Qatar Investment Fund plc Consolidated Annual Report … · Qatar Investment Fund plc Consolidated Annual Report Year ended 30 June 2015

Qatar Investment Fund plc

Consolidated Annual Report

Year ended 30 June 2015

QATAR INVESTMENT FUND PLC Annual Report 30 June 2015

CONTENTS

Page

Management and Administration 1 - 2

Chairman’s Statement 3 - 4

Business Review 5 - 6

Report of the Investment Manager and the Investment Adviser 7 – 16

Investment Policy 17 – 19

Report of the Directors 20 – 22

Corporate Governance Report 23 – 28

Board of Directors 29

Statement of Directors’ Responsibilities 30

Audit Committee Report 31

Management Engagement Committee Report 32

Directors’ Remuneration Report 33 – 34

Report of the Independent Auditors 35 – 37

Consolidated Financial Statements:

- Consolidated Income Statement 38

- Consolidated Statement of Comprehensive Income 39

- Company Income Statement 40

- Company Statement of Comprehensive Income 41

- Consolidated Balance Sheet 42

- Company Balance Sheet 43

- Consolidated Statement of Changes in Equity 44

- Company Statement of Changes in Equity 45

- Consolidated Statement of Cash Flows 46

- Company Statement of Cash Flows 47


CONTENTS continued

- Notes to the Consolidated Financial Statements 48 – 63


1

Management and Administration

Directors N Wilson (Non-executive Chairman) *

P Macdonald (Non-executive Director)*

L O’Brien (Non-executive Director)

N Benedict (Non-executive Director) *

all of the registered office below

* independent

Registered Office Millennium House

46 Athol Street

Douglas

Isle of Man

IM1 1JB

Investment Manager Epicure Managers Qatar Limited

Trinity Chambers

Road Town

Tortola

British Virgin Islands

Investment Adviser Qatar Insurance Company S.A.Q.

PO Box 666

Tamin Street

West Bay

Doha

Qatar

Brokers Panmure Gordon (UK) Limited

One New Change

London

EC4M 9AF

Custodian HSBC Bank Middle East Limited

Qatar Branch

HSBC Security Services

PO Box No. 57

Doha

Qatar


2

Management and Administration continued

Administrator Galileo Fund Services Limited

Millennium House

46 Athol Street

Douglas

Isle of Man

IM1 1JB

Auditors KPMG Audit LLC

Heritage Court

41 Athol Street

Douglas

Isle of Man

IM99 1HN

Registrar Capita Registrars (Isle of Man) Limited

Third Floor

Exchange House

54-62 Athol Street

Douglas

Isle of Man

IM1 1JD


3

Chairman’s Statement

On behalf of your Board, I am pleased to present your Company’s eighth Annual Report and Financial Statements for the

year to 30 June 2015.

During the twelve months, your Company’s Net Asset Value per Share (“NAV”) rose by 8.4% to US$1.53 which compares

with a rise of 6.2% in the Qatari stock market (Qatar Exchange Index) and a rise of 4.6% in the MSCI Emerging Markets

Index. Following a widening of the discount at which the shares trade to NAV, the shares fell from US$1.285 to US$1.26, a

fall of 1.9%. Shareholders received a dividend of 3.5c per share with an ex dividend date of 23 December.

Results

Results for the period under review showed a profit of US$22.6m generated from fair value adjustments, realised gains and

dividend income. This is equivalent to basic earnings per share of 15.31 cents.

The Qatar Exchange performed well during the period despite a fall of 46% in the price of crude oil, the benchmark for Qatari

crude oil. The continued diversification of the economy was a positive influence with double digit growth in many non-

hydrocarbon sectors as against a fall in the contribution from oil and gas.

The Company’s Ongoing Charges (formerly Total Expense Ratio) fell to 1.61% from 1.66 % in the previous year. The

charges were calculated in accordance with the methodology recommended by The Association of Investment Companies.

Managing the Discount between the share price and NAV

Discount management remains a priority for the Board and we continued to make use of the authority granted by

shareholders to buy back the Company’s shares. During the period a total of 890,509 shares were bought back to be held in

Treasury. 3,793,272 shares were cancelled, as they had been held in Treasury for 12 months. In addition to pursuing an

active buyback policy, the Board works with the Investment Adviser and the broker to raise the profile of the company, giving

frequent interviews to the financial press in order to raise the profile of the Company with institutional and private investors.

Proposed Tender Offer

As detailed in the Company’s Discontinuation Vote Proposals announced on 13 April 2015, the Board will give shareholders

the opportunity to vote for a graduated tender offer with the tender offer size a function of the average discount during the

twelve-month period prior to the tender offer date, as set out in the table below. Under this Board proposal, the maximum

size of the tender offer would therefore be capped at 15%.

12 month average discount Tender offer size

Less than 10% Nil

10.00% -10.99% 10.0%

11.00% -11.99% 11.0%

12.00% -12.99% 12.0%

13.00% - 13.99% 13.0%

14.00% - 14.99% 14.0%

15% or greater 15.0%

In addition, and subject to the discontinuation vote not being passed by shareholders, the Board proposes a further tender

offer facility under the same terms in the fourth quarter of 2016.

Proposed Dividend

We aim to pay dividends from income received from companies in which the Company is invested. Since Qatari companies

only pay dividends once a year, the Board will continue its policy of only declaring a final dividend and therefore no interim

dividend was declared this year.


4

Chairman’s Statement continued

For the twelve months, the Board proposes to pay a dividend of 4.0 cents per ordinary share (2014 - 3.5c per share) and if

the discount test described above is triggered, payable on the post tender offer share capital, with a record date and

payment date after such tender offer. Subject to shareholder approval at the forthcoming Annual General Meeting, the

dividend will be paid after the tender offer in 2016. Further details on the ex-date, record date and payment date will be

made in due course.

Post Balance Sheet events

There have been no post balance sheet events.

Outlook, risks and uncertainties

The Qatari economy continues to perform well with the Qatar National Bank forecasting GDP growth of 7% in 2015 and

7.5% in 2016. With the non-hydrocarbon sector now accounting for 62% of real GDP, the impact of the lower oil price is

likely to be limited. Qatar’s population rose by 4.9% to 2.34 million in the first half of 2015. Our investment adviser believes

that near to long-term growth prospects should remain healthy driven by a strong infrastructure pipeline, expansionary fiscal

spending and supportive demographics.

There are, of course, risks to investors. The Board believes these principally fall in the following categories; geopolitical

events, market risks, investment and strategy risks, accounting, legal and regulatory risks, operational risks and financial

risks. Information on each of these is given in the Business Review section of this Annual Report.

Looking to the future, the Board is confident that the Company is invested in companies with good prospects that are listed

on the Qatar Exchange and elsewhere in the GCC region. The Company offers international investors one of the few

practical ways to gain investment exposure to Qatar’s vigorous economy.

The Board views the future of the Company with confidence and firmly believes that continued growth in the non-

hydrocarbon Qatari economy combined with improving demographics will lead to significant improvements in corporate

profitability.

Annual General Meeting and Discontinuation Vote

I look forward to welcoming shareholders to our eighth Annual General Meeting on 12 November 2015, which will be held at

11.00 am, at the Company’s registered office at Millennium House, 46 Athol Street, Douglas, Isle of Man.

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 a certain amount 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), as further

described above. The proposed tender offer will be conditional. Inter alia, on the Discontinuation Vote failing at the Annual

General Meeting, which was the same as the structure of the 2012 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.

Nicholas Wilson

Chairman

10 September 2015


5

Business Review

The following review is designed to provide information primarily about the Company’s business and results for the year

ended 30 June 2015. It should be read in conjunction with the Report of the Investment Manager and the Investment Adviser

on pages 7 to 16 which gives a detailed review of the investment activities for the year and an outlook for the future.

Investment Objective and Strategy

The Company’s investment objective is to capture, principally through the medium of the Qatar Exchange (formerly the Doha

Securities Market), the opportunities for growth offered by the expanding Qatari economy by investing in listed companies or

companies soon to be listed. The Company may also invest in listed companies, or pre-IPO companies, in other Co-

operation Council for Arab States of the Gulf (GCC) countries.

The Company applies a top-down screening process to identify those sectors which should most benefit from sector growth

trends. Fundamental industry and company analysis, rather than benchmarking, forms the basis for both stock selection and

portfolio construction.

The Company’s investment policy is on pages 17 to 19.

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 broker to buy back shares when

we believe appropriate so as to manage any discount to net asset value.

Yield

The Board monitors the dividend income of the portfolio and the amount available for distribution and considers the impact

on the Company’s annual dividend policy of future progressive dividend payments, subject to the absence of exceptional

market events.

Principal Risks and Uncertainties

The Board confirms that there is an on-going process for identifying, evaluating and managing or monitoring the key risks to

the Company. These key risks have been collated in a risk matrix document which is reviewed and updated on a quarterly

basis by the Directors. The risks are identified and graded in this process, together with the policies and procedures for the

mitigation of the risks.

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

Market

The Company’s investments consist of listed companies. There are no investments in companies soon to be listed. Market

risk arises from uncertainty about the future prices of the investments. This is commented on in Note 15 on pages 59 to 63.


6

Business Review continued

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 on pages 23 to 28.

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 on pages 59 to 63.


7

Report of the Investment Manager and Investment Adviser

Regional Equity Market Overview

Indices 30-Jun-14 30-Jun-15 % Change

Qatar (DSM) 11,489 12,201 6.2%

Saudi (TASI) 9,513 9,087 -4.5%

Dubai (DFMGI) 3,943 4,087 3.7%

Abu Dhabi (ADI) 4,551 4,723 3.8%

Kuwait (KWSE) 6,971 6,203 -11.0%

Oman (MSI) 7,008 6,425 -8.3%

Bahrain (BAX) 1,428 1,368 -4.2%

Source: Bloomberg

In the twelve months to June 2015 the performance of GCC markets was mixed. The GCC index (Bloomberg GCC200)

fell 3.0%, weighed down by lower oil prices and regional geopolitical tensions. Qatar was the best performing market

with a rise of 6.2%, followed by Dubai and Abu Dhabi with each rising over 3.5%. The Qatari market performance can

be attributed to infrastructure spending, economic diversification, long term gas contracts and a rising population, as

well as the inclusion of two more Qatari stocks in the MSCI emerging markets index. The performance was despite

headwinds from lower oil prices and the ending of the effect of the MSCI upgrade that occurred last year. Saudi Arabia,

Kuwait, Oman and Bahrain posted negative returns during the period.

Looking back Qatar’s inclusion in the MSCI emerging markets index in May 2014 provoked a strong inflow of foreign

funds to the tune of US$943 million in the twelve months to June 2015. In the second half of 2014 alone, Qatar

experienced foreign inflows of US$560 million. This effect reduced in the first half of 2015 with the months of January,

March and June seeing outflows of foreign funds. Overall, H1 2015 saw US$384 million of foreign inflows. US$492

million was attracted in May on the inclusion of Qatar Insurance Company and Ezdan Holding into the MSCI emerging

markets index.

During the period, Saudi Arabia posted a 4.5% decline mainly on account of a continued weakness in oil prices, despite

the opening up of the Saudi market to foreign investors in June 2015. There was low uptake of qualified foreign

investors (QFIs), which resulted in just US$5 million of foreign inflows through the direct route. June 2015 witnessed

US$222 million of foreign flows out of the Saudi market.

Dubai and Abu Dhabi rose 3.7% and 3.8%, respectively. Kuwait was the worst performing market with a decline of

11.0%, followed by Oman and Bahrain with 8.3% and 4.2% falls, respectively.

In the second half of 2014, Qatar outperformed a lackluster GCC market. Sharply lower oil prices pared away gains with

Saudi leading the fall. However, in the first half of 2015, most of the GCC markets made gains excluding Qatar, Kuwait

and Bahrain.

Looking ahead, the Qatar market is expected to perform well over the long term on the back of strong fundamentals,

infrastructure spending, on-time projects completion, non-hydrocarbon economic growth and a rising population. The

Qatari government is set to continue with its infrastructure spending programme irrespective of the FIFA World Cup.

The majority of these projects were planned before the World Cup was awarded in 2010. Infrastructure spend should

support economic growth of over 6% per annum until 2017.


8

Report of the Investment Manager and Investment Adviser continued

Quarterly Performance of Regional Markets

Indices 30-Jun-14 30-Sep-14 31-Dec-14 31-Mar-15 30-Jun-15

Qatar (DSM) -1.3% 19.5% -10.5% -4.7% 4.2%

Saudi (TASI) 0.4% 14.1% -23.2% 5.3% 3.5%

Dubai (DFMGI) -11.4% 27.9% -25.2% -6.9% 16.3%

Abu Dhabi (ADI) -7.0% 12.2% -11.3% -1.3% 5.7%

Kuwait (KWSE) -7.9% 9.3% -14.2% -3.9% -1.3%

Oman (MSI) 2.2% 6.8% -15.2% -1.7% 3.0%

Bahrain (BAX) 5.2% 3.4% -3.4% 1.6% -5.7%

Source: Bloomberg

Long term infrastructure projects to give impetus to GDP growth

Qatar is spending over US$200 billion on infrastructure in the next seven years, in line with Qatar National Vision 2030.

This is funded by large reserves accumulated from hydrocarbon earnings. We expect that recent oil price declines

should have a limited or delayed impact on government revenues, given Qatar's long term liquefied natural gas (LNG)

contracts. Qatar’s 2016 budget will be based on an assumed oil price of US$55 per barrel, lower than current assumed

oil price of US$65 per barrel. Spending directly related to the World Cup is estimated at US$15-16 billion, representing

about 7.5% of total infrastructure spending. While the FIFA World Cup provides impetus to project activity it is one of

several factors driving infrastructure investment.

Source: Samba Capital, Gulf Times

According to NBK Capital reports, contracts worth US$29 billion were awarded in 2014, 30% up on 2013. This

momentum is expected to continue through2015 and 2016. In the coming year contracts valued at US$70 billion are

expected, with over US$13 billion already awarded in Q1. Further projects in 2015-16 include Qatar Integrated Railway

(US$28.8 billion), local roads and drainage (US$14.6 billion), Lusail Mixed-Use Development (US$33.0 billion), Barzan

Gas Development (US$10.3 billion) and New Doha Port (US$7 billion).


9


The Investment Adviser believes Qatar’s long term infrastructure spending will continue, driven by low gearing,

accumulated budget surpluses and Qatar having one of the lowest break even oil prices for its oil production, in the

region. Excluding the World Cup related investment, we believe that Qatar’s GDP would still continue to grow above 5%

annually.

Qatar Macroeconomic Update

According to Ministry of Development and Planning (MDPS), Qatar’s GDP increased 4.1% in Q1 2015 vs Q1 2014,

using new base year (2013), driven by non-hydrocarbon growth. Compared to Q4 2014, GDP grew 3.4%. During Q1

2015, the hydrocarbon sector contracted 0.1% on Q1 2014, while the non-hydrocarbon sector increased 8.9% on the

back of a rise in construction, trading, hospitality and financial sector activity; and a jump in Qatar’s population in Q1

2015. Construction rose 11.4% on a year on year basis, helped by major public investments. The financial sector

(which includes finance, insurance, real estate and business services) rose 9.8% while the trade, hotels and restaurants

(combined) sector expanded 9.3% vs Q1 2014.

The Investment Adviser believes that these factors should continue supporting the non-hydrocarbon growth. Additional

output from the Barzan Gas project should further help GDP growth.

Qatar’s population increased 4.9% from January to June 2015, to a total of 2.34 million. Population growth is expected

to remain strong as infrastructure spending attracts expatriate workers. The Investment Adviser believes that the rise in

population should drive consumption growth, benefiting local consumer companies.

FIFA related projects get priority in the extended state budget for 2015

Recently, Qatar announced its budget for the extended period of nine months from 1 April to 31 December 2015. The

country will be following a new January to December fiscal year from 2016, which required extending the current FY

2014-15 budget to December 2015. The budget focuses on mega development projects and investments linked to the

2022 FIFA World Cup. The budget assumes an oil price of US$65 per barrel; unchanged from the 2014-15 budgets.

Revenue is estimated at QAR169.3 billion, while expenditure is forecast to be QAR163.8 billion, which translates to a

forecast budget surplus of QAR5.5 billion. Most of the expenditure is slated for the health, education, infrastructure and

transport sectors and projects related to the 2022 FIFA World Cup.

According to the Qatari Ministry of Finance, estimated revenue during the 21 month period (1 April 2014 to 31

December 2015) is expected to reach QAR395.0 billion and total expenditure during the same period would be

QAR382.2 billion, resulting in an estimated surplus of QAR12.8 billion. The Minister of Finance stated that preliminary

estimates of the budget for FY 2014-15 (1 April 2014 to 31 March 2015) show a surplus of about QAR137 billion.

In the extended budget, allocation to major projects would be at the maximum of QAR65.6 billion, thus bringing the total

allocation during 21 months for this sector to QAR153.1 billion. The state budget has kept aside QAR53.4 billion for

current expenditure, increasing total allocation to this sector to QAR124.5 billion in the full 21 months. Total allocation to

salaries and wages is expected at QAR35.6 billion in the nine months, thus taking the total allocation to QAR83.1 billion.

Lower oil prices should mean lower budget and current account surpluses. According to the NBK Capital report, Qatar’s

budget surplus is expected to decline from 10.8% of GDP in 2014 to 1.6% and 2.2% of GDP in 2015 and 2016,

respectively,


10


The current account surplus (as a % of GDP) is forecast to fall from double-digits in 2010 to 4.4% and 3.1% in 2015

and 2016, respectively.

Recent Developments

Non-hydrocarbon sector GDP contribution stands at 62%

Qatar is consistently taking steps to reduce its reliance on hydrocarbon income. Non-hydrocarbons rose from 55% of

GDP in 2007 to 62% in 2014. Qatar is continuing to diversify and the share of the non-hydrocarbon sector in the

economy should increase further, as oil prices remain low.

In real terms the growth of the non-hydrocarbon sector has been impressive, growing between 10% - 11% per annum

since 2011 During 2007-2014, non-hydrocarbon real GDP grew at a CAGR of 12.9%; faster than the 8.5% CAGR of

the hydrocarbon sector.

Strong fiscal balances, healthy current account surpluses and low inflation levels should help the country continue with

its infrastructure development plan.

Source: Qatar Statistics Authority

Qatar’s project market to grow fastest in GCC in 2015

According to MEED, Qatar is expected to have the fastest growing project market in the GCC in 2015, with projects

worth US$30 billion planned. A similar number of new projects should be awarded in 2016. Contracts with a value of

US$135 billion are expected between 2015 and 2020. These contracts would be additional to the US$100 billion worth

of contracts already placed / in execution since Qatar won the bid for the 2022 FIFA World Cup. In 2015, MEED expects

that the value of contracts placed in the GCC to increase to US$172 billion.


11


Private sector credit growth continues

According to Qatar Central Bank (QCB) data, total credit extended by Qatari banks grew 6.5% between December 2014

and June 2015 (year to date). Public sector credit declined 4.8% while private sector credit rose 13.5%.

Total deposits grew 7.1% year to date. The banking sector’s loans-to-deposit ratio stood at 108.1% at end of June 2015,

lower than 108.7% reported at the end of December 2014.

Looking ahead, the Investment Adviser believes credit growth will remain at healthy levels, driven by infrastructure

spending, non-hydrocarbon sector growth and the increasing population.

Qatar Insurance and Ezdan Holding added to MSCI EM Index

In May, MSCI included Qatar Insurance Company and Ezdan Holding in its MSCI emerging markets index and

increased the weighting of Doha Bank. Qatar’s weighting in the MSCI emerging markets index is now 0.93%. According

to Deutsche Bank the inclusion meant Qatar Insurance Company attracted inflows of US$144 million while Ezdan

Holding attracted US$318 million. The increased weighting attracted additional foreign funds to Qatar of US$492 million.

The Qatar Stock Exchange is working with listed companies in order to increase their weighting in the MSCI emerging

markets index. Listed companies including Ezdan Holding, Commercial Bank, Aamal, Qatar Insurance Company, Doha

Bank and Qatar General Insurance and Reinsurance increased their foreign ownership limit to 49%. The Investment

Adviser believes this is a positive move with further companies expected to increase their foreign ownership limits soon.

This should help to further improve Qatar’s weighting in the MSCI emerging markets index.

Recently, the chief executive of the Qatar Exchange stated that prior to MSCI upgrade the Qatar Exchange’s total

transactions in value terms were around QAR250 million per day. Post MSCI reclassification, the Qatar Exchange’s

traded value peaked at QAR1 billion, and has been in the range of QAR600-700 million per day. The Qatar Exchange

also plans to launch new products such as margin trading and exchange traded funds, along with Real Estate

Investment Trusts and may receive regulatory approvals in the third quarter of 2015.

Changes in QE Index constituents and weights

Following the semi-annual review of the QE indices, from 1 April 2015, Aamal replaced Medicare in the QE Index, with a

weight of 2.76%, while all 43 listed companies will remain part of the QE All Share Index (& related sector index). The

Qatar Exchange caps the maximum weight a single stock can represent at 15% of the QE Index. Based on 31 March

2015 closing prices, Qatar National Bank, whose weight was exceeding 15% has been capped at 15% and excess

weight has been distributed proportionately amongst remaining stocks.


12


Trading of entitlements to rights issues

The Qatar Exchange (QE) has been planning to introduce trading of rights issue entitlements for investors. Currently,

investors need to commit additional money to exercise rights, or alternatively receive no compensation if they do not

take up their rights to subscribe for shares in rights issues. These rights are generally at a fixed price but may be lower

than the market price. However, according to the Qatar Exchange, if these rights entitlements are tradable, investors

can sell them and receive a benefit if they choose not to subscribe in the rights issue. The Qatar Exchange also stated

that it is currently working with Qatar Financial Markets Authority (QFMA), on forming the mechanism for selling and

pricing of rights issue entitlements as a new instrument in the capital market. As a result, the rights holder can either

exercise the rights by subscribing in the company’s capital increase or can sell the rights fully/ partially.

Valuations

Market Market Cap. PE (x) PB (x) Dividend Yield

(%)

US$ Mn 2015E 2016E 2015E 2015E

Saudi Arabia 542,079 17.0 18.1 2.6 4.0

UAE 221,309 14.1 12.5 1.9 4.2

Qatar 147,257 13.2 12.3 2.3 4.5

Kuwait 95,206 13.1 11.6 1.6 4.4

Oman 18,128 10.8 10.8 1.8 5.2

Bahrain 21,178 9.5 9.2 1.2 6.2

Egypt 26,300 16.2 11.5 2.8 2.8

Jordan 22,219 13.5 10.7 1.4 3.3

Overall MENA 1,093,675 15.2 15.0 2.3 4.2

Source: Bloomberg Finance LP, Deutsche Bank, Prices as of 29th June 2015

The Qatar market offers an attractive combination of appealing valuations and high dividend yields, supported by strong

fundamentals, investment spending and rising population. The Qatar market is trading at 2015 price to earnings (P/E) of

13.2x, cheaper relative to its peers such as Saudi Arabia (17.0x) and UAE (14.1x). The attractive valuation of the Qatar

market is well supported by a significant dividend yield estimated at 4.5% for 2015, one of the highest dividend yields in

the GCC.

Corporate Profitability

Sector Net Profit (QAR '000) LTM 6/30/2014 LTM 6/30/2015 Change

Banks & Financial Services 17,996,541 20,222,243 12.4%

Insurance 2,669,057 2,132,421 -20.1%

Services & Consumer Goods 1,920,727 1,859,275 -3.2%

Industry 12,271,302 12,014,721 -2.1%

Real Estate 3,383,488 8,361,471 147.1%

Telecoms 2,362,801 1,144,421 -51.6%

Transportation 1,826,253 2,281,080 24.9%

Total 42,430,169 48,015,632 13.2%

*Net profit calculation for the 12 months to 30 June 2014 is based on restated net profit numbers

Source: Qatar Exchange


13


For the 12 months to 30 June 2015, net profits of Qatar Exchange (QE) listed companies rose 13.2% on the 12 months

to 30 June 2014. This performance was fuelled by the real estate banking & financial services and transportation

sectors. The insurance, services & consumer goods, telecom and industry sectors reported lower profits.

The 43 companies listed on the QE reported profits of QAR48.0 billion (US$13.2 billion) for the year ended 30 June

2015, (year ended 2014: QAR42.4 billion (US$11.7 billion)). The real estate sector reported a powerful profit rise of

147.1% following a 300% rise in profits from Barwa Real Estate; double digit growth from United Development

Company (profit up 37.8%) and Ezdan Real Estate (profit up 14.5%). Profits rose 25% in the transportation sector; and

12.4% in the Banking & financial services sector, mainly driven by higher profits from Qatari banks (up 13.2%). The

banking & financial services sector heavyweight, Qatar National Bank, reported an 11.9% rise in profit. Industrials profits

declined 2.1% due to weak performance from Industries Qatar where profits fell 5.7% in the 12 months to 30 June 2015.

The Telecom sector profit declined substantially by 51.6%. Services & consumer goods saw a 3% profit fall.

Looking ahead, the Investment Adviser believes that earnings growth in Qatari listed companies will improve, helped by

the infrastructure spending, growing population and developing non-hydrocarbon sectors mentioned above. With project

tendering remaining strong, domestic companies in the banking, real estate, consumer and transportation sectors are

expected to be the key beneficiaries.

Net profit growth of the Company’s top 5 holdings (in QAR ‘000)

Company LTM 6/30/2014 LTM 6/30/2015 Change

Qatar National Bank 9,810,202 10,972,771 11.9%

Industries Qatar 6,281,326 5,926,102 -5.7%

Masraf Al Rayan 1,785,321 2,096,767 17.4%

Commercial Bank of Qatar 1,604,296 1,881,230 17.3%

Qatar Islamic Bank 1,430,572 1,771,290 23.8%

Source: Qatar Exchange

Company Update

QIF’s NAV was up 8.4% to US$1.5336 at the end of June 2015 from US$1.4142 at the end of June 2014, the Qatar

Exchange index gained 6.2%, during the same period. The outperformance was driven by share price rises from

portfolio companies including Qatar National Bank (up 22.8%), Qatar Islamic Bank (up 36.9%), Qatar Electricity & Water

(up 37.0%), Barwa Real Estate (up 56.9%) and Qatar Insurance Company (42.5%). As at 30 June 2015, the QIF share

price was at a 17.8% discount to NAV.

Industry Allocation

QIF remains overweight in the Qatari banking sector, with a weighting (including financial services) of 51.4% of NAV at

the end of Q2 2015 (Q1 2015: 50.8%). Qatar National Bank is QIF’s largest holding (16.9%). Qatari banking has a

record of strong growth and the Investment Adviser believes that future growth prospects remain good, fueled by the


14


government’s infrastructure investment, subsequent domestic demand for credit and Qatari banks’ international

development plans.

Industrials remain the second largest exposure at 25.7% (Q1 2015: 15.2%). During the quarter, the Investment Adviser

increased exposure to Industries Qatar (14.4% of NAV) seeing an upward trend in petrochemical prices and valuations

began looking attractive. Exposure to Gulf International Services remained stable at 6.4%, while exposure in Qatar

Electricity and Water reduced from 5.3% in Q1 2015 to 4.9% at the end of Q2 2015.

QIF’s weighting in the real estate sector was unchanged (8.8% of NAV). Exposure to the telecom sector reduced from

3.7% in Q1 2015 to 3.4% at the end of Q2 2015. The weighting in transportation increased to 5.1% in Q2 2015 from

4.7% in the previous quarter.

QIF’s allocation by sector as at 30 June 2015:

Portfolio Breakdown Top 5 Holdings

Company Name Sector % Share of NAV

Qatar National Bank Banks & Financial Services 16.9%

Industries Qatar Industry 14.4%

Masraf Al Rayan Banks & Financial Services 11.3%

Commercial Bank of Qatar Banks & Financial Services 8.5%

Qatar Islamic Bank Banks & Financial Services 7.2%

Source: Bloomberg, Qatar Insurance Company

At the end of June 2015, the top five investments on the company constituted 58.4% of NAV, up from 47.9% as at 30

June 2014. The top 10 holdings represent 83.4% of QIF’s NAV (75.4% as at 30 June 2014).


15


Country Allocation

At the end of June 2015, QIF had 20 holdings: 18 in Qatar and 2 in UAE (Q1 2015: 23 holdings: 21 in Qatar and 2 in

UAE). Cash was 2.2% of NAV (Q1 2015: 7.4%). QIF’s holdings outside Qatar represent 4.0% of NAV at the end of

June 2015.

Qatar remains the Investment Manager’s favoured market in the GCC region due to the relatively stable political

environment, infrastructure spending, non-hydrocarbon sector growth as well as sizeable hydrocarbon reserves;

coupled with attractive valuations and a healthy dividend yield.

QIF’s Allocation by Country as at 30 June 2015:

Qatar National Bank (16.9% of NAV)

Qatar National Bank (QNB) is a high quality proxy stock for Qatari economic growth, given its strong ties with the public

sector and access to state liquidity. QNB is a dominant state-owned participant in the banking sector and plays an

important role in the development of the Qatari economy and in funding key infrastructure projects. The government is

strongly committed to support QNB, thus enhancing its economic importance. The largest shareholder in QNB is the

Government of Qatar, through the Qatar Investment Authority (QIA), with a 50% equity stake. QNB is the largest bank in

Qatar and MENA, with total assets of QAR510.5 billion (US$140.2 billion) as at 30 June 2015. For the first half of 2015,

QNB reported 10.2% rise in net profit to QAR5.6 billion (US$1.5 billion) compared to H1 2014. QNB is well positioned to

benefit from the rapid expansion of the domestic economy. QNB Group, subsidiaries and associate companies, operate

in more than 27 countries, through more than 630 branches, supported by over1,340 ATMs and employing around

14,900 staff.

Industries Qatar (14.4% of NAV)

Industries Qatar (IQ) is the largest publicly traded company in Qatar. IQ is a holding company with interests in

petrochemicals via 80% owned Qatar Petrochemical Co., fertilizers via 75% owned Qatar Fertilizer Co., steel via a

wholly owned subsidiary Qatar Steel Co. and fuel additives via 50% owned Qatar Fuel Additives Co. For H1 2015, the

company’s


16


net profit stood at QAR2,423.3 million, against QAR2,838.8 million in H1 2014, largely due to reduced revenue arising

from the petrochemical segment due to price deflation following a significant fall in global oil prices and weaker fertiliser

prices. However, the company reported improved sales volumes (up 17.1% YoY) across all segments, as most of the

company’s production facilities were on extensive planned and warranty maintenance shutdown during H1 2014.

Additionally, as for the group’s current projects, Qatar Steel has opted to sell its 50% stake in the JV Qatar Steel

International to Qatar Mining Company, the other JV partner. However, Qatar Steel will continue to be involved in the

project by providing technical services and support.

Masraf Al Rayan (11.3% of NAV)

Masraf Al Rayan (MARK) was incorporated as a Qatari Shareholding Company under Qatar Commercial Company law

on 4th January 2006. It is licensed by the Qatar Central Bank and began commercial operations in October 2006. The

bank has three main business divisions mainly retail banking, wholesale banking and private banking. Besides this the

bank offers investment banking and treasury products. Presently MARK has a total of 11 branches in strategic locations

around Qatar, and a total of 62 ATMs. At the end of June 2015, the bank’s financial assets stood at QAR59.5 billion

(US$16.3 billion). During first half of 2015, the bank reported 10.5% rise in net profit to QAR998.3 million (US$274.3

million).

Commercial Bank of Qatar (8.5% of NAV)

Commercial Bank of Qatar (CBQ) was established in 1975 as a full service commercial bank. CBQ is the second -

largest commercial bank in Qatar, with total assets of QAR119.1 billion (US$32.7 billion) as at 30 June 2015. CBQ

offers retail, corporate, Islamic and investment banking products in Qatar, through its subsidiary in Turkey and through

its associates in the UAE and Oman. The bank has countrywide network with 32 full service branches and 156 ATMs. In

6M 2015, its net income was flat at QAR964.6 million (US$265.0 million) compared to same period last year.

Qatar Islamic Bank (7.2% of NAV)

Qatar Islamic Bank (QIB) is Qatar’s first Islamic financial institution that follows Shari’a principles. Established in 1982,

the bank commands 36% share of Islamic sector and over 10% share of the overall banking sector (FY 2014). The bank

has over 30 branches in Qatar and has international presence through affiliates namely QIB – UK in London, Arab

Finance House in Lebanon, Asian Finance Bank in Malaysia, and QIB Sudan. Apart from core businesses, the bank has

core holdings in QInvest (Investment bank; QIB subsidiary), Beema (Islamic Insurance Company), Al Jazeera Finance

(Islamic Consumer Finance) and Aqar (Real Estate Investment and Development). At the end of June 2015, its

financing assets stood at QAR76.6 billion (US$21.1 billion). In the first half of 2015, the bank’s net profit grew 23.4% to

QAR895.1 million (US$245.9 million).

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

10 September 2015 10 September 2015


17

Investment Policy

Investment Objective

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 GCC countries.

The Company applies a top-down screening process to identify those sectors which should most benefit from sector

growth trends. Fundamental industry and company analysis, rather than benchmarking, forms the basis of both stock

selection and portfolio construction.

Assets or companies in which the Company can invest

The Company was established to invest primarily in quoted Qatari equities. The Company invests in listed companies

on the Qatar Exchange in addition to companies soon to be listed. The Company may also invest in listed companies,

or pre-IPO companies, in other GCC Countries.

Whether investments will be active or passive investments

In the ordinary course of events, the Company is not an activist investor, although the Investment Adviser will seek to

engage with investee company management where appropriate.

Holding period for investments

In the normal course of events, the Company expects to be fully-invested, although the Company may hold cash

reserves pending new IPOs or when it is deemed financially prudent. Although the Company is a long term financial

investor, it will actively manage its portfolio.

Spread of investments and maximum exposure limits

The Company will invest in a portfolio of investee companies with restrictions in place to ensure a spread of investments

and to ensure that there are maximum exposure limits in place (see investment guidelines under Investing Restrictions).

Policy in relation to gearing and derivatives

Borrowings will be limited, as at the date on which the borrowings are incurred, to 5% of NAV. Borrowings will include

any financing element of a swap. The Company will not make use of hedging mechanisms.

The Company may utilise derivative instruments in pursuit of its investment policy subject to:

• such derivative instruments only being utilised in respect of investments listed on the Saudi Arabian stock

exchange;

• such derivative instruments being designed to offer the holder a return linked to the performance of a

particular underlying listed equity security;

• a maximum underlying equity exposure limit of 15 per cent of NAV (calculated at the time of investment); and

• a policy of entering into derivative instruments with more than one counterparty in relation to an investment,

where possible, to minimise counterparty risk.

Policy in relation to cross-holdings

Cross-holdings in other listed or unlisted closed-ended investment funds that invest in Qatar or other countries in the

GCC region will be limited to 10% of NAV at any time (calculated at the time of investment).


18

Investment Policy continued

Investing Restrictions

The investing restrictions for the Company are as follows:

(i) Foreign Ownership Restrictions

Investments in most Qatar Exchange listed companies by persons other than Qatari citizens have an ownership

restriction wherein the law precludes persons other than Qatari citizens from acquiring a certain proportion of a

company’s issued Share Capital. It is possible that the Company may have problems acquiring stock if the foreign

ownership interest in one or more stocks reaches the allocated upper limit. This may adversely impact the ability of the

Company to invest in the local Qatari market and in other GCC markets.

(ii) Investment Guidelines

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

the time of investment):

• No single investment position in a QE Index constituent may exceed the greater of: (i) 15% of the NAV of the

Company; or (ii) 125% of the constituent company’s index capitalisation divided by the index capitalisation of the

QE Index, as calculated by Bloomberg (or such other source as the Directors and Investment Manager may agree);

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

Company;

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

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

investment in P-Notes or swaps structured financial products for investment in companies listed on the Saudi

Arabian stock exchange.

(iii) Conflicts Management

The Investment Manager, the Investment Adviser, their officers and other personnel are involved in other financial,

investment or professional activities, which may on occasion give rise to conflicts of interest with the Company. The

Investment Manager will have regard to its obligations under the Investment Management Agreement to act in the best

interests of the Company, and the Investment Adviser will have regard to its obligations under the Investment Adviser

Agreement to act in the best interests of the Company, so far as is practicable having regard to their obligations to other

clients, where potential conflicts of interest arise. The Investment Manager and the Investment Adviser will use all

reasonable efforts to ensure that the Company has the opportunity to participate in potential investments that each

identifies which fall within the investment objective and strategies of the Company. Other than these restrictions set out

above, and the requirement to invest in accordance with its investing policy, there are no other investing restrictions.

Returns and Distribution Policy

The Company’s investment objective is to achieve capital growth. However the Company paid a dividend for the year

ended 30 June 2014 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.


19

Investment Policy continued

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 2015, 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.


20

Report of the Directors

The Directors hereby submit their annual report together with the audited consolidated financial statements of Qatar

Investment Fund plc (formerly Epicure Qatar Equity Opportunities plc) (the “Company”) for the year ended 30 June

2015.

The Company

The Company is incorporated in the Isle of Man and has been established to invest primarily in quoted equities of Qatar

and other Gulf Co-operation Council countries. The Company’s investment policy is detailed on pages 17 to 19.

Results and Dividends

The results of the Company for the period and its financial position at the period end are set out on pages 38 to 47 of

the financial statements.

The Directors manage the Company’s affairs to achieve capital growth and the Company has instituted an annual

dividend policy. The quantum of the dividend is calculated based on a proportion of the dividends received during the

year, net of the Company’s attributable costs. Any undistributed income will be set aside in a revenue reserve in order to

facilitate the Company’s policy of future progressive dividend payments. This policy will be subject to the absence of

exceptional market events.

For the year ended 30 June 2014, the Directors declared a dividend of US$4,875,007 (3.5c per share) which was

approved by Shareholders and paid by the Company in March 2015.

Directors

Details of Board members at the date of this report, together with their biographical details, are set out on page 29.

Director independence and Directors’ and other interests have been detailed in the Directors’ Remuneration Report on

pages 33 and 34.

Creditor Payment Policy

It is the Company’s policy to adhere to the payment terms agreed with individual suppliers and to pay in accordance

with its contractual and other legal obligations.

Gearing Policy

Borrowings will be limited, as at the date on which the borrowings are incurred, to 5% of NAV (or such other limit as may

be approved by the Shareholders in general meeting). The Company will not make use of any hedging mechanisms or

leveraged derivative instruments.

There were no borrowings during the year.

Donations

The Company has not made any political or charitable donations during the year (2014: 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.


21

Report of the Directors continued

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 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 12 November 2015 at the Company’s registered office.

A copy of the notice of Annual General Meeting is contained within this Annual Report. As well as the business normally

conducted at such a meeting, Shareholders will be asked to renew the authority to allow the Company to continue with

share buy-backs.

In addition, shareholders will be asked to vote on the Company’s life. Details of the discontinuation vote are set out

below. The Directors consider that all the resolutions to be put to the meeting, other than the discontinuation vote are in

the best interests of the Shareholders as a whole and recommend that you vote in favour of them.

The notice of the Annual General Meeting and the Annual Report are also available at www.qatarinvestmentfund.com.

Discontinuation Vote


the opportunity to review the future of the Company at appropriate intervals. Accordingly, at the Annual General Meeting

of the Company in 2015 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$213 million as at 30 June 2015 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 table below illustrates the Company’s

performance over the relevant periods as measured by these metrics.

FY 2015 FY 2014 FY 2013 FY 2012 FY2011 FY2010 FY2009 7

February

2008* to

30 June

2012

QIF NAV

per share

+8.4% +21.2% +15.5% -1.9% +22.6% +7.7% -41.8% -12.2%

QE Index +6.2% +23.6% +14.5% -2.8% +21.2% +6.3% -45.3% -19.0%

* date fully invested


22

Report of the Directors continued

Discontinuation Vote continued

The Company’s Investment Adviser is part of one of the oldest and largest property casualty insurers in the region. Its

Doha-based investment team manages assets in excess of $US3 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 on pages 23 to 28, which forms part of the Report of the

Directors.

Substantial Shareholdings

As at the date of publication of this annual report, the Company had been notified of the following holdings in its Share

Capital.

Ordinary Shares

Name %

City of London Investment Management Company 29.20*

Qatar Insurance Company S.A.Q. 18.33

Qatar Investment Authority 11.34*

Lazard Asset Management 7.20

1607 Capital Partners LLC 5.03*

Advance Frontier Market Fund Limited 2.94*

The above percentages are calculated by applying the Shareholdings as notified to the Company to the issued Ordinary

Share Capital as at 30 June 2015. For those notifications received prior to the most recent tender offer (*) the

percentage shareholding is based on the disclosure in such notification.

On behalf of the Board

Nicholas Wilson

Chairman

10 September 2015


23

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 AIC Code of Corporate Governance

The Company is committed to high standards of corporate governance. The Board is accountable to the Company’s

shareholders for good governance and this statement describes how the Company applies the principles identified in

the UK Corporate Governance Code which is available on the Financial Reporting Council’s website: www.frc.org.uk.

The Board confirms that the Company has complied throughout the accounting period with the relevant provisions

contained within the UK Code.

The Board of the Company has considered the principles and recommendations of the AIC 2010 Code of Corporate

Governance (AIC Code) by reference to the AIC Corporate Governance Guide for investment Companies (AIC Guide).

The AIC Code, as explained by the AIC Guide, addresses all the principles set out in the UK Corporate Governance

Code, as well as setting out additional principles and recommendations on issues that are of specific relevance to QIF

plc.

The Board considers that reporting against the principles and recommendations of the AIC Code, and by reference to

the AIC Guide (which incorporates the UK Corporate Governance Code), will provide better information to shareholders.

The Company has complied with the recommendations of the AIC Code and the relevant provisions of the UK

Corporate Governance Code, except as set out below.

The UK Corporate Governance Code includes provisions relating to:

• the role of the chief executive

• executive directors’ remuneration

• the need for an internal audit function

For the reasons set out in the AIC Guide, and as explained in the UK Corporate Governance Code, the Board considers

these provisions are not relevant to the position of the Company, being an externally managed investment company. In

particular, all of the Company’s day-to-day management and administrative functions, with the exception of portfolio

management, risk management and service provider performance management, are outsourced to third parties. As a

result, the Company has no executive directors, employees or internal operations. The Company has therefore not

reported further in respect of these provisions.

Directors

The Directors are responsible for the determination of the Company’s investment policy and strategy and have overall

responsibility for the Company’s activities including the review of the investment activity and performance.

All of the Directors are non-executive. Save for Leonard O’Brien, the Board considers each of the Directors to be

independent of, and free of any material relationship with, the Investment Manager and Investment Adviser.

The Board of Directors delegates to the Investment Manager through the Investment Management Agreement the

responsibility for the management of the Company’s assets in GCC securities in accordance with the Company’s

investment policy and for retaining the services of the Investment Adviser. The Company has no executives or

employees.

The Articles of Association require that all Directors submit themselves for election by Shareholders at the first

opportunity following their appointment and shall not remain in office longer than three years since their last election or

re-election without submitting themselves for re-election.

The Board meets formally at least 4 times a year and between these meetings there is regular contact with the

Investment Manager. Other meetings are arranged as necessary. The Board considers that it meets sufficiently


24

Corporate Governance Report continued

Directors continued

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 it operates;

• keeping abreast of and complying with the legislative and broader responsibilities of a Director of a company

whose shares are traded on the London Stock Exchange;

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

• disclosing to the Board as soon as possible any potential conflicts of interest.


25


The Board authorises the Nomination Committee to:

• recommend to the Board, from time to time, changes that the Committee believes to be desirable to the size

and composition of the Board;

• recommend individuals for nomination as members of the Board;

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

• review on an on-going basis succession planning for the Chairman of the Board and make recommendations

to the Board as appropriate

The Plan will be reviewed by the Board annually and at such other times as circumstances may require (e.g. a major

corporate development or an unexpected resignation from the Board). The Plan may be amended or varied in relation to

individual circumstances at the Board’s discretion.

Board Committees

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

outside the main Board meetings:

• Audit Committee

• Remuneration Committee

• Nomination Committee

• Management Engagement Committee

Throughout the year the Chairman of each committee provided the Board with a summary of the key issues considered

at the meeting of the committees and the minutes of the meetings were circulated to the Board.

The committees operate within defined terms of reference. They are authorised to engage the services of external

advisers as they deem necessary in the furtherance of their duties, at the Company’s expense.

Audit Committee

The Board has established an Audit Committee made up of at least two members and comprises Paul Macdonald,

Nicholas Wilson and Neil Benedict. The Audit Committee is responsible for, inter alia, ensuring that the financial

performance of the Company is properly reported on and monitored. The Audit Committee is chaired by Paul

Macdonald. The Audit Committee normally meets at least twice a year when the Company’s interim and final reports to

Shareholders are to be considered by the Board but meetings can be held more frequently if the Audit Committee

members deem it necessary or if requested by the Company’s auditors. The Audit Committee will, amongst other

things, review the annual and interim accounts, results announcements, internal control systems and procedures,

preparing a note in respect of related party transactions and reviewing any declarations of interest notified to the

Committee by the Board each on six monthly basis, review and make recommendations on the appointment,

resignation or dismissal of the Company’s auditors and accounting policies of the Company. The Company’s auditors

are advised of the timing of the meetings to consider the annual and interim accounts and the auditors shall be asked to

attend the audit committee meeting where the annual audited accounts are to be considered. The Audit Committee

chairman shall report formally to the Board on its proceedings after each meeting and compile a report to Shareholders

on its activities to be included in the Company’s annual report. At least once a year, the Audit Committee will review its

performance, constitution and terms of reference to ensure that it is operating at maximum effectiveness and

recommend any changes it considers necessary to the Board for approval.

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


26


Significant Issues

During its review of the Company’s financial statements for the year ended 30 June 2015, the Audit Committee

considered the following significant issues, in particular those communicated by the auditor during their reporting:

Completeness, Valuation, Existence and Ownership of Investments

The valuation of investments is undertaken in accordance with the accounting policies, disclosed in note 3.3 to the

financial statements. The audit includes independent confirmation of the existence of all investments from the

Company’s custodian. All investments are considered liquid and quoted in active markets and have been categorised as

Level 1 within the IFRS 13 fair value hierarchy and can be verified against daily market prices. The portfolio is reviewed

and verified by the Manager on a regular basis and management accounts including a full portfolio listing are prepared

each month and circulated to the Board. The Company uses the services of an independent Custodian HSBC Bank

Middle East Limited to hold the assets of the Company. The investment portfolio is reconciled regularly by the Manager

and a reconciliation is also reviewed by the Auditor.

Remuneration Committee

The Company has established a Remuneration Committee. The Remuneration Committee is made up of at least two

members from amongst the non-executive Directors identified by the Board as being independent. Its members are Neil

Benedict (Chairman), Nicholas Wilson and Paul Macdonald. The Remuneration Committee normally meets at least

once a year and at such other times as the chairman of the Remuneration Committee shall require. The Remuneration

Committee reviews the performance of the Directors and sets the scale and structure of their remuneration and the

basis of their letters of appointment with due regard to the interests of Shareholders. In determining the remuneration of

Directors, the Remuneration Committee seeks to enable the Company to attract and retain Directors of the highest

calibre. No Director is permitted to participate in any discussion of decisions concerning their own remuneration. The

Remuneration Committee reviews at least once a year its own performance, constitutions and terms of reference to

ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the Board for

approval.

The terms of reference for the Remuneration Committee are available on the Company’s website

www.qatarinvestmentfund.com Nomination Committee

The Company has established a Nomination Committee which shall be made up of at least two members and which

shall comprise all Independent Directors. The Nomination Committee comprises Nicholas Wilson (Chairman), Neil

Benedict and Paul Macdonald. The Nomination Committee meets at least once a year prior to the first quarterly Board

meeting and at such other times as the Chairman of the committee shall require. The Nomination Committee is

responsible for ensuring that the Board members have the range of skills and qualities to meet its principal

responsibilities in a way which ensures that the interests of Shareholders are protected and promoted and regularly

review the structure, size and composition of the Board. The Nomination Committee shall, at least once a year, review

its own performance, constitution and terms of reference to ensure that it is operating at maximum effectiveness and

recommend any changes it considers necessary to the Board for approval.

The Nomination Committee will assess potential candidates on merit against a range of criteria including experience,

knowledge, professional skills and personal qualities as well as independence, if this is required for the role.

Candidates’ ability to commit sufficient time to the business of the Company is also key, particularly in respect of the

appointment of the Chairman. The Chairman of the Nomination Committee is primarily responsible for interviewing

suitable candidates and a recommendation will be made to the Board for final approval.

Management Engagement Committee

The Company has established a Management Engagement Committee which is made up of at least two members and

which shall comprise independent non-executive Directors. The Management Engagement Committee members are

Neil Benedict (Chairman), Paul Macdonald and Nicholas Wilson. The Management Engagement Committee will meet at

least quarterly and is responsible for reviewing the performance of the Investment Manager and other service providers,

to ensure that the Company’s management contract is competitive and reasonable for the Shareholders and to review


27


Management Engagement Committee continued

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

9(9) 6(6) 1(1) 4(4) 3(3)

Meetings Attended (entitled to attend)

Nicholas Wilson (Chairman and Chairman of Nomination Committee)

9 (9) 6 (6) 1 (1) 4 (4) 3 (3)

Neil Benedict (Chairman of Remuneration Committee and Chairman of Management Engagement Committee)

9 (9) 6 (6) 1 (1) 4 (4) 3 (3)

Leonard O’Brien

9 (9) 0 (0)* 0 (0)* 0 (0)* 0 (0)*

Paul Macdonald (Chairman of Audit Committee)

9 (9) 6 (6) 1 (1) 4 (4)* 3 (3)

*Not a member of the committee.

The Annual General Meeting was held on 11 November 2014.

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.


28


Internal Control continued

The Board, assisted by the Investment Manager and Investment Adviser, has undertaken regular risk and controls

assessments. The business risks have been analysed and recorded in a risk and internal controls report which is

regularly reviewed. The Board has reviewed the need for an internal audit function. The Board has decided that the

systems and procedures employed by the Managers, including its internal audit function and the work carried out by the

Company’s external Auditor, provide sufficient assurance that a sound system of internal control, which safeguards

Shareholders’ investments and the Company’s assets, is maintained. An internal audit function, specific to the

Company, is therefore considered unnecessary.

The Board confirms that there is an on-going process for identifying, evaluating and managing the Company’s principal

business and operational risks that have been in place for the year ended 30 June 2015 and up to the date of approval

of the annual report and financial statements.

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

The Statement of Directors’ Responsibilities is set out on page 30.

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.


Nicholas Wilson

Chairman

10 September 2015


29

Board of Directors

Nicholas Wilson (Non-Executive Chairman)

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 was a 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.

Paul Macdonald (Non-Executive Director)

Paul Macdonald qualified as a chartered accountant in 1979. He worked for Pilkington plc for sixteen years, the last

seven of these in Germany. In Germany he was Managing Director for Pilkington Deutschland GmbH (holding

company) and Managing Director of both Flachglas AG (glass manufacturer) and Dahlbusch AG (property and holding

company). For the last fourteen years Paul has been active in the private equity market and has been successful in

developing a number of companies covering a number of industries including Sirona Beteiligungs GmbH (Germany), a

leveraged buy-out from Siemens. He is currently the Geschäftsführer for Helvetica Deutschland GmbH and a Director of

Helvetica Services GmbH and Helvetica Construction GmbH. Paul is a Non-Executive Director of PME African

Infrastructure Opportunities plc.

Leonard O’Brien (Non-Executive Director)

Leonard O’Brien is Managing Director of the Salamander Fiduciary Services Group, which consists of Salamander

Associates Limited and its two wholly owned subsidiaries. Len has had many years of experience in the fiduciary

services industry including the Silex Trust Group, the Stonehage Financial Services Group and Barclays Bank. During

this time he has served on the boards of trust companies in the British Virgin Islands, Jersey and Cayman Islands and

has acted as a Membre de Direction of Barclays Bank (Suisse) SA, Geneva. Len qualified as a Chartered Accountant

with KPMG in 1996. Len is also a Director of the Investment Manager.

Neil Benedict (Non-Executive Director)

Neil Benedict is based in the USA with over thirty years’ experience of financial markets. He was formerly a Managing

Director at Salomon Brothers, where he was Head of International Capital Markets, and, prior to that, the founder and

head of the worldwide Currency Swaps group. Neil was also a Managing Director at Dillon Read and helped establish

their Tokyo office. He is currently a Managing Director of Intelligent Edge Advisors, a New York advisory firm. Neil is a

fellow member of the Institute of Chartered Accountants in England and Wales.


30

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 and Parent Company 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;

• that in the opinion of the Directors, the Annual Report and Accounts taken as a whole, is fair, balanced and

understandable and it provides the information necessary to assess the Company’s performance, business model

and strategy: and

• the Business Review, Report of the Investment Manager and Investment Adviser and the Report of the Directors

include a fair review of the development and performance of the business and the position of the Company and the

undertakings included in the consolidation taken as a whole, together with a description of the principal risks and

uncertainties that they face.


Nicholas Wilson

Chairman

10 September 2015


31

Audit Committee Report

An Audit Committee has been established in compliance with the FSA’s Disclosure and Transparency Rule 7.1 and the

UK Corporate Governance Code consisting of independent Directors. Its authority and duties are clearly defined within

its written terms of reference. Paul Macdonald is Chairman of the Audit Committee, which also comprises Mr Nicholas

Wilson and Mr Neil Benedict.

The Committee meets at least two times a year.

.

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

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

controls;

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

• making recommendations to the Board in relation to the appointment of the external auditors and approving

their remuneration and terms of their engagement;

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

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

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

• reviewing the arrangements in place within the Administrator and Investment Manager/Adviser whereby their

staff may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other

matters insofar as they may affect the Company;

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

• reviewing the terms of the Investment Management Agreement;

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

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

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

includes confirmation that in all such work auditor objectivity and independence is safeguarded.

Owing to the nature of the fund’s business, with all major functions being outsourced and the absence of employees,

the Audit Committee do not feel it is necessary for the Company to have its own internal audit function. This situation is

re-evaluated annually.

KPMG Audit LLC was re-appointed as auditor at the last AGM on 11 November 2014. The Audit Committee considered

the experience and tenure of the audit partner and staff and the nature and level of services provided. The Audit

Committee receives confirmation from the auditor that they have complied with the relevant UK professional and

regulatory requirements on independence. The Company’s Audit Committee meets representatives of the Administrator,

who report as to the proper conduct of the business in accordance with the regulatory environment in which the

Company, the Administrator, and the Investment Manager/Adviser operate. The Company’s external auditor also

attends this Audit Committee meeting at its request and reports if the Company has not kept proper accounting records,

or if it has not received all the information and explanations required for its audit.

The Audit Committee also monitors the risks to which the Company is exposed and makes recommendations as to the

mitigation of these risks. This task is facilitated by using an extensive risk matrix that enables the committee to make a

quantitative analysis of the individual risks and to highlight those areas where risk is high or increasing.

This report was reviewed and approved by the Board on 10 September 2015.

Paul Macdonald

Chairman of the Audit Committee 10 September 2015


32

Management Engagement Committee Report

A Management Engagement Committee has been established in accordance with good corporate governance. Neil

Benedict is chairman of the committee, which also comprises Paul Macdonald and Nicholas Wilson.

The function of the Management Engagement Committee is to monitor the performance of all the Company’s service

providers and in the particular the performance of the Investment Manager/Investment Adviser.

The performance of the Investment Manager/Investment Adviser is formally reviewed annually at the end of the

Company’s financial year. The Management Engagement Committee meets quarterly prior to the quarterly Board

meetings and the chairman of the Management Engagement Committee monitors the performance periodically during

the intervening periods.

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

• monitors and evaluates the investment performance both in absolute terms and also by reference to peer

group analysis prepared by the Investment Manager/Adviser and by the Company’s broker;

• reviews the performance fee structure to ensure that it does not encourage excessive risk and that it rewards

demonstrable superior performance;

• investigates any breaches of agreed investment limits and any deviation from the agreed investment policy

and strategy;

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

• evaluates the level and effectiveness of any marketing support provided by the Investment Manager, including

but not limited to, their input into quarterly reports, handling investor relations and website monitoring and

development;

• assesses the level of fees charged by the Investment Manager and how these fees compare with those

charged to peer group companies;

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

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

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

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

• examines the effectiveness of the services provided;

• makes recommendations to the Board where changes are warranted.

At its most recent meeting, the Management Engagement Committee concluded that the performance of the Investment

Manager/Investment Adviser had been satisfactory. The Investment Manager had adhered to the investment policy and

policy limits.

The Committee was satisfied with the current performance of the Company’s other service providers.

Neil Benedict

Chairman of the Management Engagement Committee

10 September 2015


33

Directors’ Remuneration Report

This report meets the relevant rules of the Listing Rules of the Financial Services Authority and describes how the

Board has applied the principles relating to Directors’ remuneration. An ordinary resolution to receive and approve this

report will be put to the Shareholders at the forthcoming Annual General Meeting.

Role of the Remuneration Committee

The role and make-up of the Remuneration Committee is more fully discussed on page 26.

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

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

As the Board is comprised entirely of non-executive Directors the Board as a whole consider the Directors’

remuneration but it has appointed its Remuneration Committee to consider matters relating thereto.

Remuneration Policy

The Company’s Articles of Association limit the basic fees payable to the Directors to £200,000 per annum in

aggregate. Subject to this overall limit it is the Company’s policy that the fees payable to the Directors should reflect the

time spent by the Board on the Company’s affairs and the responsibilities borne by the Directors and should be

sufficient to enable candidates of high calibre to be recruited. The Directors are also entitled to receive reimbursement

of any expenses incurred in relation to their appointment.

The policy is for the Chairman of the Board and Chairman of the Audit Committee to be paid a higher fee than the other

Directors in recognition of their more onerous roles and more time spent.

In the year under review the Directors’ fees were paid at the following annual rates: the Chairman £47,500 plus £10,000

with respect to the work involved in the share buy-back programme, the Chairman of the Audit Committee £32,500, the

other Directors £30,000.

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

Reappointment

It is the Board’s policy that non-independent Directors stand for re-election every year and independent Directors stand

for re-election every three years.

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 2015 30 June 2014 £ £

Nicholas Wilson (Chairman) 57,500 57,500

Neil Benedict (Chairman of Remuneration Committee and Management Engagement Committee)

30,000 30,000

Leonard O’Brien 30,000 30,000

Paul Macdonald (Chairman of Audit Committee) 32,500 32,500

150,000 150,000

US$ charge reflected in the financial statements 239,169 244,051

Expenses totalling US$103,184 (2014: US$149,171) were incurred by the Directors and reimbursed during the year.


34

Directors’ Remuneration Report continued

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 Investment Manager.

Save as disclosed above, none of the Directors had any interest during the year in any material contract for the

provision of services which was significant to the business of the Company.

Director holdings in Company:

30 June 2015 30 June 2014

Director Shares Shares

Leonard O’Brien 42,071 26,087

Nicholas Wilson 50,000 45,000

For and on behalf of the Board

Neil Benedict

Chairman of the Remuneration Committee

10 September 2015


35

Report of the Independent Auditors, KPMG Audit LLC, to the members of Qatar Investment Fund plc

Opinions and conclusions arising from our audit

1. Our opinion on the financial statements is unmodified

We have audited the financial statements of Qatar Investment Fund plc for the year ended 30 June 2015 which

comprise the Consolidated and Parent Company Income Statements, the Consolidated and Parent Company

Statements of Comprehensive Income, the Consolidated and Parent Company Balance Sheets, the Consolidated and

Parent Company Statements of Changes in Equity and the Consolidated and Parent Company Statements of Cash

Flows and the related notes. In our opinion the financial statements:

• give a true and fair view of the state of the Group’s and Parent Company’s affairs as at 30 June 2015 and of the

Group’s and Parent Company’s profit for the year then ended;

• have been properly prepared in accordance with International Financial Reporting Standards; and

• have been properly prepared in accordance with the provisions of the Companies Acts 1931 to 2004.

2. Our assessment of risks of material misstatement

The risks of material misstatement detailed in this section of this report are those risks that we have deemed, in our

professional judgement, to have had the greatest effect on: the overall audit strategy; the allocation of resources in our

audit; and directing the efforts of the engagement team. Our audit procedures relate to these risks were designed in the

context of our audit of the financial statements as a whole. Our opinion on the financial statements is not modified with

respect to any of these risks, and we do not express an opinion on these individual risks.

In arriving at our audit opinion above on the financial statements, the risk of material misstatement that had the greatest

effect on our audit was as follows:

Carrying amount of quoted equity investments

Refer to page 26 (Significant Issues identified by the Audit Committee), note 3.3 (accounting policy for financial assets

at fair value through profit or loss) and note 15 (financial risk disclosures relating to financial instruments).

• The risk: The Group’s quoted equity investment portfolio makes up 96.8% of total assets (by value) and is

considered to be the key driver of the Group’s capital and revenue performance. We do not consider these

investments to be at high risk of significant misstatement, or to be subject to a significant level of judgment,

because they comprise liquid, quoted investments. However, due to their materiality in the context of the financial

statements as a whole, they are considered to be the area which had the greatest effect on our overall audit

strategy and allocation of resources in planning and completing our audit.

• Our response: Our procedures over the completeness, valuation, ownership and existence of the Group’s quoted

equity investment portfolio included, but were not limited to:

• documenting and assessing the processes in place to record investment transactions and to value the portfolio;

• agreeing the valuation of 100% of portfolio investments to independent externally quoted prices; and

• agreeing 100% of portfolio investment holdings to independently received third party confirmations from the

custodian.

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

Materiality is a term used to describe the acceptable level of precision in financial statements. Auditing standards

describe a misstatement or an omission as ‘material’ if it could reasonably be expected to influence the economic

decisions of users taken on the basis of the financial statements. We identify a monetary amount as ‘materiality for the


36

Report of the Independent Auditors, KPMG Audit LLC, to the members of Qatar Investment Fund plc continued

financial statements as a whole’ based on this criteria and apply the concept of materiality in planning and performing

the audit, and in evaluating the effect of identified misstatements on the audit and of uncorrected misstatements, if any,

on the financial statements and in forming our opinion on them.

The materiality for the financial statements as a whole was set at US$2,100,000. This has been determined with

reference to a benchmark of Group total assets (of which it represents 1%). Total assets, which is primarily composed

of the Group’s investment portfolio, is considered to be the key driver of the Group’s capital and revenue performance

and, as such, we consider it to be one of the principal considerations for members of the Company in assessing the

financial performance of the Group.

We agreed with the Audit Committee to report to it all corrected and uncorrected misstatements we identified through

our audit with a value in excess of US$106,000, in addition to other audit misstatements below that threshold that we

believe warranted reporting on qualitative grounds.

Our audit of the Group was undertaken to the materiality level specified above and was all performed at the head office

of the administrator, Galileo Fund Services Limited, in the Isle of Man.

4. We have nothing to report in respect of the matters on which we are required to report by exception

Under ISAs (UK and Ireland) we are required to report to you if, based on the knowledge we acquired during our audit,

we have identified other information in the annual report that contains a material inconsistency with either that

knowledge or the financial statements, a material misstatement of fact, or that is otherwise misleading.

In particular, we are required to report to you if:

• we have identified material inconsistencies between the knowledge we acquired during our audit and the directors’

statement that they consider that the annual report and financial statements taken as a whole is fair, balanced and

understandable and provides the information necessary for shareholders to assess the Group’s performance,

business model and strategy; or

• the Audit Committee Report does not appropriately address matters communicated by us to the Audit Committee.

Under the Companies Acts 1931 to 2004 we are required to report to you if, in our opinion:

• proper books of account have not been kept by the Parent Company and proper returns adequate for our audit

have not been received from branches not visited by us; or

• the Parent Company’s balance sheet and income statement are not in agreement with the books of account and

returns; or

• certain disclosures of directors’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

Under the Listing Rules we are required to review:

• the part of the Corporate Governance Report on pages 23 to 28 relating to the Company’s compliance with the nine

provisions of the 2010 UK Corporate Governance Code specified for our review.

We have nothing to report in respect of the above responsibilities.

Respective responsibilities of Directors and Auditor

As explained more fully in the Directors’ Responsibilities Statement set out on page 30, the Directors are responsible for the preparation of financial statements that give a true and fair view. Our responsibility is to audit, and express an


37

Report of the Independent Auditors, KPMG Audit LLC, to the members of Qatar Investment Fund plc continued

opinion on, the financial statements in accordance with applicable law and International Standards on Auditing (UK and

Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

Scope of an audit of financial statements performed in accordance with ISAs (UK and Ireland)

An audit in accordance with ISAs (UK and Ireland) involves obtaining evidence about the amounts and disclosures in

the financial statements sufficient to give reasonable assurance that the financial statements are free from material

misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are

appropriate to the Group’s and Company’s circumstances and have been consistently applied and adequately

disclosed; the reasonableness of significant accounting estimates made by the Directors; and the overall presentation of

the financial statements. In addition we read all the financial and non-financial information in the Annual Report to

identify material inconsistencies with the audited financial statements and to identify any information that is apparently

materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing

the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications

for our report.

Whilst an audit conducted in accordance with ISAs (UK and Ireland) is designed to provide reasonable assurance of

identifying material misstatements or omissions it is not guaranteed to do so. Rather the auditor plans the audit to

determine the extent of testing needed to reduce to an appropriately low level the probability that the aggregate of

uncorrected and undetected misstatements does not exceed materiality for the financial statements as a whole. This

testing requires us to conduct significant audit work on a broad range of assets, liabilities, income and expense as well

as devoting significant time of the most experienced members of the audit team, in particular the engagement partner

responsible for the audit, to subjective areas of accounting and reporting.

The purpose of this report and restrictions on its use by persons other than the Company’s members as a body

This report is made solely to the Company’s members, as a body, in accordance with Section 15 of the Companies Act

1982. Our audit work has been undertaken so that we might state to the Company’s members those matters we are

required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do

not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our

audit work, for this report, or for the opinions we have formed.

Simon Nicholas

Responsible Individual

For and on behalf of KPMG Audit LLC

Statutory Auditor

10 September 2015

Chartered Accountants

Heritage Court

41 Athol Street

Douglas

Isle of Man

IM99 1HN


38

Consolidated Income Statement

Note Year ended 30 June 2015 Year ended 30 June 2014

US$’000 US$'000

Income

Dividend income on quoted equity

investments

10,054 9,258

Realised gain on sale of financial assets at fair value through profit or loss

47,458 26,510

Net changes in fair value on financial assets at fair value through profit or loss

(31,408) 13,737

Commission rebate income on quoted equity investments

7 282 177

Bond interest 6 - 17

Total net income 26,386 49,699

Expenses

Investment Manager's fees 8 2,409 2,437

Performance fees 8 - -

Audit fees 46 27

Other expenses 8 1,281 1,311

Total operating expenses 3,736 3,775

Profit before tax 22,650 45,924

Income tax expense 14 - -

Retained profit for the year 22,650 45,924

Basic earnings per share (cents) 12 15.31 27.76

Diluted earnings per share (cents) 12 15.31 27.76

The Directors consider that all results derive from continuing activities.

The accompanying notes form an integral part of these consolidated financial statements


39

Consolidated Statement of Comprehensive Income

Year ended 30 June 2015 Year ended 30 June 2014

US$'000 US$'000

Profit for the year 22,650 45,924

Other comprehensive income

Items that are or may be reclassified subsequently to profit or loss:

Currency translation differences (82) (7)

Total items that are or may be reclassified subsequently to profit or loss (82) (7)

Other comprehensive expense for the year (net of tax) (82) (7)

Total comprehensive profit for the year 22,568 45,917



40

Company Income Statement


US$’000 US$'000

Income

Net change in investment in and amounts due from subsidiary

19,182 41,697

Intercompany loan interest 4,502 5,328

Other income - 2

Total net income 23,684 47,027

Expenses

Audit fees 46 27

Other expenses 8 1,070 1,083

Total operating expenses 1,116 1,110

Profit before tax 22,568 45,917

Income tax expense - -

Retained profit for the year 22,568 45,917


41

Company Statement of Comprehensive Income

Year ended 30 June 2015 Year ended 30 June 2014

US$'000 US$'000



Items that are or may be reclassified subsequently to profit or loss:

Currency translation differences - -

Total items that are or may be reclassified subsequently to profit or loss

- -

Other comprehensive income for the year (net of tax) - -

Total comprehensive profit for the year 22,568 45,917


42

Consolidated Balance Sheet

Note At 30 June 2015 At 30 June 2014

US$’000 US$'000

Financial assets at fair value through profit or loss

6(a) 206,552 202,703

Other receivables and prepayments 956 76

Cash and cash equivalents 9 5,956 17,295

Total current assets 213,464 220,074

Issued share capital 10 1,396 1,589

Retained earnings 210,425 216,938

Other reserves 11 899 788

Total equity 212,720 219,315

Current liabilities

Other payables and accrued expenses 13 744 759

Total liabilities 744 759

Total equity & liabilities 213,464 220,074

The financial statements were approved by the Directors on 10 September 2015 and signed on their behalf by:

Paul Macdonald Leonard O’Brien

Director Director



43

Company Balance Sheet

Note At 30 June 2015 At 30 June 2014

US$’000 US$'000

Due from subsidiary 6(b) 211,063 218,149

Other receivables and prepayments 542 910

Cash and cash equivalents 9 1,228 366

Total current assets 212,833 219,425

Issued share capital 10 1,396 1,589

Reserves 211,324 217,726

Total equity 212,720 219,315

Other payables and accrued expenses 13 113 110

Total liabilities 113 110

Total equity & liabilities 212,833 219,425

The financial statements were approved by the Directors on 10 September 2015 and signed on their behalf by:

Paul Macdonald Leonard O’Brien

Director Director



44

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 2013 1,839 182,058 20,165 545 204,607

Total comprehensive income for the year

Profit for the year - - 45,924 - 45,924


Foreign exchange translation differences

- - - (7) (7)

Total other comprehensive expense

- - - (7) (7)


- - 45,924 (7) 45,917

Contributions by and distributions to owners

Dividends paid - - (4,998) - (4,998)

Shares repurchased to be held in treasury

- (4,144) - - (4,144)

Shares subject to tender offer (174) (21,999) - 174 (21,999)

Tender offer expenses - (68) - - (68)

Shares in treasury cancelled (76) - - 76 -

Total contributions by and distributions to owners

(250) (26,211) (4,998) 250 (31,209)

Balance at 30 June 2014 1,589 155,847 61,091 788 219,315

Share Capital

Distributable Reserves

Retained Earnings

Other reserves

Total

US$'000 US$’000 US$'000 US$'000 US$'000

Balance at 01 July 2014 1,589 155,847 61,091 788 219,315


Profit for the year - - 22,650 - 22,650


Foreign exchange translation differences

- - - (82) (82)

Total other comprehensive expense

- - - (82) (82)


- - 22,650 (82) 22,568


Dividends paid - - (4,875) - (4,875)


- (1,169) - - (1,169)

Shares subject to tender offer (155) (22,998) - 155 (22,998)

Tender offer expenses - (121) - - (121)

Shares in treasury cancelled (38) - - 38 -


(193) (24,288) (4,875) 193 (29,163)

Balance at 30 June 2015 1,396 131,559 78,866 899 212,720



45

Company Statement of Changes in Equity

Share Capital Reserves

Total

US$'000 US$'000 US$'000

Balance at 01 July 2013 1,839 202,768 204,607


Profit for the year - 45,917 45,917


- 45,917 45,917


Dividends paid - (4,998) (4,998)


- (4,144) (4,144)

Shares subject to tender offer (174) (21,825) (21,999)

Tender offer expenses - (68) (68)

Shares in treasury cancelled (76) 76 -


(250) (30,959) (31,209)

Balance at 30 June 2014 1,589 217,726 219,315

Share Capital Reserves

Total

US$'000 US$'000 US$'000

Balance at 01 July 2014 1,589 217,726 219,315




22,568 22,568


Dividends paid (4,875) (4,875)


(1,169) (1,169)

Shares subject to tender offer (155) (22,843) (22,998)

Tender offer expenses (121) (121)

Shares in treasury cancelled (38) 38 -


(193) (28,970) (29,163)

Balance at 30 June 2015 1,396 211,324 212,720


46

Consolidated Statement of Cash Flows


US$’000 US$'000

Cash flows from operating activities

Purchase of investments (152,247) (74,863)

Proceeds from sale of investments 163,590 109,575

Interest received - 20

Dividends received 10,054 9,255

Operating expenses paid (3,841) (3,906)

Commission rebate 282 177

Net cash generated from operating activities

17,838 40,258

Financing activities


Cash used in tender offer (22,998) (21,999)


Cash used in share repurchases (1,169) (4,144)

Net cash used in financing activities (29,163) (31,209)

Net (decrease)/increase in cash and cash equivalents

(11,325) 9,049

Effects of exchange rate changes on cash and cash equivalents

(14) (11)

Cash and cash equivalents at beginning of the year

17,295 8,257

Cash and cash equivalents at end of the year

9 5,956 17,295



47

Company Statement of Cash Flows


US$’000 US$'000

Cash flows from operating activities

Interest received - 2

Due from subsidiary 31,145 31,966

Operating expenses paid (1,116) (1,170)

Net cash generated from operating activities

30,029 30,798

Financing activities


Cash used in tender offer (22,998) (21,999)


Cash used in share repurchases (1,169) (4,144)

Net cash used in financing activities (29,163) (31,209)

Net increase/(decrease) in cash and cash equivalents

866 (411)

Effects of exchange rate changes on cash and cash equivalents

(4) (6)

Cash and cash equivalents at beginning of the year

366 783

Cash and cash equivalents at end of the year

1,228 366


48

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 warrants expired on 16 November 2012.

The shares of the Company were admitted to trading on the AIM market of the London Stock Exchange (“AIM”) on 31

July 2007, when dealings also commenced.

As a result of a further fund raising in December 2007, a further 76,172,523 Ordinary Shares were issued, which were

admitted for trading on AIM on 13 December 2007.

On 4 December 2008, the Share Premium arising from the placing of shares was cancelled and the amount of the

Share Premium account transferred to Retained Earnings.

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

2011.

In the year ended 30 June 2015, the Company purchased 890,509 of its Ordinary Shares for a total value of

US$1,168,628 to be held in treasury. 3,793,272 shares had been repurchased in the year ended 30 June 2014 for

treasury but had been held for over a year and were therefore cancelled in the current financial year. The buy-backs are

effected through retained reserves.

On 23 January 2015 the Company completed a tender offer at a price of US$1.4859 per share. Under the offer

15,477,601 Shares were cancelled with US$22,998,167 being paid to participating Shareholders.

The Shareholders approved a dividend of 3.5 cents per share on 11 November 2014; this was paid to Shareholders on

13 February 2015.

The Company’s agents and the Investment Manager perform all significant functions. Accordingly, the Company itself

has no employees.

Duration


the opportunity to review the future of the Company at appropriate intervals. Accordingly, at the annual general meeting

of the Company in 2015 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 registration number 1415393.


49

Notes to the Consolidated Financial Statements continued

3 Significant Accounting Policies

The consolidated financial statements of the Company for the year ended 30 June 2015 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”) and Isle of Man Companies Act 1931 – 2004. The financial statements have been prepared under

the historic cost convention, as modified by the revaluation of financial assets held at fair value through profit or loss and

investments in and amounts due from subsidiary which are stated at fair value.

The accounting policies applied in these financial statements are the same as those applied in the Group’s consolidated

financial statements as at the year ended 30 June 2014.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates.

It also requires the Board of Directors to exercise its judgement in the process of applying the Group’s accounting

policies. The financial statements do not contain any critical accounting estimates.

3.2 Basis of consolidation

Subsidiaries

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by

the Company (its subsidiaries and subsidiary undertakings). Control is achieved where the Company has power over an

investee, exposure or rights to variable returns and the ability to exert power to affect those returns.

Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised gains or losses arising from intra-group transactions, are

eliminated in full in the consolidated financial statements.

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

and quoted convertible bonds for which fair value is based on quoted market prices. The quoted market price used for

financial assets held by the Group is the current bid price ruling at the year-end without regard to selling prices.

Purchases and sales of investments are recognised on trade date – the date on which the Group commits to purchase

or sell the asset. Investments are initially recorded at fair value, and transaction costs for all financial assets and

financial liabilities carried at fair value through profit and loss are expensed as incurred.

Gains and losses (realised and unrealised) arising from changes in the fair value of the financial assets are included in

the income statement in the year in which they arise.

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.


50


3 Significant Accounting Policies continued

3.4 Foreign currency translation continued

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 income and expense are translated at exchange

rates on the date of the relevant transactions or an average rate. Components of equity are translated at the date of the

relevant transaction and not retranslated. All resulting exchange differences are recognised in other comprehensive

income.

3.5 Dividend income

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 Investments in and amounts due from subsidiary

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

3.9 Future changes in accounting policies

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

2015, and have not been applied in preparing these financial statements. None of these are expected to have a

significant effect on the measurement of the amounts recognised on the Company’s financial statements; however,

IFRS 9, Financial Instruments (“IFRS9”) may change the classification of financial assets. This is first effective for

accounting periods beginning on or after 1 January 2018.

There are no other standards, interpretations or amendments to existing standards that are not yet effective that would

be expected to have a significant impact on the Company.

4 Net Asset Value per Share

The net asset value per share as at 30 June 2015 is US$1.5336 per share (30 June 2014: US$1.4142) based on

138,709,240 (30 June 2014: 155,077,350) Ordinary Shares in issue as at that date.

5 Fair Value Hierarchy

IFRS 13 requires the Company to classify fair value measurements using a fair value hierarchy that reflects the

significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

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

• Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that

is, as prices) or indirectly (that is, derived from prices) (level 2).

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

All the Group’s investments are classed as level 1 investments. The Company’s investment in subsidiary and amounts

due from subsidiary are also classified as level 1 investments.

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

value hierarchy.


51


6(a) Financial assets at fair value through profit or loss

Group

30 June 2015: Financial assets at fair value through profit or loss; all quoted equity securities.

Security name Number US$'000

Emaar Properties Company (EMAAR UH)

Emirates National Bank of Dubai (ENBD UH)

Barwa Real Estate (BRES QD)

Commercial Bank of Qatar (CBQK QD)

Doha Bank (DHBK QD)

Gulf International Services (GISS QD)

Gulf Warehousing (GWCS QD)

Industries Qatar (IQCD QD)

Masraf al Rayan (MARK QD)

Mazaya Real Estate Development (MRDS QD)

Medicare Group (MCGS)

National Leasing (NLCS QD)

Ooreedo (ORDS QD)

Qatar Electricity and Water (QEWS QD)

Qatar Insurance (QATI QD)

Qatar Islamic Bank (QIBK QD)

Qatar National Bank (QNBK QD)

Qatar Navigation (QNNS QD)

Qatar United Development Company (UDCD QD)

Widam Food Company (WDAM QD)

2,745,000

983,500

651,496

1,212,892

757,082

651,802

100,388

778,999

1,902,372

25

89,542

350,641

307,377

166,573

10,944

522,014

682,395

331,809

518,317

132,928

5,865

2,607

9,367

18,104

11,009

13,564

2,052

30,458

23,958

51

4,582

2,034

7,253

10,366

290

15,440

35,050

8,785

3,456

2,261

206,552


52


6(a) Financial assets at fair value through profit or loss continued

Group

30 June 2014: Financial assets at fair value through profit or loss; all quoted equity securities:

Security name Number US$'000

Emaar Properties Company (EMAAR UH)

Emirates National Bank of Dubai (ENBD UH)

Mobile Telecommunications Company (ZAIN KK)

National Bank of Kuwait (NBK KK)

National Industries Group (NIND KK)

Al Batinah Power (BATP OM)

Al Suwadi Power (SUWP OM)

Bank Muscat (BKMB OM)

Oman Telecom (OTEL OM)

Sembcorp Salalah (SEMB OM)

Al Meera Consumer Goods (MERS QD)

Barwa Real Estate (BRES QD)

Commercial Bank of Qatar (CBQK QD)

Doha Bank (DHBK QD)

Ezdan Holdings (ERES QD)

Industries Qatar (IQCD QD)

Masraf al Rayan (MARK QD)

National Leasing (NLCS QD)

Ooreedo (ORDS QD)

Qatar Electricity and Water (QEWS QD)

Qatar Gas Transport (QGTS QD)

Qatar Insurance (QATI QD)

Qatar Islamic Bank (QIBK QD)

Qatar National Bank (QNBK QD)

Qatar Navigation (QNNS QD)

Qatar United Development Company (UDCD QD)

Widam Food Company (WDAM QD)

1,595,000

1,283,500

549,000

475,250

630,000

133,202

133,518

1,860,388

109,418

346,488

96,985

1,597,739

1,120,878

936,254

345,391

513,757

1,068,065

350,641

402,207

220,829

60,360

632,488

256,911

743,948

420,610

931,395

40,000

3,652

2,813

1,206

1,617

491

59

59

3,257

466

1,902

4,503

15,347

19,041

13,926

1,832

23,644

13,249

2,887

12,936

10,424

335

13,886

5,788

33,340

9,846

5,654

543

202,703

*Bond interest amounting to US$17,401 was received in the year ended 30 June 2014, and this bond was also disposed

of during the 2014 year.

6(b) Due from subsidiary

30 June 2015 30 June 2014

US$’000 US$'000

Investment in subsidiary - -

Amount due from subsidiary 211,063 218,149


53


6 Investments and amount due from subsidiary continued

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 50% brokerage commission rebates for all trades done through its Qatar brokers.

This arrangement is set to continue. For the year ended 30 June 2015 the Group received US$281,829 (2014:

US$177,047).

8 Charges and Fees Group 30 June

2015

Company 30 June 2015

Group 30 June 2014

Company30 June 2014

US$’000 US$'000 US$'000 US$'000

Investment Manager’s fees (see below)

2,409 - 2,437 -

Performance fees (see below) - - - -

Administrator and Registrar’s fees (see below)

308 280 315 277

Custodian fees (see below) 174 2 163 -

Directors’ fees and expenses 342 342 393 393

Directors’ insurance cover 43 43 43 43

Broker fees 106 106 70 70

Other 308 297 327 300

Other expenses 1,281 1,070 1,311 1,083

Investment Manager’s fees

Annual fees

The Investment Manager was entitled to an annual management fee of 1.25% of the Net Asset Value of the Group,

calculated monthly and payable quarterly in arrears. The current Investment Management Agreement was subject to

termination on 31 October 2013 with a revised agreement coming into effect from 1 November 2013. The revised

agreement sees the annual fee reduce to 1.05% of the net asset value of the Company further reducing to an annual

fee of 1.0% of the net asset value of the Company from 1 November 2015.

Annual management fees for the year ended 30 June 2015 amounted to US$2,408,770 (30 June 2014: US$2,436,928)

and the amount accrued but not paid at the year-end was US$556,692 (30 June 2014: US$631,046).

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.


54


8 Charges and Fees continued

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 2015 amounted to US$nil as the performance

target was not reached (30 June 2014: US$nil).

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


55



Investment Manager’s fees continued

Investment Management Agreement definitions

Adjusted Net Asset

Value per Ordinary

Share

at a particular time, the sum of A plus B minus C minus D plus E where:

(i) A is the Net Asset Value per Ordinary Share at that time calculated on a basis that

does not recognise any liability of the Company to the Investment Manager in

respect of any performance fee that is, or may become, payable;

(ii) B is the amount by which any corporate action undertaken by the Company after

1 November 2013 (including, without limit, the issue of Ordinary Shares or rights

to subscribe for, or convert into. Ordinary Shares, the issue of a scrip dividend, or

the consolidation or sub-division of Ordinary Shares) results, at the time of

calculation, in a dilution to the Net Asset Value per Ordinary Share divided by the

number of Ordinary Shares in issue at the time of such corporate action;

(iii) C is the amount by which any accretion to the Net Asset Value per Ordinary

Share has arisen solely as a result of the repurchase by the Company of its

Ordinary Shares or any return of capital by the Company to its shareholders since

1 November 2013 divided by the number of Ordinary Shares in issue at the time

of such repurchase or return of capital;

(iv) D is the sum of all dividends received by the Company since 1 January 2011

divided by the number of Ordinary Shares in issue at the time of each dividend;

and

(v) E is the sum of all dividends paid by the Company since 1 January 2011 divided

by the number of Ordinary Shares in issue at the time of each dividend,

Performance Period each period in respect of which the Company produces audited accounts and, if different, the

final period for which the Investment Management Agreement subsists or any shorter period

where there has been an issue of Ordinary Shares which exceeds 10% of the then existing

Share Capital of the Company, subject always to the discretion of the Board. The first

Performance Period commenced on date of the passing of the Resolution (17 March 2011).

Outperformance

Period

any Performance Period in which the Adjusted Net Asset Value per Ordinary Share at the end

of the relevant Performance Period exceeds the Target Net Asset Value per Ordinary Share.

Shortfall Return the amount by which the Target Net Asset Value per Ordinary Share exceeds the Adjusted Net

Asset Value per Ordinary Share in respect of a Performance Period.


56



Administrator and Registrar fees

The Administrator is entitled to receive a fee of 12.5 basis points per annum of the net asset value of the Company

between US$0 and US$100 million, 10 basis points of the net asset value of the Company above US$100 million.

This is subject to a minimum monthly fee of US$15,000, payable quarterly in arrears.

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

services.

The Administrator may utilise the services of a CREST accredited registrar for the purposes of settling share

transactions through CREST. The cost of this service will be borne by the Company. It is anticipated that the cost will

be in the region of £12,000 per annum subject to the number of CREST settled transactions undertaken.

Administration fees paid for the year ending 30 June 2015 amounted to US$308,041 and US$38,837 for additional

services (30 June 2014: US$283,249 and US$32,141 respectively).

Custodian fees

The Custodian is entitled to receive fees of US$7,200 per annum and US$25 per processed transaction from the

Company.

In addition the Custodian is entitled to receive fees of 8 basis points per annum in respect of Qatari securities held by

the Group and 10 basis points per annum in respect of non-Qatari, GCC securities held by the Group and $45 per

settled transaction (Qatar)/$50 per settled transaction (GCC excluding Qatar). From 1 March 2013 the custodian agreed

to a 25% reduction in custodian fees relating to the Qatari market.

Custodian and sub-custodian fees for the year ending 30 June 2015 amounted to US$176,008 (30 June 2014:

US$163,201) and the amount accrued but not paid at the year-end was US$11,016 (30 June 2014: US$6,998).

9 Cash and Cash Equivalents Group

30 June 2015 Company

30 June 2015 Group

30 June 2014 Company

30 June 2014 US$’000 US$’000 US$'000 US$'000

Bank balances 5,956 1,228 17,295 366

Cash and cash equivalents 5,956 1,228 17,295 366

10 Share Capital

30 June 2015 30 June 2014

US$’000 US$’000

Authorised 500,000,000 Ordinary shares of US$0.01 each 5,000,000 5,000,000

Issued, Called-up and Fully-Paid:

138,709,240 (2014: 155,077,350) Ordinary Shares of US$0.01 each

in issue, with full voting rights 1,387 1551

890,509 (2014: 3,793,272) Ordinary Shares of US$0.01 each held in

Treasury 9 38

Issued share capital 1,396 1,589

During the year to 30 June 2015 the Company repurchased 890,509 (2014: 3,793,272) Ordinary Shares, to be held in

treasury, at a cost of US$1,168,628 (2014: US$4,143,929) and cancelled 3,793,272 (2014: 7,534,651) 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.


57


10 Share Capital continued

On 30 January 2015 the Company completed a tender offer at a price of US$1.4859 per share. Under the tender offer

15,477,601 shares were repurchased and cancelled.

During the year US$120,867 tender expenses were deducted from equity.

Capital management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to

sustain future development of the 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. The Company also has an active share buyback program.

11 Reserves - Group

Distributable

Reserves

Retained

Earnings

Foreign

Currency

Translation

reserve

Capital

Redemption

Reserve

30 June

2015

Total

US$'000 US$’000 US$'000 US$'000 US$'000

Balance at 1 July 2014 155,847 61,091 (98) 886 217,726

Dividends paid - (4,875) - - (4,875)

Shares subject to

tender offer

(22,998) - - 155 (22,843)

*Tender expenses (121) - - - (121)

Foreign exchange

translation differences

- - (82) - (82)

Retained earnings - 22,650 - - 22,650

Shares in treasury

cancelled

- - - 38 38

Share buy-backs (1,169) - - - (1,169)

Balance at 30 June

2015

131,559 78,866 (180) 1,079 211,324

*Exceptional expenses related to tender offer

The capital redemption reserve is created on the cancellation of shares equal to the par value of shares cancelled. This

reserve is not distributable.


58


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 2015 30 June 2014

Profit attributable to equity holders of the Company (US$’000)

22,650 45,924

Weighted average number of Ordinary Shares in issue (thousands)

147,918 165,419

Basic and diluted earnings per share (cents per share) 15.31 27.76

13 Other payables and accrued expenses

Group 30 June 2015 30 June 2014 US$’000 US$'000

Due to broker 51 -

Management fee payable 557 631

Administration fee payable 75 82

Accruals and sundry creditors 61 46

744 759

Company 30 June 2015 30 June 2014 US$’000 US$'000

Administration fee payable 68 75

Accruals and sundry creditors 45 35

113 110

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%.


59


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 other Co-operation Council for Arab States of the

Gulf (GCC).

At 30 June 2015, if the market value of the investment portfolio had increased/decreased by 9% with all other variables

held constant, this would have increased/decreased net assets attributable to Shareholders by approximately US$18.6

million (30 June 2014 : 9.0% : US$18.2 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 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 2015 30 June 2014

% %

British Pound 0.01 0.01

Omani Rial 0.04 3.88

US Dollar 0.62 0.18

Qatari Riyal 95.31 89.16

Kuwaiti Dinar 0.00 1.79

UAE Dirham 4.02 4.98


60


15 Financial instruments continued

Foreign exchange risk continued

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 2015 Monetary Assets Monetary Liabilities Net Exposure

US$’000 US$’000 US$’000

British Pound 30 (6) 24

Omani Rial 82 - 82

US Dollar 2,009 (738) 1,271

Qatari Riyal 202,796 - 202,796

Kuwaiti Dinar - - -

UAE Dirham 8,547 - 8,547

213,464 (744) 212,720

30 June 2014 Monetary Assets Monetary Liabilities Net Exposure

US$’000 US$’000 US$’000

British Pound 27 (6) 21

Omani Rial 8,511 - 8,511

US Dollar 1,147 (753) 394

Qatari Riyal 195,532 - 195,532

Kuwaiti Dinar 3,931 - 3,931

UAE Dirham 10,926 - 10,926

220,074 (759) 219,315

Foreign currency sensitivity risk – presentational currency

At 30 June 2015 had the US Dollar weakened/strengthened by 1% (2014 : 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 2015 US$’000

British Pound -

Omani Rial 1

Kuwaiti Dinar -

UAE Dirham 85

Effect on net assets 86

30 June 2014 US$’000 British Pound - Omani Rial 85 Kuwaiti Dinar 39 UAE Dirham 109

Effect on net assets 233


61



Foreign currency sensitivity risk – functional currency

As 93% of net assets are denominated in QAR and QAR is the functional currency there is no significant functional

currency risk. The Qatari Riyal is pegged to the USD within a tight band and therefore it is not included in the sensitivity

analysis.

In addition, since QAR is the functional currency of the Group and USD is the presentational currency any effect of

changes in the foreign exchange rates between these currencies 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 2015 30 June 2014

US$’000 US$’000

Financial assets at fair value through profit or loss 206,552 202,703

Cash and cash equivalents 5,956 17,295

Other receivables 956 76

213,464 220,074

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 for operations and the ability to realise market

positions. The Group’s liquidity position is monitored by the Investment Manager and the Board of Directors.

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

30 June 2015

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

744 - - - - -

744 - - - - -

30 June 2014

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

759 - - - - -

759 - - - - -


62



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 2015 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

- - - - - 206,552 206,552

Other receivables and

prepayments

- - - - - 956 956

Cash 5,956 - - - - - 5,956

Total financial assets 5,956 - - - - 207,508 213,464

Financial Liabilities

Other creditors and

accrued expenses

- - - - - (744) (744)

Total financial

liabilities

- - - - - (744) (744)

Total interest rate

sensitivity gap

5,956

30 June 2014 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

- - - - - 202,703 202,703

Other receivables and

prepayments

- - - - - 76 76

Cash 17,295 - - - - - 17,295

Total financial assets 17,295 - - - - 202,779 220,074

Financial Liabilities

Other creditors and

accrued expenses

- - - - - (759) (759)

Total financial

liabilities

- - - - - (759) (759)

Total interest rate

sensitivity gap

17,295


63



Interest rate risk continued

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). The Investment Adviser’s fees are paid by the Investment Manager.

The Investment Manager, Epicure Managers Qatar Limited, is a related party by virtue of its ability to make operational

decisions for the Company and through common Directors. Fees payable to the Investment Manager are disclosed in

note 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 Company and of the Investment Manager.

17 Post Balance Sheet Events

There have been no post balance sheet events.

Documents

Qatar Investment Fund plc Consolidated Annual Report … · Qatar Investment Fund plc Consolidated Annual Report Year ended 30 June 2015