Half Yearly Report

RNS Number : 6379F

Qatar Investment Fund PLC

24 February 2015

 



Qatar Investment Fund plc

Interim Results for the six months ended 31 December 2014

Nicholas Wilson, Chairman of Qatar Investment Fund plc said:

"The Qatar Exchange was the only market to achieve a positive return during the six-months ending 31 December 2014 with the other Gulf Cooperation Council exchanges falling by an average of 5.5%.  Qatar's positive performance in the face of sharply falling hydrocarbon prices was due to continuing diversification of the economy, with infrastructure contract awards and foreign inflows."

Highlights

·      Share price rose by 5.1 per cent

·      Net Asset Value per Share rose by 8.6 per cent against a rise of 6.9 per cent in the Qatar Exchange Index over the same period.

·      During the period a dividend of 3.5c was declared

·      15,477,601 shares tendered in the tender offer in January 2015 at USD1.4859 per share

·      Annualised ongoing charges reduced to 1.59 per cent (31 December 2013 1.74%)

Nicholas Wilson, Chairman of Qatar Investment Fund plc added:

"The government diversification policies over recent years have placed Qatar in an enviable position relative to other Gulf countries with around 50% of GDP now derived from the non-hydrocarbon sector. This, combined with strong population growth, improving demographics and a full infrastructure pipeline, should safeguard Qatar's growth prospects.

"The Board views the future of the Company with confidence, as rapid development of Qatar's non-hydrocarbon sector helps offset the slowdown in the oil and gas.  Widespread infrastructure spending underpins economic growth. Valuations and dividend yields remain attractive."

For further information:

Qatar Investment Fund Plc [phone]

Nicholas Wilson

Panmure Gordon [phone]

Richard Gray / Andrew Potts / Atholl Tweedie

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 2014.

Results

Results for the six months showed a profit after tax of US$18.93m, generated from fair value adjustments and realised gains, and equivalent to basic earnings per share of 12.22 cents. Net Asset Value per Share (NAV) rose by 8.6 per cent., as against a rise of 6.9 per cent. in the Qatar Exchange Index over the same period. During the period a dividend of 3.5c was declared with an ex-dividend date of 12 February 2015. During the period the share price rose by 5.1 per cent. following a widening of the discount to 12.1 per cent at 31 December 2014. The Company's annualised ongoing charges are running at 1.59 per cent (31 December 2013 1.74%).

The Qatar Exchange was the only market to achieve a positive return during the period with the other Gulf Cooperation Council (GCC) exchanges falling by an average of 5.5%.  Qatar's positive performance in the face of sharply falling hydrocarbon prices was due to continuing diversification of the economy with infrastructure contract awards and foreign inflows following the upgrade to emerging market status last year. The banking sector, including financial services, remains our largest single sector with a 52.0 per cent. exposure on 31 December 2014.

At the interim stage we had a total of 25 holdings: 21 in Qatar, 3 in UAE and 1 in Oman. The Company increased its cash position towards the end of the period in anticipation of the tender offer referred to below.

Tender offer

On 11 December, we wrote to shareholders explaining that our average discount during the twelve month period to 27 November 2014 (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 9 January 2015, the ordinary resolution to implement the tender was duly passed on a poll. The tender price was USD1.4859 and settlement took place on 30 January with 15,477,601 shares cancelled and US$22,998,167 being paid to participating shareholders.

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 use the authority granted by shareholders to buy back shares. During the period 1 July 2014 to 31 December 2014, the Company purchased 313,837 of its ordinary shares. 2,812,448 shares had been repurchased in the period ended 31 December 2013 but had been held for over a year and were therefore cancelled in the current financial period. The buy-backs are paid for out of distributable reserves. 

In addition to share buybacks, the Board works with our Investment Manager and Company brokers as well as the financial press in order to maintain institutional and private investor awareness of both Qatar and demand for the Company's shares. The Company received extensive positive media coverage during 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 following the accompanying financial statements.

Outlook, risks and uncertainties

The fall in oil and gas prices will undoubtedly have some impact on the Qatari economy as certain low priority projects may be deferred. However, Qatar is the world's largest exporter of liquid natural gas (LNG) and an overwhelming majority of these exports are secure under long-term contracts so have steadier revenue streams. The government diversification policies over recent years have placed Qatar in an enviable position relative to other Gulf countries with around 50% of GDP now derived from the non-hydrocarbon sector. This, combined with strong population growth, improving demographics and a full infrastructure pipeline, should safeguard Qatar's growth prospects.

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 expecting healthy growth in the Qatari economy, as rapid growth in the non-hydrocarbon sector helps offset slowdown in the hydrocarbon sector.  Widespread infrastructure spending underpins economic growth with valuations and dividend yields remaining attractive.

Nicholas Wilson

Chairman

23 February 2015

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 2014 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

23 February 2015

Report of the Investment Manager and the Investment Adviser

Market Overview

The performance of the GCC markets is shown below:

Index	30-Jun-14	31-Dec-14	% Change
Qatar (DSM)	11,489	12,286	6.9%
Saudi (TASI)	9,513	8,333	-12.4%
Dubai (DFMGI)	3,943	3,774	-4.3%
Abu Dhabi (ADI)	4,551	4,529	-0.5%
Kuwait (KWSE)	6,971	6,536	-6.3%
Oman (MSI)	7,008	6,343	-9.5%
Bahrain (BAX)	1,428	1,427	-0.1%

Source: Bloomberg

Global markets witnessed an eventful year, with some markets reporting strong results despite increased geopolitical risks, lower than expected recovery in the global economy, uncertainty in timing and effect of macroeconomic policies in major economies and volatile oil prices. The S&P 500 index gained 11.4% in 2014, reflecting continued improvement in the US economy on the back of continued falls in debt levels and improving consumer sentiments. In 2014, MSCI World Index grew marginally by 2.9%, while MSCI Emerging Market was down 4.6%.

GCC markets reported healthy gains during the first half of 2014, with Qatar, UAE and Saudi Arabia touching multi-year highs. Momentum was largely driven by high oil prices, solid corporate earnings, the impending opening of the Saudi market to foreign investors later in 2015 and the MSCI upgrade of Qatar and UAE. However, in the second half of 2014 Saudi led all major GCC markets down, excluding Qatar. The sharp decline in oil prices reversed much of the earlier gains in GCC markets, as investors worried about growth prospects of the region. The rapid sell-off in GCC markets was also fuelled by year-end profit booking after strong performance in the past year and a half.

So the overall performance of GCC markets in 2014 was mixed, with Qatar and Dubai reporting double digit gains, while the Saudi Arabia market fell 2.4%. Qatar and Dubai rose 18.4% and 12.0% respectively over the year. MSCI's move to increase the weighting of the two countries in its Emerging Market Index encouraged demand from foreign investors. In 2014 the Bloomberg GCC index closed flat. Among other GCC markets, Abu Dhabi gained 5.6%, helped by its banking and consumer sectors. Saudi Arabia, the largest oil producer in OPEC, fell 2.4% in 2014, as the Saudi's petrochemical sector declined over 22%. Kuwait was the worst performer in the region, losing 13.4%. Oman was down 7.2% as all sectors reported negative returns. Bahrain rose 14.2%.

Despite the oil price fall, Saudi Arabia and Oman confirmed that they continue their 2015 spending plans. According to Standard Chartered estimates, the GCC region has seen successive surpluses recorded over the last decade in budgets which have helped build up a net asset position of US$2.2 trillion. As a result, the Investment Advisor expects governments to adopt a counter-cyclical approach to spending, which means that lower oil prices will not impact capital expenditure and infrastructure projects in the short to medium term, keeping real GDP growth healthy.

Qatar was the top performing market in the GCC region and was in the top 10 best performing indices in the world.

Fundamental story of Qatar remains intact

The strong performance of Qatar compared to GCC peers can largely be attributed to a robust infrastructure pipeline, coupled with lesser reliance on crude oil prices, Qatar's economy continued to grow with Q3 2014 real GDP rising at 6.0% on an annual basis. Non-hydrocarbon sector growth was resilient, with a 12% rise reported during Q3 2014. This helped make up for the slowdown in the oil sector, which contracted by 2.8% in Q3 2014.  Recent falls in oil prices might have a temporary impact on the country's budget surpluses. However, in the coming years, the non-hydrocarbon sector is expected to play an important role, as infrastructure remains a priority. Infrastructure spending remains the backbone of non-hydrocarbon sector growth, supported by a rising population and increased consumer spending. More than US$182 billion is budgeted to be spent on infrastructure between 2014 and 2018. New projects to the tune of US$30 billion are lined up in 2015.

Qatar's state budget has been assuming conservative oil price estimates, helping the country build substantial surpluses over the past decade. For 2014/15, the budget was drafted on an estimated oil price of US$65 per barrel when Brent crude was around US$100 per barrel. The nation's budget surplus for 2004/5 stood at QAR19.0 billion (16.4% of GDP at current prices) which has increased to QAR115.0 billion (15.6% of GDP at current prices) during 2013/14. Budget surpluses also helped the country to diversify its economy from the traditional hydrocarbon sector to non-hydrocarbon sectors. Latest data from MEED Projects states that Qatar's infrastructure projects pipeline is set to increase, with ~US$30 billion worth of new projects lined up in 2015.

Qatar Budget Surplus

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

The Investment Adviser believes that Qatar's long term growth story remains intact, driven by double digit growth of the non-hydrocarbon sector on the back of a strong infrastructure development pipeline, ahead of the FIFA World Cup 2022 and in line with Qatar National Vision 2030. Most of this infrastructure spend is related to road and rail transport projects, expansion of air and sea ports, healthcare and education investments, with a lesser allocation to the conventional real estate sector. Furthermore, investors have visibility of projects being completed on time, as these are expected to be ready for the FIFA World Cup in 2022.

Qatar Macroeconomic Update

During Q3 2014, GDP grew by 6.0%, on an annual basis, according to a report released by the Ministry of Development Planning and Statistics (MDPS). The non-hydrocarbon sector was again the key driver of growth.  growing by 12.0%, when compared to the same period in 2013. This countered the slowdown in the oil sector, which contracted 2.8% in Q3 2014.

Sectors including electricity, construction, trading, transport & communication, financial and domestic services were the top performers. The hydrocarbon sector slowdown was mainly attributable to lower crude oil production and maintenance shutdowns in gas plants coupled with price falls.

The Investment Adviser believes that the growth prospects for the Qatari economy remain compelling, backed by significant infrastructure spending ahead of the 2022 FIFA World Cup and in line with Qatar National Vision 2030. Recently, the Minister of MDP&S, HE Dr. Saleh Al Nabit indicated that the nation's non-hydrocarbon sector remains resilient and that its contribution to the overall economy would surpass that of the hydrocarbon sector.

According to QNB's estimates, Qatar's non-hydrocarbon economy is expected to witness double digit growth in coming years. Population growth should drive consumer spending. As at the end of December 2014, Qatar's population stood at 2.24 million, up 9.3% on December 2013.

Recent Developments

Changes to QE Index constituents and weightings

Following the semi-annual review of the QE indices, from 1 October 2014, Al Khaliji Commercial Bank and Al Meera Consumer Goods were replaced by Ezdan Holding and Mazaya Qatar in the QE Index. Additionally, Ezdan Holding, Mannai Corp. and Mesaieed Petrochemical Holding Co. will join the QE All Share Index from 1 October 2014. Following these additions, the QE All Share Index will comprise of 43 stocks.

S&P Dow Jones moves Qatar to its Emerging Market Index

Recently, Standard & Poor's (S&P) Dow Jones announced an upgrade of the Qatari market from Frontier Market to Emerging Market. The Qatari market will have a 0.9% weight in Standard & Poor's Broad Market Index (BMI) for emerging markets.

MSCI increases weightings of some Qatari stocks following foreign ownership increase

In August 2014, MSCI the global index provider increased the weightings of three Qatari companies in the MSCI Emerging Markets Index following changes in the way foreign ownership limit is calculated by the Qatari authorities (from free float to a proportion of the total share capital).

Following a change in calculation method, the foreign inclusion factor for Qatar National Bank (QNB) was raised to 0.13 from 0.06, Industries Qatar (IQ) to 0.13 from 0.06 and Qatar Islamic Bank (QIB) to 0.25 from 0.21. A foreign inclusion factor for a company reflects the percentage of outstanding shares available for foreign investors which are freely floated. As a result, Qatar's total weighting in the MSCI Emerging Markets Index increased to an estimated 0.59% from 0.47%.

MSCI increases weightings of some Qatari stocks following foreign ownership increase continued

MSCI lifted the weighting of a few Qatari and UAE companies in its emerging market index. MSCI also removed the adjustment factor of 0.5 for selected companies from the countries, citing the relaxation of their foreign ownership requirements. These companies include Emaar Properties, Dubai Islamic Bank, Qatar National Bank, Industries Qatar, Commercial Bank of Qatar and Doha Bank. Meanwhile, MSCI also announced the inclusion of Gulf International Services to its emerging market index.

GCC and MENA companies may list their stocks on QE

According to reports, the Qatar Exchange (QE) is likely to see companies from the GCC and MENA region listing on the QE, driven by QE's three phase development program to make Qatar an attractive investment destination for global fund managers. Dual listing of companies and products are under discussion. QE is expected to introduce securities lending and borrowing, margin trading, omnibus accounts and a central counterparty in order to attract foreign investors and improve operational efficiency. The Qatar Exchange's regulator, Qatar Financial Markets Authority, has set the guidelines for investors looking to undertake margin trading on the exchange.

S&P affirms AA/A-1+ for Qatar with a stable outlook

Standard & Poor's has affirmed its 'AA' long-term and 'A-1+' short-term foreign and local currency sovereign credit ratings for Qatar. The agency has also maintained its 'Stable' outlook for Qatar, citing economic wealth and surplus.

Credit growth

Qatari credit growth continued the loan book grew by 7.8% in November 2014 on a YTD basis. Public sector lending declined 5.9% between December 2013 and November 2014, while private sector lending increased 16.6%. The private sector loan book increased mainly from lending to the trading and contractor sectors. The private sector now represents almost 60.4% of total credit, as compared to 55.9% at the end of 2013.

Islamic loans grew at a quicker pace than traditional loans, raising 21.5%, whereas traditional loans increased by 3.0%. Total deposits in the nation grew by 9.3% between December 2013 and November 2014. Islamic deposits also grew at a quicker pace as compared to commercial deposits. The overall loan to deposit ratio in the Qatari banking sector stood at 104%, compared to 105% recorded as at the end of December 2013.

Credit growth is expected to remain buoyant on the back of infrastructure spending and growth in the non-hydrocarbon sector.

Qatar: corporate profits increased 8.8% in the first 9 months of 2014

Net profits of Qatari listed companies rose 8.8% during the first 9 months of 2014 compared to 2013, to QAR32.7 billion (US$9.0 billion). The rise in profitability was driven by robust earnings growth achieved by the real estate and transportation sectors during the period. In Q3 2014, earnings increased by 23.9%, with net profits reaching QAR11.3 billion (US$3.1 billion), helped by a strong rise in net income from the insurance and transportation sectors.

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

Sectors	9M 2013	9M 2014	% Change	Q3 2013	Q3 2014	% Change
Banks & Financial	3,622,974	4,072,410	12.4%	1,161,870	1,440,855	24.0%
Insurance	389,676	309,366	-20.6%	44,189	78,793	78.3%
Industrial	2,481,799	2,569,129	3.5%	763,502	967,652	26.7%
Services & Consumer Goods	340,490	374,770	10.1%	144,381	126,990	-12.0%
Real Estate	466,643	641,591	37.5%	188,173	231,130	22.8%
Telecoms*	568,312	571,151	0.5%	92,655	103,010	11.2%
Transportation	386,069	443,748	14.9%	115,467	160,560	39.1%
Total	8,255,964	8,982,165	8.8%	2,510,236	3,108,991	23.9%

* Excluding Vodafone Qatar because of 31 March year end

Source: Qatar Exchange

Banking & financial services sector net income rose 12.4% in the first 9 months of 2014, compared with the first 9 months of 2013. Banking continued to remain the major profit contributor of the sectors, as its profitability increased by 12.2%, with most of the listed banks posting double-digit rate of growth. The rise in the profitability can be mainly attributed to the healthy credit growth rate achieved by the banking sector, especially in the private sector. This trend is expected to continue, as infrastructure spending could keep supporting the lending growth. Sector heavyweight, Qatar National Bank posted a 12.6% rise in its net profits during the first 9 months of 2014. Qatar Islamic Bank posted the highest growth rate of 15.9% during that period.

Earnings of the Qatari financial services sector advanced 39.5% in the first 9 months of 2014, compared with the first 9 months of 2013, as net profits of Dlala Brokerage rebounded strongly during the period. Meanwhile, Qatar Oman Investment Company and Islamic Holding Company also posted robust earnings growth during the similar period. However, the net income of National Leasing Company experienced a sharp decline in the period.

Industrial sector profits improved by 3.5% during the first 9 months of 2014, compared with the first 9 months of 2013. The sector continues to remain the second largest contributor of total profits amongst all the Qatari listed companies. The modest rise in the sector's profitability was mainly a result of the robust earnings growth rates achieved by Qatar Electricity & Water and Gulf International Services. Net income of Gulf International Services increased sharply, this was partially on account of buy-out of the remaining 30% stake by the company in its drilling segment JV in April 2014. Sector heavyweight, Industries Qatar, reported a decline in net profit, as shutdown programs in H1 2014 continued to weigh on the company's profitability.

In the first 9 months of 2014, the net profit of the insurance sector was down by almost 20%, as earnings of Qatar General Insurance & Reinsurance Company declined by 77.4%. The sharp decline in the company's net income is mainly due to a one-off fair value gain for the company during the first 9 months of 2013. Net income of Qatar Insurance Company was QAR779.8 million for the period, rising by 45.9% compared with the first 9 months of 2013.

Net profit in services & consumer goods sector rose 10.1% in the first 9 months of 2014, compared to the same period last year. The sector's largest profit contributor, Qatar Fuel, reported a 2.8% rise in its net income during the period.

The real estate sector continued to post healthy earnings growth, as its net profit increased by 37.5% during the first 9 months of 2014. The largest contributor of profits, Ezdan Holdings, posted a 41.4% rise in its earnings growth during the period, mainly on the back of a strong rise achieved by the company's rental income. Other major players in the sector, United Development Company and Barwa Real Estate Company, also posted double-digit earnings growth.

The telecom sector includes two companies, Ooredoo and Vodafone Qatar. Vodafone Qatar was excluded from this profit comparison, since its fiscal year ends on 31 March. Ooredoo's net income grew marginally to QAR2.1 billion in the period.

The transportation sector profitability increased 14.9% in the first 9 months of 2014, compared with the same period last year, with Gulf Warehousing Company and Qatar Gas Transport Company posting an earnings growth of more than 25%. Meanwhile, Qatar Navigation, the largest profit contributor of the sector, reported a 5.5% rise in net profits in the period.

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 the end of December 2014, QIF had 25 holdings: 21 in Qatar, 3 in UAE and 1 in Oman. (Q3 2014: 26 holdings: 22 were in Qatar, 3 in the UAE and 1 in Oman). Cash was 1.2% of NAV (Q3 2014: 2.6%).

The Investment Adviser remains focused on Qatar because of encouraging economic growth coupled with infrastructure spending. Robust earnings potential and attractive dividend yields of selected Qatari companies remain key drivers behind the heavy Qatar exposure.

Sector Allocation

Industry allocation (% of gross assets)

Embedded image removed - pleaserefer to the Company's website www.qatarinvestmentfund.com for a chart depicting Industry allocation.

The Investment Adviser remains positive on Qatari banking because the infrastructure development plans announced by the government are expected to support lending activity, from which domestic banks will benefit. The Company's banking and financial sector weighting rose from 41.0% in Q3 2014 to 52.0% in Q4 2014. Qatar National Bank remains QIF's largest holding at 17.7% of NAV, followed by Commercial Bank of Qatar at 9.4%.

Industrials remain the second largest exposure at 16.8% of NAV. The allocation to industrials decreased from 22% in Q3 2014 to 16.8% in Q4 2014. Industries Qatar remained the largest holding in the industrial sector at 6.6% of NAV.

The Investment Adviser decreased the Company's real estate exposure in Q4 2014, reducing exposure in United Development Company (from 2.9% of NAV in Q3 2014 to 0.9% at the end of Q4 2014) and Ezdan Holding Group (from 1.4% in Q3 2014 to 0.4% in Q4 2014). The Investment Adviser reallocated the cash into other sectors, mainly banking. This move has yielded positive results for the portfolio, as these two stocks corrected significantly by 18.7% and 30.1%, respectively, during Q3. The Company's weighting in telecom, transportation and insurance was broadly unchanged.

Portfolio Structure

Top 10 Holdings

As at 31 December 2014, the top five investments formed 47% of total NAV of the Company, while the top 10 holdings of the Company constituted 76.1% of the total NAV.

During Q4 2014, Masraf Al Rayan and Gulf International Services replaced Qatar Navigation and Qatar International Islamic Bank in QIF's top 10 holdings. The Investment Adviser expects markets to remain volatile in the near to medium term and the portfolio is positioned to take advantage of the companies with high dividend yields and which are directly linked to non-hydrocarbon economic growth.

Company Name	Sector	% share of NAV
Qatar National Bank	Banks & Financial Services	17.7%
Commercial Bank of Qatar	Banks & Financial Services	9.4%
Qatar Islamic Bank	Banks & Financial Services	6.9%
Industries Qatar	Industry	6.6%
Ooredoo	Telecoms	6.3%
Barwa Real Estate	Real Estate	6.2%
Doha Bank	Banks & Financial Services	6.0%
Qatar Insurance	Insurance	5.9%
Masraf Al Rayan	Banks & Financial Services	5.6%
Gulf International Services	Industry	5.3%

Source: Bloomberg, Qatar Insurance Company

Profile of Top Five Holdings (As At 31 December 2014)

Qatar National Bank (17.7% 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 the largest bank in Qatar, with total assets of QAR486.4 billion (US$133.6 billion) as at 31 December 2014. For the FY2014, QNB reported 10.3% rise in net profit to QAR10.5 billion (US$2.9 billion). QNB is well positioned to benefit from the rapid expansion of the domestic economy. The bank operates in 26 countries, through more than 615 branches, supported by over 1,300 ATMs and employing around 14,500 staff.

Commercial Bank of Qatar (9.4% of NAV)

Commercial Bank of Qatar (CBQ) was incorporated in 1975 as a full service commercial bank. CBQ is the second - largest commercial bank in Qatar, with total assets of QAR114.3 billion (US$31.4 billion) as at 30 September 2014. CBQ offers retail, corporate, Islamic and investment banking products in Qatar, through its subsidiary in Turkey and through its associates in the UAE and Oman. In 9M 2014, its net income rose 19.0% to QAR1.6 billion (US$0.44 billion) compared to same period last year.

Qatar Islamic Bank (6.9% of NAV)

Qatar Islamic Bank (QIBK) is Qatar's first Islamic financial institution that follows the Sharia' principles. It was established in 1982 and over the years it has since grown its presence in the international market with branches in UK, Lebanon, Malaysia and Sudan. Apart from core banking activities, it also holds a stake in other Qatari Sharia'-compliant companies like Qinvest, Al Jazeera Finance and Durat Al Doha. As at the end of December 2014, its financing assets stood at QAR59.7 billion (US$16.4 billion), with the real estate and personnel segment occupying the largest share of the loan basket. Its market share in terms of financing assets stood at 10.2%, as at the end of December 2014. In FY2014, the bank's net profit grew around 20% to QAR1.6 billion (US$0.44 billion).

Industries Qatar (6.6% 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. The company holds a 50% stake in a joint venture, Qatar Steel International Company QPSC, in association with the government of Algeria which plans to develop a 2.0 million MT PA integrated steel mill in Algeria. In the first phase, the company is estimated to contribute around QAR0.6 billion through Qatar Steel for building up a direct reduction plant, steel melt shop and rolling mill. The construction is expected to commence in H1 2015 and project completion date would be Q1 2018. Further, the company has confirmed that the Al Sejeel Petrochemical Complex project has been put on hold and a new downstream petrochemical project with higher yields is under study. In FY2014, IQ reported net profit of QAR6.3 billion, down 20.8% against FY2013, mainly due to reduced sales volumes following extensive planned preventive maintenance and warranty shut-downs during the year, weak urea prices and heightened operating costs in the petrochemical and steel segments.

Ooredoo (6.3% of NAV)

Ooredoo (formerly known as Qatar Telecom) 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 and, cable and wireless TV services for home, business, corporate, and government customers. For the first nine months of 2014, Ooredoo reported a marginal rise in net profit to QAR2.1 billion (US$0.57 billion), compared to same period last year.

Performance and Portfolio Structure

The net asset value per share, net of dividends (NAV per share), increased by 23.4% to US$1.5359 as at 31 December 2014, compared to US$1.2449 as at 31 December 2013. On 31 December 2014, the QIF share price was trading at a 12.1% 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	2014
QIF NAV*	13.9%	-36.4%	10.4%	29.9%	1.3%	-4.7%	24.2%	20.6%
QE Index	27.0%	-28.8%	1.1%	24.8%	1.1%	-4.8%	24.2%	18.4%
QIF Share Price	15.5%	-67.5%	97.3%	23.0%	-2.3%	2.4%	26.4%	17.4%

* NAV net of dividends

Source: Bloomberg, Qatar Insurance Company

Outlook

The Qatari economy is expected to grow healthily in the near-term, as the fast growing non-hydrocarbon sector offsets the slowdown in hydrocarbon. A sustained oil price downturn would likely result in capex downsizing and prioritising of ongoing / strategic projects in the GCC. However, Qatar's capex pipeline is relatively resilient given sizeable investments by central government and greater public sector involvement. While a large chunk of government spending is allocated to urban, utilities and transport projects, a significant amount is committed to the FIFA 2022 World Cup and ancillary projects. Widespread infrastructure spending remains the engine of Qatar's growth potential, as these contracts help economic activity in related industries.

The current slump in energy prices should not significantly adversely affect Qatar as its long term strategic gas sale contracts should mean less price volatility. Compared to other GCC nations, Qatar is in a better position to withstand lower oil prices, as it enjoys one of the lowest per-barrel budget costs.

The growing population and an influx of expatriates should help domestic demand, notably in financial services, consumer, transport and communications, and tourism sectors. Hence, the Investment Adviser favours selected banking and consumer-driven companies.  

The Investment Adviser believes that the recent correction in the Qatari market gives fresh entry points for long term investors seeking robust earnings growth potential and attractive dividend yields.

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

23 February 2015                                                   Consolidated Income Statement		23 February 2015 (Unaudited)		(Unaudited)
	Note	For the period from  1 July 2014 to 31 December 2014		For the period from 1 July 2013 to 31 December 2013
		US$'000		US$'000
Income
Dividend income on quoted equity investments		1,077		8
Realised gain on sale of financial assets at fair value through profit or loss		27,612		8,673
Net changes in fair value on financial assets at fair value through profit or loss		(7,954)		12,281
Commission rebate income on quoted equity investments	7	182		108
Bond interest		-		18
Total net income		20,917		21,088
Expenses
Investment Manager's fees	6	1,302		1,256
Performance fees	6	-		-
Audit fees		29		14
Other expenses	6	659		591
Total operating expenses		1,990		1,861
Profit before tax		18,927		19,227
Income tax expense	13	-		-
Retained profit for the period		18,927		19,227
Basic and diluted earnings per share (cents)	10	12.22		11.03
Consolidated Statement of Comprehensive Income
			(Unaudited)		(Unaudited)
			For the period from  1 July 2014 to 31 December 2014		For the period from 1 July 2013 to 31 December 2013
			US$'000		US$'000
Profit for the period			18,927		19,227
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss:
Currency translation differences			(126)		(18)
Total items that are or may be reclassified subsequently to profit or loss			(126)		(18)
Other comprehensive (expense)/income for the period (net of tax)			(126)		(18)
Total comprehensive profit  for the period			18,801		19,209

Consolidated Balance Sheet

		(Unaudited)	(Audited)
	Note	At 31 December 2014	At 30 June 2014
		US$'000	US$'000
Financial assets at fair value through profit or loss	5	235,221	202,703
Due from broker		-	-
Other receivables and prepayments		104	76
Cash and cash equivalents	8	3,156	17,295
Total current assets		238,481	220,074
Issued share capital		1,561	1,589
Reserves	9	236,134	217,726
Total equity		237,695	219,315
Other creditors and accrued expenses	11	786	759
Total liabilities		786	759
Total equity & liabilities		238,481	220,074

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 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.

	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 2014	1,589	155,847	61,091	788	219,315
Total comprehensive income for the period
Profit	-	-	18,927	-	18,927
Other comprehensive income
Foreign currency translation differences	-	-	-	(126)	(126)
Total other comprehensive expense	-	-	-	(126)	(126)
Total comprehensive profit for the period	-	-	18,927	(126)	18,801
Contributions by and distributions to owners
Dividends payable	-	-	-	-	-
Shares repurchased to be held in treasury	-	(421)	-	-	(421)
Shares in treasury cancelled	(28)	-	-	28	-
Total contributions by and distributions to owners	(28)	(421)	-	28	(421)
Balance at 31 December 2014	1,561	155,426	80,018	690	237,695

Consolidated Statement of Cash Flows

		(Unaudited)	(Unaudited)
	Note	For the period from 1 July 2014 to 31 December 2014	For the period from 1 July 2013 to 31 December 2013
		US$'000	US$'000
Cash flows from operating activities
Purchase of investments		(97,633)	(46,892)
Proceeds from sale of investments		84,676	66,630
Interest received		-	18
Dividends received		1,077	-
Operating expenses paid		(1,991)	(2,006)
Commission rebate		182	108
Net cash (used in)/generated from operating activities		(13,689)	17,858
Financing activities
Cash used in share repurchases		(421)	(2,932)
Net cash used in financing activities		(421)	(2,932)
Net (decrease)/increase in cash and cash equivalents		(14,110)	14,926
Effects of exchange rate changes on cash and cash equivalents		(29)	(11)
Cash and cash equivalents at beginning of period		17,295	8,257
Cash and cash equivalents at end of period	8	3,156	23,172

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 warrants expired on 16 November 2012.

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

As a result of a further fund raising in December 2007, a further 76,172,523 Ordinary Shares were issued, which were admitted for trading on 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 2014 to 31 December 2014, the Company purchased 313,837 of its ordinary shares for a total value of US$421,200 to be held in treasury. 2,812,448 shares had been repurchased in the period ended 31 December 2013 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 30 January 2015 the Company completed a tender offer at a price of US$1.4859 per share. Under the offer 15,477,601 shares were cancelled with US$22,998,167 being paid to participating shareholders.

The shareholders approved a dividend of 3.5 cents per share on 11 November 2014; this was paid to shareholders on 13 February 2015.

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 2014 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 2014. 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 2014.

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 2014 is US1.5359 per share based on 154,763,513 ordinary shares in issue as at that date (excluding 1,294,661 shares held in treasury), (30 June 2014: US$1.4142 based on 155,077,350 ordinary shares in issue, excluding 3,793,272 shares held in treasury).

5              Investments

31 December 2014 financial assets at fair value through profit or loss: all quoted equity securities

Security name	Number	US$'000
Emaar Malls Group (EMAARMALLS UH)	415,000	302
Emaar Properties Company (EMAAR UH)	3,145,000	6,215
Emirates National Bank of Dubai (ENBD UH)	1,283,500	3,106
Bank Muscat (BKMB OM)	60,388	90
Barwa Real Estate (BRES QD)	1,297,739	14,882
Commercial Bank of Qatar (CBQK QD)	1,195,162	21,903
Doha Bank (DHBK QD)	927,779	14,330
Doha Insurance (DOHI QD)	164,215	1,307
Ezdan Holding Group (ERES QD)	236,610	969
Gulf International Services (GISS QD)	479,519	12,774
Industries Qatar (IQCD QD)	345,675	15,932
Masraf Al Rayan (MARK QD)	1,104,685	13,396
Mazaya Real Estate Development (MRDS QD)	59,500	310
Medicare Group (MCGS QD)	82,542	2,582
National Leasing (NLCS QD)	350,641	1,924
Ooredoo (ORDS QD)	446,146	15,055
Qatar Electricity & Water Company (QEWS QD)	224,396	11,543
Qatar Gas Transport (QGTS QD)	60,360	378
Qatar Insurance (QATI QD)	573,488	14,255
Qatar International Islamic Bank (QIIK QD)	452,246	9,975
Qatar Islamic Bank (QIBK QD)	592,958	16,626
Qatar National Bank (QNBK QD)	728,686	42,321
Qatar Navigation (QNNS QD)	405,610	10,571
Qatar United Development Company UDCD QD)	321,183	2,062
Widam Food Company  (WDAM QD)	145,622	2,413
		235,221

6              Charges and Fees

	31 December 2014	31 December 2013
	US$'000	US$'000
Investment Manager's fees (see below)	1,302	1,256
Performance fees (see below)	-	-
Administrator and Registrar's fees (see below)	162	133
Custodian fees (see below)	98	88
Directors' fees and expenses	172	170
Directors' insurance cover	22	22
Broker fees	55	34
Other	150	144
Other expenses	659	591

 

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. This will further reduce to an annual fee of 1.0% of the net asset value of the Company from 1 November 2015.

Management fees for the period ended 31 December 2014 amounted to US$1,302,037 (31 December 2013: US$1,255,774).

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 2014 amounted to US$nil (31 December 2013: US$nil).

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

Investment Management Agreement definitions

Adjusted Net Asset Value per Ordinary Share	at a particular time, the 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 2014 amounted to US$97,934 (31 December 2013: US$88,190).

Administrator and Registrar fees

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

This is subject to a minimum monthly fee of US$15,000, payable quarterly in arrears. The Administrator receives an additional fee of £1,200 per month for providing monthly valuation data to the Association of Investment Companies.

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 2014 amounted to US$161,653 and US$32,582 for additional services (31 December 2013: US$132,758 and US$22,152 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 2014 the Group received US$182,452 (2013: US$108,281).

8              Cash and Cash Equivalents

	31 December 2014	30 June 2014
	US$'000	US$'000
Bank balances	3,156	17,295
Cash and cash equivalents	3,156	17,295

9              Other Reserves

	Distributable Reserves	Retained Earnings	Foreign currency translation reserve	Capital redemption reserves	Total
	US$'000	US$'000	US$'000	US$'000	US$'000
Balance at 1 July 2014	155,847	61,091	(98)	886	217,726
Foreign exchange translation differences	-	-	(126)	-	(126)
Retained earnings for period	-	18,927	-	-	18,927
Dividends paid	-	-	-	-	-
Shares repurchased into Treasury	(421)	-	-	-	(421)
Shares in Treasury cancelled				28	28
Balance at 31 December 2014	155,426	80,018	(224)	914	236,134

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 2014	31 December 2013
Profit attributable to equity holders of the Company (US$'000)	18,927	19,227
Weighted average number of ordinary shares in issue (thousands)	154,842	174,334
Basic earnings per share (cents per share)	12.22	11.03

11            Trade and other payables

	31 December 2014	30 June 2014
	US$'000	US$'000
Management fee payable	655	631
Administration fee payable	84	82
Accruals and sundry creditors	47	46
	786	759

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 2014 amounted to US$172,308 (31 December 2013: US$169,832).

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.

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

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

15            Post Balance Sheet Events

On 30 January 2015 the Company completed a tender offer at a price of US$1.4859 per share. 15,477,601 shares were cancelled with US$22,998,167 being paid to participating shareholders.

Shareholders will receive a dividend of 3.5 cents per share on 13 March 2015.

 

END

 

 

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