Half Yearly Report

RNS Number : 5879A

Qatar Investment Fund PLC

21 February 2014

 



Qatar Investment Fund plc

Interim Results for the six months ended 31 December 2013

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

"The Qatar Exchange Index performed well throughout the period buoyed by more infrastructure contract awards and MSCI upgrading the Qatar from a frontier market to an emerging market status, effective from May of this year."

Highlights

·     Share price rose 12.7 per cent to $1.15 as at 31 December 2013 following a narrowing of the discount to 7.2 per cent.

·     Net Asset Value per Share (NAV) rose by 7.2 per cent.to $1.2449

·     During the period a dividend of 3.2 cents was declared

·     Profit after tax US$19.23m, generated from fair value adjustments and realised gains, equivalent to earnings per share of 11.03 cents

·     17,357,728 shares were tendered in the tender offer in December 2013, at US$1.2674 per share

·     Annualised on-going charges (formerly total expense ratio) reduced to 1.74 per cent.

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

"The outlook for the Qatari economy remains excellent with real GDP expected to have risen by 6.5 per cent. in 2013 with a further 6.8 per cent. expected in 2014 (source: Qatar National Bank)  largely due to the expansion of the non-hydrocarbon economy.  Project spending per capita is also forecast to be the highest in the Gulf Co-operation Council region. Our investment adviser believes that Qatar's near to long-term growth prospects should remain healthy driven by a strong infrastructure pipeline, expansionary fiscal spending, and supportive demographics

"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."

For further information:

Qatar Investment Fund Plc - [phone]

Nicholas Wilson

Panmure Gordon - [phone]

Andrew Potts

Maitland - [phone]

William Clutterbuck / Robbie Hynes

Chairman's Statement

On behalf of the Board, I am pleased to present the interim results for Qatar Investment Fund Plc for the six-months ending 31 December 2013.

Results

Results for the six months showed a profit after tax of US$19.23m, generated from fair value adjustments and realised gains, and equivalent to basic earnings per share of 11.03 cents. Net Asset Value per Share (NAV) rose by 7.2 per cent.to $1.2449 in the six months ending 31 December 2013, as against a rise of 11.9 per cent. in the Qatar Exchange Index over the same period. Adjusted for the dividend declared during the six month period, the adjusted NAV at 31 December 2013 was $1.2769, a rise of 10.0 per cent. over the same period. During the period a dividend of 3.2 cents was declared with an ex-dividend date of 23 December 2013. We also saw the share price rise by 12.7 per cent. to $1.15 at 31 December 2013 following a narrowing of the discount to 7.2 per cent. The Company's annualised on-going charges (formerly total expense ratio) are running at 1.74 per cent.

The Qatar Exchange Index performed well throughout the period buoyed by increased infrastructure contract awards and the MSCI upgrading the Qatar Exchange from frontier  market  to emerging market status, effective from May of this year, which the Investment Adviser believes has resulted in foreign investors buying ahead of May 2014. The banking sector, including financial services, continues to represent our largest single sector with a 45.8 per cent. exposure on 31 December 2013. Qatar National Bank, our largest holding, increased net profits by 13.7 per cent. for the year with total assets increasing by 20.9 per cent. At 31 December 2013 we had a total of 27 holdings: 17 in Qatar, 4 in UAE, 5 in Oman and 1 in Kuwait. The Company increased its cash position towards the end of the period in anticipation of the tender offer referred to below.

Our Investment Adviser remains firmly positive on the outlook for Qatar, driven by a combination of healthy economic growth underpinned by infrastructure spending and a stable political environment. This view is supported by the dividend yield and attractive market valuations.

Tender offer

On 5 December 2013, we wrote to shareholders explaining that our average discount during the twelve month period to 28 November 2013 (Calculation Date) had been greater than 10 per cent. and accordingly the directors were putting forward a tender offer for up to 10 per cent of the issued capital (excluding treasury shares) at a discount of 1 per cent to formula asset value. At an extraordinary general meeting held on 23 December 2013, the ordinary resolution to implement the tender was duly passed on a poll. The tender price was USD1.2674 and settlement took place on 17 January with 17,357,728 purchased and cancelled and US$21,999,184 being paid to participating shareholders.

If the average discount to NAV per share at which the shares trade in the subsequent twelve month period to 27 November 2014 is greater than 10 per cent., a further tender offer will be implemented, subject to shareholder approval and the Company satisfying the distributable profits requirements under Isle of Man law, on the same terms as the 2013 tender offer.

Managing the discount between the share price and NAV

Discount management remains a priority for the Board and as part of this we continued to make use of the authority granted by shareholders to buy back the Company's shares. During the period 1 July 2013 to 31 December 2013, the Company purchased 2,812,448 of its ordinary shares which were held in treasury. 3,657,131 shares had been repurchased in the period ended 31 December 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. 

In addition to the share buybacks, the Board works with our Investment Adviser, Company Broker and Financial Public Relations, as well as the financial press, in order to maintain institutional and private investor awareness of both Qatar and the Company's shares. During the period, I gave a number of interviews to the investment press and, in early December, spoke about the Company at the Euromoney Qatar conference in Doha.

New Management Agreement

A revised management agreement was entered into with the investment manager Epicure Managers Qatar Limited ("EMQL"), a wholly owned subsidiary of Qatar Insurance Company S.A.Q. (the "Revised Investment Management Agreement").

The Revised Investment Management Agreement is for a three year period from 1 November 2013. The revised fee arrangements are a reduced management fee of 1.05% per annum of the net asset value of the Company, calculated monthly and payable quarterly in arrears, with such management fee reducing further to 1.0% from 1 November 2015 for the final year of the agreement. The lower management fee will significantly reduce the overall costs for the Company.

There have been minor amendments to the terms of the performance fee, such that the effect of accretion of net asset value as a result of buybacks or other returns of capital are excluded from the net asset value used for the performance fee calculation, and any dilution from a corporate action such as an issue of new ordinary shares would be added back to the net asset value calculation. All other terms remain unchanged from that of the previous investment management agreement.

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 following the accompanying financial statements

Outlook, risks and uncertainties

The outlook for the Qatari economy remains excellent with real GDP expected to have risen by 6.5 per cent. in 2013 with a further 6.8 per cent. expected in 2014 (source: QNB Group), largely due to the expansion of the non-hydrocarbon economy.  Project spending per capita is forecast to be the highest in the Gulf Co-operation Council region. Our investment adviser believes that Qatar's near to long-term growth prospects should remain healthy driven by a strong infrastructure pipeline, expansionary fiscal spending, and supportive demographics. The Investment Adviser believes that the near term catalysts for the Qatari market include the recent upgrade to the MSCI Emerging Market index, upcoming IPO activity, and healthy dividend payouts against a background of attractive valuations.  

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.

Nicholas Wilson

Chairman

20 February 2014

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 2013 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  2014

Report of the Investment Manager and the Investment Adviser

Market Overview

The performance of the other GCC markets is shown below:

Index	30-Jun-13	31-Dec-13	% Change
Qatar (DSM)	9,276	10,380	11.9%
Saudi (TASI)	7,497	8,536	13.9%
Dubai (DFMGI)	2,223	3,370	51.6%
Abu Dhabi (ADI)	3,551	4,290	20.8%
Kuwait (KWSE)	7,773	7,550	-2.9%
Oman (MSI)	6,338	6,835	7.8%
Bahrain (BAX)	1,188	1,249	5.1%

Source: Bloomberg

Global equity markets performed strongly in 2013, driven by improved manufacturing activity in the majority of global economies. This was further supported by improved jobs data and strong GDP numbers in the US coupled with the UK reporting strong manufacturing data. Also, the beginning of the Quantitative Easing (QE) tapering program by the US Fed Reserve amid improving economic conditions in the US, considered as a positive sign by the global market, led to ending the year on a positive note.

Gulf Cooperation Council (GCC) markets performed well in 2013, in line with global markets. Dubai rose 107.7% driven by recovery in the property sector coupled with an improved macro-economic outlook; supported by winning the rights to host the 2020 World Expo and MSCI's decision to upgrade UAE to emerging market with effect from May 2014. Abu Dhabi also made progress (+63.1%) on the back of the UAE's macro recovery. Saudi Arabia, the largest market in the GCC, recorded an increase of 25.5% in 2013, partially helped by substantial gains posted by the real estate and retail indices. The Kuwait and the Oman markets rose 27.2% and 18.6%, respectively in 2013, while the Bahrain index gained 17.2% during the period.

The Qatar Exchange index gained 24.2% in 2013 after witnessing a fall of 4.8% in 2012. MSCI's decision to upgrade the bourse to emerging market with effect from May 2014, acted as one of the major driver to boost the market. This was also supported by strong economic performance of Qatar. Qatar's economy continues to grow with Q3 2013 real GDP rising by 6.2% compared to Q3 of 2012. The QNB Group expects Qatar's economy (real GDP) to grow by 6.5% in 2013. Real GDP growth is estimated to pick up further to 6.8% in 2014, largely due to the expansion of the non-hydrocarbon economy. The non-hydrocarbon sector growth shall be increased by implementation of large infrastructure projects and a healthy growth in the population boosting domestic demand. The QNB Group expects the contribution of the non-hydrocarbon sector to the nominal GDP to increase from 42% in 2012 to over 50% by 2015. According to the Middle East Economic Digest (MEED), major projects to the tune of US$200 billion are expected to be awarded between 2014 and 2030.

The Investment Adviser believes that the GCC markets could continue their bullish run in 2014, but gains are expected to be lower as valuations increase. Market experts believe that the GCC region is becoming a mainstream investment destination for international funds. This belief is further supported by the recent upgrade of Qatar and UAE to emerging market status by MSCI and S&P Dow Jones.

Qatar Macroeconomic Update

Qatar's economy continues to grow with Q3 2013 real GDP rising by 6.2% compared to Q3 of 2012. Growth was marginally higher than the 6.1% recorded in Q1 2013 and 6.0% recorded in Q2 2013. The hydrocarbon sector, which includes Qatar's oil and gas production, rose 1.8% in Q3 2013 compared to Q3 2012, driven by higher production of natural gas during the quarter. The non-hydrocarbon sector real GDP increased by 9.5% over the same period. The combined finance, insurance, real estate and business services sectors grew by 10.5%, while the construction sector expanded 13.0% driven by government spending on infrastructure projects. When compared to the previous quarter, the real GDP growth stood at 4.3%. On a quarter-on-quarter basis, the non-hydrocarbon sector grew 4.8%, while the hydrocarbon sector expanded by 3.5%.

The QNB Group expects Qatar's economy to grow 6.5% in 2013. Growth is estimated to pick up further to 6.8% in 2014, largely due to the expansion of the non-hydrocarbon economy. This growth is likely to be boosted by the implementation of large infrastructure projects and a healthy growth in the population boosting domestic demand. Large infrastructure projects include the Lusail real estate development, the new Doha Port, and the Doha Metro Rail project. The QNB Group expects the contribution of the non-hydrocarbon sector to the nominal GDP to increase from 42% in 2012 to over 50% by 2015.

Population growth in Qatar has been strong in recent years. At the end of December 2013, Qatar's population reached 2.05 million, growth of 11.4% compared to December 2012. Looking ahead, Qatar's population growth in 2014 is expected to remain strong, mainly driven by the new employment opportunities created by the country's substantial pipeline of projects. Steady growth in population bodes well for the overall economy as it will increase demand for local services, and should stimulate services activity.

Robust growth in the construction sector should also provide an impetus to the manufacturing, basic fabrication activity and cement production. Additionally, banks are also expected to benefit as contractors' needs for working capital and ancillary services increase. Hence, the Investment Adviser favors selected banks, real estate and consumer driven companies.

Recent Developments

Strong infrastructure growth to stay

In the past few years, Qatar's economic growth was largely driven by ambitious infrastructure development plans, including the infrastructure for the 2022 FIFA World Cup. According to MEED, major projects valued at US$200 billion are expected to be awarded between 2014 and 2030. MEED expects strong activity in Qatar's project market in 2014, with contract awards in the infrastructure and transport expected at US$24 billion. In Doha alone, a substantial backlog of project work is expected to be completed between 2014 and 2019, with an estimate of associated contractor and third party contracts/tenders worth US$90 billion. These include roads, ports and rail work of about US$40 billion and construction projects valued at around US$19 billion. Qatar Rail Company (QRC) is expecting additional contract awards for the upcoming stages of its mega-rail project in 2014 and 2015. These contracts are in addition to recent deals worth US$8.8 billion awarded for the Doha metro and a passenger and freight rail network in Lusail. New contracts are expected to be awarded at the start and the end of 2014, as well as in 2015, and should cover both metro and cargo trains, as well as the related systems.

According to MEED, Qatar's petrochemicals industry also offers substantial opportunities to international EPC contractors, as contracts worth US$14.63 billion are in the design and tender phases. About US$14 billion would be accounted by two large schemes which are being planned for the Ras Lafan industrial city in northern Qatar.

Banking sector credit growth remains healthy in 2013

According to a QNB report, the banking sector activity in Qatar is expected to pick up in the coming months. During 2013, loan growth remained healthy at around 13.3%. Public sector credit (including credit outside Qatar) was 10.1% higher in 2013. Total domestic public sector credit, which consists of government, government institutions and semi-government institutions, grew 9.7% in 2013 This growth was mainly driven by 9.3% credit growth witnessed by the government institutions' segment (that represents 63.6% of public sector loans) and 12.7% credit growth reported by the semi-government institutions segment. The government segment loan book expanded 9.3% in 2013.

During the same period, the private sector loan book (including credit outside Qatar) grew higher by 16.8%. Total credit extended to the domestic private sector increased 13.9% in 2013, helped by strong growth reported in the loans extended to the services sector (up 44.3%). The consumption & others sector loan book witnessed an increase of 10.7% in 2013.

Total deposits (including deposits outside Qatar) also grew at a healthy level, by 19.7% in December 2013 compared to December 2012. The banking sector's loan-to-deposit ratio (LDR) stood at 105% at end of December 2013 compared to 111% at the end of December 2012. Going forward, public sector loan growth should largely drive the overall credit growth in 2014, helped by an estimated uptick in project mobilizations in the coming months.

Strong forex reserves with 6 months of import cover

According to the Ministry of Development Planning and Statistics (MDP&S) Qatar reported a trade surplus of QAR200.3 billion in the first half of 2013 or equivalent to 54.7% of nominal GDP. During the period export revenue grew by 4.4% driven by oil and gas, as non-hydrocarbon exports are still very small. In the first half of 2013, a huge trade surplus helped creating a substantial current account surplus. MDP&S expects the country's external current account surplus to remain sizeable at 26.6% (as a % of GDP) in 2013 and 22.7% in 2014. The reduction of the surplus can largely be attributed to an expected decline in hydrocarbon export revenues and higher imports on the back of stronger domestic demand. The overall balance of payments surplus is expected to decline to US$5.5 billion in 2013 and to US$1.5 billion in 2014, as the substantial portion of current account surpluses are expected to be recycled outside Qatar in the form of overseas investments funded by export earnings.

At the end of September 2013, Qatar Central Bank's (QCB) foreign currency reserves stood at QAR143 billion, growing by QAR7 billion reported at the end of September 2012. Going forward, foreign exchange cover is expected to remain strong, equivalent to about six months of total imports of goods and services.

Changes to QE Index constituents and weightings

Following the semi-annual review of QE Index constituents, the Qatar Exchange announced that from 1 October 2013, Al Khaliji Commercial Bank and Mazaya will not be a part of the QE Index and they will be replaced by Al Meera and Qatar Insurance. Based on 17 September 2013 closing prices, Qatar Insurance will represent an index weight of 2.9%, while Al Meera will have a weight of 0.7%. Additionally Al Ahli Bank has been added to the All Share index and Mannai Corporation was removed.

The Qatar Exchange caps the maximum weight a single stock can represent at 15% of the QE Index. Based on 17 September 2013 closing prices, Qatar National Bank (22.2% weight) and Industries Qatar (17.3% weight) were capped at 15% and with excess weights distributed proportionately among the remaining QE Index constituents.

Qatar Exchange to launch further financial products

After the upgrade by MSCI granting the Qatar Exchange Emerging Market status, the Qatar Exchange has submitted proposals to the government for higher limits on foreign ownership of Qatari listed stocks. In the recent past, the Qatar Exchange has also undertaken various steps to enhance the liquidity of the market.

Going forward, the Qatar Exchange is likely to introduce margin trading and covered short selling regulations. Additionally, the Qatar Exchange is expected to shorten the settlement cycle for bonds traded on the exchange to T+1. There are also plans to launch the first Exchange Traded Fund (ETFs) on the exchange soon. In 2014, it is expected that the first SME company will list on the dedicated SME market, the QE Venture market (QEVM).Going ahead, the Qatar Exchange is expected to introduce derivatives, with an initial focus on offering futures on the local index as well as several individual stock options.

Qatar: corporate profitability increased 6.7% in 9M 2013

Net profits of Qatar Exchange listed companies rose 6.7% in 9M 2013 compared to 9M 2012, to QAR30.1 billion (US$8.3 billion). In Q3 2013, the performance of Qatar Exchange listed companies was subdued, with net profit declining 6.4% to QAR9.1 billion (US$2.5 billion) compared to Q3 2012. The slowing in Q3 2013 was mainly due to a substantial fall in profits of the telecom sector and muted performance of the industrial sector.

Sector profitability (net profit/loss in US$000s)

Sectors	9M 2012	9M 2013	% Change	Q3 2012	Q3 2013	% Change
Banking & Financial	3,450,028	3,622,974	5.0%	1,161,014	1,161,870	0.1%
Insurance	175,534	389,676	122.0%	36,624	44,189	20.7%
Industrial	2,465,812	2,481,800	0.6%	941,297	763,502	-18.9%
Services & Consumer Goods	331,978	365,272	10.0%	115,824	146,461	26.5%
Real Estate	401,611	466,643	16.2%	100,198	188,173	87.8%
Telecoms*	592,227	568,312	-4.0%	220,766	92,655	-58.0%
Transportation	346,067	386,070	11.6%	109,240	115,467	5.7%
Total	7,763,257	8,280,746	6.7%	2,684,964	2,512,316	-6.4%

* excluding Vodafone Qatar

Source: Qatar Exchange

Banking and financial services sector net profit grew 5.0% in 9M 2013 compared to 9M 2012. Banking was the main contributor to this growth, with profits improving 6.1% in 9M 2013 compared to 9M 2012. Banking sector growth in Qatar can largely be attributed to growth in lending, particularly to the private sector. Loan growth was strong, principally helped by the industrial, consumption and others segments. Lending to the government segment also remained strong. Going forward, public sector loan growth is expected to remain healthy, as project/contract awards gather pace. The sector heavyweight Qatar National Bank reported profit growth of 14.1%. Masraf Al Rayan Bank reported a 15.4% profit rise, the fastest growth among the eight Qatari listed banks. Commercial Bank of Qatar and Qatar Islamic Bank reported a decline of 16.6% and 13.8% in net profits respectively.

The net profit of the financial services sector declined 56.1% in 9M 2013 compared to 9M 2012, mainly due to losses reported by Dlala Brokerage and a fall in net profit reported by National Leasing Company and Qatar Oman Investment Company.

Industrials sector profits increased marginally by 0.6% in 9M 2013 compared to 9M 2012. This sector now contributes 30% to the total profits of all the Qatari listed companies. During the same period, sector heavyweight and one of the largest chemical producers in the GCC region, Industries Qatar, reported a 4.8% fall in net profit.

Net profit in the insurance sector surged 122.0% in 9M 2013 compared to 9M 2012 largely driven by strong growth reported by Qatar General Insurance & Reinsurance Company (QGRI) and Qatar Insurance Company. During the period, QGRI became the largest company in the sector by net profit with 955% growth. This extraordinary growth was mainly driven by a one-off fair value gain of QAR690 million realized during 9M 2013 as against fair value losses of QAR6.7 million reported during 9M 2012. Net profit of Qatar Insurance Company grew 28.7% during the same period.

In 9M 2013, the net profit of the services & consumer goods sectors increased by 10.0% compared to 9M 2012. The largest profit contributor was Qatar Fuel Company, which reported a growth of 5.4% in net profit.

After reporting a 7.6% decline in H1 2013, the real estate sector reported a strong 16.2% in 9M 2013 net profit compared to same period previous year. This growth was mainly driven by strong profitability of companies such as Ezdan Holding Group and Mazaya Qatar Real Estate. On the other hand, Barwa Real Estate net profit declined 40.0% during the period.

The telecom sector comprises of two companies, Vodafone Qatar and Qatar Telecom. Vodafone Qatar was excluded from this profit comparison, since its fiscal year ends on 31 March. Ooredoo (formerly Qatar Telecom), reported a 4.0% fall in net profit in 9M 2013 compared to 9M 2012.

The transportation sector net profit has risen 11.6%, with the two companies in the sector reporting higher profits and the remaining one reporting a decline in net profit. The largest company by net profit, Qatar Navigation, reported a 22.1% rise in net profit in 9M 2013 compared to 9M 2012.

Country Allocation

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 2 January 2014.

At quarter end QIF had 27 holdings: 17 in Qatar, 4 in UAE, 5 in Oman and one in Kuwait. Cash was 10.6% of NAV (Q3 2013: 2.8%). QIF has increased its overall cash position during the quarter, given the upcoming tender offer.

Qatar remains the main focus area for the Investment Adviser, driven by a combination of healthy economic growth underpinned by infrastructure spending and a stable political environment. This view is supported by the dividend yield and attractive market valuations.

Sector Allocation

Embedded image removed - please refer to the Company's website www.qatarinvestmentfund.com for a chart depicting Industry allocation as at 2 January 2014.

The banking sector (including financial services) continues to be the largest single sector exposure within the portfolio, with a 45.8% weighting. The Investment Adviser believes that Qatari banks are well positioned for growth driven by growth in disbursements and an uptick in project starts. Qatar National Bank is the Company's largest holding (16.4% of NAV) followed by Industries Qatar (10.6% of NAV).

The second largest sector exposure was industrials at 15.8% of NAV (Q3 2013: 16.2% of NAV). Weighting in the real estate sector declined marginally from 9.7% in the previous quarter to 9.5%. The telecom sector decreased from 8.4% in Q3 2013 to 7.5% in Q4 2013. Transport decreased from 4.8% in the previous quarter to 4.4% in Q4 2013. The allocation to the insurance sector has risen to 4.4%, while weighting in the services and consumer goods sector reduced to 2.0% in Q4 2013.

Portfolio Structure

Top 10 Holdings

As at 2 January 2014, the top five investments formed over 50% of total NAV of the company, while the top 10 holdings of the Company constituted 76.6% of the total NAV. The top 10 holdings are unchanged from the end of the previous quarter.

Name	Sector	% Share of NAV
Qatar National Bank	Banks & Financial Services	16.4%
Industries Qatar	Industry	10.6%
Masraf Al Rayan Bank	Banks & Financial Services	10.0%
Doha Bank	Banks & Financial Services	6.8%
Qatar Telecom	Telecoms	6.8%
Commercial Bank of Qatar	Banks & Financial Services	6.6%
Barwa Real Estate	Real Estate	6.3%
Qatar Electricity & Water Co	Industry	4.4%
Qatar Insurance Co	Insurance	4.4%
Qatar Navigation	Transportation	4.3%

Source: Bloomberg, Qatar Insurance Company

Profile of Top Five Holdings (As At 2 January 2014)

Qatar National Bank (16.4% 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 support QNB, thus enhancing its economic importance. The largest shareholder in QNB is the Government of Qatar through the Qatar Investment Authority (QIA), with a 50% equity stake. QNB is Qatar's largest bank with total assets of QAR443 billion (USD121.7 billion). In FY 2013, QNB reported 13.7% increase in net profit to QAR9.5 billion (USD2.6 billion). QNB is expected to benefit from rapid expansion of the domestic economy. The bank has presence in 26 countries through 590 locations, supported by staff of more than 13,600 and more than 1,240 ATMs.

Industries Qatar (10.6% 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 a wholly owned subsidiary Qatar Steel Co. and fuel additives via 50% owned Qatar Fuel Additives Co. Qatar Steel commenced work on its EF5 project consisting of a QAR1.2 billion green field steel melt plant built adjacent to its main facility in Mesaieed Industrial City, Qatar, in Q2 2010. The facility has a capacity of 1.1 million MT / PA of billets and is expected to be commercially launched in the early part of Q1 2014. For the first 9 months of 2013, IQ reported a 4.8% decrease in net profit to QAR6.3 billion (US$1.7 billion).

Masraf Al Rayan (10.0% of NAV)

Masraf Al Rayan (MARK) was incorporated as a Qatari Shareholding Company under Qatar Commercial Company law on 4th January 2006. It is licensed by the Qatar Central Bank and began commercial operations in October 2006. Currently, MARK runs 11 branches in Qatar supported by strategically placed ATMs. MARK offers Islamic commercial and investment banking services. Recently, the bank through its wholly owned UK subsidiary Al Rayan (UK) has acquired Shariah-compliant Islamic Bank of Britain (IBB). This acquisition would help MARK to extend its services into the UK and continental European markets. The bank benefits from key strengths such as a healthy balance sheet and government backing. In FY 2013, the bank reported 13.2% increase in net profit to QAR1.7 billion (USD0.5 billion), with total assets reaching QAR66.5 billion (USD18.3 billion) at the end of December 2013.

Doha Bank (6.8% of NAV)

Established in 1978, Doha Bank is one of the largest private commercial banks in Qatar. The bank, which is headquartered in Doha, is the third largest commercial bank in Qatar in terms of total asset base. Doha Bank provides conventional banking services in Qatar. The bank has international presence with operations in other parts of GCC such as Dubai, Abu Dhabi, Kuwait. Recently, the bank announced that it has been granted the license by the Reserve Bank of India (RBI) to start commercial banking operations in India. As at December 2013 end, the bank's assets stood at QAR67 billion (USD18.4 billion). In FY 2013, the bank's net profit increased 0.6% to QAR1.3 billion (USD0.4 billion).

Qatar Telecom (6.8% of NAV)

Qatar Telecom (also known as Ooredoo) is a Qatar based telecommunication services provider. The company was established in 1998 (through transfer from Qatar Public Telecommunications Corporation) with first listing of the company in 1999. Ooredoo is the brand name that the company adopted in March 2013. Headquartered in Doha, the company offers landline, mobile (GSM) services, Internet and data services, cable and wireless TV services for home, business, corporate, and government customers. For the first nine months of 2013, Ooredoo reported net profit of QAR2.1 billion (USD0.58 billion) as compared to QAR2.2 billion (USD0.6 billion) reported for the corresponding period last year.

Performance and Portfolio Structure

The net asset value per share excluding dividends (NAV per share) increased by 25.5% to US$1.2576 as at 2 January 2014 compared to US$1.0022 as at 31 December 2012. As at 2 January 2014, the QIF share price was trading at an 8.2% discount to NAV per share.

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	2013*
QIF NAV	13.87%	-36.42%	10.40%	29.86%	1.29%	-4.68%	25.48%
QE Index	27.00%	-28.80%	1.10%	24.80%	1.10%	-4.79%	26.16%

* From 31 Dec 2012 to 2 January 2014

Source: Bloomberg, Qatar Insurance Company

Outlook

Economic growth in Qatar is expected to remain modest in the coming years, after growing at around 6% in the last three quarters. The QNB Group expects Qatar's real GDP to grow 6.5% in 2013 and growth is estimated to pick up further to 6.8% in 2014, driven by non-hydrocarbon sector. Implementation of large infrastructure projects and fast growth in population, boosting domestic demand, should drive the non- hydrocarbon sector growth. Healthy growth in population should create opportunities in areas such as financial services, transport and communications, and tourism. The Investment Adviser believes strong domestic demand will continue helped by strong investment spending, an expansionary fiscal stance and a continuing inflow of workers. The banking sector activity should remain strong in the coming months driven by public sector loan growth. The banking sector is expected to benefit from the business generated by real estate development and infrastructure projects. Hence, the Investment Adviser favors selected banks.

Qatar's near to long term growth prospects should remain healthy driven by a strong infrastructure pipeline, expansionary fiscal spending, and supportive demographics. The Investment Adviser believes that the near term catalysts for the Qatari market include the recent upgrade to the MSCI Emerging Market index, upcoming IPO activity, and healthy dividend payouts against a background of attractive valuations.

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

20 February  2014                                                                                                                  20 February 2014

Consolidated Income Statement

		(Unaudited)	(Unaudited)
	Note	For the period from  1 July 2013 to 31 December 2013	For the period from 1 July 2012 to 31 December 2012
		US$'000	US$'000
Income
Bond interest		18	-
Dividend income on quoted equity investments		8	-
Realised gain on sale of financial assets at fair value through profit or loss		8,673	5,018
Net changes in fair value on financial assets at fair value through profit or loss		12,281	1,127
Commission rebate income on quoted equity investments	7	108	87
Total net income		21,088	6,232
Expenses
Investment Manager's fees	6	1,256	1,414
Audit fees		14	14
Other expenses	6	591	1,023
Total operating expenses		1,861	2,451
Profit before tax		19,227	3,781
Income tax expense	13	-	-
Retained profit for the period		19,227	3,781
Basic and diluted earnings per share (cents)	10	11.03	1.75

Consolidated Statement of Comprehensive Income

		(Unaudited)	(Unaudited)
		For the period from  1 July 2013 to 31 December 2013	For the period from 1 July 2012 to 31 December 2012
		US$'000	US$'000
Profit for the period		19,227	3,781
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss:
Currency translation differences		(18)	70
Total items that are or may be reclassified subsequently to profit or loss		(18)	70
Other comprehensive (expense)/income for the period (net of tax)		(18)	70
Total comprehensive profit  for the period		19,209	3,851

Consolidated Balance Sheet

		(Unaudited)	(Audited)
	Note	At 31 December 2013	At 30 June 2013
		US$'000	US$'000
Financial assets at fair value through profit or loss	5	196,856	197,676
Due from broker		1,812	-
Other receivables and prepayments		122	44
Cash and cash equivalents	8	23,172	8,257
Total current assets		221,962	205,977
Issued share capital		1,801	1,839
Reserves	9	214,085	202,768
Total equity		215,886	204,607
Other creditors and accrued expenses	11	6,076	1,370
Total liabilities		6,076	1,370
Total equity & liabilities		221,962	205,977

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 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 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.

	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 2013	1,839	182,058	20,165	545	204,607
Total comprehensive income for the period
Profit	-	-	19,227	-	19,227
Other comprehensive income
Foreign currency translation differences	-	-	-	(18)	(18)
Total other comprehensive expense	-	-	-	(18)	(18)
Total comprehensive profit for the period	-	-	19,227	(18)	19,209
Contributions by and distributions to owners
Dividends payable*	-	-	(4,998)	-	(4,998)
Shares repurchased to be held in treasury	-	(2,932)	-	-	(2,932)
Shares in treasury cancelled	(38)	-	-	38	-
Total contributions by and distributions to owners	(38)	(2,932)	(4,998)	38	(7,930)
Balance at 31 December 2013	1,801	179,126	34,394	565	215,886

* 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 2013 to 31 December 2013	For the period from 1 July 2012 to 31 December 2012
		US$'000	US$'000
Cash flows from operating activities
Purchase of investments		(46,892)	(12,366)
Proceeds from sale of investments		66,630	59,892
Interest received		18	-
Operating expenses paid		(2,006)	(2,527)
Commission rebate		108	87
Net cash generated from operating activities		17,858	45,086
Financing activities
Dividends paid		-	-
Cash used in tender offer		-	(42,461)
Cash used in share repurchases		(2,932)	(3,235)
Net cash used in financing activities		(2,932)	(45,696)
Net increase/(decrease) in cash and cash equivalents		14,926	(610)
Effects of exchange rate changes on cash and cash equivalents		(11)	53
Cash and cash equivalents at beginning of period		8,257	6,129
Cash and cash equivalents at end of period	8	23,172	5,572

Notes to the Interim Consolidated Financial Statements

1              The Company

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

Pursuant to an Admission Document dated 25 July 2007 there was an original placing of up to 171,355,000 Ordinary Shares 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 2013 to 31 December 2013, the Company purchased 2,812,448 of its ordinary shares for a total value of US$2,931,997 to be held in treasury. 3,657,131 shares had been repurchased in the period ended 31 December 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 10 January 2014 the Company completed a tender offer at a price of US$1.2674 per share. Under the offer 17,357,728 shares were cancelled with US$21,998,837 being paid to participating shareholders.

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

The Company's agents and the 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 2013 comprises the Company and its subsidiary (together referred to as the "Group").  With the exception of the below items, 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 2013. The interim consolidated financial statements are unaudited.

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

a.         IFRS 10 Consolidated Financial Statements (2011). b.         IFRS 11 Joint Arrangements c.         IFRS 12 Disclosure of Interests in Other Entities. d.         IFRS 13 Fair Value Measurement. e.         Disclosures - Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7). f.          Presentation of Items of Other Comprehensive Income (Amendments to IAS 1). g.         IAS 19 Employee Benefits (2011). h.         Recoverable Amount Disclosures for Non-Financial Assets (Amendments to IAS 36) (2013). i.          Novation of Derivatives and Continuation of Hedge Accounting (Amendments to IAS 39).

The nature and the effects of significant changes are explained below.

(a) Subsidiaries, including structured entities

As a result of IFRS 10 (2011), the Group has changed its accounting policy for determining whether it has control over and consequently whether it consolidates other entities. IFRS 10 (2011) introduces a new control model that focuses on whether the Group has power over an investee, exposure or rights to variable returns from its involvement with the investee and the ability to use its power to affect those returns.   In accordance with the transitional provisions of IFRS 10 (2011), the Group reassessed its control conclusions as of 1 January 2013.  No changes resulted from this reassessment.

(b) Fair value measurement

In accordance with the transitional provisions of IFRS 13, the Group has applied the new definition of fair value, as follows: ·      Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Group has access at that date. The fair value of a liability reflects its non-performance risk. This change had no significant impact on the measurements of the Group's assets and liabilities.

(c) Presentation of items of other comprehensive income ("OCI")

As a result of the amendments to IAS 1, the Group has modified the presentation of items of OCI in its statement of comprehensive income, to present items that would be reclassified to profit or loss in the future separately from those that would never be. Comparative information has been re-presented on the same basis.

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 2013.

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 2013 is US1.2449 per share based on 173,415,902 ordinary shares in issue as at that date (excluding 6,689,968 shares held in treasury), (30 June 2013: US$1.1610 based on 176,228,350 ordinary shares in issue, excluding 7,534,651 shares held in treasury).

5              Investments

31 December 2013 financial assets at fair value through profit or loss: all quoted equity securities

Security name	Number	US$'000
Abu Dhabi Commercial Bank (ADCB UH)	500,000	882
Dubai Islamic Bank (DIB UH)	725,000	1,056
Emaar Properties Company (EMAAR UH)	1,450,000	3,016
Emirates National Bank of Dubai (ENBD UH)	1,357,500	2,324
Kuwait Food Company (FOOD)	105,000	928
Bank Muscat (BKMB OM)	1,110,388	1,830
Dhofar International Dev and Investment (DIDI OM)	156,024	249
Oman Qatari Telecommunication Co (NWRS OM)	408,000	634
Oman Telecom (OTEL OM)	167,155	654
Sembcorp Salalah (SSPW OM)	346,488	1,710
Al Meera Consumer Goods (MERS QD)	96,985	3,516
Barwa Real Estate (BRES QD)	1,682,739	13,761
Commercial Bank of Qatar (CBQK QD)	759,970	14,703
Doha Bank (DHBK QD)	946,254	15,087
Industries Qatar (IQCD QD)	499,257	23,126
Masraf Al Rayan (MARK QD)	2,491,476	21,400
National Leasing (NLCS QD)	270,641	2,239
Ooredoo (ORDS QD)	407,207	15,331
Qatar Electricity & Water Company (QEWS QD)	200,754	9,971
Qatar Gas Transport (QGTS QD)	60,360	335
Qatar Insurance (QATI QD)	528,991	9,653
Qatar International Islamic Bank (QIIK QD)	69,475	1,165
Qatar Islamic Bank (QIBK QD)	177,229	3,356
Qatar National Bank (QNBK QD)	773,948	36,488
Qatar Navigation (QNNS QD)	411,829	9,335
Qatar United Development Company UDCD QD)	644,186	3,986
Vodafone Qatar (VFQS QD)	41,260	121
		196,856

6              Charges and Fees

	31 December 2013	31 December 2012
	US$'000	US$'000
Investment Manager's fees (see below)	1,256	1,414
Performance fees (see below)	-	-
Administrator and Registrar's fees (see below)	133	193
Custodian fees (see below)	88	103
Directors' fees and expenses	170	203
Directors' insurance cover	22	22
Broker fees	34	51
Commission	-	-
Tender costs	-	300
Other	144	151
Other expenses	591	1,023

 

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. A new management fee agreement was effective from 1 November 2013 with the fee being reduced to 1.05% of the Net Asset Value of the Group calculated monthly and payable quarterly in arrears.

Management fees for the period ended 31 December 2013 amounted to US$1,255,774 (31 December 2012: US$1,413,540).

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 2013 amounted to US$nil (31 December 2012: US$nil).

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

The existing Investment Management Agreement was subject to termination on 31 October 2013 with a revised agreement being effective from 1 November 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; From 1 November 2013 this definition changed to:
Adjusted Net Asset Value per Ordinary Share	at a particular time, the sum of A plus B minus C minus D plus E where: (i)            A is the Net Asset Value per Ordinary Share at that time calculated on a basis that does not recognise any liability of the Company to the Investment Manager in respect of any performance fee that is, or may become, payable; (ii)           B is the amount by which any corporate action undertaken by the Company after 1 November 2013 (including, without limit, the issue of Ordinary Shares or rights to subscribe for, or convert into. Ordinary Shares, the issue of a scrip dividend, or the consolidation or sub-division of Ordinary Shares) results, at the time of calculation, in a dilution to the Net Asset Value per Ordinary Share divided by the number of Ordinary Shares in issue at the time of such corporate action; (iii)           C is the amount by which any accretion to the Net Asset Value per Ordinary Share has arisen solely as a result of the repurchase by the Company of its Ordinary Shares or any return of capital by the Company to its shareholders since 1 November 2013 divided by the number of Ordinary Shares in issue at the time of such repurchase or return of capital; (iv)           D is the sum of all dividends received by the Company since 1 January 2011 divided by the number of Ordinary Shares in issue at the time of each dividend; and (v)           E is the sum of all dividends paid by the Company since 1 January 2011 divided by the number of Ordinary Shares in issue at the time of each dividend,
Performance Period	each period in respect of which the Company produces audited accounts and, if different, the final period for which the Investment Management Agreement subsists or any shorter period where there has been an issue of Ordinary Shares which exceeds 10% of the then existing share capital of the Company, subject always to the discretion of the Board. The first Performance Period commenced on date of the passing of the Resolution (17 March 2011)
Outperformance Period	any Performance Period in which the Adjusted Net Asset Value per Ordinary Share at the end of the relevant Performance Period exceeds the Target Net Asset Value per Ordinary Share
Shortfall Return	the amount by which the Target Net Asset Value per Ordinary Share exceeds the Adjusted Net Asset Value per Ordinary Share in respect of a Performance Period

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 2013 amounted to US$88,190 (31 December 2012: US$105,120).

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.

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.

Administration fees paid for the period ending 31 December 2013 amounted to US$132,758 and US$22,152 for additional services (31 December 2012: US$165,361 and US$27,519 respectively).

7              Commission rebate

During the period the Company received 50% brokerage commission rebates for all trades done through its Qatar brokers. This arrangement is set to continue. For the period ended 31 December 2013 the Group received US$108,281 (2012: US$87,676).

8              Cash and Cash Equivalents

	31 December 2013	30 June 2013
	US$'000	US$'000
Bank balances	23,172	8,257
Cash and cash equivalents	23,172	8,257

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 2013	182,058	20,165	(91)	636	-	202,768
Foreign exchange translation differences	-	-	(18)	-	-	(18)
Retained earnings for period	-	19,227	-	-	-	19,227
Dividends paid	-	(4,998)	-	-	-	(4,998)
Shares repurchased into Treasury	(2,932)	-	-	-	-	(2,932)
Shares in Treasury cancelled	-	-	-	38	-	38
Balance at 31 December 2013	179,126	34,394	(109)	674	-	214,085

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 2013	31 December 2012
Profit attributable to equity holders of the Company (US$'000)	19,227	3,781
Weighted average number of ordinary shares in issue (thousands)	174,334	216,589
Basic earnings per share (cents per share)	11.03	1.75

11            Trade and other payables

	31 December 2013	30 June 2013
	US$'000	US$'000
Due to broker	294	512
Management fee payable	620	642
Administration fee payable	68	63
Dividend payable*	4,998	-
Accruals and sundry creditors	96	153
	6,076	1,370

*On 11 September 2013, QIF announced a final dividend of 3.2 cents per ordinary share in respect of the year ended 30 June 2013, payable after the proposed tender offer. This was approved by shareholders at the Annual General Meeting on 4 November 2013 and was paid on 31 January 2014 to ordinary shareholders on the register as at 27 December 2013 (the "Record Date"). The corresponding ex-dividend date was 23 December 2013.

12            Directors' Remuneration

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

Nick Wilson as 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 2013 amounted to US$169,832 (31 December 2012: US$202,029).

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

On 10 January 2014 the Company completed a tender offer at a price of US$1.2674 per share, 17,357,728 shares were cancelled with US$21,999,184 being paid to participating shareholders.

Shareholders received a dividend of 3.2 cents per share on 31 January 2014.

 

END

 

 

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