock market. The Financial sector reported a 13.0% rise in net profit to QAR215.32 million (US$59.13 million) in the first 9 months of 2012 compared to 9M 2011. All eight banks reported growth in their 9M 2012 results with increases ranging from 1.8% for Qatar Islamic Bank to 15.0% for Qatar National Bank.

For the 9M 2012, the largest bank, Qatar National Bank (QIF's largest holding), reported a 15.0% growth in net profit to QAR6.23 billion (US$1.71 billion), and accounted for 50.4% of total banking sector profits. Commercial Bank of Qatar's net income increased 3.8% to QAR1.57 billion (US$0.43 billion) during the same period.

Industrial Sector

The Industrial sector recorded a rise in net profit from QAR8.37 billion (US$2.30 billion) for 9M 2011 to QAR8.98 billion (US$2.47 billion) in 9M 2012, growth of 7.2%. However the growth accelerated in Q3 2012 to 22.1% compared to Q3 2011. The sector accounted for 31.5% of the net profit of the market for the first nine months of 2012, the second largest following the Banking and Financial sector (44.0% contribution).

For the first 9 months of 2012 sector heavyweight Industries Qatar (IQ) reported a 6.6% increase in net profit to QAR6.66 billion (US$1.83 billion), representing not only 74.1% of the sector's net profit, but also 23.3% of the total Qatar market's net profit. The other sector heavyweight, Qatar Electricity and Water Co. (QEW) reported a 6.0% decline in net profit in the period, to QAR0.98 billion (US$0.27 billion) compared to 9M 2011, largely due to higher input costs.

Insurance Sector

The profitability of the Insurance sector was subdued in the first 9 months of 2012, with the sector's net profit decreasing 8.7% compared to 9M 2011. The five insurance companies reported aggregate net profit of QAR0.64 billion (US$0.18 billion) for 9M 2012 compared to QAR0.70 billion (US$0.19 billion) in 9M 2011, with 2 companies posting higher net profits as compared to the previous year and 3 generating lower profits compared to the same period in 2011. The largest company in the sector in terms of net profit, Qatar Insurance Company, reported a 9.6% decline in net profit to QAR0.42 billion (US$0.11 billion) for the 9 months period and contributed almost 65% of the sector's net profit.

Services and Consumer Goods Sector

For the 9M 2012, the Services and Consumer Goods sector, which accounted for 4.2% of the total stock market profits, reported a 1.2% increase in net profit to QAR1.21 billion (US$0.33 billion). Of the eight listed companies in the sector, five reported a higher figure; two reported lower net earnings; while losses at Qatar German Co for Medical Devices widened, compared with the same period last year.

The largest company by net profit in the sector, Qatar Fuel Company, reported a 1.3% drop in net profit to QAR0.88 billion (US$0.24 billion), for 9M 2012. Qatar Fuel Company accounted for 72.5% of the sector's net profit, lower than the 74.4% recorded for 9M 2011.

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Real Estate Sector

The Real Estate sector, comprising 5.1% of the total Qatar stock market net profits, reported the most significant decline in net profits, with a drop of 49.0% to QAR1.46 billion (US$0.40 billion) for 9M 2012. Of the 4 listed companies in the sector, 3 reported a sharp decline in their 9M 2012 net profits. The sector heavyweight by profit share, Barwa Real Estate Co reported a 6.5% fall in net profit to QAR0.78 billion (US$0.21 billion). United Development Company was the worst performer during the period, with net profit declining 77.1%. However, the sharp fall in net profit of United Development. Company was largely due to a prior period revaluation gain on investment properties amounting to QAR1.37 billion, reported during 9M 2011. Excluding the 2011 revaluation gain, the net profit of United Development declined 8.1% compared to the first 9 months of 2011. Ezdan Holding Group was the only company in the Real Estate sector to report higher net profit as compared to the 9M 2011.

Telecom Sector

The Telecom sector comprises two companies, Vodafone Qatar and Qatar Telecom. Vodafone Qatar was excluded from this profits comparison, since its fiscal year ends on March 31. The Telecom sector reported a 12.6% increase in net profit for the first 9 months of 2012 to QAR2.42 billion (US$0.66 billion). For Q3 2012, Qatar Telecom reported a 60.7% increase in net profit compared to Q3 2011, to QAR1.19 billion (US$0.33 billion).

Transportation Sector

For 9M 2012 the Transportation sector contributed 4.4% of the total Qatar market profits, yet reported a mere 0.3% growth in net profit to QAR1.26 billion (US$0.35 billion), with two out of three companies reporting higher earnings. The largest company by net profit in the sector, Qatar Navigation reported a 9.1% growth in net profit to QAR0.64 billion (US$0.18 billion) for 9M 2012. During the same period, Gulf Warehousing Company's net profit increased 31.1% to QAR60.05 million (US$16.49 million).

Country Allocation

Qatar remains the Investment Adviser's favourite market within the GCC due to the stable political environment, substantial hydrocarbon resources, significant currency reserves, strong government balance sheet and high growth prospects driven by the government infrastructure program.

Embedded image removed - please refer to the Company's website www.qatarinvestmentfund.com for a chart depicting Country breakdown as a percentage of NAV as at 31 December 2012.

Sector Allocation

Embedded image removed - please refer to the Company's website www.qatarinvestmentfund.com for a chart depicting Industry allocation as at 31 December 2012.

The Investment Adviser continues to maintain its positive stance on the Qatari Banking sector, with an aggregate sector weighting (including Financial Services) of 51.1% in the portfolio, down from 56.9% at the end of Q3 2012. Banks in Qatar are expected to capitalise on the improving investment environment in the country and large-scale infrastructure projects coming up in 2013. The Qatari government is continuing with its massive US$150 billion infrastructure program, ahead of 2022. The related project tendering and awards are expected to gather pace in 2013. The preparations for the big event have helped galvanise the construction of other long-term infrastructure projects, such as a metro and rail system, new airport, improved roads and new hotels.

In recent months, banks in Qatar have been returning to the capital markets to expand their finances, seeing growth domestically as well as in foreign markets. In November 2012, Qatar National Bank (QNB), the country's largest bank by assets, reported that it had successfully completed a US$1 billion bond issue in the international markets, through its Euro Medium Term Note (EMTN) programme. In October 2012, Qatar Islamic Bank (QIB) issued a US$750 million five-year sukuk (Islamic bond), while in late October 2012 Qatar International Islamic Bank (QIIB) successfully priced a US$700 million five-year sukuk, its first international capital market bond launch. QIIB mentioned that this capital would help the bank participate in major projects in Qatar, particularly in infrastructure development.

The second largest portfolio allocation, at 23.6%, is to the Industrial sector; particularly Industries Qatar (17.6% of the total Company NAV). The weighting of the Real Estate sector increased from 8.7% at the end of Q3 2012 to 9.0% at the end of the fourth quarter of 2012. The weighting of the Transportation sector stood at 4.8% of NAV at the end of Q4 2012. The allocation to the Insurance sector stood at 2.2%, while the fund's position in the Telecom sector increased to 4.4% at the end of Q4 2012 from 4.2% of NAV at the end of the third quarter.

Portfolio Structure

Top 10 Holdings

As at 31 December 2012, the top five investments comprised of 59.3% of the total NAV of the Company, unchanged from the end of the previous quarter (27 September 2012). The top 10 holdings of the Company constituted 84.4% of the total NAV, lower than 86.8% reported at the end of Q3 2012.

Company Name	Sector	% Share
Qatar National Bank	Banks & Financial Services	19.0%
Industries Qatar	Industry	17.6%
Commercial Bank of Qatar	Banks & Financial Services	8.7%
Masraf Al Rayan	Banks & Financial Services	7.7%
Barwa Real Estate	Real Estate	6.3%
Qatar Islamic Bank	Banks & Financial Services	5.8%
Doha Bank	Banks & Financial Services	5.6%
Qatar Electricity & Water Co	Industry	5.1%
Qatar Telecom	Telecommunication Services	4.4%
Qatar Navigation	Transportation	4.1%

Source: Bloomberg

At the end of Q4 2012, the Company held a total of 20 positions, 17 in Qatar, two in Oman, while the Company added one position in Dubai (at the end of Q3 2012: 20 positions in Qatar and two positions in Oman). At the end of Q4 2012, the cash position increased to 3.0% of the Company's NAV.

Profile of Top Five Holdings (As at 31 December 2012)

Qatar National Bank (19.0% 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 government is strongly committed to supporting the bank, thus further enhancing its systemic importance. The largest shareholder in QNB is the Qatar Investment Authority (QIA), with a 50% equity stake. QNB is the largest bank in Qatar with total assets of QAR366.8 billion (US$100.7 billion) as at 31 December 2012. For the FY2012, QNB reported 11.1% rise in net profit to QAR8.4 billion (US$2.3 billion). QNB is well positioned to reap the benefits of the rapid expansion of the domestic economy. The bank operates a large product distribution network in Qatar consisting of 400 branches and offices and 800 ATMs.

Industries Qatar (17.6% of NAV)

Industries Qatar (IQ) is the largest publicly traded company in Qatar. IQ is a holding company with interests in petrochemicals via 80% owned Qatar Petrochemical Co., fertilizers via 75% owned Qatar Fertilizer Co., steel via 100% owned Qatar Steel Co. and fuel additives via 50% owned Qatar Fuel Additives Co. As per IQ's 2012-16 business plan, the company has no major capex plan post 2013. In 2012, IQ invested about QAR0.8 billion in its new billet plant which is expected to be ready for commercial production by the end of 1Q 2013. The plant should attract at-least an additional investment of QAR200 million in 2013. In 2013 and 2014, IQ has planned capex to the tune of QAR0.68 billion and QAR0.5 billion for petrochemical segment, which would largely be utilized for up-gradation and debottlenecking of existing facilities, rather than building up new facilities. For the first 9 months of 2012, IQ reported a 6.6% increase in net profit to QAR6.66 billion (US$1.83 billion), representing not only 74.1% of the sector's net profit, but also 23.3% of the total Qatar market's net profit.

Commercial Bank of Qatar (8.7% of NAV)

Commercial Bank of Qatar (CBQ) was incorporated in 1975 as a full service commercial bank, offering a broad range of corporate, retail, Islamic, and investment banking products and services. CBQ is the second-largest commercial bank in Qatar with total assets of QAR76.4 billion (US$21.0 billion) as at 30 September 2012. CBQ offers retail, corporate Islamic and investment banking products in Qatar and through its associates also in the UAE and Oman. CBQ's capitalisation is strong with a Tier 1 ratio of 15.6% as at 30 September 2012. Asset quality has been improving since 2009. The NPLs ratio stood at 0.90% as at 30 September 2012, significantly down from 2.74% as at 30 September 2011.

Masraf Al Rayan (7.7% of NAV)

Masraf Al Rayan (MARK) was incorporated as a Qatari Shareholding Company under Qatar Commercial Company law on 4th January 2006. It was licensed by the Qatar Central Bank and began commercial operations in October 2006. Presently MARK has a total of 11 branches in strategic locations around Qatar, and a total of 33 ATMs. MARK offers Islamic commercial and investment banking services. It benefits from key positives such as its solid balance sheet, government backing, strong capitalization and low gearing. For the first 9 months of 2012, MARK reported a 7.0% increase in net profit to QAR1.08 billion (US$0.3 billion).

Barwa Real Estate (6.3% of NAV)

Barwa Real Estate Company (BRE) is one of the major real estate developers in Qatar. BRE generates its revenue from sales of developed land, semi developed land, residential units, commercial units and office space. The company primarily operates in Qatar, but it is also expanding its footprint in other regional countries. Through its non-controlling subsidiary Barwa Bank the company has extended its portfolio of businesses into the financial markets. Barwa was created by the government-owned Qatari Diar Real Estate Investment Company in 2004 to concentrate on building medium-sized residential and tourism developments locally and abroad. Barwa underwent an IPO on the Doha Securities Market in 2006 that raised US$330 million for 55% of the company's equity. Although the group's main activities remain in Qatar, Barwa has a wide array of investments and operations in 13 other countries regionally and internationally. For the first 9 months of 2012, BRE reported a 6.5% decline in net profit to QAR0.78 billion (US$0.21 billion).

Performance and Portfolio Structure

On 27 December 2012, the QIF NAV per share reached US$1.0026. At that date the QIF share price was trading at a 9.0% discount to NAV.

Embedded image removed - please refer to the Company's website www.qatarinvestmentfund.com for a chart depicting NAV compared to share price.

Historic Performance against the QE Index

Performance	2007 5M	2008	2009	2010	2011	2012
QIF (NAV)	13.90%	-36.40%	10.40%	29.90%	1.30%	-4.61%*
QE Index	27.00%	-28.80%	1.10%	24.80%	1.10%	-5.33%*

Source: Bloomberg, Qatar Insurance Company

* 27 Dec 2012 compared to 29 Dec 2011

Outlook

The Investment Adviser believes that Qatar's near to long term growth prospects remain compelling, largely driven by a strong infrastructure pipeline of US$150 billion as the country prepares for the 2022 FIFA World Cup, coupled with record budget spending plans during 2013, supportive demographics and improving spending trends.

The heavy spending by the government on large scale infrastructure projects is expected to drive lending growth in the country and is a reason the Investment Adviser favours selected domestic banks. Further, the Investment Adviser likes the Consumer and Retail sector companies, largely supported by favourable demographics and improving spending trends, highlighting the exciting demand story in the country.

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

20 February 2013                                                                                                                   20 February 2013

Consolidated Income Statement

		(Unaudited)	(Unaudited)
	Note	For the period from  1 July 2012 to 31 December 2012	For the period from 1 July 2011 to 31 December 2011
		US$'000	US$'000
Income
Interest income on cash balances		-	1
Realised gain on sale of financial assets at fair value through profit or loss		5,018	3,681
Net changes in fair value on financial assets at fair value through profit or loss		1,127	9,690
Commission rebate income on quoted equity investments	7	87	37
Total net income		6,232	13,409
Expenses
Investment Manager's fees	6	1,414	1,516
Audit fees		14	15
Other expenses	6	1,023	1,354
Total operating expenses		2,451	2,885
Profit before tax		3,781	10,524
Income tax expense	13	-	-
Retained profit for the period		3,781	10,524
Basic and diluted earnings per share (cents)	10	1.75	4.53

Consolidated Statement of Comprehensive Income

		(Unaudited)	(Unaudited)
		For the period from  1 July 2012 to 31 December 2012	For the period from 1 July 2011 to 31 December 2011
		US$'000	US$'000
Profit for the period		3,781	10,524
Other comprehensive loss
Currency translation differences		70	(15)
Other comprehensive loss for the period (net of tax)		70	(15)
Total comprehensive profit  for the period		3,851	10,509

Consolidated Balance Sheet

		(Unaudited)	(Audited)
	Note	At 31 December 2012	At 30 June 2012
		US$'000	US$'000
Financial assets at fair value through profit or loss	5	181,684	222,856
Due from broker		-	74
Other receivables and prepayments		86	50
Cash and cash equivalents	8	5,572	6,129
Total current assets		187,342	229,109
Issued share capital		1,903	2,330
Reserves	9	178,609	225,444
Total equity		180,512	227,774
Other creditors and accrued expenses	11	6,830	1,335
Total liabilities		6,830	1,335
Total equity & liabilities		187,342	229,109

Consolidated Statement of Changes in Equity

	Share Capital	Distributable reserves	Retained Earnings*	Other Reserves (note 9)	Total
	US$'000	US$'000	US$'000	US$'000	US$'000
Balance at 01 July 2011	2,335	238,592	(1,357)	805	240,375
Total comprehensive income for the period
Profit	-	-	10,524	-	10,524
Other comprehensive income
Foreign currency translation differences	-	-	-	(15)	(15)
Total other comprehensive expense	-	-	-	(15)	(15)
Total comprehensive profit/(loss) for the period	-	-	10,524	(15)	10,509
Contributions by and distributions to owners
Dividends paid*	-	-	(6,275)	-	(6,275)
Shares repurchased to be held in treasury	-	(1,043)	-	-	(1,043)
Shares in treasury cancelled	(1)	-	-	1	-
Total contributions by and distributions to owners	(1)	(1,043)	(6,275)	1	(7,318)
Balance at 31 December 2011	2,334	237,549	2,892	791	243,566

* Retained earnings include realised gains and losses on the sale of assets at fair value through profit or loss and net changes in fair value on financial assets at fair value through profit or loss. The level of dividend is calculated based only on a proportion of the dividends received during the year, net of the Company's attributable costs.

	Share Capital	Distributable reserves	Retained Earnings*	Other Reserves (note 9)	Total
	US$'000	US$'000	US$'000	US$'000	US$'000
Balance at 01 July 2012	2,330	231,695	(6,957)	706	227,774
Total comprehensive income for the period
Profit	-	-	3,781	-	3,781
Other comprehensive income
Foreign currency translation differences	-	-	-	70	70
Total other comprehensive expense	-	-	-	70	70
Total comprehensive profit/(loss) for the period	-	-	3,781	70	3,851
Contributions by and distributions to owners
Dividends payable*	-	-	(5,417)	-	(5,417)
Expiration of option deed (see note 6)	-	-	672	(672)	-
Shares repurchased to be held in treasury	-	(3,235)	-	-	(3,235)
Shares subject to tender offer (see note 1)	(415)	(42,461)	-	415	(42,461)
Shares in treasury cancelled	(12)	-	-	12	-
Total contributions by and distributions to owners	(427)	(45,696)	(4,745)	(245)	(51,113)
Balance at 31 December 2012	1,903	185,999	(7,921)	531	180,512

* Retained earnings include realised gains and losses on the sale of assets at fair value through profit or loss and net changes in fair value on financial assets at fair value through profit or loss. The level of dividend is calculated based only on a proportion of the dividends received during the year, net of the Company's attributable costs.

Consolidated Statement of Cash Flows

		(Unaudited)	(Unaudited)
	Note	For the period from 1 July 2012 to 31 December 2012	For the period from 1 July 2011 to 31 December 2011
		US$'000	US$'000
Cash flows from operating activities
Purchase of investments		(12,366)	(11,357)
Proceeds from sale of investments		59,892	23,017
Interest received		-	-
Operating expenses paid		(2,528)	(2,924)
Commission rebate		88	37
Net cash generated from operating activities		45,086	8,773
Financing activities
Dividends paid		-	(6,275)
Cash used in tender offer		(42,461)	-
Cash used in share repurchases		(3,235)	(1,043)
Net cash used in financing activities		(45,696)	(7,318)
Net (decrease)/increase in cash and cash equivalents		(610)	1,455
Effects of exchange rate changes on cash and cash equivalents		53	(6)
Cash and cash equivalents at beginning of period		6,129	1,199
Cash and cash equivalents at end of period	8	5,572	2,648

1              The Company

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

Pursuant to an Admission Document dated 25 July 2007 there was an original placing of up to 171,355,000 Ordinary Shares of 1 cent each, 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 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 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 distributable reserves.

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

During the period 1 July 2012 to 31 December 2012, the Company purchased 3,657,131 of its ordinary shares for a total value of US$3,235,956 to be held in treasury. 1,202,714 shares had been repurchased in the year ended 30 June 2012 for treasury but had been held for over a year and were therefore cancelled in the current financial period. The buy-backs are effected through distributable reserves.

On 7 December 2012 the Company completed a tender offer at a price of US$1.0219 per share. Under the offer 41,552,272 shares were cancelled with US$42,462,267 being paid to participating shareholders.

The shareholders approved a dividend of 3.0 cents per share on 14 November 2012; this was paid to shareholders on 30 January 2013.

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

2              The Subsidiary

The Company has the following subsidiary company:

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

3              Significant Accounting Policies

The Interim Report of the Company for the period ending 31 December 2012 comprises the Company and its subsidiary (together referred to as the "Group"). The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements for the year ended 30 June 2012. The interim consolidated financial statements are unaudited.

3.1           Basis of presentation

These financial statements have been prepared in accordance with International Financial Reporting Standard ("IFRS") IAS 34 Interim Financial Reporting. They do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 30 June 2012.

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

3.2           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.

4              Net Asset Value per Share

The net asset value per share as at 31 December 2012 is US1.0022 per share based on 180,105,870 ordinary shares in issue as at that date (excluding 10,135,610 shares held in treasury), (30 June 2012: US$1.0109 based on 225,315,273 ordinary shares in issue, excluding 7,681,193 shares held in treasury).

5              Investments

31 December 2012 financial assets at fair value through profit or loss: all quoted equity securities

Security name	Number	US$'000
Bank Muscat (BKMB OM)	1,144,388	1,704
Oman Qatari Telecommunication Co (NWRS OM)	13,774	16
Emaar Property Company (EMAAR AED)	1,750,000	1,786
Barwa Real Estate (BRES QD)	1,585,077	11,854
Commercial Bank of Qatar (CBQK QD)	841,865	16,196
Doha Bank (DHBK QD)	765,369	10,492
Gulf International Services (GISS QD)	194,001	1,597
Industries Qatar (IQCD QD)	779,167	33,144
Masraf Al Rayan (MARK QD)	2,119,796	14,340
Mazaya Real Estate Development (MRDS QD)	1,062,816	3,194
National Leasing (NLCS QD)	438,573	5,440
Qatar Electricity & Water Company (QEWS QD)	265,754	9,518
Qatar Gas Transport (QGTS QD)	298,562	1,249
Qatar Insurance (QATI QD)	220,166	4,054
Qatar International Islamic Bank (QIIK QD)	63,500	899
Qatar Islamic Bank (QIBK QD)	530,796	10,867
Qatar Meat and Livestock Company (QMLS QD)	232,176	3,747
Qatar National Bank (QNBK QD)	994,411	35,505
Qatar Navigation (QNNS QD)	449,901	7,778
Qatar Telecom (QTEL QD)	290,954	8,304
		181,684

6              Charges and Fees

	31 December 2012	31 December 2011
	US$'000	US$'000
Investment Manager's fees (see below)	1,414	1,516
Performance fees (see below)	-	-
Administrator and Registrar's fees (see below)	193	200
Custodian fees (see below)	103	270
Directors' fees and expenses	203	196
Directors' insurance cover	22	29
Broker fees	51	57
Commission	-	336
Tender costs	300	-
Other	151	266
Other expenses	1,023	1,354

Investment Manager's fees

Annual fees

The Investment Manager is entitled to an annual management fee of 1.25% of the Net Asset Value of the Group calculated monthly and payable quarterly in arrears.

Management fees for the period ended 31 December 2012 amounted to US$1,413,540 (31 December 2011: US$1,515,882).

Performance fees

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

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

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

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

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

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

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

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

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

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

Performance fees accrued but not paid during the period ended 31 December 2012 amounted to US$nil (31 December 2011: US$nil).

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

A new Investment Management Agreement was entered into on 17 October 2012 for a period of approximately one year, expiring on 31 October 2013.

Investment Management Agreement definitions

Adjusted Net Asset Value per Ordinary Share	at a particular time, the total of A minus B plus C where: (i)           A is the Net Asset Value per Ordinary Share at that time calculated on a basis that does not recognise any liability of the Company to the Investment Manager in respect of any performance fee that is, or may become, payable; (ii)          B is the sum of all dividends received by the Company since 1 January 2011 divided by the number of Ordinary Shares in issue at the time of each dividend; and (iii)         C is the sum of all dividends paid by the Company since 1 January 2011 divided by the number of Ordinary Shares in issue at the time of each dividend;
Performance Period	each period in respect of which the Company produces audited accounts and, if different, the final period for which the Investment Management Agreement subsists or any shorter period where there has been an issue of Ordinary Shares which exceeds 10% of the then existing share capital of the Company, subject always to the discretion of the Board. The first Performance Period commenced on date of the passing of the Resolution (17 March 2011)
Outperformance Period	any Performance Period in which the Adjusted Net Asset Value per Ordinary Share at the end of the relevant Performance Period exceeds the Target Net Asset Value per Ordinary Share
Shortfall Return	the amount by which the Target Net Asset Value per Ordinary Share exceeds the Adjusted Net Asset Value per Ordinary Share in respect of a Performance Period

Under the terms of an option agreement dated 25 July 2007 the Investment Manager was granted an option to acquire 1,713,550 shares at an option price of US$1.00 per share. The Investment Manager Option Deed provided for the transfer of the options by the Investment Manager to the Distribution Adviser and the Placing Agent. This transfer has now taken place.

The option could have been exercised by the Distribution Adviser and the Placing Agent in whole or in part at any time before the fifth anniversary of admission to trading on AIM, this deadline has now passed and the option value of US$672,300 has been transferred to retained reserves.

Custodian fees

The Custodian is entitled to receive fees of US$7,200 per annum and US$25 per processed transaction from Qatar Investment Fund PLC.

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 (GCCC excluding Qatar)..

Custodian and subcustodian fees for the period ending 31 December 2012 amounted to US$105,120 (31 December 2011: US$269,782).

Administrator and Registrar fees

The Administrator is entitled to receive a fee of 15 basis points per annum of the net asset value of the Company between US$0 and US$100 million, 12.5 basis points of the net asset value of the Company between US$100 and US$200 million and 10 basis points of the net asset value of the Company in excess of US$200 million, subject to a minimum monthly fee of US$15,000, payable quarterly in arrears. These fees have been subject to change from 1 January 2013, please see note 15.

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

Administration fees paid for the period ending 31 December 2012 amounted to US$165,361 and US$27,519 for additional services (31 December 2011: US$172,712 and US$27,306 respectively).

7              Commission rebate

During the period the Company received 60% brokerage commission rebates for all trades done through its Qatar brokers. This arrangement is set to continue. For the period ended 31 December 2012 the Group received US$87,676 (2011: US$36,726).

8              Cash and Cash Equivalents

	31 December 2012	30 June 2012
	US$'000	US$'000
Bank balances	5,572	6,129
Cash and cash equivalents	5,572	6,129

9              Other Reserves

	Distributable Reserves	Retained Earnings	Foreign currency translation reserve	Capital redemption reserves	Other reserves	Total
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
Balance at 1 July 2012	231,695	(6,957)	(111)	145	672	225,444
Foreign exchange translation differences	-	-	70	-	-	70
Retained earnings for period	-	3,781	-	-	-	3,781
Dividends paid	-	(5,417)	-	-	-	(5,417)
Expiration of option deed	-	672	-	-	(672)	-
Shares repurchased into Treasury	(3,235)	-	-	-	-	(3,235)
Shares subject to tender offer	(42,461)	-	-	415	-	(42,046)
Share buy-backs	-	-	-	12	-	12
Balance at 31 December 2012	185,999	(7,921)	(41)	572	-	178,609

10            Earnings per Share

Basic and diluted earnings per share are calculated by dividing the profit attributable to equity holders of the Group by the weighted average number of ordinary shares in issue during the period:

	31 December 2012	31 December 2011
Profit attributable to equity holders of the Company (US$'000)	3,781	10,524
Weighted average number of ordinary shares in issue (thousands)	216,589	232,483
Basic and diluted earnings per share (cents per share)	1.75	4.53

There is no difference between basic and diluted earnings per share as the warrants and options are not dilutive in 2012.

11            Trade and other payables

	31 December 2012	30 June 2012
	US$'000	US$'000
Due to broker	505	386
Management fee payable	704	755
Administration fee payable	84	87
Dividend payable*	5,417	-
Accruals and sundry creditors	120	107
	6,830	1,335

*On 26 September 2012, QIF announced a final dividend of 3.0 cents per ordinary share in respect of the year ended 30 June 2012, payable after the proposed tender offer. This was approved by shareholders at the Annual General Meeting on 14 November 2012 and was paid on 30 January 2013 to ordinary shareholders on the register as at 14 December 2012 (the "Record Date"). The corresponding ex-dividend date was 12 December 2012.

12            Directors' Remuneration

The maximum amount of remuneration payable to the Directors permitted under the Articles of Association is £200,000 per annum.

David von Simson was non-executive chairman of the Company until his sudden death on 11 November 2012.

Nick Wilson as the new non-executive chairman is entitled to receive an annual fee of £47,500. He also receives an additional fee in respect of his work regarding the Company's share buy-back programme of £10,000 per annum.

Paul Macdonald as non-executive chairman of the audit committee is entitled to receive £32,500 per annum.

Leonard O'Brien and Neil Benedict in their capacity as non-executive directors receive £30,000 each per annum.

The Directors are each entitled to receive reimbursement of any expenses incurred in relation to their appointment. Total fees and expenses paid to the Directors for the period ended 31 December 2012 amounted to US$202,029 (31 December 2011: US$196,411).

13            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 is zero. The Group is required to pay an annual corporate charge of £250 per annum.

The Company became registered for VAT from 1 February 2011.

Qatar taxation

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

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

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

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

Kuwait taxation

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

14            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 5). It is paid fees 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 6.

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

15            Post Balance Sheet Events

As part of managing the Company's on-going charges, the number of brokers for the Company was reduced to one with Oriel Securities Limited ceasing to act as the Company's broker from 1 January 2013.

The Administrator has agreed to a reduction in fees. With effect from 1 January 2013, Administration fees shall be charged based on the net asset value of the Company as of each Valuation Day in accordance with the schedule below and subject to a minimum monthly fee of US$15,000.

$0 to $100 million                   12.5 basis points per annum

Above $100 million                10 basis points per annum

Maitland Consultancy Group which provides public relations support to the Company has agreed to a reduced fee of GBP5,750 per month from 1 January 2013.

The custodian has agreed to a 25% reduction in custody fees for the Qatari market which is expected to take effect from 1 March 2013.

The Company paid out a dividend of US$5,416,506 to shareholders on 30 January 2013.

 

END

 

 

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