Unaudited Preliminary Results 30 June 2012

RNS Number : 1461N

Qatar Investment Fund PLC

26 September 2012

Qatar Investment Fund Plc

Unaudited Preliminary Results for the year ended 30 June 2012

Qatar Investment Fund Plc ('QIF' or 'the Company'), the main market listed fund established to invest in opportunities in Qatar and the Gulf Cooperation Council (GCC) region, announces preliminary results for the year ended 30 June 2012.

David von Simson, Chairman of the Qatar Investment Fund, said:

"After the 23% rise in net asset value ("NAV") per share last year, we recorded a slight drop in the year under review, from US$1.03 to US$1.01 per share (excluding the dividend of 2.7 cents per share), but this has been more than recovered since the financial year-end.

"In contrast, our share price improved during a difficult year for global markets, from $0.87 to $0.88, and shareholders also received a dividend of 2.7c per share, making a total return of just under 4%. In the same period the UK's FTSE index slid 6.30% and the MSCI Emerging Markets Index fell by a full 18.22%.

"In order further to enhance shareholder returns, the Board is proposing a tender offer, to allow shareholders to sell a fifth of their holdings at a marginal discount to net asset value, and an increased dividend of 3.0 cents per share."

Highlights:

· The International Monetary Fund (IMF) expects Qatar's real GDP growth to reach 6.0% in 2012 and slow to 4.6% in 2013, the highest in the MENA region (with the exception of Iraq).

· QIF's Investment Adviser feels that the IMF growth estimates are rather conservative, and that Qatar is well positioned to maintain its steady economic growth.

· Qatar Government expects a surplus of US$7.7 billion during the fiscal year and it indicated a strong outlook for infrastructure spending, thus providing impetus to the non-oil sector.

· Qatar's growth prospects are well supported by the expansionary budget announced for 2012-2013. This coupled with the time pressure imposed by preparations for the 2022 FIFA World Cup, are indicative of further growth in spending. Planned infrastructure spending and higher budget allocation for education and healthcare sectors also represent long-term positives for the economy.

Financials:

· Net asset value per share at 30 June 2012 was US$1.01 (US$ 1.03 at 30th June 2011).

· Dividend paid in October 2011 of 2.7 cents per share.

· At the end of June 2012 the share price was trading at a 13% discount to NAV.

Holdings as of June 30th 2012

· The profitability of Qatari-listed companies witnessed reasonable growth during the year, supported by measures taken by the government to accelerate development and to counter the effects of the global financial crisis.

· Qatar continues to be our favourite market within the GCC due to a combination of relatively low political risk and high growth prospects. At 30 June 2012, the Company was invested in 21 companies in Qatar and 1 in Oman.

Discontinuation Vote and proposed Tender Offer

· Discontinuation vote to be put to shareholders at the annual general meeting, in accordance with the Company's Articles of Association.

· Board proposes tender offer to provide shareholders the opportunity to tender up to 20% of their shareholding at a price which will reflect a 1% discount to Formula Asset Value per share (Formula Asset Value being net asset value less the costs of undertaking the tender offer).

· Further details on the tender offer, and the Company's annual report, are expected to be sent to shareholders shortly.

David von Simson added:

"The Qatari economy remains in extremely good health and is well placed in a global context in terms of its robust growth expectations. Of particular note is its enviable budget surplus, beyond the dreams of most European or US finance ministries, much of which is being funnelled back into the local economy. We believe that in the coming years, there will be a strong correlation between national budget surpluses or deficits, and the performance of local economies.

"Given this economic background, we believe that the Qatari stock market, trading on a forward price earnings ratio of 8.7 and with a dividend yield of 6% represents exceptionally good value."

For further information:

Qatar Investment Fund Plc -

David von Simson

Oriel Securities - +44 (0) 20 7710 7600

Joe Winkley

Neil Winward

Panmure Gordon - +44 (0) 20 7459 3600

Andrew Potts

Maitland - +44 (0) 20 7379 5151

William Clutterbuck

Robbie Hynes

Chairman's Statement

On behalf of your Board, I am pleased to present your Company's Annual Report and Accounts for the period ended 30 June, 2012.

After the 23% rise in net asset value ("NAV") per share last year, we recorded a slight drop in the year under review, from US$1.03 to US$1.01 per share (excluding the dividend of 2.7 cents per share), which has been more than recovered since the year end.

In contrast, our share price improved over the period from $0.87 to $0.88, and shareholders also received a dividend of 2.7c per share, making a total return of just under 4%. While this return is pedestrian compared to last year's, it is of course largely a reflection of international markets: over the same period, the UK's FTSE index slid 6.30% and the MSCI Emerging Markets Index fell by 18.22%.

This again demonstrates that our share price has historically outperformed in good times, and yet proved defensive in bad ones.

Results

Results for the period under review showed a profit after tax of US$0.7m, generated from fair value adjustments and realised gains, and equivalent to basic earnings per share of 0.29 cents.

Our Total Expense Ratio came down to 2.05% from 2.07% in the previous year. The aim of your Board remains to achieve a Total Expense Ratio of less than 2% - based on our fund size as at 30^th June, 2011.

Share Buybacks

During the year, a total of 7,681,193 ordinary shares were purchased at prices ranging from US$0.81 to US$0.935 and are held in treasury. 464,696 ordinary shares held in treasury at 30^th June, 2011 have now been cancelled, having been held for more than twelve months.

Proposed Dividend

We aim to pay dividends from income received from investee companies. Since Qatari companies only pay dividends once a year, the Board will continue its policy of not declaring interim dividends, and none was declared this year.

The Board intention is to propose a dividend of 3.0 cents per ordinary share (2011 - 2.7c per share) with an ex-date and payment date after the proposed tender offer, as announced on 2 August 2012, has closed. Further details on the ex-date and payment date will be announced in due course.

Related Party Transactions

Details of related party transactions are addressed in note16 of this report.

Outlook, risks and uncertainties

As the Investment Manager's Report explains, the Qatari economy remains in extremely good health and is well placed in a global context in terms of its robust growth expectations, forecasted by the IMF to be 6% for 2012. Of particular note is its enviable budget surplus, beyond the dreams of most European or US finance ministries, much of which is being funnelled back into the local economy. We believe that in the coming years, there will be a strong correlation between national budget surpluses or deficits, and the performance of local economies. Given this economic background, we believe that the stock market, trading on a forward price earnings ratio of 8.7 and with a dividend yield of 6% represents exceptionally good value.

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 the Annual Report for the year ended 30 June 2012.

Post balance sheet events

As already announced, the Board has reached in principle agreement with the Investment Manager and the Investment Advisor, to renew our present contractual arrangements for a further year to 1^st November, 2013 on unchanged terms. This is subject to the outcome of the forthcoming discontinuation vote, agreeing the necessary terms and legal documentation, and obtaining any regulatory or other approvals as required.

On 31 July 2012, the 1,713,550 US$1.00 share options that were granted to professional advisors at the time of the Company's admission to AIM expired unexercised.

Discontinuation Vote and proposed Tender Offer

Shareholders will be aware that a discontinuation vote will be put to shareholders at the next annual general meeting, in accordance with the Company's articles of association, and that certain proposals will be put to shareholders. Shareholders holding at least 51 per cent. of the ordinary shares must vote in favour of the discontinuation resolution for it to be passed. If the resolution is not passed, a similar resolution will be proposed at every third annual general meeting thereafter. If the discontinuation resolution is passed, the Directors will be required to formulate proposals to be put to Shareholders to reorganise or reconstruct the Company or for the Company to be wound up.

As part of those proposals, the Board has resolved that it intends to make available a tender offer to provide shareholders the opportunity to tender up to 20% of their shareholding at a price which will reflect a 1% discount to Formula Asset Value per share (Formula Asset Value being net asset value less the costs of undertaking the tender offer).

The Board continues to look forward to the future with confidence and on your behalf thanks the advisors and other service providers who have contributed to your Company's success.

David von Simson

Chairman

25 September 2012

Business Review

The following review is designed to provide information primarily about the Company's business and results for the year ended 30 June 2012. It should be read in conjunction with the Report of the Investment Manager and the Investment Adviser which gives a detailed review of the investment activities for the year and an outlook for the future.

Investment Objective and Strategy

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

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

Performance Measurement and Key Performance Indicators

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

Returns and Net Asset Value

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

Discount/Premium to Net Asset Value

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

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

Yield

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

Principal Risks and Uncertainties

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

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

Market

The Company's investments consist of listed companies or companies soon to be listed. Market risk arises from uncertainty about the future prices of the investments. This is commented on in Note 15.

Investment and Strategy

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

Accounting, legal and regulatory

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

Operational

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

Financial

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

Report of the Investment Manager and Investment Adviser

Regional Equity Market Overview

Investors in the Co-operation Council for Arab States of the Gulf (GCC) region had a tough FY2011-2012, largely impacted by the Arab Spring, followed by the US credit downgrade, the Euro zone sovereign debt crisis and geopolitical tensions which shaped the performance of regional markets during the financial year ended 30 June 2012. After a tough 2011, world markets staged some recovery in the first quarter of 2012. But the recovery was short lived as European debt woes weighed heavily on global markets in the second quarter of 2012. Some respite did come on the last trading day of the first half of 2012 after a marathon meeting at Brussels. Anaemic growth in developed countries, combined with a slowdown in emerging markets (especially China) pushed down oil prices in the first half of 2012.

Despite a pick-up in activity in Qatar and the UAE, the Gulf Co-operation Council (GCC) projects' market struggled in the first half of 2012, which can be attributed to a slowdown in Saudi Arabia. Projects to the tune of US$55bn were awarded in the GCC in the first half of 2012, some 10% lower than the corresponding period in previous year. This was noted as the worst performance overall since 2005.

During the financial year ended 30 June 2012 the Qatar Exchange witnessed volatility in line with international markets.

The Saudi Arabian equity market was the best performer in the 12 months to 30 June 2012 with a gain of 2.0%. This was largely due to Saudi Arabia's increased spending in the local economy and its buoyant external account. The external accounts reaped the benefits of the fastest rise in oil output since 2003, in order to compensate for the shortfall in conflict stricken countries within the Middle East and North African (MENA) region. This coupled with a surge in prices, boosted the country's trade surplus by 62% to a historical high of US$233.0 billion in 2011, according to the Saudi Arabian Monetary Agency.

Indices	30 Jun 11	30 Jun 12	Change
Saudi (TASI)	6,576	6,709	2.0%
Qatar (QE)	8,361	8,123	-2.8%
Oman (MSI)	5,916	5,690	-3.8%
Dubai (DFMGI)	1,517	1,452	-4.3%
Kuwait (KWSE)	6,212	5,789	-6.8%
Abu Dhabi (ADI)	2,704	2,448	-9.5%
Bahrain (BAX)	1,320	1,127	-14.6%

Source: Bloomberg

Qatar was the second best performer in the 12 months to 30 June 2012, although showing a decline of 2.8%. While Abu Dhabi and Kuwait fell 9.5% and 6.8%, respectively, Bahrain was the worst performer, down 14.6%.

Indices	30 Jun 11	30 Sep 11	30 Dec 11	31 Mar 12	30 Jun 12
Oman (MSI)	-4.1%	-5.3%	1.7%	-0.1%	0.0%
Bahrain (BAX)	-7.4%	-11.7%	1.9%	0.8%	-2.2%
Abu Dhabi (ADI)	3.7%	-6.3%	5.2%	6.3%	-4.1%
Kuwait (KWSE)	-1.3%	-6.1%	0.3%	6.0%	-6.1%
Qatar (DSM)	-1.1%	0.4%	4.6%	0.1%	-7.6%
Saudi (TASI)	0.9%	-7.1%	5.0%	22.1%	-16.0%
Dubai (DFMGI)	-2.5%	-5.6%	5.5%	21.8%	-12.0%

Source: Bloomberg, QIC

Renewed evidence of a global economic deceleration, emerging-market corrections, and intensifying European Financial stress continued to impact negatively on investor sentiment and the performance of international and regional equity markets. Disappointing U.S. economic data and the market impacting European events (Greek elections:-distressed Spanish banking system and deeper recession) triggered a sell-off in equity markets across the GCC region and heightened volatility in global and regional equity markets.

However, on a more positive note, the recent PwC Capital Markets Watch GCC report highlights that GCC initial public offering (IPO) activity picked up in Q2 2012, with capital raisings totalling about US$1.1bn. This was the strongest quarterly IPO performance in the last two years. Although new listings were confined to only a few regional exchanges, it helped to absorb some of the excess liquidity in the region and improve overall investor confidence.

Qatar's Macro Update

Qatar GDP

Qatar's nominal GDP for Q1 2012 is estimated at Qatari riyals (QR)176.07bn (US$48.4bn), up 24.8% YoY and 4.0% QoQ. While the growth was largely driven by Oil and Gas sector, manufacturing and the government services sector provided considerable impetus.

During the quarter, the mining and quarrying sector (which includes oil & gas) reported robust 30.0% year on year growth to reach QR105.46bn, while the non-mining and quarrying sector (which excludes oil & gas) expanded 17.8% year on year to reach QR70.62bn. The manufacturing sector witnessed 21.0% year on year growth to reach QR17.11bn. While double digit growth was registered in transport & communications (10.8% year on year), trade, hotels & restaurants (12.5% year on year) and government services (45.0% year on year), the construction sector output increased 6.8% year on year to reach QR6.51bn. The rise in the government services sector was largely due to the salary hike for government employees.

The International Monetary Fund (IMF) expects Qatar's real GDP growth to reach 6.0% in 2012 and slow to growth of 4.6% in 2013. Given that the Qatari economy expanded by an average of 14.4% annually in real terms over 2004-2011, the 6% growth forecasting for 2012 may be disappointing to some. However, this forecast is not only the highest in the MENA region (with the exception of Iraq), but it also tops the emerging market average of 5.2% forecast by the HSBC global economics team.

The economic outlook for 2012 and beyond looks favourable, despite increased external risks. The main downside risks are lower hydrocarbon prices and potential disruption in transportation of liquefied natural gas (LNG) due to increased geopolitical tensions. The real GDP growth rate is projected to moderate to 6% in 2012, with real hydrocarbon GDP slowing down to 3%, as LNG production remains constant due to Qatar's self-imposed moratorium on new hydrocarbon projects. Large government investment for infrastructure is expected to sustain growth in the non-hydrocarbon sector between 9% and 10% beyond 2012.

Additionally, the Investment Adviser feels that the IMF growth estimates are rather conservative, and that Qatar is well positioned to maintain its steady economic growth, backed by a strong fiscal position, higher contributions from the non-hydrocarbon sector, and significant Government spending on infrastructure projects.

Inflation

Inflation in Qatar has declined from 1.2% in March 2012 to 1.1% in April 2012 and May 2012, due to lower rents and energy costs. In May 2012, there were increases in all the major Consumer Price Index (CPI) components, except rent, fuel and energy which reported a drop of 6.0% year on year. Other components (excluding rent, utilities & related housing services) of the CPI witnessed a rise of around 4.0% year on year. The IMF estimates inflation to rise to an average of 4.0% in 2012 and 2013, due to large government spending leading to higher domestic demand.

Population grew 7.1% year on year in July 2012

Qatar's population continues to grow at a healthy pace. Total population grew from 1.60 million at the end of July 2011 to 1.71 million in July 2012, registering a growth of 7.1%, according to the Qatar Statistics Authority. This positive trend is encouraging and should bode well for the profitability of local companies.

Potential Reclassification to Emerging Markets by Morgan Stanley Capital International (MSCI)

MSCI has further delayed the potential upgrade of Qatar and UAE upgrade to Emerging Market status. In June 2012 MSCI placed Qatar and the UAE under review for a potential upgrade to Emerging Markets (EM) status from the current Frontier Markets (FM) classification, during 2013. The low level of foreign ownership limits in Doha is seen as the only major impediment to Qatar being re-classified as an emerging market.

According to Deutsche Bank research an upgrade of Qatar to EM status would result in Qatar representing a 0.35% weighting within the MSCI EM index, and generate US$400mn of incremental funds inflows into the Qatar equity market. In addition, if South Korea and Taiwan, currently the largest constituents of the MSCI EM index, were to be upgraded to Developed Market (DM) status, this would result in approximately 25% of the EM Index being reassigned, in which case Qatar's weighting and funds inflow could potentially double.

Qatar Exchange (QE) Index - Semi Annual Review

The semi-annual review of the QE Index constituents took place at the end of March. The changes to the index involved removing Salam International and Al Khalij Holding from the index and replacing them with Al Meera Consumer Goods and Qatar Meat and Livestock. The review also led to the change in the QE Index methodology, with a maximum weight of 15% for a single stock within the QE Index as of the rebalance date. If, during the index review, any stock is found to exceed this weight, then for index calculation purposes the stock's market value is capped, and any excess weight is distributed proportionately among the remaining index constituents. This rule also applies to the new QE Total Return Index, whose constituents are identical to the QE Index.

As a result of the change in the index calculation methodology Qatar National Bank's (QNB) weight in the index has been reduced to 15% from around 22% at the end of March 2012. The Company's exposure to QNB has subsequently been reduced, to ensure that the Investment Adviser has sufficient flexibility on further purchases, in order to comply with the Company's investment policy.

Qatar Exchange launched two new Indices

The Qatar Exchange launched a number of new equity indices to complement the existing QE Index, including a total return version of the QE Index and an All-Share Index. The new indices went live from 1 April 2012. Based on global industry standards, and accepted best practice, the Qatar Exchange also announced the reclassification of the sectors within the index. This has led to the addition of four new sectors including transport, real estate, telecom and consumer goods & services. Thus, from April 1, 2012 the QE reflects seven primary sectors: banks & financial services, consumer goods & services, industrials, insurance, real estate, telecom and transportation.

The changes to the index methodology and launch of the new indices are seen as the first step towards further product development in the Qatari market. The QE introduced the new index methodology in May 2010 and has embarked on a number of initiatives since then to enhance the visibility of the market performance and provide investors tools to increase liquidity in the market. Introduction of new products such as Exchange Traded Funds (ETFs) and Real Estate Investment Trusts (REITs) are also part of the overall development strategy of the Qatari market.

Qatar State Budget

Qatar presented its budget for the 2012-2013 financial year, and it indicated a strong outlook for infrastructure spending, thus providing sustainable growth impetus to the non-oil sector. The budget assumed an oil price forecast of US$65 per barrel, higher than the US$55 per barrel assumption for the FY 2011-12 budget. Qatar Government expects a surplus of 28billion Qatari Riyals (QR) (US$7.7billion) during the fiscal year.

	2011-2012	2012-2013	% Change
Revenue	163	206	26.4%
Expenditures	140	178	27.1%
Salaries and Wages	25	37	48.0%
Current	50	69	38.0%
Capital	7	11	57.1%
Public Projects	58	62	6.9%
Balance	23	28	21.7%

Source: Commercial Bank of Qatar, Qatar Budget 2012-13

Higher oil price assumption contributes to a forecast 26.4% year on year rise in government revenue to QR206bn ($56.6bn) for FY 2012-13. Government spending is forecasted to increase from QR140bn (US$38.5bn) in 2011-2012 to QR178bn (US$50bn) in 2012-2013, representing a 27.1% increase on the previous budget.

The Qatari Government has allocated QR62bn (US$17bn) for public projects, which includes expansion of the Doha port, the new international airport, investments in the power and water sector, and development of a rail network. Additionally, an estimated QR36bn (US$9.9bn) is forecast to be deployed on infrastructure projects in preparation for the 2022 FIFA World Cup. Spending on healthcare is estimated to grow 63% year on year to QR14bn (US$3.8bn), while spending on education is set to grow 14% year on year to QR22bn (US$6.0bn). Outlay for the housing sector is estimated to increase by 37% to QR 7.1bn (US$1.9bn).

The Investment Adviser believes that the country's growth prospects in the medium and long term are well supported by the expansionary budget announced for 2012-2013. This coupled with the time pressure imposed by preparations for the 2022 FIFA World Cup, are indicative of further growth in spending. Additionally, planned infrastructure spending and higher budget allocation for education and healthcare sectors also represent long-term positives for the economy.

Valuations

Recent underperformance of the QE Index compared to its regional peers has resulted in compelling valuations, underpinned by sound fundamentals:

	P/E (x)		P/B (x)		ROE (%)		Div. Yld (%)
Market	12E	13E	12E	13E	12E	13E	12E	13E
Qatar	10.1	8.7	2.0	1.7	20.1	20.8	5.4	6.0
Saudi Arabia	11.8	10.9	2.1	1.9	17.3	17.6	4.5	5.1
Abu Dhabi	9.0	8.4	1.2	1.1	12.8	13.1	5.8	6.1
Kuwait	14.0	12.0	1.7	1.6	12.7	13.4	4.1	4.6
Oman	10.9	9.5	1.8	1.7	16.7	17.1	4.8	5.2
Dubai	10.7	9.5	1.6	1.5	7.4	7.8	3.1	3.5
Egypt	10.1	8.7	1.7	1.5	16.2	17.0	6.2	6.6
Lebanon	8.7	7.4	1.0	0.9	14.4	15.6	5.7	6.8

Source: Bloomberg, Beltone Financial

Qatari companies are forecast to maintain earnings momentum in the coming years after reporting a strong 8.4% year on year growth for the year ended June 2012. The Investment Adviser believes the Qatari market continues to offer attractive valuations, relative to its earnings growth potential and profitability.

Qatar's economic growth in the near and long term should be driven by the substantial infrastructure spending pipeline in Qatar. Approximately US$100bn (QNB Group forecast) will be spent between 2012 and 2016 on projects already in the pipeline and that further investments will be made in the run-up to the 2022 FIFA World Cup. The Investment Adviser believes that the publication of an expansionary FY2012-2013 budget, combined with improving spending visibility on long-term infrastructure mega-projects, will only improve investors' perceptions of Qatar's medium and long-term prospects.

The Qatar equity market remains one of the strongest growth stories in the region, combining extremely robust fiscal & external positions, and domestic political stability, coupled with a relative lack of exposure to the troubled European economies. The Investment Adviser therefore sees recent price weakness as an excellent buying opportunity, and favours selected banks and consumer-driven stocks.

Corporate Profitability

The profits of companies listed on the QE witnessed reasonable growth during the year ended June 2012. The results were supported by measures taken by the government to accelerate development and to counter the effects of the global financial crisis. The government aims to build a strong economic base and create a climate for sustainable development within the country.

The 42 listed companies on the QE posted a net profit of ~QAR35.5bn (~US$9.7bn) for the year ended June 2012, representing an 8.4% year on year increase (profit figures are calculated for last 12 months for each year). The increase was driven by a rise in profits of the banking & financial sector, reasonable growth in the industry sector and a small expansion in earnings of companies within the transportation sector. Qatar National Bank and Industries Qatar, posted a strong profit growth of 24.4% year on year and 9.6% year on year, respectively, for the year ended June 2012.

Sector Net Profit (QR Mn)	LTM 6/30/2011	LTM 6/30/2012	Change
Banks & Financial Services	14,026	16,072	14.6%
Insurance	898	896	-0.2%
Services & Consumer Goods	1,516	1,569	3.5%
Industry	10,296	11,041	7.2%
Real Estate	2,392	2,223*	-7.1%
Telecoms	1,964	2,040	3.9%
Transportation	1,625	1,638	0.7%
Total	32,718	35,479	8.4%

*Net profit calculation excluded one time fair value gain of QAR3,057.2 million reported by United Development Co.

An analysis of the sector-wise performances of the Qatari market shows that all sectors, except real estate and insurance, reported growth in the year ended 30 June 2012. The banking & financial and the industrial sectors displayed the highest growth. Profits for telecom and services & consumer goods sectors also grew during the period.

Going forward, we do not expect any major negative surprises in the corporate results for the coming year and expect most companies to announce an improved outlook.

Net profit growth of the Company's top 5 holdings

Top Five Holdings
Company	LTM 6/30/2011	LTM 6/30/2012	Change
Qatar National Bank	6,517	8,109	24.4%
Industries Qatar	7,116	7,796	9.6%
Commercial Bank Qatar	1,773	1,945	9.7%
Rayan Bank	1,298	1,442	11.1%
Doha Bank	1,142	1,279	12.0%

(In QR Mn)

Source: Qatar Exchange

Company Update

As at 30 June 2012, the Company's NAV per share stood at US$1.01 compared to US $1.03 as of 30 June 2011.

At 30 June 2012, the Company was invested in 21 companies in Qatar and 1 in Oman (no change from the previous quarter), while the cash position increased from 1.9% to 2.7% of the Company's NAV. At 30 June 2011, the Company was invested in 16 companies, of which 15 are listed in Qatar and 1 in Oman.

Industry Allocation

Banks continue to represent the largest single sector exposure within the portfolio, with a weighting of 57.5% of NAV at the end of June 2012, down slightly from 57.7% at the end of March 2012. The Investment Adviser maintains a positive outlook on the Qatari banking sector and remains overweight compared to the QE Index with an aggregate position of 57.5% in the portfolio vs 52.4% for the QE Index.

The Banking sector reported a 12.9% year on year net profit growth during the first quarter of 2012, comfortably outstripping the growth of the market, and the Investment Adviser believes that positive trends in public sector lending, which is up 27% year-to-date will continue to underpin growth going forward.

The Company's 18.3% weighting to the Industrial sector represents its second largest sector exposure, in particular Industries Qatar. The weighting of the transportation sector stood at 5.0% of NAV at the end of the second quarter of 2012, compared to a 5.2% allocation at the end of the first quarter.

The weighting to the real estate sector has been increased to 8.2% at the end of the second quarter of 2012 from 6.5% at the end of the first quarter, mainly due to a new position being taken in small cap Mazaya Real Estate Development Co. The allocation to the insurance sector stood at 3.6%, same as the last quarter, while the Company's position in the telecom sector stood at 4.3% of NAV at the end of the second quarter compared to 4.7% at the end of the first quarter.

Embedded image removed - please refer to the Company's website www.qatarinvestmentfund.com for a chart depicting portfolio allocation by sector.

Portfolio Breakdown Top 5 Holdings

Top Five Holdings
Company	Sector	% of NAV
Qatar National Bank	Banks	18.9%
Industries Qatar	Industries	12.5%
Commercial Bank Qatar	Banks	10.5%
Rayan Bank	Banks	9.2%
Doha Bank	Banks	7.8%

Source: Bloomberg, Qatar Insurance Company (30th June 2012)

As at 30 June 2012, the top five investments of the Company constituted 58.9% of NAV, down from 62.1% as at 31 March 2012. The top 10 holdings represent 85.4% of the Company's NAV.

Country Allocation

Qatar continues to be the Investment Adviser's favourite market within the GCC due to a combination of relatively low political risk and high growth prospects. Around 96.8% of the Company's investments are in Qatar, with non Qatar investments constituting 0.5% of the portfolio and the remainder in cash.

In addition, and as illustrated in the valuations table above, the Investment Adviser believes that the Qatari market is trading at an attractive level both relative to its earnings growth potential and its regional peer group.

Embedded image removed - please refer to the Company's website www.qatarinvestmentfund.comfor a chart depicting the overall portfolio allocation by country.

Qatar National Bank (18.9% of NAV)

Qatar National Bank (QNB) is a high quality proxy stock for Qatari economic growth given its strong ties with the public sector and access to state liquidity. The government of Qatar owns 50% of QNB. The bank enjoys dominant market position in the Qatari banking sector. The bank's Non Performing Loans (NPL) ratio stood at 1.1% as at June 2012, indicating the high asset quality. The bank offers superior visibility on balance-sheet momentum and earnings growth. In addition to an international presence in key financial centres around the world such as London, Paris and Geneva, QNB has been building a network of branches, representative offices and associates (Jordan, UAE, Iraq, and Tunisia) throughout the MENA region.

Industries Qatar (12.5% of NAV)

Industries Qatar (IQ) is the second largest publicly traded company in Qatar. IQ is a holding company with interests in petrochemicals via 80% owned Qatar Petrochemical Co., fertilizers via 75% owned Qatar Fertilizer Co., steel via 100% owned Qatar Steel Co. and fuel additives via 50% owned Qatar Fuel Additives Co. Similar to many of its Middle Eastern peers, IQ is one of the lowest cost producers in the industry with operating and net margins in excess of 45%-50%, much higher than its global peers. IQ commercially launched Qafco 5, the group's 1.0 million metric ton urea facility during Q1 2012. Qafco 5 would prove to be a major growth driver for the group in the coming period. Additionally, the group is expected to benefit from the launch of Qapco's Low Density Polyethylene (LDPE) -3 facility. When fully operational, this plant should add 240,000 metric tons of LDPE to the group's product suite. By the end of 2012, the group expects to launch plants with a total of 2.0 million metric ton per annum of urea capacity and 240,000 metric tons of LDPE capacity.

Commercial Bank of Qatar (10.5% of NAV)

Commercial Bank of Qatar (CBQ) represents a high beta play within the Qatari banking universe. It has been one of the fastest growing banks in the Middle East from 2004 to 2008, but its growth has been slowed significantly by domestic and global issues. CBQ's investment case lies mostly in the strength of its balance sheet. CBQ's outlook is positive given its relatively strong balance sheet, solid long-term funding and high capitalization level, as evidenced by its high Tier 1 ratio of 16.5% and Capital Adequacy Ratio (CAR) at 18.3% at the end of Q1 2012. CAR is well above Qatar Central Bank's minimum requirement of 10%. The bank has a proven track record of well managed liquidity; balance sheet actively managed to optimize efficiency. CBQ can afford to pursue growth opportunities either organically or through acquisition, and is likely to remain a generous dividend payer in the near-term.

Masraf Al Rayan (9.2% of NAV)

Masraf Al Rayan (MARK) was incorporated as a Qatari Shareholding Company under Qatar Commercial Company law on 4th January 2006. It was licensed by the Qatar Central Bank and was launched in October 2006. Presently MARK has a total of 10 branches in strategic locations around Qatar, and a total of 44 ATMs. This presence has increased in harmony with business need and customer activities. Since inception, the bank has shown excellent growth which is expected to continue in the short and the long term. MARK has a very well diversified customer base in both sources and uses of funds. The bank's balance sheet and the calibre of its backers underscore its ability to carry out acquisitions. The bank has gained a good market share in a short span and is poised to benefit from on-going demand in Islamic banking. The outlook remains bright given limited competition in a high growth Islamic banking segment. Financial performance in the recent years of operation has been very strong and is expected to remain so.

Doha Bank (7.8% of NAV)

Doha Bank (DHBK) is the 3rd largest bank in Qatar (by assets - US$14,395 million). It is ranked fourth, with a loan market share of ~9% (2010). The bank serves more than 100k customers and has around 38 domestic branches plus 11 global offices. Over time, the bank has expanded its overseas presence with branches in Kuwait and Dubai, in addition to representative offices in Singapore, Turkey, Japan, China, UK, Germany and South Korea. Relative to peers, DHBK is a more retail-oriented bank as evidenced by the Personal/Consumption loans segment contributing almost one‐third of the overall loan book. Loans and advances to customers have grown at a Compound Annual Growth Rate (CAGR) of 15.7% in 2011 from 2010.

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

25 September 2012 25 September 2012

Investment Policy

Investment Objective

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

Assets or companies in which the Company can invest

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

Whether investments will be active or passive investments

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

Holding period for investments

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

Spread of investments and maximum exposure limits

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

Policy in relation to gearing

Borrowings will be limited, as at the date on which the borrowings are incurred, to 5% of NAV. The Company will not make use of any hedging mechanisms or derivative instruments.

Policy in relation to cross-holdings

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

Investing Restrictions

The investing restrictions for the Company are as follows:

(i) Foreign Ownership Restrictions

Investments in most Qatar Exchange listed companies by persons other than Qatari citizens have an ownership restriction wherein the law precludes persons other than Qatari citizens from acquiring more than 25% of a company's issued share capital. It is possible that the Company may have problems acquiring stock if the foreign ownership interest in one or more stocks reaches the allocated upper limit. This may adversely impact the ability of the Company to invest in the local Qatari market.

(ii) Investment Guidelines

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

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

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

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

· The Company may hold up to a maximum of 15% of its NAV outside Qatar, within the GCC region.

(iii) Conflicts Management

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

Returns and Distribution Policy

The Company's investment objective is to achieve capital growth. However the Company paid a dividend for the year ended 30 June 2010 and has instituted an annual dividend policy. The quantum of the dividend is calculated based on a proportion of the dividends received during the year, net of the Company's attributable costs. Any undistributed income will be set aside in a revenue reserve in order to facilitate the Company's policy of future progressive dividend payments. This policy will be subject to the absence of exceptional market events.

Life of the Company

The Company currently does not have a fixed life but the Board considers it desirable that Shareholders should have the opportunity to review the future of the Company at appropriate intervals. Accordingly, at the annual general meeting of the Company in 2012, a resolution will be proposed that the Company ceases to continue in existence. Shareholders holding at least 51% of the ordinary shares must vote in favour of this resolution for it to be passed. If the resolution is not passed, a similar resolution will be proposed at every third annual general meeting thereafter. If the resolution is passed, the Directors will be required to formulate proposals to be put to Shareholders to reorganise, unitise or reconstruct the Company or for the Company to be wound up.

Report of the Directors

The Directors hereby submit the preliminary results of Qatar Investment Fund plc (the "Company") for the year ended 30 June 2012.

The Company

The Company is incorporated in the Isle of Man and has been established to invest primarily in quoted equities of Qatar and other Gulf Co-operation Council countries.

Results and Dividends

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

Subject to shareholder approval, the Directors intend to declare a dividend as detailed in the Chairman's Statement. For the year ended 30 June 2011, the Directors declared a dividend of US$6,274,745 which was approved by Shareholders and paid by the Company in October 2011.

Directors

Details of Board members at the date of this report, together with their biographical details, are set out under the Board of Directors section of this report.

Director independence and Directors' and other interests have been detailed in the Directors' Remuneration Report.

Creditor Payment Policy

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

Gearing Policy

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

There were no borrowings during the year.

Donations

The Company has not made any political or charitable donations during the year (2011: US$ nil).

Adequacy of the Information Supplied to the Auditors

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

Statement of Going Concern

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

Independent Auditors

KPMG Audit LLC was appointed as auditor by the Directors. It has expressed its willingness to continue in office in accordance with Section 12 (2) of the Companies Act 1982.

Annual General Meeting

The Annual General Meeting of the Company will be held on the same date as the proposed tender offer at the Company's registered office. We expect to send further details of the tender offer to shareholders shortly, together with the Company's Annual Report and details of the AGM and shareholder meeting regarding the tender offer.

Discontinuation Vote

The Company currently does not have a fixed life but the Board considers it desirable that Shareholders should have the opportunity to review the future of the Company at appropriate intervals. Accordingly, at the Annual General Meeting of the Company in 2012 a resolution will be proposed that the Company ceases to continue in existence. Shareholders holding at least 51% of the shares must vote in favour of this resolution for it to be passed. If the resolution is not passed, a similar resolution will be proposed at every third annual general meeting of the Company thereafter.

In considering its recommendation to shareholders, the Board has considered the strategic position of the Company; the long-term performance of the Company; the services provided to the Company by its Investment Manager and Investment Adviser; and the prospects for investment by the Company in Qatar and other GCC countries.

The Company is a closed-ended investment company which was incorporated in the Isle of Man on 26 June 2007. The investment objective of the Company is to achieve long-term capital growth by investing primarily in Qatari equities and in listed companies in other GCC countries. The Company is one of the largest London-listed regional funds with net assets of US$229.1 million as at 30 June 2012 and represents an actively-managed way to access the Qatari equity market.

The Company's investment performance may be measured by comparing the performance of its NAV to the performance of the benchmark, the Qatar Exchange ("QE") Index. The tables below illustrate the Company's performance over the relevant periods as measured by these metrics.

	FY 2012	FY2011	FY2010	FY2009	7 February 2008* to 30 June 2012
QIF NAV per share	-1.9%	+22.6%	+7.7%	-41.8%	-12.2%
QE Index	-2.8%	+21.2%	+6.3%	-45.3%	-19.0%

* date fully invested

Source: Company data Bloomberg

The Company's Investment Adviser is part of the one of the oldest and largest property casualty insurers in the region. Its Doha-based investment team manages assets in excess of $US1.5 billion around the world, and has over 40 years of regional investment experience. The Investment Adviser believes that Qatar is well positioned to maintain its steady economic growth, backed by a strong fiscal position, higher contributions from the non-hydrocarbon sector, and significant Government spending on infrastructure projects.

In light of its considerations the Board considers that the Company's long-term investment objectives remain appropriate and its structure remains beneficial to all shareholders.

The Directors consider that the discontinuation vote put to the meeting is not in the best interests of the Shareholders as a whole and recommend that you vote against such a resolution and the Directors intend to vote their shares accordingly.

Corporate Governance

Full details are given in the Corporate Governance Report, which forms part of the Report of the Directors.

Substantial Shareholdings

At 2 July 2012 the Company had been notified of the following holdings in its share capital.

	Ordinary Shares
Name	Number	%
City of London Investment Management Company	65,973,351	29.28
Qatar Insurance Company	39,241,275	17.42
Qatar Holding LLC	25,000,000	11.10
Henderson Global Investors	11,823,322	5.25
Advance Frontier Markets Fund Limited	8,030,395	3.56

The above percentages are calculated by applying the shareholdings as notified to the Company to the issued ordinary share capital as at 2 July 2012.

On behalf of the Board

David von Simson

Chairman

25 September 2012

Corporate Governance Report

Compliance with Companies Acts

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

Compliance with the UK Corporate Governance Code

In June 2010, the Financial Reporting Council issued the UK Corporate Governance Code (the ''Corporate Governance Code'') to replace the Combined Code on Corporate Governance. The Corporate Governance Code applies to all companies with a premium listing of equity shares with accounting periods beginning on or after 29 June 2010 regardless of whether they are incorporated in the UK or elsewhere. Accordingly, the Company is required for this annual report to comply with the Corporate Governance Code or explain its reasons for not doing so. The Corporate Governance Code is available from the website of the UK Financial Reporting Council: www.frc.org.uk.

The Company is committed to high standards of corporate governance. The Board has put in place a framework for corporate governance, which it believes is suitable for an investment company and which will enable the Company to comply with the Corporate Governance Code.

As an overseas company with a Premium Listing of equity shares, the Company complies fully with the Corporate Governance Code from admission to the Official List of the UK Listing Authority on 13 May 2011, except that the Corporate Governance Code includes provisions relating to the role of the chief executive, executive directors' remuneration and the need for an internal audit function. The Board considers that these issues are not relevant to the position of the Company, being an externally managed investment company. The Company has therefore not reported further in respect of these provisions. In accordance with Rule 15.6.6 of the Listing Rules (applicable to closed-ended investment funds) the Company is not required to report on compliance with Principles D.1 and D.2 (including the related Code Provisions) of the Corporate Governance Code relating to remuneration of directors.

The Board is mindful of best practice as set out in the corporate governance guidelines issued by the City of London Investment Group plc, which has over time become and remains today our largest shareholder.

The Company complies with a code of securities dealings in relation to the Ordinary Shares and warrants which is consistent with, and no less onerous than, the Model Code.

Directors

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

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

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

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

The Board meets formally at least 4 times a year and between these meetings there is regular contact with the Investment Manager. Other meetings are arranged as necessary. The Board considers that it meets sufficiently regularly to discharge its duties effectively. The Board ensures that at all times it conducts its business with the interests of all shareholders in mind and in accord with Directors' duties.

Directors receive the relevant briefing papers in advance of Board and Board Committee meetings, so that should they be unable to attend a meeting they are able to provide their comments to the Chairman of the Board or Committee as appropriate. The Board meeting papers are the key source of regular information for the Board, the contents of which are determined by the Board and contain sufficient information on the financial condition of the Company. Key representatives of the Investment Manager attend each Board meeting. All Board and Board Committee meetings are formally minuted.

Board Composition and Succession Plan

Objectives of Plan

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

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

Methodology

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

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

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

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

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

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

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

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

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

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

The Board authorises the Nomination Committee to:

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

· recommend individuals for nomination as members of the Board;

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

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

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

Board Committees

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

· Audit Committee

· Remuneration Committee

· Nominations Committee

· Management Engagement Committee

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

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

Audit Committee

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

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

Remuneration Committee

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

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

Nominations Committee

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

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

Management Engagement Committee

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

Board Attendance

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

	Board	Audit Committee	Remuneration Committee	Nomination Committee	Management Engagement Committee
Total number of meetings in year	8	6	2	1	4
	Meetings Attended (entitled to attend)
David von Simson (Chairman)	6 (8)+	0(0)*	0 (2)^	1 (1)	4 (4)
Nicholas Wilson Senior Independent Director ¹ (Chairman of Audit, Remuneration, Nomination and Management Engagement Committees)	7 (8)	6 (6)	2 (2)	1 (1)	4 (4)
Neil Benedict	8 (8)	6 (6)	2 (2)	1 (1)	4 (4)
Leonard O'Brien	6 (8)+	3 (3)*	0 (0)*	0 (0)*	0 (0)*
Paul Macdonald²	7 (8)+	3 (3)	1 (1)*	1 (1)*	1 (1)

¹Nicholas Wilson was appointed as the Senior Independent Director on 30 April 2012

² Paul Macdonald was appointed as a member of the (a) Audit Committee on 7 February 2012, and (b) Management Engagement Committee on 30 April 2012.

*Not a member of the committee.

^ Due to a conflict concerning the business of these meetings Mr von Simson recused himself from attendance.

+ A short meeting was held to appoint Mr Macdonald (who had become independent) to the Company's Audit Committee with the full consent of the entire Board with those absent offering their apologies.

In addition, the Annual General Meeting was held on 3 October 2011.

Internal Control

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

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

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

The Board confirms that there is an on-going process for identifying, evaluating and managing the Company's principal business and operational risks that it has been in place for the year ended 30 June 2012 and up to the date of approval of the annual report and financial statements.

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

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

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

Continued Appointment of the Investment Manager

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

Relations with Shareholders

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

On behalf of the Board

David von Simson

Chairman

25 September 2012

Board of Directors

David von Simson (Non-Executive Chairman)

David von Simson is a co-founder of Europa Partners Limited, a London-based investment bank, and was formerly a managing director of Warburg Dillon Read (now part of UBS). He was successively chief executive, then chairman, of SBC Warburg France, which was a leading foreign owned investment banking, stock broking and fund-management group in France.

Before joining Warburg Dillon Read in 1995 (when Swiss Bank Corporation acquired S.G. Warburg), he was co-head of corporate finance at Swiss Bank Corporation in London. Prior to joining Swiss Bank Corporation in 1985, he was an executive director of Hill Samuel & Co. Limited. He has also served as a non-executive director of companies, including Gardner Merchant Services Group plc, a leading food services provider in the UK. He was founding chairman of InTechnology plc, which was admitted to trading on AIM in 2000. He also serves as non-executive chairman of the AIM quoted PME African Infrastructure Opportunities plc.

David has an honours degree in Law from Oxford University.

Paul Macdonald (Non-Executive Director)

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

Leonard O'Brien (Non-Executive Director)

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

Nicholas Wilson (Non-Executive Director)

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

Neil Benedict (Non-Executive Director)

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

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

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

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

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

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

· select suitable accounting policies and then apply them consistently;

· make judgements and estimates that are reasonable and prudent;

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

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

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

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

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

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

DTR Compliance statement

We confirm that to the best of our knowledge:

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

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

On behalf of the Board

David von Simson

Chairman

25 September 2012

Audit Committee Report

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

The Committee meets at least two times a year.

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

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

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

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

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

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

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

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

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

• reviewing the terms of the Investment Management Agreement;

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

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

The Audit Committee does not award any non-audit work. The full Board has to approve any non-audit work.

KPMG Audit LLC was re-appointed as auditors at the last AGM on 3 October 2011. The Audit Committee considered the experience and tenure of the audit partner and staff and the nature and level of services provided. The Audit Committee receives confirmation from the auditors that they have complied with the relevant UK professional and regulatory requirements on independence. The Company's Audit Committee meets representatives of the Administrator, who report as to the proper conduct of the business in accordance with the regulatory environment in which the Company, the Administrator, and the Investment Manager/Adviser operate. The Company's external auditor also attend this Audit Committee at its request and report if the Company has not kept proper accounting records, or if it has not received all the information and explanations required for their audit.

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

This report was reviewed and approved by the Board on 25 September 2012.

Nicholas Wilson

Chairman of the Audit Committee

25 September 2012

Management Engagement Committee Report

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

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

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

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

· monitors and evaluates the investment performance both in absolute terms and also by reference to peer group analysis prepared by the investment manager/adviser and by the Company's joint brokers;

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

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

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

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

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

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

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

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

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

· examines the effectiveness of the services provided;

· makes recommendations to the Board where changes are warranted.

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

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

Nicholas Wilson

Chairman of the Management Engagement Committee

25 September 2012

Directors' Remuneration Report

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

Role of the Remuneration Committee

The role and make-up of the Remuneration Committee is more fully discussed within the Corporate Governance Report.

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

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

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

Remuneration Policy

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

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

In the year under review and for the prior year the Directors' fees were paid at the following annual rates: the Chairman £45,000, the Chairman of the Audit Committee £42,500, the other Directors £30,000.

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

Reappointment

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

Directors' fees

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

	30 June 2012	30 June 2011
	£	£
David von Simson (Chairman)*	60,000	59,164
Nick Wilson (Chairman of Audit Committee)	42,500	57,500
Neil Benedict	30,000	29,647
Leonard O'Brien	30,000	35,829
Paul Macdonald	30,000	35,829
	192,500	217,969
US$ charge reflected in the financial statements	304,616	354,555

*The amount shown includes a special payment of £15,000 to Mr von Simson with respect to additional promotional work expended by him in forty-two press interviews and several appearances on CNBC Europe as agreed by the Remuneration Committee..

Expenses totalling US$103,259 (2011: US$71,700) were incurred by the Directors and reimbursed during the year.

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

Director independence

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

Directors' and Other Interests

Leonard O'Brien is a director of the Manager.

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

Director holdings in Company:

	30 June 2012		30 June 2011
Director	Shares	Warrants	Shares	Warrants
David von Simson	225,000	-	225,000	-
Leonard O'Brien	16,700	250,000	16,700	250,000

For and on behalf of the Board

Nicholas Wilson

Director

25 September 2012

Consolidated Income Statement

	Note	Year ended 30 June 2012	Year ended 30 June 2011
		US$'000	US$'000

Income
Interest income on cash balances		1	2
Dividend income on quoted equity investments		11,030	11,028
Realised gain on sale of financial assets at fair value through profit or loss		8,809	2,675
Net changes in fair value on financial assets at fair value through profit or loss		(14,009)	43,427
Commission rebate income on quoted equity investments	7	157	160
Total net income		5,988	57,292

Expenses
Investment Manager's fees	8	3,013	2,886
Performance fees	8	-	-
Audit fees		28	33
Main market listing costs		-	1,230
Other expenses	8	2,272	1,833
Total operating expenses		5,313	5,982

Profit before tax		675	51,310

Income tax expense	14	-	-
Retained profit for the year		675	51,310

Basic earnings per share (cents)	12	0.29	21.98
Diluted earnings per share (cents)	12	0.29	21.98

The Directors consider that all results derive from continuing activities.

Consolidated Statement of Comprehensive Income

	Year ended 30 June 2012	Year ended 30 June 2011
	US$'000	US$'000

Profit for the year	675	51,310
Other comprehensive income
Currency translation differences	(104)	(316)
Other comprehensive income for the year (net of tax)	(104)	(316)
Total comprehensive profit for the year	571	50,994

Consolidated Balance Sheet

	Note	At 30 June 2012	At 30 June 2011
		US$'000	US$'000

Financial assets at fair value through profit or loss	6	222,856	239,945
Due from broker		74	297
Other receivables and prepayments		50	301
Cash and cash equivalents	9	6,129	1,199
Total current assets		229,109	241,742

Issued share capital	10	2,330	2,335
Retained earnings		224,738	237,235
Other reserves	11	706	805
Total equity		227,774	240,375

Other creditors and accrued expenses	13	1,335	1,367
Total liabilities		1,335	1,367
Total equity & liabilities		229,109	241,742

Company Balance Sheet

	Note	At 30 June 2012	At 30 June 2011
		US$'000	US$'000

Due from subsidiary	6	223,994	238,453
Other receivables and prepayments		583	1,745
Cash and cash equivalents		3,333	648
Total current assets		227,910	240,846

Issued share capital	10	2,330	2,335
Reserves	11	225,444	238,040
Total equity		227,774	240,375

Other creditors and accrued expenses	13	136	471
Total liabilities		136	471
Total equity & liabilities		227,910	240,846

Inter-company balances have been impaired by US$483,344 in the year (2011: upwards revision US$4,867,025) (primarily as a result of the fair value movement of investments held by the Company's subsidiary).

Consolidated Statement of Changes in Equity

	Share Capital	Distributable Reserves		Retained Earnings		Other reserves (note 11)	Total
	US$'000	US$'000		US$'000		US$'000	US$'000

Balance at 01 July 2010	2,336	238,989		(46,832)		1,120	195,613
Total comprehensive income for the year
Profit for the year	-	-		51,310		-	51,310
Other comprehensive income
Foreign exchange translation differences	-	-		-		(316)	(316)
Total other comprehensive income	-	-		-		(316)	(316)
Total comprehensive income for the year	-	-		51,310		(316)	50,994
Contributions by and distributions to owners
Dividends paid	-	-		(5,835)		-	(5,835)
Shares repurchased to be held in treasury	-	(397)		-		-	(397)
Shares in treasury cancelled	(1)	-		-		1	-
Total contributions by and distributions to owners	(1)	(397)		(5,835)		1	(6,232)
Balance at 30 June 2011	2,335	238,592		(1,357)		805	240,375
	Share Capital		Distributable Reserves		Retained Earnings	Other reserves (note 11)	Total
	US$'000		US$'000		US$'000	US$'000	US$'000

Balance at 01 July 2011	2,335		238,592		(1,357)	805	240,375
Total comprehensive income for the year
Profit for the year	-		-		675	-	675
Other comprehensive income
Foreign exchange translation differences	-		-		-	(104)	(104)
Total other comprehensive income	-		-		-	(104)	(104)
Total comprehensive income for the year	-		-		675	(104)	571
Contributions by and distributions to owners
Dividends paid	-		-		(6,275)	-	(6,275)
Shares repurchased to be held in treasury	-		(6,897)		-	-	(6,897)
Shares in treasury cancelled	(5)		-		-	5	-
Total contributions by and distributions to owners	(5)		(6,897)		(6,275)	5	(13,172)
Balance at 30 June 2012	2,330		231,695		(6,957)	706	227,774

Consolidated Statement of Cash Flows

	Note	Year ended 30 June 2012	Year ended 30 June 2011
		US$'000	US$'000

Cash flows from operating activities
Purchase of investments		(53,930)	(68,904)
Proceeds from sale of investments		66,225	68,298
Interest received		1	2
Dividends received		11,030	11,028
Operating expenses paid		(5,409)	(5,851)
Commission rebate		157	160
Net cash generated from/(used in) operating activities		18,074	4,733

Financing activities
Dividends paid		(6,275)	(5,835)
Cash used in share repurchases		(6,897)	(397)
Net cash used in financing activities		(13,172)	(6,232)

Net increase/(decrease) in cash and cash equivalents		4,902	(1,499)
Effects of exchange rate changes on cash and cash equivalents		28	(58)
Cash and cash equivalents at beginning of the year		1,199	2,756
Cash and cash equivalents at end of the year	9	6,129	1,199

Notes to the Consolidated Financial Statements

1 The Company

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

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

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

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

On 4 December 2008, the share premium arising from the placing of shares was cancelled and the amount of the share premium account transferred to retained earnings.

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

In the year ended 30 June 2012, the Company purchased 7,681,193 of its ordinary shares for a total value of US$6,895,889 to be held in treasury. 464,696 shares had been repurchased in the year ended 30 June 2011 for treasury but had been held for over a year and were therefore cancelled in the current financial year. The buy-backs are effected through retained reserves.

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

Duration

The Company currently does not have a fixed life but the Board considers it desirable that Shareholders should have the opportunity to review the future of the Company at appropriate intervals. Accordingly, at the annual general meeting of the Company in 2012 a resolution will be proposed that the Company ceases to continue in existence. Shareholders holding at least 51% of the shares must vote in favour of this resolution for it to be passed. If the resolution is not passed, a similar resolution will be proposed at every third annual general meeting of the Company thereafter. If the resolution is passed, the Directors will be required, within 3 months of the resolution, to formulate proposals to be put to Shareholders to reorganise, unitise or reconstruct the Company, or for the Company to be wound up.

2 The Subsidiary

The Company has the following subsidiary company:

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

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

3 Significant Accounting Policies

The consolidated financial statements of the Company for the year ended 30 June 2012 comprise the Company and its subsidiary, Note 2, (together referred to as the "Group").

3.1 Basis of presentation

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"). The financial statements have been prepared under the historic cost convention, as modified by the revaluation of financial assets held at fair value through profit or loss.

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

3.2 Basis of consolidation

Subsidiaries

Subsidiaries are those enterprises controlled by the Company. Control exists where the Company has the power, directly or indirectly, to govern the financial and operating policies of an enterprise so as to obtain benefits from its activities. The financial statements of the subsidiaries are included in the consolidated financial statements from the date that control effectively commences until the date that control effectively ceases.

Transactions eliminated on consolidation

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

3.3 Financial assets at fair value through profit or loss

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

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

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

3.4 Foreign currency translation

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

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

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

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

3.5 Interest income and dividend income

Interest income is recognised on a time-proportionate basis using the effective interest rate method. Dividend income is recognised when the right to receive payment is established.

3.6 Segment reporting

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

3.7 Cash and cash equivalents

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

3.8 Investment in subsidiaries

Investment in subsidiaries in the Company balance sheet is stated at fair value.

3.9 Future changes in accounting policies

IASB (International Accounting Standards Board) and IFRIC (International Financial Reporting Interpretations Committee) have issued the following standards and interpretations with an effective date after the date of these financial statements:

New/Revised International Financial Reporting Standards (IAS/IFRS)	Effective date (accounting periods commencing on or after)

IAS 1 Presentation of Financial Statements - amendments to revise the way other comprehensive income is presented	1 July 2012
IAS 12 Income Taxes - Limited scope amendment (recovery of underlying assets) (December 2010)	1 January 2012
IAS 19 Employee Benefits - Amendment resulting from the Post-Employment Benefits and Termination Benefits projects	1 January 2013
IAS 27 Consolidated and Separate Financial Statements - Reissued as IAS 27 Separate Financial Statements (as amended in May 2011)	1 January 2013
IAS 28 Investments in Associates - Reissued as IAS 28 Investments in Associates and Joint Ventures (as amended in May 2011)	1 January 2013
IFRS 7 Financial Instruments: Disclosures - Amendments enhancing disclosures about transfers of financial assets (October 2010)	1 July 2011
IFRS 9 Financial Instruments - Classification and Measurement	1 January 2015
IFRS 10 Consolidated Financial Statements*	1 January 2013
IFRS 11 Joint Arrangements*	1 January 2013
IFRS 12 Disclosure of Interests in Other Entities**	1 January 2013
IFRS 13 Fair Value Measurement*	1 January 2013

* Original issue May 2011

The Directors do not expect the adoption of the standards and interpretations to have a material impact on the Group's financial statements in the period of initial application.

4 Net Asset Value per Share

The net asset value per share as at 30 June 2012 is US$1.0109 per share (30 June 2011: US$1.0317) based on 225,315,273 (30 June 2011: 232,996,466) ordinary shares in issue as at that date.

5 Fair Value Hierarchy

IFRS 7 requires the Company to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

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

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

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

All the Company's investments are classed as level 1 investments.

6 Investments and amount due from subsidiary

Group

30 June 2012: Financial assets at fair value through profit or loss; all quoted equity securities:

Security name	Number	US$'000
Oman Qatari Telecommunication Company (NWRS OM)	918,048	1,198
Al Khaleej Bank (KCBK QD)	567,768	2,573
Barwa Real Estate (BRES QD)	2,019,213	14,681
Commercial Bank of Qatar (CBQK QD)	1,275,677	23,940
Doha Bank (DHBK QD)	1,203,916	17,836
Gulf International Services (GISS QD)	269,001	1,886
Gulf Warehousing	77,500	859
Industries Qatar (IQCD QD)	836,712	28,695
Masraf Al Rayan (MARK QD)	2,865,701	21,150
Mazaya Real Estate Development (MRDS QD)	1,012,816	3,473
Medicare Group (MCGS QD)	5,000	52
National Leasing (NLCS QD)	490,700	5,331
Qatar Electricity and Water (QEWS QD)	312,563	11,362
Qatar Gas Transport (QGTS QD)	298,562	1,272
Qatar Insurance (QATI QD)	429,600	8,357
Qatar International Islamic Bank (QIIK QD)	63,500	842
Qatar Islamic Bank (QIBK QD)	800,816	16,698
Qatar Meat and Livestock Company (QMLS QD)	74,173	900
Qatar National Bank (QNBK QD)	1,202,104	43,304
Qatar Navigation (QNNS QD)	575,977	9,276
Qatar Telecom (QTEL QD)	301,954	8,574
Qatar United Development Company (UDCD QD)	123,517	597
		222,856

30 June 2011 Financial assets at fair value through profit or loss, all quoted equity securities

Security name	Number	US$'000
Oman Qatari Telecommunication Company (NWRS OM)	918,048	1,621
Barwa Real Estate (BRES QD)	1,892,213	15,611
Commercial Bank of Qatar (CBQK QD)	1,300,666	25,710
Doha Bank (DHBK QD)	1,302,063	18,374
Gulf International Services (GISS QD)	1,085,662	8,807
Industries Qatar (IQCD QD)	879,620	32,891
Masraf Al Rayan (MARK QD)	4,612,790	29,405
National Leasing (NLCS QD)	235,728	2,550
Qatar Electricity and Water (QEWS QD)	246,191	9,726
Qatar Gas Transport (QGTS QD)	555,562	2,762
Qatar Insurance (QATI QD)	392,729	8,582
Qatar Islamic Bank (QIBK QD)	856,078	18,379
Qatar National Bank (QNBK QD)	1,130,195	43,750
Qatar National Cement Company (QNCD QD)	35,725	1,120
Qatar Navigation (QNNS QD)	545,977	11,991
Qatar Telecom (QTEL QD)	206,182	8,666
		239,945

Company

	30 June 2012	30 June 2011
	US$'000	US$'000

Investment in subsidiary	-	-
Amount due from subsidiary	223,994	238,453

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

7 Commission rebate

During the year the Group received 60% brokerage commission rebates for all trades done through its Qatar brokers. This arrangement is set to continue. For the year ended 30 June 2012 the Group received US$156,995 (2011: US$160,151).

8 Charges and Fees

	30 June 2012	30 June 2011
	US$'000	US$'000
Investment Manager's fees (see below)	3,013	2,886
Performance fees (see below)	-	-

Administrator and Registrar's fees (see below)	382	391
Custodian fees (see below)	432	562
Directors' fees and expenses	408	337
Directors' insurance cover	55	44
Broker fees	113	117
Other	* 882	382
Other expenses	2,272	1,833

*The increase in other expenses is explained by the additional costs of US$378k for changing custodian.

Investment Manager's fees

Annual fees

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

Annual management fees for the year ended 30 June 2012 amounted to US$3,012,615 (30 June 2011: US$2,886,079) and the amount accrued but not paid at the year-end was US$754,745 (30 June 2011: US$759,261).

Performance fees

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

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

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

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

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

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

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

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

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

Performance fees accrued but not paid during the year ended 30 June 2012 amounted to US$nil (30 June 2011: US$nil).

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

The Investment Management Agreement is subject to termination, inter alia, on 12 months' notice by either party.

Investment Management Agreement definitions

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

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

The option could have been exercised by the Distribution Adviser and the Placing Agent in whole or in part at any time before the fifth anniversary of admission to trading on AIM.

The option was independently valued using a Black-Scholes model giving a fair value of US$672,300 which was charged to equity as a share issue expense.

Administrator and Registrar fees

The Administrator is entitled to receive a fee of 15 basis points per annum of the net asset value of the Company between US$0 and US$100 million, 12.5 basis points of the net asset value of the Company between US$100 and US$200 million and 10 basis points of the net asset value of the Company in excess of US$200 million, subject to a minimum monthly fee of US$15,000, payable quarterly in arrears. The Administrator has also received an inception fee on a time and charges basis subject to a minimum fee of US$20,000.

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

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

Administration fees paid for the year ending 30 June 2012 amounted to US$343,796 and US$37,816 for additional services (30 June 2011: US$357,240 and US$33,794 respectively).

Custodian fees

During the year we renegotiated the terms of our custody arrangements to arrive at a lower cost for the Company. This new agreement was executed with effect from 1 February 2012. The new custodian is HSBC who replace Anglo Irish Bank Corporation (International) PLC.

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 sub-custodian fees for the year ending 30 June 2011 amounted to US$431,976 (30 June 2011: US$562,341) and the amount accrued but not paid at the year-end was US$18,692 (30 June 2011: US$99,705).

9 Cash and Cash Equivalents

	30 June 2012	30 June 2011
	US$'000	US$'000
Bank balances	6,129	1,199
Cash and cash equivalents	6,129	1,199

10 Share Capital

	30 June 2012	30 June 2011
	US$'000	US$'000
Authorised 500,000,000 Ordinary shares of US$0.01 each	5,000,000	5,000,000
Allotted, Called-up and Fully-Paid:
225,315,273 (2011: 232,996,466) Ordinary shares of US$0.01 each in issue, with full voting rights	2,253	2,330
7,681,193 (2011: 464,696) Ordinary shares of US$0.01 each held in Treasury	77	5
	2,330	2,335

During the year to 30 June 2012 the Company repurchased 7,681,193 (2011: 464,696) Ordinary shares, to be held in treasury, at a cost of US$6,895,889 (2011: US$398,566) and cancelled 464,696 (2011: 60,000) Ordinary shares in treasury which had been held for more than one year. The Ordinary shares held in treasury have no voting rights and are not entitled to dividends.

Warrants

34,271,000 warrants were issued pursuant to the initial Placing (one warrant for every five ordinary shares issued). The warrants entitle the holder to subscribe for one Ordinary Share of 1 cent each in the Company in cash on 31 October in any of the years 2008 to 2012 inclusive, at a price of US$1.25 per Share payable in full on subscription.

Share Option

There is a share option in existence, which is disclosed in more detail in note 8 - this option expired unexercised on 31 July 2012

Capital management

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

Group capital comprises share capital and reserves. Neither the Company nor its subsidiary is subject to externally imposed capital requirements.

11 Reserves

	Distributable Reserves	Retained Earnings	Foreign Currency Translation reserve	Capital Redemption Reserve	Other Reserves	30 June 2011 Total
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000

Balance at 1 July 2011	238,592	(1,357)	(7)	140	672	238,040
Dividends paid		(6,275)	-	-	-	(6,275)
Foreign exchange translation differences	-		(104)	-	-	(104)
Retained earnings	-	675	-	-	-	675
Shares in treasury cancelled	-	-	-	5	-	5
Share buy-backs	(6,897)	-	-	-	-	(6,897)
Balance at 30 June 2012	231,695	(6,957)	(111)	145	672	225,444

*Other reserves figure is comprised of share issue expenses relating to the issue of share options.

12 Earnings per Share

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

	30 June 2012	30 June 2011

Profit attributable to equity holders of the Company (US$'000)	675	51,310
Weighted average number of ordinary shares in issue (thousands)	231,099	233,403
Basic and diluted earnings per share (cents per share)	0.29	21.98

There is no difference between basic and diluted ordinary shares in issue as the options and the warrants (Note 11) are not dilutive in 2012.

13 Trade and other payables

Group

	30 June 2012	30 June 2011
	US$'000	US$'000
Due to broker	386	70
Management fee payable	755	759
Administration fee payable	87	86
Accruals and sundry creditors	107	452
	1,335	1,367

Company

	30 June 2012	30 June 2011
	US$'000	US$'000
Administration fee payable	80	80
Accruals and sundry creditors	56	391
	136	471

14 Taxation

Isle of Man taxation

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

The Company became registered for VAT from 1 February 2011.

Qatar taxation

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

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

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

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

Kuwait taxation

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

15 Financial instruments

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

Market price risk

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

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

The Group's market price risk is managed through the diversification of the investment portfolio. Approximately 99% of the net assets attributable to holders of ordinary shares is invested in equity securities, of which a maximum of 15% is to be invested outside Qatar. Investment opportunities are available in the United Arab Emirates and Kuwait.

At 30 June 2012, if the market value of the investment portfolio had increased/decreased by 1.5% with all other variables held constant, this would have increased/decreased net assets attributable to shareholders by approximately US$3.3 million (30 June 2011 : 1% : US$2.4 million).

Foreign exchange risk

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

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

At the reporting date the Group had the following exposure:

Currency	30 June 2012	30 June 2011
	%	%

British Pound	0.01	(0.01)
Omani Rial	0.79	0.71
US Dollar	1.11	(0.12)
Qatari Riyal	98.09	99.41
Kuwaiti Dinar	-	-
UAE Dirham	-	0.01

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

30 June 2012	Monetary Assets	Monetary Liabilities	Net Exposure
	US$'000	US$'000	US$'000

British Pound	26	-	26
Omani Rial	1,825	(31)	1,794
US Dollar	3,438	(918)	2,520
Qatari Riyal	223,820	(386)	223,434
Kuwaiti Dinar	-	-	-
UAE Dirham	-	-	-
	229,109	1,335	227,774

30 June 2011	Monetary Assets	Monetary Liabilities	Net Exposure
	US$'000	US$'000	US$'000

British Pound	265	(301)	(36)
Omani Rial	1,711	-	1,711
US Dollar	696	(996)	(300)
Qatari Riyal	239,046	(70)	238,976
Kuwaiti Dinar	-	-	-
UAE Dirham	24	-	24
	241,742	(1,367)	240,375

At 30 June 2012 had the US Dollar weakened/strengthened by 1% (2011 : weakened/strengthened 1%) in relation to all currencies, with all other variables held constant, net assets attributable to equity holders of the Company would have increased/decreased by the amounts shown below:

30 June 2012	US$'000
British Pound	-
Omani Rial	17
Qatari Riyal	2,234
Kuwaiti Dinar	-
UAE Dirham	-
Effect on net assets	2,251

30 June 2011	US$'000
British Pound	-
Omani Rial	17
Qatari Riyal	2,390
Kuwaiti Dinar	-
UAE Dirham	-
Effect on net assets	2,407

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

Credit risk

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

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

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

	30 June 2012	30 June 2011
	US$'000	US$'000
Financial assets at fair value through profit or loss	222,856	239,945
Cash and cash equivalents	6,129	1,199
Other receivables	124	598
	229,109	241,742

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

Liquidity risk

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

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

30 June 2012	Less than 1 month	1-3 months	3 months to 1 year	1-5 years	Over 5 years	No stated maturity
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
Financial liabilities
Other creditors and accrued expenses	1,335	-	-	-	-	-
	1,335	-	-	-	-	-

30 June 2011	Less than 1 month	1-3 months	3 months to 1 year	1-5 years	Over 5 years	No stated maturity
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
Financial liabilities
Other creditors and accrued expenses	1,367	-	-	-	-	-
	1,367	-	-	-	-	-

Interest rate risk

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

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

30 June 2012	Less than 1month	1-3 months	3 months to 1 year	1-5 years	Over 5 years	Non-interest bearing	Total
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
Financial Assets
Financial assets at fair value through profit or loss	-	-	-	-	-	222,856	222,856
Other receivables and prepayments	-	-	-	-	-	124	124
Cash	6,129	-	-	-	-	-	6,129
Total financial assets	6,129	-	-	-	-	222,980	229,109
Financial Liabilities
Other creditors and accrued expenses	-	-	-	-	-	(1,335)	(1,335)
Total financial liabilities	-	-	-	-	-	(1,335)	(1,335)

Total interest rate sensitivity gap	6,129	-	-	-	-	-	-

30 June 2011	Less than 1month	1-3 months	3 months to 1 year	1-5 years	Over 5 years	Non-interest bearing	Total
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
Financial Assets
Financial assets at fair value through profit or loss	-	-	-	-	-	239,945	239,945
Other receivables and prepayments	-	-	-	-	-	598	598
Cash	1,199	-	-	-	-	-	1,199
Total financial assets	1,199	-		-	-	240,543	241,742
Financial Liabilities
Other creditors and accrued expenses	-	-	-	-	-	(1,367)	(1,367)
Total financial liabilities	-	-	-	-	-	(1,367)	(1,367)

Total interest rate sensitivity gap	1,199	-	-	-	-	-	-

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

16 Related Party Transactions

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

The Investment Adviser is Qatar Insurance Company S.A.Q. The Group holds shares in Qatar Insurance Company S.A.Q. (see note 6). 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 8.

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

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

17 Post Balance Sheet Events

On 31 July 2012, 1,713,550 US$1.00 share options that were granted to professional advisors at the time of the Company's admission to AIM expired unexercised.

Basis of Financial Information Included in this Preliminary Announcement

The consolidated financial statements contained in this preliminary announcement represent a substantial extract from the consolidated annual report. This has not yet been signed and the audit for the year ended 30 June 2012 is not yet complete. The Board is not aware of any likely modifications to the audit report that will be issued with respect to the financial statements. The final audited consolidated annual report, which is not expected to include any changes from this preliminary announcement, will be issued together with the details of the tender offer and notice of AGM in early October.

This information is provided by RNS

The company news service from the London Stock Exchange

END

FR PGUGWBUPPGQA

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